continuum development group projects book miami & nc

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Approved

9. File No. 3617

Royal Polo Investors, LLC

2940 Collins Avenue

The applicant is requesting the following variance in order to perm

it the retention of the existing guest room

s: 1. A variance to w

aive the required minim

um hotel unit size: 15%

of the hotel units shall be betw

een 300-335 s.f. and 85% of units shall be 335 s.f. of larger, in order to

retain 88 hotel units at less than 300 s.f (the smallest at 202 s.f., 91.6%

of units), 6 hotel units betw

een 300 and 335 s.f. (6.3% of units) and 2 units exceeding 335 s.f.

(2.1% of units).

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ll (no

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) http://therealdeal.com

/miam

i/blog/2013/03/06/miam

i-penthouse-sells-for-34m

/

Miam

i penthouse sells for $34M

March 06, 2013 02:00P

M

A

rendering of the penthouse at the Residences at The M

iami B

each ED

ITION

A com

bined-unit penthouse at the Residences at the M

iami B

each ED

ITION

has closed for $34 m

illion, making it one of M

iami’s priciest penthouse sales ever,

Coldw

ell Banker announced today. C

oldwell B

anker’s sales associate William

Pierce

closed the deal. P

enthouses 1601 and 1602 in the building were com

bined to form a 16,271-square-

foot triplex featuring eight bedrooms and eight and three-half bathroom

s. The building offers m

ultiple pools and outdoor kitchens. “This record-breaking sale exem

plifies the wonderful flexibility that M

iami B

each offers,” P

ierce said in a statement. “There w

ill be a nearly 360 degree view of our

beautiful city.” –Christopher C

ameron

Tags: Coldw

ell banker, residences at Miam

i beach edition R

elated posts

• Pharrell W

illiams lists B

rickell Avenue penthouse for $16.8 m

illion • R

ental potential drives South B

each condo-hotel sales • P

enthouse B sells at S

etai

• Rental potential drives S

outh Beach condo-hotel sales

N

EW

DE

VE

LOP

ME

NT || C

OLLIN

S A

VE

23R

D – 41S

T || M

IAM

I BE

AC

H || 2012 - 2015

1. 224 23

rd St &

2200 Liberty Ave &

340 23rd S

t

· Form

er Property N

ame C

ity of Miam

i Beach surface

parking (separate blocks)

· N

ew P

roperty Nam

e City of M

iami B

each parking structure &

retail

· D

etails New

structure that will

encompass tw

o half’s of City blocks

· A

rchitect Zaha Hadid – w

orld renow

ned designed in London for Olym

pics

· Links

http://ww

w.zaha-hadid.com

/ http://w

ww

.dezeen.com/2011/12/21/m

iami-beach-parking-garage-by-zaha-hadid/

2. 2360 C

ollins Ave

· Form

er Property N

ame B

anana Bungalow

· N

ew P

roperty Nam

e a-loft (W H

otel Brand)

· D

etails New

8-story building,

restaurant, club, waterfront

· A

rchitect Unknow

n – Starw

ood

· Links http://w

ww

.starwoodhotels.com

/alofthotels/index.html?

PS

=GW

S_aa_S

tarwood_A

loft_Brand_E

xact_Google_aloft_hotels_09170

8

3. 2901 Collins A

ve

· Form

er Property N

ame S

eville Beach H

otel

· N

ew P

roperty Nam

e Marriott E

DITIO

N

· D

etails New

8-story building, restaurant, club, w

aterfront

· A

rchitect Ian Schrager / Lionstone

Developm

ent

· P

lanned renovation $250m

· Links

http://ww

w.w

orldpropertychannel.com/featured-colum

nists/deal-of-the-week-

holliday-fenoglio-fowler-seville-beach-hotel-m

arriott-international-manny-de-

zarraga-fortune-international-lionstone-group-ian-schrager-2927.php http://w

ww

.marriott.com

/hotel-development/E

DITIO

N.m

i http://w

ww

.editionhotels.com/en-us/

http://ww

w.ianschragercom

pany.com/

http://ww

w.lionstone.net/

4. 3201 C

ollins Ave

· Form

er Property N

ame S

axony Hotel (form

er to-be C

ipriani)

· N

ew P

roperty Nam

e Faena

· D

etails Residential tow

er (North

tower of S

axony) highest cost of residential on all of Miam

i Beach

· A

rchitect Norm

an Foster & R

em

Koolhass

· P

lanned renovation $150m

· Links

http://ww

w.faena.com

http://w

ww

.faena.com/en/m

iami#!/

http://miam

i.curbed.com/tags/saxony-hotel

5. V

ersailles

· 275 key hotel

· N

ew 10 story residential tow

er / 50 units

· A

pproved 2 story restaurant

· U

nderground parking

· K

obi Karp – A

rchitecture

6. West side C

ollins from 32

nd – 34th

· R

em K

oolhaus (Am

sterdam)

· R

etail & entertainm

ent complex

· U

nderground mechanical parking

· B

outique hotel, shopping, residences

7. Other sales / developm

ent notable

· *D

ays Inn SO

LD $70m

+ and possible new flag

· *S

oho House established

· *Indian C

reek Hotel recently sold – Italian brand forthcom

ing

· *V

acant buildings on 37th / C

ollins just sold recently

· *Fontainebleau

CO

NTIN

UU

M D

EVELOPM

ENT G

ROU

PEXEC

UTIVE SU

MM

ARY AND

PROJEC

T SUM

MARY

Continuum Developm

ent Group is a newly incorporated design and developm

ent group developing a hotel and perform

ance venue here in Miam

i and one in the Research Triangle Park area in Durham, North Caro-

lina. Our concept brings together experienced developm

ent executives, technology and guest experience experts, and world class architects who have designed and executed projects all over the world and de-veloped the high-tech progressive design approach we are applying. The concept is m

eticulously planned to create an integrated environm

ent of both aesthetics and lifestyle that will bring a new and highly desirable scene and lifestyle to the areas. O

ur architects, Jordan Trachtenberg and Michael Sim

s have worked with the top architects and firm

s in the world, SOM

(World Trade Center), Frank G

ehry (Guggenheim

, New World

Symphony, NY By G

ehry at 8 Spruce), UN Studio-Amsterdam

(Mercedes-Benz M

useum- G

ermany), Zaha

Hadid (1000 Museum

Park - Miam

i).

CDG has created a concept and m

odel which can be applied to varying lots and properties and able to be duplicated in other m

arkets. We have identified properties to im

plement our unique concept upon which fills

a void and need in this Miam

i market and others around the country. W

e already have land possessed for the NC project. M

iami is one of the hottest real estate m

arkets in the world and a top ten luxury market glob-

ally, and RTP is a one of fastest growing areas in the country. We believe our concept of luxury residences

and an upscale boutique hotel, coupled with the city’s premiere upscale yet hip destination restaurant with

an integrated live music and perform

ance experience fits well into the current real estate and economic en-

vironments. Finding world-class live m

usic in Miam

i is a tough endeavor in itself. Enjoying quality live music

in a nice venue while enjoying a fine meal is unprecedented in either m

arket currently. Our concept also

includes an “Integrated Living” theme of having design and technology integrated not only into the units, but

also integrating the residents and guests with the neighborhood, the areas services providers, and the cities happenings and culture. This will be a distinguishing characteristic of the property. O

ur concept of “Living in the State of Luxury” entails not solely luxury accom

modations, nor sim

ple access to the best of what the city has to offer. O

ur definition entails creating a unique destination attraction that brings the best of an area to the guests and resident’s doorstep through our well thought out program

of outlets; rooftop bars, beach and social clubs, restaurants, and perform

ance lounges.

We have been in discussions with m

ultiple Miam

i Heat players in regards to being involved in the projects. Having the m

ost visible people in the city being principles in and frequenting the venues will make these

the premiere venues in the city. W

e anticipate bringing in a high visibility music partner as well. This is the

model for M

iami Beach, which will be the flagship and showpiece for the brand. W

e are also developing a sim

ilar concept of great design, but limited services and wrapped in a lim

ited services business model that

is attractive to investors for other markets. The plan is to duplicate the m

odel and concept for other primary

markets in addition to m

arkets where our high visibility partners are originally from or have great recognition

or a following, like Chicago. Detroit, Kansas City, Virginia Beach, Cleveland, and other secondary markets.

We have had extensive discussions with experienced hotel operators such Keith M

enin at Menin Hotels

(Mondrian, Shelbourne, G

ale, Regent-Chicago and Anthony Melchiorri, host of the Travel Channel’s show,

Hotel Impossible, and the m

anaging director of RDV Hospitality, Josh Wagner (who form

erly ran F&B and venues for M

organ’s Group Hotels) in regards to their potential participation in the projects in a m

anagement

capacity as a contracted service provider.

EXECUTIVE SUMM

ARY

CO

NTIN

UU

M D

EVELOPM

ENT G

ROU

P LLC ///

1 of 4

CDG has developed a concept that is an architectural, technological, and cultural m

arvel. We have tried to

structure the projects to be as remarkable to our partners and investors as it is for those who experience

the properties and venues. We have included a m

ix of condos, hotel rooms, and revenue outlets that

creates an attractive financial offering and provides security to our investors. The condos provide for an early revenue source or return for equity investors through pre-construction sales (M

ajestic Properties has signed on as a broker for pre-sales). The hotel and outlet provides cash flow and value for an exit in addi-tion to revenue from

condo sales. We are flexible in regards to deal param

eters and partnership structures. W

e are seeking an equity partner, which can be leveraged to obtain debt financing. We also m

ay be able to provide secured collateralization through a group, Iconic Ventures, for investors which 100% guarantees

PROJECT DEVELO

PMENT

//////01 ROYAL PO

LO /////// 02 LM

NT /////// 03 TRIANGLE HO

USE///////

CO

NTIN

UU

M D

EVELOPM

ENT G

ROU

P LLC ///

2 of 4

With the design district being one of the hottest neighborhoods in M

iami, LM

NT will be a true destination for guests to come and

spend some tim

e enjoying the lush garden patio, cocktail bar, salon lounge and main restaurant. After a fine dinner and perform

ance, there is no better way to burn som

e of those calories than shaking a leg on the dance floor. LMNT has a full cabaret and 5AM

liquor license, and will convert into a full nightclub venue late nights.

The restaurant and event space in itself will be a new icon for the city and a good business for principles and investors, yet it is just a sm

all piece of the value of this opportunity. The existing operating business of production services, events and the bar will produce a revenue stream

to carry initial operations. The new restaurant and music concept can be im

plemented with m

inimal investm

ent and construction to existing structure. LM

NT’s existing production resources enables a robust artist-in-residency program which will keep a

constant and fresh crop of artist creating and performing at the venue.

This situation is an exceptional opportunity due to the ability to construct a 32 story mix-use tower on the back of the lot. W

e envision a 200,000 sq. ft. (150k sellable) building with approxim

ately 100 luxury condos and 20 hotel suites with spectacular city and bay views in the property. Current m

arket rate for the area is $350 to $500 per sq. ft. The property will have amenities such as a gym

, pool, rooftop lounge, and a grocery store on ground floor. Integrated living is the them

e, encompassing technology, design, and culture. W

e have had discussions about the possibility of bringing Jay-Z’s 40/40 club to our project, which we envision being on the rooftop of the building. Existing design inspirations would include Butter in NYC, the garden patio at the Hudson Hotel in NYC and the form

er Asia De Cuba in NYC. Infuse those spaces design and am

biance with the live music experience of Joe’s Pub in NYC and you have a solid

understanding of our concept for this project.

- Price: $12M (asking) $9M

(offer)- Building Size: 7,000 SF- Property Type: T5 Zoning residential/m

ix use for nightclub/cabaret & residential tower- Property Use Type (operating): G

allery, Event Space, Bistro- Proposed Use: T6 m

ix use for residential tower, restaurant, music venue, lounge/club,

event space, retail- Year Built: 2011- Lot Size: 0.8 acre (32 story Condotel to be constructed on back ⅔

of lot)

Highlights- Existing owner is reporting estim

ated annual income for property around $4M

with net incom

e of $2.7M. Using a conservative reverse m

ultiple, we will use $1.5M

- Projected new restaurant and venue revenues - $6M- Build cost: $200/sq. (200k) = $40M

Revenue from condo sales: $400/sq. (150k) = $60M

Project Costs- Acquisition of existing structure, business, land, and interior redesign - $12M

- Construction costs for tower - $8M

(20% of total construction costs)- Total project costs - $52M

02 LMNT

CO

NTIN

UU

M D

EVELOPM

ENT G

ROU

P LLC ///

3 of 4

TEAM

Scott Bednaz is a com

mer-

cial broker

and developer

with 19 years experience in

North and South C

arolina. As President of TerraC

orp Com

-m

ercial properties and Tallus D

evelopment group M

r. Bed-naz has negotiated the pur-chase, sale, or lease of 1 m

il-lion square feet of com

mercial

space, 3,500 acres of land re-sulting in $100 m

illion in com-

pleted transactions. In 2005 he branched out from

repre-sentation to develop his ow

n projects including Advanced Auto, H

ooters Burlington, The Estates at Barton’s C

reek, and the Straw

Valley Project. His

projects have

been recog-

nized by multiple new

s and architectural outlets and re-ceived aw

ards from the N

C

and Durham

Preservation So-cieties.

Cedric H

Watkins is a technolo-

gist and founder of a technology com

pany providing solutions for the hospitality industry, Adjacent Innovations. M

r. Watkins is a sea-

soned business

development

and m

arketing executive

who

has founded marketing and tech-

nology companies and has done

development projects in Raleigh

and New

ark, New

Jersey.

After attending UN

C-C

hapel Hill

where he studied M

anagement

and Sociology, Mr. W

atkins has lived in M

anhattan and Miam

i for the last 12 years w

here he has developed a netw

ork of re-sources in finance, real estate, hospitality,

design, technology,

and entertainment. M

r. Watkins

will be project coordinator, lead

business developm

ent, and

serve as technology and guest experience architect.

Jordan Trachtenberg Assoc. AIA, LEED

AP has practiced ar-chitecture over the last decade in five continents ranging from

Asia to South Am

erica. During 2009-

2012 in Amsterdam

, NL, w

hile practicing under Ben van Berkel at

UN

Studio, M

r Trachtenberg

ed the design and execution as C

oordinating Architect

/Project M

anager on several successful projects such as the Singapore U

niversity of Technology and De-

sign to finish completion in 2014.

In addition, Mr. Trachtenberg led

the design on successful com-

petitions, sm

all built

projects, interior,

and industrial

design solutions, such as the Library + C

enter for New

Media in G

hent, Belgium

, Zara flagship store in Rom

e, Italy and the 29th Annual Art Biennale’s Youturn Pavilion in Sao Paulo, Brazil.

Mr. Trachtennberg received the

degree Master of Architecture,

with H

onors in Design, from

Co-

lumbia U

niversity, NY, and holds

a Bachelor of Design in Architec-

ture, with H

onors, from Florida In-

ternational University, M

iami.

ww

w.JordanTrachtenberg.com

Michael Sim

s, Jr. is an archi-tectural design professional now

living and w

orking in Europe. H

e has over 10 years profes-sional experience in the offices of Em

ergent (Tom W

iscombe),

Coop-H

imm

elblau (W

olfgang Prix), Frank G

ehry Associates, SO

M (N

Y), UN

Studio (Ben van Berkel),

and co-taught

work-

shops with Lebbeus W

oods.

As a

proponent of

BIM

and param

etric design

processes, M

r. Sims has been involved in

several high

profile projects

including M

anhattan’s tallest

residential tower, Frank G

ehry’s new

8 Spruce Street tower, the

King of Morocco’s current the-

atre project, and the UN

Studio in Am

sterdam. H

e earned his M

asters of

Architecture from

SC

I-ARC, and a Bachelor of Ar-

chitecture from the U

niversity of N

orth Carolina at C

harlotte. Mr.

Sims has taught digital design

at AIU (Am

erican Intercontinen-tal U

niversity) in Los Angeles, and w

as an SOM

instructor in an applied studies research col-laboration w

ith SCI-Arc, inves-

tigating concepts related to re-sponsive kinetic façades. H

e is now

with Zaha H

adid Architects in London.

CO

NTIN

UU

M D

EVELOPM

ENT G

ROU

P LLC ///

4 of 4

Plaza Hotel

418 -‐426 Meridian Ave – South Beach

Located SW Corner of 5

th st and Meridian Ave M

iami Beach, Fl. 33141

Property consists of 2 adjacent parcels improved w

ith a rooming house

and 2 apartment buildings. Properties are zoned com

mercial m

ixed use. The #426 building has historical classifications and the facades w

ould need to be m

aintained or replicated. The property was approved by the

City for a hotel as shown in the enclosed renderings and plans. The

property can be converted to retail, hotel, residential or office or any com

bination 418 M

eridian Ave Built 1953 Land Size: 50 x 140 = 7000 sf Bldg Size: 1 story bldg. – 2302 sf 5 -‐ 1/1 bath units of 400 sf each – each unit pays $600 /m

onth 2 story bldg. -‐ 2045 sf

1 1/1 bath

5 studio apartments

426 M

eridian Ave (completely vacant and boarded)

Built 1925 Land Size: 50 x 140 = 7000 sf Bldg Size: 3 story bldg. -‐ 16563 -‐ approxim

ate 215 sf per unit 76 units – H

otel Rooms w

ith only a sink and common area bathroom

s on

each floor his / hers with toilet room

s and showers. Property

has 3 stairw

ells, front , rear and center. 1

st floor – 20 units

2nd floor – 27 units

3

rd floor -‐ 29 units

Total Land Size: 14,000 sf 100x140 – 140 feet on 5

th st Total Bldg Size: 20,910

3/24/12 3:18 PMShulm

an + Associates

Page 1 of 1http://w

ww

.shulman-design.com

/swf/sa_system

.html

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arcus&

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This

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securedfrom

sourcesw

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reliable,butw

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akeno

representationsor


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plied,asto

theaccuracy

ofthe

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eferencesto

squarefootage

orage

areapproxim

ate.B

uyerm

ustverify

theinform

ationand

bearsallrisk

forany

inaccuracies.M

arcus&

Millichap

Real

Estate

Investment

Servicesis

aservice

mark

ofM

arcus&

Millichap

Real

Estate

Investment

Servicesof

Florida © 2012 M

arcus & M

illichap T0240188

DE

MO

GR

AP

HIC

RE

PO

RT

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TH

E S

EA

SP

RA

Y M

iam

i Beach

, 20

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uou

s a

dd

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rate

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isto

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nt

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f his

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artm

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t bu

ildin

g

THE

LOO

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N M

iami B

each, 2009A

IA M

IAM

I DE

SIG

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2009

21

3/24/12 3:33 PMShulm

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MIA

MI, FL

MARKET PO

SITION

ING

&

PRICING

ANALYSIS

Prepared For:

Esther Klepach Trust

DO

WN

TOW

N H

OTEL SITE

SECTION

ON

E...............................................PRICIN

G &

FINA

NCIA

L AN

ALYSIS

SECTION

TWO

..................................................PROPERTY D

ESCRIPTION

SECTION

THREE

...................................................RECENT SA

LES

SECTION

FOU

R...............................D

EMO

GRA

PHIC A

NA

LYSIS

SECTION

FIVE..................................M

ARKETIN

G PLA

N

SECTION

SIX...TH

E MA

RCUS &

MILLICH

AP A

DVA

NTA

GE

DO

WN

TOW

N H

OTEL SITE

MIA

MI, FL

Thisinform

ationhas

beensecured

fromsources

we

believeto

bereliable,butw

em

akeno

representationsorw

arranties,expressedor

implied,

asto

theaccuracy

ofthe

information.

References

tosquare

footageor

ageare

approximate.

Buyerm

ustverify

theinform

ationand

bearsallrisk

forany

inaccuracies.M

arcus&

Millichap

RealEstate

InvestmentServices

isa

servicem

arkof

Marcus

& M

illichap Real Estate Investm

ent Services of Florida © 2012 M

arcus & M

illichap

TABLE OF CONTENTS

DO

WN

TOW

N H

OTEL SITE

MIA

MI, FL

PRICING & FINANCIAL ANALYSIS

DO

WN

TOW

N H

OTEL SITE

MIA

MI, FL

Thisinform

ationhas

beensecured

fromsources

we

believeto

bereliable,butw

em

akeno

representationsorw


implied,

asto

theaccuracy

ofthe

information.

References

tosquare

footageor

ageare

approximate.

Buyerm

ustverify

theinform

ationand

bearsallrisk

forany

inaccuracies.M

arcus&

Millichap

RealEstate

InvestmentServices

isa

servicem

arkof

Marcus

& M



arcus & M

illichap


1

SUM

MA

RY

PropertyD

owntow

n Hotel Site

Property Address

1789 Biscayne Boulevard

Miam

i, FL 33132

Price4,800,000

Dow

n Payment

100% $4,800,000

Lot Size (SF)13,125

Price/SF$365.71

Lot Size (Acres)

0.3013

Price/Acre

$15,930,966Buildable SF

10,500

Price/Buildable SF$457.14

Num

ber of Units

150Price/U

nit$32,000

Num

ber of Lots3

Price/Lot$1,600,000

Lot Dim

ensions105 X 125

Type of Ow

nershipFee Sim

ple

Loan TypeA

ll Cash

Financial Overview

SITE DESCRIPTIO

NA

ssessor's Parcel Num

ber0132310030730, 720, 710

ZoningT6-24-O

, C-1, SD

-20Taxes

26,051Tax Year

2010Frontage

105' on Biscayne BlvdTraffic C

ounts61,000

Adjacent D

evelopment

New

Publix Supermarket

DO

WN

TOW

N H

OTEL SITE

MIA

MI, FL

Thisinform

ationhas

beensecured

fromsources

we

believeto

bereliable,butw

em

akeno

representationsorw


implied,

asto

theaccuracy

ofthe

information.

References

tosquare

footageor

ageare

approximate.

Buyerm

ustverify

theinform

ationand

bearsallrisk

forany

inaccuracies.M

arcus&

Millichap

RealEstate

InvestmentServices

isa

servicem

arkof

Marcus

& M



arcus & M

illichap


2

Pricing

List Price

Price4,800,000

Dow

n Payment

100%$4,800,000

VALU

E IND

ICATO

RS

Price/SF$365.71

Price/Acre

$15,930,966

Price/Buildable SF$457.14

DO

WN

TOW

N H

OTEL SITE

MIA

MI, FL

Thisinform

ationhas

beensecured

fromsources

we

believeto

bereliable,butw

em

akeno

representationsorw


implied,

asto

theaccuracy

ofthe

information.

References

tosquare

footageor

ageare

approximate.

Buyerm

ustverify

theinform

ationand

bearsallrisk

forany

inaccuracies.M

arcus&

Millichap

RealEstate

InvestmentServices

isa

servicem

arkof

Marcus

& M



arcus & M

illichap


3

COM

MEN

TS(1) Includes principal reduction.(2) Before taxes.(3) D

epreciation not included.(4) A

ssumptions: 75%

occ., $129.99 and $159.99 AD

R respectively, 150 rooms

Alternative Investm

ent Analysis

Best Western Prem

ier

Cost Per K

ey$170,000.00

Price25,500,000

CA

P Rate

7.33%

New

Loan$12,750,000

Interest Rate

5.500%

Net O

perating Income (4)

1,868,200

Debt Service

939,554

Net C

ash Flow A

fter Debt Service

$928,646

Principal Reduction

244,404

Total Return (3)

$1,173,050

aLoft

Cost Per K

ey200,000

Price30,000,000

CA

P Rate

7.66%

New

Loan$15,000,000

Interest Rate

5.500%

Net O

perating Income (4)

2,299,356.28

Debt Service

1,105,357

Net C

ash Flow A

fter Debt Service

$1,193,999

Principal Reduction

287,534

Total Return (3)

$1,481,533

DO

WN

TOW

N H

OTEL SITE

MIA

MI, FL

PROPERTY DESCRIPTION

Marcus &

Millichap is pleased to offer for purchase and sale, the fee

simple interest in 1789 Biscayne Boulevard, and the adjacent 2 parcels

to the east ("Site"), in Dow

ntown M

iami. The site is Zoned T-6 U

rban C

ore, which allow

s for up to 24 stories and 80% lot coverage. This

13,125 +/- SF development site is ideally located in the heart of

Dow

ntown

Miam

i w

ithin w

alking distance

of the Miam

i Herald

Building, and adjacent to the Hilton H

otel, which w

ere both purchased by G

enting in the past twelve m

onths. Aside from

Genting's recent

acquisitions, Dow

ntown M

iami is poised to becom

e THE hot spot of

Greater M

iami. The A

merican A

irlines Arena is a short distance South

on Biscayne Blvd, and there have been several construction and redevelopm

ent projects adjacent to the the site including the Publix Superm

arket building which opened in M

arch of this year.

While the original plans for G

enting's World Resort on the M

iami

Herald Site have been w

ithdrawn, the scaled-back plans are scheduled

to be released within the next tw

o months. A

lthough the Casino Bill,

which w

ould have legalized casinos and gambling for select sites

including the World Resort, did not pass, m

any experts predict that w

ithin the next two to three years a sim

ilar bill will pass. D

owntow

n M

iami faces its highest cost of entry in years thanks to G

entings $460,000,000 real estate purchases driving the cost per square foot to over $300.00 in areas close by. W

hile sub-prime locations are still

offered at around $120.00 per square foot, the surrounding areas have not seen the sam

e push in terms of re-developm

ent and "clean up", leaving them

unsafe in terms of pedestrian traffic.

DO

WN

TOW

N H

OTEL SITE

MIA

MI, FL

Thisinform

ationhas

beensecured

fromsources

we

believeto

bereliable,butw

em

akeno

representationsorw


implied,

asto

theaccuracy

ofthe

information.

References

tosquare

footageor

ageare

approximate.

Buyerm

ustverify

theinform

ationand

bearsallrisk

forany

inaccuracies.M

arcus&

Millichap

RealEstate

InvestmentServices

isa

servicem

arkof

Marcus

& M



arcus & M

illichap


INVESTM

ENT

HIG

HLIG

HTS

5

Prime Location on one of the few

remaining parcels in D

owntow

nw

ithin 3 blocks of the Genting

Developm

ent Site

Optim

al Zoning for small lot

construction (T-6 Urban Core)

Approved uses include H

otel,Retail, and M

ulti-Family

Across the street from

the newly

constructed Publix Supermarket,

Wells Fargo, and G

NC building

Investment O

verview

As it currently stands, D

owntow

n Miam

i is in need of a limited service nationally branded hotel. The

current hotel market has a surplus of full service room

s with a drastic shortage of lim

ited service. By undercutting the rates of the full service hotels, currently offering room

s above $200.00 per night, a lim

ited service hotel will thrive. A

n additional benifit to a limited service hotel in this location is the new

Publix Superm

arket accross the street. With a Superm

arket within w

alking distance, guests will be

inclined to book this hotel for their extended stays.

DO

WN

TOW

N H

OTEL SITE

MIA

MI, FL

Thisinform

ationhas

beensecured

fromsources

we

believeto

bereliable,butw

em

akeno

representationsorw


implied,

asto

theaccuracy

ofthe

information.

References

tosquare

footageor

ageare

approximate.

Buyerm

ustverify

theinform

ationand

bearsallrisk

forany

inaccuracies.M

arcus&

Millichap

RealEstate

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Investment O

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Property Photos

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Property Photos 2

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Area M

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Plat Map

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Aerial Photo

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Aerial Photo w

ith Labels

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3D A

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South Easterly View

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MIA

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RECENT SALES

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RECENT SALES

16

Recent Sales Map

0.00

40.00

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RECENT SALES

17

AVERA

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MIA

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1825 Northeast 4th avenue

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SUBJECT PRO

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Close of Escrow

:05/26/2011

Lot Size (SF):609,840

Sale Price:$236,000,000

Price/SF:$386.99

Dow

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Lot Size (Acres):

14.0000

Dow

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RECENT SALES

Close of Escrow

:02-07-2012


Sale Price:$9,000,000

Price/SF:$333.25

Dow

n Payment:

Lot Size (Acres):

0.6200D

own Paym

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Price/Acre:

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Zoning:

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Lot Dim

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18

Sale Price:4,800,000


Dow

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Lot Dim

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Recent Sales

MARKET PO

SITION

ING

&

PRICING

ANALYSIS

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Offices N

ationwide

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OTEL SITE

Light House ///

A New Way to Stay // Concept Design Book

03.2013 /// TRACHTENBERG LLC

The Concept /// Past + Present + Future

With its rich cultural history and well deserved reputation for some of the best weather in the world and establishing the idea of “living the life of luxury”, Mi-ami is undoubtedly a world-class city, yet it is lacking in one area. With such a legacy, the current version of the luxury experience with thousand dollar bottles at packed clubs, celebrity dj’s, and laser light shows are not doing this legacy justice. In a city like Miami where money does not ensure access, the true defini-tion of luxury must include access to the best of the life of luxury, which includes service, entertainment and socializing with like natured individuals.

Experiencing luxury in the manner and style in which you desire is the para-mount of living the life of luxury. The manner, frequency, and consistency in which the Lighthouse lifestyle of luxury will provide this paramount experi-ence to our guests and residents creates a lifestyle and residential environment unique and incomparable to anywhere in the world. Living in the state of luxury requires not only access, but also convenience. Having access to the best of the life of luxury is the current standard for experiencing luxury. Having those things brought to your doorstep is “living in the state of luxury”, which is life at The Lighthouse.

With Miami being one of the hottest travel destinations and condo markets in the world and the hotel market being one of the few markets experiencing in-creased tourism and higher rates for both occupancy and average daily rates, the opportunity to leverage both of these facts and capitalizing on Miami’s current lack of quality live music and entertainment makes this opportunity unique and one-of-a-kind. The Lighthouse brings together the culture of The City and ap-preciation for creation, music, and performance with the Miami lifestyle of luxury and celebrity, and infused with the universal spirit of the true appreciation of “the party scene”. This unique combination will make The Lighthouse a true destina-tion experience for the few fortunate enough to experience it during their stay or for the truly fortunate who call it home.



The Lighthouse Residences are an ultra-luxury condo and hotel with a private social club, rooftop pool and bar, world-class restaurant and spa, and performance lounge space. The Lighthouse experience will become the new beacon for what luxury living and accommodations are judged, yet globally incompara-ble due to the unique attributes of location, quality of facilities, and the world-class environment for en-tertainment which draws world-class talent, residents, and guests which creates world-class experiences and memories. The Lighthouse will be a cultural, architectural, technological, and ecological beacon for Miami. Bringing together the best of the old, using a bit of the current, and bringing them together to create a true desti-nation experience where the of the experiences of “the life of luxury” are alive, vibrant and being created every day.

“Old fashion service is the most pleasent luxury.” - Andre Balasz


Team //


Scott Bednaz is a commercial broker and developer with 19 years experience in North and South Carolina. As President of TerraCorp Commercial properties and Tallus Development group Mr. Bednaz has negotiated the purchase, sale, or lease of 1 million square feet of commercial space, 3,500 acres of land resulting in $100 million in completed transactions. In 2005 he branched out from representation to develop his own projects including Advanced Auto, Hooters Burlington, The Estates at Barton’s Creek, and the Straw Valley Project. His projects have been recognized by multiple news and architectural outlets and received awards from the NC and Durham Preservation Societies.

Isaac Brown has been Director of Emerging Markets for Choice HotelsInternational for the past 9 years and has worked with Marriott developing over 60 properties. Prior to his cur-rent position, he was Architectural Designer, where he was responsible for prototype design for all Choice brands, and design reviews which

Mr. Brown will be

these brands. In addition he has been responsible for almost a half a billion dollars worth of revenue during his tenure working in development at Choice International.leaving Choice durring 2013 in his full-time capacity, and is currently in the early stages of developing four other properties where he is majority principal in the project. Mr. Brownhas a masters degree in architecture from Louisiana State Universityand a MBA from New York University. Mr. Brown is a New York City native and will lead the development team for the project.

Cedric H Watkins is a technologist and founder of a technology compa-ny providing solutions for the hospi-tality industry, Adjacent Innovations. Mr. Watkins is a seasoned business development and marketing execu-tive who has founded marketing and technology companies and has done development projects in Raleigh and Newark, New Jersey.

After attending UNC-Chapel Hill where he studied Management andSociology, Mr. Watkins has lived in Manhattan and Miami for the last12 years where he has developed a

real estate, hospitality, design, tech-nology, and entertainment. Mr.Watkins will be project coordinator, lead business development, andserve as technology and guest expe-rience architect.

Jordan Trachtenberg Assoc. AIA, LEED AP has practiced architecture

-nents ranging from Asia to South America. During 2009-2012 in Am-sterdam, NL, while practicing under Ben van Berkel at UNStudio, Jordan led the design and execution as Coordinating Architect /Project Man-ager on several successful projects such as the Singapore University

-ish completion in 2014. In addition, Jordan led the design on successful competitions, small built projects, in-terior, and industrial design solutions, such as the Library + Center for New

-ship store in Rome, Italy and the 29th Annual Art Biennale’s Youturn Pavil-ion in Sao Paulo, Brazil.

Jordan received the degree Master of Architecture, with Honors in De-sign, from Columbia University, NY, and holds a Bachelor of Design in Architecture, with Honors, from Flori-da International University, Miami.

Michael Sims, Jr. is an architectural design professional now living and working in Europe. He has over 10 years professional experience in

-combe), Coop-Himmelblau (Wolf-gang Prix), Frank Gehry Associates, SOM (NY), UN Studio (Ben van Berkel), and co-taught workshops with Lebbeus Woods.

As a proponent of BIM and paramet-ric design processes, Mr. Sims has

projects including Manhattan’s tallest residential tower, Frank Gehry’s new 8 Spruce Street tower, the King of Morocco’s current theatre project, and the UN Studio in Amsterdam. He earned his Masters of Architec-ture from SCI-ARC, and a Bachelor of Architecture from the University of North Carolina at Charlotte. Mr. Sims has taught digital design at AIU (American Intercontinental Univer-sity) in Los Angeles, and was an SOM instructor in an applied studies research collaboration with SCI-Arc, investigating concepts related to responsive kinetic façades. He is now with Zaha Hadid Architects in London.

Team /// 03.2013 /// TRACHTENBERG LLC

Team /// Jordan Trachtenberg // Architecture Projects Sample Work

www.jordantrachtenberg.com

Pavilion / Sao Paulo, Brazil University / NYC, New York University / NYC, New York

Hotel / Philidelphia, PA Library / Ghent, Belgium

Library / Ghent, Belgium

University / Singapore

University / Singapore Performing Art Center / S. Korea Performing Art Center / S. Korea

Office Park / South Korea

Pavilion / Sao Paulo, Brazil


Team /// Michael Sims /// Architecture Projects

Residental Tower / NYC, NY

Residental Tower / NYC, NY

Mixed Use / ChinaTower / Abu Dabi

Tower / Abu DabiSympony Center / Miami, Florida

Theater / Moroco

Sympony Center

Sympony Center

Commercial Tower / NYC, NY


Sample Work 03.2013 /// TRACHTENBERG LLC

Design Model / /


Organization /// Event as an Integrated Concept

EventSpace

Auditorium

Restaurant

Pool + Deck

EventSpace

Bed

Bath

EventSpace

Eventspace

Bath

Bath

Bed

Bed

Lounge

Back oces

Stage

Logistics

Kitchen

Lounge +Bar

Parking

Lounge

Lounge

Relations

publicprimary

secondary

tertiary

semi-public

not publicDouble Quarters

Loft Quarters

Single Quarters

21

EventSpace

Auditorium

Restaurant

Pool + Deck

EventSpace

Bed

Bath

EventSpace

Eventspace

Bath

Bath

Bed

Bed

Lounge

Back oces

Stage

Logistics

Kitchen

Lounge +Bar

Parking

Lounge

Lounge

Relations

publicprimary

secondary

tertiary

semi-public


Loft Quarters

Single Quarters

21

The Event Space becomes the central nucleus to the program. All spaces are in-terwoven and interdependent .The circula-tion around the event spaces are a direct connection between the different clusters. The secondary route,Within each cluster, leads each visitor through the experience.

The functional diagram shows the various user levels magnified to best visualize and represent each relationship. It fulfills the event space as a crucial link, as well as an element that binds together the differ-ent spaces of the hotel.The relationship between the Event Spac-es and the surrounding clusters, creates various degrees of public / dynamic (cen-tral event space, Lounges, Restaurants) to private / introvert (quiet lounges, Quar-ters.)

The shared Lounge/event spaces in turn form the internal link between the clusters of Quarters, and provide a smooth transi-tion through the main event spaces. This seamless interweaving of function and circulation also creates various spatial experiences of open spaces, to intimate enclosed areas, and excites the visitors to discover and participate in the new way to stay.


Design Strategies ///

Vertical Landscape - Minimum Site Coverage - Iconic

Urban Social Landscape - Max Site Coverage

Vertical to LateralOur design philosophy is flexible in its concept. Depending on each site in context we adapt the design model to both vertical and horizontal typologies. This promotes a true understanding of our site, its surroundings, and how to best integrate the design model.


Organization /// Example // Plymouth Hotel + Ansonia

The Plymouth Hotel as context; erties where our design ory and relationships

of 1940’s Miami Beach Art Deco to most recently housing the New World Symphony student body will play an integral role in our event, marketing and branding. Preserved Historical the Plymouth hotel is an icon of Miami Beach. With proper direction the hotel will become a destination. Linking Miami Beach to the sub culture and event spaces it desires.

Current Situation | Preserved Historical the Plymouth hotel is a Icon of Mi-ami Beach. With proper direction the hotel will become a desitation. Linking Miami Beach to the sub culture and event spaces it desires.

Current Situation | Parralel sites that are less desierable are being broken down to the bare walls and recreated into moder hotels. Our objective is to go beyond our neighbors stting a new bar for the area.

Plymouth example

Plymouth Ansonia

roof terraceQuarters and lounge

Quarters

Event SpaceLoungePool and deck Lobby

extending Event Space throughout


Roof Terrace


Organization /// Vertical Landscape // Site Context

Parking

150 Condo

150 Hotel

RestaurantCommercial Lobby

Event

EventBar/Social

The Design philosophy applied to this site in Edgewater, centrally located between Mid-Town, South Beach and Downtown offers an ideal proximity to tap into the optimal demo-graphic applying a mixed use programmatic approach amplifies the ability to tap into mul-tiple revenue streams.


Program Typologies /// Example aesthetics

Quarters //

Event Spaces //

Common Spaces//


Referenced /// 03.2013 /// TRACHTENBERG LLC

Details /// Technology + Space + FunctionalityEach square foot is thought about in detail. How to maximize interactivity, comfort and usability


Details /// Finishes, Materials, Texture, LightingCrisp and simple details will allow the design to maintain a cost effective background and elegant foreground. // Crisp, sharp, elegant, defining,


Financials / /


Urban A

partment:

§I believe this is the m

ost viable version§

The sketches are very rough and don’t have an elevation; consider that a massing and general

image sim

ilar to those in the Mixed U

se and the Boutique Hotel could be used to visualize the scale and

general appearance.§

There is an optional 7th Floor show

ing 4 additional units, a Fitness Center and roof terrace show

n.Note that these units are beyond the parking and w

ould require the building type to become light gauge

(noncombustible). At 6 stories / 40 units (as show

n) it could be wood fram

ed.§

An optional additional level of parking is shown, though w

e found digging further would be very

costly, there is some rock below

the site.

Mixed U

se Building

§The m

aterials and massing could be used for the apartm

ent complex. This schem

e went to

construction drawings and w

as generally approved by the City Planning agencies.

Boutique H

otel§

This would be an interesting use and w

ould require a good operator. Some parking w

ould beavailable next door on the H

ousing Authority Site, with approval, but no long term

deal. There is a parkingstructure a block aw

ay.§

The massing, perspective im

age is similar to the apartm

ent concept and could be used to visualizethe general apartm

ent massing.

F. THOMAS M

URPH

Y, A

IA NCARB

partner | principal architect

OLIVE architecture

OLIVE design + build

436 n. harrington st. suite 140raleigh, nc 27603O 919.838.9934 (x203)

F 919.838.9995M 919.819.3296

[email protected]

www.olivedb.com

FIRST LEVELPARKING

0' - 0"

SECOND LEVELOFFICE

10' - 0"

BASEMENT LEVELPARKING

-10' - 0"

THIRD LEVELOFFICE

22' - 4"

FOURTH LEVEL -APARTMENTS

34' - 8"

FIFTH LEVEL-APARTMENTS

46' - 0"

SIXTH LEVEL -APARTMENTS

57' - 4"

SEVENTH LEVEL -ROOF68' - 8"

E BF C

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0"

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(316.5)

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GREEN WALL; BYG-SKY OR EQUIVALENT

AWNING ABOVE MAIN ENTRANCE@ 11'-0" HT.

OPTIONAL:GREEN WALL TO EXTEND OVERWALL FACE; WALL TO BE POUREDCONC. W/ DETAIL TO BE DETERMINED

ADGH

1

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1

(314.5)DOOR AT ENTRY

FIRE ACCESSTO FIRE PUMPFDC

3 STREETPLANTER

DECORATIVE SECURITYROLL-UP SCREEN - ON SITE PARKING BEYOND

FIRST LEVELPARKING

0' - 0"

SECOND LEVELOFFICE

10' - 0"

THIRD LEVELOFFICE

22' - 4"


34' - 8"


46' - 0"


57' - 4"


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Revision Date Description1 10.20.08 City Comments2 11.04.08 DRC Review3 12.04.08 City Comments

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SITE

ATTENTION ACTION ADVENTUREACCOMPLISHMENT ATTENTION ACTION

9001 glenwood ave raleigh, nc 27617 p 919.838.9977 f 919.838.9995

www.centrepointpa.com

Raleigh, North Carolina

B O U T IQ U E H O T EL6 1 5 N . Bo y lan

April 24, 2009

S D - 1Site Plan

73 4 5 6 8 9 10 11 12 13 14

18 19

15 16 17

2120

1 2

22 23 24

Parking

Car Lift

LegendCirculationParking

Parallel Parking






April 24, 2009

S D - 2Parking Lower Level

25 26 27 28 29 30 31 32 33 34 35 36 37

38 3940 41 B.O.H

Parkingup

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LegendCirculationMaintenance/B.O.H.Parking

Parallel Parking






April 24, 2009

S D - 3Parking Entrance Level

4945 46 47 48 50 51 52 53

56 57

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55

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Parallel Parking






April 24, 2009

S D - 4Lobby Level

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April 24, 2009

S D - 5Typical Guestroom Level

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LegendCirculationGuest RoomsMaintenance/B.O.H.Support ATTENTION ACTION ADVENTURE

ACCOMPLISHMENT ATTENTION ACTION





April 24, 2009

S D - 6Guestroom/Lounge Level

Parking Entrance Level0"

Lobby Level9'-8"

Level 319'-4"

Level 428'-10"

Level 538'-4"

Level 647'-10"

Level 757'-4"

Level 866'-10"

T.O. Roof76'-4"

Parking Lower Level-8'-8"

Parking

Parking

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Guestrooms

Guestrooms

Guestrooms

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April 24, 2009

S D - 7Schematic Section & Project Data

PROJECT DATA

Floor Use Guestrooms Parking Spaces Hotel Area (sf) Parking Area (sf)8 Hotel 9 - 7,6507 Hotel 17 - 7,6506 Hotel 17 - 7,6505 Hotel 17 - 7,6504 Hotel 17 - 7,6503 Hotel 17 - 7,650Lobby Level Lobby/Parking - 18 2,650 6,375Parking Entrance Level Parking/B.O.H. - 18 9,710Parking Lower Level Parking - 25 9,710TOTAL 94 61 48,550 25,795






April 24, 2009

S D - 8View from SE






April 24, 2009

S D - 9View from NE

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URBAN APARTMENTS 615 North Boylan AvenueRaleigh, NC

11/19/2010

PRELIMINARY PROFORMAPROJECT INFORMATION Project is based upon a development consisting of:40 Apartments with lobby and fitness center and 40 parking spaces

Const.

Floor Units

Unit AreaCommon Area

Bed / BathParking Space

Total Area (sf)Floor Total (sf)

Const. PSFCost

61

945

2 B/2 B945

8,42578.00

657,150.001

6901 B/1 B

6901

7301 B/1 B

7301

10302 B/2 B

1,0301

10802 B/2 B

1,0801

8502 B/1 B

8501

8302 B/1 B

8301

11802 B/2 B

1,180

1,090

1,0905

1945

2 B/2 B

9458,425

78.00657,150.00

1690

1 B/1 B690

1730

1 B/1 B730

11030

2 B/2 B1,030

11080

2 B/2 B1,080

1850

2 B/1 B850

1830

2 B/1 B830

11180

2 B/2 B1,180

1,0901,090

41

945

2 B/2 B945

8,42578.00

657,150.001

6901 B/1 B

6901

7301 B/1 B

7301

10302 B/2 B

1,0301

10802 B/2 B

1,0801

8502 B/1 B

8501

8302 B/1 B

8301

11802 B/2 B

1,180

1,090

1,0903

1945

2 B/2 B

9458,425

78.00657,150.00

1690

1 B/1 B690

1730

1 B/1 B730

11030

2 B/2 B1,030

11080

2 B/2 B1,080

1850

2 B/1 B850

1830

2 B/1 B830

11180

2 B/2 B1,180

1,0901,090

21

945

2 B/2 B945

8,42578.00

657,150.001

7701 B/1 B

7701

7572 B/1 B

7571

10802 B/2 B

1,0801

7251 B/1 B

7251

7251 B/1 B

7251

7001 B/1 B

7001

7151 B/1 B

715Fitness Ctr

900900

1,1081,108

Lobby Level 1,023

1,023

1,02385.00

86,955.0021

210,000.00Parking Level

904

904904

65.0058,760.00

19

190,000.00

4035,757

8,29540

44,05244,052

3,831,465.00

URBAN APARTMENTS 615 North Boylan AvenueRaleigh, NC

11/19/2010

PRELIMINARY PROFORMA:

LAND COSTS: Land Purchase and Closing costs

725,000.00

Site Cost / Demolitionestimate

100,000.00Land Carry ($2,000/ mo + taxes)

25,000.00850,000.00

HARD COSTS:estimate

3,831,465.00Total Construction Cost

3,831,465.00

SOFT COSTS:Architect & Engineer

(incl civil & entitlements)5.00%

191,573.25

Consultants(special inspections, waterproofing inspections, reimbursables)

90,000.00Permits & Fees

112,000.00

Legal (Development)(includes appraisal and market study)

19,500.00Legal (Closing)

10,000.00Real Estate Taxes

5,000.00Insurance

15,000.00Development Fee

200,000.00Marketing

80,000.00Soft Subtotal

723,073.25FINANCING COSTS:Points and Fees

0.00FHA Related Fees

70,000.00

Construction Subtotal81,009.00

Interest during sale28,101.00

Real Estate Taxes5,000.00

Financing subtotal184,110.00

CONTINGENCY:3.00%

(of Hard Costs + Soft Costs)136,636.15

BOND:2.00%

(of Hard Costs and Site Costs)78,629.30

TOTAL DEVELOPMENT COSTS:5,803,913.70

RETURN ON PROJECT / DEVELOPMENT PROFITABILITY:

Original Investment(based on 83.7%

LTV)Land Cost

16.3% of Land Cost

134,475.00Construction Cost

16.3% of Construction

624,528.80Site Development

16.3% of Site Development

187,034.14Total:

946,037.93

Additional Development based upon equity:Total Project Cost

0.005,803,913.70

Less Project Investment

946,037.93Mortgage Amount

4,857,875.76

APARTMENT INCOMERental Income at $1.50 / sf per month average (assume 5%

vacancy)50,953.73

per month

Trash/Water at $20/unit per month (assumes 5%

vacancy)760.00

per month OPERATING COSTSOverhead

D&F Fee: (Leasing agent, Maintenance, Marketing, Admin) 6,667.00

Other: (Taxes, utilities, out-of pocket maint. costs, misc.)6,000.00

Mortgage / Loan Carry 4.7%

@ 40 years 83.7%

LTV22,455.61

Total Profit- monthly

$16,591.12199,093.38

annually

Return on Investm

ent 21.0%

Triangle House ///

A New Way to Stay // Concept Design Book



The Triangle House Resort & Spa is a luxury, full service “inner-suburban” resort and conference center, with an emphasis on world-class facilities and service made comfortable with some south-ern hospitality. The project is an architectural, technological, and ecological showpiece for the “New North Carolina” which is building its reputation from the RDU/Triangle area, based of world-class universities, research and industry, mild seasonal weather, and a quality of life paralleled by very few places in the country.

The Triangle House Resort & Spa will have a focus on hosting small to medium sized university and corporate meetings and conferences. We will capitalize on the triangle’s geography and ex-istent conference business and area attractions by providing the areas only world-class banquet and meeting spaces with conference focused facilities and guest-facing technologies. The Tri-angle House will continue the areas rich traditions of producing and showcasing world-class and local talent in the event lounge space.

The hotel will tell this rich history through art, and help create new chapters with Artist-in- residen-cy programs and providing a venue for the creation and expression for the wealth of talent in our area.

The areas legendary universities and athletic programs will be steady drivers of business, includ-ing conferences, graduations, game-days, and other events. Banquet facilities, performance lounge, spa, retail and bar will also bring steady visibility, traffic, and revenue. The hotel will of-fer memberships to the private social club, which provides access to the wine bar and rooftop lounge, fitness facilities, preferential considerations for restaurant reservations, event tickets, facili-ties access, and discounts on hotel rooms.

Designed by world-class architects and expertly appointed, Triangle House blends world-class hospitality with a collection of exquisite condominium residences located in the heart of the RTP area. Residents will enjoy access to Triangle House’s superlative services and offerings in addi-tion to an array of enviable building amenities. The Residences at Triangle House represents the ultimate in



The property will be a hospitable and conducive environment for gathering, celebrating, work-ing, creating, and relaxation, with a staff that exudes sincere hospitality and professionalism, without the stuffiness.

The property will carry a mystique and demand reminiscent of what the Morgan Hotels had when they first opened. Where people wanted to stay there because it was the place to be in that area, where you experienced the newest trends, and you never know who would also be-ing staying there. With a spa, pool, fantastic restaurants, rooftop and lobby bars, and the hot-test club and live music venue in the area, a guest has no reason to leave the property. We will create this experience, and enable the guests to take some of the it with them, with our “Take it with You” program, which allows the guests to purchase anything they experienced at the hotel (bed, sheets, furniture, TV, food, art, etc).

Additional property amenities will include a library to access and showcase research and the pursuit of knowledge. A place for people to study, work, and research, utilizing mobile kiosks linked to university libraries, with printing, creation, and business center facilities available.


Team //


Scott Bednaz is a commercial broker and developer with 19 years experience in North and South Carolina. As President of TerraCorp Commercial properties and Tallus Development group Mr. Bednaz has negotiated the purchase, sale, or lease of 1 million square feet of commercial space, 3,500 acres of land resulting in $100 million in completed transactions. In 2005 he branched out from representation to develop his own projects including Advanced Auto, Hooters Burlington, The Estates at Barton’s Creek, and the Straw Valley Project. His projects have been recognized by multiple news and architectural outlets and received awards from the NC and Durham Preservation Societies.

Isaac Brown has been Director of Emerging Markets for Choice HotelsInternational for the past 9 years and has worked with Marriott developing over 60 properties. Prior to his cur-rent position, he was Architectural Designer, where he was responsible for prototype design for all Choice brands, and design reviews which

Mr. Brown will be

these brands. In addition he has been responsible for almost a half a billion dollars worth of revenue during his tenure working in development at Choice International.leaving Choice durring 2013 in his full-time capacity, and is currently in the early stages of developing four other properties where he is majority principal in the project. Mr. Brownhas a masters degree in architecture from Louisiana State Universityand a MBA from New York University. Mr. Brown is a New York City native and will lead the development team for the project.

Cedric H Watkins is a technologist and founder of a technology compa-ny providing solutions for the hospi-tality industry, Adjacent Innovations. Mr. Watkins is a seasoned business development and marketing execu-tive who has founded marketing and technology companies and has done development projects in Raleigh and Newark, New Jersey.

After attending UNC-Chapel Hill where he studied Management andSociology, Mr. Watkins has lived in Manhattan and Miami for the last12 years where he has developed a

real estate, hospitality, design, tech-nology, and entertainment. Mr.Watkins will be project coordinator, lead business development, andserve as technology and guest expe-rience architect.

Jordan Trachtenberg Assoc. AIA, LEED AP has practiced architecture

-nents ranging from Asia to South America. During 2009-2012 in Am-sterdam, NL, while practicing under Ben van Berkel at UNStudio, Jordan led the design and execution as Coordinating Architect /Project Man-ager on several successful projects such as the Singapore University

-ish completion in 2014. In addition, Jordan led the design on successful competitions, small built projects, in-terior, and industrial design solutions, such as the Library + Center for New

-ship store in Rome, Italy and the 29th Annual Art Biennale’s Youturn Pavil-ion in Sao Paulo, Brazil.

Jordan received the degree Master of Architecture, with Honors in De-sign, from Columbia University, NY, and holds a Bachelor of Design in Architecture, with Honors, from Flori-da International University, Miami.

Michael Sims, Jr. is an architectural design professional now living and working in Europe. He has over 10 years professional experience in

-combe), Coop-Himmelblau (Wolf-gang Prix), Frank Gehry Associates, SOM (NY), UN Studio (Ben van Berkel), and co-taught workshops with Lebbeus Woods.

As a proponent of BIM and paramet-ric design processes, Mr. Sims has

projects including Manhattan’s tallest residential tower, Frank Gehry’s new 8 Spruce Street tower, the King of Morocco’s current theatre project, and the UN Studio in Amsterdam. He earned his Masters of Architec-ture from SCI-ARC, and a Bachelor of Architecture from the University of North Carolina at Charlotte. Mr. Sims has taught digital design at AIU (American Intercontinental Univer-sity) in Los Angeles, and was an SOM instructor in an applied studies research collaboration with SCI-Arc, investigating concepts related to responsive kinetic façades. He is now with Zaha Hadid Architects in London.

Team ///


Team /// Jordan Trachtenberg // Architecture Projects Sample Work

www.jordantrachtenberg.com

Pavilion / Sao Paulo, Brazil University / NYC, New YorkUniversity / NYC, New York

Hotel / Philidelphia, PALibrary / Ghent, Belgium

Library / Ghent, Belgium

University / Singapore

University / Singapore Performing Art Center / S. Korea Performing Art Center / S. Korea

Office Park / South Korea

Pavilion / Sao Paulo, Brazil


Team /// Michael Sims /// Architecture Projects

Residential Tower / NYC, NY

Residential Tower / NYC, NY

Mixed Use / China Tower / Abu Dhabi

Tower / Abu Dhabi Symphony Center / Miami, Florida

Theater / Morocco

Symphony Center

Symphony Center



Sample Work


Design Model //


Organization /// Event as an Integrated Concept

EventSpace

Auditorium

Restaurant

Pool + Deck

EventSpace

Bed

Bath

EventSpace

Eventspace

Bath

Bath

Bed

Bed

Lounge

Back oces

Stage

Logistics

Kitchen

Lounge +Bar

Parking

Lounge

Lounge

Relations

public primary

secondary

tertiary

semi-public


Loft Quarters

Single Quarters

21

EventSpace

Auditorium

Restaurant

Pool + Deck

EventSpace

Bed

Bath

EventSpace

Eventspace

Bath

Bath

Bed

Bed

Lounge

Back oces

Stage

Logistics

Kitchen

Lounge +Bar

Parking

Lounge

Lounge

Relations

public primary

secondary

tertiary

semi-public


Loft Quarters

Single Quarters

21

The Event Space becomes the central nucleus to the program. All spaces are in-terwoven and interdependent. The circula-tion around the event spaces are a direct connection between the different clusters. The secondary route, within each cluster, leads each visitor through the experience.

The functional diagram shows the various user levels magnified to best visualize and represent each relationship. It fulfills the event space as a crucial link, as well as an element that binds together the differ-ent spaces of the hotel.The relationship between the Event Spac-es and the surrounding clusters creates various degrees of public / dynamic (cen-tral event space, Lounges, Restaurants) to private / introvert (quiet lounges, quar-ters.)

The shared Lounge/event spaces in turn form the internal link between the clusters of Quarters, and provide a smooth transi-tion through the main event spaces. This seamless interweaving of function and circulation also creates various spatial experiences of open spaces, to intimate enclosed areas, and excites the visitors to discover and participate in the new way to stay.


Design Strategies ///

Vertical Landscape - Minimum Site Coverage - Iconic

Urban Social Landscape - Max Site Coverage

Vertical to LateralOur design philosophy is flexible in its concept. Depending on each site in context we adapt the design model to both vertical and horizontal typologies. This promotes a true understanding of our site, its surroundings, and how to best integrate the design model.


Organization /// Design Model //

INPUT | Basic Program 100 units50 Single30 Doubble10 Suites6 Condos 2500 SQ feet of Event Space

01 Program 02 Placement 03 Design model04 Site Specific adapta-tion

SIte Placement and Typical Organization- Maintains program requirements - Approach does not promote program intergration

Adaptable Model | Pulling of floor plates- Pulling out frees up internal space for events- Creates a central organizational atrium - Maintains program requirements while promoting program integration- Landscape connectivity from inside out

Site Specific | Straw valleyApplying to the Site and making small adjustments adapts the Design model to its most ideal site to shape relationship.


Organization /// Site Model //

UNC/Duke/DPAC - 6mi.Research Triangle Park - 11 miRDU Airport - 16 mi.Raleigh/NC State/PNC Center - 20 mi.

Northwest View

North West

Exisitng Straw valley Cafe Proposed Triangle House Resort and Spa


Urban Context // Site Diagram

Straw Valley Site

40FWY

Marriott Suites

Hilton Homewood Suites

15 501

University ofNorth Carolina

Duke University Downtown DurhamDurham Performing Art Center

Research Triangle ParkRDU Airport


Principles /// Sketch // Atrium Space Ground Level


Principles /// Sketch // Atrium Space Pool Level


Principles /// Sketch // Landscape Connectivity


Principles /// Sketch // Site and view


Program Typologies /// Example aesthetics

Quarters //

Event Spaces //

Common Spaces//


Referenced ///


Details /// Technology + Space + FunctionalityEach square foot is thought about in detail. How to maximize interactivity, comfort and usability


Details /// Finishes, Materials, Texture, LightingCrisp and simple details will allow the design to maintain a cost effective background and elegant foreground. // Crisp, sharp, elegant, defining,


Financials //


Financials/// Total Project Cost $9.5MM for 80 hotel keys + $ 6MM to build 20 condos + $4MM for land

Number of Keys - 80 built at $180/sq. ft. = $9.5MM Cost per Key - $119KComp Value for completed project $300K per key = $24MM ($500k = $40MM)Land (amortized purchase 4-5 yrs.) $4MMConstruction cost $15.5MM Total (land +const.) = $20MM10 condo units with 1350 sq. ft. to be sold at $203/sq. ft. = per unit $2757K 10 condo units with 2000 sq. ft. to be sold at $200/sq. ft = per unit $400K Condo Sales - 20 units = $6.75MM80 Hotel Rooms with an average room size of 600 sq. ft. 48000 Sq. ft of hotel space built for $ 180 sq. ft = $8.64MM33500 sq. ft of condo space built for $180 sq. ft = $6MM5000 sq. ft of event and gathering space built for $130 sq. ft = $650K

Median Home price in RTP is $343KPrice per sq. ft Durham - $92 Chapel Hill - $220 Cary - $118

Revenue StreamsHotel: 80 rooms with a 60% occupancy rate has 17520 paid room nights with a ADR of $250 gen-erates $4.3M/yr in revenues which is $358K/mo Banquet - $1MM/yr. Bars/Rest./Clubs - $1.5MM

Hotel will be worth $30MM with a $15MM mortgage which is a 50% LTVCondo owners can put their units into the hotel rental program when vacant and earn ROI, which makes attractive to parents of students at local universities and foreign investors.

Located on five acres and one of the busiest intersections in thestate, 15-501 (100K VPD) and I-40 (20K VPD)Convenient to and offering shuttle service to major area destinations

UNC/Duke/DPAC - 6mi.Research Triangle Park - 11 miRDU Airport - 16 mi.Raleigh/NC State/PNC Center - 20 mi.

- University community provides for constant stream of business ofconferences, events, banquest, and area visitation- Luxury market historicly has higher occupancy rates than statewide ADR of 61%- World-class amenities, including spa, restaurant, rooftop lounge,pool, and private social club coupled with event, banquet, retail, and performance space will be incomparable to all other properties in the area, making it adistinctive destination attraction


Investin

g in

secon

dary

mark

ets is lucra

tive

19

Feb

rua

ry 2

01

3

By

Aik

Ho

ng

Ta

n

Ho

telNew

sNo

w.co

m co

lum

nist

S

tory

Hig

hlig

hts

W

ith in

terest rates remain

ing at h

istoric lo

w lev

els, cash-o

n-cash

yield

inv

esting in

secon

dary

mark

ets can b

e lucrativ

e with

the ap

pro

priate lev

el of lev

erage.

T

he k

ey to

successfu

l inv

estmen

ts in seco

nd

ary m

arkets is th

e existen

ce of d

iverse an

d

sustain

able d

eman

d g

enerato

rs.

T

he n

um

ber o

f dem

and

driv

ers in seco

nd

ary m

arkets is m

ore targ

eted th

an in

majo

r

mark

ets.

As th

e ind

ustry

recov

ery co

ntin

ues to

gain

mo

men

tum

, op

po

rtun

ities for in

vesto

rs abo

un

d.

Wh

ether it’s a fu

ll-service p

roperty

in N

ew Y

ork

, San

Fran

cisco o

r Miam

i, a select service h

otel

in P

ittsbu

rgh

or R

aleigh

, No

rth C

arolin

a, or a lim

ited-serv

ice asset in F

risco, T

exas, o

r Pu

eblo

,

Co

lorad

o, th

ere is no

sho

rtage o

f capital w

aiting to

get o

ff the sid

elines an

d b

ack in

the g

ame.

With

real estate inv

estmen

t trusts, so

vereig

n fu

nd

s and

institu

tion

al capital ch

asing d

eals in th

e

majo

r mark

ets, yield

s are bein

g d

riven

do

wn

to th

e range o

f 3%

to 5

%. T

he situ

ation

is qu

ite

differen

t in th

e secon

dary

mark

ets, wh

ere capitalizatio

n rates are ran

gin

g fro

m 8

.5%

up

to as

hig

h as 1

2%

. As a resu

lt, with

interest rates rem

ainin

g at h

istoric lo

w lev

els, cash-o

n-cash

yield

inv

esting in

secon

dary

mark

ets can b

e

lucrativ

e with

the ap

pro

priate lev

el of

leverag

e.

With

that said

, to b

e successfu

l, an in

vesto

r mu

st pay

special atten

tion

to sp

ecific issues th

at are

un

iqu

e to an

y seco

nd

ary-m

arket d

eal.

Dem

an

d

First an

d fo

remo

st, as with

deals o

f any k

ind

, careful stu

dy an

d u

nd

erstand

ing o

f dem

and

gen

erators in

the m

arket are cru

cial. Th

e nu

mb

er and

natu

re of d

eman

d d

rivers in

secon

dary

mark

ets tend

s to b

e fewer an

d m

ore targ

eted th

an in

majo

r mark

ets such

as New

Yo

rk o

r Lo

s

An

geles.

It is imp

ortan

t to u

nd

erstand

the d

yn

amics th

at draw

travelers to

the area. S

om

etimes it can

be a

single lan

dm

ark su

ch as a co

llege o

r military

base. In

these cases, it is essen

tial to realize th

at

even

on

e single ev

ent, lik

e the clo

sure o

f the m

ilitary b

ase, can h

ave a m

ajor im

pact o

n d

eman

d.

In o

ther cases, facto

rs such

as the co

nstru

ction

or m

ajor refu

rbish

men

t of a facto

ry m

igh

t brin

g

new

, sho

rt-term d

eman

d to

the m

arket, cau

sing o

ccup

ancy an

d av

erage d

aily rate to

increase b

ut

on

ly tem

po

rarily.

Th

e key

to su

ccessful in

vestm

ents in

secon

da

ry m

ark

ets is the ex

istence

of d

iverse a

nd

susta

ina

ble d

ema

nd

gen

erato

rs. Ex

am

ples m

igh

t inclu

de a

stron

g co

rpo

rate b

ase, a

ma

jor

un

iversity

or p

op

ula

r attra

ction

s tha

t dra

w leisu

re trav

elers on

a co

nsisten

t ba

sis.

On

e exam

ple o

f such

a mark

et is Bu

rlingto

n, V

ermo

nt. G

E, IB

M an

d B

en &

Jerry’s ice cream

hav

e a majo

r corp

orate p

resence th

ere. Th

e Un

iversity

of V

ermo

nt an

d L

ake C

ham

plain

also

attract week

end

travelers fro

m N

ew E

nglan

d as w

ell as Can

ada. W

ith th

e excep

tion

of a slig

ht

declin

e du

ring th

e dep

th o

f the recessio

n in

20

09

, the rev

enu

e per av

ailable ro

om

in th

e

Bu

rlingto

n m

arket h

as increased

con

sistently

by 4

% to

5%

ann

ually

from

20

07

to 2

01

2.

Su

pp

ly

Ev

en th

ou

gh

barriers to

entry

in seco

nd

ary m

arkets are n

ot as h

igh

as in m

ajo

r mark

ets, careful

con

sideratio

n n

eeds to

be g

iven

to k

ey v

ariables. A

t the to

p o

f that list is lo

cation

as it pertain

s to

po

tential n

ew su

pp

ly. F

or ex

amp

le, it is better to

be in

the d

ow

nto

wn

or co

re center o

f a

secon

dary

mark

et rather th

an at a h

igh

way lo

cation

in th

e ou

ter ring. W

hy? It is h

arder to

bu

ild in

the u

rban

center d

ue to

infill an

d p

ermittin

g co

nstrain

ts, and b

ecause su

pp

ly is lim

ited in

tho

se

areas, it po

ses a distin

ct adv

antag

e if a ho

tel can b

e acqu

ired in

the u

rban

center.

Bu

yin

g at sig

nifican

t valu

e belo

w rep

lacemen

t costs is also

a go

od

strategy as it p

rovid

es a

sign

ificant co

st adv

antag

e ov

er a new

-bu

ild h

otel. S

ecurin

g affiliatio

n w

ith to

p b

rand

s inclu

din

g

Marrio

tt Intern

ation

al and

Hilto

n W

orld

wid

e with

a reason

able area o

f pro

tection

un

der th

e

franch

ise agreem

ent also

wo

rks to

mitig

ate again

st new

sup

ply

enterin

g th

e mark

et.

Ex

it strateg

y

Ex

it strategies fo

r ho

tels in seco

nd

ary m

arkets m

ust b

e dev

elop

ed strateg

ically an

d ev

aluated

carefully

. On

e qu

estion

to ask

is wh

ether th

e curren

t bran

d w

ill be av

ailable to

the n

ext b

uyer.

Th

is dep

end

s, in larg

e part, o

n th

e age o

f the asset. A

select-service h

otel w

ith a m

ajor flag

mig

ht

sou

nd

like a g

reat op

po

rtun

ity. H

ow

ever, it m

igh

t no

t be su

ch a g

oo

d d

eal if the p

roperty

is 40

years o

ld an

d is u

nlik

ely to

retain th

at same flag

wh

en th

e ow

ner attem

pts to

sell it three o

r fou

r

years later. A

s a result, th

e valu

e of th

e ho

tel will b

e com

pro

mised

greatly

.

It is also im

po

rtant to

pro

ject ho

w an

d w

hy th

e valu

e of th

e asset will in

crease by th

e time th

e

ho

tel wo

uld

be so

ld. In

majo

r mark

ets, sup

ply

con

straints an

d scarcity

of lan

d d

rive a n

atural

app

reciation

of real estate p

rices ov

er time. T

his is n

ot th

e case in seco

nd

ary m

arkets, w

here real

estate valu

es are mo

re sub

ject to a ran

ge o

f variab

les.

Th

e mo

st critical factor is h

ow

cash flo

w o

f the h

otel w

ou

ld g

row

. To b

e successfu

l, a bu

yer in

a

secon

dary

mark

et mu

st clearly d

evelo

p an

d im

plem

ent a p

lan to

increase th

e cash flo

w o

f the

pro

perty

betw

een th

e time o

f acqu

isition

and

the tim

e of sale. S

om

e strategies to

accom

plish

this

cou

ld in

clud

e an u

pgrad

e of th

e bran

d as w

ell as mo

re focu

sed an

d so

ph

isticated m

anag

emen

t

than

the p

revio

us o

wn

er.

Co

nclu

sion

N

ew Y

ork

’s Tim

es Sq

uare an

d M

ain S

treet’s tow

n sq

uare each

offer o

pp

ortu

nities fo

r the h

otel

inv

estor. T

ho

se wh

o are m

ost su

ccessful are th

e on

es wh

o u

nd

erstand

the d

yn

amics an

d d

istinct

differen

ces betw

een th

e two

mark

et typ

es and w

ho

are able to

iden

tify an

d cap

italize on

the

factors th

at driv

e custo

mer d

eman

d, in

fluen

ce sup

ply

and

hav

e an effectiv

e exit strateg

y.

Dev

elop

men

t execs sh

are recip

es for su

ccess

1

2 F

ebru

ary

20

13

By

Sh

aw

n A

. Tu

rner

Fin

an

ce Ed

itor

Sh

aw

n@

Ho

telNew

sNow

.com

S

tory

Hig

hlig

hts

M

arkets su

ch as A

ustin

, Tex

as, and C

olu

mb

us, O

hio

, are catchin

g th

e eye o

f

dev

elop

men

t execu

tives.

“W

e’ll certainly

chase w

here th

ere is oil d

eman

d,” C

ho

ice’s Sh

ane P

latt said.

G

eneratio

n X

, Gen

eration

Y an

d m

illenn

ials are driv

ing th

e desig

n o

f ho

tels tod

ay,

pan

elists said.

HO

US

TO

N—

Bran

d ex

ecutiv

es detailed

their recip

es for d

evelo

pm

ent su

ccess Mo

nd

ay d

urin

g an

open

ing d

ay p

anel at th

e H

osp

itality L

aw C

on

ference.

Th

e pan

elists agreed

the to

p 2

0 U

.S. m

arkets are still en

vo

gu

e, bu

t they

also are in

creasingly

find

ing su

ccess in m

arkets su

ch as

Au

stin, T

exas; C

olu

mb

us, O

hio

; and

Pittsb

urg

h.

“So

me o

f these seco

nd

-tier mark

ets are ph

eno

men

al,” said C

hip

Ohlsso

n, V

P o

f dev

elop

men

t at Starw

oo

d H

otels &

Reso

rts W

orld

wid

e.

Sh

ane P

latt, VP

of fran

chise sales an

d d

evelo

pm

ent at C

ho

ice Ho

tels Intern

ation

al, said it’s a “n

o b

rainer” th

at man

y o

f the

com

pan

y’s b

rand

s, such

as Cam

bria S

uites, n

eed to

be in

the to

p U

.S. m

arkets. B

ut creativ

e dev

elop

men

t creeps in

to th

e pictu

re

wh

en co

nsid

ering so

me o

ther C

ho

ice bran

ds, su

ch as S

leep In

n.

Platt said

wh

en co

nsid

ering d

evelo

pm

ent o

f that b

rand

, the co

mp

any lo

oks fo

r small m

arkets th

at can su

pp

ort o

nly

on

e or tw

o

ho

tels.

“Mid

-mark

et rates did

n’t fall as far,” P

latt said. “T

here’s b

een b

ig in

terest in d

evelo

pm

ent o

f secon

dary

and

tertiary m

arkets w

ith

the rig

ht b

rand

s.” Th

ere is a lot o

f dev

elop

er interest in

the S

leep In

n b

rand

also b

ecause it is an

afford

able b

rand

to b

uild

, he

add

ed.

Dev

elop

ing

aro

un

d en

ergy

A

merica’s en

ergy in

du

stry b

oo

m in

mark

ets such

as No

rth D

ako

ta and

Tex

as has b

een a b

oon

to th

e ho

tel indu

stry, p

anelists said

.

Earlier in

the d

ay, S

teph

en B

arth, fo

un

der an

d p

residen

t of H

osp

italityL

awyer.co

m, talk

ed ab

ou

t a Mo

tel 6 p

rop

erty in

Od

essa, T

exas, th

at is gen

erating a $

31

0 av

erage d

aily rate th

anks to

the en

ergy in

du

stry.

“It’s crazy rig

ht n

ow

,” Oh

lsson

said d

urin

g th

e pan

el.

An

d th

e execu

tives said

they

’re loo

kin

g to

get th

eir share o

f the m

arket. T

ye T

urm

an, sen

ior V

P o

f hotel d

evelo

pm

ent at M

arriott

Intern

ation

al, said th

e com

pan

y is activ

ely seek

ing d

evelo

pm

ent o

pp

ortu

nities fo

r its Fairfield

bran

d in

oil-p

atch m

arkets.

“We’ll certain

ly ch

ase wh

ere there is o

il dem

and

,” Platt said

. “If they

keep

find

ing o

il, they

’ll keep

bu

ildin

g h

otels.”

Desig

n in

fluen

ce

Th

e pan

elists also d

iscussed

the em

ergin

g m

arket d

ictating th

e desig

n o

f these h

otels.

Wh

ile the b

aby-b

oo

mer g

eneratio

n is still o

n th

e road

, it is Gen

eration

X, G

eneratio

n Y

and m

illenn

ials wh

o are in

fluen

cing h

otel

desig

n, th

e pan

elists said.

“No

w w

e are desig

nin

g h

otels fo

r the so

cial med

ia netw

ork

ing g

rou

p,” O

hlsso

n said

. “Th

ey w

ant in

stant resu

lts.”

Recen

t up

dates to

the C

ou

rtyard

by M

arriott b

rand, fo

r instan

ce, were m

ade w

ith th

ese new

travelers in

min

d, T

urm

an said

.

“At th

e end

of th

e day

, bab

y b

oom

ers, they

’re still travelin

g. B

ut G

eneratio

n X

, Gen

eration

Y, th

ey’re th

e on

es we h

ave to

app

eal

to,” h

e said.

So

wh

en th

inkin

g ab

ou

t the red

esign

of th

e Cou

rtyard

by M

arriott p

rop

erties, Marrio

tt focu

sed o

n ro

un

ded

corn

ers instead

of

straigh

t lines, T

urm

an said

. Th

e com

pan

y also

cho

se mu

ted earth

ton

es for th

e gu

estroo

ms b

ecause th

ese gen

eration

s of trav

elers

ind

icated th

ey w

anted

to relax

first and

thin

k ab

ou

t wo

rk seco

nd

.

Th

e chan

ges w

ere rolled

ou

t in D

ecemb

er du

ring th

e com

pan

y’s an

nu

al Co

urty

ard b

y M

arriott b

rand

con

ference.

Co

mp

anies are also

loo

kin

g to

eke o

ut as m

uch

fun

ction

ality as p

ossib

le from

pu

blic sp

aces, the p

anelists said

.

“It’s abo

ut g

etting p

eop

le ou

t of th

eir roo

ms an

d creatin

g a co

mm

un

ity en

viro

nm

ent,” S

tarwo

od

Ho

tels’ Oh

lsson

said.

$2

0-m

illion

wish

list M

od

erator R

ich S

prech

er, VP

of b

usin

ess dev

elop

men

t at Aim

brid

ge H

osp

itality, ask

ed th

e pan

elists wh

at they

wo

uld

do

in th

e h

otel secto

r if han

ded

a $20

-millio

n ch

eck.

“I wo

uld

love to

say I’d

go

ou

t and

do

new

con

structio

n,” O

hlsso

n said

.

Instead

, Oh

lsson

said h

e’d lik

ely acq

uire an

office b

uild

ing an

d co

nvert it to

a desig

n-cen

tered b

rand

.

“Desig

n is th

e futu

re of o

ur in

du

stry,” h

e said.

Ch

oice’s P

latt said h

e’d d

evelo

p a v

ariety o

f ho

tels in v

ariou

s mark

ets and

mig

ht also

loo

k to

acqu

ire an o

ffice bu

ildin

g an

d g

ive

it “a fresh n

ew lo

ok” as a h

otel.

An

d fin

ally, T

urm

an said

his w

ishes fo

r the $

20

millio

n are n

ot as co

mp

lex. H

e wo

uld

dev

elop as m

any T

ow

neP

lace Su

ites by

Marrio

tt and

Fairfield

Inn

& S

uites p

rop

erties as po

ssible b

ecause d

evelo

pers h

ave sh

ow

n a h

igh

level o

f interest in

the b

rand

s.

“In o

ur in

du

stry, so

metim

es we th

ink to

o m

uch

,” he said

. “We th

ink it’s ro

cket scien

ce, and

it do

esn’t n

eed to

be.”

Move-in

s help

pu

sh d

ema

nd

in co

llege to

wn

s

1

4 S

eptem

ber 2

01

2

By

Sa

ma

nth

a W

org

ull

Ed

itoria

l Assista

nt

swo

rgu

ll@h

oteln

ewsn

ow

.com

S

tory

Hig

hlig

hts

T

he C

arolin

a Inn

, a histo

ric ho

tel located

directly

on

UN

C’s cam

pu

s, sells ou

t every

mo

ve-in

week

end

.

O

ccup

ancy in

creased b

y at least 1

0%

in select U

.S. co

llege to

wn

s in co

mp

arison

to Ju

ly

year-to

-date n

um

bers.

F

argo

, No

rth D

ako

ta, had

the h

igh

est occu

pan

cy rates d

urin

g m

ov

e-in

week

end

.

RE

PO

RT

FR

OM

TH

E U

.S.—

While th

e fall travel seaso

n m

eans a b

oo

n fo

r man

y u

rban

ho

tels, pro

perties in

mo

re

isolated

colleg

e tow

ns trad

itionally

also

repo

rt a dem

and

up

tick as stu

den

ts—and

their p

arents—

return

to ca

mp

us.

In A

nn A

rbo

r, Mich

igan, th

e Univ

ersity o

f Mic

hig

an is a stead

y d

em

and

driv

er, accord

ing to

Joe S

efcovic, G

M at

the H

olid

ay In

n n

ear the U

niv

ersity o

f Mich

igan.

“We h

ave 9

,70

0 k

ids m

ove in

to th

e do

rms at th

e univ

ersity, an

d a to

tal of 5

0,0

00

go

to th

e univ

ersity, so

we see all

tho

se peo

ple m

ovin

g in

to to

wn,” h

e said “It d

efinitely

accelerates occu

pan

cy.”

Occu

pan

cy at h

is 22

5-ro

om

pro

perty

—th

e largest h

otel in

Ann A

rbo

r—w

as 90

% d

urin

g th

e univ

ersity’s m

ove-in

wee

ken

d d

urin

g 3

1 A

ug

ust.

Durin

g th

e first seven

mo

nth

s of th

e year, h

otels in

the m

arket rep

orted

an av

erage o

ccup

ancy o

f 69

.3%

, averag

e

daily

rate of $

88

.70, an

d rev

enue p

er availab

le roo

m o

f $6

1.4

3, acco

rdin

g to

ST

R, p

arent co

mp

an

y o

f

Ho

telNew

sNo

w.co

m.

Perfo

rmance d

urin

g F

riday a

nd

Satu

rday n

ight o

f mo

ve-in

week

end

were m

uch stro

nger: O

ccup

ancy w

as 90

.1%

and

88

.9%

; AD

R w

as $

94

.01

and

$9

2.0

8; an

d R

evP

AR

was $

84

.72

and

$81

.90

, respectiv

ely.

Ho

teliers in C

hap

el Hill, N

orth

Caro

lina—

ho

me to

The U

niv

ersity o

f No

rth C

arolin

a at Chap

el Hill—

saw

a similar

bu

mp

in p

erform

ance, acco

rdin

g to

ST

R d

ata. Ho

teliers reported

averag

e occu

pan

cy o

f 90

.4%

and

80

.7%

; AD

R o

f

$1

19

.49

and

11

8.7

5; an

d R

evP

AR

of $

10

8.0

3 an

d $

95

.88

on 1

7 an

d 1

8 A

ugu

st, respectiv

ely.

July

year-to

-date n

um

bers sh

ow

ed o

ccup

ancy o

f 70

.2%

, AD

R o

f $1

10

.58 an

d R

evP

AR

of $

77

.58

.

Th

e Ca

rolin

a In

n, a

histo

ric ho

tel loca

ted d

irectly o

n U

NC

’s cam

pu

s, sees d

em

an

d in

crea

se du

ring

ever

y

ma

jor w

eek

end

thro

ug

ho

ut th

e scho

ol y

ea

r, inclu

din

g m

ov

e-in

, ma

jor sp

ortin

g ev

ents a

nd

un

iver

sity-re

lated

mee

ting

s, said

GM

Ja

ck S

chm

idt.

“W

e sell ou

t ever

y m

ov

e-in

wee

ken

d a

nd

du

ring

seven

ho

me fo

otb

all g

am

es

thro

ug

ho

ut th

e scho

ol y

ear,”

he sa

id. “

It's a g

oo

d p

lace

to b

e beca

use n

ob

od

y is fu

lly in

sula

ted fro

m

do

wn

turn

s in th

e eco

no

my

, an

d u

niv

ersitie

s driv

e a lo

t of b

usin

ess.”

Man

ish A

tma, o

wner o

f Atm

a Ho

tel Gro

up

, wh

ich m

anag

es a H

olid

ay In

n E

xp

ress, a Ham

pto

n In

n &

Suites a

nd

a

Ham

pto

n In

n in

Chap

el Hill, said

mo

ve-in

wee

kend

is like an

y o

ther.

“We d

o see a sp

ike in

occu

pan

cy in

Au

gu

st wh

en tra

vel is a little b

it slow

, but it’s stag

gere

d,” h

e said. “It’s a n

orm

al

wee

ken

d, b

ut th

e differe

nce is w

e get a lo

t of q

uestio

ns fro

m th

e fam

ily ab

out th

e tow

n.”

Atm

a add

ed ap

pro

xim

ately

70

% o

f his h

otels’ b

usin

ess com

es from

UN

C a

nd

UN

C H

ealth C

are, a no

t-for-p

rofit

health

-care syste

m a

ssociated

with

the u

niv

ersity’s sc

ho

ol o

f med

icine.

And

while F

argo

, No

rth D

ako

ta, repo

rted so

me o

f the co

untry

’s hig

hest o

ccup

ancy rate

s du

ring N

orth

Dak

ota S

tate

Univ

ersity’s m

ove-in

week

en

d—

96

% an

d 9

5.8

% o

n 1

7 an

d 1

8 A

ugu

st, respectiv

ely—

sou

rces could

no

t confirm

dem

and

was d

irectly a

ttributa

ble to

paren

ts visitin

g.

The 8

3-ro

om

Best W

estern P

lus K

elly In

n &

Suites in

Farg

o, fiv

e mile

s from

ND

SU

’s cam

pus, o

nly

filled th

ree to

five ro

om

s with

mo

ve-in

-related trav

elers, said G

M L

isa Am

ann. S

till, occu

pan

cy at h

er ho

tel w

as 10

0%

durin

g th

e

wee

ken

d.

“It’s no

t an an

om

aly,” sh

e said. “It’s n

ot so

meth

ing w

here th

ere’s an u

nco

nstrain

ed d

em

and

becau

se we’re n

ot n

ext

do

or to

the co

llege.”

San

di A

dam

s, GM

at the 1

51

-roo

m R

adisso

n H

otel F

argo

, located

in th

e heart o

f do

wn

tow

n, said

mo

st of h

er

pro

perty

’s busin

ess com

es fro

m m

eetin

gs an

d co

nferen

ces. She d

oes, h

ow

ever, see so

me p

arents co

min

g to

stay.

“We are m

ore o

f a busin

ess ho

tel, and

we d

o g

et paren

ts here

… b

ut it’s n

ot so

meth

ing th

at is huge n

um

bers a

nd

hu

ge o

ccup

ancy,” sh

e said.

But ev

en th

en, b

eing ab

le to attrib

ute d

em

and

to an

y g

iven g

enerato

r can p

rove ch

allengin

g, A

dam

s add

ed.

“It’s diffic

ult b

ecause w

e do

n’t alw

ays k

no

w w

hy p

eop

le are here to

stay.”

D

ivis

ion o

f Touris

m, F

ilm a

nd S

ports

Develo

pm

ent

2

01

2 N

orth

Caro

lina Lo

dgin

g Re

po

rt

A P

ub

lication

of th

e N

orth

Caro

lina D

ivision

of

Tou

rism, Film

and

Spo

rts De

velo

pm

en

t

Janu

ary 20

13

Division of Tourism, Film and Sports Development

2012 North Carolina Lodging Report

Year-end 2012 hotel/motel occupancy was up 2.5% statewide from 2011. This represents a nearly fourteen percent increase over the last three years, and slightly above 2008 occupancy. Though still down about five percent from the peak in 2007, the last three years have significantly lessened the gap. o The US occupancy and South Atlantic states occupancy were also up 2.5% from 2011.

Smith Travel Research, 2013 *Occupancy – Rooms sold divided by rooms available.

44%

46%

48%

50%

52%

54%

56%

58%

60%

62%

20052006200720082009201020112012

58.3

60.0 60.4

55.9

50.5

53.9

56.1

57.4

Occupancy in North Carolina 2005-2012

+2.9% +0.7% -7.5% +2.8%

-1.5%

-9.7% +6.7% +4.0% +2.5%


In 2012 monthly hotel/motel occupancy followed the same general trend as in recent years. Historically, statewide occupancy is always higher during the summer months and October. Nine months of 2012 experienced the highest occupancy since 2007. Growth was stronger during the spring, summer and early fall, and slowed a bit in late fall/early winter. Information from neighboring states confirms similar trend lines for them, as well as nationwide estimates.

Smith Travel Research, 2013

35%

45%

55%

65%

Janu

ary

Febru

ary

March

Ap

ril

May

Jun

e

July

Au

gust

Septem

ber

Octo

ber

No

vemb

er

Decem

ber

Monthly Occupancy in North Carolina 2007-2012

200720082009201020112012


2012 room rates (ADR) in North Carolina were up 4.5% from 2011, just topping the 2008 average rate to be the highest on record. Room rates have increased seven percent over the last two years. o The US ADR was up 4.2% from 2011. ADR in the South Atlantic states was up 3.1% from 2011.

Smith Travel Research, 2013 *ADR (Average Daily Rate) – Room revenue divided by rooms sold.

$30.00

$45.00

$60.00

$75.00

$90.00

20052006200720082009201020112012

$70.42

$75.73

$81.51 $84.84

$80.21 $79.80 $81.86 $85.34

Average Daily Room Rates (ADR) in North Carolina 2005-2012

+7.5% +7.6% +4.1% +3.8%

+21.2%

-5.5% -0.5% +2.6% +4.5%


Room rates (ADR) in North Carolina in 2012 were the highest on record (+0.5% over the previous high in 2008). In particular, September rates, as a result of the Democratic National Convention, increased four percent statewide (38% in the Carolinas Region). Late fall/early winter saw the highest room rates on record for those particular months.


$65.00

$75.00

$85.00

$95.00

Janu

ary

Febru

ary

March

Ap

ril

May

Jun

e

July

Au

gust

Septem

ber

Octo

ber

No

vemb

er

Decem

ber

Monthly ADR in North Carolina 2007-2012

200720082009201020112012


Statewide, Revenue Per Available Room (RevPAR) was up 7.1% from 2011, nearly reaching the peak set in 2007. RevPAR has increased over twenty percent in the last three years. o Nationally, RevPAR was up 6.8% from 2011. South Atlantic states RevPAR was up 5.7% from 2011.

Smith Travel Research, 2013 *RevPAR – Revenue Per Available Room – Room revenue divided by rooms available (occupancy times average room rate will closely approximate RevPAR)

$35.00

$40.00

$45.00

$50.00

$55.00

20052006200720082009201020112012

$41.02

$45.44

$49.13

$47.46

$40.52

$43.05

$45.92

$49.00

Revenue Per Available Room (RevPAR) in North Carolina 2005-2012

+10.8% +8.1% -3.4% +6.6%

+19.5%

-14.6% +6.2% +6.7% +7.1%


2012 statewide monthly Revenue per Available Room (RevPAR) increased each month from 2011, particularly late spring, summer and early fall. As with ADR, RevPAR was at a record in September, due in part to the increased room rates as a result of the DNC in Charlotte.


$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

$50.00

$55.00

$60.00

$65.00

$70.00

Janu

ary

Febru

ary

March

Ap

ril

May

Jun

e

July

Au

gust

Septem

ber

Octo

ber

No

vemb

er

Decem

ber

Monthly Revenue Per Available Room (RevPAR) in North Carolina 2007-2012

200720082009201020112012


2012 Room Supply was up 0.7% in the state from 2011. Room supply has increased 8.5% since 2005, in small part leading to some of the decrease in occupancy over that time period. Room supply in 2012 is at its highest on record for North Carolina with nearly 53 million room nights available for the year. o Nationally, room supply was up 0.5%. Room supply was flat from 2011 to 2012 in the South Atlantic region overall.

Smith Travel Research, 2013 *Room Supply – The number of rooms times the number of days in the period.

40,000,000

42,000,000

44,000,000

46,000,000

48,000,000

50,000,000

20052006200720082009201020112012

48,621,947 48,511,069 48,920,614

49,750,126 51,185,909 52,272,499 52,407,657 52,765,069

Room Supply in North Carolina 2005-2012

-0.3% +0.8% +1.7% -1.3%

+8.5%

+2.9% +2.1% +0.9% +0.7%


Room Supply in 2012 followed the same trend line as last year, showing more growth in the second half of the year.


3,000,000

3,200,000

3,400,000

3,600,000

3,800,000

4,000,000

4,200,000

4,400,000

4,600,000

4,800,000

5,000,000

Janu

ary

Febru

ary

March

Ap

ril

May

Jun

e

July

Au

gust

Septem

ber

Octo

ber

No

vemb

er

Decem

ber

Monthly Room Supply in North Carolina 2007-2012

200720082009201020112012


2012 Room Demand was up 3.2% in the state, and surpassed 2007 demand to reach a new record for lodging demand in North Carolina. More than 30 million room nights were sold in 2012. Since 2005, room demand is up 7%. o Room demand was up 3.0% nationally and up 2.6% in the South Atlantic region from 2011 to 2012

Smith Travel Research, 2013 *Room Demand – The number of rooms sold (excludes complimentary rooms).

24,000,000

25,000,000

26,000,000

27,000,000

28,000,000

29,000,000

30,000,000

31,000,000

20052006200720082009201020112012

28,326,368

29,082,633 29,509,250

28,075,933

26,222,409

28,140,015

29,396,468

30,296,298

Room Demand in North Carolina 2005-2012

+2.7% +1.5% -4.9% +1.4%

+7.0%

-6.6% +7.3% +4.5% +3.2%


Nearly every month in 2012 showed increased statewide Room Demand from 2011, setting records in many months. Winter months were fairly flat, but spring and summer picked up before slowing in late fall. Due to an increased supply in rooms over the last several years, demand has fared somewhat better than occupancy; meaning a slightly smaller number of people are filling an even larger number of rooms than in previous years.


1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2,200,000

2,400,000

2,600,000

2,800,000

3,000,000

Janu

ary

Febru

ary

March

Ap

ril

May

Jun

e

July

Au

gust

Septem

ber

Octo

ber

No

vemb

er

Decem

ber

Monthly Room Demand in North Carolina 2007-2012

200720082009201020112012


North Carolina room revenues were up 7.9% in 2012 from 2011, reaching nearly $2.6 billion and topping the previous high set in 2007. Statewide room revenues have increased nearly thirty percent since 2005. This is due in part to the increased ADR from 2005-2007, and a resurge in 2011. However, demand has also increased over fifteen percent over the last three years, contributing to the increased revenues as well. o Nationally, room revenues were up 7.3%. In the South Atlantic states, room revenues increased 5.7% from 2011 to 2012.

Smith Travel Research, 2013 *Room Revenue – Total room revenue generated from the sale or rental of rooms.

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

20052006200720082009201020112012

$1.99

$2.20 $2.40 $2.35

$2.06 $2.24

$2.41 $2.59

Room Revenues in North Carolina 2005-2012 ($ billions)

+10.4% +9.2% -2.1% +5.2%

+29.6%

-12.4% +8.5% +7.6% +7.9%


North Carolina room revenues in 2012 showed very positive increases nearly every month over 2011, particularly during September (as a result of the previously noted DNC in Charlotte). However, May through August and October through December also reported strong growth in revenues.


100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

200,000,000

220,000,000

240,000,000

260,000,000

Janu

ary

Febru

ary

March

Ap

ril

May

Jun

e

July

Au

gust

Septem

ber

Octo

ber

No

vemb

er

Decem

ber

Monthly Room Revenues in North Carolina 2007-2012

200720082009201020112012


Methodology

While virtually every chain in the United States provides STR with data on almost all of their properties, there are still some hotels that don't submit data. However, every year STR examines guidebook listings and hotel directories for information on hotels that don't provide data. STR calls each hotel in their database every year to obtain "published" rates for multiple categories. Based on this information all hotels are grouped - those that report data and those that don't - into groupings based off of price level and geographic proximity. They then estimate the non-respondents based off of nearby hotels with similar price levels.

Glossary

ADR (Average Daily Rate)

Revenue (Room Revenue)

Room revenue divided by rooms sold.

Total room revenue generated from the sale or rental of rooms.

Affiliation Date

RevPAR - Revenue Per Available Room

Date the property affiliated with current chain/flag

Room revenue divided by rooms available (occupancy times average room rate will closely approximate RevPAR).

Census (Properties and Rooms)

The number of properties and rooms that exist (universe)

Sample % (Rooms)

The % of rooms STR receives data from. Calculated as (Sample

Change in Rooms

Rooms/Census Rooms) * "100".

Indicator of whether or not an individual hotel has had added or deleted rooms.

Standard Historical TREND

Exchange Rate

Data on selected properties or segments starting in 1997.

The factor used to convert revenue from U.S. Dollars to the local currency.

The exchange rate data is obtained from Oanda.com. Any aggregated number

STR Code

in the report (YTD, Running 3 month, Running 12 month) uses the exchange

Smith Travel Research's proprietary numbering system. Each hotel in the

rate of each relative month when calculating the data.

lodging census has a unique STR code.

Demand (Rooms Sold)

Supply (Rooms Available)

The number of rooms sold (excludes complimentary rooms).

The number of rooms times the number of days in the period.

Full Historical TREND

Twelve Month Moving Average

Data on selected properties or segments starting in 1987.

The value of any given month is computed by taking the value of that month

and the values of the eleven preceding months, adding them together and

Occupancy

dividing by twelve.

Rooms sold divided by rooms available.

Year to Date

Open Date

Average or sum of values starting January 1 of the given year.

Date the property opened

Percent Change

Amount of growth, up, flat, or down from the same period last year (month, ytd, three months, twelve months). Calculated as ((TY-LY)/LY) * "100".

Articles fro

m

recappin

g th

e

2012 L

ifestyle/B

ou

tique H

otel D

evelo

pm

ent C

onferen

ce

Boom

ing B

ou

tiqu

e Bu

siness M

eets in M

iam

i

Bea

ch

Oct 1

9, 2

01

2 7

:06

AM

, By E

d W

atkin

s

So

uth

Flo

rida L

eads th

e Way

Back

in B

ou

tiqu

e/Lifesty

le Seg

men

t

Jason

Po

meran

c of C

om

mu

ne H

otels b

elieves in

som

e cases bran

din

g can

be a n

egativ

e in

ob

tainin

g fin

ancin

g.

It‟s no

surp

rise to an

yo

ne th

at the b

ou

tiqu

e and

lifestyle seg

men

ts of th

e ho

tel ind

ustry

are do

ing

well. A

nd

based

on

stron

g o

peratin

g p

erform

ance in

the secto

r, interest in

the p

rodu

ct has g

ained

a lot o

f gro

un

d in

recent y

ears from

dev

elop

ers, op

erators, len

ders an

d ev

en trad

ition

al bran

d

com

pan

ies. An

d n

ow

here is th

at trend

mo

re evid

ent th

an in

Miam

i, and

in its M

iami B

each

sub

mark

et, on

e of tw

o ep

icenters (M

anh

attan is th

e oth

er) of th

e bo

utiq

ue an

d lifesty

le ho

tel

ind

ustry

.

As Jay

Co

ldren

, vice p

residen

t of lifesty

le bran

ds at M

arriott, said

du

ring an

op

enin

g p

anel at th

is

week

‟s Lifesty

le/Bo

utiq

ue H

otel D

evelo

pm

ent C

on

ference, “If y

ou

‟re seriou

s abo

ut th

is

segm

ent, y

ou

mu

st be in

Miam

i.”

Lo

dg

ing

Ho

spita

lity, in co

nju

nctio

n w

ith H

VS

Ho

tel Man

agem

ent, sp

on

sors L

BH

DC

, wh

ich is

bein

g h

eld at th

e Fo

ntain

ebleau

Ho

tel in M

iami B

each. T

he S

cho

ol o

f Ho

spitality

Man

agem

ent

at Mich

igan

State U

niv

ersity is th

e con

ference‟s acad

emic sp

on

sor.

New

data fro

m S

TR

sho

ws th

e strength

of th

e Miam

i area mark

ets. Year-to

-date th

rou

gh

Au

gu

st

occu

pan

cy fo

r Miam

i was 7

7.7

%, w

hile R

evP

AR

increased

a wh

op

pin

g 8

.2%

. An

d p

erhap

s mo

st

pro

misin

g is th

e new

s that A

DR

has alm

ost fu

lly reco

vered

to p

re-recessio

n lev

els, a pro

cess that

too

k 4

8 m

on

ths.

Th

e success o

f the lifesty

le/bo

utiq

ue seg

men

t is hav

ing an

effect thro

ugh

ou

t the in

du

stry. A

ll

ho

tels, bu

t especially

lifestyle an

d b

ou

tiqu

e pro

perties, n

eed to

beco

me “m

ore ex

perien

tial and

senso

ry, said

Marrio

tt‟s Co

ldren

. “Th

e alternativ

e is to p

erish.”

An

exam

ple o

f how

this seg

men

t has g

row

n is seen

in th

e finan

cing aren

a. Wh

ile man

y b

elieve

it‟s difficu

lt for n

on

-bran

ded

ho

tels to attract d

ebt o

r equ

ity fin

ancin

g, Jaso

n P

om

eranc o

f

Co

mm

un

e Ho

tels said a b

rand

can actu

ally b

e a neg

ative fo

r a bo

utiq

ue h

otel seek

ing fin

ancin

g,

particu

larly in

som

e hig

h-rate m

arkets lik

e New

Yo

rk C

ity.

“With

som

e pro

du

cts and

in so

me m

arkets it‟s w

arranted

[to affiliate w

ith a b

rand

], bu

t lend

ers

and

institu

tion

s are starting to

see in certain

sectors y

ou

can d

o w

itho

ut b

rand

s and

be b

etter off,”

said P

om

eranc. C

om

mu

ne in

clud

es a JdV

Co

llection

and

the T

ho

mp

son

-bran

d h

otels. H

e said

the co

mp

any is also

dev

elop

ing a n

ew v

alue-o

riented

, desig

n-d

riven

chain

that w

ill com

pete w

ith

bo

utiq

ues in

low

er price seg

men

ts.

Marrio

tt‟s Jay C

old

ren say

s all ho

tels need

to tak

e on

som

e of th

e

characteristics o

f bo

utiq

ue h

otels.

No

r surp

risingly

, Co

ldren

of M

arriott h

ad a d

ifferent o

pin

ion

. In ex

plain

ing th

e ration

ale for

Marrio

tt‟s soft-b

rand

Au

tograp

h C

ollectio

n, h

e said, “P

eop

le are loo

kin

g fo

r the ab

ility to

fun

ction

ind

epen

den

tly in

the lifesty

le segm

ent b

ut also

to h

ave a flo

or to

their risk

. By p

lug

gin

g

into

ou

r [reservatio

ns sy

stem] b

ut m

aintain

ing th

e ind

epen

den

t integ

rity o

f these h

otels g

ives

lend

ers a lot m

ore co

mfo

rt and

the fin

ancin

g co

mes a lo

t easier.”

Th

e bo

utiq

ue seg

men

t is a ben

eficiary to

wh

at Den

ihan

Ho

spitality

Presid

ent D

avid

Du

ncan

called a “rain

dro

p reco

very

. Reco

very

very

specifically

dep

end

s on

wh

ere yo

u are,” h

e said,

add

ing th

at wh

ile natio

nw

ide ab

ou

t 35

% o

f job

s lost in

the d

ow

ntu

rn h

ave retu

rned

, in N

ew Y

ork

City

13

5%

of jo

bs h

ave retu

rned

. Den

ihan

has 1

6 h

otels u

nd

er two b

rand

s (Affin

ia and

James)

and

a collectio

n o

f ind

epen

den

t pro

perties. “T

hat‟s w

hy w

e focu

s on

the to

p fiv

e to 1

0 m

arkets

and

in th

e center cities o

f tho

se mark

ets.”

Ev

ery in

du

stry co

nferen

ce pan

el focu

sed o

n th

e bo

utiq

ue seg

men

t seems o

blig

ated to

defin

e the

wo

rd b

ou

tiqu

e, and

this o

ne w

as no

differen

t. Wh

ile terms lik

e “lux

ury

finish

es,” and

“ind

ivid

ualized

exp

eriences” w

ere cited b

y so

me p

anelists, T

rust H

osp

itality P

residen

t & C

OO

Patrick

Go

dd

ard m

ay h

ave h

ad th

e mo

st insig

htfu

l take o

n th

e top

ic.

“In m

any w

ays, a co

nsu

mer‟s lo

dgin

g d

ecision

is a form

of self-ex

pressio

n,” h

e said. “T

hat‟s th

e

way co

nsu

mers b

uy certain

bran

ds o

f cars, cloth

ing o

r sho

es. Th

e ways th

ey ch

oo

se a restauran

t

or a h

otel are reflectio

ns o

f them

selves. S

o w

hen

we‟re creatin

g a b

rand

iden

tity o

r voice, w

e

loo

k at th

e target d

emo

grap

hic an

d th

ink

abo

ut w

hat th

ey w

ant in

their ex

perien

ce.”

“Lifesty

le” may b

e an ev

en h

arder term

to p

in d

ow

n. A

s Co

ldren

said, “E

very

con

sum

er pro

du

ct

on

the m

arket seem

s to h

ave a „lifesty

le‟ ben

t to it, rig

ht d

ow

n to

„lifestyle tires.‟” A

nd

as

mo

derato

r Jeff Hig

ley o

f Sm

ith T

ravel R

esearch n

oted

, the n

otio

n o

f a lifestyle p

rod

uct is really

no

t new

in th

e ho

tel ind

ustry

. “Ev

en K

nig

hts In

n w

as dev

elop

ed d

ecades ag

o as a lifesty

le ho

tel

becau

se it catered to

the lifesty

le of tru

ckers,” h

e said.

Ind

epen

den

t an

d B

ou

tiqu

e Hotels G

ain

Main

stream

Accep

tan

ce

by E

ric Sto

essel Octo

ber 1

9th

, 20

12

Wh

at Ian S

chrag

er and

Bill K

imp

ton

started 2

5 y

ears ago

on

op

po

site end

s of th

e cou

ntry

in

gatew

ay cities lik

e San

Fran

cisco an

d N

ew Y

ork

has n

ow

met in

the m

idd

le. Ind

epen

den

t

bo

utiq

ue h

otels can

wo

rk —

and

thriv

e — in

cities like M

ilwau

kee, an

d d

evelo

pers at th

e fou

rth

ann

ual L

ifestyle/B

ou

tiqu

e Ho

tel Dev

elop

men

t Co

nferen

ce in M

iami th

is week

talked

abo

ut

pro

jects in faraw

ay p

laces like M

on

tana, K

entu

cky an

d T

enn

essee.

Th

e segm

ent h

as reached

main

stream accep

tance b

y co

nsu

mers, in

vesto

rs and

even

the h

otel

franch

ise com

pan

ies.

Jay C

old

ren, v

ice presid

ent o

f lifestyle b

rand

s for M

arriott In

ternatio

nal, said

it‟s becau

se of a

gen

eration

al — an

d tran

sform

ation

al — sh

ift hap

pen

ing as G

en Y

con

sum

ers and

their

preferen

ce for lifesty

le ho

tels take o

ver b

uyin

g p

ow

er from

the B

aby B

oo

mers in

the n

ext fiv

e

years.

Co

ldren

head

s Marrio

tt‟s fast-gro

win

g A

uto

grap

h C

ollectio

n, a p

seud

o-b

rand

allow

ing o

wn

ers

mo

re ind

epen

den

ce, yet a co

nn

ection

to th

e po

werfu

l Marrio

tt system

. Oth

er ho

tel franch

ise

com

pan

ies hav

e similar o

fferings, lik

e Ch

oice‟s A

scend

Co

llection

, and

mo

re will fo

llow

in th

e

nex

t five y

ears, said Jeff L

ow

, CE

O an

d fo

un

der o

f Stash

Ho

tel Rew

ards.

Inv

estors an

d len

ders are also

takin

g n

otice. N

eil Sh

ah, p

residen

t and ch

ief op

erating o

fficer of

Hersh

a Ho

spitality

Tru

st, said in

som

e mark

ets ind

epen

den

ts hav

e recov

ered faster th

an th

eir

bran

ded

-cou

nterp

arts and

are tradin

g at sim

ilar or ev

en p

remiu

m lev

els, in p

art becau

se they are

un

encu

mb

ered o

f a franch

ise or m

anag

emen

t con

tract. He also

add

ed th

at du

ring th

e last cycle

there w

ere man

y len

ders w

ho

were o

nly

interested

in b

rand

ed p

rop

erties. “No

t anym

ore,” h

e said

du

ring a g

eneral sessio

n at th

e Fo

ntain

ebleau

Th

ursd

ay. “T

hat‟s ch

angin

g. M

ore in

vesto

rs are

interested

in in

dep

end

ents.”

Th

e gen

eral acceptan

ce of th

e segm

ent an

d su

ccess stories lik

e the Iro

n H

orse in

Milw

auk

ee

hav

e help

ed o

pen

the d

oo

r to n

ew d

evelo

pm

ent in

secon

dary

mark

ets. Patrick

Go

dd

ard, p

residen

t

of T

rust H

osp

itality, said

his co

mp

any ev

en targ

ets som

e of th

ose n

on

-gatew

ay cities. “T

here are

differen

t prices, in

vestm

ents an

d it m

ay b

e hard

er to g

et finan

cing, b

ut it can

be d

on

e,” he said

.

Wh

en th

is conferen

ce beg

an th

ree years ag

o w

e talked

abo

ut th

e “bu

rgeo

nin

g” lifesty

le and

bo

utiq

ue seg

men

ts. Th

ey‟re n

ow

bo

om

ing.

Related

To

pics: G

eneral |

Ind

epen

den

t Hoteliers S

hare B

est Pra

ctices

Oct 2

3, 2

01

2 9

:03

AM

, By E

ric Sto

essel

Jeff Lo

w, fo

un

der an

d C

EO

of S

tash H

otel R

eward

s, said o

ne o

f the b

iggest ch

allenges facin

g

ind

epen

den

t ho

tel ow

ners an

d o

perato

rs is their “iso

lation

.” Th

ey h

ave n

o “id

ea ban

k” to

draw

from

.

At last w

eek‟s L

ifestyle/B

ou

tiqu

e Ho

tel Dev

elop

men

t Co

nferen

ce at the F

on

taineb

leau in

Miam

i,

a pan

el of in

dep

end

ent h

oteliers trad

ed b

est practices an

d sh

ared sim

ilar stories o

f the ch

allenges

they

face com

petin

g in

a bran

ded

wo

rld. T

he p

anel —

titled, „In

dep

end

ents‟ D

ay‟ —

was

mo

derated

by P

aramo

un

t Lo

dgin

g A

dv

isors A

ssociate M

ichael K

itchen

, and

also in

clud

ed

Stash

‟s Lo

w, C

larend

on

Ho

tel Ow

ner an

d G

eneral M

anag

er Ben

Beth

el, Gem

ston

e Reso

rts

Prin

cipal Jeff M

cInty

re and

Cam

bean

Ho

spitality

Presid

ent B

rian S

chein

blu

m.

“Wh

at‟s coo

l abo

ut b

eing an

ind

epen

den

t is the cu

stom

er tells us w

hat w

e sho

uld

be d

oin

g, n

ot

the b

rand

,” said M

cInty

re. “We‟re in

the b

usin

ess of m

akin

g m

emo

ries.”

Bein

g n

imb

le and

capab

le of reactin

g q

uick

ly to

pro

blem

s and

mark

et situatio

ns w

as the

con

sensu

s adv

antag

e ind

epen

den

ts hav

e. “We can

do

wh

at we w

ant w

hen

we w

ant,” said

Sch

einb

lum

, wh

ose C

amb

ean H

osp

itality o

wn

s and

op

erates fou

r small b

ou

tiqu

e ho

tels in S

ou

th

Beach

.

On

line trav

el agen

cies were th

e big

gest ch

allenge facin

g in

dep

end

ents, th

e pan

el agreed

.

“Ind

epen

den

ts hav

e twice th

e bo

ok

ings fro

m O

TA

s,” said L

ow

. “Th

ink

abo

ut th

at, there‟s so

mu

ch m

on

ey g

oin

g o

ut. M

eanw

hile y

ou

‟re calkin

g y

ou

r win

do

w to

save m

on

ey an

d y

ou

‟ve g

ot

an en

tire wall m

issing. A

lot in

dep

end

ent p

layers ju

st aren‟t aw

are …

“If OT

As are lik

e crack, th

en flash

sales are like m

eth. E

ither w

ay, y

ou

r teeth fall o

ut.”

Stash

Rew

ards h

as app

rox

imately

20

0 h

otel p

artners tak

ing ad

van

tage o

f its loyalty

pro

gram

for

ind

epen

den

ts that h

elps o

ffset franch

ised ch

ains‟ h

ugely

successfu

l reward

s pro

gram

s.

Du

ring th

e do

wn

turn

, Sch

einb

lum

said, th

ere were m

any h

otels p

rob

ably

“bo

rderlin

e losin

g

mo

ney

on

every

single ro

om

they

sold

thro

ugh

OT

As” b

ecause o

f the red

uced

rates and

hig

h

com

missio

ns.

“Cap

ture an

d k

eep,” said

McIn

tyre o

f the strateg

y after b

ringin

g in

a custo

mer th

rou

gh

an O

TA

bo

ok

ing. “W

e do

n‟t ju

st loo

k at th

e 24

% (co

st), bu

t (OT

As) are also

a search en

gin

e to u

s. Man

y

custo

mers lo

ok

at pricin

g an

d p

rod

uct o

fferings an

d th

en b

oo

k at th

e ho

tel‟s web

site. Th

ere is a

billb

oard

effect.”

He also

said O

TA

s cou

ld b

e a “great to

ol” fo

r distressed

pro

perties, w

hich

Gem

ston

e often

is

bro

ugh

t on

to m

anag

e. “As in

dep

end

ents, th

ose ch

ann

els can‟t b

e ign

ored

.”

Lik

e the O

TA

s, wh

ere franch

ise partn

ers often

get b

etter marg

ins th

rou

gh

bran

d-n

ego

tiated rates,

pro

curem

ent w

as anoth

er area of co

ncern

for th

e ind

epen

den

t ho

telier. Lo

w said

he‟s h

eard fro

m

his h

otel p

artners th

at marg

ins th

ey‟re p

ayin

g fo

r pu

rchasin

g p

rodu

cts can b

e 25

%, w

hile th

e rate

is as low

as 17

% fo

r at least on

e of th

e large fran

chise co

mp

anies.

Beth

el, the o

wn

er and

gen

eral man

ager o

f the C

larend

on

, said h

e‟s ord

ered p

rod

ucts d

irect from

Am

azon

.com

and

also reco

mm

end

ed alib

aba.co

m fo

r sou

rcing an

d sh

ipp

ing d

irect from

factories

arou

nd th

e wo

rld.

Beth

el, wh

o h

ad n

o p

rior h

otel ex

perien

ce, said h

e‟s no

t afraid to

call oth

er ow

ners an

d

pro

perties h

e respects to

ask fo

r adv

ice. It was h

is on

ly ed

ucatio

n after m

axin

g o

ut cred

it cards

and

usin

g h

om

e equ

ity lo

ans to

bu

y th

e dilap

idated

bu

ildin

g in

Ph

oen

ix tw

o w

eeks after h

e first

con

sidered

the id

ea.

At th

e Claren

do

n, h

e do

esn‟t see an

RO

I in h

avin

g a sales staff an

d d

oesn

‟t emp

loy a d

irector o

f

sales. Instead

, he h

eavily

incen

ts his fro

nt-d

esk staff w

ith 2

0%

to 5

0%

com

missio

ns fo

r every

roo

m u

pgrad

e, early ch

eck-in

or ad

ditio

nal p

oo

l pass so

ld, m

eanin

g th

ey can

mak

e up

to $

80

,00

0

per y

ear on

their $

10

/ho

ur salary

. “Ou

r fron

t desk

staff is so im

po

rtant, n

ot ju

st for lo

yalty

bu

ildin

g, b

ut to

increase rev

enu

e,” he said

.

Ev

en m

ore o

utsid

e the b

ox

, Beth

el charg

ed g

uests fo

r his p

rop

erty tax

es du

ring th

e do

wn

turn

to

stay aflo

at wh

en h

e cou

ldn

‟t even

mak

e his d

ebt serv

ice. A 5

% p

rop

erty tax

fee was in

clud

ed o

n

all folio

s and

also listed

as a surch

arge at all o

nlin

e sites. “We b

rough

t in $

90

,00

0 in

itially an

d it

enab

led u

s to catch

up

,” he said

. “It‟s no

t wh

at I wan

ted to

do

, bu

t at the tim

e was so

meth

ing I

tho

ugh

t was a g

reat idea w

hen

we w

ere hav

ing p

rob

lems m

akin

g en

ds m

eet.”

Be S

tron

g If Y

ou

Wan

t to F

inan

ce a B

ou

tiqu

e

Hotel

Oct 2

4, 2

01

2 6

:44

AM

, By E

d W

atkin

s

Cash

Flo

w Is th

e Mo

st Imp

ortan

t Ing

redien

t

A p

anel o

n len

din

g to

bo

utiq

ues said

stron

g an

d stab

le cash flo

w is th

e mo

st imp

ortan

t elemen

t in

securin

g fin

ancin

g.

In th

e final an

alysis, fin

din

g fin

ancin

g fo

r a transactio

n in

vo

lvin

g a b

ou

tiqu

e or lifesty

le ho

tel

isn‟t m

uch

differen

t than

for a m

ore trad

ition

al bran

ded

pro

perty

. Mo

st speak

ers on

the to

pic at

last week

‟s Lifesty

le/Bo

utiq

ue H

otel D

evelo

pm

ent C

on

ference in

Miam

i agreed

it‟s all a matter

of stren

gth

: a stron

g sto

ry, stro

ng sp

on

sorsh

ip an

d m

anag

emen

t and

, perh

aps ab

ov

e all, stron

g

cash flo

w.

“In p

uttin

g to

geth

er the cap

ital stack fo

r a bo

utiq

ue p

roperty

, the first q

uestio

ns to

com

e up

are

wh

at is the cash

flow

, ho

w stab

le is it, ho

w d

oes it co

mp

are to th

e peak

of th

e mark

et and

ho

w

mu

ch m

ore ro

om

is there to

gro

w,” said

Fran

k N

ardo

zza, chairm

an &

CE

O o

f RE

H C

apital

Partn

ers, wh

o sp

ok

e on

a pan

el titled „T

he B

ou

tiqu

e Len

din

g L

and

scape.‟ “If w

e can articu

late

the cash

flow

, we can

then

get th

e interest o

f capital, b

oth

deb

t and

equ

ity.”

Fin

an

cing

is easier fo

r bo

utiq

ue p

rop

erties in a

ho

t ma

rket lik

e Mia

mi, sa

id S

uza

nn

e

Am

ad

ucci-A

da

ms o

f Bilzen

Su

mb

erg la

w firm

.

Wh

ile she ag

reed “cash

is kin

g,” atto

rney S

uzan

ne A

mad

ucci-A

dam

s said cap

ital sou

rces also

loo

k at o

ther facto

rs in co

nsid

ering d

ebt o

r equ

ity p

lacemen

t for a b

ou

tiqu

e ho

tel transactio

n.

Lo

cation

, un

iqu

eness o

f pro

du

ct, foo

d an

d b

everag

e offerin

gs an

d sp

on

sorsh

ip are o

n h

er list of

imp

ortan

t items.

“Th

e mark

et is critical. Miam

i is so h

ot rig

ht n

ow

it‟s a lot easier to

get fin

ancin

g fo

r a bo

utiq

ue

ho

tel here,” said

Am

adu

cci-Ad

ams, a p

artner w

ith th

e Miam

i firm o

f Bilzen

Su

mb

erg. “T

he

ho

tel need

s to b

e un

iqu

e and

part o

f that o

ften is fo

od

and

bev

erage. B

ut, at th

e end

of th

e day,

it‟s all abo

ut sp

on

sorsh

ip.”

Still, so

me sig

nifican

t barriers ex

ist for b

ou

tiqu

es that m

ake acq

uirers, an

d esp

ecially d

evelo

pers,

wo

rk h

arder to

get fu

nd

ing fo

r their p

rojects. T

he co

nsen

sus am

on

g p

anelists w

as that b

ou

tiqu

e

and

lifestyle h

otels are fin

anceab

le, bu

t it may

cost m

ore to

do

so. N

ardo

zza specu

lated w

hile

loan

-to-v

alue ratio

s for fin

ancin

g o

f a traditio

nal b

rand

ed h

otel m

ay b

e as hig

h as 7

0%

, it‟s mo

re

like 6

0%

to 6

5%

for n

on

-bran

ded

pro

perties o

r bo

utiq

ue h

otels. A

nd

deb

t yield

s (net o

peratin

g

inco

me d

ivid

ed b

y th

e amo

un

t of th

e loan

) tend

to b

e hig

her, h

e said. C

assie Resn

ick, a v

ice

presid

ent o

f Mast C

apital, p

egg

ed y

ields fo

r bo

utiq

ue d

eals at 9%

-10

% u

p to

13

% if it‟s a

particu

larly risk

y d

eal.

Craig

Green

berg

of 2

1c M

useu

m H

otels said

it too

k a co

mp

licated w

eb o

f finan

cing v

ehicles to

fun

d th

e com

pan

y‟s first b

ou

tiqu

e ho

tel in L

ou

isville, K

Y.

An

oth

er pan

el at the co

nferen

ce tackled

the p

rob

lem o

f ho

w to

ov

ercom

e the o

ften-n

egativ

e

percep

tion

lend

ers hav

e abo

ut u

nb

rand

ed an

d in

dep

end

ent b

ou

tiqu

e ho

tels. Craig

Green

berg

,

presid

ent o

f 21

c Mu

seum

Ho

tels, ackn

ow

ledg

ed th

e issue is esp

ecially critical in

the m

arkets in

wh

ich h

is firm o

perates. T

he co

mp

any h

as a successfu

l pro

perty

op

en in

Lo

uisv

ille, KY

, with

ano

ther to

op

en n

ext m

on

th in

Cin

cinn

ati, follo

wed

by o

ne in

no

rthw

est Ark

ansas.

“It‟s defin

itely m

ore ch

allengin

g, esp

ecially in

smaller o

r med

ium

-sized cities, to

get m

on

ey,”

said G

reenb

erg, w

ho

sho

wed

the au

dien

ce an elab

orate ch

art ou

tlinin

g th

e variety

of fu

nd

ing

sou

rces—a m

ix o

f tax cred

its, rebates, g

rants, eq

uity

and

traditio

nal reco

urse b

ank

loan

s—u

sed

to d

evelo

p th

e first 21

c. “In th

at kin

d o

f env

iron

men

t, it usu

ally tak

es a perfect sto

ry to

pu

t

togeth

er a finan

cing p

ackag

e.”

Oliv

er Strik

er, a directo

r at UB

S In

vestm

ent B

ank

, agreed

, sayin

g h

is firm, w

hich

pro

vid

es bo

th

CM

BS

finan

cing an

d d

irect inv

estmen

t, takes a “h

olistic ap

pro

ach” to

evalu

ating fin

ancin

g

pro

po

sals, bo

th fro

m trad

ition

al ho

tels and

also b

ou

tiqu

e and

lifestyle p

roperties. W

hile h

e said

locatio

n is a p

rimary

factor, it‟s n

ot th

e on

ly o

ne.

“Gatew

ay cities w

ith h

igh

barriers o

f entry

and

dep

th o

f dem

and

are ob

vio

usly

preferred

,” he

said, “b

ut sp

on

sorsh

ip is also

crucial, esp

ecially th

e dep

th o

f exp

erience th

ey h

ave in

the secto

r.

It‟s also im

po

rtant th

e spo

nso

r has sk

in in

the g

ame, b

ecause it fo

rces them

to k

eep th

eir eyes o

n

the b

all.”

Desp

ite these cav

eats, speak

ers on

bo

th p

anels b

elieve fin

ancin

g fo

r bo

utiq

ue an

d lifesty

le

pro

du

cts, bo

th b

rand

ed an

d n

on

-bran

ded

, is beco

min

g m

ore m

ainstream

.

“Becau

se real cash flo

ws are sh

ow

ing u

p o

n th

e bo

ttom

lines o

f bo

utiq

ue h

otels, th

ere is mo

re

receptiv

ity in

the len

din

g co

mm

un

ity to

fun

din

g an

d cap

italizing [th

ese pro

du

cts],” said

Nard

ozza. “It‟s a m

ore fam

iliar pro

du

ct to g

uests an

d a m

ore fam

iliar pro

du

ct to th

e capital

mark

ets.”

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