Feasibility Study of Proposed Woodspring Suites West Iris Dive in SWQ of I-20 Exit 84 Conyers, Georgia 30013

Prepared For Mr. David Babatope, Member Mountain View Hospitality LLC 2183 Salem Road Conyers, Georgia 30013 & Peoples Bank 1793 Highway 138 SE Conyers, Georgia 30013 Feasibility Study of Proposed WoodSpring Suites West Iris Dive in SWQ of I-20 Exit 84 Conyers, Georgia 30013 Prepared By Shamrock Capital LLC 322 N Forest Boulevard Lake Mary, Florida 32746 Date of Analysis October 21, 2016 Date of Report November 28, 2016 SHAMROCK CAPITAL LLC November 28, 2016 Mr. David Babatope, Member Mountain View Hospitality LLC 2183 Salem Road & Peoples Bank 1793 Highway 138 SE Conyers, Georgia 30013 Reference: Feasibility Study Proposed WoodSpring Suites West Iris Dive in SWQ of I-20 Exit 84, Conyers, Georgia 30013 Dear Mr. Babatope & Mr. Khanna: Per your request, on October 21, 2016 we analyzed the Conyers, Georgia lodging market as it pertains to the proposed WoodSpring Suites. Based on the provided 124-room prototype design and an all-in project cost of $7,700,000, the subject property should produce a free-and-clear Internal Rate of Return (IRR) of 10.5%. This return is considered average based on accepted market returns for similar hotel investments. Please review the enclosed report and if you have any questions or need additional information, please feel free to contact us. Respectfully submitted, Shamrock Capital LLC Robert P Hill Christopher M. Keegan 322 N Forest Blvd, Lake Mary, FL 32746 Tel. (407) 402-9042 [email protected] Executive Summary Proposed WoodSpring Suites Prototype Project Summary A proposed 124-room prototype WoodSpring Suites extended-stay hotel is contemplated for the vacant parcel at West Iris Drive & Flat Shoals Road, Conyers, Georgia. The proposed WoodSpring will be positioned as an economy- priced extended-stay hotel. Our research indicates that the 124-room proposed design would be suitable for this market. Client and Intended User The client and intended user of this feasibility study is Mountain View Hospitality LLC. Mr. David Babatope, Member, authorized the preparation of this feasibility study by signing a letter of proposal dated October 17, 2016. Any use of this report by third parties is unauthorized without the written consent of the Client and Shamrock Capital LLC. Client’s Intended Use Financial analysis and decision making as they pertain to the development of the subject property and to provide supporting documentation for financing. Date of Report November 28, 2016 Executive Summary (cont’d) Economy Conyers is experiencing a period of moderate economic expansion whereby several film and television production companies like Warner Brothers’ Bonanza Productions and Twentieth Century Fox all located permanent production facilities calling Rockdale County and the City of Conyers home. These production companies alone lease more than 300,000 sf of office space and sound stages per month and contract with over 75 local businesses for goods and services. They employ over 300 people, with about 20 percent of their full-time employees coming from Rockdale County. The metro area is supported by a number of employers currently relocating their operations to the city/county to take advantage of the significant tax incentives and thus providing a solid foundation for the local economy. Immediately east and abutting the city's downtown core is the Georgia International Horse Park. The park's 1,400 acres can accommodate other entertainment and special event venues such as concerts and outdoor festivals, providing both employment and revenue to the City of Conyers. Market Area Land uses in the proposed subject’s immediate market area include light industrial, warehousing and distribution facilities; Fieldstone Plaza Shopping Center; quick-service food venues including Burger King, Dunkin’ Donuts, Hardee’s, McDonald’s and Wendy’s; diners and casual dining venues including Los Bravos, Sudo Bar & Grill, Third Base Grill, Tokyo Hibachi Express, and Waffle House; four gas station/convenience stores; a medical clinic and animal hospital; two grocery stores; an auto dealership and auto and truck accessory and service centers. Executive Summary (cont’d) Local Lodging Trends The projection of market demand by segment in consideration of overall market supply indicates that market occupancy is expected to end Fiscal 2017 up 3.0% followed by a net decrease of -10.2% in Fiscal 2018 with the opening of the subject WoodSpring Suites. In Fiscal 2019, competitive occupancy is forecast to increase by 2.7% to a stabilized level of 68.7%. Occupancy Projection Using projections for the subject’s demand by segment and considering overall market supply and demand forecasts, the proposed subject’s Year 1 occupancy rate is projected to be 79.1% at a penetration rate of 120%. In Year 2, the proposed subject’s occupancy and penetration rates are forecast to increase to a stabilized level of 86.0% and 125%, respectively. Revenue Projection The competitive set offered estimated average daily rates in the previous 12 months that ranged from a low of $35.00 to a high of $75.00, and averaged $46.41 per occupied room night. Considering the subject will be a new-construction, interior- corridor, purpose-built, economy extended-stay hotel with a fresh design and branding as a WoodSpring Suites, we estimate, if the subject existed in today’s market, it would command an ADR of $38.83, or an AWR of $271.84. Given that the subject will not enter the market until early 2018, and considering the historical ADR growth rates in the market, we forecast a Year 1 ADR and AWR of $40.00 and $280.00, respectively, with annual increases of 3.0% per year throughout the projection period. Executive Summary (cont’d) Revenue Projection (cont’d) Noting the subject will generate income from extra fees and services, including kitchen packages, guest laundry, WiFi and requested room cleanings, we have projected net rentals and other income in the amount of $1.50 per occupied room night for a Year 1 combined revenue of $41.50 per room night or $290.50 per week. NOI Projection Total revenue and expenses for Year 1 are projected at $1,460,884 and $858,375, respectively, resulting in a Year 1 Net Operating Income estimated at $602,509, or 42.5% or total revenue. Reversion Estimate The reversion price has been estimated using a Terminal Capitalization Rate of 9.5% as follows: Net Operating Income at Year 8 $900,410 Out-Going Capitalization Rate ÷ 9.50% Indicated Resale Price $9,478,001 Sale Costs @ 3.0% - $284,340 Net Proceeds from Sale $9,193,661 IRR Projection On the basis of the following cash flow projections, including the above reversion price after sale costs, the subject’s implied free-and-clear IRR equals 10.5%, which meets the risk-adjusted expectations of investors based on average expected market returns of 10.7% for similar hotel investments. Year 1 2 3 4 5 6 7 ($7,700,000) $602,509 $693,240 $717,322 $742,173 $767,816 $792,226 $809,031 $8,545,695 ($7,700,000) $602,509 $693,240 $717,322 $742,173 $767,816 $792,226 $9,354,726 Note: Figures may not add due to rounding. Table of Contents ASSUMPTIONS AND LIMITING CONDITIONS ....................................................................................................... 1 INTRODUCTION.................................................................................................................................................. 5 IDENTIFICATION OF THE PROPERTY .................................................................................................................................... 5 Site ....................................................................................................................................................................... 5 Improvements ...................................................................................................................................................... 7 CLIENT AND INTENDED USER DISCLOSURE ......................................................................................................................... 11 CLIENT’S INTENDED USE DISCLOSURE .............................................................................................................................. 11 DATE OF ANALYSIS ....................................................................................................................................................... 11 OWNERSHIP AND PROPERTY HISTORY .............................................................................................................................. 12 SCOPE OF THE FEASIBILITY STUDY .................................................................................................................................... 12 AREA OVERVIEW ............................................................................................................................................... 13 THE CITY OF CONYERS, ROCKDALE COUNTY, GA AND ATLANTA–SANDY SPRINGS–ROSWELL MSA .............................................. 13 Population/Demographics ................................................................................................................................. 15 Transportation ................................................................................................................................................... 15 Education ........................................................................................................................................................... 17 Health Services ..................................................................................................................................................

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