CANDLEWOOD SUITES ATHENS, GEORGIA CANDLEWOOD SUITES ATHENS, GEORGIA OFFERING MEMORANDUM / PREPARED BY HUNTER HOTEL ADVISORS / 1 CANDLEWOOD SUITES ATHENS, GEORGIA NATIONAL REACH. LOCAL KNOWLEDGE. Hunter Hotel Advisors is pleased to present to qualified investors the opportunity to acquire the fee simple interest in the 97-room Candlewood Suites located near the University of Georgia in Athens, Georgia. Tim Osborne Daniel Riley Vice President Senior Analyst [email protected] [email protected] 770-701-2197 770-916-0300 / PREPARED BY HUNTER HOTEL ADVISORS / 1 CANDLEWOOD SUITES TABLE ATHENS, GEORGIA OF CONTENTS Executive Summary .........................................................................................................3 Property Overview ...........................................................................................................5 Property Description .........................................................................................................7 Financials ........................................................................................................................8 Market Summary ............................................................................................................15 About Hunter .................................................................................................................26 / PREPARED BY HUNTER HOTEL ADVISORS / 2 CANDLEWOOD SUITES EXECUTIVE ATHENS, GEORGIA SUMMARY Investment Highlights • Highway Location in College Market: The Candlewood Suites features • Owner / Operator or Regional Hotel Company Opportunity: The Candlewood an attractive location along Atlanta Highway (Highway 78) across the Suites is a four-story, interior corridor hotel situated within close proximity street from Georgia Square Mall and within close proximity to all of the to many of the area’s year-round recreational opportunities as well as the businesses in the heart of Athens’ commercial and retail corridor. The region’s corporate offices. It’s size at 97 guestrooms is ideal for an owner property is a quick drive to the University of Georgia campus (34,000+ / operator or group of investors to acquire and operate the business. students) and near numerous dining and shopping options. Athens is • Discount to Replacement Costs: At the asking price presented herein, the part of Athens-Clark County, the 6th largest county in Georgia offering Candlewood Suites will trade at a meaningful discount to replacement a population in excess of 115,000 people. Athens is easily accessible costs. The price-point of the property is within reach of smaller and from US-441, US-78 and GA-316, with Hartsfield-Jackson International medium-sized investors and regional hotel companies that might not Airport only 80 miles away. Located 20 miles from I-85 and 30 miles otherwise be able to acquire such a building due to large initial equity/ from I-20, Athens affords easy access to the City of Atlanta and the Port cash investments. of Savannah. Athens’ own Ben Epps Airport is a mere three miles from the heart of downtown. CSX and Norfolk Southern provide freight service in and out of Athens, with lines running directly to the Athena Industrial Park. • Consistent Performance With Upside Potential: The property has achieved consistent performance on a year-over-year basis with nearly 13% RevPAR growth since Year End 2014. Occupancy has increased dramatically since Year End 2015 and the market is set to begin growing average rates now that corporate and leisure demand has outpaced supply. Room Revenue grew by 8.6% at Year End 2016 and the competitive environment achieved strong growth in occupancy and RevPAR in recent years. Future growth will continue current pacing as the Athens market is expanding and becoming more diverse. • Attractive IHG Branding: The Candlewood Suites brand is attractive to Purchasers and Owners due to the strong support provided by the Intercontinental Hotels’ Group (IHG) systems. The brand provides Price: $7,250,000 operational support and guidance and the reservations system and customer loyalty programs are amongst the best in the lodging business Price per Key: $74,742 today. Fee Simple Interest Conveyed. / PREPARED BY HUNTER HOTEL ADVISORS / 3 CANDLEWOOD SUITES INVESTMENT ATHENS, GEORGIA CONSIDERATIONS Fee Simple The hotel will be sold with fee simple interests conveyed. Property Improvement Plan (PIP) The franchise license is considered an exceptionally valuable asset of the Candlewood Suites. It provides a high level of franchise flexibility for an Owner, traveler allegiance and recognition, an excellent computerized reservation system, and a well-known and highly regarded rewards program. On change of ownership, it is anticipated that IHG will require the new owner to complete certain improvements, upgrades and modifications to the hotel as a condition of the issuance of a new license. The Buyer will be responsible for all repairs and renovations needed to satisfy IHG’s requirements. The Change of Ownership PIP will be made available for review in the dataroom. Unencumbered by Management The Candlewood Suites Hotel is being offered unencumbered by its current management agreement, thereby providing an excellent opportunity for an owner to fully control the property’s operations. / PREPARED BY HUNTER HOTEL ADVISORS / 4 CANDLEWOOD SUITES PROPERTY ATHENS, GEORGIA OVERVIEW Overview The four-story, interior corridor, 97-guestroom Candlewood Suites is located in a densely developed commercial and retail corridor along Atlanta Highway (Highway 78) just west of the University of Georgia campus (34,000+ students). The property was built in 2009, renovated in 2015, and is built in a straight-line configuration. Situated across Atlanta Highway from Georgia Square Mall, the Candlewood Suites is located within close proximity to the Caterpillar manufacturing facility (2.5 miles away) as well as a number of manufacturers and distributors including Bimbo Bakeries, Dixie Canner, Benchmark Automation, Evoshield, Quality Deer Management Association (QDMA), Central Label Products, Compass Industrial Products, and Formtech Enterprises to name a few examples. Large retailers nearby include Sam’s Club, Southern Surplus, multiple automotive dealerships, Mattress Firm, Belk’s, Macy’s, JCPenney, Academy Sports, Target, Office Depot, and Hobby Lobby to name a few. Additional demand generators and attractions in the area include Medical Center of Central GA, Georgia Theatre, Sanford Stadium, Oconee Veterans Park, and the Classic Center. The University of Georgia, the flagship university of the State of Georgia, is home to more than 34,000+ students, generating significant room demand in the market throughout the year with graduation, educational seminars, athletics, and other leisure and business related activities. The university generates multiple “sell out” weekday and weekend dates throughout the year and area hotels are often full during these periods. Construction Features • Originally opened in July 2009 • 4-story, interior corridor • 97 guestrooms • Outdoor gazebo, grill, and picnic tables / PREPARED BY HUNTER HOTEL ADVISORS / 5 Area Map UNIVERSITY OF GEORGIA Health SCIENCES CAMPUS DOWNtowN ATHENS Historic District ATHENS REGIONAL MEDICAL CENTER SANFORD stadium ST. MARy’S Health CARE SYSTEM UNIVERSITY OF GEORGIA ATHENS BEN EPPS Airport / PREPARED BY HUNTER HOTEL ADVISORS / 6 CANDLEWOOD SUITES PROPERTY ATHENS, GEORGIA DESCRIPTION Hotel Configuration and Layout The ground floor consists of the lobby, breakfast area, administrative offices, and back-of-the-house areas such as commercial kitchen, maintenance room and storage, and the commercial laundry equipment. Guestrooms offer a flat screen television, armoire, nightstands, desk and / or activity table, closet, iron and ironing board, hairdryer, telephone, internet connectivity, and mini refrigerators and microwaves. Dining The Candlewood Suites offers a complimentary breakfast to its guests. The complimentary breakfast includes both hot and cold items and is available daily. Additionally, the property is located within close proximity to a number of restaurants including Olive Garden, Rafferty’s, Sonny’s BBQ, McDonald’s, Zaxby’s Chicken Fingers, and a number of other options in the immediate area due to its location in a mature commercial and retail corridor. Business Center The business center features a computer and printer workstation for guests to use during their stay. There are also meeting rooms, a fax machine, and a printer available to guests. Audio/Visual equipment is available for rental. Fitness Center The hotel features an upgraded 24-hour fitness center with the standard mix of exercise machines and treadmills. / PREPARED BY HUNTER HOTEL ADVISORS / 7 CANDLEWOOD SUITES HISTORICAL STATEMENT ATHENS, GEORGIA 97 Guestrooms & Suites Year End 2015 Year End 2016 TTM January 2017 Occupancy 60.6% 67.8% 68.1% Average Room Rate $79.71 $77.22 $76.93 RevPAR $48.28 $52.32 $52.42 TRevPAR** $48.52 $52.66 $52.78 Revenue Per Room $17,512 $19,021 $19,060 Available Rooms 35,405 35,502 35,502 Occupied Rooms 21,444 24,053 24,189 Department Revenue Room Revenue $1,698,627 98.9% $1,844,992 98.7% $1,848,836 98.7% Other Revenue $19,149 1.1% $24,566 1.3% $24,858 1.3% Total Revenue $1,717,776 100.0% $1,869,558 100.0% $1,873,694 100.0% Departmental Expenses Room Expense $347,006 20.4% $370,373 20.1% $383,306 20.7% Other Expense $22,404 117.0% $21,507 87.5% $21,968 88.4% Total Departmental Expenses $369,410 21.5% $391,880