The Dallas Design District
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/ 1 THIS CONFIDENTIAL LOAN SUBMISSION (the “Loan Submission”) is being furnished to the recipient (the “Recipient”) solely for the Recipient’s own limited use in considering whether to provide to Dunhill Partners, Vinculum Partners, The Crosland Group and Virgin Hotels collectively (the “Borrowers” or the “Sponsors”) all or a portion of a loan (the “Loan”) which will be secured by, among other collateral, a first-priority mortgage lien and a first-priority assignment of rents, leases and profits of the Virgin Hotel & Residences, Dallas, Texas (the “Property” or the “Subject”). Jones Lang LaSalle (“JLL”) has prepared this confidential Loan Submission, which contains brief, selected information pertaining to the business and affairs of the Property. This confidential information does not purport to be all-inclusive nor does it purport to contain all the information, which a prospective lender may desire. Neither the Borrower, nor the Owner, nor JLL nor any of their respective partners, officers, employees or agents makes any representation or warranty, expressed or implied, as to the accuracy or completeness of this Loan Submission or any of its contents and no legal liability is assumed or shall be implied with respect thereto. The Recipient agrees that (a) the Loan Submission and its contents are Confidential Information, except for such information contained in the Loan Submission, which is a matter of public record, (b) the Recipient, the Recipient’s employees, agents and consultants (collectively, the “need to know parties”) will hold and treat it in the strictest of confidence, and the Recipient and the need to know parties will not, directly or indirectly, disclose or permit anyone else to disclose its contents to any other person, firm, or entity without the prior written authorization of JLL and the Borrower, and (c) the Recipient and the need to know parties will not use or permit to be used this Loan Submission or its contents in any fashion or manner detrimental to the interest of the Borrower, the Owner or JLL or for any purpose other than use in considering whether to provide all or a portion of the Loan. The Recipient and the need to know parties agree to keep this Loan Submission and all Confidential Information contained herein permanently confidential and further agree to use this Loan Submission for the purpose set forth above. PHOTOCOPYING OR OTHER DUPLICATION IS STRICTLY PROHIBITED. THE BORROWER EXPRESSLY RESERVES THE RIGHT, AT ITS SOLE DISCRETION, TO REJECT ANY OR ALL PROPOSALS OR EXPRESSIONS OF INTEREST IN THE PROPOSED UNDERLYING LOAN AND TO TERMINATE DISCUSSIONS WITH ANY PARTY, AT ANY TIME, WITH OR WITHOUT NOTICE. THE CONFIDENTIAL LOAN SUBMISSION SHALL NOT BE DEEMED TO BE A REPRESENTATION OF THE STATE OF AFFAIRS OF THE PROPERTY OR CONSTITUTE AN INDICATION THAT THERE HAS BEEN NO CHANGE IN THE BUSINESS OR AFFAIRS OF THE PROPERTY SINCE THE DATE OF PREPARATION OF THIS LOAN SUBMISSION. If either party does not wish to pursue negotiations leading to the placement of the Loan, or if in the future the Lender or Borrower discontinues such negotiations, you agree to return this Confidential Loan Submission to JLL. Environmental/Hazardous Waste Whereas JLL has no knowledge of asbestos, hazardous waste or other toxic materials on the Property, we recommend an environmental survey be conducted prior to funding. / 3 STAY AWHILE DINE / RELAX / SIP / MEET DINE / RELAX / SIP / MEET TABLE OF CONTENTS EXECUTIVEEXECUTIVE SUMMARYSUMMARY////////////////////////////////////////// 64 FINANCIALFINANCIAL ANALYISISANALYISIS////////////////////////////////////////// 1813 •• PropertyProperty OverviewOverview •• FinancialFinancial OverviewOverview •• DevelopmentDevelopment BudgetBudget •• DrawDraw // CashCash FlowFlow ScheduleSchedule •• ResidencesResidences AnalysisAnalysis •• HotelHotel AnalysisAnalysis CONTACTS PROJECTPROJECT DETAILSDETAILS////////////////////////////////////////////////////// 3218 RANDY FLEISHER •• PropertyProperty DetailDetail Managing Director •• SiteSite PlanPlan 214.438.6545 •• PropertyProperty RenderingsRenderings [email protected] THETHE DALLASDALLAS DESIGNDESIGN DISTRICTDISTRICT//////////// 4630 HUTTON LUNSFORD •• OverviewOverview Associate •• LocationLocation MapMap 214.438.6149 •• AerialAerial PhotographsPhotographs [email protected] MARKETMARKET INFORMATIONINFORMATION//////////////////////////////////// 6042 BEVERLY WOODALL •• HotelHotel MarketMarket SummarySummary Vice President •• MarketMarket SummarySummary -- PerPer SourceSource StrategiesStrategies 214.438.6349 •• HVSHVS FeasibilityFeasibility StudyStudy OverviewOverview [email protected] •• HotelHotel SaleSale ComparablesComparables •• CondominiumCondominium MarketMarket SummarySummary •• MeyersMeyers ResearchResearch ReportReport •• CondominiumCondominium ComparablesComparables •• LandLand SaleSale ComparablesComparables SPONSORSHIPSPONSORSHIP////////////////////////////////////////////////////////////////////7860 EXECUTIVE SUMMARY VIRGIN HOTEL & RESIDENCES EXECUTIVE SUMMARY OVERVIEW The Virgin Hotel & Residences is an iconic project that will change the Dallas skyline and provide a unique hospitality and residential experience. Jones Lang LaSalle (“JLL”) has been exclusively engaged to secure $80,123,700 of non-recourse construction financing for the The Virgin Hotel & Residences (“The Property”), a best-in-class high-rise offering 214 premium hotel rooms and 70 exclusive condominium units. The Property’s 18 floors and ideal location along I-35 provide high visibility and unparalleled views. The Property will serve as one of the anchors to the Design District and provides residents/guests with a sought-after, walkable community and easy accessibility to all areas of Dallas. The Design District provides a diversified mix of shops, boutiques, bistros, design showrooms and galleries. The Design District has evolved from a “trade only” warehouse district to a hip, blossoming “live-work- play” community that has acted as a catalyst for both commercial and residential growth. With critical mass under single ownership, the neighborhood’s transformation is visible and gaining momentum. Dunhill Partners, one of the Virgin Hotel & Residences’ development sponsors, currently owns approximately 700,000 square feet across 15 sites within the Design District with plans to construct an additional 16-story office building, 200 multifamily units and a 125-room boutique hotel. / 8 EXECUTIVE SUMMARY The Virgin Hotel & Residences – Dallas Design District The Virgin Hotel & Residences will be the most innovative, cutting edge hotel in Dallas/Fort Worth (D/ FW). The 18-floor high-rise will contain 214 of the highest quality hotel rooms in Dallas as well as 70 elite, unparalleled condominium units. The Property will be the crown jewel of the Design District, which is quickly becoming the most sought-after and fastest growing area in greater D/FW. Upon entering the hotel, visitor’s eyes will be drawn to the highly popularized Common’s Club which serves as a dramatic meeting point amongst guests and residents to enjoy fine dining, cocktails and after-hour fun. The Virgin Hotel & Residences’ design, ambiance and service will be the first of many luxuries that guests will experience during their time spent at what will be the most highly-sought-after hotel in D/FW. The Property will bring an unprecedented level of style, luxury and playful sophistication to Dallas’ Design District. The Virgin Hotel fuses a passion for food and beverage with music and culture, providing a vibrant and inclusive environment for travelers and locals alike, all presented with a nuanced sophistication that has been mastered in every service offering offered by Virgin. The experience begins even before a guest checks in with a series of personalized choices, services, and pre-arrival check in, thus creating an uncluttered and stress-free lobby space showcasing the Virgin brand’s convergence of style and dedication to world-class service. The approach to design is delivering memorable, fun, sexy and smart spaces, each truly authentic and reflective of the city’s local character, bringing a one-of-a-kind residential quality to the design. For example, adjacent to the lobby, the Commons Club defines the Virgin brand upon arrival. It is the social center and heart of each Virgin Hotel, presenting a fun and dynamic hybrid of hotel lobby, reception, / 9 EXECUTIVE SUMMARY lounge, and restaurant/bar with heartfelt service at its core. It will combine an irreverent impulse to dazzle and delight with an atmosphere of intimacy and refinement, serving as a dramatic meeting point amongst guests and residents, thus dramatically enhancing the lobby experience, making it less transient and a space to experience, all while adding revenue opportunities for the property. The Virgin Hotel & Residences’ design team combines global exposure with local roots; 5G Architects and Duncan Miller Ullman, both based in Dallas, bring together a global portfolio with a deep understanding of Texas, thus delivering a refreshing fusion of sensory experiences with an energetic atmosphere to create a lasting impression for travelers and residents. Notable highlights of The Virgin Hotel include five star F&B venues, a dedicated and exclusive music venue and cocktail bar, a state-of-the-art business center, ballroom and meeting space, an expansive gym featuring Internet-equipped Technogym cardio machines and a saline luxury swimming pool with tanning deck and outdoor pool bar. The pool experience is