825 Ocean Highway Pocomoke City, Md 21851

825 OCEAN HIGHWAY POCOMOKE CITY, MD 21851

Shailesh Shah, CCIM Managing Director 757.695.3180 [email protected] Wesley Cox, CCIM Senior Advisor 410.543.2421 [email protected]

SVN | SHAH COMPANIES | 3213 DUQUESNE DRIVE, CHESAPEAKE, VA 23321 OFFERING MEMORANDUM PROPERTY INFORMATION 1 Property Summary Property Description Complete Highlights Additional Photos LOCATION INFORMATION 2 Location Maps Additional Photos Additional Photos Additional Photos Additional Photos Additional Photos Additional Photos FINANCIAL ANALYSIS 3 Financial Summary Income & Expenses Econo_Lodge_2018_Fiancial_Statement.pdf Unit Mix Summary DEMOGRAPHICS 4 Demographics Report Demographics Map ADVISOR BIOS 5 Advisor Bio & Contact 1

SVN | SHAH COMPANIES | 3213 DUQUESNE DRIVE, CHESAPEAKE, VA 23321 OFFERING MEMORANDUM 1 PROPERTY INFORMATION 825 Ocean Highway Pocomoke City, MD 21851

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 3 Property Summary

OFFERING SUMMARY PROPERTY OVERVIEW Sale Price: $2,300,000 The subject property comprises five buildings, four of which are guest room buildings with 62-units and one that houses the lobby, breakfast dining area and administrative offices. The hotel's stucco and block exteriors were in good Lot Size: 8.6 Acres condition. The guest room buildings' roofs are made of a combination of wood with asphalt shingles or aluminum, as well as concrete with a rubber membrane; the lobby building roof is made of wood covered with aluminum. Year Built: 1963 PROPERTY HIGHLIGHTS

Building Size: 22,665 SF • Outstanding location on Route 13. Excellent location for owner/operator. • Excellent asset features the newest and most desirable guest room product in the market. Zoning: B2-Gneral Business • Price at significant discount to replacement.

Market: Eastern Shore • Econolodge is member of Choice Hotels Group.

Submarket: ROUTE 13

Price / SF: $101.48

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 4 The information presented here is deemed to be accurate, but it has not been independently verified. eW make no guarantee, warranty or representation. It is your responsibility to independently confirm accuracy and completeness. All SVN® offices are independently owned and operated. Property Description

PROPERTY OVERVIEW

The subject property comprises five buildings, four of which are guest room buildings with 62-units and one that houses the lobby, breakfast dining area and administrative offices. The hotel's stucco and block exteriors were in good condition. The guest room buildings' roofs are made of a combination of wood with asphalt shingles or aluminum, as well as concrete with a rubber membrane; the lobby building roof is made of wood covered with aluminum.

LOCATION OVERVIEW

Pocomoke City in Worcester Country, MD. City is a part of the Salisbury, Maryland-Delaware Metropolitan Statistical Area.

Pocomoke City is located on Maryland’s Eastern Shore at the intersection of U.S. Route 13 and Route 113, and is five miles from the Maryland-Virginia state line.

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 5 The information presented here is deemed to be accurate, but it has not been independently verified. eW make no guarantee, warranty or representation. It is your responsibility to independently confirm accuracy and completeness. All SVN® offices are independently owned and operated. Complete Highlights

SALE HIGHLIGHTS • Outstanding location on Route 13. Excellent location for owner/operator. • Excellent asset features the newest and most desirable guest room product in the market. • Price at significant discount to replacement. • Econolodge is member of Choice Hotels Group.

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 6 The information presented here is deemed to be accurate, but it has not been independently verified. eW make no guarantee, warranty or representation. It is your responsibility to independently confirm accuracy and completeness. All SVN® offices are independently owned and operated. Additional Photos

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 7 The information presented here is deemed to be accurate, but it has not been independently verified. eW make no guarantee, warranty or representation. It is your responsibility to independently confirm accuracy and completeness. All SVN® offices are independently owned and operated. 2 LOCATION INFORMATION 825 Ocean Highway Pocomoke City, MD 21851

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 8 Location Maps

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 9 The information presented here is deemed to be accurate, but it has not been independently verified. eW make no guarantee, warranty or representation. It is your responsibility to independently confirm accuracy and completeness. All SVN® offices are independently owned and operated. Additional Photos

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 10 The information presented here is deemed to be accurate, but it has not been independently verified. eW make no guarantee, warranty or representation. It is your responsibility to independently confirm accuracy and completeness. All SVN® offices are independently owned and operated. Additional Photos

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 11

The information presented here is deemed to be accurate, but it has not been independently verified. eW make no guarantee, warranty or representation. It is your responsibility to independently confirm accuracy and completeness. All SVN® offices are independently owned and operated. Additional Photos

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 12

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 13

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 14

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 15 The information presented here is deemed to be accurate, but it has not been independently verified. eW make no guarantee, warranty or representation. It is your responsibility to independently confirm accuracy and completeness. All SVN® offices are independently owned and operated. 3 FINANCIAL ANALYSIS 825 Ocean Highway Pocomoke City, MD 21851

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 16 Financial Summary

INVESTMENT OVERVIEW 2017 2016 2015

Price $2,300,000 $2,560,000 $2,560,000

Price per Room $37,096 $41,290 $41,290

RevPAR - - -

ADR - - -

CAP Rate - - -

Cash-on-Cash Return (yr 1) - % - % - %

Total Return (yr 1) - - -

Debt Coverage Ratio - - -

OPERATING DATA 2017 2016 2015

Gross Scheduled Income - - -

Other Income - - -

Total Scheduled Income - - -

Vacancy Cost - - -

Gross Income - - -

Operating Expenses - - -

Net Operating Income - - -

Pre-Tax Cash Flow - - -

FINANCING DATA 2017 2016 2015

Down Payment - - -

Loan Amount - - -

Debt Service - - -

Debt Service Monthly - - -

Principal Reduction (yr 1) - - -

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 17 The information presented here is deemed to be accurate, but it has not been independently verified. eW make no guarantee, warranty or representation. It is your responsibility to independently confirm accuracy and completeness. All SVN® offices are independently owned and operated. Income & Expenses

INCOME SUMMARY 2017 2016 2015

Total Revenue $748,263 $836,976 $686,418 Cost of Goods sold -$46,855 -$37,738 -$31,418 Other Income $14,114 $21,526 $13,260 Gross Income $715,522 $820,764 $668,260

EXPENSE SUMMARY 2017 2016 2015

Compensation of Officers ( $ 84,600) $0 $0 $0 Salaries and Wages $103,920 $148,403 $155,030 Repairs and Maintenance $22,368 $51,408 $42,620 Taxes and Licenses $39,605 $41,160 $40,061 Interest ( $ 67,563.00) $0 $0 $0 Depreciation ($ 69,348) $0 $0 $0 Pension, Profit-Sharing ($ 21,150) $0 $0 $0 Employee benefit program $1,004 $0 $0 Automobile Expenses ( $ 13,886) $0 $0 $0 Bank Service Charges $2,710 $59 $0 Cable Expenses $13,670 $14,738 $11,134 Travel Agent Commission $18,273 $0 $10,712 Franchise Fee $77,082 $97,295 $57,169 Cleaning Expenses $8,243 $6,178 $3,617 Credit Card Expenses $11,821 $22,438 $13,439 Insurance $25,670 $12,511 $13,096 Laundry Expenses $2,009 $0 $0 Lawn & Gardening $5,003 $6,443 $3,212 Maintenance Supplies $31,885 $9,289 $0 Office Supplies $1,360 $2,548 $3,503 Pest Control $2,185 $1,784 $3,060 Pool Expenses $3,366 $4,291 $0 Professional Fees $4,238 $2,200 $2,250 Auto Rental $500 $0 $0 Sewer Charges $3,491 $3,708 $4,292 Snow Removal $2,931 $0 $2,532 Telephone Expenses $4,549 $5,115 $4,447 Temporary Help $11,559 $10,967 $9,053 Travel Expenses $2,810 $0 $0 Utilities $39,156 $38,625 $34,242 Waste Disposal $4,151 $5,270 $2,343 Amortization $8,680 $13,020 $13,020 Environmental Services - $3,000 $0 Petty Cash Expenses - $6,741 $0

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 18 The information presented here is deemed to be accurate, but it has not been independently verified. eW make no guarantee, warranty or representation. It is your responsibility to independently confirm accuracy and completeness. All SVN® offices are independently owned and operated. Income & Expenses

INCOME SUMMARY 2017 2016 2015 PRINTING & REPRODUCTION - - $700 License & Permits - - $2,668 50% Meal ($2030) - - $0 Gross Expenses $452,239 $507,191 $432,200

Net Operating Income - - -

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 19 The information presented here is deemed to be accurate, but it has not been independently verified. eW make no guarantee, warranty or representation. It is your responsibility to independently confirm accuracy and completeness. All SVN® offices are independently owned and operated.

Unit Mix Summary

UNIT TYPE COUNT % TOTAL SIZE (SF) MIN. RENT MAX RENT RACK RATE DESCRIPTION

King Rooms 22 35.5 - -

Double/Double 38 61.3 - -

Queen Rooms 2 3.2 - -

Totals/Averages 62 100% 0 $0.00 $0.00

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 26 The information presented here is deemed to be accurate, but it has not been independently verified. eW make no guarantee, warranty or representation. It is your responsibility to independently confirm accuracy and completeness. All SVN® offices are independently owned and operated. 4 DEMOGRAPHICS 825 Ocean Highway Pocomoke City, MD 21851

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 27 Demographics Report

1 MILE 5 MILES 10 MILES

Total population 336 6,678 16,492

Median age 37.5 38.9 41.3

Median age (male) 30.5 32.5 36.8

Median age (female) 41.5 42.2 43.3

1 MILE 5 MILES 10 MILES

Total households 136 2,725 6,740

Total persons per HH 2.5 2.5 2.4

Average HH income $46,165 $48,262 $52,885

Average house value $287,851 $214,859 $207,118

* Demographic data derived from 2010 US Census

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 28 The information presented here is deemed to be accurate, but it has not been independently verified. eW make no guarantee, warranty or representation. It is your responsibility to independently confirm accuracy and completeness. All SVN® offices are independently owned and operated. Demographics Map

POPULATION 1 MILE 5 MILES 10 MILES

Total population 336 6,678 16,492

Median age 37.5 38.9 41.3

Median age (Male) 30.5 32.5 36.8

Median age (Female) 41.5 42.2 43.3

HOUSEHOLDS & INCOME 1 MILE 5 MILES 10 MILES

Total households 136 2,725 6,740

# of persons per HH 2.5 2.5 2.4

Average HH income $46,165 $48,262 $52,885

Average house value $287,851 $214,859 $207,118

* Demographic data derived from 2010 US Census

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 29 The information presented here is deemed to be accurate, but it has not been independently verified. eW make no guarantee, warranty or representation. It is your responsibility to independently confirm accuracy and completeness. All SVN® offices are independently owned and operated. 5 ADVISOR BIOS 825 Ocean Highway Pocomoke City, MD 21851

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 30 Advisor Bio & Contact 1

SHAILESH SHAH, CCIM PROFESSIONAL BACKGROUND

Managing Director Shailesh Shah, CCIM serves as a senior advisor for SVN/Small-Shah Commercial Advisors specializing in the sale of

hotel/motel and convenience stores in the South and Eastern States. Shah has years of commercial real estate 3213 Duquesne Drive experience. Chesapeake, VA 23321 T 757.695.3180 Prior to joining SVN, Shah was a sales associate with Advantis Commercial Real Estate Company focusing on C 757.617.5188 hospitality properties and C-store gas station sales and sites selection. He started his sales carrer with Century 21 [email protected] First Colony real estate for three years.

As an active advisor, Shah is Certified Commercial Investment Member (CCIM). As such, he is a candidate for the

prestigious CCIM designation. He is also a member of the Hotel Brokers International and a candidate for the

organization's Certified Hotel Broker designation. He is a member of the National Association of Realtors holding

the GRI designation; the National Association of C-stores; and the Asian Indian Hotel Owner Association (AAHOA.

Shah has been awarded from the Hampton Roads Realtors Association.

Shah earned a Bachelor of Science in physics and math from Gujarat University, India.

With a love of photography, Shah served as a photographer for royal families of India. He came to the U.S. in 1995

with little pocket money and purchased a grocery store.

EDUCATION

CCIM- Certified ommerC cial Investment Member.

A CCIM (Certified Commercial Investment Member) is a recognized expert in the commercial and investment real

estate industry. The CCIM lapel pin is earned after successfully completing a designation process that ensures

CCIMs are proficient not only in theory, but also in practice. This elite corps of CCIMs includes brokers, leasing

professionals, investment counselors, asset managers, appraisers, corporate real estate executives, property

managers, developers, institutional investors, commercial lenders, attorneys, bankers, and other allied

professionals.

A CCIM is part of a global commercial real estate network with members across North America and more than 30

countries. This professional network has enabled CCIM members to close thousands of transactions annually,

representing more than $200 billion in value. As a result, the experts who possess the CCIM designation are an

invaluable resource for commercial real estate owners, investors, and users.

CCIMs have completed a designation curriculum that covers essential CCIM skill sets including ethics,

interest-based negotiation, financial analysis, market analysis, user decision analysis, and investment analysis for

commercial investment real estate. CCIMs have completed a portfolio demonstrating the depth of their commercial

real estate experience. Finally, they have demonstrated their proficiency in the CCIM skill sets by successfully

completing a comprehensive examination. Only then is a designation candidate awarded the coveted CCIM pin,

joining the ranks of highly skilled commercial and investment real estate experts.

Over 15,000 commercial real estate professionals have earned the designation. Currently, 5,500 professionals are

pursuing their CCIM designation.

ECONOLODGE, POCOMOKE CITY, MD | 825 OCEAN HIGHWAY, POCOMOKE CITY, MD 21851 SVN | Shah Companies | Page 31 The information presented here is deemed to be accurate, but it has not been independently verified. eW make no guarantee, warranty or representation. It is your responsibility to independently confirm accuracy and completeness. All SVN® offices are independently owned and operated.