Breakwater Inn 1 Juneau, Alaska Presented By

BREAKWATER INN 1 JUNEAU, ALASKA PRESENTED BY

Calvin Y. Lee “Andy” Gunsuk Yang First Vice President Investments Licensed Assistant Los Angeles Office Los Angeles Office Tel: (213) 943-1826 Tel: (213) 943-1861 Fax: (213) 943-1810 Fax: (213) 943-1810 [email protected] [email protected] License: CA 01210501 License: CA 01925021

2 NON - ENDORSEMENT AND DISCLAIMER NOTICE

Non-Endorsements Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

Disclaimer THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

BREAKWATER INN AT JUNEAU, ALASKA Juneau, AK ACT ID ZAA0140246

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PROPERTY OVERVIEW PROPERTY OVERVIEW

Marcus & Millichap exclusively presents for sale the Breakwater Inn in Juneau, Alaska. A three-story 49 room full service hotel sits on a open harbor water view less than a mile from Juneau Downtown and one and a half miles from the Juneau Cruise Ship Terminal.

Juneau is the Capital of Alaska with government sector as the largest employment with nearly 7,000 people and total population of 36,000 thousand residents. Over a million out-of-state visitors visit annually, of which 93 percent are cruise passengers. Popular activities are visiting Glacier Bay, nature hiking, kayaking, whale watching, wildlife viewing, hunting and fishing.

Hotel rooms provide spectacular waterfront views with full dining and bar. All Harbor View rooms have private decks and Mountain View rooms have kitchenette units. The sale includes a fishing boat, snow plowing truck and a shuttle van. Also, the BDL (Beverage Dispensary- Tourism AS 04.11.400(d)) license is included in the sale which is valued approximately $450,000, which only 11 such limited license is available in entire Juneau Alaska.

The property has incredible potential opportunities to increase revenue as the property is under performing compared to comparable hotels in the area. Extended stay accounts for only 46% occupancy and only 6.7% occupancy accounts for daily room charge while local occupancy is at above 60%, which provides significant opportunity to increase the occupancy and increase revenue. The banquet room that is about 3,000 sq. ft. is inactive which can be opened for extra revenue. Also, the ground level has spaces to be utilized as retail business to provide services for the Juneau Douglass High School right next door.

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EXECUTIVE SUMMARY

ACTUAL VIEW FROM THE RESTAURANT

LOCATION SUMMARY

Breakwater Inn, is ideally located half way between Juneau International Airport and downtown Juneau. It is the second largest city by area in the US. The city is many things: a mountain town, a coastal community and the most scenic capital city in the United States. It is not only America’s “Last Frontier,” but also a natural wonder, wildlife hot spot and cultural jewel. It is rich in history, art, music and Native heritage; an outdoor enthusiast’s paradise, a shopper’s trove and a food lover’s dream - not just the state capital, but the beating heart of Southeast Alaska. Over a million people visit Juneau to experience it’s stunning, natural beauty, including glaciers, national parks and the tallest mountain in North America, Denali (formerly Mount McKinley). Juneau is the most visited city in Alaska, with visitors contributing over 25% of Juneau’s annual sales tax.

5 BREAKWATER INN AT JUNEAU, ALASKA Juneau, AK AREA OVERVIEW

Mendenhall Glacier

OVERVIEW

According to U.S. News & World Report, Juneau is ranked as • #10 in Best Small Towns to Visit in the USA • #11 in Best Adventure Vacations in the USA

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Frederick Sound OVERVIEW

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RESTAURANT & BAR

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AREA OVERVIEW Juneau, AK

OVERVIEW

Cruise Ship Traffic: Southeast Alaska continues to see larger ships replacing smaller vessels. There has been a gradual increase in the number of overall visitors, including during Juneau’s off-season (fall/winter), especially in its cruise visitor industry. To handle this change and the anticipated visitor growth in 2019 of 80,000 more passengers, Juneau has built two new panamax docks at the Port of Juneau, which opened in 2016 and 2017 with the capacity to host four 1,000-foot vessels at a time. This past summer, Juneau welcomed the arrival of Alaska’s first mega-ship, the Norwegian Bliss.

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EXECUTIVE SUMMARY

PROPERTY DETAIL VITAL DATA ROOM BREAKDOWN Name of Property Breakwater Inn Kings 29 (15with Kitchenettes) 1711 Glacier Ave, Juneau, Alaska Property Address Double Double 14 (11 with Kitchenettes) 99801 Price $3,380,000 Queen Queen 4 (1 with Kitchenette) Cap Rate 8.08% Bunk Bed with 1 (with Kitchenette) Proforma Cap Rate 14.60% Queen Master Suite 1 Owership Fee Simple Total Number of Rooms 49 (29 with Kitchenettes) Price/Room $68,979.59 Room Count 49 Average Daily Rate $53.63 Occupancy 53% (*16%) RevPAR $28.18 Price $/ SQ FT. $149.69 *16% occupancy for daily stay BREAKWATER INN ACCESSIBILITY Assessor's Parcel Number 10020-J05-0030 Highway Alaska Route 7 Franchise Independent Airport Juneau Int'l Airport - 7miles Franchise Available Quality Inn, Days Inn, Howard Johnson Juneau (Downtown) Downtown - 1 miles Lot Size (Acres) 0.52 Gross Leasable Area (SF) 22,580 Year Built 1969 Number of Buildings 1 Number of Stories 3

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HISTORICAL P&L HISTORICAL PROFIT & LOSS

BREAKWATER INN - JUNEAU, ALASKA 2017 2018 Profoma

Rooms 49 49 49

REVENUE Room Revenue 540,478 65.0% $508,934 65.0% $818,110 64.3% F&B Revenue (Restaurant) 291,027 35.0% $274,041 35.0% $455,000 35.7% Total $831,505 100.0% $782,975 100.0% $1,273,110 100.0% Departmental Expenses . Rooms $108,844 20.1% $98,689 12.6% $133,230 10.5% Food & Beverage $58,608 20.1% $53,140 6.8% $122,850 27.0% Total $167,452 20.1% $151,829 19.4% $204,969 16.1% Departmental Income $664,053 79.9% $631,146 80.6% $1,068,141 83.9% Undistributed Operating Expenses Administration & General $46,770 5.6% $39,687 5.1% $53,577 4.2% Marketing $11,290 1.4% $8,963 1.1% $12,100 1.0% Property Operations & Maintenance $5,600 0.7% $4,200 0.5% $5,670 0.4% Utility Costs $132,975 16.0% $122,683 15.7% $150,000 11.8% Payroll $174,870 21.0% $159,481 20.4% $310,000 24.3%

Total $371,505 44.7% $335,014 42.8% $531,348 41.7% Gross Operating Profit $292,548 35.2% $296,132 37.8% $536,793 42.2%

Fixed Expenses Property Taxes $12,840 1.5% $13,005 1.7% $28,000 2.2% Insurance $13,560 1.6% $10,170 1.3% $15,000 1.2% Total $26,400 3.2% $23,175 3.0% $43,000 5.5%

Net Operating Income $266,148 32.0% $272,957 34.9% $493,793 38.8%

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HISTORICAL P&L 2019 Revenue Breakdown

Breakwater Inn - 2018 Breakdown Breakwater Inn Room (Sold) Mth Days Room (Available) Room (Sold = Monthly + Daily) Restaurnt Monthly Guest Daily Guest Total (A+B)

Day Month Day Month Revenue Day Month ADR Occu. RevPar Revenue ADR Occu. RevPar Total (A) Total (B) Jan 31 49 1,519 14 436 $ 18,900 2 61 $ 118.80 6% $ 6.69 $ 7,250 $ 52.62 33% $ 17.22 $ 26,150 $ 15,500 $ 41,650 Feb 28 49 1,372 16 443 $ 21,250 2 70 $ 118.80 8% $ 8.93 $ 8,300 $ 57.65 37% $ 21.54 $ 29,550 $ 19,800 $ 49,350 Mar 31 49 1,519 16 498 $ 21,600 2 72 $ 118.80 7% $ 8.41 $ 8,580 $ 52.91 38% $ 19.87 $ 30,180 $ 23,600 $ 53,780 Apr 30 49 1,470 18 535 $ 23,950 2 68 $ 118.80 7% $ 8.63 $ 8,075 $ 53.15 41% $ 21.79 $ 32,025 $ 21,470 $ 53,495 May 31 49 1,519 32 996 $ 43,200 3 108 $ 118.80 21% $ 24.49 $ 12,800 $ 50.72 73% $ 36.87 $ 56,000 $ 22,470 $ 78,470 Jun 30 49 1,470 33 993 $ 44,500 6 185 $ 118.80 39% $ 46.15 $ 22,000 $ 56.43 80% $ 45.24 $ 66,500 $ 29,840 $ 96,340 July 31 49 1,519 34 1,056 $ 45,800 5 166 $ 118.80 36% $ 42.59 $ 19,700 $ 53.59 80% $ 43.12 $ 65,500 $ 31,850 $ 97,350 Aug 31 49 1,519 35 1,070 $ 46,400 5 143 $ 118.80 32% $ 37.77 $ 16,950 $ 52.23 80% $ 41.71 $ 63,350 $ 30,340 $ 93,690 Sep 30 49 1,470 23 693 $ 31,050 4 131 $ 118.80 17% $ 20.08 $ 15,600 $ 56.59 56% $ 31.73 $ 46,650 $ 21,720 $ 68,370 Oct 31 49 1,519 17 529 $ 22,950 3 104 $ 118.80 10% $ 12.43 $ 12,300 $ 55.70 42% $ 23.21 $ 35,250 $ 20,980 $ 56,230 Nov 30 49 1,470 15 452 $ 20,250 2 49 $ 118.80 5% $ 5.70 $ 5,800 $ 52.01 34% $ 17.72 $ 26,050 $ 19,530 $ 45,580 Dec 31 49 1,519 16 504 $ 21,870 2 48 $ 118.80 5% $ 5.67 $ 5,750 $ 49.96 36% $ 18.18 $ 27,620 $ 21,050 $ 48,670 Total 365 49 17,885 22 8,207 $ 361,720 3 1205 $ 118.80 16% $ 18.96 $ 143,105 $ 53.63 53% $ 28.18 $ 504,825 $ 278,150 $ 782,975

Monthly Rate : $ 1,344.00 ($1,200+Tax/12%) * Occupancy = Sold Room/Total Room Daily Rate : $ 118.80 ($99+Tax/12%) * ADR = Sold Room Revenue / Sold Room Total * RevPar = Sold Room Revenue / Total Room

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Proforma Revenue Breakdown

Breakwater Inn -Proforma Breakwater Inn Room (Sold) Mth Days Room (Available) Room (Combined = Monthly + Daily) Restaurnt Monthly Guest Daily Guest Total (A+B)

Day Month Day Month Revenue Day Month ADR Occu. RevPar Revenue ADR Occu. RevPar Total (A) Total (B) Jan 31 49 1,519 16 496 $ 24,000 5 155 $ 130.00 15% $ 19.70 $ 20,150 $ 67.82 43% $ 29.07 $ 44,150 $ 20,000 $ 64,150 Feb 28 49 1,372 18 504 $ 27,000 5 140 $ 130.00 16% $ 20.97 $ 18,200 $ 70.19 47% $ 32.94 $ 45,200 $ 30,000 $ 75,200 Mar 31 49 1,519 18 558 $ 27,000 5 155 $ 130.00 16% $ 20.97 $ 20,150 $ 66.13 47% $ 31.04 $ 47,150 $ 30,000 $ 77,150 Apr 30 49 1,470 20 600 $ 30,000 5 150 $ 130.00 17% $ 22.41 $ 19,500 $ 66.00 51% $ 33.67 $ 49,500 $ 35,000 $ 84,500 May 31 49 1,519 34 1,054 $ 51,000 7 217 $ 130.00 47% $ 60.67 $ 28,210 $ 62.32 84% $ 52.15 $ 79,210 $ 40,000 $ 119,210 Jun 30 49 1,470 35 1,050 $ 70,000 13 390 $ 130.00 93% $ 120.71 $ 50,700 $ 83.82 98% $ 82.11 $ 120,700 $ 70,000 $ 190,700 July 31 49 1,519 36 1,116 $ 72,000 10 310 $ 130.00 77% $ 100.00 $ 40,300 $ 78.75 94% $ 73.93 $ 112,300 $ 60,000 $ 172,300 Aug 31 49 1,519 37 1,147 $ 74,000 10 310 $ 130.00 83% $ 108.33 $ 40,300 $ 78.45 96% $ 75.25 $ 114,300 $ 60,000 $ 174,300 Sep 30 49 1,470 25 750 $ 37,500 8 240 $ 130.00 33% $ 43.33 $ 31,200 $ 69.39 67% $ 46.73 $ 68,700 $ 40,000 $ 108,700 Oct 31 49 1,519 19 589 $ 28,500 6 186 $ 130.00 20% $ 26.00 $ 24,180 $ 67.97 51% $ 34.68 $ 52,680 $ 30,000 $ 82,680 Nov 30 49 1,470 17 510 $ 25,500 4 120 $ 130.00 13% $ 16.25 $ 15,600 $ 65.24 43% $ 27.96 $ 41,100 $ 20,000 $ 61,100 Dec 31 49 1,519 18 558 $ 27,000 4 124 $ 130.00 13% $ 16.77 $ 16,120 $ 63.23 45% $ 28.39 $ 43,120 $ 20,000 $ 63,120 Total 365 49 17,885 24 744 $ 493,500 7 208 $ 130.00 37% $ 48.01 $ 324,610 $ 69.94 64% $ 45.66 $ 818,110 $ 455,000 $ 1,273,110 Monthly Rent: $1,500 Monthly Rate : $ 1,344.00 ($1,200+Tax/12%) * Occupancy = Sold Room/Total Room Daily Rate : $ 118.80 ($99+Tax/12%) * ADR = Sold Room Revenue / Sold Room Total * RevPar = Sold Room Revenue / Total Room

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COMPARABLES

Selected Competitive Set of Hotels - Estimated Operating Performance Estimated 2014

No. Property Location Room Occu. ADR RevPar Subject Breakwater Inn Juneau 49 38% $ 41.29 $ 15.87 #1 Best Western Country Lane Inn Juneau 55 57% $ 138.00 $ 78.66 #2 Best Western Grandmas Feather Bed Juneau 14 69% $ 153.00 $ 105.57 #3 Extended Stay Deluxe Juneau Shell Simmons Drive Juneau 95 71% $ 88.00 $ 62.48 #4 Super 8 Juneau Juneau 75 52% $ 110.00 $ 57.20 #5 Travelodge Juneau Airport Juneau 86 64% $ 103.00 $ 65.82

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Hotel

Full Hotel Amenities List Room Types • Balconies with Mountain or Harbor Vies 2 Double Bed Room w/ kitchenette • Restaurant and Bar • This Mountain View uni has 2 double beds and 2 cpmfoprtable chairs, kitchenette • Meeting Room • includes under the counter refrigerator, 2 buner stove top, microwave, coffee pot, • Banquet Area • pots, pans, utensils, table and chair. Cable TV *** FISHING BOAT, SNOW PLOWING TRUCK & SHUTTLE VAN INCLUDED *** . Delicatessen and Convenience Store 1 King Bed Room w/ Kitchenette . Complimentary with and Cable with HBO • This Mountain View unit has 1 King beds and 2 comfortable chairs. Kitchenette . On-site Management Suite • includes under the counter refrigerator, 2 burner stove top, microwave, coffee pot, . Variety of Room Types, • pots, pans, untensils, table and chairs. Cable TV . including rooms w/ Kitchenetes 2 Duble Bed Room w/ Harbor view and Balcony • Room Service • This Harbor view nnit has 2 Double Bed and 2 comfortable chairs Harbor View • 24-hour Front Desk Service • Private deck balcony, cable TV and microwave, coffee pot. • Refrigerator / Micorwave / AM-FM radio • Store your catch in our freezer/refrigerator 1 King Bed Room w/ Harbor view and Balcony • This Harbor View unit has 1 King bed and 2 comfortable chairs Harbor View Private • Wake-up calls • deck balcony, cable TV and microwave, coffee port • Free airport shuttle • Copier / Fax machine Spacious Family Suite Room w/ Mountain View • Lounge / Handicap room • This spacious Mountain View suite unit has 2 Double bed and 2 comfortable chiars, • Dining table and sofa cable TV and microwave, coffee pot • Alarm clock / Hair dryer / Iron • Secure room entry by Electronic Key Family Room bunk Bed w/ 2 Double Beds • Security / Fire alarm / Smoke dectors • This Mountain view unit has 1 Bunk bed, 2 Double bed, 2 comfortable chairs, • Telephone / Voicemail / Climate control • 1 Sofa bed, cable TV, microwave and coffee pot (Up to 8 People)

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Hotel

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FISHING BOAT – PART OF SALE

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ACTIVITIES

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JUNEAU DOWNTOWN

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8 AERIAL PHOTO

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MARKETINGDEMOGRAPHICS TEAM Created on June 2019

POPULATION 1 Miles 3 Miles 5 Miles HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles . 2023 Projection . 2018 Estimate Total Population 3,666 8,895 13,114 $200,000 or More 6.48% 6.94% 6.81% . 2018 Estimate $150,000 - $199,000 10.82% 9.83% 9.42% Total Population 3,622 8,712 12,875 $100,000 - $149,000 22.28% 23.02% 22.32% . 2010 Census $75,000 - $99,999 10.25% 12.19% 13.79% Total Population 3,438 8,071 11,955 $50,000 - $74,999 17.21% 17.10% 17.12% . 2000 Census $35,000 - $49,999 13.96% 12.33% 13.23% Total Population 3,454 8,063 11,829 $25,000 - $34,999 5.96% 5.91% 5.89% . Daytime Population $15,000 - $24,999 5.47% 5.54% 5.32% 2018 Estimate 8,469 12,063 16,148 Under $15,000 7.59% 7.15% 6.10% HOUSEHOLDS 1 Miles 3 Miles 5 Miles Average Household Income $101,902 $102,946 $101,737 . 2023 Projection Median Household Income $74,692 $78,676 $79,035 Total Households 1,767 4,157 5,697 Per Capita Income $49,184 $48,196 $44,604 . 2018 Estimate POPULATION PROFILE 1 Miles 3 Miles 5 Miles Total Households 1,736 4,055 5,545 . Population 25+ by Education Level Average (Mean) Household Size 2.04 2.14 2.27 2018 Estimate Population Age 25+ 2,854 6,648 9,532 . 2010 Census Elementary (0-8) 0.69% 0.67% 0.93% Total Households 1,682 3,817 5,231 Some High School (9-11) 3.09% 2.89% 3.30% . 2000 Census High School Graduate (12) 15.33% 17.16% 20.51% Total Households 1,619 3,647 4,960 Some College (13-15) 20.53% 23.75% 25.10% HOUSING UNITS 1 Miles 3 Miles 5 Miles Associate Degree Only 4.31% 5.45% 5.60% . Occupied Units Bachelors Degree Only 32.93% 31.88% 28.51% 2023 Projection 1,767 4,157 5,697 Graduate Degree 22.89% 18.03% 15.78% 2018 Estimate 1,861 4,352 5,903

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MARKETINGDEMOGRAPHICS TEAM

Population Race and Ethnicity In 2018, the population in your selected geography is 3,622. The The current year racial makeup of your selected area is as follows: population has changed by 4.86% since 2000. It is estimated that the 72.15% White, 2.32% Black, 0.46% Native American and 4.98% population in your area will be 3,666.00 five years from now, which Asian/Pacific Islander. Compare these to US averages which are: represents a change of 1.21% from the current year. The current 70.20% White, 12.89% Black, 0.19% Native American and 5.59% population is 49.63% male and 50.37% female. The median age of the Asian/Pacific Islander. People of Hispanic origin are counted population in your area is 45.66, compare this to the US average which independently of race. is 37.95. The population density in your area is 1,146.25 people per square mile. People of Hispanic origin make up 6.06% of the current year population in your selected area. Compare this to the US average of 18.01%.

Households Housing There are currently 1,736 households in your selected geography. The The median housing value in your area was $346,600 in 2018, number of households has changed by 7.23% since 2000. It is compare this to the US average of $201,842. In 2000, there were 869 estimated that the number of households in your area will be 1,767 five owner occupied housing units in your area and there were 750 renter years from now, which represents a change of 1.79% from the current occupied housing units in your area. The median rent at the time was year. The average household size in your area is 2.04 persons. $677.

Income Employment In 2018, the median household income for your selected geography is In 2018, there are 8,764 employees in your selected area, this is also $74,692, compare this to the US average which is currently $58,754. known as the daytime population. The 2000 Census revealed that The median household income for your area has changed by 43.34% 76.44% of employees are employed in white-collar occupations in this since 2000. It is estimated that the median household income in your geography, and 25.48% are employed in blue-collar occupations. In area will be $99,029 five years from now, which represents a change 2018, unemployment in this area is 3.28%. In 2000, the average time of 32.58% from the current year. traveled to work was 13.00 minutes.

The current year per capita income in your area is $49,184, compare this to the US average, which is $32,356. The current year average household income in your area is $101,902, compare this to the US average which is $84,609.

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8 DEMOGRAPHICS

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8 LOCATION MAP

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8 MAP OF SOUTH EAST ALASKA

25 PRESENTED BY