MARKET TRENDS | SEATTLE 1ST QUARTER Estimated 2019  ROOM OCCUPANCY |  AVERAGE ROOM RATE |  DAILY REVPAR 2020

Projected 2020  ROOM OCCUPANCY |  AVERAGE ROOM RATE |  DAILY REVPAR

The Day the Earth Stood Still. The title is from a film that envisioned our collective response to an alien visitor. But it also describes be slower, with some tourists returning our attempt to cope with COVID-19, the new coronavirus that this summer but others putting off trips until 2021. Since many group events are has caused major disruptions in most sectors of the national and booked well in advance, the impact of regional economy. the virus on group demand will extend out at least two years. The lodging industry has been particularly hard hit. As of this writing, nearly half the in Downtown Seattle had suspended operations. We expect that room prices will remain Those that remain open are struggling with very low occupancy. One flat through 2020. While some hotels hotel is being used to house patients under voluntary quarantine. may attempt to maintain occupancy by offering discounted rates, we do not It appears that the primary arc of the virus lasts three to four months, expect that strategy to succeed, as no with a few cases in the early weeks, a rapid rise in infections among discount will be sufficient to offset the the most vulnerable populations, and an eventual tapering off. The fear of infection. first case in Washington was reported in late January, and the infection rate accelerated in February. This suggests that the impact will be most During 2020, we are projecting that the severe through April and that there could be a noticeable decrease in RevPAR in affected markets will decline new infections by the end of May. by an average of 40% to 50% from the levels recorded in 2019. Barring a As the virus abates, lodging demand will begin to recover. Business resurgence of the virus, most hotels will travel will resume first, once local companies are convinced that their show strong improvement in 2021 and employees and visitors are not at risk. The recovery in leisure travel will should fully recover by 2022.

Hotel Market Performance

Room Occupancy Average Room Rate Daily RevPAR Market 2019 2020 Change 2019 2020 Change 2019 2020 Change Downtown Seattle 83.3% 44.6% -46.5% $223 $223 0.0% $186 $99 -46.5% Downtown Bellevue 70.8% 42.2% -40.4% $198 $198 0.0% $140 $84 -40.4% Kirkland/Redmond 63.8% 36.4% -42.9% $123 $123 0.0% $78 $45 -42.9% Kent/Tukwila 70.6% 41.9% -40.7% $138 $138 0.0% $97 $58 -40.7% Puyallup/Sumner 86.7% 42.1% -51.4% $138 $138 0.0% $120 $58 -51.4% Marysville/Arlington 66.1% 37.7% -43.0% $122 $122 0.0% $81 $46 -43.0%

Sample Average 73.6% 40.8% -44.5% $157 $157 0.0% $115 $64 -44.5%

1Q 2020 | SEATTLE | HOTEL | KIDDER MATHEWS MARKET UP CLOSE

THE OUTBREAK of the coronavirus ONLY ONE new hotel opened in the SEVERAL HOTEL SALES closed in the has decimated lodging demand tri-county area during 1Q2020. first quarter, but only one at a price throughout the region. above $2MM. TWELVE HOTELS remain under NUMEROUS HOTELS have suspended construction, though completion operation and furloughed staff. dates are being extended.

RECENT HOTEL SALES Name Location Date Price Rooms $/Room $/SF

Lotte Hotel & Sanctuary Seattle December 2019 $175,000,000 189 $925,926 $786 Salish Lodge & Gift Shop Snoqualmie October 2019 $62,500,000 86 $726,744 $704 Clarion Inn Tacoma February 2020 $10,500,000 128 $82,031 $159 Evergreen Inn & Suites Monroe December 2019 $7,850,000 66 $118,939 $206

RECENT OPENINGS/UNDER CONSTRUCTION Name Address City Type Rooms Status Date

Residence Inn 1100 Lake Washington Blvd Renton Extended 140 Open August 2019 Express 507 C Street SW Auburn Limited 120 Open August 2019 1028 13th Street Everett Select 142 Open September 2019 Wingate Hotel 19031 International Blvd SeaTac Limited 157 Open December 2019 Courtyard Northgate 10733 Meridian Avenue N Seattle Select 140 Open February 2020 Marriott Tacoma Hotel 1538 Commerce Street Tacoma Full 304 U/C 2020 Marriott Hotel 300 Terry Avenue N Seattle Full 267 U/C 2020 citizenM 201 Westlake Avenue N Seattle Limited 264 U/C 2020 Lotte Hotel 801 5th Avenue Seattle Select 189 U/C 2020 16630 Redmond Way Redmond Select 177 U/C 2020 969 118th Avenue SE Bellevue Limited 164 U/C 2020 Hilton Garden Inn 3801 Alderwood Mall Boulevard Lynnwood Select 155 U/C 2020 Woodspring Suites 11329 Pacific Highway SW Lakewood Extended 122 U/C 2020 La Quinta Inn & Suites 11430 38th Drive NE Marysville Limited 117 U/C 2020 2520 136th Ave Ct E Sumner Extended 109 U/C 2020 Home2 Suites 4070 116th Street NE Marysville Extended 90 U/C 2020 Comfort Inn & Suites 12704 Pacific Highway SW Lakewood Limited 55 U/C 2020

Kidder Mathews is the largest, independent commercial real estate firm on the West Coast, with 900 real estate professionals and staff in 22 offices in Washington, Oregon, California, Nevada, and Arizona. We offer a complete range of brokerage, appraisal, property management, consulting, project and construction management, and debt equity finance services for all property types.

CONTACT COMMERCIAL BROKERAGE BRIAN HATCHER Regional President, Brokerage ANNUAL NO. OF Northwest 27M SALES SF 440+ BROKERS 206.296.9600 [email protected] ANNUAL ANNUAL TRANSACTION LEASING SF $9.6B VOLUME 42M The information in this report was composed by the Kidder Mathews VALUATION ADVISORY Valuation Advisory Group. APPRAISALS TOTAL NO. JOHN GORDON, MAI, AI-GRS ANNUALLY APPRAISERS/MAI’S 425.454.7040 1,680+ 38/23 [email protected] PROPERTY MANAGEMENT

MANAGEMENT IN ASSETS UNDER KIDDER.COM 70M+ PORTFOLIO SF $12B+ MANAGEMENT

This information supplied herein is from sources we deem reliable. It is provided without any representation, warranty or guarantee, expressed or implied as to its accuracy. Prospective Buyer or Tenant should conduct an independent investigation and verification of all matters deemed to be material, including, but not limited to, statements of income and expenses. CONSULT YOUR ATTORNEY, ACCOUNTANT, OR OTHER PROFESSIONAL ADVISOR.

DATA SOURCE: COSTAR 1Q 2020 | SEATTLE | HOTEL | KIDDER MATHEWS