ICONIC Rochester, HOTEL PORTFOLIO 498 LUXURY ROOMS & BEST-IN-CLASS AMENITIES NON-ENDORSEMENT & DISCLAIMER NOTICE

CONFIDENTIALITY AND DISCLAIMER The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap. All rights reserved.

NON-ENDORSEMENT NOTICE 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.

BRETT CHETEK RYAN BRIGGS Senior Director Senior Financial Analyst Office: (786) 522-7091 Office: (786) 522-7126 Cell: (314) 775-4285 Cell: (314) 540-1421 [email protected] [email protected]

ii ROCHESTER HOTEL PORTFOLIO TABLE of CONTENTS

Section 1 Portfolio Overview ______1 Offering Summary ______6 Year 1 Pro Forma ______7 Section 2 | Hyatt Regency Hyatt Regency Overview ______8 Financial Analysis ______13 Features and Amenities ______21 Ballrooms & Boardrooms ______27 Fine Dining & Entertainment ______32 Location Overview ______37 Section 3 | Strathallan Strathallan Overview ______38 Location Overview ______43 Tapestry Collection Conversion ______44 Financial Analysis ______45 Features and Amenities ______51 Ballrooms & Boardrooms ______58 Fine Dining & Entertainment ______63 Section 4 | Rochester, New York Market Overview ______68 Downtown Revitalization ______72 Demographics ______77

iii ROCHESTER HOTEL PORTFOLIO Section1

The Chetek Group of Marcus & Millichap, as exclusive advisor, is pleased to present the exceptional opportunity to acquire a 100% fee-simple interest in two of the top performing full-service hotels in Rochester, New York. Totaling 498-contemporary rooms boasting the highest ADR’s in the market, the hotels offer 399,051 square-feet of luxury space, and best-in-class amenities including – highly sought after event spaces producing large revenues, extremely successful restaurants with proven track records and a national presence, the swankiest bars and rooftop decks in Rochester, and a full-service resort style spa leased to Ape + Canary.

THE PROPERTIES ARE COMPRISED OF: 1. The iconic Hyatt Regency Rochester (“The Hyatt”) is a 25-story upper upscale Hotel which received an $18,000,000 in renovations in 2017, leaving no stone unturned. The hotel features 247,105 square-feet of premium accommodations and event space – the largest event space in Rochester outside of the convention center. The Hyatt also features a brand-new Morton’s Steakhouse and Starbucks Café, both exceeding forecasts.

2. The Strathallan Rochester Hotel, a DoubleTree by Hilton (“The Strathallan”) is a 155 room, 151,946 square-foot, 9-story best- in class hotel with the highest ADR and RevPAR in Rochester. The Strathallan is the chicest and most desirable wedding venue in all of Rochester with advanced bookings through 2020. The Strathallan also features Char Steak and Lounge, one of the highest grossing restaurants in upstate New York. The Property has the unique ability to be converted to a Tapestry Collection by Hilton, creating substantial upside for investors, which will further solidify the Strathallan as the top performing hotel in all of Rochester.

The highly coveted hotels are notable landmarks in Rochester with incredible appeal to investors seeking reliable cash flow and considerable upside, such as – operational synergies between the hotels, expense optimization, organic growth, and rebranding The Strathallan hotel from a DoubleTree to a Tapestry Collection by Hilton, a vibrant Hilton flag that promotes hotel exclusivity.

1 ROCHESTER HOTEL PORTFOLIO 343 GUEST ROOMS 25 STORIES 247,105 SQUARE FEET

2 ROCHESTER HOTEL PORTFOLIO 155 GUEST ROOMS 9 STORIES 151,946 SQUARE FEET

3 ROCHESTER HOTEL PORTFOLIO Genesse River Located Just 1-Mile Apart

Genesse River

490 Genesse River

DOWNTOWN ROCHESTER

490

490 Genesse River 490

4 ROCHESTER HOTEL PORTFOLIO LAKE ONTARIO

ROCHESTER

SYRACUSE

BUFFALO

5 ROCHESTER HOTEL PORTFOLIO PORTFOLIO OFFERING SUMMARY

PORTFOLIO PURCHASE PRICE UNPRICED

NUMBER OF HOTELS 2

PORTFOLIO GUEST ROOMS 498

PORTFOLIO SQUARE FEET 399,051

HYAT T STRATHALLAN

ROOMS 343 155

SQUARE FEET 247,105 151,946

PRO FORMA ADR $153.63 $201.84

PRO FORMA REVPAR $94.90 $147.48

PRO FORMA OCCUPANCY 61.78% 72.62%

PORTFOLIO OPERATING DATA

INCOME YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

ROOM REVENUE $20,225,259 $21,384,334 $22,667,394 $24,027,437 $25,469,083

FOOD & BEVERAGE REVENUE $16,294,139 $16,620,021 $16,952,422 $17,291,470 $17,637,300

OTHER REVENUE $326,228 $332,753 $339,408 $346,196 $353,120

NON-OPERATED REVENUE $395,212 $403,116 $411,178 $419,402 $427,790

TOTAL REVENUE $37,240,838 $38,740,224 $40,370,402 $42,084,505 $43,887,293

TOTAL EXPENSES $29,018,535 $29,948,360 $31,192,428 $32,517,976 $34,017,987

NET OPERATING INCOME $8,222,303 $8,791,863 $9,177,974 $9,566,529 $9,869,306

6 ROCHESTER HOTEL PORTFOLIO PRO FORMA YEAR 1 - HYATT PRO FORMA YEAR 1 - STRATHALLAN PROPERTY DETAIL PROPERTY DETAIL Fiscal Year Start 9/1/18 Fiscal Year Start 9/1/18 Fiscal Year End 8/31/19 Fiscal Year End 8/31/19 Average Daily Rate 153.63 Average Daily Rate 201.84 Occupied Rooms 77,340 Occupied Rooms 41,084 Available Rooms 125,195 Available Rooms 56,575 Occupancy Percentage 61.78% Occupancy Percentage 72.62% Rev PAR 94.90 Rev PAR 147.48

REVENUE $ % REVENUE $ % Rooms Department 11,881,358 59.1% Rooms Department 8,343,902 49.8% Food & Beverage Department 7,946,027 39.5% Food & Beverage Department 8,348,112 49.9% Other Operated Departments 272,167 1.4% Other Operated Departments 54,061 0.3% TOTAL REVENUE 20,099,551 100.0% TOTAL REVENUE 16,746,075 100.0%

DEPARTMENTAL EXPENSES DEPARTMENTAL EXPENSES Rooms Department 4,752,543 40.0% Rooms Department 2,038,567 24.4% Food & Beverage Department 3,973,013 50.0% Food & Beverage Department 5,958,948 71.4% Other Operated Department 150,747 55.4% Other Operated Department 25,800 47.7% TOTAL DEPARTMENTAL EXPENSES 8,876,303 44.2% TOTAL DEPARTMENTAL EXPENSES 8,023,315 47.9%

TOTAL DEPARTMENTAL INCOME 11,223,248 55.8% TOTAL DEPARTMENTAL INCOME 8,722,760 52.1%

UNDISTRIBUTED OPERATING EXPENSES UNDISTRIBUTED OPERATING EXPENSES Administrative & General 1,004,978 5.0% Administrative & General 1,936,984 11.6% Sales & Marketing 1,507,466 7.5% Sales & Marketing 1,205,717 7.2% Repairs & Maintenance 1,004,978 5.0% Repairs & Maintenance 534,592 3.2% Utilities 1,306,471 6.5% Utilities 400,914 2.4% Royalty 752,988 3.7% TOTAL UNDISTRIBUTED EXPENSES 4,078,208 24.4% TOTAL UNDISTRIBUTED EXPENSES 5,576,881 27.7%

GROSS OPERATING PROFIT 4,644,552 27.7% GROSS OPERATING PROFIT 5,646,368 28.1%

NON - OPERATED INCOME 320,212 1.6% NON - OPERATED INCOME 75,000 0.4% INCOME BEFORE FIXED CHARGES 5,966,580 29.7% INCOME BEFORE FIXED CHARGES 4,719,552 28.2% FIXED COSTS Management Fees 602,987 3.0% FIXED COSTS Insurance 127,728 0.6% Management Fees 502,382 3.0% Leases 68,196 0.3% Insurance 140,011 0.8% Property Taxes 669,500 3.3% Property Taxes 353,026 2.1% TOTAL FIXED COSTS 1,468,411 7.3% TOTAL FIXED COSTS 995,419 5.9%

NOI (EBITDA) 4,498,169 22% NOI (EBITDA) 3,724,134 22.2%

7 ROCHESTER HOTEL PORTFOLIO Property Overview

Ownership took over the Hyatt Regency in February 2016 with the plan of renovating the property into the premier hotel in Rochester. Construction began in December of 2016 – at that time 50% of the rooms were taken out of service, and all public spaces were demolished. During this period the hotel operated at 50% of its capacity with no F&B outlets until September of 2017. Ownership completed the renovation in October of 2017 and are seeing tremendous growth in ADR and F&B year-over-year as expected. 125 East Main Street, Rochester, New York 14604

The Hyatt Regency Rochester (“The Hyatt”) – Located in , New York, this upper upscale hotel features 343 brand new renovated rooms, and 247,105 square-feet of luxury space. The Hyatt underwent an $18,000,000 all-inclusive renovation, modernizing the hotel and adding first class amenities. The Hyatt fully reopened in October of 2017 and has seen exciting growth in ADR and RevPAR, demonstrated by its current $30 ADR premium over the competitive set in its last 3 months of operations. Occupancy, ADR, and RevPAR continue to trend upwards, month over month. The hotel has been primed for maximum operating potential and is now among the top performing hotels in Rochester this year, with peak season still approaching.

From the lobby, rooms, roof, and new escalators to the fine details such as finishes, décor, and interior fascia, the renovations spared no expense. With multi-million-dollar renovations and forecasted hotel revenues, Morton’s Steakhouse chose the Hyatt Regency as it’s first location in Rochester, and Starbucks quickly followed.

The Hyatt is conveniently connected by an enclosed sky-walk bridge to the Rochester Riverside Convention Center, which has plans for a $75,000,000 to $100,000,000 renovation. The Hyatt Regency now offers state-of-the-art amenities, including a newly built contemporary style lobby, 20,000 square-feet of functional event space, a brand-new Morton’s Steakhouse, a Starbucks Café, the Street Craft Kitchen and Bar located on the main floor, and the renowned Center City Terrace roof top bar with stunning views of downtown Rochester

Situated along the , the Hyatt Regency is the tallest, most upscale hotel in Upstate New York. The Hyatt Regency boasts a new contemporary façade, etching an exceptional new chapter in its history, making it naturally among the hottest hotels in Rochester, resulting in a top lodging choice for visitors and events.

9 INVESTMENT SUMMARY - HYATT REGENCY THE HOTEL SECTOR POSTED THE STRONGEST GROWTH IN DEAL VOLUME ACROSS MAJOR PROPERTY SECTORS IN Q1’18. $10.9B – TRANSACTION VOLUME 63% YOY VOLUME CHANGE

ATTACHED PARKING GARAGE

ENCLOSED SKYWALK BRIDGE TO THE CONVENTION CENTER

10 INVESTMENT SUMMARY - HYATT REGENCY With the new renovation - The Hyatt is focused on targeting corporate business rather than the transient traveler.

11 INVESTMENT SUMMARY - HYATT REGENCY Hyatt Regency Square Footage Breakdown

Floor SF

Ground Floor/Lower Level 23,574

Lobby 21,585

2nd Floor 29,659

4th Floor 12,645

5th - 22nd Floor 139,808

23rd Floor 6,833

24th Floor 6,833

25th Floor 6,168

Total Square Feet: 247,105

12 INVESTMENT SUMMARY - HYATT REGENCY Section3 FINANCIAL Analysis

13 FINANCIAL ANALYSIS - HYATT REGENCY PRO FORMA YEAR 1 - HYATT Financial Assumptions Summary PROPERTY DETAIL Fiscal Year Start 9/1/18 Income Assumptions Fiscal Year End 8/31/19 1. Fiscal Year 1 ADR Growth: 7% - this is consistent with the Strathallan, Hilton Garden Inn, and [1] Average Daily Rate 153.63 other first-class hotels in Rochester. Occupied Rooms 77,340 a. The Hyatt Regency also experienced significant ADR growth from 2016 to 2017 due to the Available Rooms 125,195 $18,000,000 renovation completed in October 2017. Occupancy Percentage 61.78% b. The Fiscal Year 1 ADR growth is in-line with owner’s expectations and achieves the goal set Rev PAR 94.90 by management as a result of the renovation. c. ADR in 2016 was $108.14 vs. $134.06 in 2017, a 23.9% increase year-over-year. REVENUE $ % Rooms Department 11,881,358 59.1% 2. F&B for the trailing 12 month period ending February 2018 totaled $5,064,293. Ownership [2] Food & Beverage Department 7,946,027 39.5% anticipates full year 2018 F&B revenue to total $6,553,846. Other Operated Departments 272,167 1.4% TOTAL REVENUE 20,099,551 100.0% a. This increase is due to in-place events and rooms bookings reported as of April 2018, which is $2,317,643 or 35% of annual fiscal year 1 budget. DEPARTMENTAL EXPENSES b. Note, in the Trailing-12 February 2018 period, the hotel did not have a working kitchen or [4] Rooms Department 4,752,543 40.0% restaurant from December 2016 through September 2017. [5] Food & Beverage Department 3,973,013 50.0% c. In addition, management expects F&B Revenue to make up 40% of total revenue, which is [6] Other Operated Department 150,747 55.4% in-line with historical average. TOTAL DEPARTMENTAL EXPENSES 8,876,303 44.2% d. The growth in F&B is a result of continued focus on events with 250-guests and greater, and the re-negotiation of legacy corporate event contracts. TOTAL DEPARTMENTAL INCOME 11,223,248 55.8% e. The Hyatt Regency downtown has the largest event space in Rochester outside of the Convention Center and can hold up to 750 sit-down guests. UNDISTRIBUTED OPERATING EXPENSES [7] Administrative & General 1,004,978 5.0% 3. Non-Operated Income: includes gross rent from Morton’s Steakhouse. [8] Sales & Marketing 1,507,466 7.5% [9] Repairs & Maintenance 1,004,978 5.0% Expense Assumptions: [10] Utilities 1,306,471 6.5% 4. Rooms Department: presumed 40% of Total Room Revenue, in-line with historical. [12] Royalty 752,988 3.7% TOTAL UNDISTRIBUTED EXPENSES 5,576,881 27.7% 5. Food & Beverage: presumed 50% of total F&B Revenue, in-line with historical. 6. Other Operated Department: presumed 55.4%, in-line with historical. GROSS OPERATING PROFIT 5,646,368 28.1% 7. Admin & General: presumed [3] NON - OPERATED INCOME 320,212 1.6% 8. Sales & Marketing: presumed 7.5%. Increasing revenue will drive this expense down as a INCOME BEFORE FIXED CHARGES 5,966,580 29.7% proportion of Total Revenue, as revenue is increasing year-over-year. 9. Repairs & Maintenance: presumed 5%, in-line with historical. FIXED COSTS 10. Utilities: presumed 6.5%, in-line with historical. [11] Management Fees 602,987 3.0% 11. Management Fee: presumed 3%, in-line with industry standards for similar hotels. Insurance 127,728 0.6% Leases 68,196 0.3% 12. Royalty: 5% on rooms and 2% on F&B through 12/31/2021, per the Amended Franchise Property Taxes 669,500 3.3% Agreement. TOTAL FIXED COSTS 1,468,411 7.3%

NOI (EBITDA) 4,498,169 22%

CAPEX RESERVE 401,991 2.00%

NET CASH FLOW 4,096,178 20.4%

14 FINANCIAL ANALYSIS - HYATT REGENCY TRAILING 12 - HYATT REGENCY

ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL PROPERTY DETAIL APR-17 MAY-17 JUN-17 JUL-17 AUG-17 SEP-17 OCT-17 NOV-17 DEC-17 JAN-18 FEB-18 MAR-18 TOTAL Average Daily Rate 108.28 123.62 118.96 112.39 123.04 115.41 142.50 139.83 133.93 129.35 128.74 138.12 126.93 Occupied Rooms 3764 4,489 4,756 4,854 6,128 4,612 6,772 5,815 3,338 3,364 4,087 4,567 56,546 Available Rooms 10,140 10,478 10,140 10,478 10,478 10,140 10,478 10,290 10,633 10,633 9,604 10,633 124,125 [1} Occupancy Percentage 37.12% 42.84% 46.90% 46.33% 58.48% 45.48% 64.63% 56.51% 31.39% 31.64% 42.56% 42.95% 45.56% Rev PAR 40.19 52.96 55.79 52.06 71.96 52.49 92.10 79.02 42.04 40.92 54.78 59.32 57.82

REVENUE Rooms Department 407,571 554,943 565,757 545,523 753,999 532,271 964,999 813,129 447,059 435,142 526,147 630,788 7,177,328 55.7% [2] Food & Beverage Department 300,027 419,768 343,428 156,872 260,778 592,797 837,546 606,048 596,822 406,751 363,486 544,564 5,428,887 42.1% Other Operated Departments 16,497 21,178 29,979 16,370 30,729 17,800 27,421 33,818 22,116 30,315 16,396 22,602 285,221 2.2% TOTAL REVENUE 724,095 995,889 939,164 718,765 1,045,506 1,142,868 1,829,966 1,452,995 1,065,997 872,208 906,029 1,197,954 12,891,436 100.0%

DEPARTMENTAL EXPENSES Rooms Department 131,837 181,122 196,656 292,669 333,698 263,268 318,704 349,805 190,032 190,645 175,320 250,340 2,874,096 40.0% Food & Beverage Department 180,241 246,606 255,803 192,296 258,373 289,464 352,918 328,230 228,748 207,365 190,952 299,208 3,030,204 55.8% Other Operated Department 34,113 38,691 35,440 43,202 32,986 29,809 36,551 35,190 31,812 41,130 44,216 37,714 440,854 154.6% TOTAL DEPARTMENTAL EXPENSES 346,191 466,419 487,899 528,167 625,057 582,541 708,173 713,225 450,592 439,140 410,488 587,262 6,345,154 49.2%

TOTAL DEPARTMENTAL INCOME (LOSS) 377,904 529,470 451,265 190,598 420,449 560,327 1,121,793 739,770 615,405 433,068 495,541 610,692 6,546,282 50.8%

UNDISTRIBUTED OPERATING EXPENSES Administrative & General 102,238 148,727 162,693 134,418 176,562 154,591 203,096 128,945 144,600 119,049 139,992 166,561 1,781,472 13.8% Sales & Marketing 84,912 92,360 102,777 109,838 120,068 118,343 89,742 109,987 95,118 90,052 103,257 110,777 1,227,231 9.5% Repairs & Maintenance 55,562 45,601 61,829 56,369 68,666 49,552 55,221 61,852 59,992 56,755 48,671 61,618 681,688 5.3% Utilities 54,579 69,875 53,353 71,820 60,785 64,366 60,256 57,724 68,803 70,540 63,973 69,802 765,876 5.9% TOTAL UNDISTRIBUTED EXPENSES 297,291 356,563 380,652 372,445 426,081 386,852 408,315 358,508 368,513 336,396 355,893 408,758 4,456,267 34.6%

GROSS OPERATING PROFIT (LOSS) 80,613 172,907 70,613 -181,847 -5,632 173,475 713,478 381,262 246,892 96,672 139,648 201,934 2,090,015 16.2%

NON - OPERATED INCOME 10000 10,000 10,000 10,000 10,000 10,000 10,000 26,667 26,667 26,667 26,667 26,667 203,335 1.6%

INCOME BEFORE FIXED CHARGES 90,613 182,907 80,613 -171,847 4,368 183,475 723,478 407,929 273,559 123,339 166,315 228,601 2,293,350 17.8%

FIXED COSTS Management Fees 0 0 0 0 0 0 0 0 0 26166 27,181 35,939 89,286 0.7% Insurance 10,961 10,961 12,409 10,993 10,993 10,993 10,993 32,979 10,644 10,644 10,644 8,962 152,176 1.2% Leases 5,551 17,978 34,352 6,359 5,437 5,437 10,404 11,668 7,176 12,249 6,768 5,490 128,869 1.0% Property Taxes 46,788 46,788 46,788 0 106,473 53,237 53,237 53,237 53,237 54,560 54,560 54,560 623,465 4.8% TOTAL FIXED COSTS 63,300 75,727 93,549 17,352 122,903 69,667 74,634 97,884 71,057 103,619 99,153 104,951 993,796 7.7%

NOI (EBITDA) 27,313 107,180 -12,936 -189,199 -118,535 113,808 648,844 310,045 202,502 19,720 67,162 123,650 1,299,554 10.1%

Trailing 12 Notes 1. Renovation construction commenced in December 2016 and completed in October 2017, during which time the hotel operated at 50% capacity, with no F&B outlets. 2. The hotel did not have a working kitchen or restaurant during the renovation.

15 FINANCIAL ANALYSIS - HYATT REGENCY TRAILING 3-MONTHS & PRO FORMA YEAR 1 - HYATT REGENCY

PROPERTY DETAIL ACTUAL ACTUAL ACTUAL FORECAST FORECAST FORECAST FORECAST FORECAST FORECAST FORECAST FORECAST FORECAST YTD 2018 JAN-18 FEB-18 MAR-18 APR-18 MAY-18 JUN-18 JUL-18 AUG-18 SEP-18 OCT-18 NOV-18 DEC-18 Average Daily Rate 129.35 128.74 138.12 145.00 150.00 155.00 155.00 150.00 148.00 156.00 152.00 143.00 147.69 Occupied Rooms 3,364 4,087 4,567 6,812 7,177 6,699 6,667 7,156 6,627 7,156 6,987 4,583 71,881 Available Rooms 10,633 9,604 10,633 10,290 10,633 10,290 10,633 10,633 10,290 10,633 10,290 10,633 125,195 Occupancy Percentage 31.64% 42.56% 42.95% 66.20% 67.50% 65.10% 62.70% 67.30% 64.40% 67.30% 67.90% 43.10% 57.42% Rev PAR 40.92 54.78 59.32 95.99 101.25 100.91 97.19 100.95 95.31 104.99 103.21 61.63 84.80

REVENUE Rooms Department 435,142 526,147 630,788 987,737 1,076,591 1,038,312 1,033,368 1,073,401 980,760 1,116,337 1,062,010 655,344 10,615,939 60.0% Food & Beverage Department 406,751 363,486 544,564 491,544 627,534 565,135 478,724 575,934 591,783 808,790 650,888 651,078 6,756,208 38.2% Other Operated Departments 30,315 16,396 22,602 26,967 30,778 28,672 28,171 29,074 29,725 29,826 31,330 19,948 323,804 1.8% TOTAL REVENUE 872,208 906,029 1,197,954 1,506,248 1,734,903 1,632,119 1,540,263 1,678,409 1,602,268 1,954,953 1,744,228 1,326,369 17,695,951 100.0%

DEPARTMENTAL EXPENSES Rooms Department 190,645 175,320 250,340 395,095 430,637 415,325 413,347 429,361 392,304 446,535 424,804 262,137 4,225,850 39.8% Food & Beverage Department 207,365 190,952 299,208 245,772 313,767 282,567 239,362 287,967 295,891 404,395 325,444 325,539 3,418,229 50.6% Other Operated Department 41,130 44,216 37,714 11,297 13,012 12,241 11,552 12,588 12,017 14,662 13,082 9,948 233,458 72.1% TOTAL DEPARTMENTAL EXPENSES 439,140 410,488 587,262 652,164 757,415 710,133 664,261 729,915 700,213 865,592 763,330 597,624 7,877,537 44.5%

TOTAL DEPARTMENTAL INCOME (LOSS) 433,068 495,541 610,692 854,084 977,488 921,986 876,002 948,494 902,056 1,089,361 980,898 728,745 9,818,415 55.5%

UNDISTRIBUTED OPERATING EXPENSES Administrative & General 119,049 139,992 59,898 75,312 86,745 81,606 77,013 83,920 80,113 97,748 87,211 66,318 1,054,927 6.0% Sales & Marketing 90,052 103,257 89,847 112,969 130,118 122,409 115,520 125,881 120,170 146,621 130,817 99,478 1,387,138 7.8% Repairs & Maintenance 56,755 48,671 59,898 75,312 86,745 81,606 77,013 83,920 80,113 97,748 87,211 66,318 901,312 5.1% Utilities 70,540 63,973 77,867 97,906 112,769 106,088 100,117 109,097 104,147 127,072 113,375 86,214 1,169,164 6.6% Royalty 29,892 33,577 42,431 59,218 66,380 63,218 61,243 65,189 60,874 71,993 66,118 45,789 665,921 3.8% TOTAL UNDISTRIBUTED EXPENSES 366,288 389,470 329,940 420,717 482,757 454,927 430,906 468,007 445,418 541,181 484,733 364,117 5,178,462 29.3%

GROSS OPERATING PROFIT (LOSS) 66,780 106,071 280,752 433,367 494,731 467,059 445,096 480,487 456,638 548,180 496,165 364,628 4,639,953 26.2%

NON - OPERATED INCOME 16,667 16,667 16,667 16,667 16,667 16,667 19,679 40,667 36,667 36,667 41,867 44,667 320,212 1.8%

INCOME BEFORE FIXED CHARGES 83,447 122,738 297,419 450,034 511,398 483,726 464,774 521,153 493,304 584,846 538,032 409,295 4,960,165 28.0%

FIXED COSTS Management Fees 26,166 27,181 35,939 45,187 52,047 48,964 46,208 50,352 48,068 58,649 52,327 39,791 530,879 3.0% Insurance 10,644 10,644 10,644 10,644 10,644 10,644 10,644 10,644 10,644 10,644 10,644 10,644 127,728 0.7% Leases 12,249 6,768 5,683 5,683 5,683 5,683 5,683 5,683 5,683 5,683 5,683 5,683 75,847 0.4% Property Taxes 55,792 55,792 55,792 55,792 55,792 55,792 55,792 55,792 55,792 55,792 55,792 55,792 669,500 3.8% TOTAL FIXED COSTS 104,851 100,385 108,057 117,306 124,166 121,082 118,327 122,471 120,187 130,767 124,446 111,910 1,403,954 7.9%

NOI (EBITDA) -21,404 22,353 189,362 332,728 387,232 362,643 346,448 398,682 373,118 454,079 413,586 297,385 3,556,211 20.1%

*Year 1 of Ownership begins 9/01/18

16 FINANCIAL ANALYSIS - HYATT REGENCY TRAILING 3-MONTHS & PRO FORMA YEAR 1 (CONTINUED) - HYATT REGENCY

FORECAST FORECAST FORECAST FORECAST FORECAST FORECAST FORECAST FORECAST FULL PROPERTY DETAIL JAN-19 FEB-19 MAR-19 APR-19 MAY-19 JUN-19 JUL-19 AUG-19 YEAR 1 OF OWNERSHIP Average Daily Rate 138.41 137.75 150.86 155.15 160.50 165.85 165.85 160.50 153.63 Occupied Rooms 5,540 5,695 6,242 6,812 7,177 6,699 6,667 7,156 77,340 Available Rooms 10,633 9,604 10,633 10,290 10,633 10,290 10,633 10,633 125,195 Occupancy Percentage 52.10% 59.30% 58.70% 66.20% 67.50% 65.10% 62.70% 67.30% 61.78% Rev PAR 72.11 81.68 88.55 102.71 108.34 107.97 103.99 108.02 94.90

REVENUE Rooms Department 766,747 784,500 941,590 1,056,879 1,151,953 1,110,994 1,105,704 1,148,539 11,881,359 59.1% Food & Beverage Department 498,386 509,925 612,034 686,971 748,769 722,146 718,708 746,551 7,946,027 39.5% Other Operated Departments 15,335 15,690 18,832 21,138 23,039 22,220 22,114 22,971 272,167 1.4% TOTAL REVENUE 1,280,468 1,310,115 1,572,456 1,764,987 1,923,761 1,855,361 1,846,525 1,918,061 20,099,553 100.0%

DEPARTMENTAL EXPENSES Rooms Department 306,699 313,800 376,636 422,751 460,781 444,398 442,282 459,416 4,752,544 40.0% Food & Beverage Department 249,193 254,963 306,017 343,486 374,385 361,073 359,354 373,275 3,973,014 50.0% Other Operated Department 9,604 9,826 11,793 13,237 14,428 13,915 13,849 14,385 150,747 55.4% TOTAL DEPARTMENTAL EXPENSES 565,495 578,589 694,446 779,474 849,594 819,386 815,484 847,077 8,876,304 44.2%

TOTAL DEPARTMENTAL INCOME (LOSS) 714,973 731,527 878,009 985,513 1,074,167 1,035,974 1,031,041 1,070,984 11,223,249 55.8%

UNDISTRIBUTED OPERATING EXPENSES Administrative & General 64,023 65,506 78,623 88,249 96,188 92,768 92,326 95,903 1,004,978 5.0% Sales & Marketing 96,035 98,259 117,934 132,374 144,282 139,152 138,489 143,855 1,507,466 7.5% Repairs & Maintenance 64,023 65,506 78,623 88,249 96,188 92,768 92,326 95,903 1,004,978 5.0% Utilities 83,230 85,158 102,210 114,724 125,044 120,598 120,024 124,674 1,306,471 6.5% Royalty 48,305 49,424 59,320 66,583 72,573 69,993 69,659 72,358 752,988 3.7% TOTAL UNDISTRIBUTED EXPENSES 355,617 363,851 436,710 490,180 534,276 515,279 512,825 532,693 5,576,881 27.7%

GROSS OPERATING PROFIT (LOSS) 359,355 367,676 441,300 495,333 539,891 520,695 518,216 538,292 5,646,368 28.1%

NON - OPERATED INCOME 20,043 20,043 20,043 20,043 20,043 20,043 20,043 20,043 320,212 1.6%

INCOME BEFORE FIXED CHARGES 379,398 387,719 461,343 515,376 559,935 540,738 538,259 558,335 5,966,580 29.7%

FIXED COSTS Management Fees 38,414 39,303 47,174 52,950 57,713 55,661 55,396 57,542 602,987 3.0% Insurance 10,644 10,644 10,644 10,644 10,644 10,644 10,644 10,644 127,728 0.6% Leases 5,683 5,683 5,683 5,683 5,683 5,683 5,683 5,683 68,196 0.3% Property Taxes 55,792 55,792 55,792 55,792 55,792 55,792 55,792 55,792 669,500 3.3% TOTAL FIXED COSTS 110,533 111,422 119,292 125,068 129,831 127,779 127,514 129,660 1,468,411 7.3%

NOI (EBITDA) 268,866 276,297 342,051 390,307 430,103 412,959 410,744 428,674 4,498,169 22.4%

17 FINANCIAL ANALYSIS - HYATT REGENCY HISTORICAL FINANCIAL SUMMARY - HYATT REGENCY

PROPERTY DETAIL 2016 2017 2018 FULL YEAR 1 ACTUAL ACTU7L BUDGET OF OWNERSHIP Fiscal Year Start 1/1/16 1/1/17 1/1/18 9/1/18 Fiscal Year End 12/31/16 12/31/17 12/31/18 8/31/19 Average Daily Rate 108.14 122.58 147.71 153.63 Occupied Rooms 71,678 53,031 73,556 77,340 Available Rooms 123,370 123,675 125,195 125,195 Occupancy Percentage 58.10% 42.88% 58.75% 61.78% Rev PAR 62.87 52.56 86.79 94.90

REVENUE $ % $ % $ % $ % Rooms Department 6,579,626 62.6% 6,500,797 58.1% 10,865,141 61.2% 11,881,358 59.1% Food & Beverage Department 3,578,336 34.0% 4,428,210 39.6% 6,553,846 36.9% 7,946,027 39.5% Other Operated Departments 360,282 3.4% 263,079 2.4% 325,563 1.8% 272,167 1.4% TOTAL REVENUE 10,518,244 100.0% 11,192,086 100.0% 17,744,550 100.0% 20,099,551 100.0%

DEPARTMENTAL EXPENSES Rooms Department 2,141,277 32.5% 2,722,407 41.9% 4,327,506 39.8% 4,752,543 40.0% Food & Beverage Department 2,503,651 70.0% 2,695,675 60.9% 3,290,121 50.2% 3,973,013 50.0% Other Operated Department 363,577 100.9% 397,074 150.9% 205,093 63.0% 150,747 55.4% TOTAL DEPARTMENTAL EXPENSES 5,008,505 47.6% 5,815,156 52.0% 7,822,721 44.1% 8,876,303 44.2%

TOTAL DEPARTMENTAL INCOME 5,509,739 52.4% 5,376,930 48.0% 9,921,829 55.9% 11,223,248 55.8%

UNDISTRIBUTED OPERATING EXPENSES Administrative & General 1,257,149 12.0% 1,287,703 11.5% 1,057,357 6.0% 1,004,978 5.0% Sales & Marketing 959,641 9.1% 1,228,881 11.0% 1,390,782 7.8% 1,507,466 7.5% Repairs & Maintenance 458,749 4.4% 656,110 5.9% 903,742 5.1% 1,004,978 5.0% Utilities 605,640 5.8% 725,043 6.5% 1,172,323 6.6% 1,306,471 6.5% Royalty 502,407 4.8% 388,418 3.5% 674,334 3.8% 752,988 3.7% TOTAL UNDISTRIBUTED EXPENSES 3,783,586 36.0% 4,286,155 38.3% 5,198,538 29.3% 5,576,881 27.7%

GROSS OPERATING PROFIT 1,726,153 16.4% 1,090,775 9.7% 4,723,291 26.6% 5,646,368 28.1%

NON - OPERATED INCOME 0 0.0% 123,333 1.1% 320,212 1.8% 320,212 1.6%

INCOME BEFORE FIXED CHARGES 1,726,153 16.4% 1,214,108 10.8% 5,043,503 28.4% 5,966,580 29.7%

FIXED COSTS Management Fees 0 0.0% 31,893 0.3% 532,336 3.0% 602,987 3.0% Insurance 269,417 2.6% 173,082 1.5% 127,728 0.7% 127,728 0.6% Leases 55,742 0.5% 121,017 1.1% 75,847 0.4% 68,196 0.3% Property Taxes 653,413 6.2% 600,150 5.4% 669,500 3.8% 669,500 3.3% TOTAL FIXED COSTS 978,572 9.3% 926,142 8.3% 1,405,411 7.9% 1,468,411 7.3%

NOI (EBITDA) 747,581 7.1% 287,966 2.6% 3,638,092 20.5% 4,498,169 22.4%

2016-2017 P&L Notes 1. Renovation construction commenced in December 2016 and completed in October 2017, during which time the hotel operated at 50% capacity, with no F&B outlets. 2. The hotel did not have a working kitchen or restaurant during the renovation.

18 FINANCIAL ANALYSIS - HYATT REGENCY PRO FORMA FISCAL YEAR 1 THROUGH 5 - HYATT REGENCY

PROPERTY DETAIL FULL YEAR 1 FISCAL FISCAL FISCAL FISCAL OF OWNERSHIP YEAR 2 YEAR 3 YEAR 4 YEAR 5 Fiscal Year Start 9/1/18 9/1/19 9/1/20 9/1/21 9/1/22 Fiscal Year End 8/31/19 8/31/20 8/31/21 8/31/22 8/31/23 Average Daily Rate 153.63 162.84 172.61 182.97 193.95 Occupied Rooms 77,340 77,340 77,340 77,340 77,340 Available Rooms 125,195 125,195 125,195 125,195 125,195 Occupancy Percentage 61.78% 61.78% 61.78% 61.78% 61.78% Rev PAR 94.90 100.60 106.63 113.03 119.81

REVENUE Rooms Department 11,881,358 59.1% 12,594,239 60.0% 13,349,894 61.0% 14,150,887 61.9% 14,999,941 62.8% Food & Beverage Department 7,946,027 39.5% 8,104,947 38.6% 8,267,046 37.7% 8,432,387 36.9% 8,601,035 36.0% Other Operated Departments 272,167 1.4% 277,610 1.3% 283,163 1.3% 288,826 1.3% 294,602 1.2% TOTAL REVENUE 20,099,551 100.0% 20,976,797 100.0% 21,900,102 100.0% 22,872,100 100.0% 23,895,578 100.0%

DEPARTMENTAL EXPENSES Rooms Department 4,752,543 40.0% 5,037,696 40.0% 5,339,957 40.0% 5,660,355 40.0% 5,999,976 40.0% Food & Beverage Department 3,973,013 50.0% 4,052,474 50.0% 4,133,523 50.0% 4,216,193 50.0% 4,300,517 50.0% Other Operated Department 150,747 55.4% 157,326 56.7% 164,251 58.0% 171,541 59.4% 179,217 60.8% TOTAL DEPARTMENTAL EXPENSES 8,876,303 44.2% 9,247,495 44.1% 9,637,731 44.0% 10,048,089 43.9% 10,479,710 43.9%

TOTAL DEPARTMENTAL INCOME 11,223,248 55.8% 11,729,302 55.9% 12,262,371 56.0% 12,824,011 56.1% 13,415,867 56.1%

UNDISTRIBUTED OPERATING EXPENSES Administrative & General 1,004,978 5.0% 1,048,840 5.0% 1,095,005 5.0% 1,143,605 5.0% 1,194,779 5.0% Sales & Marketing 1,507,466 7.5% 1,573,260 7.5% 1,642,508 7.5% 1,715,408 7.5% 1,792,168 7.5% Repairs & Maintenance 1,004,978 5.0% 1,048,840 5.0% 1,095,005 5.0% 1,143,605 5.0% 1,194,779 5.0% Utilities 1,306,471 6.5% 1,363,492 6.5% 1,423,507 6.5% 1,486,687 6.5% 1,553,213 6.5% Royalty 752,988 3.7% 791,811 3.8% 832,836 3.8% 989,108 4.3% 1,158,027 4.8% TOTAL UNDISTRIBUTED EXPENSES 5,576,881 27.7% 5,826,242 27.8% 6,088,860 27.8% 6,478,413 28.3% 6,892,966 28.8%

GROSS OPERATING PROFIT 5,646,368 28.1% 5,903,059 28.1% 6,173,511 28.2% 6,345,599 27.7% 6,522,901 27.3%

NON - OPERATED INCOME 320,212 1.6% 326,616 1.6% 333,148 1.5% 339,811 1.5% 346,608 1.5%

INCOME BEFORE FIXED CHARGES 5,966,580 29.7% 6,229,676 29.7% 6,506,659 29.7% 6,685,410 29.2% 6,869,509 28.7%

FIXED COSTS Management Fees 602,987 3.0% 629,304 3.0% 657,003 3.0% 686,163 3.0% 716,867 3.0% Insurance 127,728 0.6% 10,644 0.1% 10,644 0.0% 10,644 0.0% 10,644 0.0% Leases 68,196 0.3% 69,560 0.3% 70,951 0.3% 72,370 0.3% 73,818 0.3% Property Taxes 669,500 3.3% 682,890 3.3% 696,548 3.2% 710,479 3.1% 724,688 3.0% TOTAL FIXED COSTS 1,468,411 7.3% 1,392,398 6.6% 1,435,146 6.6% 1,479,656 6.5% 1,526,017 6.4%

NOI (EBITDA) 4,498,169 22.4% 4,837,278 23.1% 5,071,513 23.2% 5,205,754 22.8% 5,343,492 22.4%

CAPEX RESERVE 401,991 2.0% 471,978 2.3% 547,503 2.5% 628,983 2.8% 716,867 3.0%

NET CASH FLOW 4,096,178 20.4% 4,365,300 20.8% 4,524,011 20.7% 4,576,771 20.0% 4,626,624 19.4%

YEARS 2-5 ASSUMPTIONS ADR Growth 6% FNB Growth 2% Management Fee 3.0% Inflation 2.0% 19 FINANCIAL ANALYSIS - HYATT REGENCY Rochester Riverside Doubletree Rochester Marriott Rochester Airport Holiday Inn Rochester Downtown Hilton Garden Inn Rochester Downtown

STR COMPETITIVE SET 2016 2017 2018 SEP SEP JUL JUL FEB FEB JAN JAN JUN JUN

Hotel Address Rooms Open Date APR APR DEC DEC OCT OCT AUG AUG MAY MAY NOV NOV MAR MAR Hyatt Regency Rochester 125 E Main St, Rochester, NY 14604 343 MAR-1992 • • • • • • • • • • • • • • • • • • • • • • • • [1] Rochester Riverside 120 E Main St, Rochester, NY 14604 460 JUN-1970 • • • • • • • • • • • • • • • • • • • • • • • • Doubletree Rochester 1111 Jefferson Rd, Rochester, NY 14623 248 SEP-1985 • • • • • • • • • • • • • • • • • • • • • • • • Marriott Rochester Airport 1890 W Ridge Rd, Rochester, NY 14615 210 OCT-1979 • • • • • • • • • • • • • • • • • • • • • • • • Holiday Inn Rochester Downtown 220 S Broadway, Rochester, MN 55904 217 JUN-1969 • • • • • • • • • • • • • • • • • • • • • • • • Hilton Garden Inn Rochester Downtown 155 E Main St, Rochester, NY 14604 106 MAR-2015 • • • • • • • • • • • • • • • • • • • • • • • • [1] The Rochester Riverside is also owned by Seller and is an outlier in the competitive set. The hotel has not been renovated, as the Data Received: • = Monthly & Daily = Monthly Only Seller has plans to convert the property into a multi-family development.

2018 YEAR TO DATE RUNNING 3 MONTH RUNNING 12 MONTH OCCUPANCY (%) JAN FEB MAR 2016 2017 2018 2016 2017 2018 2016 2017 2018 My Property 31.1 40.9 42.7 51.8 28.0 38.1 51.8 28.0 38.1 64.4 52.3 44.5 Competitive Set 37.5 43.4 47.4 45.9 48.8 42.7 45.9 48.8 42.7 52.6 55.1 53.5

2018 YEAR TO DATE RUNNING 3 MONTH RUNNING 12 MONTH ADR JAN FEB MAR 2016 2017 2018 2016 2017 2018 2016 2017 2018 My Property 131.54 134.05 139.03 99.05 107.67 135.27 99.05 107.67 135.27 108.86 110.32 127.83 Competitive Set 104.38 106.21 109.63 96.58 99.80 106.97 96.58 99.80 106.97 98.89 100.66 107.98

2018 YEAR TO DATE RUNNING 3 MONTH RUNNING 12 MONTH REVPAR JAN FEB MAR 2016 2017 2018 2016 2017 2018 2016 2017 2018 My Property 40.87 54.78 59.32 51.31 30.10 51.56 51.31 30.10 51.56 70.06 57.67 56.93 Competitive Set 39.11 46.13 51.98 44.32 48.74 45.73 44.32 48.74 45.73 52.01 55.45 57.80

20 ROCHESTER HOTEL PORTFOLIO ACCOMMODATIONS & AMENITIES

343 guest rooms, including 6 suites, 190 kings, 148 queen/queen rooms, »rooms with river views and 12 ADA accessible rooms.

Valet Parking available $17 per car, per day with unlimited in/out privileges»

Over night parking in the adjoining indoor covered garage. $12 per car, per» day with unlimited in/out privileges.

Complimentary shuttle to/from (ROC) Rochester International Airport and» other transportation hubs within 3 miles.

Premier Dining and entertainment amenities including: The Street Restaurant» and Bar: Serving breakfast, Full Starbucks Cafe, Morton’s Steakhouse, a 24-Hour market, and the Center City Lounge and Terrace.

Fitness Amenities include the 24-hour Hyatt StayFit gym, a Glass enclosed» 25-meter indoor pool with skylight and outdoor sun deck, Jogging and walking paths along the Genesee River.

Connected via an enclosed sky-way system to the Joseph A. Floreano Rochester» Riverside Convention Center offering over 100,000 square feet of exhibit and meeting space.

» Beautifully renovated rooms and lobby/reception area.

Elegant Grand Ballroom accommodating up to 1,000 people. The Grand Ballroom» is the largest event space in Downtown Rochester outside of the Convention Center.

» Regency Ballroom accommodating up to 300 guests. » Private executive meeting spaces.

21 FEATURES & AMENITIES - HYATT REGENCY ROOMS& SUITES

STANDARD • One King or Two Queen Beds • 350 Square Feet of Space • Modern Décor ACCESSIBLE • One King Bed • 350 Square Feet of Space • Modern Décor with ADA Amenities BUSINESS PLAN • One King Bed • 350 Square Feet of Space • Breakfast for One, Bottled Water HIGH FLOOR • One King or Two Queen Beds • 350 Square Feet of Space • City Views from Rochester’s Tallest Hotel VIEW • One King or Two Queen Beds • 350 Square Feet of Space • Panoramic Views of Genesee River SUITE • One Hyatt Grand King Bed™ • Queen-Size Sleeper Sofa & 2-Bedroom Options • 700-2100 S.F. with separate bedroom and living spaces

22 FEATURES & AMENITIES - HYATT REGENCY 343 Spacious Rooms and suites featuring sleek wood flooring, crisp Hyatt Grand Beds™, and premium travel amenities.

23 FEATURES & AMENITIES - HYATT REGENCY Breathtaking Panoramic Views of Downtown Rochester and the Genesee River

24 FEATURES & AMENITIES - HYATT REGENCY FULLY RENOVATED HOTEL & LOBBY

25 FEATURES & AMENITIES - HYATT REGENCY FITNESS CENTER & HEATED POOL

Hyatt Regency Rochester offers each guest an opportunity to enhance their stay and keep active by using the fitness facilities. Stay at the top of your game at the 24-hour Gym. The Hyatt’s fully-equipped fitness center offers a bright, inviting environment with a wall of windows with fantastic views.

Dive into the soothing waters of the indoor pool and feel recharged. Adjacent to the newly expanded 24-hour Gym, you can work out and refresh yourself with a swim afterwards, or swim laps as part of your routine.

26 FEATURES & AMENITIES - HYATT REGENCY HYATT BOOKING REPORT SUMMARY BALLROOMS & BOARDROOMS (as of 4/3/2018) Host Unforgettable Events in Rochester, NY WEDDING STATS » As of the April 2018 booking report, $2,317,643 The Ballrooms and Boardrooms are Located on Second Floor in F&B revenue is booked for 2018, which is 35% of and Encompass 29,659 Square-Feet of Newly Renovated Event Space. budget. This does not include revenue from Street Craft Kitchen & Bar, or the Center City Terrace. Host, motivate, and inspire ideas in Hyatt’s ornate conference table. Fit a smaller group into the » Current Wedding guest room blocks on the books 29,659-square-foot function space for sports Regency Ballroom. Built for intimate occasions, is 136, for $461,433 revenue, a 167% increase. celebrations, bar/bat mitzvahs, civic gatherings, with a roster that doesn’t surpass 120 people, the » Current 2018 average wedding ADR (not galas, reunions, and birthday parties. Depart from Regency Ballroom offers the perfect Goldilocks- including suites) is $157. ordinary event venues in Rochester, New York; zone for wedding venues at Hyatt Regency » 2017 Wedding guest room block revenue seek out extraordinary exhibit halls, efficient Rochester: size, décor, lighting, and even the actualized $172,916 revenue at $140 ADR. boardrooms, and unforgettable ballrooms. Hyatt 1,500-square-foot pre-function space, is just right. » Weddings blocks typically actualize above Regency Rochester offers function space and original expectations via overblock and past cutoff effective foyers with versatile catering, expert staff, CHRISTA AND MORGAN ROOM strategies. and staggeringly high ceilings, complemented Each of these rooms is just shy of 1,000 square feet, » Easter through Thanksgiving, every Saturday by crystal chandeliers. Greet guests at the door but the character in their décor and dimensions evening Grand Ballroom space is booked other than 1 after their ride from Rochester Airport on the is enough to make up for it. Prepare a cocktail July date. complimentary hotel shuttle, walk across the sky reception of up to 90 people, or split the space for » This year’s wedding event minimum went up bridge to reach the Rochester Convention Center, segmented training sessions using the convenient from $20,000 to 23,000. 2019 wedding minimums and grab a light snack from our Scene on Main Bar air walls. The Christa Room offers an additional are as high as $28,500. after all is said and done. foyer, while the Morgan Room offers an alcove. » The hotel actualized 20 wedding events in 2017 for $458,404 revenue. 2018 has 35 wedding events GRAND BALLROOM EASTMAN & STRONG on the books for $794,143 not including cash bar Mix and match the seating layouts of this massive BOARDROOM sales. space totaling almost 9,000 square feet, with an Take a seat around the conference table, a sturdy, additional 4,000 square feet of pre-function spacious centerpiece that enhances productivity space. Divide the facility into eight sections for for any corporate refresher, brainstorming ornate, white tablecloth banquets, rehearsal session, or presentation. Each boardroom is airy ADDITIONAL STATS dinners, and wedding receptions. The Grand for its modest size of 364 square feet, and the Ballroom is Hyatt Regency’s largest facility on- table seats up to a dozen coworkers. » Group pace is up 976 room nights year over site, forming the crux of Rochester’s ornate year at +14.0%. venues and featuring 16-foot ceilings and large ON-SITE CATERING » Group ADR is pacing up by $4.08 year over year function space for up to 1,000 people. Discover the perfect blend of location, style, at +3.0%. and amenities at Hyatt Regency Rochester. Add the crowning touch to your meeting, corporate » Group revenue pace is up $154,277 year over REGENCY BALLROOM year at +18.0%. At almost a quarter of the size to the Grand event or social occasion with a memorable meal Ballroom, Regency takes the elegant décor, crafty prepared by the innovative catering staff. From » Current group rooms pipeline ADR is $40.93 cocktail seating, and ornate lighting and delivers the simplicity of afternoon snack breaks to above last year. it all in miniature. Host 255 theater-style, 160 formal white glove service, the newly remodeled schoolroom-style, or 50 around the hardwood banquet facilities provide the perfect setting whether you require seating for 750 or for eight.

27 BALLROOMS & BOARDROOMS - HYATT REGENCY Hyatt Regency has the second largest event space In Rochester

28 BALLROOMS & BOARDROOMS - HYATT REGENCY ROOM CAPACITY CHART

Capacity Chart

Room Dimensions Room Size Room Name L x W x H Sq. Ft. Banquet Reception Theater Classroom Board Room U-Shape Hollow Square Exhibit Second Floor

GRAND BALLROOM* 126’ x 71’ x 16’ 8,693 750 1,000 1,000 600 - - 200 55 Section A 42’ x 24’ x 16’ 1,008 60 100 100 45 34 33 42 - Section B 42’ x 23’ x 16’ 966 60 95 100 45 34 33 42 - Section C 42’ x 24’ x 16’ 1,008 60 100 100 45 34 33 42 - Section D 43’ x 71’ x 16’ 3,050 240 315 300 180 90 90 90 - Section E 41’ x 24’ x 16’ 984 60 100 100 45 34 33 42 - Section F 41’ x 23’ x 16’ 943 60 95 100 45 34 33 42 - Section G L SHAPED ROOM 734 40 60 60 25 20 - - - GRAND FOYER 65’ x 23’ x 10’ 1,495 ------REGENCY BALLROOM* 71’ x 33’ x 10’ 2,343 180 300 210 150 50 50 80 14 Section A 24’ x 33’ x 10’ 792 60 100 70 45 22 22 30 - Section B 23’ x 33’ x 10’ 759 60 100 70 45 22 22 30 - Section C 23’ x 33’ x 10’ 792 60 100 70 45 22 22 30 - REGENCY FOYER 71’ x 13’ x 10’ 923 ------MORGAN ROOM 32’ x 26’ x 10’ 832 60 90 65 36 25 24 30 - Section A 16’ x 26’ x 10’ 416 24 45 30 15 14 15 15 - Section B 16’ x 26’ x 10’ 416 24 45 30 15 14 15 15 - MORGAN ALCOVE 17’ x 12’ x 10’ 204 ------CHRISTA ROOM 39’ x 25’ x 10’ 975 60 90 65 36 25 25 30 - Section A 19’ x 25’ x 10’ 475 24 45 30 15 14 15 15 - Section B 19’ x 25’ x 10’ 475 24 45 30 15 14 15 15 - CHRISTA FOYER 30’ x 15’ x 10’ 450 - 14 ------EASTMAN BOARDROOM 26’ x 14’ x 10’ 364 14 14 - - 14 - - - STRONG BOARDROOM 26’ x 14’ x 10 364 14 14 - - 14 - - - Fourth Floor**

CENTER CITY TERRACE 84’1” x 48’3” 4,032 - 75 ------CENTER CITY LOUNGE 40’ x 26’ 1,040 34 50 ------

29 BALLROOMS & BOARDROOMS - HYATT REGENCY FLOOR PLAN Second Floor

30 BALLROOMS & BOARDROOMS - HYATT REGENCY FLOOR PLAN Second Floor

31 BALLROOMS & BOARDROOMS - HYATT REGENCY Indulge in Downtown Rochester’s Best Restaurants

The Hyatt is at the heart of the city’s best dining. With its downtown location in the Rochester New York restaurant district, guests of the hotel enjoy international cuisine just steps from their room. Socialize with friends in area lounges, catch up with business partners at the hotel restaurant, or savor unique flavors from all over the world thanks to recognized chefs.

32 FINE DINING & ENTERTAINMENT- HYATT REGENCY Morton’s The Steakhouse is conveniently located in Downtown Rochester at the Hyatt Regency Rochester. What began in Chicago in 1978 is now one of the most award- winning steakhouses around. For over 30 years, Morton’s Steakhouse has been on a mission to provide “The Best Steak... Anywhere.” Focusing on quality, consistency and genuine hospitality, Morton’s seeks to provide not only memorable cuisine, but a memorable experience. With fresh, succulent seafood and famed USDA prime-aged steak, it’s no surprise that Morton’s has thrilled diners all over the world.

Discover a downtown Rochester restaurant with a national reputation for excellence. Talent, innovation, and years of experience have been combined with an obsession for quality food and service, making Morton’s one of Rochester’s most impressive restaurants. Savor generous portions of USDA prime aged beef, as well as fresh fish, lobster and chicken entrées served with Morton’s animated signature table-side menu presentation.

33 EXECUTIVEFINE DINING SUMMARY & ENTERTAINMENT- HYATT REGENCY In House Starbucks Cafe Get your favorite coffee beverages, tasty sandwiches, delicious pastries and more at this nationally recognized coffeehouse. Free Wi-Fi is available, making it the ideal spot for casual client meetings, study sessions or just taking some time to relax from a day exploring Rochester, NY. The baristas are always ready with a smile and can craft coffee beverages off the menu or customize any drink to your liking. Take the elevator to street level and find Starbucks there. This Starbucks features great street level visibility and easy access for other Downtown Rochester commuters.

34 FINE DINING & ENTERTAINMENT- HYATT REGENCY Dine In Style At THE STREET CRAFT KITCHEN AND BAR Global meets local at The Street Craft Kitchen and Bar. Indulge in a menu showcasing cuisine inspired by street food around the world. Pick your favorite drink from the cocktail, beer and wine list showcasing local and distant breweries, wineries, and distilleries. The Street serves breakfast, lunch and dinner while the bar is open late and offers a special small plates menu to keep the celebration going. Located conveniently in the lobby, The Street is the place for travelers and locals alike to gather for a great time.

35 FINE DINING & ENTERTAINMENT- HYATT REGENCY Enjoy An Evening Cocktail At The Center City Terrace and Lounge

A carefully curated wine, beer and cocktail list awaits at this stylish, urban rooftop bar on the fourth floor of Hyatt Regency Rochester. This is your outdoor space to relax with a drink and a tapas-style menu. Center City Terrace and Lounge is the perfect venue for casual gatherings and private events. The fire pits and comfortable outdoor seating invite you to kick back, celebrate and enjoy the weather in this oasis that places you in the center of Rochester, New York.

36 FINE DINING & ENTERTAINMENT- HYATT REGENCY Rochester Downtown Perennial Luxury Hotel

The Hyatt Regency provides a convenient location off Rochester’s downtown Main Street, within walking distance to many shopping, restaurant, and entertainment options, including the East End Entertainment and Restaurant District, , , Rochester Museum and Science Center, and the Genesee Riverwalk. In addition, the Property is conveniently located 6 miles (10 minutes) from Rochester International Airport.

The site is less than a 15-minute drive from the Seabreeze Amusement Park, a historical amusement park that is still celebrated and well visited by visitors. Several city parks, including High Falls Overlook Park, Genesee Crossroads Park and the Aqueduct Park, are all within walking distance of the site. The Hyatt is located in a busy, densely populated area with 309,332 residents within a 5-mile radius, and on “Main Street”, a main road bisecting the downtown Rochester area.

37 HYATT REGENCY - ROCHESTER, NEW YORK PROPERTY Overview

The Strathallan was purchased by ownership in 2011, in 2012 they completed a $9,000,000 renovation and took this renowned boutique hotel under the DoubleTree by Hilton flag. After the first full year of renovation ADR jumped from $80 to $152, and most recently ended at $185 in December of 2017. 550 East Avenue, Rochester, New York 14607

Situated in the heart of Rochester’s cultural and historical districts, the Strathallan Hotel and Spa a Doubletree by Hilton is a 155-room premier boutique hotel with luxurious accommodations, cuisine, cocktails, and breathtaking views. The Strathallan - locally acclaimed as the best hotel in Rochester, is the foremost wedding venue and a central hub for the hottest events in Rochester.

The Strathallan was completely renovated in 2012 with an up-to- date modern motif and contemporary room styling. The hotel’s amenities include: Char Steak and Lounge, consistently ranking as the top restaurant and bar in Rochester, Hattie’s Japanese Cuisine and Rooftop Bar, the Ape + Canary Spa and Hair Salon, the Century Club - a 10,000-square-foot 20th century upscale event mansion located across the street as a part of the hotel, and 7 on Strath with 6 newly renovated suites located adjacent to the hotel.

Currently flying a Doubletree flag, the Strathallan has a unique ability to seamlessly be converted to a Tapestry Collection by Hilton. The Tapestry conversion has already been put at the forefront of ownerships future plans. The new Hilton Tapestry Collection allows hotels to maintain their own style and personality – promoting hotels under the Tapestry flag to weave their own story. True to the Tapestry brand the Strath embraces a sense of individuality and class, where travelers and Rochesterians alike gather for an unforgettable experience. It’s a dynamic fusion of social hub and urban retreat with a chic Hilton branding.

The Strathallan is a beautiful location to spend your holiday and a great functional hotel for a quick overnight business trip. This hotel features all of the benefits you expect from a Hilton hotel including Hilton Honors Points and exceptional service and amenities. Whether your travel is for work or pleasure, the Strathallan Rochester, NY is an excellent choice that will provide guests with everything they need for a comfortable stay. 39 INVESTMENT SUMMARY - STRATHALLAN HOTEL The Strathallan is considered the premier hotel for events and weddings in Rochester, NY commanding a minimum of $35k for weddings, the highest in the area. The Strathallan also features the revered restaurant Char Steak and Lounge, one of the top grossing restaurants in all of Rochester. Char is operated by ownership and will be transferred to the buyer. STRATHALLAN SQUARE FOOTAGE BREAKDOWN

FLOOR SF

Basement 17,381

1st Floor 16,997

2nd-8th Floor 107,506

9th Floor Including +/- 6,000 SF for Rooftop/Hatties 10,062

Total Square Feet: 151,946

Ownership is working towards transitioning the Hotel to a Tapestry Collection Hotel under the Hilton brand. The conversion will occur in Q3 of 2018 and will bring with it more event space and is expected to further grow ADR and F&B. EXCEPTIONAL LOCATION East Avenue The Strathallan is situated in an elegant neighborhood featuring mature trees, gardens, mansions, and museums. The Hotel is just minutes from many of Rochester’s major international companies and corporations as well as within walking distance to popular attractions such as Memorial Art Museum, Rochester Science Museum or the George Eastman House. The Strathallan has an exceptional location in the lively East Avenue neighborhood which is lined with restaurants, coffee houses, and boutiques. This vibrant neighborhood is home to craft beer houses, one-of- a-kind boutiques, and great restaurants. The Strathallan is located within a 5-minute drive from High Falls, the city’s historic riverside district that’s home to the iconic Genesee Brewery, , restaurants, and the spectacular High Falls and River Gorge.

Take a short scenic drive to the region that includes many parks and scenic waterways. This area is also home to wineries, shopping and historic landmarks. Drive through the finger lakes region to find Waterloo Outlets, a shopper’s paradise of over 100 stores.

43 INVESTMENT SUMMARY - STRATHALLAN HOTEL A Vibrant Upscale Collection A gathering of original upscale hotels catering to guests seeking reliability and value in their independent hotel choice.

When Hilton decided they were going to start a Tapestry Collection by Hilton marks the 14th new soft brand collection, they explored more than brand and second collection brand for Hilton, the 500 names, but in their final decision they found world’s fastest-growing hospitality company on an only one word that fit exactly what they were organic net unit growth percentage basis. looking for - “Tapestry.” A Tapestry is a one-of-a- kind woven piece of art. This is exactly what you Hilton currently has 7 Tapestry hotels in 6 states: get when you visit one of Hilton’s “Tapestry” brand The Cotton Sail Hotel Savannah in Georgia, The collection hotels- a-one-of-a-kind experience. Hotel Ballast Wilmington in North Carolina, The Graham Washington D.C. Georgetown, Black Fox Lodge The Graham Washington DC Tailwater Lodge Altmar The Tapestry Collection by Hilton is a vibrant The Tailwater Lodge Altmar in New York, The Pigeon Forge, Tennessee Washington D.C. Altmar, New York new brand that offers guests a refreshing choice Troubadour Hotel New Orleans in Louisiana, The for an independent hotel stay, it is a gathering of Virginia Crossings Hotel & Conference Center in original hotels chosen because of a commitment Virginia, and The Hotel Skyler Syracuse in New to being anything but generic. Tapestry Collection York. Hilton has plans to open 35 more Tapestries by Hilton was curated due to customer and through 2018. owner demand for original upscale hotels that cater to guests seeking reliability and value in Economic benefits to the Tapestry conversion their independent hotel choices. Each hotel will include significant reduction of chain fees maintain its individual spirit, offering guests an resulting in a 35% savings in the first year experience that is approachable and familiar as of operation, over $1,000,000 in savings well as different from other hotels. Tapestry Hotels over five years, and an immediate increase The Cotton Sail Hotel Savannah The Bernic Hotel The Sire Hotel Lexington cater to upscale events and provide many food and in occupancy and ADR – attracting more Savannah, Georgia New York, New York Lexington, Kentucky beverage options to their guests. customers seeking an upscale boutique hotel experience, with a new modern Hilton When staying at a tapestry, you can be assured that brand, driving revenue. your stay will be far different from any other hotel ADR growth in this model is expected to be you have stayed at before. Each Hotel is a reflection 10% which is consistent with ADR growth at of the independent nature of its guests, who want the Strathallan in previous years. to weave their own story through travel, yet each stay is backed by the reassurance of the Hilton name as well as its unmatched commercial engine and award-winning Hilton Honors program. The

The Troubadour Hotel Virginia Crossings Hotel Hotel Skyler Syracuse New Orleans, Louisiana Glen Allen, Virginia Syracuse, New York

44 INVESTMENT SUMMARY - STRATHALLAN HOTEL FINANCIAL Analysis

45 FINANCIAL ANALYSIS - STRATHALLAN HOTEL PRO FORMA YEAR 1 - STRATHALLAN Financial Assumptions Summary PROPERTY DETAIL Fiscal Year Start 9/1/18 Income Assumptions Fiscal Year End 8/31/19 1. ADR growth in this model is expected to be 10% which is consistent with ADR growth at the [1] Average Daily Rate 201.84 Strathallan in previous years. The 10% growth is in a month-by-month basis over the prior year data. Occupied Rooms 41,084 2. F&B is expected to growth 7% from 2017. This is a conservative growth rate as 2017 was an outlier in Available Rooms 56,575 terms of FNB potential which was more accurately realized in 2016. Occupancy Percentage 72.62% 3. Non-Operated Income: includes gross rent from the Spa, which is operated by tenant, Ape & Canary. Rev PAR 147.48

REVENUE $ % Rooms Department 8,343,902 49.8% Expense Assumptions: [2] Food & Beverage Department 8,348,112 49.9% 4. Rooms Department: presumed 24% of Total Revenue, in-line with historical. Other Operated Departments 54,061 0.3% 5. Food & Beverage: presumed 71% of total F&B Revenue, in-line with historical. TOTAL REVENUE 16,746,075 100.0% 6. Other Operated Department: presumed 47% of total Other Operated Departments, in-line with historical. DEPARTMENTAL EXPENSES 7. Admin & General: presumed 11.6%, in-line with historical, after conversion to Hilton’s “Tapestry [4] Rooms Department 2,038,567 24.4% Collection.” Amended fee structure as follows: [5] Food & Beverage Department 5,958,948 71.4% a. Year 1: 3% vs. 5% in-place today. [6] Other Operated Department 25,800 47.7% b. Year 2: 3% vs. 5% in-place today. TOTAL DEPARTMENTAL EXPENSES 8,023,315 47.9% c. Year 3: 4% vs. 5% in-place today. TOTAL DEPARTMENTAL INCOME 8,722,760 52.1% d. Year 4: 4% vs. 5% in-place today. e. Year 5: 5% vs. 5% in-place today. UNDISTRIBUTED OPERATING EXPENSES [7] Administrative & General 1,936,984 11.6% 8. Sales & Marketing: presumed 7%, in-line with historical. [8] Sales & Marketing 1,205,717 7.2% 9. Repairs & Maintenance: presumed 3%, in-line with historical. [9] Repairs & Maintenance 534,592 3.2% 10. Utilities: presumed 2.4%, in-line with historical. [10] Utilities 400,914 2.4% 11. Management Fee: presumed 3%, in-line with industry standards for similar hotels. TOTAL UNDISTRIBUTED EXPENSES 4,078,208 24.4%

GROSS OPERATING PROFIT 4,644,552 27.7%

[3] NON - OPERATED INCOME 75,000 0.4%

INCOME BEFORE FIXED CHARGES 4,719,552 28.2%

FIXED COSTS [11] Management Fees 502,382 3.0% Insurance 140,011 0.8% Property Taxes 353,026 2.1% Total Fixed Costs 995,419 5.9%

NOI (EBITDA) 3,724,134 22.2%

CAPEX RESERVE 250,317 3.0%

NET CASH FLOW 3,473,817 20.7%

46 FINANCIAL ANALYSIS - STRATHALLAN HOTEL TRAILING 12 - STRATHALLAN

ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL PROPERTY DETAIL APR-17 MAY-17 JUN-17 JUL-17 AUG-17 SEP-17 OCT-17 NOV-17 DEC-17 JAN-18 FEB-18 MAR-18 TOTAL Average Daily Rate 177.01 199.56 199.06 191.68 194.91 197.62 204.54 173.38 169.98 168.44 171.25 174.15 186.36 Occupied Rooms 3,491 3,702 3,684 3,547 3,722 3,544 3,578 3,522 2,732 2,780 2,755 3,019 40,076 Available Rooms 4650 4805 4650 4805 4805 4650 4805 4650 4805 4805 4340 4805 56575 Occupancy Percentage 75.08% 77.04% 79.23% 73.82% 77.46% 76.22% 74.46% 75.74% 56.86% 57.86% 63.48% 62.83% 70.84% Rev PAR 132.89 153.75 157.71 141.50 150.98 150.61 152.31 131.32 96.65 97.45 108.71 109.42 132.01

REVENUE Rooms Department 617,955 738,753 733,348 679,902 725,462 700,350 731,844 610,631 464,397 468,258 471,792 525,759 7,468,451 49.7% Food & Beverage Department 602,583 798,289 761,325 620,327 630,716 706,086 664,598 556,107 736,016 490,105 458,340 480,690 7,505,182 49.9% Other Operated Departments 3,137 22,594 6,388 4,940 2,008 -1,844 4,260 1,431 4,945 14,054 1,075 1,127 64,115 0.4% TOTAL REVENUE 1,223,675 1,559,636 1,501,061 1,305,169 1,358,186 1,404,592 1,400,702 1,168,169 1,205,358 972,417 931,207 1,007,576 15,037,748 100.0%

DEPARTMENTAL EXPENSES Rooms Department 131,601 145,090 183,625 144,981 177,294 144,199 134,763 171,408 193,077 151,526 138,427 161,922 1,877,913 25.1% Food & Beverage Department 442,812 497,044 581,424 449,556 516,744 464,069 503,982 470,144 502,698 394,696 380,297 422,485 5,625,951 75.0% Other Operated Department 3,235 2,255 2,054 1,947 1,460 2,119 1,448 2,757 2,228 1,698 1,771 2,130 25,102 39.2% TOTAL DEPARTMENTAL EXPENSES 577,648 644,389 767,103 596,484 695,498 610,387 640,193 644,309 698,003 547,920 520,495 586,537 7,528,966 50.1%

TOTAL DEPARTMENTAL INCOME 646,027 915,247 733,958 708,685 662,688 794,205 760,509 523,860 507,355 424,497 410,712 421,039 7,508,782 49.9%

UNDISTRIBUTED OPERATING EXPENSES Administrative & General 165,838 149,505 190,978 151,200 189,189 135,289 191,298 177,543 335,323 122,427 118,410 152,822 2,079,822 13.8% Sales & Marketing 99,830 87,301 86,258 85,211 84,586 84,832 71,618 90,073 174,015 65,873 79,449 68,797 1,077,843 7.2% Repairs & Maintenance 42,249 34,351 44,449 40,095 43,092 45,352 39,623 42,303 49,812 47,165 41,397 41,909 511,797 3.4% Utilities 27,520 26,091 32,094 30,402 31,635 27,483 33,472 34,633 23,351 49,614 34,181 32,554 383,030 2.5% TOTAL UNDISTRIBUTED EXPENSES 335,437 297,248 353,779 306,908 348,502 292,956 336,011 344,552 582,501 285,079 273,437 296,082 4,052,492 26.9%

GROSS OPERATING PROFIT 310,590 617,999 380,179 401,777 314,186 501,249 424,498 179,308 -75,146 139,418 137,275 124,957 3,456,290 23.0%

NON - OPERATED INCOME 0 0 0 0 0 0 0 0 0 0 0 0 0 0.0%

INCOME BEFORE FIXED CHARGES 310,590 617,999 380,179 401,777 314,186 501,249 424,498 179,308 -75,146 139,418 137,275 124,957 3,456,290 23.0%

FIXED COSTS Management Fees 0 0 0 0 0 0 0 0 0 28989 28,009 29,434 86,432 0.6% Insurance 9,016 10,234 9,580 10,050 10,395 9,580 10,727 12,442 10,933 10,933 10,933 17,433 132,256 0.9% Property Taxes 26,543 26,543 26,543 26,543 26,543 26,543 26,543 22,132 10,380 22,132 22,132 22,132 284,709 TOTAL FIXED COSTS 35,559 36,777 36,123 36,593 36,938 36,123 37,270 34,574 21,313 62,054 61,074 68,999 503,397 3.3%

NOI (EBITDA) 275,031 581,222 344,056 365,184 277,248 465,126 387,228 144,734 -96,459 77,364 76,201 55,958 2,952,893 19.6%

47 FINANCIAL ANALYSIS - STRATHALLAN HOTEL HISTORICAL FINANCIAL SUMMARY - STRATHALLAN

PROPERTY DETAIL 2015 2016 2017 FULL YEAR 1 ACTUAL ACTUAL ACTUAL OF OWNERSHIP Fiscal Year Start 1/1/15 1/1/16 1/1/17 9/1/18 Fiscal Year End 12/31/15 12/31/16 12/31/17 8/31/19 Average Daily Rate 170.89 176.15 187.62 201.84 Occupied Rooms 41,019 41,918 41,084 41,084 Available Rooms 55,575 56,730 56,575 56,575 Occupancy Percentage 72.50% 73.89% 72.62% 72.62% Rev PAR 121.66 127.54 134.39 147.48

REVENUE Rooms Department 6,882,918 51.0% 7,235,330 46.5% 7,585,404 49.1% 8,343,902 49.8% Food & Beverage Department 6,537,118 48.5% 8,241,194 53.0% 7,801,976 50.5% 8,348,112 49.9% Other Operated Departments 63,224 0.5% 69,172 0.4% 54,062 0.4% 54,061 0.3% TOTAL REVENUE 13,483,260 100.0% 15,545,696 100.0% 15,441,442 100.0% 16,746,075 100.0%

DEPARTMENTAL EXPENSES Rooms Department 1,674,855 24.3% 1,776,652 24.6% 1,853,252 24.4% 2,038,567 24.4% Food & Beverage Department 5,059,220 77.4% 6,176,228 74.9% 5,769,863 74.0% 5,958,948 71.4% Other Operated Department 52,132 82.5% 45,533 65.8% 26,401 48.8% 25,800 47.7% TOTAL DEPARTMENTAL EXPENSES 6,786,207 50.3% 7,998,413 51.5% 7,649,516 49.5% 8,023,315 47.9%

TOTAL DEPARTMENTAL INCOME 6,697,053 49.7% 7,547,283 48.5% 7,791,926 50.5% 8,722,760 52.1%

UNDISTRIBUTED OPERATING EXPENSES Administrative & General 1,493,761 11.1% 1,670,961 10.7% 2,124,376 13.8% 1,936,984 11.6% Sales & Marketing 993,689 7.4% 1,157,210 7.4% 1,115,354 7.2% 1,205,717 7.2% Repairs & Maintenance 528,696 3.9% 645,898 4.2% 492,944 3.2% 534,592 3.2% Utilities 340,038 2.5% 341,634 2.2% 369,680 2.4% 400,914 2.4% TOTAL UNDISTRIBUTED EXPENSES 3,356,184 24.9% 3,815,703 24.5% 4,102,354 26.6% 4,078,208 24.4%

GROSS OPERATING PROFIT 3,340,869 24.8% 3,731,580 24.0% 3,689,572 23.9% 4,644,552 27.7%

NON - OPERATED INCOME 5,592 0.0% 9,626 0.1% 0 0.0% 75,000 0.4%

INCOME BEFORE FIXED CHARGES 3,346,461 24.8% 3,741,206 24.1% 3,689,572 23.9% 4,719,552 28.2%

FIXED COSTS Management Fees 50,000 0.4% 0 0.0% 0 0.0% 502,382 3.0% Insurance 92,431 0.7% 125,937 0.8% 129,103 0.8% 140,011 0.8% Property Taxes 319,915 2.4% 319,915 2.1% 296,850 1.9% 353,026 2.1% TOTAL FIXED COSTS 462,346 3.4% 445,852 2.9% 425,953 2.8% 995,419 5.9%

NOI (EBITDA) 2,884,115 21.4% 3,295,354 21.2% 3,263,619 21.1% 3,724,134 22.2%

48 FINANCIAL ANALYSIS - STRATHALLAN HOTEL PRO FORMA FISCAL YEAR 1 THROUGH 5 - STRATHALLAN

PROPERTY DETAIL FULL YEAR 1 FISCAL FISCAL FISCAL FISCAL OF OWNERSHIP YEAR 2 YEAR 3 YEAR 4 YEAR 5 Fiscal Year Start 9/1/18 9/1/19 9/1/20 9/1/21 9/1/22 Fiscal Year End 8/31/19 8/31/20 8/31/21 8/31/22 8/31/23 Average Daily Rate 201.84 213.95 226.79 240.40 254.82 Occupied Rooms 41,084 41,084 41,084 41,084 41,084 Available Rooms 56,575 56,575 56,575 56,575 56,575 Occupancy Percentage 72.62% 72.62% 72.62% 72.62% 72.62% Rev PAR 147.48 155.37 164.69 174.57 185.05

REVENUE $ % Rooms Department 8,343,902 49.8% 8,790,094 50.6% 9,317,500 51.6% 9,876,550 52.6% 10,469,143 53.5% Food & Beverage Department 8,348,112 49.9% 8,515,074 49.0% 8,685,376 48.1% 8,859,083 47.1% 9,036,265 46.2% Other Operated Departments 54,061 0.3% 55,142 0.3% 56,245 0.3% 57,370 0.3% 58,517 0.3% TOTAL REVENUE 16,746,075 100.0% 17,360,311 100.0% 18,059,121 100.0% 18,793,003 100.0% 19,563,925 100.0%

DEPARTMENTAL EXPENSES Rooms Department 2,038,567 24.4% 2,147,580 24.4% 2,276,435 24.4% 2,413,021 24.4% 2,557,802 24.4% Food & Beverage Department 5,958,948 71.4% 6,078,127 71.4% 6,199,689 71.4% 6,323,683 71.4% 6,450,157 71.4% Other Operated Department 25,800 47.7% 2,150 3.9% 2,150 3.8% 2,150 3.7% 2,150 3.7% TOTAL DEPARTMENTAL EXPENSES 8,023,315 47.9% 8,227,857 47.4% 8,478,274 46.9% 8,738,854 46.5% 9,010,109 46.1%

TOTAL DEPARTMENTAL INCOME 8,722,760 52.1% 9,132,454 52.6% 9,580,847 53.1% 10,054,150 53.5% 10,553,817 53.9%

UNDISTRIBUTED OPERATING EXPENSES Administrative & General 1,936,984 11.6% 2,008,565 11.6% 2,183,252 12.1% 2,274,464 12.1% 2,475,045 12.7% Sales & Marketing 1,205,717 7.2% 1,249,942 7.2% 1,300,256 7.2% 1,353,096 7.2% 1,408,602 7.2% Repairs & Maintenance 534,592 3.2% 554,201 3.2% 576,509 3.2% 599,937 3.2% 624,548 3.2% Utilities 400,914 2.4% 415,619 2.4% 432,349 2.4% 449,919 2.4% 468,375 2.4% TOTAL UNDISTRIBUTED EXPENSES 4,078,208 24.4% 4,228,327 24.4% 4,492,366 24.9% 4,677,416 24.9% 4,976,571 25.4%

GROSS OPERATING PROFIT 4,644,552 27.7% 4,904,127 28.2% 5,088,481 28.2% 5,376,733 28.6% 5,577,246 28.5%

NON - OPERATED INCOME 75,000 0.4% 76,500 0.4% 78,030 0.4% 79,591 0.4% 81,182 0.4%

INCOME BEFORE FIXED CHARGES 4,719,552 28.2% 4,980,627 28.7% 5,166,511 28.6% 5,456,324 29.0% 5,658,428 28.9%

FIXED COSTS Management Fees 502,382 3.0% 520,809 3.0% 541,774 3.0% 563,790 3.0% 586,918 3.0% Insurance 140,011 0.8% 145,146 0.8% 150,989 0.8% 157,125 0.8% 163,570 0.8% Property Taxes 353,026 2.1% 360,086 2.1% 367,288 2.0% 374,634 2.0% 382,126 2.0% TOTAL FIXED COSTS 995,419 5.9% 1,026,042 5.9% 1,060,050 5.9% 1,095,548 5.8% 1,132,614 5.8%

NOI (EBITDA) 3,724,134 22.2% 3,954,586 22.8% 4,106,460 22.7% 4,360,776 23.2% 4,525,814 23.1%

CAPEX RESERVE 250,317 3.0% 263,703 3.0% 279,525 3.0% 296,296 3.0% 314,074 3.0%

NET CASH FLOW 3,473,817 20.7% 3,690,883 21.3% 3,826,935 21.2% 4,064,479 21.6% 4,211,740 21.5%

YEARS 2-5 ASSUMPTIONS ADR Growth 6% FNB Growth 2% Management Fee 3.0% Royalty Savings 2.0% Inflation 2.0% 49 FINANCIAL ANALYSIS - STRATHALLAN HOTEL Rochester Riverside Doubletree Rochester Holiday Inn Rochester Downtown Hyatt Regency Rochester Del Monte Lodge Rochester Staybridge Suites Rochester

STR COMPETITIVE SET 2016 2017 2018 SEP SEP JUL JUL FEB FEB JAN JAN JUN JUN

Hotel Address Rooms Open Date APR APR DEC DEC OCT OCT AUG AUG MAY MAY NOV NOV MAR MAR DoubleTree Rochester The Strathallan 550 East Ave, Rochester, NY 14607 155 MAR-1992 • • • • • • • • • • • • • • • • • • • • • • • • [1] Rochester Riverside Hotel 120 E Main St, Rochester, NY 14604 460 JUN-1970 • • • • • • • • • • • • • • • • • • • • • • • • Doubletree Rochester 1111 Jefferson Rd, Rochester, NY 14623 248 SEP-1985 • • • • • • • • • • • • • • • • • • • • • • • • Holiday Inn Rochester Downtown 1890 W Ridge Rd, Rochester, NY 14615 217 OCT-1979 • • • • • • • • • • • • • • • • • • • • • • • • Hyatt Regency Rochester 125 E Main St, Rochester, NY 14604 343 NOV-1990 • • • • • • • • • • • • • • • • • • • • • • • • Renaissance The Del Monte Lodge Rochester 41 N Main St, Pittsford, NY 14534 99 JUN-1969 • • • • • • • • • • • • • • • • • • • • • • • • Staybridge Suites Rochester University 1000 Genesee St, Rochester, NY 14611 88 MAR-2015 • • • • • • • • • • • • • • • • • • • • • • • •

[1] The Rochester Riverside is also owned by Seller and is an outlier in the competitive set. The hotel has not been renovated, as the Seller Data Received: = Monthly & Daily = Monthly Only has plans to convert the property into a multi-family development. The property is far inferior to any individual property within the compet- • itive set by large margin.

2018 YEAR TO DATE RUNNING 3 MONTH RUNNING 12 MONTH OCCUPANCY (%) JAN FEB MAR 2016 2017 2018 2016 2017 2018 2016 2017 2018 My Property 57.4 63.0 62.3 64.7 67.4 60.8 64.7 67.4 60.8 70.8 73.1 70.0 Competitive Set 33.9 41.0 45.1 46.7 42.6 40.0 46.7 42.6 40.0 56.1 54.1 50.5

2018 YEAR TO DATE RUNNING 3 MONTH RUNNING 12 MONTH ADR JAN FEB MAR 2016 2017 2018 2016 2017 2018 2016 2017 2018 My Property 169.77 172.75 175.45 158.93 168.43 172.73 158.93 168.43 172.73 172.99 178.20 188.98 Competitive Set 112.46 116.57 119.25 96.35 100.42 116.41 96.35 100.42 116.41 103.56 105.14 114.87

2018 YEAR TO DATE RUNNING 3 MONTH RUNNING 12 MONTH REVPAR JAN FEB MAR 2016 2017 2018 2016 2017 2018 2016 2017 2018 My Property 97.48 108.90 109.28 102.77 113.46 105.10 102.77 113.46 105.10 122.41 130.23 132.33 Competitive Set 38.17 47.81 53.75 44.96 42.77 46.54 44.96 42.77 46.54 58.13 56.93 58.06

50 FINANCIAL ANALYSIS - STRATHALLAN HOTEL ACCOMMODATIONS & AMENITIES

» Elegantly finished all-white wedding space with seating for 240. » Sky Room Restaurant on 9th floor, with stunning 360° views of Rochester. » Casual dining on 1st floor. » Sophisticated 3,000-square-foot ballroom. » Marble-paneled lobby bar with brass fittings. Ample parking with 253 overnight spaces, 4 handicap spaces, and an agreement» with the two neighboring properties for an additional 150 Valet spaces.

» Char Steak & Lounge - Rochester New York’s favorite restaurant. » Hattie’s Japanese Cuisine and Bar. » Ape+ Canary on Strathallan Resort Spa and Hair Salon. 7th on Strath – Six (6) Queen Anne style private suites located in their »own mansion next door.

» Century Club – a historical mansion perfect for special events.

51 FEATURES & AMENITIES - STRATHALLAN HOTEL ROOMS & SUITES GUEST ROOMS | All The Amenities Trendy and tranquil, each oversized guest room at the Strathallan features Sweet Dreams® bedding, high- speed Internet, a large work desk, two telephones, and a coffeemaker, hair dryer, and iron. Flat-screen HD televisions feature premium channels. The rooms also feature walk out balconies.

LUXURY SUITES | High Style These full-sized rooms feature comfortable seating, a full-sized sofa, flat screen television, large work desk, high-speed internet, two telephones with two lines, and individual climate controls. The suites connect two standard rooms to give you the option of bringing the family or hosting a small gathering.

ACCESSIBLE | Comfort Made Easy The ADA-accessible rooms feature all the opulent amenities as other guest rooms, but are totally accessible for guests with disabilities.

7 ON STRATH | Inn Next Door 7 On Strath Luxury Suites features six newly renovated luxury suites that can be the memorable setting for your next special family or business function. All suites feature private baths (some with spa showers), dinettes or full kitchens, and common gathering spaces where guests can mingle within steps of the privacy of their suites.

Bedrooms are luxuriously appointed with fine linens and spacious sitting areas, and no two rooms are the same with architectural elements ranging from fireplaces and fine paneling to stained glass and skylights.

52 FEATURES & AMENITIES - STRATHALLAN HOTEL Strathallan - Guest room Carpet and Pool Room Square Footage

NUMBER OF SQUARE FEET TOTAL ROOM TYPE EACH PER ROOM SQUARE FEET

Single 53 170 9,010

Double 13 240 3,120

Suites (Including (5) 2 Queen Suites 86 470 40,420

905 1 777 777

904 1 360 360

903 1 542 542

Pool area 1 1344 1,344

Total Square Feet: 55,573

53 FEATURES & AMENITIES - STRATHALLAN HOTEL A Queen Anne Style oasis in the heart of Rochester, New York’s Neighborhood of the Arts

A luxurious private oasis in the heart of Rochester’s cultural district awaits you at 7 On Strath Luxury Suites. Housed in a historic Queen Anne-style mansion, this unique residence features six newly renovated luxury suites that can be the memorable setting for your next special family or business function.

54 FEATURES & AMENITIES - STRATHALLAN HOTEL Simply Spectacular Style With a 360-degree view, inspiration is everywhere you turn.

55 FEATURES & AMENITIES - STRATHALLAN HOTEL BEAUTIFUL LOBBY & COMMON AREA

56 FEATURES & AMENITIES - STRATHALLAN HOTEL FITNESS CENTER & HEATED POOL

The finest amenities and a passion for detail--that’s what set’s the Strathallan experience apart. There is simply nothing else like it in the region—sophisticated, contemporary, and in the heart of a thriving cultural and professional environment.

57 FEATURES & AMENITIES - STRATHALLAN HOTEL STRATHALLAN BOOKING REPORT SUMMARY (as of 4/3/2018) WEDDING STATS » The Strathallan has events or weddings booked nearly every day of 2018.

» Nearly 50% of the forecasted room revenue for 2018 has already been booked for events and weddings as of April 2018.

Plan Your Special Occasion

The Strathallan has fast become one of the most sought-after event venues in Rochester for its food, rooftop views, style, and ambiance. Whether you’re planning a wedding, corporate event, or social gathering, the expert event staff is there to help you make it seamless, unforgettable, and unlike anything you and your guests have ever experienced.

The Strathallan is a popular venue choice for businesses and organizations looking to host everything from annual meetings, retreats and team days, conferences, award and launch parties, to trade shows.

58 BALLROOMS & BOARDROOMS - STRATHALLAN HOTEL 59 BALLROOMS & BOARDROOMS - STRATHALLAN HOTEL 9th Floor Wedding Reception Floor Plan

60 BALLROOMS & BOARDROOMS - STRATHALLAN HOTEL A historical mansion rich in detail and style, perfect for special events

One of the last great ladies on East Avenue! Built as a private residence in 1896, the home was designed with weddings in mind- Albrecht Vogt, the original owner and builder of the house, created a grand staircase and Tiffany-style Occulus to provide a dramatic backdrop for his daughters to use on their wedding days. The house was sold to the Century Club in 1913, and has been a private ladies club ever since. Today, The Century Club is open for private events- it is ideal for weddings, but excellent for corporate events as well.

61 BALLROOMS & BOARDROOMS - STRATHALLAN HOTEL Conferences, weddings and special events are held in the 12,000 square foot, state-of-the-art meeting space.

62 BALLROOMS & BOARDROOMS - STRATHALLAN HOTEL Food & Drink World Class Cuisine

With handcrafted cocktails, unbeatable atmosphere, and food menus that render even the most fastidious foodie indecisive, the Strathallan is a place where people come to explore and be delighted.

63 FINE DINING & ENTERTAINMENT - STRATHALLAN HOTEL Flavor and Style CHAR STEAK & LOUNGE

The Strathallan’s Char Steak & Lounge has been on Rochester’s must-dine list since the restaurant’s unveiling in 2012. The reasons why are obvious: the ambiance is big city, the wine list is exceptional, and the menu is exquisitely curated and widely pleasing.

Chef, Jeremy Nucelli, hails from the Manhattan restaurant scene and creates incredible menus of homemade pastas, the freshest seafood and, of course, steaks. (The latter are wood fired on an all-day grill, then finished in a 1000-degree coal oven to caramelize the juices and tantalize the diner.) Eat inside among art, or on the outside patio featuring a cozy fireplace.

64 FINE DINING & ENTERTAINMENT - STRATHALLAN HOTEL Cocktails And Fine Japanese Cuisine This rooftop bar and restaurant is one of a kind. A blend of modern and traditional, this incredible 9th floor space is replete with tufted leather booths, mahogany-paneled walls, chandelier-adorned ceilings, and massive windows to take in the fantastic view.

If you love liquor, pull up a seat at the quartz-trimmed bar. Hattie’s offers an extensive scotch menu, perfectly chilled vodka on draft, and craft cocktails that are as authentic as they are artful.

Hattie’s Japanese-centric menu features impeccably fresh sashimi, nigiri, rolls, salads, maki, buns, and more. Order a tokkuri of sake and call it an impossibly gorgeous night.

65 FINE DINING & ENTERTAINMENT - STRATHALLAN HOTEL The Bar With The View The rooftop at the Strathallan is a rare, daring space with breathtaking, 360-degree views of the city and beyond. Here, guests can have a drink at Hattie’s, a gentleman’s club-inspired lounge, as well as a 3,300-square foot banquet space that’s ideal for weddings, events, and unforgettable parties.

There’s also a cigar patio where all guests can enjoy their drink and their Cubans by a rooftop fire pit. Surrounding this amazing 9th floor experience is a wraparound patio on which to take in the amazing 360-degree vistas of Rochester and the surrounding foothills.

66 FINE DINING & ENTERTAINMENT - STRATHALLAN HOTEL 67 FINE DINING & ENTERTAINMENT - STRATHALLAN HOTEL Section4 MARKET Overview

68 MARKET OVERVIEW - ROCHESTER, NEW YORK Rochester, New York is a stimulating, inventive, The Greater Rochester, NY region is a history-rich metropolitan community, and is the 3rd largest urban boomtown that today ranks among the top knowledge-based economic regions in the world. Rochester area in the state of New York. Rochester combines small has received various honors for their business environment town accessibility with big-city services. Yet this high-tech and exceptional quality of life. community has also preserved so many links with the past in that it claims more sites on the National Register » Rochester’s location in Western NY is a competitive of Historic Places than any other city of its size. Rochester advantage because of its close proximity to major East Coast markets without the high cost associated with a is uniquely centered within the heart of the Northeast major metropolitan area. Region, providing an economic bridge to Washington D.C., New York, Toronto, Philadelphia, Detroit, Cleveland, » One-third of the US and Canadian population is within Boston, Baltimore and Montreal. Within a 400-mile radius 500 miles of Rochester, NY. that includes twelve Northeastern states and the two most » 7% of the world’s fresh water supply is right here in populous Canadian provinces, Rochester reaches out to the Greater Rochester, NY Region. No water rationing or more than 80 million people-that is over one-third of the water rights fees and rates well below the national average total U.S. population. make this region attractive for hundreds of food processing, agriculture and advanced manufacturing Amidst some of the most beautiful scenery in the United » At $134,000, the median home sales price is 47% more States, residents enjoy a housing market known for great affordable than the national average. Approximately bargains, short commute times, world-class cultural and 81.4% of area homes are affordable for our region’s median entertainment offerings and a fast growing innovation income. economy poised to thrive. Rochester is a community » Rochester is among the most innovative cities in the of innovators on the cutting edge of scientific research country ranking 13th among metropolitan regions for the and discovery; a community of artists featuring world number of patents issued per million residents. renowned performers, a top-flight orchestra and with one of the nation’s premier schools of music; a community of entrepreneurs, home to some of the world’s best known brands and fastest growing startups.

69 MARKET OVERVIEW - ROCHESTER, NEW YORK ROCHESTER, NEW YORK THE FESTIVAL CITY

This metropolitan region situated on the southern shore of Lake Ontario is also part of New York’s breathtaking Finger Lakes region. Known for its vast selection of family-oriented activities and attractions, Rochester hosts nearly two million visitors each year. As the third largest city in New York, the greater Rochester region is poulated by a little more than one million people. Conveniently located, Rochester is a six-hour drive from New York City, 3 1/2 hours from Toronto and 90 minutes from Niagara Falls.

Rochester is home to world-class events throughout the year. The festival season kicks-off with the world’s largest lilac collection at Highland Park’s Lilac Festival (May) where hundreds of thousands visitors enjoy 10 days of brilliant floral colors, fragrance and entertainment. Downtown is alive with the sounds of jazz during the Rochester International Jazz Festival (June) held in the City’s East End Entertainment District, home to the renowned . Rochester has been named one of the 10 best golf cities in the country. It is the only city in the U.S. to host both the PGA championship (Oak Hill Country Club) and LPGA championship (Locust Hill Country Club) tournaments in one summer- 2013. Rochester is set to host the Senior Open in 2019 and is looking forward to the return of the PGA Championship in 2023.

Rochester sits at the center of 100 Must-See Miles of the Erie Canal which when opened in 1825, made Rochester the country’s first “boomtown.” Today, the historic canal thrives as an active recreational waterway with towpaths, shops and charming towns telling America’s story of “how the west began”. Rochester is home Xerox Rochester International Jazz Festival to multiple national historic landmarks open to the public, the National Susan B. Highland Park’s Lilac Festival Anthony Museum & House and are two prominent attractions. Adults and children are entertained in the second largest children’s museum in the U.S., at the National Museum of Play at The Strong also home to the National Toy Hall of Fame.

70 MARKET OVERVIEW - ROCHESTER, NEW YORK Rochester is known as “Festival City,” with festivals almost every weekend from late spring through the fall. Plus, everyday there is something to do---from performing arts to museum exhibits to musical recitals--and family fun!

OVER 140 OVER 2,000,000 FESTIVALS & EVENTS ANNUAL EACH YEAR VISITORS

OVER 60 OVER 100 RENOWNED PUBLIC WINERIES, BREWERIES GOLF COURSES & DISTILLERIES

OVER 100 OVER 12,000 FAMILY FRIENDLY ACRES OF LOCAL ATTRACTIONS PARKLAND

71 MARKET OVERVIEW - ROCHESTER, NEW YORK DOWNTOWN ROCHESTER REVITALIZATION

Downtown Rochester is currently undergoing a major revitalization. With Hundreds of millions of dollars pouring into the city from state and federal programs, Rochester is watching what other larger cities like Chicago, Toronto, and Pittsburgh are doing “right,” and trying to mirror those ideas at home. Rochester realizes the importance of a vibrant Center City and is dedicated to making decisions that will produce a high quality urban life that its citizens are proud of and that is attractive to 21st century entrepreneurial talent and investment. With new major development projects like The Hyatt Regency, Sibley Square, Tower 280, and The Alliance Building which is being renovated to accommodate over 130 apartments just a block away from the Hyatt Regency, Downtown Rochester is becoming the new destination for millennials to work, live, and play in New York.

Xerox Rochester International Jazz Festival SIBLEY SQUARE Located one block east on Main Street from the Hyatt Regency is Sibley Square, a $200-million redevelopment project which will transform a 1-million square foot historic Rochester building into a vibrant, mixed-use urban center which will include 200 apartments, 200,000 SF of Class “A”, LEED-certified office space, and 40,000 SF of restaurants and retail. The site was once home to the largest department store between New York City and Chicago, Sibley’s Department Store. Winn Development out of Boston is leading the project, and projected occupancy is slated for the second quarter of 2018. More than half of the residential apartments have been pre-leased as of January 2018, and HTR, currently headquartered in Henrietta, will relocate its headquarters and occupy the entire sixth floor 68,000 SF of office space.

TOWER 280 Tower 280, formerly known as Midtown Tower, was a $59 million redevelopment project which was completed in 2017 and awarded by the Urban Land Institute New York for its excellence in repositioning and redevelopment of the 17-store tower, calling it “the most significant redevelopment in the Rochester region in decades” and “a beacon” in the city skyline. The new development includes 80,000 SF of office space, 50,000 square-feet of retail space, two-story penthouses among its 179 apartments and a three-story atrium with a skylight. There is a public space for local artists to use for displays and a rooftop lounge with a 2,000-square foot dog park.

72 MARKET OVERVIEW - ROCHESTER, NEW YORK DOWNTOWN ROCHESTER REVITALIZATION

On the heels of the success of the region’s wines, Rochester is developing a reputation for their brewers and their special craft. Whether brewed from hops, barley malt or wheat, their craft brews are bringing people from all corners of the Northeast in for a taste.

GENESEE BREWING COMPANY Founded in 1878 in Rochester, the is one of the country’s largest and oldest continually operating breweries. In 2017, Genesee Brewing Company began a huge expansion and renovation project. The $49.1 million project at Genesee, on St. Paul Street in Rochester, is expected to take about five years to complete. It includes adding 18,000 square feet to the brewery’s footprint, installing a new “advanced” brewing system, reducing the the plant’s environmental impact, creating new event space and enhancing the smaller Genesee Brew House pilot brewery. The project is expected to create 128 new jobs -- 64 of them targeted to people living in low income areas. The brewery currently employs 592 workers.

CB CRAFTBREWERS CB Craftbrewers, a brewery in the charming village of Honeoye Falls, NY supplies custom beers (like Jeremiah’s Frog Grog and Distillery Scotch Ale) for area bars and restaurants. CB CraftBrewers believes “Craft beer is best enjoyed fresh and in the backyard of the brewery where it was brewed.” If you’re here in October, check out the brewery’s Festival of Ales, featuring 40 unique beers, music and a Chili Cookoff.

ROC BREWING CO. Roc Brewing Co is one of Rochester’s original craft breweries. The team at Roc Brewing Co. focuses on creating consistent, high-quality beer made with the best ingredients. Beers are brewed in-house just behind its South Union Street tasting room located in the heart of downtown Rochester.

73 MARKET OVERVIEW - ROCHESTER, NEW YORK FINGER LAKES MAJOR DESTINATION

Rochester is your gateway to the Finger Lakes, with glacier-carved lakes and beautiful views make this region a “must see” destination. Over 100 New York State wineries are situated in the Finger Lakes Region. Many of these wineries welcome visitors to see their operations and taste their wines. Tour operators can provide guided tours of the area’s wineries, breweries, distilleries, and culinary experiences. Visitors will also enjoy visiting the region’s natural wonders and state parks as well as world-class museums and attractions.

Defined by 11 finger-shaped lakes running north to south, the Finger Lakes is renowned for its natural scenic beauty, great outdoors, cultural richness, small town charm, and culinary splendor. Whether you are an outdoor recreation enthusiast, a nature-lover, a foodie, a wine or beer lover, or someone who cannot get enough time on the water, the Finger Lakes is the perfect destination every season of the year.

EVENTS & FESTIVALS New York’s Finger Lakes has seemingly endless events and festivals to provide the answer to the “Top Things To Do” question. The Finger Lakes region is known for its wine and culinary highlights, exceptional hiking and biking, skiing, and golf in our great outdoors, and of course, our family-friendly atmosphere.

COLLEGES & UNIVERSITIES The Finger Lakes region is home to some well known and well established colleges and universities offering studies in an array of degree programs. From our two year college - Finger Lakes Community College (FLCC) with campus facilities in Canandaigua, Geneva, and Victor to the prestigious Division 3 Hobart and William Smith Colleges to those that are nearby in Rochester, Syracuse, Geneseo and Ithaca - the Finger Lakes is one college town after another.

74 MARKET OVERVIEW - ROCHESTER, NEW YORK GREATER ROCHESTER INTERNATIONAL AIRPORT

The Greater Rochester International Airport (“ROC”) is located 3 miles southwest of downtown Rochester and 12 miles south of Lake Ontario in Monroe County, New York. It is the second-busiest airport in the state of New York outside of the New York City metropolitan area. The largest airline that serves the airport is Delta Air Lines – the subject property Hyatt Regency is the exclusive full-service hotel accommodations provider for Delta Airlines, United, and Express Jet crew members and staff with nearly 10,000 rooms pre-booked for 2018.

ROC has non-stop flights to over 19 cities, currently, and convenient one-stop connections to hundreds of cities worldwide. The airport serves approximately 2.4 million passengers annually and provides vital air transportation services to cities in the northeast and to major hubs in the Midwest. In addition, it serves as an important economic component of the air transportation network connecting to other parts of the nation and the world.

2018 RENOVATION PROJECT ROC is currently undergoing a $79 million-dollar renovation project to transform and enhance its terminals inside and out, to create a 21st Century, high-tech, smart facility that best serves the business and economic needs of travelers. The project will include improved airport landscape and access, airport entrance canopy with colorful lighting, solar panels and rainwater storage, and smart terminal revitalization and integration throughout including Bluetooth connectivity.

Cost & Funding The total project cost is $79 million. ROC competed and was the first airport in the state to win Governor Cuomo’s Upstate Airport Economic and Revitalization Competition receiving nearly $40 Million. The remainder was funded through a combination of Passenger Facility Charges and Airport Authority Funds. The project is expected to be completed in the fall of 2018.

75 MARKET OVERVIEW - ROCHESTER, NEW YORK MAJOR EMPLOYERS

COMPANY NO. OF EMPLOYEES /UR Medicine 27,590 Rochester Regional Health 15,753 13,606 Xerox 6,396 Rochester City School District 5,574 Unity Health System 5,500 Monroe County Government 4,549 4,123 Rochester Institute of Technology 3,993 Lifetime Healthcare Cos 3,587 RIT 3,274 Sutherland Global Services Inc. 3,009 City of Rochester government 2,715 Tops Markets LLC 2,588 Eastman 2,300 Greece Central School District 2,232 Harris RF Communications 3,450 YMCA of Greater Rochester 2,745 Heritage Christian Services 1,650 Frontier Communications Corp. 1,400 Webster Central School District 1,328 Finger Lakes Health 1,305 Monroe #1 BOCES 1,285 St. Ann's of Greater Rochester 1,244 Verizon Wireless 1,200 Rush-Henrietta School District 1,123 Ortho-Clinical Diagnostics 1,100 Exelis Geospatial Systems 1,100 General Motors Co. 1,100

76 MARKET OVERVIEW - ROCHESTER, NEW YORK MARKET AREA DEMOGRAPHICS

Radius 3 Mile 5 Mile 10 Mile Rochester Radius 3 Mile 5 Mile 10 Mile Population New York Population 2017 Population 199,459 309,332 623,569 2017 Population 186,808 303,629 627,057 Households MSA Population Households 2017 Households 82,063 129,404 255,568 2017 Households 78,820 126,505 257,006 Owner Occupied 29,837 61,379 157,508 1,149,653 Owner Occupied 30,074 59,547 158,542 Renter Occupied 52,226 68,025 98,061 Renter Occupied 48,746 66,958 98,464

2017 HH Income 82,063 129,406 255,568 2017 HH Income 78,820 126,507 257,005

<$25,000 33,222 42,728 61,106 Rochester is the <$25,000 30,152 41,591 61,300 $25,000 - $50,000 21,670 34,474 62,038 3rd Largest $25,000 - $50,000 20,025 32,904 62,323 $50,000 - $75,000 11,479 19,953 42,668 City in New York $50,000 - $75,000 11,144 19,412 42,484 $75,000 - $100,000 7,188 13,699 33,731 $75,000 - $100,000 7,428 13,326 33,798

$100,000 - $125,000 3,557 7,612 21,640 $100,000 - $125,000 3,798 7,528 21,722

$125,000 - $150,000 1,857 3,712 12,486 Rochester is the $125,000 - $150,000 2,191 3,791 12,694

$150,000 - $200,000 1,627 3,786 12,076 $150,000 - $200,000 2,081 4,157 12,371

$200,000+ 1,463 3,442 9,823 2nd Wealthiest $200,000+ 2,001 3,798 10,313 Region in New York State 2017 Avg HH Income $48,103 $56,873 $70,628 2017 Avg HH Income $52,860 $58,446 $71,200 After NYC MSA

77 MARKET OVERVIEW - ROCHESTER, NEW YORK NON-ENDORSEMENT & DISCLAIMER NOTICE

CONFIDENTIALITY AND DISCLAIMER The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap. All rights reserved.

NON-ENDORSEMENT NOTICE 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.

RYAN BRIGGS Senior Financial Analyst Office: (786) 522-7126 Cell: (314) 540-1421 [email protected]

78 ROCHESTER HOTEL PORTFOLIO ICONIC Rochester, New York HOTEL PORTFOLIO 498 LUXURY ROOMS & BEST-IN-CLASS AMENITIES