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