MARKET STUDY & FINANCIAL PROJECTIONS Proposed Hyatt

MARKET STUDY & FINANCIAL PROJECTIONS

Proposed Hyatt Place Perry, Georgia

Mr. Stephen Shimp Executive Director Georgia National Fairgrounds & Agricenter 401 Larry Walker Parkway Perry, Georgia 31069

CBRE, Inc. 225 Water Street, Suite 110 Jacksonville, FL 32202

+1 904 634 1200 Office Henry B. Staley, Jr., MAI, CPA +1 904 610 9679 Mobile Managing Director CBRE Hotels, Advisory [email protected] www.cbrehotels.com

March 14, 2018

Mr. Stephen Shimp Executive Director Georgia National Fairgrounds & Agricenter 401 Larry Walker Pkwy Perry, Georgia 31069

Dear Mr. Shimp:

In accordance with our engagement letter, we have prepared a market analysis and projections of occupancy, average daily rate (ADR) and cash flow for a proposed 100-unit Hyatt Place hotel to be attached to the Miller-Murphey Howard Building, at the Georgia National Fairgrounds & Agricenter, in Perry, Georgia. The following paragraphs present our conclusions.

EXECUTIVE SUMMARY

Metropolitan Warner Robins MSA Overview

. The Warner Robins metropolitan statistical area (MSA) is a three-county area in Central Georgia, including Peach, Houston and Pulaski Counties. Perry is the county seat of Houston County, approximately 25 miles south of Macon and 100 miles southeast of Atlanta. This area is often called the crossroads of Georgia, a popular stopover for vacationers headed from the north to Florida.

. The three-county Warner Robins MSA is the eighth largest in the state with an estimated 2016 population of 189,800. During the period from 2011 to 2016, the population of the MSA increased at a compound annual rate of 0.7 percent. It is anticipated to grow to 208,700 by 2026, reflecting a 1.0 percent compounded annual growth rate.

. Between 2011 and 2016, total nonagricultural employment in the MSA grew at a compound annual rate of 0.4 percent. Employment trends turned positive in 2015, with 2,400 jobs added between 2015 and 2016. Based on preliminary figures, average monthly employment increased 1.6 percent year-to-date November 2017 versus the

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same period in 2016. Forecasts by Woods & Poole Economics, Inc. indicate compound annual employment growth of 1.3 percent for both the MSA and Houston County through 2026.

Site and Neighborhood Evaluation

. The subject is on the grounds of the Georgia National Fairgrounds & Agricenter (GNFA), attached to the Miller-Murphey Howard Building, at the entrance gates. This site is visible from I-75 and equidistant from two interstate highway interchanges at Golden Isles Parkway and Perry Parkway. It is less than two-miles from downtown Perry.

. GNFA is the dominant feature in the neighborhood, located on some 1,000-acres, with five arenas, exhibit halls, two 480-stall horse barns, four ponds, a carnival midway, and parking for 13,000 vehicles. The 11 days of the Georgia National Fair in September/October draws over 500,000 attendees. This is supplemented by over 200 non-fair events throughout the year, with annual attendance cumulatively totaling approximately 450,000 attendees.

. On balance, the site is considered adequately suited to hotel development. Though the interchange lacks an array of support facilities (e.g. restaurants, retail, entertainment, etc.), the presence of GNFA and the lodging demand it generates mitigates this competitive disadvantage to a substantial degree.

Recommended Facilities

. We recommend a 100-unit Hyatt Place featuring a fitness room, a business center, a swimming pool, complimentary parking and all of the typical features and services of the brand. At least 60 percent of the guest rooms should be double queen bedded. Dedicated meeting space at the hotel should not exceed 1,200 square feet given the property’s proximity to GNFA. Food and beverage outlets in the hotel should include the brand’s proprietary concepts: the 24/7 Gallery Menu and Coffee to Cocktails Bar, the 24/7 Gallery Market, and complimentary breakfast offered in the Gallery Kitchen. . We have assumed separate food and beverage operations between the hotel and the Fairgrounds. . For purposes of this analysis, we have assumed a January 1, 2020 opening date.

Supply and Demand Analysis

. There are 12 properties with a total of 992 guest rooms in the MSA which would compete to varying degrees with the subject 100-unit Hyatt Place. Market area occupancy and ADR are estimated to have been approximately 68 percent and $109.62, respectively, for 2017. The properties garner 58 percent of their accommodated demand from business travelers, 31 percent from leisure guests and 11 percent from groups.

. We have identified four additions to the competitive supply other than the subject. An 82- unit Home2 Suites is being built between the Hampton Inn and Hilton Garden Inn in Warner Robins. The three properties will be commonly owned. The Home2 Suites is expected to be complete by February 2019. A 72-unit LaQuinta Inn & Suites is scheduled for a November 2018 delivery, as a renovation project in Perry. Additional hotels

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proposed in Perry include a 95-unit Avid by IHG and a 75-unit Comfort Inn & Suites. These properties are scheduled for completion in January 2020 and January 2021, respectively.

. Considering recent trends in the market, base growth rates are expected to be moderate. An additional level of “supply-driven” growth is anticipated to be generated by the five new hotels, along with a 2018 to 2020 demand spike in the group and leisure segments associated with construction at GNFA.

Estimated Levels of Utilization

. The proposed Hyatt Place is expected to achieve penetration levels in excess of its fair market share in the group and leisure segments, and below its fair share in the corporate segment.

. Projected market penetration, occupancy, ADR and revenue per available room (RevPAR) are presented in the table below:

ESTIMATED MARKET PENETRATION, OCCUPANCY, AVERAGE DAILY RATE AND REVPAR PROPOSED 100-UNIT HYATT PLACE PERRY, GEORGIA CALENDAR 2020 THROUGH 2024

Average Daily Rate Occupancy Constant Inflated RevPAR Year Penetration1 Occupancy 2017 Dollars Dollars2 (Inflated $)

2020 93% 61% $131.00 $143.25 $ 87.13 2021 101 64 133.00 149.75 95.59 2022 105 67 135.00 156.50 105.05 2023 105 68 135.00 161.25 110.00 2024 105 69 135.00 166.00 114.61

1 Presented as a percentage of fair market share.

2 Inflated annually at 3.0 percent and rounded to the nearest $0.25. Inflation rates were based on the results of recent investor surveys.

Financial Projections

. Projected cash flows from operations before debt service and income taxes, in constant 2017 and inflated dollars, are depicted in the following table.

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PROJECTED CASH FLOWS FROM OPERATIONS BEFORE DEBT SERVICE AND INCOME TAXES PROPOSED 100-UNIT HYATT PLACE PERRY, GEORGIA CALENDAR 2020 THROUGH 2024

Constant Inflated Year 2017 Dollars Dollars

2020 $ 930,000 $1,018,000 2021 1,066,000 1,201,000 2022 1,216,000 1,409,000 2023 1,253,000 1,497,000 2024 1,281,000 1,575,000

METROPOLITAN WARNER ROBINS MSA OVERVIEW

An analysis of the economic characteristics of a given market area is critical in assessing historical and future growth patterns and their impact on levels of lodging demand. Such an analysis also contributes to a proper evaluation of market risks. For instance, a market heavily oriented towards a single demand generator (e.g., a military installation) often carries a high level of inherent risks. Conversely, a market having a diverse economy typically is less vulnerable to downturns. Further, the sheer size of a market can impact risks through its ability to recover from conditions of oversupply.

The Warner Robins MSA is a three-county area in Central Georgia, including Peach, Houston and Pulaski Counties. Perry is the county seat of Houston County, approximately 25 miles south of Macon and 100 miles southeast of Atlanta. Given the convergence of Interstates 16 and 75, this area is a popular stopover for vacationers headed from the northeast and midwest to Florida. The maps on the following pages depict the location of the subject site within the region and metropolitan area.

Population: Population growth is an important factor in determining the economic strength of a given area. Although the growth of a local population is not related directly to room-night demand for hotels, it does reflect employment growth and future employment concentration which, in turn, typically influence levels of commercial room-night demand.

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REGIONAL LOCATION

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METROPOLITAN LOCATION

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The three-county Warner Robins metropolitan statistical area (MSA) is the eighth largest in the state with an estimated 2016 population of 189,800. During the period from 2011 to 2016, the population of the MSA increased at a compound annual rate of 0.7 percent. Houston County, which contains the subject site and nearly 80 percent of the metropolitan population exhibited growth, while Peach and Pulaski County experienced declines. With limited employment opportunities in the MSA’s more rural counties, population growth has been constrained by a loss of younger people moving elsewhere to find work. Further, outbound migration is weighted heavily to a reduction in government payrolls. Over the next 10 years, however, population is projected to increase in all three counties at an average rate of 1.0 percent compounded annually, slightly below that of Georgia, but near the level of the U.S.

The following table depicts population characteristics for all three counties, the MSA, the state and the nation.

POPULATION HOUSTON, PEACH AND PULASKI COUNTIES, THE WARNER ROBINS MSA, GEORGIA AND THE UNITED STATES 2011, 2016 AND 2026 (in thousands)

Compound Compound Annual Change Annual Change 2011 2016 2011-2016 2026 2016-2026

Houston County 144.2 151.5 1.0% 167.8 1.0% Peach County 27.6 26.9 (0.5) 29.2 0.8 Pulaski County 11.9 11.4 (0.9) 11.7 0.3 Warner Robins MSA 183.7 189.8 0.7 208.7 1.0 Georgia 9,812.3 10,388.6 1.1 11,741.5 1.2 United States 311,718.8 324,161.0 0.8 355,562.0 0.9

Bibb County’s Share of MSA 78.5% 79.8% 80.4%

Source: Woods & Poole Economics, Inc. - 2017 CEDDS

Employment and Economy: The Warner Robins MSA is home to a growing defense/aerospace, agribusiness, manufacturing, and logistics base. The region has a diverse economy benefiting from its central location, transportation infrastructure, abundant water resources, available land, low cost of living and pro-business environment. Further, it acts as somewhat of a bedroom community for nearby Bibb County. Highlights of the local economy are outlined below.

. Robins Air Force Base is in the northeast part of the MSA and is the dominant economic engine in the area. It is the state’s largest industrial complex and has a $2.75 billion economic impact. Employing 21,900 civilians, contractors and military personnel, it serves as one of three major air logistics centers in the country as well as home to the 78th Air Base Wing (ABW), 461st Air Control Wing and the Air Force Life Cycle Management Center. The latter is one of six centers under the Air Force Materiel Command and is responsible for life cycle management of Air Force weapon systems. The missions of the

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78th ABW range from operational flying wings to specialized support services. The 461st ACW is the Air Force’s only active duty E-8C joint Surveillance Target Attack Radar System (STARS) wing.

. Industries targeted for expansion by local economic development officials include warehousing/distribution, aerospace, automotive, food processing and advanced manufacturing. Home to more than 100 aerospace companies and contractors, Middle Georgia is known as the state’s “Aerospace Corridor.” Further, there are 21 automotive, truck and bus assembly plants within 500 miles of Macon. Fort Valley is home to Blue Bird Corporation’s bus manufacturing division, with some 1,950 of its 2,200 employees working in Peach County.

. The MSA is home to four colleges and universities including: Fort Valley State University, Middle Georgia State University (Warner Robins Campus), Georgia Military College (Warner Robins Campus), and Central Georgia Technical College (Peach County Workforce Development Center). The most influential is Fort Valley State University, one of three historically black colleges in Georgia and the cornerstone institution of the area since 1895. It has more than 2,800 students enrolled in 31 undergraduate and nine graduate programs. Its 1,365-acre campus has abundant room for expansion, as only 80-acres are presently developed. The University has 11 Division II SAC sports teams.

. There have several recent economic developments. Perdue Fars is expected to undergo a $100 million expansion adding 400 jobs. In 2017, Canadian based Pure Flavor announced that it will invest $105 million to build a 75-acre state of the art high tech tomato and cucumber greenhouse and distribution facility in Peach County, employing some 200 people. Sandler Nonwoven Corporation, a German textile company, opened a plant in Perry in 2016 with 50 new employees and plans to add an additional 150 workers in the next two years. Locally owned Rigby’s Entertainment is constructing a $12 million 23-acre waterpark to complement its existing family entertainment facility in Warner Robins. Lastly, an 850+/- acre disaster preparedness and tactical training center in Perry, the Guardian Centers of Georgia, is growing with military, Department of Defense and state and federal government training.

. Existing agriculture based businesses are peach, cotton, wheat and pecan centric. Lane Southern Orchards is one of the largest in the area with over 5,000-planted acres. Growers in the area include Cleveland Organics and Pure Flavor, among others. Also, the USDA has a 1,163-acre Fruit and Tree-Nut Research Unit in Byron.

. Houston Healthcare serves the region with seven facilities and two fully accredited acute care medical facilities with a combined capacity of 282 beds. This health system serves approximately 300,000 people within the region every year, generating more than $482 million in revenue for the local and state economy.

The area’s top non-governmental employers are listed in the following table.

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LARGEST NON-GOVERNMENTAL EMPLOYERS WARNER ROBINS MSA

Number of Employer Industry Employees Robins Air Force Base Defense 24,500 Blue Bird Bus Company Automotive 2,400 Houston Healthcare Healthcare 2,355 Perdue Farms Food Processing 2,267 Frito Lay Food Processing 1,352 Fort Valley State University Education 674 Northrup Grumman Defense 500 Central Georgia Technical College Education 419 Anchor Glass Container Corp Manufacturing 358 Lane Southern Orchards Food Processing 325 Source: Houston, Peach and Pulaski Economic Development Authorities

Employment by nonagricultural industry for the Warner Robins MSA in 2011 and 2016 is depicted below.

EMPLOYMENT BY NONAGRICULTURAL INDUSTRY WARNER ROBINS MSA 2011 AND 2016

2011 2016 Compound Employment Employment Annual Industry Number Percent Number Percent Change

Private Service Providing 33,400 47.0% 35,400 48.8% 1.2% Government 29,300 41.2 26,900 37.1 (1.7) Goods Producing 8,400 11.8 10,300 14.2 4.2

Total 71,100 100.0% 72,600 100.0% 0.4%

Source: U.S. Department of Labor, Bureau of Labor Statistics

Between 2011 and 2016, total nonagricultural employment in the MSA grew at a compound annual rate of 0.4 percent. The recession had much less of an impact on this region due to the heavy military presence. Job losses were evident starting in 2009 and extending through 2010. The government shutdown in 2013 also impacted payrolls. While government job consolidation has negatively impacted the MSA, strong growth has occurred in the service and goods producing sectors, led by leisure/hospitality, retail and business/professional services. Private sector increases have driven the economy, as government employment has stagnated since 2015. Growth of 2.5 percent (1,800 jobs) was experienced in 2016 alone. Based on preliminary figures, average monthly employment increased 1.6 percent year-to-date November 2017 versus the same period in 2016. Given federal budget approvals under the current administration, defense spending is likely to increase in the near to mid-term, and Forecasts by Woods & Poole Economics, Inc. indicate compound annual employment growth of 1.3 percent for both the MSA and Houston County through 2026.

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As of December 2017, the unemployment rates for the county and MSA were 4.4 and 4.5 percent, respectively. Comparatively, the unemployment rates for Georgia and the United States were 4.5 and 4.1 percent, respectively. From 2013 to 2015, more than 500 people accepted early retirement options from Robins Air Force Base, with the majority in the 35 to 55 age range, providing an additional available pool of qualified workers. Graphical depictions of 2016 employment by industry and the annual new job growth for the past five years are presented below.

EMPLOYMENT BY INDUSTRY ANNUAL NEW JOB GROWTH

2,000 14.2% 1,500 Private Service Producing 1,000 Government 48.8% 500

37.1% Goods Producing 0 2012 2013 2014 2015 2016 -500

-1,000

Tourism: The following table presents historical visitation statistics for Houston, Peach and Pulaski Counties through 2016 (latest available). Tourism contributed $282 million to the MSA’s economy and supported 2,500 jobs. This generated $8.19 million in local tax revenue and $12.16 million in state tax revenue. While visitation is not tracked, visitor expenditures grew 5.4 percent annually from 2012 to 2016.

HISTORICAL VISITOR EXPENDITURES THREE COUNTY MSA– HOUSTON, PEACH & PULASKI COUNTIES, GEORGIA 2012 THROUGH 2016

Visitor Expenditures (In Millions of $s) Compounded 2012 2013 2014 2015 2016 Annual Growth Rate Houston 196.29 204.58 213.22 225.07 237.09 3.8% Peach 31.70 32.94 34.60 35.07 36.02 2.6 Pulaski 8.30 8.51 8.83 8.78 9.16 2.0

MSA Total 236.29 246.03 256.65 268.92 282.27 3.6%

Source: Georgia Department of Economic Development

It is instructive to note that there were two new hotel openings with 170 rooms from 2012 through 2016. This helped facilitate a level of supply induced demand.

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Numerous attractions, venues and recreational facilities draw visitors to the area. The MSA’s largest tourism generators include the following:

. Opened in 1990, The Georgia National Fairgrounds & Agricenter is sited on 1,100-acres in Perry. It is one of the largest such facilities in the country. The Agricenter contains 10- acres of exhibition space with five arenas, exhibit halls, two 480-stall horse barns, four ponds, a carnival midway, and parking for 13,000 vehicles. In addition to the fair, hundreds of events are held annually at the facility. The Georgia Grown Building is presently being expanded to include 36,000 square feet of meeting space. This facility is scheduled for completion in 2018, while a new arena is set for development by 2020. The 11 days of the Georgia National Fair in September/October draw over 500,000 attendees, while an additional 200 non-fair events attract some 450,000 attendees.

. Located just south of the Robins Airforce Base is the The Museum of Aviation. Opened to the public in 1984, it is the second largest aerospace museum of the United States Air Force and fourth most visited Department of Defense museum. Annual visitation exceeds 400,000. The visiting public has access to the 51-acre complex with four primary climate controlled hangers.

. Go Fish Education Center is a hands-on educational journey through Georgia’s watersheds, offering freshwater aquariums, habitat exhibits, a catch and release live stocked fishing pond, and interactive shooting and fishing simulators. The center is adjacent to the Georgia National Fairgrounds & Agricenter and is operated by the Georgia Department of National Resources, Wildlife Recourses Division. The hatchery at Go Fish provides walleye, Alabama shad, smallmouth bass, lake sturgeon and bluegill to the watersheds in Georgia.

. Agricultural attractions are important to the area. Lane Southern Orchards in Perry operates a sprawling peach packing and retail facility just outside of Fort Valley and Byron. Barbour Farms offers a country store in addition to its peach growing and packing facility, while Pearson Farms has a store and tours at their packing house. Georgia Bob’s Cane River Orchard is a wine tasting room. Lastly, Fort Valley is home to the American Camelia Society, headquartered at Massee Lane Gardens, which offers over 1,000 varieties of camellias on its nine-acre grounds.

. Venues such as the Warner Robins Little Theatre and Perry Players Community Theatre are important to the MSA’s cultural offerings.

The Parks and Recreation Departments of Perry and Warner Robins offer 15 parks spread throughout Houston County, hosting youth and adult sports and outdoor activities. The Ocmulgee River traverses Pulaski County in downtown Hawkinsville.

Downtown Macon is 30 miles to the northeast and is the economic and cultural hub of middle Georgia. It boasts a large convention center and arena. The city’s attractions include the Georgia Sports Hall of Fame, the Tubman African-American Museum, the Museum of Arts and Sciences, Mercer University, and a number of theatres and musical history venues like The Allman Brothers Band Museum at the Big House and Otis Redding Foundation’s Mini Museum. Large events such as the Cherry Blossom Festival draw up to 230,000 visitors to the region.

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Event Activity: Beyond the events hosted by GNFA, Fort Valley State University generates a material amount of activity. The university hosts over 1,300 events of various sizes annually. Of particular note are orientation, graduation and sporting events. Homecoming alone brings over 10,000 fans. Other area festivals include the Peach Blossom Festival, the Fall Farm Festival, the Perry Dogwood Festival, the Peaches to Beaches Yard Sale, and the annual Perry Buzzard Drop.

Transportation: The Warner Robins MSA is centrally located with good regional transportation infrastructure. It is along I-75, less than 30 miles from Macon and the convergence of I-16 and I-75. It is also approximately two hours from Atlanta, where three interstate highways converge (I-75, I-85 and I-20). I-75 is the main traffic artery connecting the MSA to Macon and Atlanta to the north, and with Tampa to the south. I-16 is a 167-mile long highway which travels in an east/west manner and connects I-75 with I-95 at Savannah.

Nearby air service is provided by Middle Georgia Regional Airport, located between Byron and Macon, roughly 15-miles northeast of Perry. Service had been operated by Silver Airways, which ceased in November 2014. Fights resumed to Baltimore/Washington International Thurgood Marshall Airport by Contour Airlines in 2017. Primary commercial air service is provided by Hartsfield-Jackson Atlanta International Airport less than a two-hour drive to the northwest. With flights to over 150 U.S. destinations and more than 70 international cities in 45 countries, Hartsfield-Jackson currently is the world’s busiest airport with 103.9 million passengers served in 2017. General aviation needs are accommodated at Perry-Houston County Airport and Warner Robins Air Park.

There is presently no public bus or passenger rail service in the MSA, but train service is provided by Norfolk Southern and CSX, with a Norfolk Southern line running through Fort Valley and Warner Robins. Nearby Macon has one of the largest rail switching yards in the Southeast.

Future Outlook: Although lagging the nation and many other metropolitan areas historically, most indices suggest the Warner Robins MSA economy has stabilized and is now experiencing modest growth, buoyed by private sector spending and a recent uplift in defense spending. The presence of numerous agrarian businesses and nearby Robins Air Force Base provide a measure of stability to the region. Although, there is some risk an undersized private sector may be unable to carry the economy if the large federal presence is diminished.

SITE AND NEIGHBORHOOD EVALUATION

The neighborhood within which a hotel operates can have a significant impact on its operating performance. Emerging neighborhoods experiencing substantial growth can generate increasing levels of demand and provide an environment characterized by new development and, more importantly, popular support facilities (e.g., restaurants, retail, entertainment, etc.). Conversely, a

Mr. Stephen Shimp March 14, 2018 declining neighborhood or, in some cases, a mature one relative to a nearby emerging one, can be detrimental to a property’s operations. In this section, we address the location, access and development characteristics of the subject neighborhood.

The subject site is visible from I-75 and equidistant from two I-75 interchanges at Golden Isles Parkway and Perry Parkway. It is less than two-miles from downtown Perry. GNFA is the dominant feature in the neighborhood and the addition of a new arena and expansion of the Georgia Grown facility will enhance the center’s offerings. Go Fish Education Center is also in the vicinity. On the following page is a site layout of the facility.

On the eastern side of the Golden Isles Parkway interchange with I-75 are convenience stores, car dealerships, Cracker Barrell restaurant, Waffle House, Subway, and several hotels, including Best Western Bradbury Inn & Suites, Comfort Inn & Suites, Relax Inn Perry, Travelodge Perry, and Budget Inn. These are followed by the Georgia State Patrol Station, Perry Feed & Tackle and a planned industrial park. The west side of this interchange is home to the Holly Hills single-family residential subdivision, several churches and the Fair Harbor RV Park.

The Perry Parkway interchange has experienced recent development. West of I-75 at this interchange the Loudermilk Companies developed Agricultural Village, a 240-acre mixed-use project that features Brannen Outfitters, a Ford Dealership, Microtel, Waffle House, and Stripling General Store (under construction). Further west is the Preserve at Agricultural Village, a 400 +/- lot subdivision, with several homes being built. Other uses in the vicinity include an Interstate Batteries store, Middle Georgia Tennis Center, and The Westfield School, a 520-student K-12 private school on a 28-acre campus. Radiating from the development are agricultural properties, interspersed with single-family residences.

Downtown Perry is characterized as a quaint Southern town, with unique shops, restaurants, government buildings, offices, and a residential base. Many of the historic homes, some of which are now businesses, were constructed in the mid- to late-1800’s. Direct linkage to GNFA is provided via Courtney Hodges Boulevard, with the City of Perry planning a bike and hiking trail connecting the two, to be called Big Indian Creek.

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The map on the following page depicts the location of the site within its neighborhood. With the exception of GNFA, demand generators are dispersed throughout the neighborhood. The lack of immediately adjacent food & beverage alternatives is considered a competitive disadvantage, but the presence of GNFA is clearly an advantage.

On balance, the site and neighborhood are adequately suited to hotel development.

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NEIGHBORHOOD LOCATION

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RECOMMENDED FACILITIES

Brand affiliation has become increasingly important to successful hotel operations. Accordingly, the competitive strengths and weaknesses of a particular brand can have a substantial impact on a property’s performance.

Hyatt Place is Hyatt Hotels Corporation’s select-service lifestyle offering. The concept got its start when Hyatt Hotels acquired the AmeriSuites chain in late 2004 and rebranded those properties as a means to better compete with Courtyard by Marriott and Hilton Garden Inn. It now includes a mix of conversions and new construction. Key design elements of the brand include the following:

. Spacious guest rooms featuring the Hyatt Grand Bed®, a mini-fridge, luxury skin and hair care amenities, an oversized sleeper sofa and the Hyatt Plug Panel™ which connects laptop computers and other electronic devices with a 42-inch high-definition television.

. The Gallery, a 24-hour quick-service restaurant/market offering freshly prepared soups, salads, sandwiches, appetizers, flatbreads and desserts along with pre-packaged grab ‘n go items.

. Coffee to Cocktails Bar, offering Starbucks® coffee, teas, cold beverages, Canvas® wines by Michael Mondavi for Hyatt®, beer, spirits and mixed drinks.

. StayFit Gym, open 24 hours and offering free ear buds and LCD touchscreens so guests can watch television while exercising.

. Odds & Ends, a variety of items guests can purchase, borrow or use at no charge such as nail polish, a universal cell phone charger and toothpaste.

As of December 31, 2017, there were 302 Hyatt Place hotels worldwide, with an additional 22 in the construction pipeline. Systemwide, Hyatt Place properties achieved an aggregate occupancy of 77.6 percent in 2017 at an average daily rate of $131.02. By comparison, the U.S. lodging industry occupancy for 2017 was 65.9 percent at an ADR of $126.71. It should be noted that systemwide ADR for the Hyatt Place brand is somewhat understated due to the inclusion of a large number of conversions when the brand was first introduced. Though Hyatt does not publish aggregate statistics for newly built hotels, it is widely understood that the rates garnered by these properties are measurably higher. As a brand Hyatt Place generates 46 percent of its aggregate gross rooms revenue and 38 percent of its room nights from loyalty program members. This equates to some 13,650 room nights on average at each stabilized Hyatt Place hotel.

The hotel site is visible from I-75 and will be connected to the Miller-Murphey Howard Building, one of the main meeting buildings and a focal point of the Fairgrounds. We recommend the following features/design elements be put in place for the property:

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 At least 60 percent of the guest rooms will be double queen bedded.  Given its connection to GNFA facilities, dedicated meeting space should not exceed 1,200 square feet.  Amenities should include a swimming pool, a fitness center and complementary parking.  Food and beverage outlets in the hotel will include the brand’s proprietary concepts: the 24/7 Gallery Menu and Coffee to Cocktails Bar, the 24/7 Gallery Market, and complimentary breakfast offered in the Gallery Kitchen. Sample photographs depicting these concepts are included in the attachment.  We have assumed separate food and beverage operations between the hotel and the Fairgrounds. This hotel should meet or exceed brand standards. For purposes of this analysis, we have assumed a January 1, 2020 opening date.

SUPPLY AND DEMAND ANALYSIS

The supply and demand analysis involves a qualitative and quantitative evaluation of the lodging facilities in the Warner Robins MSA with which the proposed hotel would potentially compete for various segments of demand. This section includes a description of the existing supply of, and demand for, hotel rooms in the subject market area, identification of proposed competitive properties, and a discussion of the growth potential of area demand by segment. The analysis is for the period through December 31, 2024 to encompass the first five full years of operation for the subject following its anticipated opening by January 1, 2020.

Understanding the relationship between supply and demand is a critical component of any market study, particularly with respect to hotels. Unlike other property types, hotels essentially lease their rooms on a daily basis. While this characteristic allows for an immediate response to changes in market conditions, it also requires a high level of management intensity. There is an inverse relationship between occupancy and ADR, and raising or lowering rates typically has an immediate impact on room-nights sold. Effective management entails finding the proper balance that allows for the maximization of revenue.

In this section we first identify the subject property’s competitive set (e.g., those hotels that tend to compete for the same sources of demand). We then identify relevant demand sources, analyze historical growth patterns and assess the potential for growth (or lack thereof) in demand by segment. The result is a projection of future market performance. Lastly, we conclude with a projection of occupancy and ADR for the subject property, taking into consideration its competitive strengths and weaknesses relative to the overall market.

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Obviously, some hotels are more directly competitive than others based on their locations, facilities, branding, etc. This disparity in the level of competitiveness can be handled in a number of ways. Some consultants assign a percentage to each property and include only a portion of their guest rooms in the competitive set. This technique, while theoretically sound, is highly subjective and the overall analysis can be extremely sensitive to the assumptions made. Alternatively, we have chosen to address this issue through our projected penetration rates. For example, the introduction of a new property that is only marginally competitive will have a limited impact on the subject property’s penetration level, whereas a directly competitive property will likely have a substantial effect. Regardless of the method employed, properly assessing the relationship between supply and demand and its impact on the subject property and market occupancy requires a level of professional judgment.

Our analysis begins with an overview of the national lodging market as presented next.

National Lodging Market Overview: CBRE Hotels owns the database for Trends in the Hotel Industry®, the statistical review of U.S. hotel operations which first appeared in 1935 and has been published every year since. Beginning in 2007, CBRE Hotels (formerly PKF) unveiled its powerful Hotel Horizons®, an econometrically-developed hotel forecasting model that projects five years of supply, demand, occupancy, ADR and RevPAR for the U.S. lodging industry with a high degree of accuracy. Hotel Horizons® reports are published on a quarterly basis for 60 of the nation’s largest markets and six national chain-scales.

CBRE Hotels has determined through econometric analysis that strong relationships exist between employment, income, price and demand for hotel rooms. Using proprietary models developed in the course of this research the firm produces national quarterly forecasts for demand, occupancy, ADR, RevPAR and supply. These forecasts use baseline historical hotel operating data from STR, and historic and forecast economic data from Moody’s Analytics.

The following table shows the national forecast for all hotels from CBRE Hotel’s Hotel Horizons® March 2018 – May 2018 National Edition.

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The U.S. lodging industry enjoyed its seventh consecutive year of growth in RevPAR during 2017. According to STR, RevPAR grew by 3.0 percent for the year, the result of a 0.9 percent gain in occupancy and a 2.1 percent increase in ADR. RevPAR growth was well distributed between the chain scales in 2017, with economy and midscale brands leading all sectors at 3.2 percent in both segments.

The national occupancy level reached 65.9 percent in 2017. This level is greater than the long- run average occupancy rate of 61.9 percent, and tops the 63.1 percent pre-recession peak occupancy level reported by STR in 2006. Supply growth is slated to outpace demand growth in 2018 and 2020, subsiding by 2021. By year-end 2022, therefore, U.S. occupancy is forecasted to decline to 65.8 percent. Still, CBRE Hotels projects continued strength in ADR from 2018 through 2022, at annual growth rates between 1.7 and 2.6 percent, driving gains in RevPAR.

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Existing Competitive Facilities: There are 12 properties with a total of 992 guest rooms in the MSA which would potentially compete with the proposed 100-unit Hyatt Place. The competitive set includes the market’s highest quality limited service and select service offerings. Although additional lodging facilities are present in the market area, they are not considered to be directly competitive due to disparities in terms of location, product, pricing, affiliation and/or quality. Accordingly, a guest who patronizes one of the competitive properties is not likely to be the same type of traveler who, under normal circumstances, would choose these other facilities.

The map on page 24 depicts the location of each property in relation to the subject. The table on the page after the map provides a summary profile of the defined competitive properties. Additional information on the competitors is provided in the following paragraphs.

. The four-story 82-unit Holiday Inn Express & Suites Perry- National Fairgrounds Area was constructed in 2014 in the northwest quadrant of I-75 and Sam Nunn Boulevard in Perry. The property garners corporate demand from Warner Robins and Fort Valley, but only a small amount of government business from the air base. The hotel captures a large portion of its business from groups associated with the GNFA. Highway motorists on I-75 are also a significant source. The property features complimentary breakfast, an indoor pool, a fitness center and 528 square feet of meeting space. It is the market RevPAR leader and achieves the highest penetration of the group segment.

. The Holiday Inn Express & Suites Warner Robins North West is located on the north side of Watson Boulevard, between the LaQuinta and Hampton Inn in Warner Robins. It is one of the hotels closest to Warner Robbins Air Base. The four-story 88-unit hotel was constructed in 2014 and includes 24 suites, complimentary breakfast, an outdoor pool and 3,738 square feet of meeting space. The property achieves the second highest ADR in the competitive set, even though it underperforms its systemwide brand ADR. Base contractors are a large source of business for this hotel, along with corporate clients such as Frito Lay and Norfolk Southern. The hotel’s ADR lags the Holiday Inn Express & Suites Perry-National

Mr. Stephen Shimp March 14, 2018

Fairgrounds Area even though the two properties are the same age, likely due to the increased amount of government contract business it accommodates.

. The 108-unit Holiday Inn Express & Suites Byron is in the southeast quadrant of the I-75/Georgia Hwy 49 interchange. Completed in 2001, this property was recently purchased by a group who intend to renovate it in the fourth quarter of 2018. The hotel fills on weekends, during dog and horse shows at the GNFA. Its location at the north end of the corridor precludes the accommodation of a material amount of military business. Corporations in Fort Valley and Fort Valley State University are primary sources of demand. While its ADR is well below its systemwide brand average, the hotel has the second highest occupancy in the competitive set, and leads in leisure penetration. . The three-story 74-unit Fairfield Inn & Suites Warner Robins is located on Margie Drive, proximate to Robins Air Force Base. Completed in 2006, the hotel is scheduled for renovation in 2019. The Fairfield Inn & Suites features complimentary breakfast, The Market grab n go, a business center, a fitness center, an indoor pool and 777 square feet of meeting space. 24 of the rooms are suites. . The 106-unit Courtyard Warner Robins is closest to Robins Air Force Base and has the largest amount of meeting space. Some 60 percent of its business is base or base contractor related, with medical related business accounting for some 20 percent. Contracted rates are likely the reason the property achieves such a low ADR, some $20 below brand average. This four-story hotel was constructed in 2010 and is between two restaurants, La Parrilla and Logan’s Roadhouse, on Watson Boulevard. The Courtyard features The Bistro restaurant and bar, a business center, a fitness center, an indoor pool and 9,341 square feet of meeting space. . Constructed in 1997, the two-story 90-unit Comfort Inn & Suites Perry is in the northeast quadrant of the I-75/Golden Isles Parkway interchange in Perry. Amenities include complimentary breakfast, an indoor pool, a fitness center and 1,000 square feet of meeting space. Carpets were replaced in 2017. The property captures business from events at GNFA, Fort Valley State University and I-75 highway motorists. It has the lowest ADR in the competitive set. . The 72-unit Best Western Bradbury Inn & Suites is in the northeast quadrant of I-75 and Golden Isles Parkway in Perry. The property garners a large portion of its business from the GNFA and I-75 travelers. It is positively impacted by every fair event, though its no pet policy limits its penetration during dog shows. Weekends generate more fill nights than weekdays due to events at GNFA and Fort

Mr. Stephen Shimp March 14, 2018

Valley State University. November to December are the slowest months. Corporate demand is dominated by businesses in Perry, but not Fort Valley or the military base. The property was constructed in 2000, rooms were renovated in 2017, and common areas are being renovated in 2018. The hotel has no dedicated meeting space. . The four-story 71-unit Comfort Inn & Suites Byron is located in the southeast quadrant of Georgia Hwy 49 and I-75 in Byron. Completed in 2009, the hotel is in good condition. It offers 400 square feet of meeting space, complimentary breakfast, a fitness center and an indoor pool. The hotel has one of the lowest ADRs in the competitive set, but can penetrate the leisure market at an above average rate given its proximity to I-75. . The 94-unit Hampton Inn Perry is in the southeast quadrant of the I-75/Golden Isles Parkway interchange. This two- story hotel was constructed in 1992 and is the oldest hotel in the competitive set. It underperforms the Hampton Inn systemwide brand average and the nearby Hampton Inn Warner Robins, likely due to its age and layout. The hotel offers a fitness center, a business center, and an outdoor pool, but lacks dedicated meeting space. . Constructed in 2000, the three-story 87-unit Hampton Inn Warner Robins is under renovation. It is adjacent to its sister properties, a Home2 Suites (under construction) and a Hilton Garden Inn, at the northeast corner of Watson Boulevard and Willie Lee Parkway, adjacent to a Kohl’s anchored power center. The hotel has 960 square feet of meeting space, and features a complimentary breakfast, a fitness center and an indoor pool. It has the third highest RevPAR penetration of the competitive set.

. The three-story 91-unit Hilton Garden Inn Warner Robins is located on Willie Lee Parkway, two parcels removed from Watson Boulevard in Warner Robins. Two sister properties, a Hampton Inn and a Home2 Suites (under construction), are sited in front of it. Completed in 2009, this hotel has the highest ADR in the competitive set, only slightly below the systemwide brand average. Still, the property achieves the second highest RevPAR penetration. Amenities include the Garden Grille and Pavilion Pantry, a fitness center, a business center, an indoor pool and 2,094 square feet of meeting space. . The 76-unit LaQuinta Inn & Suites Warner Robins has the lowest occupancy and RevPAR of the competitive set, in part due to its weaker branding. The four-story hotel was constructed in 2010 and is located closer to I-75 than other hotels on Watson Boulevard. It features a complimentary breakfast, a business center, a fitness center, an indoor pool and 900 square feet of meeting space. Many construction and government contractors stay at the hotel.

Mr. Stephen Shimp March 14, 2018

Approximately 40 percent of the hotel’s leisure business is garnered from highway motorists. Supply Additions: Based on our fieldwork, we have identified four additions to the competitive supply other than the subject:

. An 82-unit Home2 Suites is being built between the Hampton Inn and Hilton Garden Inn in Warner Robins, with an anticipated completion date of February 2019. The three properties will be commonly owned. . A 72-unit LaQuinta Inn & Suites is scheduled for a November 2018 delivery, as a renovation project in Perry. . Two additional hotels are proposed, both in Perry, a 95-unit Avid by IHG and a 75-unit Comfort Inn & Suites. The two properties are scheduled to open by January 2020 and January 2021, respectively. . Also of note is a Best Western Plus under construction at Rigby’s Entertainment complex between Perry and Warner Robins. Due to its location and orientation this property is not considered to be direct competition to a Hyatt Place at the GNFA. Should any competitive supply additions occur beyond those listed above and the subject, the estimates of occupancy (and possibly ADR) contained herein would thus be affected and a revision might be required.

The next map depicts the location of the competitive properties. It is followed by a summary of each hotel’s operating performance.

Mr. Stephen Shimp March 14, 2018

COMPETITIVE PROPERTIES

Mr. Stephen Shimp March 14, 2018

SUMMARY OF COMPETITIVE PROPERTIES PERRY, GEORGIA PROPOSED 100-UNIT HYATT PLACE

Estimated 2017 Estimated 2017 Year Percent Average Demand Segmentation Total Sq. Ft. Name of Property Units Open Occupancy Daily Rate RevPAR1 Corporate Group Leisure Meeting Amenities Space

Holiday Inn Exp & Suites Perry 82 2014 75% - 80% $125-$130 $100-$105 55% 20% 25% 528 C-D-E-F Holiday Inn Exp & Suites Warner Robins 88 2014 65 - 70 115 - 120 80 - 85 70 10 20 3,738 C-D-E-F Holiday Inn Exp & Suites Byron 61 2001 75 - 80 90 - 95 70 - 75 45 5 50 450 C-D-E-F Fairfield Inn & Suites Warner Robins 74 2006 70 - 75 100 - 105 70 - 75 75 5 20 777 C-D-E-F Courtyard Warner Robins 106 2010 65 - 70 110 - 115 75 - 80 80 10 10 9,341 A-B-C-D-F Comfort Inn & Suites Perry 90 1997 60 - 65 85 - 90 50 - 55 25 15 60 1,000 C-D-E-F Best Western Bradbury Inn & Suites 72 2000 65 - 70 90 - 95 60 - 65 40 20 40 0 C-D-E-F Comfort Inn & Suites Byron 71 2009 60 - 65 90 - 95 55 - 60 45 10 45 400 C-D-E-F Hampton Inn Perry 94 1992 60 - 65 115 - 120 70 - 75 50 15 35 0 C-D-E-F Hampton Inn Warner Robins 87 2000 70 - 75 120 - 125 90 - 95 60 10 30 960 C-D-E-F Hilton Garden Inn Warner Robins 91 2009 70 - 75 130 - 135 95 - 100 70 10 20 2,094 A-B-C-D-F LaQuinta Inn & Suites Warner Robins 76 2010 50 - 55 95 - 100 50 - 55 60 5 35 900 C-D-E-F

Total/Averages 992 68% $109.62 $74.74 58% 11% 31%

Estimated 2017 Market Penetration Fair Market Estimated 2017 Market Share Percentage2 as a Percentage of Fair Market Share3 RevPAR Name of Property Share Total Corporate Group Leisure Total Corporate Group Leisure Penetration4

Holiday Inn Exp & Suites Perry 8.3% 9.4% 9.0% 16.4% 7.6% 114% 109% 199% 92% 130 - 135 Holiday Inn Exp & Suites Warner Robins 8.9 9.0 11.0 7.8 5.8 102 124 88 66 105 - 110 Holiday Inn Exp & Suites Byron 6.1 6.9 5.4 3.0 11.1 112 88 49 181 90 - 95 Fairfield Inn & Suites Warner Robins 7.5 7.7 10.0 3.3 4.9 103 134 45 66 95 - 100 Courtyard Warner Robins 10.7 11.0 15.2 9.5 3.5 103 143 89 33 100 - 105 Comfort Inn & Suites Perry 9.1 8.2 3.6 10.7 15.9 90 39 118 175 70 - 75 Best Western Bradbury Inn & Suites 7.3 7.1 5.0 12.4 9.2 98 68 171 127 80 -85 Comfort Inn & Suites Byron 7.2 6.6 5.2 5.8 9.7 93 73 81 135 75 -80 Hampton Inn Perry 9.5 8.9 7.7 11.6 10.0 94 82 123 106 95 -100 Hampton Inn Warner Robins 8.8 9.5 9.9 8.3 9.2 109 113 94 105 120 -125 Hilton Garden Inn Warner Robins 9.2 9.7 11.8 8.4 6.3 106 128 92 68 125 -130 LaQuinta Inn & Suites Warner Robins 7.7 6.0 6.2 2.6 6.7 78 81 34 88 65 -70

Notes: Amenities Key

1 Occupancy × average daily rate. A = Restaurant(s) D = Exercise Room 2 Property’s accommodated demand ÷ total demand accommodated in market. B = Lounge(s) E = Complimentary Breakfast 3 Market share percentage ÷ fair market share. C = Swimming Pool F = Complimentary High-Speed 4 Property's RevPAR ÷ market RevPAR. Internet Access

Source: CBRE Hotels

Mr. Stephen Shimp March 14, 2018

Principal Sources of Demand: The principal sources of demand for transient lodging accommodations for the defined competitive set are the corporate, leisure and group segments. From our analysis of the operating performance of the existing competitive properties, it is estimated that the total demand accommodated by these properties in 2017 was segmented as follows:

ESTIMATED ACCOMMODATED DEMAND SEGMENTATION DEFINED COMPETITIVE SUPPLY PERRY, GEORGIA 2017

Annual Accommodated Percent of Demand Segmentation Room-Nights Total Demand

Corporate 142,018 58% Group 28,360 11 Leisure 76,508 31

Total 286,885 100%

The table on the page to follow depicts trends in occupancy, ADR, RevPAR, supply and demand for the defined competitive supply since 2011. Following the national recession, demand growth has been positive every year with the exception of 2013, a year that was negatively impacted by government sequestration. The addition of the 82-unit Holiday Inn Express & Suites Perry Georgia National Fairgrounds and the 88-unit Holiday Inn Express & Suites Warner Robins North West, both in 2014, provided a level of supply induced demand in 2014 and 2015. In fact, this latent demand far exceeded the level of supply on a percentage basis.

Mr. Stephen Shimp March 14, 2018

HISTORICAL OCCUPANCY, ADR, REVPAR, SUPPLY AND DEMAND DEFINED COMPETITVE SUPPLY PERRY, GEORGIA

Occupancy Year January February March April May June July August September October November December Total Year Dec YTD % Change % Change YTD 2011 41.4% 51.2% 64.8% 52.8% 49.8% 57.9% 54.5% 55.0% 46.4% 60.2% 50.6% 44.2% 52.4% 52.4% - - 2012 51.7 59.3 69.2 56.1 54.4 60.2 62.0 56.9 46.0 65.3 51.5 44.2 56.4 56.4 7.6% 7.6% 2013 50.2 58.3 64.4 57.2 54.3 56.8 60.8 48. 9 44.3 64.7 48.7 46.1 54.6 54.6 -3.3 -3.3 2014 52.3 55.6 69.6 57.8 58.5 62.6 66.0 56.9 51.0 66.7 47.5 46.8 57.6 57.6 5.6 5.6 2015 53.5 65.3 69.4 70.7 61.7 65.2 68.4 55.3 50.5 72.4 55.9 52.0 61.7 61.7 7.1 7.1 2016 60.5 65.3 76.4 65.6 61.1 70.3 70.6 58.1 61.3 75.7 57.8 50.3 64.4 64.4 4.4 4.4 2017 60.3 73.5 81.4 67.7 67.4 67.0 64.6 62.6 74.5 74.9 65.9 59.7 68.2 68.2 5.9 5.9 Avg 53.2% 61.7% 71.1% 61.6% 58.6% 63.2% 64.2% 56.4% 54.1% 68.9% 54.3% 49.4% 59.7% 59.7%

ADR Year January February March April May June July August September October November December Total Year Dec YTD % Change % Change YTD 2011 $87.19 $90.74 $90.13 $89.69 $88.26 $88.91 $88.26 $90.54 $87.90 $89.79 $86.45 $83.48 $88.59 $88.59 - - 2012 88.57 90.33 89.30 88.72 87.38 87.26 88.85 89.3 6 88.64 92.37 89.95 87.77 89.11 89.11 0.6% 0.6% 2013 92.30 93.10 94.09 93.41 91.33 91.75 91.57 92.91 92.25 94.03 91.65 89.51 92.41 92.41 3.7 3.7 2014 92.65 95.95 97.94 96.68 95.22 95.39 95.85 97.5 9 97.22 101.35 99.57 97.51 97.04 97.04 5.0 5.0 2015 99.31 101.96 103.65 102.09 102.26 100.60 101.35 102.19 101.22 106.69 101.29 99.91 102.03 102.03 5.1 5.1 2016 103.04 106.41 109.73 106.75 106.61 107.18 107.39 107.13 106.09 112.52 104.47 102.14 106.89 106.89 4.8 4.8 2017 106.78 108.17 111.02 110.02 109.37 107.47 107.23 109.13 114.42 115.02 108.63 106.03 109.63 109.63 2.6 2.6 Avg $96.97 $99.32 $100.64 $99.49 $98.58 $98.06 $98.29 $99.32 $100.55 $103.12 $98.68 $96.52 $99.25 $99.25

RevPAR Year January February March April May June July August September October November December Total Year Dec YTD % Change % Change YTD 2011 $36.07 $46.47 $58.43 $47.39 $44.00 $51.48 $48.11 $49.81 $40.79 $54.04 $43.78 $36.90 $46.45 $46.45 - - 2012 45.81 53.61 61.83 49.75 47.50 52.52 55.10 50.8 7 40.82 60.30 46.31 38.84 50.28 50.28 8.2% 8.2% 2013 46.34 54.28 60.57 53.46 49.56 52.08 55.71 45.40 40.88 60.87 44.64 41.30 50.42 50.42 0.3 0.3 2014 48.44 53.33 68.17 55.85 55.72 59.72 63.26 55.55 49.57 67.55 47.30 45.61 55.89 55.89 10.8 10.8 2015 53.10 66.56 71.98 72.18 63.10 65.57 69.34 56.56 51.13 77.22 56.66 51.97 62.94 62.94 12.6 12.6 2016 62.35 69.52 83.87 70.04 65.15 75.34 75.82 62.24 65.08 85.17 60.36 51.38 68.87 68.87 9.4 9.4 2017 64.38 79.54 90.33 74.45 73.76 72.01 69.30 68.26 85.29 86.20 71.58 63.28 74.82 74.82 8.6 8.6 Avg $51.63 $61.27 $71.58 $61.30 $57.76 $61.98 $63.09 $56.06 $54.39 $71.10 $53.56 $47.66 $59.28 $59.28

Supply Year January February March April May June July August September October November December Total Year Dec YTD % Change % Change YTD 2011 25,668 23,184 25,668 24,840 25,668 24,840 25,668 2 5,668 24,840 25,637 24,810 25,637 302,128 302,128 - - 2012 25,637 23,156 25,606 24,780 25,606 2 4,780 25,606 25,606 24,780 25,606 24,780 25,606 301,549 301,549 -0.2% -0.2% 2013 25,606 23,128 25,606 24,780 25,606 24,780 25,606 25, 606 24,780 25,606 24,780 25,606 301,490 301,490 0.0 0.0 2014 25,606 25,424 28,148 27,240 28,148 2 7,240 28,148 28,148 27,240 30,876 29,880 30,876 336,974 336,974 11.8% 11.8% 2015 30,876 27,888 30,876 29,760 30,752 29,760 30,752 30, 721 29,730 30,721 29,730 30,721 362,287 362,287 7.5 7.5 2016 30,721 27,748 30,721 29,730 30,721 29,730 30,721 30, 721 29,730 30,721 29,730 30,721 361,715 361,715 -0.2 -0.2 2017 30,721 27,748 30,721 29,730 30,721 29,730 30,752 30, 752 29,760 30,752 29,760 30,752 361,899 361,899 0.1 0.1 Avg 27,834 25,468 28,192 27,266 28,175 27,266 28,17 9 28,175 27,266 28,560 27,639 28,560 332,577 332,577

Demand Year January February March April May June July August September October November December Total Year Dec YTD % Change % Change YTD 2011 10,619 11,873 16,642 13,125 12,795 14,381 13,991 1 4,120 11,529 15,431 12,565 11,333 158,404 158,404 - - 2012 13,261 13,742 17,729 13,895 13,920 14,914 15,879 14, 577 11,411 16,715 12,759 11,330 170,132 170,132 7.4% 7.4% 2013 12,856 13,485 16,484 14,181 13,895 14,066 15,578 12, 512 10,982 16,576 12,070 11,816 164,501 164,501 -3.3 -3.3 2014 13,388 14,131 19,590 15,736 16,471 17,053 18,578 16, 022 13,888 20,581 14,193 14,443 194,074 194,074 18.0 18.0 2015 16,510 18,206 21,441 21,040 18,975 19,398 21,039 17, 002 15,019 22,236 16,630 15,980 223,476 223,476 15.1 15.1 2016 18,589 18,128 23,480 19,506 18,775 20,898 21,689 17, 847 18,237 23,252 17,177 15,455 233,033 233,033 4.3 4.3 2017 18,522 20,403 24,996 20,119 20,719 19,920 19,873 19, 236 22,184 23,047 19,611 18,354 246,984 246,984 6.0 6.0 Avg 14,821 15,710 20,052 16,800 16,507 17,233 18,09 0 15,902 14,750 19,691 15,001 14,102 198,658 198,658

*The 82-unit Holiday Inn Express Perry National Fairgrounds opened in February of 2014 and the 88-unit Holiday Inn Express & Su ites Warner Robins Northwest opened October 2014 Source: STR, Inc. 27

Mr. Stephen Shimp March 14, 2018

Seasonality of Demand: The subject market area is mildly seasonal. Special events tend to boost occupancy and ADR in March and in September/October. As with most commercial markets, December and January are the weakest months of the year due to the holidays. With the exception of being somewhat lighter during the summer months and holiday periods, commercial demand is fairly consistent on a year-round basis and generally is concentrated on Monday through Thursday nights. Group meetings are most prevalent during the spring and fall months, while social groups are more evenly spread throughout the year. Leisure demand is usually concentrated during the summer months, particularly on weekends, and corresponds with typical vacation practices and traffic volume on I-75. The table and graphs below profile the trend in seasonality for the competitive set from 2016 through 2017.

SEASONALITY TRENDS DEFINED COMPETITIVE SUPPLY PERRY, GEORGIA 2016 THROUGH 2017

Occupancy Average Daily Rate Month 2016 2017 2016 2017

January 60.5% 60.3% $103.04 $106.78 February 65.3 73.5 106.41 108.17 March 76.4 81.4 109.73 111.02 April 65.6 67.7 106.75 110.02 May 61.1 67.4 106.61 109.37 June 70.3 67.0 107.18 107.47 July 70.6 64.6 107.39 107.23 August 58.1 62.6 107.13 109.13 September 61.3 74.5 106.09 114.42 October 75.7 74.9 112.52 115.02 November 57.8 65.9 104.47 108.63 December 50.3 59.7 102.14 106.03

Source: STR, Inc.

MONTHLY OCCUPANCY MONTHLY ADR

100.00% $120.00 90.00% $110.00 80.00% 70.00% $100.00

60.00% $90.00 50.00% 40.00% $80.00

30.00% $70.00 20.00% $60.00 10.00% 0.00% $50.00 Jan '16 Apr Jul Oct Jan '17 Apr Jul Oct Jan '16 Apr Jul Oct Jan '17 Apr Jul Oct

Mr. Stephen Shimp March 14, 2018

Due to typical commercial travel patterns, the market frequently reaches capacity midweek. Weekends can also be strong during special events. The following table presents the daily occupancy and ADR patterns for the three-year period ended December 2017.

OCCUPANCY AND ADR BY DAY OF THE WEEK DEFINED COMPETITIVE SUPPLY PERRY, GEORGIA THREE YEARS ENDED DECEMBER 2017

Day of the Week Occupancy ADR

Sunday 41.7% $102.80 Monday 63.4 107.98 Tuesday 72.4 109.66 Wednesday 73.1 108.98 Thursday 64.3 105.42 Friday 72.0 104.48 Saturday 66.6 103.22

Three-Year Average 64.8% $106.31

Source: STR, Inc.

It is estimated that the defined market reaches capacity on 99 nights per year and unaccommodated demand approximates five to 30 percent of inventory on fill-days. Accordingly, some 22,800 room-nights of unaccommodated demand were included in our analysis.

Future Demand: Future room-night demand for the commercial, leisure and group segments was estimated based upon an analysis of key economic and demographic indicators. For each segment, relevant factors were identified and weighted according to their relative impact on demand. The annual growth rates estimated for each segment are discussed in the following paragraphs.

Corporate Demand: This segment consists of demand generated by vendors, service representatives, corporate executives and other visitors to area businesses and industries. Corporate demand is primarily generated by various local businesses and government offices/agencies located within the immediate area. The biggest nearby corporate demand generators are those associated with government, and large employers such as Blue Bird Company, Frito Lay, Perdue Farms, CEMEX, IP and others. Transient government demand also is included here, particularly that associated with Robins Air Force Base.

Those commercial travelers on a per diem, such as government employees, tend to choose lower-priced facilities offering a good price/value relationship (and often including complimentary food and beverage), while business people on an expense account consider the quality of the accommodations to be more important than the price charged. The current federal

Mr. Stephen Shimp March 14, 2018 per diem rate for the area is $93 per night, with meals and incidentals at $51 per day. In general, business travelers pay the highest rates available in the marketplace, although certain accounts may negotiate lower rates in return for a guaranteed level of demand.

In projecting commercial demand growth for the competitive market, we have examined historical trends as well as anticipated growth in area employment. As previously mentioned, employment in the MSA increased 0.4 percent compounded annually between 2011 and 2016. Woods & Poole forecasts employment growth of 1.3 percent annually through 2026 for both the MSA and Houston County. We have projected modest, albeit steady, growth within the corporate segment.

Leisure Demand: The leisure segment consists primarily of demand generated by vacationing travelers, supplemented by visitors to friends and relatives residing in the area and highway motorists on I-75. Visitor expenditures grew at a 3.6 percent compounded annual rate from 2012 to 2016, with a strong economy fueling travel. The largest festivals in the area are the Peach Blossom Festival, Fall Farm Festival, Perry Dogwood Festival, Peaches to Beaches Yard Sale, and the annual Perry Buzzard Drop. Fort Valley State University conferences and sporting events, along with homecoming, orientation and graduation, foster additional demand.

GNFA’s annual attendance ranges between 900,000 and 1,000,000, generated by 200+ events per year. The following chart depicts total attendance which has grown at a compounded annual rate of 2.1 percent. It is important to note that during recessionary periods in the early 2000’s, and from 2008 to 2009, attendance declined to a significant degree. Attendance has since recovered. Hurricane Irma occurred near the time of fair week in 2017, negatively impacting attendance.

Fair attendance peaked in 2016 at 536,840 for the 11-day event. Non-fair event attendance peaked in 2002 at 544,617, garnered from 260 events. Non-fair attendance bottomed out in 2011 following the Great Recession at 332,996 attendees from 211 events. From 2011 to 2017 non-fair attendance increased by a compounded annual rate of 5.2 percent.

Mr. Stephen Shimp March 14, 2018

The Georgia Grown event center is GEORGIA NATIONAL FAIRGROUNDS undergoing a $2.4 million expansion to 1991 to 2017

36,000 square feet, scheduled for YEAR EVENTS EVENT DAYS ATTENDANCE completion by September 2018. During the 1991 131 271 539,792 expansion, demand has been 1992 129 244 512,714 accommodated at Heritage Hall where it will 1993 119 257 574,252 1994 191 393 678,014 likely remain. The Georgia Grown event 1995 190 418 747,420 center has the potential to host 120 new 1996 197 361 743,871 1997 217 406 726,107 events per year. 1998 227 423 795,947 1999 246 449 853,961 2000 269 496 856,570 A new $8.7 million arena is projected to be 2001 252 483 853,799 2002 261 512 911,174 completed by January 2020. It will be able 2003 293 564 860,019 to accommodate 30 new events per year, for 2004 306 558 794,479 2005 338 601 901,898 four to five-day periods. 2006 369 607 858,964 2007 277 528 886,549 2008 303 544 790,431 Overall, leisure demand is anticipated to 2009 228 435 777,636 increase at a moderate pace. However, the 2010 221 418 808,412 2011 212 413 772,227 new arena and Georgia Grown expansion 2012 207 407 834,772 should spike demand from 2018 to 2020 in 2013 185 391 815,881 2014 185 403 852,832 the leisure and group segments. 2015 216 472 931,980 2016 209 459 994,824 2017 191 447 918,496

AVG 228 443 799,742 Group Demand: Group demand accruing 26-YR CAGR 2.07% to the subject market area consists of 10-YR CAGR 0.14% corporate groups holding meetings or conducting training; demand from events held at the Auditorium and Coliseum, and SMERF (social, military, educational, religious and fraternal) groups such as weddings and reunions. This segment can be further defined as follows:

. Conventions: Private groups or associations meeting to exchange ideas. National and regional associations generally prefer larger markets with activities for spouses.

. Conferences: Small private groups conducting training sessions, sales presentations or exchanging ideas. These events are typically held in hotels, although some of the larger ones may accrue to the convention center.

. Assemblies: These groups are typically large and usually require tiered seating. Examples are large religious events.

. Trade Shows: The primary purpose of a trade show is to bring buyers and sellers together within a particular industry. These events typically require large amounts of exhibit space. In general, trade show promoters try to attract as many participants as possible; accordingly, they are often held in major cities with extensive transportation networks and large populations.

Mr. Stephen Shimp March 14, 2018

. Consumer Shows: These events are organized to sell goods and/or services directly to the public and are usually space intensive. Most attendees are from the local area which serves to limit economic impact. Accordingly, few hotel room-nights are generated.

. Special Events: Most of these events are entertainment oriented (e.g., athletic events, concerts, festivals, large banquets, etc.). Depending upon the event, a substantial number of room-nights can be generated. As previously noted, there are several wedding venues in the downtown area that contribute significant levels of group demand.

Group demand during the week tends to be corporate-based, while weekend group demand is generally leisure-based. Many small groups such as weddings are spread across the market in small to medium sized venues and churches. Larger groups are accommodated at Fort Valley State University and GNFA. The group segment was the last to recover from the The Great Recession. While the temperament of association, corporate, government and independent meeting planners cannot be characterized as exuberant, most expect consistent improvement going forward. We projected demand spikes in this segment through 2020 associated with the Georgia Grown facility expansion and the new arena, followed by modest growth thereafter.

ESTIMATED ANNUAL GROWTH RATES BY SEGMENT AND TOTAL DEMAND DEFINED COMPETITIVE SUPPLY PERRY, GEORGIA CALENDAR 2017 THROUGH 2024

Corporate Leisure Group Total Percent Percent Percent Percent Year1 Change Amount Change Amount Change Amount Change Amount

2017 - 153,2002 - 31,2002 - 85,9002 - 270,3002 2018 1.6 155,600 6.6 33,200 3.3 88,700 2.7 277,500 2019 2.7 159,800 11.7 37,100 6.3 94,300 4.9 291,200 2020 2.0 163,000 8.1 40,100 25.2 118,100 10.3 321,200 2021 2.0 166,200 1.8 40,900 1.9 120,400 2.0 327,500 2022 1.5 168,700 1.3 41,400 1.2 121,800 1.3 331,900 2023 1.5 171,200 1.3 41,900 1.2 123,300 1.3 336,400 2024 1.5 173,700 1.3 42,500 1.2 124,800 1.4 341,000

1 All years are calendar years.

2 Includes unaccommodated demand as discussed herein.

Overall Demand Growth: The segmented growth rates and overall lodging demand growth anticipated for the subject lodging market area are as shown in the previous table. The higher rates of growth through 2020 reflect several factors. As previously stated, the Georgia Grown center and new arena will add new capacity to accommodate additional group and leisure events. Also, several new hotels are being added to the competitive supply. These properties will offer product types and/or affiliations heretofore unavailable in the market area. As such, they should draw a level of demand to the market by their presence and in-house marketing efforts. They will also be able to accommodate some of the turn away demand that is displaced on fill

Mr. Stephen Shimp March 14, 2018 nights. This phenomenon of supply driven growth was clearly demonstrated in 2014 and 2015 with the opening of two Holiday Inn Express & Suites hotels.

Estimated Relationship of Supply to Demand: Based on the foregoing discussion of growth in demand for transient lodging facilities in the market area, together with our analysis of existing and foreseeable supply characteristics, the following table indicates resulting market occupancy levels estimated for the defined competitive supply from calendar 2017 through 2024.

ESTIMATED RELATIONSHIP OF SUPPLY TO DEMAND DEFINED COMPETITIVE SUPPLY PERRY, GEORGIA CALENDAR 2017 THROUGH 2024

Estimated Estimated Annual Estimated Rooms Supply Demand in Room-Nights Market Area Year Daily Annual TotalA Accommodated OccupancyB

2017 9921 362,080 270,300 246,900 68% 2018 1,0042 366,460 277,500 254,700 70 2019 1,1393 415,796 291,200 280,400 67 2020 1,3414 489,465 321,200 320,600 66 2021 1,4165 516,840 327,500 327,500 63 2022 1,416 516,840 331,900 331,900 64 2023 1,416 516,840 336,400 336,400 65 2024 1,416 516,840 341,000 341,000 66

A Includes unaccommodated demand which, due to capacity constraints, is turned away from the market.

B Based on estimated levels of accommodated demand in the market area. Rounded to the nearest whole percentage point.

1 Existing competitive supply.

2 First partial year of operation of the 72-unit LaQuinta Inn & Suites Perry.

3 First full year of operation of the 72-unit LaQuinta Inn & Suites Perry, and partial year of operation for the 75-unit Home2 Suites Warner Robins.

4 First full year of operation of the 75-unit Home2 Suites Warner Robins, subject 100-unit Hyatt Place and 95-unit Avid Perry.

5 First full year of operation of the 75-unit Comfort Suites Perry.

ESTIMATED LEVELS OF UTILIZATION

Projected levels of occupancy and average daily rate for the subject hotel are discussed in detail in this section. The bases of the estimates were determined through the evaluation of the subject property’s competitive position, future supply and demand, and fair market share penetration rates, which also are presented.

Mr. Stephen Shimp March 14, 2018

Estimated Occupancy and Market Segmentation: Prospective levels of utilization for the subject hotel have been analyzed for its first five full fiscal years of operation, 2020 through 2024. Our quantitative analysis anticipated the hotel’s ability to capture future market area demand in terms of its “fair share” percentage of the competitive room supply. Fair market share is based on the ratio of the hotel’s available guest rooms to the total market supply.

As discussed previously, there are 992 rooms in the competitive market. This number will increase to 1,341 by fiscal 2020 following the opening of the LaQuinta Inn & Suites Perry, Home2 Suites Warner Robins, Avid Perry and subject Hyatt Place. Accordingly, the subject ‘s fair market share will be 7.5 percent (100 ÷ 1,341). This will be reduced to 7.1 percent (100 ÷ 1,416) by 2021, with the opening of the Comfort Suites Perry. This fair market share is expected to remain constant through 2024 based on our assumption that no further supply additions will occur. The existing competitive properties’ 2017 penetration as a percentage of fair market share and market capture percentage are depicted by the following graphs.

ESTIMATED 2017 PENETRATION 2017 MARKET CAPTURE PERCENTAGE HIX Pery

120% HIX Warner Robins

114% 100% HIX Byron 112% 109% 102% 103% 6.00% 9.40% 103% 98% 106% 93% 94% Fairfied Inn & Suites 80% 9.70% 90% 78% 9.00% Courtyard 60%

9.50% Comfort Perry 40% 6.90% HIX Perry Best Western Perry HIX Warner Robins HIX Byron 8.90% 7.70% Comfort Byron Fairfied Inn & Suites Courtyard Comfort Perry Hampton Inn Perry Best Western Perry 6.60% 11.00% Comfort Byron Hampton Inn Warner Hampton Inn Perry 7.10% Robins 8.20% Hampton Inn Warner Robins HGI HGI LaQuinta LaQuinta

The proposed Hyatt Place is anticipated to achieve penetration levels well in excess of its fair market share in the group and leisure segments, and below its fair share in the corporate segment. Its overall penetration is projected to range between 93 and 105 percent of fair market share during the period analyzed. These projections are based on the following factors:

. The Hyatt Place concept is attractive to both business and leisure travelers and has a strong reputation in these segments. It will also introduce a new brand to the MSA, not affiliated with Hilton, Marriott or InterContinental Hotels Group.

. The proposed hotel will have the best location in Perry in terms of proximity to GNFA. It will also be visible from I-75. These are competitive advantages. Conversely, the interchange lacks the array of support amenities that characterize other interchanges. Also, it is further from Robins Air Force Base than hotels in Warner Robins. Lastly, its higher rate structure will likely deter some price sensitive highway motorists.

Mr. Stephen Shimp March 14, 2018

. This area provides for a diverse demand mix. GNFA, I-75, Robins Air Force Base, Fort Valley State University and numerous large corporations (e.g. Perdue Farms, Frito Lay, CEMEX, IP, Bluebird and others) are significant sources of demand.

. The subject hotel should be recognized as the highest quality hotel in the area, allowing it to attract less price sensitive corporate guests desirous of the market’s best accommodations regardless of price.

. The inclusion of the 24/7 Gallery Menu, Coffee to Cocktails Bar, and the 24/7 Gallery Market, will provide food and beverage options in addition to the event offering that presently operates in the fairgrounds.

. Although not as large as the Marriott Rewards or the Hilton HHonors frequent guest programs, Hyatt Gold Passport is reasonably strong and should render the subject attractive to guests who participate in such programs.

. As previously noted, Hyatt Place achieved a system-wide occupancy of 77.6 percent and $131.02 ADR in 2017, demonstrating the strong success of the brand to date.

Based on the foregoing considerations and assuming competent management, the penetration rates by segment and the resulting estimated occupancy and corresponding room-nights for the subject were projected as shown on the following page. The stabilized occupancy represents a long-term average. Year-to-year fluctuations can be expected in actuality, and the property may in fact achieve occupancies and/or rates (as discussed below) higher than those depicted here during the period of our analysis.

Mr. Stephen Shimp March 14, 2018

ESTIMATED MARKET PENETRATION PROPOSED 100-ROOM HYATT PLACE PERRY, GEORGIA

2020 2021 2022 2023 2024 CORPORATE

MARKET AREA ACCOMMODATED DEMAND 163,000 166,200 168,700 171,200 173,700

SUBJECT'S CAPTURE PERCENTAGE 4.23% 4.58% 4.82% 4.82% 4.82%

ROOM NIGHTS CAPTURED 6,900 7,600 8,100 8,200 8,400

PENETRATION AS A PERCENTAGE OF FAIR MARKET SHARE 56.76% 64.85% 68.20% 68.19% 68.18%

GROUP

MARKET AREA ACCOMMODATED DEMAND 40,100 40,900 41,400 41,900 42,500

SUBJECT'S CAPTURE PERCENTAGE 14.57% 14.50% 15.08% 15.08% 15.08%

ROOM NIGHTS CAPTURED 5,800 5,900 6,200 6,300 6,400

PENETRATION AS A PERCENTAGE OF FAIR MARKET SHARE 195.39% 205.26% 213.48% 213.48% 213.49%

LEISURE

MARKET AREA ACCOMMODATED DEMAND 117,600 120,400 121,800 123,300 124,800

SUBJECT'S CAPTURE PERCENTAGE 8.06% 8.15% 8.35% 8.36% 8.36%

ROOM NIGHTS CAPTURED 9,500 9,800 10,200 10,300 10,400

PENETRATION AS A PERCENTAGE OF FAIR MARKET SHARE 108.10% 115.37% 118.29% 118.35% 118.39%

TOTAL

MARKET AREA ACCOMMODATED DEMAND 320,600 327,500 331,900 336,400 341,000

SUBJECT'S CAPTURE PERCENTAGE 6.93% 7.13% 7.39% 7.39% 7.39%

ROOM NIGHTS CAPTURED 22,200 23,300 24,500 24,900 25,200

PENETRATION AS A PERCENTAGE OF FAIR MARKET SHARE 92.91% 100.94% 104.71% 104.69% 104.67%

MARKET SEGMENTATION

CORPORATE 31.1% 32.6% 33.1% 32.9% 33.3% GROUP 26.1% 25.3% 25.3% 25.3% 25.4% LEISURE 42.8% 42.1% 41.6% 41.4% 41.3% TOTAL 100.0% 100.00% 100.00% 100.00% 100.00%

PROJECTED OCCUPANCY 61% 64% 67% 68% 69%

Mr. Stephen Shimp March 14, 2018

Estimated Average Daily Rate: The estimates of future average daily rate for the proposed Hyatt Place are based on the following factors:

. The competitive advantages and disadvantages outlined previously;

. Anticipated rate structure relative to the competitive lodging supply; and

. Estimated economic inflation of 3.0 percent per annum.

Average daily rates for each of the competitive properties in 2017 were estimated as follows:

ESTIMATED 2017 AVERAGE DAILY RATES DEFINED COMPETITIVE SUPPLY PERRY, GEORGIA

Average Property Daily Rate

Holiday Inn Exp & Suites Perry $125-$130 Holiday Inn Exp & Suites Warner Robins 115-120 Holiday Inn Exp & Suites Byron 90-95 Fairfield Inn & Suites Warner Robins 100-105 Courtyard Warner Robins 110-115 Comfort Inn & Suites Perry 85-90 Best Western Bradbury Inn & Suites 90-95 Comfort Inn & Suites Byron 90-95 Hampton Inn Perry 115-120 Hampton Inn Warner Robins 120-125 Hilton Garden Inn Warner Robins 130-135 LaQuinta Inn & Suites Warner Robins 95-100 Market Average $109.62

The subject will be one of the highest quality hotels in the MSA, with superior branding to many of its competitors. With exception of the Holiday Inn Express & Suites Perry-National Fairgrounds Area (the newest hotel in Perry), competitive set hotels underperform their system-wide averages. The subject will be newer than the Holiday Inn Express & Suites and of a select service nature, and should exceed the $125 to $130 ADR of this competitor.

In terms of brand orientation and condition the Hilton Garden Inn Warner Robins and the Courtyard Warner Robins are the best benchmarks in gauging the performance of the subject property. However, these hotels are nearer to Robins Air Force Base and tend to be oriented towards different demand sources. The Courtyard Warner Robins, in particular, captures a significant amount of base related business, thus compressing its rate. The Hilton Garden Inn achieves an ADR of $130 to $135.

Mr. Stephen Shimp March 14, 2018

Considering the foregoing and assuming competent management, the subject property’s ADR has been projected as depicted in the following table. The lower rates in years 2020 and 2021 reflect discounting to induce trial.

ESTIMATED AVERAGE DAILY RATE PROPOSED 100-UNIT HYATT PLACE PERRY, GEORGIA CALENDAR YEARS ENDING SEPTEMBER 30, 2020 THROUGH 2024

Constant Inflated Year 2017 Dollars Dollars1

2020 $131.00 $143.25 2021 133.00 149.75 2022 135.00 156.50 2023 135.00 161.25 2024 135.00 166.00

1 Inflated annually at 3.0 percent and rounded to the nearest $0.25. Inflation rates were based on the results of recent investor surveys.

FINANCIAL PROJECTIONS

Estimates of cash flow before debt service and income taxes have been prepared for the property’s first five years of operation, calendar years 2020 through 2024. All projections and calculations were based on an analysis of the proposed facilities, operating data for comparable hotels, the experience of the consultants and industry statistics for similar type properties.

In preparing the financial projections, stabilized year amounts were projected first on the bases presented in the following table. The fixed and variable components of each line item were then estimated and the projections for the years prior to stabilization were prepared. The fixed and variable components presented in the table were based on industry standards and the consultants’ experience.

Each line item was evaluated on the most appropriate basis for that particular revenue or expense. For example, rooms department payroll was projected on a “per occupied room” basis versus a percentage basis since increases in average daily rate do no result in corresponding increases in payroll. It must be pointed out that we have assumed that this property will be tax exempt, and have not projected real estate taxes.

Mr. Stephen Shimp March 14, 2018

BASES OF PROJECTIONS AND FIXED AND VARIABLE COMPONENT PERCENTAGES

Line Item Basis Fixed Variable Food Sales $3.00/occupied room 25% 75% Beverage Sales $2.50/occupied room 25 75 Other Food & Beverage Income $0.50/occupied room 25 75 Miscellaneous Income (Net) $0.75/occupied room 5 95 Rooms Payroll $20.00/occupied room 70 30 Rooms Other Expense $13.00/occupied room 35 65 Food Cost 38.0 % of food sales 10 90 Beverage Cost 28.0 % of beverage sales 5 95 Food & Beverage Payroll 25.0 % of food & beverage sales 65 35 Food & Beverage Other Expenses 10.0 % of food & beverage sales 35 65 Administrative & General $3,300/available room 75 25 Information & Technology $475/available room 75 25 Franchise Fees 8.5% of room revenue 0 100 Management Fees 3.0% of total revenue 0 100 Marketing $1,500/available room 75 25 Utility Costs $4.50/occupied room 65 35 Property Operation & Maint. $1,400/available room 65 35 Property Taxes $0 annually (Exempt) 100 0 Insurance $400/available room 100 0 Replacement Reserve 4.0% of total revenues 0 100

Prospective revenues and expenses were first prepared and expressed in constant 2017 dollars. These amounts were then inflated at 3.0 percent annually and rounded to the nearest thousand dollars. The 3.0 percent inflation rate was selected based upon the results of recent investor surveys. Statements were then prepared in inflated dollars (see Exhibits I and I-A). If higher or lower inflation rates are experienced, these statements would thus be affected and a revision would be appropriate. All account classifications generally conform to the definitions prescribed in the Uniform System of Accounts for the Lodging Industry.

INVESTMENT SUMMARY

Based on the foregoing, we have prepared an investment summary as presented in Exhibit II reflecting hypothetical return levels given certain investment parameters. The following assumptions were employed.

INVESTMENT SUMMARY

Assumptions Amount Project costs ($175,000 per room) $17,500,000 Interest rate 5.50 percent Terminal capitalization rate 9.00 percent Sales cost 2.00 percent Amortization period 20 years Debt Ratio 70 percent

Mr. Stephen Shimp March 14, 2018

It is instructive to note no land costs were included and the project was assumed to be exempt from annual real estate taxation. Based on these assumptions, the property is projected to generate an unleveraged internal rate of return of 9.49 percent and a leveraged IRR of 15.07 percent. Of course, these returns will vary depending upon the actual development costs and debt terms.

TERMS AND CONDITIONS

The projections of occupancy, average daily rate and cash flow presented in this report are based on estimates, assumptions and other information developed from research of the market as of March 14, 2018, knowledge of the industry and other factors including certain information provided by you. Some assumptions inevitably will not materialize, and unanticipated events and circumstances may occur; therefore, actual results achieved during the period covered by our analysis may vary from the estimates, and these variations may be material. Further, the performance estimates assume the hotel will be professionally and effectively managed.

CBRE Hotels will make no representations or warranty as to the accuracy or completeness of the information contained within this report, including any estimates, and shall have no liability for any representations (expressed or implied) contained herein. This report is intended for your internal information only. Otherwise, neither our report, nor any reference to our firm, may be included or quoted in any offering circular or registration statement, prospectus, sales brochure or appraisal.

♦ ♦ ♦ ♦ ♦ ♦ ♦

We appreciate your consideration of CBRE Hotels for professional services. Please contact us should you have any questions regarding this report.

Sincerely,

CBRE Hotels A Subsidiary of CBRE, Inc.

HBS/amc (18-485JA-0005)

EXHIBIT I PROPOSED 100-ROOM HYATT PLACE PERRY, GEORGIA PROJECTED CASH FLOW FROM OPERATIONS BEFORE DEBT SERVICE AND INCOME TAXES EXPRESSED IN THOUSANDS OF INFLATED DOLLARS

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent

Revenues: Rooms $3,180 94.9% $3,489 95.1% $3,834 95.2% $4,015 95.2% $4,183 95.2% $4,309 95.2% $4,442 95.2% $4,574 95.2% $4,706 95.2% $4,851 95.2% Food and Beverage 152 4.5 162 4.4 172 4.3 179 4.2 186 4.2 192 4.2 197 4.2 203 4.2 209 4.2 216 4.2 Miscellaneous Income (Net) 18 0.5 20 0.5 21 0.5 22 0.5 23 0.5 24 0.5 25 0.5 25 0.5 26 0.5 27 0.5

3,350 100.0 3,670 100.0 4,028 100.0 4,217 100.0 4,392 100.0 4,525 100.0 4,663 100.0 4,802 100.0 4,942 100.0 5,094 100.0

Departmental Expenses: Rooms 861 27.1 905 25.9 952 24.8 988 24.6 1,023 24.4 1,053 24.4 1,085 24.4 1,118 24.4 1,151 24.5 1,186 24.4 Food and Beverage 103 67.6 108 66.8 114 66.1 118 65.8 122 65.7 126 65.7 130 65.7 133 65.7 137 65.7 142 65.7

Departmental Expenses: 964 28.8 1,013 27.6 1,066 26.5 1,106 26.2 1,145 26.1 1,179 26.1 1,215 26.0 1,251 26.1 1,289 26.1 1,327 26.1

Gross Operating Income 2,386 71.2 2,657 72.4 2,962 73.5 3,111 73.8 3,248 73.9 3,345 73.9 3,449 74.0 3,551 73.9 3,653 73.9 3,766 73.9

Undistributed Operating Expenses: Administrative and General 348 10.4 363 9.9 380 9.4 393 9.3 406 9.2 418 9.2 431 9.2 443 9.2 457 9.2 471 9.2 Information & Technology 50 1.5 52 1.4 55 1.4 57 1.3 58 1.3 60 1.3 62 1.3 64 1.3 66 1.3 68 1.3 Management Fees 101 3.0 110 3.0 121 3.0 126 3.0 132 3.0 136 3.0 140 3.0 144 3.0 148 3.0 153 3.0 Franchise Fees 270 8.1 297 8.1 326 8.1 341 8.1 356 8.1 366 8.1 378 8.1 389 8.1 400 8.1 412 8.1 Marketing 158 4.7 165 4.5 173 4.3 179 4.2 184 4.2 190 4.2 196 4.2 202 4.2 208 4.2 214 4.2 Utility Costs 119 3.5 124 3.4 130 3.2 135 3.2 139 3.2 144 3.2 148 3.2 152 3.2 157 3.2 162 3.2 Property Operation and Maintenance 145 4.3 153 4.2 161 4.0 166 3.9 172 3.9 177 3.9 183 3.9 188 3.9 194 3.9 200 3.9

1,191 35.5 1,264 34.4 1,345 33.4 1,397 33.1 1,448 33.0 1,491 33.0 1,536 32.9 1,582 32.9 1,629 33.0 1,679 33.0

Cash Flow From Operations Before Fixed Charges 1,196 35.7 1,393 38.0 1,617 40.1 1,714 40.6 1,800 41.0 1,854 41.0 1,913 41.0 1,969 41.0 2,024 41.0 2,088 41.0

Fixed Charges: Property Taxes 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Insurance 44 1.3 45 1.2 46 1.2 48 1.1 49 1.1 51 1.1 52 1.1 54 1.1 55 1.1 57 1.1

44 1.3 45 1.2 46 1.2 48 1.1 49 1.1 51 1.1 52 1.1 54 1.1 55 1.1 57 1.1

Cash Flow From Operations Before Reserve For Replacement of Fixed Assets 1,152 34.4 1,348 36.7 1,570 39.0 1,666 39.5 1,751 39.9 1,804 39.9 1,860 39.9 1,915 39.9 1,968 39.8 2,031 39.9

Reserve For Replacement of Fixed Assets 134 4.0 147 4.0 161 4.0 169 4.0 176 4.0 181 4.0 187 4.0 192 4.0 198 4.0 204 4.0

Cash Flow From Operations Before Debt Service and Income Taxes $1,018 30.4% $1,201 32.7% $1,409 35.0% $1,497 35.5% $1,575 35.9% $1,623 35.9% $1,674 35.9% $1,723 35.9% $1,771 35.8% $1,827 35.9%

Statistics: Number of Rooms 100 100 100 100 100 100 100 100 100 100 Percentage of Occupancy 61% 64% 67% 68% 69% 69% 69% 69% 69% 69% Average Daily Rate $143.25 $149.75 $156.50 $161.25 $166.00 $171.00 $176.25 $181.50 $186.75 $192.50 Occupied Rooms 22,200 23,300 24,500 24,900 25,200 25,200 25,200 25,200 25,200 25,200

Notes: - Percentages of departmental expenses are to departmental revenue; all other percentages are to total revenue. - Totals may not add due to rounding. Source: CBRE Hotels Estimates EXHIBIT I-A PROPOSED 100-ROOM HYATT PLACE PERRY, GEORGIA PROJECTED ROOMS AND FOOD AND BEVERAGE DEPARTMENTAL INCOME EXPRESSED IN THOUSANDS OF INFLATED DOLLARS

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent

Rooms Department: Room Revenue $3,180 100.0% $3,489 100.0% $3,834 100.0% $4,015 100.0% $4,183 100.0% $4,309 100.0% $4,442 100.0% $4,574 100.0% $4,706 100.0% $4,851 100.0% Payroll and Related Expenses 531 16.7 554 15.9 579 15.1 600 14.9 620 14.8 638 14.8 658 14.8 677 14.8 698 14.8 719 14.8 Other Expenses 330 10.4 351 10.0 373 9.7 388 9.7 403 9.6 415 9.6 427 9.6 440 9.6 453 9.6 467 9.6

Departmental Income $2,319 72.9% $2,584 74.1% $2,882 75.2% $3,027 75.4% $3,160 75.6% $3,256 75.6% $3,356 75.6% $3,456 75.6% $3,555 75.5% $3,665 75.6%

Food and Beverage Department: Revenues: Food $75 49.5% $80 49.7% $86 49.9% $89 50.0% $93 50.0% $96 50.0% $99 50.0% $102 50.0% $105 50.0% $108 50.0% Beverage 64 42.3 68 42.0 72 41.8 75 41.7 77 41.7 80 41.7 82 41.7 85 41.7 87 41.7 90 41.7 Other 13 8.2 13 8.3 14 8.3 15 8.3 15 8.3 16 8.3 16 8.3 17 8.3 17 8.3 18 8.3

152 100.0 162 100.0 172 100.0 179 100.0 186 100.0 192 100.0 197 100.0 203 100.0 209 100.0 216 100.0

Cost of Food Sales 29 38.4 31 38.2 33 38.1 34 38.0 35 38.0 36 38.0 37 38.0 39 38.0 40 38.0 41 38.0 Cost of Beverage Sales 18 28.1 19 28.1 20 28.0 21 28.0 22 28.0 22 28.0 23 28.0 24 28.0 24 28.0 25 28.0

Total Gross Profit 105 69.1 112 69.2 119 69.3 124 69.3 129 69.3 133 69.3 137 69.3 141 69.3 145 69.3 149 69.3

Payroll and Related Expenses 40 26.4 42 25.9 44 25.3 45 25.1 46 25.0 48 25.0 49 25.0 51 25.0 52 25.0 54 25.0

Other Expenses 16 10.3 16 10.2 17 10.1 18 10.0 19 10.0 19 10.0 20 10.0 20 10.0 21 10.0 22 10.0

Departmental Income $49 32.4% $54 33.2% $58 33.9% $61 34.2% $64 34.3% $66 34.3% $68 34.3% $70 34.3% $72 34.3% $74 34.3%

Notes: - Percentages of departmental expenses are to departmental revenue. - Totals may not add due to rounding. Source: CBRE Hotels Estimates EXHIBIT II INVESTMENT SUMMARY PROPOSED 100-ROOM HYATT PLACE PERRY, GEORGIA

ASSUMPTIONS: LOAN AMORTIZATION PERIOD (MONTHS): 240 EQUITY AMOUNT $5,250,000 INTEREST RATE (MONTHLY): 0.46% DEBT AMOUNT: $12,250,000 COST PER ROOM: $175,000 MONTHLY PAYMENT: $84,266 ROOMS: 100 TERMINAL CAPITALIZATION RATE: 9.00% TOTAL COSTS: $17,500,000 SALES COSTS: 2.00% EQUITY PERCENT: 30.00% DEBT PERCENT: 70.00%

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 CASH FLOW BEFORE DEBT SERVICE $1,018,000 $1,201,000 $1,409,000 $1,497,000 $1,575,000 $1,623,000 $1,674,000 $1,723,000 $1,771,000 $1,827,000

ANNUAL DEBT SERVICE (MONTHLY AMORTIZATION) 1,011,194 1,011,194 1,011,194 1,011,194 1,011,194 1,011,194 1,011,194 1,011,194 1,011,194 1,011,194

CASH FLOW AFTER DEBT SERVICE 6,806 189,806 397,806 485,806 563,806 611,806 662,806 711,806 759,806 815,806

CASH ON CASH RETURN 0.13% 3.62% 7.58% 9.25% 10.74% 11.65% 12.62% 13.56% 14.47% 15.54%

UNLEVERAGED INTERNAL RATE OF RETURN 9.49%

LEVERAGED INTERNAL RATE OF RETURN 15.07%

DEBT SERVICE COVERAGE 1.01 1.19 1.39 1.48 1.56 1.61 1.66 1.70 1.75 1.81

NOTE: THE FOREGOING IS BASED UPON MARKET, FINANCIAL AND COSTS ASSUMPTIONS THAT MAY DIFFER MATERIALLY FROM ACTUAL CIRCUMSTANCES. ACCORDINGLY, THESE PROJECTIONS SHOULD NOT BE CONSTRUED AS RESULTS WHICH WILL ACTUALLY BE ACHIEVED. SOURCE: CBRE HOTELS ESTIMATES