Embassy Suites Philadelphia – Valley Forge (The “Embassy

Executive Summary

PHILADELPHIA – VALLEY FORGE

PRESENTED BY 2 EXECUTIVE SUMMARY Additional Considerations AmenitiesProperty Parking Largest MeetingVenue Total MeetingSpace Food &Beverage Management Brand Affiliation Building Height Building Area &Parcel Size Guestrooms Year Opened Address Investment Summary an established, Hilton-branded hotel teemingwithmeaningful revenue potential in alocationatthecenterof one nation’s mostprominent corporate hubs. acquire to rareopportunity representsa Valleyoffering Forgeinvestment – Philadelphia Suites Embassy come. The to years for marketbroader the dominate to caliber asset in an irreplaceable location within the region, but suffers from a decade-old, tired guest-facing product. Upon renovation, the hotel has the potential the hotel’s guestrooms and public areas, and the potential conversion of the hotel’s existing restaurant into additional function space. The hotel is an institutional- The Embassy Suites boasts an excellent operational track record, yet the opportunity exists to significantly grow revenues following a comprehensive renovation of inhockey,across to thecountry participate lacrosse, soccer, basketball, andvolleyball tournaments. National Historic Park, the expansive and thriving King facilitiesof Prussia which Mall, routinelyand an aggregation draw of youth sports competitors from SAP America. The location’s stellar corporate weekday demandis complemented by abevy ofweekend and family leisure attractions, including Valley Forge street, and other notable nearby corporate residents include Microsoft, Comcast, Triumph and Group, Ricoh,Johnson & Johnson, Siemens, Lockheed Martin, 500 Fortune several of headquarters Companies, international including AmerisourceBergen, Universal the Health Services, and of UGI Corporation. Vanguard’s doorstep the international headquarters campus is at located down the sits Suites Embassy The district. office suburban largest area’s Philadelphia the Suites”). is situated within an elegantly manicured of King of Prussia’sThe property Chesterbrook business park at the heart Highway 202 corporate corridor, THE PLASENCIA GROUP increase inloanamountfora qualified buyer; Non-union property The EmbassySuites isoffered subjectto the assumptionoffavorable in-place life-company financing,withthe prospect ofan wave, refrigerator Office campuslocationandnearby regional mall,businesscenter, fitnesscenter, indoorpool,wireless wetbar, internet, roomservice, micro- parkingspaces 302 complimentary 1,800-square-foot Terrace functionspace 4,000 square feet Grille atChesterbrook breakfast (breakfast andevening anddinner),EBARLounge(casualbar),complimentary reception PM HotelGroup the EmbassySuitesflagforanadditionalfifteen years,atthenewowner’s option,andsubject tothecompletionofachange-of-ownershipPIP. The current EmbassySuites(Hilton familyofbrands) franchise licenseexpires inDecemberof2018.Hilton hasindicatedawillingnessto renew Five stories 196,801 square feet 229 king-bedded,shotgun-stylesuites,inclusive oftentwo-kingsuites and tenADA-compliant suites 1985 888 Chesterbrook Boulevard, Wayne, Pennsylvania 19087 is pleased to present for your investment consideration the 229-suite Embassy Suites Philadelphia – Valley Forge (the “Embassy

EXECUTIVE SUMMARY 3

Independence Hall

UNPARALLELED ACCESS UNPARALLELED INTERNATIONAL GATEWAY MARKET GATEWAY INTERNATIONAL Investment Highlights Investment The Philadelphia area benefits from exceptional access via road, air, air, road, access via exceptional from benefits The Philadelphia area highways, major two of intersection the at sits Philadelphia rail. and and Coast) East the on roadway crucial most the (arguably 95 Interstate The Embassy Suites sits south Turnpike). (the Pennsylvania Interstate 76 Its northjust and highway. regional major a 202, Route of Turnpike the of regional, local, a on road by accessible easily hotel the makes location the presence from The Embassy Suites also benefits and national basis. its south. of Philadelphia International Airport miles to 25 approximately airportThe airportstwenty top the of one is countrythe in passenger by Airlines. American for gateway international servesmajor and a count as trains Amtrak both accessible by is submarket Forge the Valley By rail, system. rail regional the SEPTA, and The Embassy Suites’ location within the broader Philadelphia area, the the area, Philadelphia broader the within location Suites’ Embassy The demand hotel capture to it allows city, populous sixth-most nation’s of King / Forge Valley The events. citywide major during compression downtown to alternative attractive as an extremely is viewed Prussia area rates local office rental refining space, perennially Philadelphia for office evolution in America’s prominence Philadelphia’s and tenant quality. year, each tourists international and domestic of millions of tens draws Liberty the as such the and Hall, attractions Independence visiting Bell, historical of dozens the to visit leisure A Center. Constitution National be would area the Philadelphia metro throughout attractions cultural and and Park Historic National Forge Valley the at stop a without incomplete Prussia Mall. of King the world-renowned 4 Valley Forge National Historical Park The Liberty Bell The Liberty EXECUTIVE SUMMARY and consistently generates additionalweekend demand for the area. Opened in 2012, the casino is the region’s only full-gaming destination popular leisure demand generator, the Valley Forge CasinoResort. ofthe worldeachyear.parts ofthemall is another Justto thenorthwest retailers andattracts 22 millionshoppersfrom theregion andfrom other per square foot, is a destination in its own right, as it features over 400 largest shoppingmallon the East Coast by square footage and sales War. The recently renovated and expanded King of Prussia Mall, the Continental Army led by George Washington during the Revolutionary Valley Forge National Historical Park, the site of the encampment for the the many nearby athletic facilities. Tourists can also visit the 3,500-acre teams that are in towninundated with youth for sports games at one of of leisure and recreational activities. On weekends, the local market is The market surrounding the Embassy Suites offers guests a diverse array and provides yet anotherconsistent stream of guestroom demand. of the hotel sits just a few miles north exhibition halls in the Northeast, engine, theGreater PhiladelphiaExpoCenteratOaks, oneofthelargest rates in the localarea. Inadditionto theregion’s strong corporate companies leadsto highhouseholdincomesandlowunemployment in Malvern to the west. international headquarters The presence of these of Prussia to the east, to a large Microsoft campus and Vanguard’s 500-ranked andUGICorporation Universal HealthServices inKing dozens of corporations within a four mile radius, ranging from Fortune- upscale community of Chesterbrook, the Embassy Suites is central to Center, hometo pharmaceutical giantAmerisourceBergen, withinthe suburban officesubmarket. LocatedintheChesterbrook Corporate barrier-to-entry Highway 202 corporate corridor, Philadelphia’s largest The Embassy Suites benefits from its excellent location on the high- REGIONAL LEISURE DESTINATION CORPORATE DEMAND HOTBED

POST-RENOVATION ADR GROWTH The Embassy Suites has an exceptional track record of profitability and registers as one of the top RevPAR assets in the region, driven primarily by its extraordinarily high occupancy levels. However, there is a significantly higher ADR potential that can be achieved at the hotel following a renovation of the hotel’s tired guestrooms and public areas. Bathrooms at the property were EXECUTIVESUMMARY recently updated, but the guestroom soft goods and case goods are on track 6 for a full renovation upon change of ownership and have not been updated in a decade. The hotel’s public areas and meeting spaces will also benefit from a renovation, allowing the property to be much more competitive in retaining the region’s lucrative corporate group accounts. The hotel currently achieves an annual ADR penetration of only approximately 100%, a figure well below E-Bar typical Embassy Suites benchmarks. The hotel’s weekend ADR index is under 100%, an even more pronounced anomaly which should surely be corrected through a renovation. With modest capital investments, the Embassy Suites should be able to improve its competitive set ADR ranking from its current 4 out of 7, to the first or second position among its rivals, resulting in nearly pure Corner Suite Living Area flow through to the bottom line.

PRIME HILTON FLAG The Embassy Suites brand is widely recognized as a “category killer,” boasting an all-suite product which appeals to both corporate transient guests and leisure travelers alike. The brand is ideally suited for the hotel’s location proximate to such a diverse mix of weekday corporate business and weekend tourist and sports-related demand generators. The Embassy Suites is currently the top brand offering within Hilton’s family of brands in the broader Valley Forge/King of Prussia region. The Hilton network includes 14 lodging brands and over 5,100 properties in 103 countries. The Hilton brand enjoys one of the largest and most powerful guest loyalty programs, with over 69 million members worldwide. EXECUTIVE SUMMARY EXECUTIVE

MEETING SPACE EXPANSION OPPORTUNITY While the hotel will benefit greatly from the renovation of its existing meeting facilities, it may also be possible to add meaningful banquet and function square footage. The hotel’s site and configuration could allow for the addition of a 4,000-square-foot ballroom through new construction on a portion of the parking lot. There is also an opportunity to convert the existing 3,000-square- foot Grille at Chesterbrook into a separate event venue, which would make it the largest function space within the hotel. In expanding the property’s meeting 7 space, the complimentary breakfast and dining service could be relocated to the hotel’s ample lounge area. The hotel’s ADR would be greatly enhanced by the introduction of additional meeting space, as it would allow the Embassy Suites to recapture corporate and social group accounts that once utilized Meeting Room the property in the years immediately following its last renovation. While the Embassy Suites has an exceptional transient base of business, its group occupancy and ADR are both lower than those of the competitive set. With a renovated product and improved function facilities, the hotel’s performance in the group segment should improve dramatically. Indoor Pool

MANAGEMENT AVAILABILITY The Embassy Suites is offered free and clear of the current management agreement. This flexibility will allow new ownership to insert its operator of choice to oversee the renovation of the asset and implement its desired operational and revenue enhancement strategies. CONTACT INFORMATION For additional information regarding the Embassy Suites Philadelphia – Valley Forge investment opportunity, please contact:

LOU PLASENCIA NICK PLASENCIA CHRIS PLASENCIA Chief Executive Officer Vice President Vice President [email protected] [email protected] [email protected] (813) 932-1234 (813) 445-8276 (813) 445-8259