Red Roof Inn Flint – Bishop Airport G3219 Miller Rd. • Flint, MI 48507 NON-ENDORSEMENT & DISCLAIMER NOTICE

NON- ENDORSEMENT NOTICE Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

SPECIAL COVID-19 NOTICE All potential buyers are strongly advised to take advantage of their opportunities and obligations to conduct thorough due diligence and seek expert opinions as they may deem necessary, especially given the unpredictable changes resulting from the continuing COVID-19 pandemic. Marcus & Millichap has not been retained to perform, and cannot conduct, due diligence on behalf of any prospective purchaser. Marcus & Millichap’s principal expertise is in marketing investment properties and acting as intermediaries between buyers and sellers. Marcus & Millichap and its investment professionals cannot and will not act as lawyers, accountants, contractors, or engineers. All potential buyers are admonished and advised to engage other professionals on legal issues, tax, regulatory, financial, and accounting matters, and for questions involving the property’s physical condition or financial outlook. Projections and pro forma financial statements are not guarantees and, given the potential volatility created by COVID-19, all potential buyers should be comfortable with and rely solely on their own projections, analyses, and decision-making.

DISCLAIMER THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

ALL PROPERT Y SHOWINGS ARE BY APPOINTMENT ONLY.

PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS. 2 Table of Contents

04 Investment Overview

15 Financial Analysis

19 Competitive Market Analysis

25 Market Overview

03 Investment Overview Marcus & Millichap

0417 PROPERTY DE TAILS EXECUTIVE SUMMARY

Red Roof Inn Flint – Bishop Airport INTEREST OFFERED Franchise Parent Company Westmont Hospitality Group Fee simple interest on the Red Roof Inn Flint – Bishop Franchise Affiliation Red Roof Inn Airport, a 107-room located at G3219 Miller Year Built 1970 Rd., Flint, on approximately 2.65 acres. Lot Size 2.5 Acres

Number of Floors 2

Total Number of Guest Rooms 107 THE OFFERING PIP $100,000 Price: $4,250,000 Corridor Exterior Property: Red Roof Inn Flint – Bishop Airport Highways Interstate 69

Interstate 75 Address: G3219 Miller Rd, Flint, MI US Highway 23

Interstate 475 PROPERTY TOURS Airports

Bishop International Airport 1.0 mile Prospective purchasers are encouraged to visit the subject

MBS International Airport 42 miles property prior to submitting offers. However, all property tours Oakland County International Airport 28 miles must be arranged with the Marcus & Millichap listing agents. Please do not contact the tenants, on-site management or staff without prior approval.

6 PROPERTY AMENITIES *Insert photo*

WIFI Coin Laundry

Pet Free Parking Friendly

Free Coffee Expanded Cable TV

6 Asset Info Property Overview

107 Guest Rooms Situated with premier Interstate 75 highway frontage, the Red Roof Inn Flint Bishop Exterior Corridor Airport boasts 107 rooms, housed in 2 exterior corridor buildings on a Two-and-a- Two Floors half-acre lot. Recent improvements at this property include a newly repaved parking Two-and-a-Half Acre lot, along with hotel sign reinforcement. Lot Size Guest rooms are well-kept and up to date with offered amenities including Wi-Fi, coin 50,000 Gross Square Feet laundry, cable TV, hair dryers, and free coffee. This property’s close proximity to Bishop Two Buildings International Airport, downtown Flint, Genesee Valley Shopping Center, and a large amount of General Motors operations serves as a crossroads for many travelers.

07 Investment Overview

Marcus & Millichap’s National Hospitality Group is pleased to announce the exclusive listing of the Red Roof Inn Flint Bishop Airport. Located in close proximity to Flint’s Bishop International Airport, Interstate 75, and Interstate 69, this hotel is perfectly positioned to serve travelers in the Flint metro. Offering direct flights to eight destinations on three different airlines, Bishop International Airport serves as a major demand generator for the Flint region through serving over 600,000 travelers annually.

Regarding operations, this asset has consistently maintained occupancy levels around 89 percent, far exceeding competitors. These high occupancy levels have led to the hotel also outperforming its competitive set in the RevPAR category $41.40 to $29.50 in the current trailing 12-month period. In 2019, this asset brought in $1,656,389 in revenue, resulting in an NOI of $739,526.

Listed at $4,250,000, this asset presents investors the opportunity to acquire a proven successful hospitality property, benefit from competitive pricing, and utilize hands-on revenue management strategies to boost ADR Figures. This property is well-positioned geographically and allows investors to purchase a limited-service asset that will likely benefit from a projected uptick in tourism. Financial & STR Overview

2020 2019

ADR $46.50 $46.27

Occupancy 89% 89.1%

RevPAR $41.40 $41.23

Revenue $1,586,965 $1,656,389

NOI $728,416 $739,526 5-Year Pro Forma Overview

Historical Projected

• Assumption #1- Current year room revenues • Assumption #1- Both occupancy and ADR were reflect the trailing 12-month period projected to grow slightly in year one, followed by • Assumption #2- Expenses for 2020 were larger growth percentages in the years following standardized to fit the equivalent expense ratio • Assumption #2- Undistributed expenses were seen in 2019, except insurance expense which projected to maintain steady at current year ratios has already exceeded 2019 in the first nine • Assumption #3- Room expense was projected to months of 2020. hold steady at around 28 percent; also maintaining the same ratio as the current year.

09 Red Roof Inn Red Roof Inn

*Insert property photos*

13 14 Financial Analysis Marcus & Millichap

1517 Historical P&L

16 Historical P&L

16 Pro Forma

17 Pro Forma – Cont.

17 Pro Forma Cont.

18 Competitive Market Analysis Marcus & Millichap

1917 STR – At A Glance

Occupancy ADR RevPAR

My Prop. Comp. Set Index My Prop. Comp. Set Index My Prop. Comp. Set Index

Running 89% 54.3% 163.8 $46.50 $54.28 85.7 $41.40 $29.50 140.3 12 Months

Michigan North Pipeline

 1383 rooms planned  634 rooms under construction

 14 properties planned  9 properties under construction

20 STR – Industry Segmentation

Industry Segmentation Comparisons Running 12 Months

Red Roof Inn Flint Bishop Airport Occupancy: 89% ADR: $46.50 RevPAR: $41.50 Market: Michigan North Occupancy: 45.1% ADR: $110.73 RevPAR: $49.89 Market Class: Economy Occupancy: 43.3% ADR: $86.07 RevPAR: $37.27 Submarket: Midland/Flint, MI Occupancy: 45.7% ADR: $83.52 RevPAR: $38.16 Submarket Scale: Economy Chains Occupancy: 50.7% ADR: $48.29 RevPAR: $24.48 Competitive Set: Competitors Occupancy: 54.3% ADR: $54.28 RevPAR: $29.50

21 STR – Time Segmented Performance

My Property (running 12 months)1

Weekday Weekend

Occupancy 86.6% 95.1%

ADR $45.66 $48.42

RevPAR $39.56 $46.05

1 Weekday vs. Weekend footnote

2 Monthly index footnote 22 4

3 1 2 Red Roof Inn COMPETITIVE PROPERTY SE T

Number NAME CITY, STATE ROOMS BRAND RANKING*

1 Quality Inn & Suites Airport Flint Flint, MI 79 Midscale

2 Flint Miller Road Flint, MI 62 Economy

3 Flint/Bishop International Airport Flint, MI 60 Economy

4 Baymont Inn & Suites Flint Flint, MI 88 Midscale 23 COMPETITIVE SET PERFORMANCE

Occupancy Comparison ADR Comparison RevPAR Comparison

Hotel/Motel Comp Set Hotel/Motel Comp Set Hotel/Motel Comp Set

100.00% $60.00 $45.00 90.00% $40.00 80.00% $50.00 70.00% $35.00 $40.00 60.00% $30.00 50.00% $30.00 $25.00 40.00% $20.00 30.00% $20.00 $15.00 20.00% $10.00 $10.00 10.00% $5.00 0.00% $0.00 $0.00 Prior Year 2 Prior Year 1 Prior Year 2 Prior Year 1 Prior Year 2 Prior Year 1

COMPETITIVE PROPERTY SET PERFORMANCE

Occupancy ADR RevPAR

Hotel/ Comp Hotel/ Comp Hotel/ Year Penet. Penet. Comp Set Penet. Motel Set Motel Set Motel

Prior Year 1 89.1% 53.2% 167.5% $46.27 $54.79 84.4% $41.23 $29.15 141.5%

Current Year 89% 54.3% 163.8% $46.50 $54.28 85.7% $41.40 $29.50 140.3%

% Change -0.1% 2.2% 0.5% -0.9% 0.4% 1.2%

24 Market Overview Marcus & Millichap

2517 LOCAL HIGHLIGHTS

Flint Institute of Arts Frankenmuth, MI

Established in 1928, the Flint Institute of Arts is a Located a short 30-minute drive away is one of longstanding community staple. The art museum’s Michigan’s most famous tourism destinations. collection size has since grown to over 8,000 pieces, Frankenmuth offers family fun year-round with its earning its spot as Michigan’s second largest art Bavarian atmosphere, Oktoberfest festival, and museum. The museum’s wide array of paintings, unique shopping and dining experiences. Visitors sculptures, and artifacts from across the globe come from across the country to experience all the attracts over 160,000 visitors annually. town has to offer as it attracts about 3 million visitors annually.

26 Detroit Overview

The Detroit metro is located in the southeastern portion of Michigan along the Detroit River, which connects Lake St. Clair

and Lake Erie. Across the Detroit River lies the city of Windsor, Ontario, which provides access to the Canadian market. The

metro is a nearly 4,000-square-mile region composed of six counties: Wayne, Macomb, Lapeer, Oakland, St. Clair and

Livingston. More than 4.3 million residents live in the metro with Wayne is the most populated county, followed by Oakland

County. Detroit is the largest city with nearly 680,400 residents. The metro has become the epicenter for electronic and

autonomous driving technology. Plans are underway downtown for the Detroit Center for Innovation. The center’s aim is to

make the region more competitive in a variety of tech industries.

METRO HIGHLIGHTS

AUTO DESIGN AND MANUFACTURING The metro is home to the Big Three and numerous auto suppliers as well as many of the world’s automotive research and development firms.

DIVERSIFYING ECONOMY Increased entrepreneurial activity has created a knowledge-based economy, diversifying beyond manufacturing and the auto industry

RESEARCH AND INNOVATION Electric and self-driving technology is generating the need for additional designers and engineer, bringing well-paying jobs to the metro. 27 Detroit Economy

Economic Highlights  Multiple Fortune 500 corporations are based in the metro, many of which are in the auto industry, such as General Motors Corp., Ford Motor Co. and American Axle. Other companies include Autoliv, BorgWarner, DTE Energy, Lear and Ally Financial.  A growing knowledge-based economy is supplementing the manufacturing and automotive industries. The New Economy Initiative for Southeast Michigan provides support and networking for entrepreneurial activity.  The economy is diversifying into the healthcare and technology sectors, attracting companies to the area. Tech companies work alongside the auto industry.

Major Employers  General Motors  Rock Ventures  FCA US LLC  DTE Energy C  Beaumont Health  Henry Ford Health System  Trinity Health

28 * Forecast Detroit Demographics Summary

. The metro is expected lose 4,800 people through 2024; however, the number of households will increase by 8,200, generating demand for housing. . Relatively affordable home prices produce a homeownership SPORTS rate of 61 percent, which is above the national rate of 57 percent. . Almost 30 percent of residents age 25 and older are bachelor’s degree holders and 12 percent also have earned a graduate or professional degree.

2019 Population by Age EDUCATION

6% 19% 6% 25% 28% 16% 0-4 YEARS 5-19 YEARS 20-24 YEARS 25-44 YEARS 45-64 YEARS 65+ YEARS

The Detroit region, birthplace of Motown and the mass- production automobile industry, offers all the benefits of living ARTS & ENTERTAINMENT close to the Great LakesQUALITYbut at a moderate OF LIFEcost. Revitalization has included sports facilities such as Comerica Park for the Tigers, Ford Field for the Lions, and a new arena for the Red Wings and Pistons. Additionally, new entertainment and retail venues are reshaping downtown Detroit. For culture buffs, the region is home of the Detroit Institute of Arts, the Detroit Historical Museum and the Michigan Science Center. Meanwhile, several universities and colleges are located nearby, including the University of Michigan, Wayne State University, University of 3 29 Detroit Mercy and Lewis College of Business. Regional Hospitality Outlook

Percent of Inventory • North Central 4.3% Under Construction as of December 2019 2020 Region Forecast 10 bps Five-year occupancy growth 2015-2020 Supply Across the region, 15,200 rooms are underway, and an up 2.5% additional 19,100 doors are likely to break ground over the Five-year RevPAR next 12 months. Of the rooms currently being constructed, 9% growth Detroit leads all markets with 2,600 keys, while Cleveland has just 250 rooms underway.

Regional occupancy will drop to 60.1 percent in 2020 Occupancy following a 50-basis-point decline in the previous year. down 30 bps

In 2020, the average daily rate moves up to $102.87, yet this ADR margin of annual growth falls shy of the 3.2 percent cycle up 0.3% average.

RevPAR Declining occupancy levels and minimal gains to daily rates down 0.6% will weigh on revenue this year. RevPAR is expected to move down to $62.09, dropping for the first time since 2009.

After many investors rode the wave of surging revenue gains Investment in Detroit throughout this cycle, some will place properties on the market as they reevaluate their strategies following a s 2019 = recent openings; 2020 = under construction as of sluggish year. This will open the door for new investors to December 2019 Sources: CoStar Group, Inc.; STR, Inc.; enter, while sellers transfer their returns into other assets or Real Capital Analytics in nearby major markets. 30 Regional Hospitality Summary

Investment Strategies Shift as Michigan Faces Headwinds and Ohio Outperforms

Momentum in Ohio is not enough to overcome losses in Michigan. Occupancy and RevPAR rose in Ohio this past year, while the other two states in the region faced challenges. Ending 2019, occupancy in Ohio was up for the third straight year. The 140-basis-point jump during that span facilitated a RevPAR advancement of 5.5 percent. Metrics in Michigan moved in the opposite direction in 2019, as the 160- basis-point occupancy drop snapped a streak of nine consecutive annual increases. During this cycle, Michigan hotels greatly outperformed regional averages, so last year’s losses may be a realignment following the rapid improvement rather than a long-term disturbance. Similar to Michigan, occupancy in Indiana fell in 2019; however, growth in ADR held RevPAR stable. A similar regional performance is expected in 2020 as the construction pipeline, while sizable, is well dispersed among the three states. The two markets that will see the largest change in inventory following completion of projects under construction are Columbus and Indianapolis. Demand drivers such as conventions and sporting events that bring overnight visitors to these metros should assist occupancy and revenue gains.

31 PRESENTED BY

Steve Chaben Broker of Record Detroit Office Main: (248) 415-2600 License: MI 6502387903

www.MarcusMillichap.com