EUREKA (415) 523-0393 www.ThePassportGroup.com THE PASSPORT GROUP

548 Market St #60420 , CA 94104-5401

(415) 523-0393 www.ThePassportGroup.com

LISTING TEAM

Joe Wolosz Jeff Durham Principal Broker

(415) 519-5639 (415) 706-6011 [email protected] [email protected]

CONTENTS

Property Overview 1 Executive Summary 3 About Fortuna 6 Lodging Market 8 Ŵḏ ḡŻůḏ njæṩŻĥłḏĉ ṩḡḏ ĥłʒnjplj Żṩĥnjł ĥł ṩḡĥṛÇnjł ž ĉḏł ṩĥŻǩŎʒʒḏpĥłǯ Financial Summary 9 N ḏlj njpŻł ĉẗ lj ʒpnjlj ṛnjẗpǽḏṛ ũ ḏ æḏǩĥḏůḏ ṩnjæḏpḏǩĥŻæǩḏ⁶ Ĭṩ ĥṛṛẗ ǯ ǯ ḏṛṩḏĉ ẅnjẗ Żł ĉ2njẗpŻĉůĥṛnjpṛ ṛḡnjẗǩĉ ǽnjł ĉẗ ǽṩŻ ǽŻpḏʒẗ ǩ¹ĥłĉḏṏḏł ĉḏł ṩ ĥłůḏṛṩĥǯŻṩĥnjł njʒṩḡḏ ṏpnjṏḏpṩẅṩnjĉḏṩḏplj ĥłḏ ṩnjẅnjẗpṛŻṩĥṛʒŻǽṩĥnjł ṩḡḏ ṛẗ ĥṩŻæĥǩĥṩẅnjʒṩḡḏ ṏpnjṏḏpṩẅʒnjpẅnjẗpł ḏḏĉṛ⁶ Ȟnjũḏůḏp¹Ťḡḏ QŻṛṛṏnjpṩ Ĝpnjẗṏ ḡŻṛ ł njṩůḏpĥžḏĉ ĥṩṛ ŻǽǽẗpŻǽẅŻł ĉ ũ ḏ lj Żȷ ḏ ł njǯ ẗ ŻpŻł ṩḏḏ¹ ũ ŻppŻł ṩẅnjppḏṏpḏṛḏł ṩŻṩĥnjł Żænjẗṩ ĥṩ⁶ ABOUT THIS PROPERTY

Eureka is the largest city on the west coast PROPERTY OVERVIEW between San Francisco, California and Portland, Oregon. As of the 2010 Census the population of Humboldt County was 134,623. The County Seat is Eureka. It is located on Property Clarion Hotel by California’s far 250 miles north of San Francisco. The surrounding area covers Address 2223 Fourth Street, Eureka, California the Eureka-Arcata-Fortuna Micropolitan Statistical Area and is located in Humboldt County Humboldt County, California. The primary population center is concentrated in Eureka, Arcata and Listing Price $5,800,000 Fortuna.

Price Per Room $89,231 GUEST ROOM BREAKDOWN No. of Rooms 65 Guest Rooms

Year Built & Additions Approximately 1992 with additions approximately in 1995 and 2001 King 18

Parcel Number 002-132-008-000 King ADA 3

Ownership Interest Fee-Simple Queen 28

Site Area 1.3223 acres Double Bedded 9

Zoning CS (Commercial Service) District Suites 7

Franchisee Choice Hotels Total 65 Three buildings: one building with three floors and interior Floors / Layout corridors; two buildings with two floors both with exterior corridors. Continental breakfast served in the lobby. Dinner and snacks Food and Beverage available during the evening hours.

1 / TheRedwood

EXECUTIVE SUMMARY

The Passport Group has been retained as exclusive broker to INVESTMENT HIGHLIGHTS offer the fee-simple interest in the 65 guest room Clarion Hotel by Humboldt Bay (“Hotel” or “Property”) located at 2223 Fourth Street, Eureka, California. The Hotel is � Strong Revenues and Cash Flow positioned on approximately 1.32 acres. The Hotel is located The Hotel continues to show significant signs of revenue growth, on iconic Hwy 101, visible from the north and southbound with 2019 out performing 2018. lanes. It is being offered unencumbered by management and is in good physical condition. Capital Improvements � Hotel has completed Choice Hotels PIP list within the past 12 months including a new roof. This is an opportunity to acquire a , coastal, franchise hotel with small restaurant. The Hotel is a cash flowing asset. The Property is two buildings, Additional Improvements: constructed in 1992 and 2001. ▷ New Roof ▷ All furniture ▷ All carpet ▷ All paint interior and exterior ▷ All new mattress ▷ All tiles in bathrooms and entrance and breakfast and walkways ▷ All new drapes ▷ All new sinks and vanities in bathrooms ▷ All new WiFi system

Excellent US 101 Location and Visibility The Hotel has excellent visibility and is located on southbound US 101. It is the first hotel coming into the densely populated Eureka market where US 101 becomes city surface streets. The hotel is visible from both the southbound and northbound lanes.

Discount to Replacement Cost � The Hotel is being offered at a discount to current replacement cost.

3 / TheRedwood MURRAY FIELD AIRPORT NORTHERN AIR

ST. JOSEPH HOSPITAL EUREKA

REDWOOD ACRES RACEWAY VICTORIAN SEAPORT OF HISTORIC DOWNTOWN EUREKA

HUMBOLDT BAY NATIONAL WILDLIFE REFUGE

AVENUE OF THE GIANTS HUMBOLDT REDWOODS STATE PARK EXECUTIVE SUMMARY

Humboldt Redwoods State Park Located at the southern end of Humboldt County, this is California’s largest redwood state park. It contains the largest remaining contiguous old growth coastal redwoods in the world within its 53,000 acres. With over 250 developed camp sites the park brings people from all over the world to camp, hike, swim, fish, raft, bike ride and picnic.

Avenue of the Giants Surrounded by Humboldt Redwoods State Park, this world famous scenic drive is a 31 mile portion of old Highway 101. It is said to be the most outstanding display of giant trees in the California redwood belt.

Humboldt Bay Wildlife Refuge Located on the Humboldt Bay, this refuge was created to protect and enhance wetland habitats for migratory water birds and is currently the home of hundreds of bird species including four endangered species. Recreational opportunities include hiking, observation, boating, hunting, fishing and wildlife education.

Victorian Seaport of Historic Downtown Eureka The Victorian Seaport with its waterfront boardwalk invites visitors to see hundreds of Victorian homes and is home to the magnificent Carson Mansion which is perhaps the most spectacular Victorian in the Nation.

Shelter Cove This hidden stretch of beautiful California has an interesting history. The builders constructing the Pacific Coast Highway decided it was too difficult to build the highway along a stretch of what is now called the Lost Coast. As a result, the small fishing village of Shelter Cove remained very secluded from the rest of the booming state and is now a popular reprieve for those seeking a quite vacation. DEMAND GENERATORS

Redwood National and State Parks The Redwood National and State Parks are old-growth temperate rainforests located in the United States, along the coast of northern California.

Carson Mansion The Carson Mansion is a large located in Old Town, Eureka, California. Regarded as one of the highest executions of American Queen Anne Style architecture, the house is “considered the most grand Victorian home in America.”

Blue Lake Casino A 20-minute drive from the hotel, this modern casino hotel is a 15- minute drive from the beach.

Trinidad Memorial Lighthouse/ Trinidad Head LighthouseTrinidad Head, a large domed prominence rising to a height of 380 feet, is connected to the mainland only on its northern end, thus forming the beautiful and natural Trinidad Bay on its eastern side. On the bluffs overlooking the bay, Trinidad, the oldest town on the northern California coast, was founded on April 8, 1850. Early on, the town was a vital link between ships anchored in the bay and miners testing their luck in the Klamath, Trinity, Salmon River, and Gold Bluff Mines. As the gold rush slowed, Trinidad Bay, like most bays along the Redwood Coast, became home to multiple sawmills. To aid vessels engaged in the lumber trade, a lighthouse was proposed for the ocean-facing side of the headland in 1854.

Humboldt State University Humboldt State University or Humboldt State, also occasionally referred to as Humboldt, is the northernmost campus of the 23-school California State University system, located in Arcata, Humboldt County, California, United States. - College of the Redwoods is a public two-year community college with its main campus of approximately 270 acres located on the southernmost edge of Eureka in Humboldt County, California. DEMAND GENERATORSCONTINUED

Downtown Eureka / Victorian Seafront This meticulously preserved and restored district of unique shops, restaurants, galleries and museums on Humboldt Bay, is a must stop on your visit to the redwoods. The Old Town/Downtown district includes theaters, pubs, antique shops and local coffee houses. Follow this link for a Walking tour of the historic buildings in Old Town. Or view it from the seat of a horse drawn carriage.

Bayshore Mall The is an indoor shopping mall located in Eureka, California owned and managed by Rouse Properties, a former division of General Growth Properties, one of the largest mall owners in the United States.

Arcata-Eureka Airport Located in McKinleyville, just north, just north of the property. Commercial flights are available. Fly-Humboldt is currently working with the FAA to get an additional air carrier to accommodate the airport. The general aviation airport, Murray Field, is located steps from the hotel.

Other general aviation airports are located in Dismore, Garberville, Kneeland, Samoa Field, Rohnerville and Shelter Cove. MARKET

The greater market surrounding the subject property offers 45 lodging properties with 2,113 guest rooms. The Clarion Hotel by Humboldt Bay competes with a smaller set of hotels based on various factors including location, rate, quality, and brand among others. Having reviewed these attributes the Clarion Hotel by Humboldt Bay offers an equal to or higher quality experience compared to the smaller competitive set.

The Eureka market is currently and historically strong. Many demand generators support the hotel and local economies making this an area less susceptible to economic downturns and attractive to investors. Metrics associated with the recent economic recession are good indicators. According to the California STR report of year-end 2008, the first year of the recession, the Eureka/Crescent City segment dipped only slightly at -0.7 from 2007 in revenue per available room (RevPAR), faring better than 11 out of the 14 segments. To note, the two that out performed the Eureka/Crescent City segment were Merced and Bakersfield who were riding the last of the construction wave but fell in 2009. In comparison many markets were down in double digits of -17, - 16.6, -15.8, and -13.1; Santa Rosa, Monterey/Salinas MSA, Oxnard/Ventura MSA, and Santa Barbara/Santa Maria MSA respectively. LODING MARKET OVERVIEW

COMPETITIVE SET

10 / TheRedwood FINANCIAL SUMMARY

HISTORICAL MONTHLY OPERATING PERFORMANCE

2020 2019 2018

ADR Occ Rev RevPar ADR Occ Rev RevPar ADR Occ Rev RevPar

JAN $70.05 72.03% $92,747.75 $50.46 $72.66 45.30% $64,089.20 $32.92 $75.51 62.18% $71,508.66 $46.95

FEB $68.26 69.01% $86,961.05 $47.11 $76.56 51.15% $69,669.58 $39.16 $74.43 56.15% $67,584.11 $41.80

MAR $68.97 48.05% $56,208.40 $33.14 $77.95 59.53% $90,113.05 $46.40 $76.58 74.14% $104,530.80 $56.78

APR $64.82 31.54% $36,430.36 $20.44 $79.36 73.11% $109,829.75 $58.02 $82.99 66.97% $104,314.89 $55.58

MAY $74.04 45.54% $59,006.82 $33.72 $97.83 75.95% $145,177.88 $74.30 $98.96 73.26% $139,330.77 $72.49

JUN $85.08 65.54% $100,995.86 $55.77 $95.96 80.05% $142,507.42 $76.82 $96.83 78.01% $142,249.53 $75.54

JUL $111.73 77.56% $161,778.96 $86.65 $109.92 84.48% $179,503.85 $92.86 $105.20 85.52% $178,937.15 $89.96

AUG $109.25 89.53% $179,286.74 $97.81 $106.04 86.10% $177,943.35 $91.30 $104.86 73.84% $153,626.69 $77.43

SEP $98.67 85.49% 153,438.45 $84.35 $93.71 75.98% $131,286.46 $71.20 $92.61 70.96% $126,037.03 $65.71

OCT $79.96 89.64% 135,528.95 $71.67 $78.45 57.99% $84,800 $45.49 $80.50 62.47% $96,757.69 $50.29

NOV - - - - $70.87 64.00% $88,443 $48.84 $76.32 48.23% $70,598.80 $36.81

DEC - - - - $71.51 57.00% $82,361 $42.57 $72.60 47.08% $67,805.27 $34.18

Other Rev $14,332.17 $26,736

Total Rev $1,076,715.51 T12* $1,392,460.54 $1,323,281.39

11 / TheRedwood CONFIDENTIAL OFFERING MEMORANDUM PROPERTY TOURS

This Confidential Investment Offering Memorandum (“Memorandum”), which is All inquiries, requests for information and property tours intended solely for your limited use and benefit in determining whether you desire to are to be made solely directly through The Passport ex- press any further interest in participating in the acquisition of the Redwood Hotel Group. Prospective purchasers are instructed NOT to (the “Property” or “Hotel”) in Fortuna, CA. By accepting this Memorandum, the disrupt operation of the hotel and NOT to contact the staff recipient agrees to comply strictly with the terns and conditions of the Confidentiality or management of the The Redwood, Fortuna, CA. To Agreement previously executed and delivered to The Passport Group by the Recipient schedule a tour of this Hotel please contact Jeff Durham with respect to this Memorandum and all information contained herein, and to use directly at (415) 706-6011. this Memorandum only for the purpose of evaluating the offering made hereby.

This Memorandum was prepared by The Passport Group and has been reviewed by the Owner. It contains select information pertaining to the Property and does not purport to be all-inclusive or to contain all of the information, which prospective investors may desire. It should be noted that all the market analysis projections are provided for general reference purposes and are based on assumptions relating to the general economy, competition and other factors beyond our control and, therefore, are subject to material variation. The material contained in this Memorandum is provided solely to assist the Recipient in determining whether it is interested in making an investigation or evaluation concerning a potential purchase of the Property.

More detailed information and an opportunity to inspect material related to the Property will be made available to interested and qualified prospective investors. Neither the Owner nor The Passport Group nor any of their respective officers have made any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents, and no legal commitments or obligations shall arise by reason of this Memorandum or its contents. The Agent, Owner, and the Manager reserve the right to engage in discussions or negotiations with one or more recipients or other perspective investors at any time without notification to, or other obligation to, any other Recipient or prospective investor. The offering is subject to change in terms or termination without notice. The Owner and the Manager will remain free to operate the Property in their sole and absolute discretion during the evaluation and offering process, including the taking of such actions, whether within or outside of the ordinary course of business, which the Owner or the Manager shall deem necessary, prudent or desirable.

The Agent reserves the right to require the return of this Memorandum and any other material provided to the Recipient at any time. Photocopying or other duplication of the Investment Offering Memorandum in part or entirety is not authorized.

12 / TheRedwood THE (415) 523-0393 PASSPORT www.ThePassportGroup.com GROUP Hospitality Real Estate