FAIRFIELD INN BY MARRIOTT PROVO, UTAH FAIRFIELD INN BY MARRIOTT PROVO, UTAH OFFERING MEMORANDUM / PREPARED BY HUNTER HOTEL ADVISORS / 1 FAIRFIELD INN BY MARRIOTT PROVO, UTAH NATIONAL REACH. LOCAL KNOWLEDGE. Hunter Hotel Advisors is pleased to present to qualified investors the opportunity to acquire the fee simple interest in the 72-room Fairfield Inn Provo, Utah. Danny Givertz Brian Embree Daniel Riley Senior Vice President Senior Associate Senior Analyst [email protected] [email protected] [email protected] 818-992-2902 818-992-2906 770-916-0300 / PREPARED BY HUNTER HOTEL ADVISORS / 1 FAIRFIELD INN BY MARRIOTT TABLE PROVO, UTAH OF CONTENTS Executive Summary .........................................................................................................3 Property Overview ...........................................................................................................5 Property Description .........................................................................................................7 Financials ........................................................................................................................8 Market Summary ............................................................................................................16 About Hunter .................................................................................................................28 / PREPARED BY HUNTER HOTEL ADVISORS / 2 FAIRFIELD INN BY MARRIOTT EXECUTIVE PROVO, UTAH SUMMARY Interstate Location Near Popular Year-Round Recreation Opportunities The Fairfield Inn is located on the southern side of Provo in a highly visible location where Interstate 15 traverses the East Bay Technology Park. Interstate 15 provides direct access to Salt Lake City, Utah. The property’s location within close proximity to Park City, Midway, Alpine, Orem, and Salt Lake City provide a wealth of outdoor, year-round recreational opportunities and festivals, which attract hundreds of thousands of visitors each year. There are multiple ski resorts, championship-level golf courses, and State Park areas within a short drive of the Subject. Incredible Growth Opportunity There is significant growth opportunity for the Fairfield Inn as the Provo market continues to be one of the nation’s fastest growing communities due to its resort lifestyle and overall quality of life. Provo has one of the lowest unemployment rates in Utah. Local developers and business leaders cite that there are not enough jobs in the city itself (as 27% of residents commute to Park City or Salt Lake City for work). Average home prices in the valley doubled from 2002–2008 and the population grew by 25% in that same time period. Owner / Operator or Regional Hotel Company Opportunity The Fairfield Inn is a three-story, interior corridor limited service hotel situated within close proximity to many of the area’s year-round recreational opportunities. It’s size at 72 guestrooms is ideal for an owner / operator or group of investors to acquire and operate the business. Discount to Replacement Costs At the asking price presented herein, the Fairfield Inn will trade at a meaningful discount to replacement costs. The price-point of the property is within Price: $6,500,000 reach of smaller and medium-sized investors and regional hotel companies that might not otherwise be able to acquire such a building due to large initial Price per Key: $90,278 equity/cash investments. Fee Simple Interest Conveyed. / PREPARED BY HUNTER HOTEL ADVISORS / 3 FAIRFIELD INN BY MARRIOTT INVESTMENT PROVO, UTAH CONSIDERATIONS Fee Simple The hotel will be sold with fee simple interest conveyed. Property Improvement Plan (PIP) The franchise license is considered an exceptionally valuable asset of the Fairfield Inn. It provides a high level of franchise flexibility for an Owner, traveler allegiance and recognition, an excellent computerized reservation system, and a well-known and highly regarded rewards program. On change of ownership, it is anticipated that Marriott will require the new owner to complete certain improvements, upgrades and modifications to the hotel as a condition of the issuance of a new license. The Buyer will be responsible for all repairs and renovations needed to satisfy Marriott’s requirements. The Change of Ownership PIP will be made available for review in the dataroom. Unencumbered by Management The Fairfield Inn is being offered unencumbered by its current management agreement, thereby providing an excellent opportunity for an owner to fully control the property’s operations. / PREPARED BY HUNTER HOTEL ADVISORS / 4 FAIRFIELD INN BY MARRIOTT PROPERTY PROVO, UTAH OVERVIEW Overview The three-story, interior corridor, 72-guestroom Fairfield Inn opened in July 1992 and has achieved considerable market share, revenue, and NOI growth throughout its existence. The property is situated just off Interstate 15 between the East Bay Technology Park and Provo Towne Center shopping mall in Provo, Utah, a bedroom community / suburb of Salt Lake City, Utah, and within close proximity to the area’s primary demand generators and attractions. Known for its access to highly marketed winter season activities such as skiing, snowboarding, snowmobiling, etc., Provo is a year-round destination. The Fairfield Inn is located adjacent to East Bay Technology Park and is within close proximity to innovative firms such as Chrysalis, Rocky Mountain University of Healthcare, Wavetronix, InsideSales.Com, Micro Focus, and Start Studio to name a few. The overall Salt Lake City region is wildly Tourism is a year-round industry in the Provo / Salt Lake City region. The local popular with outdoor enthusiasts and offers plenty of recreational activities tourism market features 2 separate “busy seasons” with one coinciding with and attractions throughout the year including cross country skiing and tubing, the annual Sundance Film Festival, the largest independent film festival in the alpine/mogul skiing, horse drawn sleigh rides, snowmobiling, Nordic skiing, United States (home to 46,000+ annual attendees), and the other coinciding the Heber Valley Railroad, Deer Creek State Park, horseback riding, fly fishing, with the warmer summer months. The Sundance Film Festival featured nearly mountain biking and cycling, river rafting and canoeing, caving, hiking, and 50,000 registered guests in 2016 (not counting “unregistered attendees”) for paddle board yoga as examples. the official events of the festival and likely several tens of thousands more for unofficial events that regularly occur throughout the city during the festival Construction Features periods. Occupancy for the Fairfield Inn’s competitive set swelled to nearly • Opened in July 1992 55% in January 2016. During this time, average rates for the competitive set • 3-story, interior corridor approached $75.00 (the Subject achieved ADR of roughly $90.00), and RevPAR • 72 guestrooms figures hovered around $40.00 for the competitive market. The second busy • Meeting and banquet facilities to accommodate up to 25 guests period occurring in the warmer months of June, July, and August offering • Heated indoor pool and whirlpool higher average rates in the $90.00 to $115.00 range for both the Subject and competitive market. We believe there is significant room for upside potential during the festival period, particularly in average rates given the ADR disparity between the Subject and competitive hotels. The Provo area is located in Utah County and is situated only 50 miles from Salt Lake City International Airport and 45 miles from Park City to the north (Summit County). Provo conveniently sits amongst multiple world-class ski resorts including the wildly popular Deer Valley Resort and the Sundance Resort. / PREPARED BY HUNTER HOTEL ADVISORS / 5 Area Map TO SALT laKE CITY & PARK CITY BRIGHAM young UNIVERSITY (AS WELL AS MAJORITY OF OTHER SKI RESORTS) provo COLLEGE UTAH valley REGIONAL MEDICAL CENTER provo AIRPORT Provo TOWN CENTER EAST BAY Technology parK / PREPARED BY HUNTER HOTEL ADVISORS / 6 FAIRFIELD INN BY MARRIOTT PROPERTY PROVO, UTAH DESCRIPTION Hotel Configuration and Layout The ground floor consists of the lobby, breakfast area, administrative offices, and back-of-the-house areas such as commercial kitchen, maintenance room and storage, and the commercial laundry equipment. Guestrooms offer a flat screen television, armoire, nightstands, desk and / or activity table, closet, iron and ironing board, hairdryer, telephone, internet connectivity, and mini refrigerators and microwaves. Dining The Fairfield Inn offers a complimentary breakfast to its guests. The complimentary breakfast includes both hot and cold items and is available daily. Additionally, there are numerous options for guests of all budgets including options such as Olive Garden, Sizzler, Ruby River Steakhouse, Red Robin Gourmet Burgers, Wingers, Village Inn, Brick Oven Restaurant, and Lotus Garden Restaurant to name a few. Business Center The business center features a computer and printer workstation for guests to use during their stay. There are also meeting rooms, a fax machine, and a printer available to guests. Audio/Visual equipment is available for rental. Fitness Center The hotel features an upgraded 24-hour fitness center with the standard mix of exercise machines and treadmills. Pool The Fairfield Inn offers a heated indoor pool for guests use. Event Space The Fairfield Inn offers meeting and banquet space to accommodate up to 25 guests. / PREPARED BY