PKF Hotel Market Demand and Financial Analysis - DIA Business ...

The Westin Denver International AirportStatement of Estimated Annual Operating ResultsInsurancePer Available RoomIn-Terminal HotelsHotel A $431Hotel B 379Hotel C 613Hotel D 280Hotel E 772Hotel F 407Westin HotelsHotel G $545Hotel H 296Hotel I 580Hotel J 1,166Hotel K 646Weighted Average 529Subject Stabilized Year $750The comparable hotels indicated a wide range of insurance expense between $296and $1,166 PAR. For a stabilized year of operation, we project insurance expensefor the proposed Subject to be $750 PAR, slightly above average of all of thecomparable hotels.d. Reserves for ReplacementsAn additional item not typically listed on an owner’s income statement is the amountrequired for the periodic replacement of certain short-lived items such as carpeting,draperies, and other furniture, fixtures and equipment. The QMA stipulates areserve for capital expenditures of 1.0 percent of total revenues during the firsttwelve months of operation, ramping up to 6.0 percent of total revenues in the fifthtwelve-month period and thereafter. Additionally, the QMA stipulates a subordinatereserve for capital expenditures, which falls below the NOI line. During the first fouryears of operation, the stipulated reserve is 0.0 percent of total revenues, rampingup to 3.0 percent in the eighth year and thereafter. The following table summarizesthe increase in reserves for the proposed Subject.V-20