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

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September 18, 2012Mr. Patrick HeckDeputy Chief Financial OfficerDenver International Airport201 West Colfax AvenueDenver, Colorado 80202Re: The Westin Denver International Airport – Denver, ColoradoDear Mr. Heck:Pursuant to your request, we have conducted a study of the potential marketdemand and developed a statement of the estimated annual operating results for aproposed 519-room Westin hotel (the “Subject”) to be located at the south terminalof the Denver International Airport (“DIA”) in Denver, Colorado. Throughout thisanalysis, we formally refer to the Subject as The Westin Denver InternationalAirport.The development of the Subject hotel is expected to be financed through theissuance of tax-exempt bonds coupled with some form of publicsubsidies/guarantees/loans. This report has been prepared for use by the DenverInternational Airport and its financial advisors in determining the estimated annualoperating results of the proposed Subject. The conclusions set forth in this reportare based on an analysis for supply and demand for the transient lodging market inthe Denver-Aurora market area as of August 8, 2012, the completion date of ourfieldwork and primary market research.As in all studies of this type, the estimated results assume competent and efficientmarketing and operational management, and presume no significant change in thestatus of the competitive lodging industry from that as set forth in this report. Theterms of this engagement are such that we have no obligation to revise this reportto reflect events or conditions which occur subsequent to the date of completion ofour fieldwork; however, we are available to discuss the necessity for revision inview of changes in the economy or market factors which have a material effect onthe project.Since our projections of the market performance of the hotel are based onestimations and assumptions, which are subject to uncertainty and variation, we donot represent them as results that will actually be achieved; however, ourPKF Consulting USA | 50 California Street, 19 th Floor | San Francisco, CA 94111TEL: 415 788 3102 | FAX: 415 433 7844 | www.pkfc.com
The Westin Denver International AirportDenver International Airportprojections have been conscientiously prepared on the basis of informationobtained during the course of this assignment and in our capacity as professionalanalysts in both the real estate and lodging industries.This report is subject to the Certification and Statement of Assumptions and LimitingConditions presented in the Addenda. The report is also subject to the followingthree special assumptions.For the purpose of this analysis, we have assumed an opening date ofAugust 1, 2015.We understand that the Subject will be affiliated with and operated byStarwood Hotels and Resorts. For the purpose of this analysis, we haveprojected management fees in line with those stipulated in the QualifiedManagement Agreement (“QMA”) between the City and County ofDenver on behalf of its Department of Aviation and Westin DIA Operator,LLC.The Subject is a component of a larger $500 million development at DIA.Due to the fact that the Subject will be owned by the City and County ofDenver and DIA, there are certain elements of the project that we haveexcluded from our projections of revenues and expenses includingparking, property taxes, and restaurant lease income. These elementswill be explained in further detail throughout this report.PKF Consulting USA (“PKF Consulting”) appreciates this opportunity to be ofservice to you. Should you have any questions, or if we can be of furtherassistance, please do not hesitate to contact us.Yours sincerely,PKF Consulting USABy: Christopher A. Kraus, MAISenior Vice Presidentchris.kraus@pkfc.com | 406.582.8189- 2 -
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SECTION VSTATEMENT OF ESTIMATED ANN
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ADDENDA
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ADDENDUM ACERTIFICATION OF THE CONS
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PKF Consulting appreciates the oppo
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STATEMENT OF ASSUMPTIONS AND LIMITI
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ADDENDUM CQUALIFICATIONS OF THE CON
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QUALIFICATIONS OFCHRISTOPHER A. KRA
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QUALIFICATIONS OFCATHERINE E. BOLST
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Appraisal for the Yountville Inn lo
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Sent via email to: patrick.heck@fly
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Mr. Patrick HeckJune 14, 2012Housto
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Mr. Patrick HeckJune 14, 2012In ord
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Mr. Patrick HeckJune 14, 20127. Mar
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ADDENDUM ESENSITIVITY ANALYSIS
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