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

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The Westin Denver International HotelProperty DescriptionD. MANAGEMENT AND AFFILIATION1. Management AgreementThe Subject will be affiliated with and operated by Starwood Hotels and Resortsunder a long term management agreement. Under this agreement, the hotel will beencumbered with a management fee, national marketing assessment, and otheraffiliation fees. These fees have been included in our forecast of marketingexpense as will be presented in Section V of this report. We have based our feeson a qualified Management Agreement (“QMA”) dated April 11, 2011. Presented inthe following table is a summary of the fees stipulated in the QMA.Owner:Manager:Date: April 11, 2011Term:15 yearsThe Westin Denver International AirportSummary of the Qualified Management AgreementCity and County of Denver on behalf of its Department of AviationWestin DIA Operator, LLCSubordinateManagementFeeSeniorCapExReserveSubordinateCapExReserveBase ManagementFees:FeeFirst 12 months $684,309 $0 1.0% 0.0%Second 12 months $788,119 $197,030 2.0% 0.0%Third 12 months $1,319,743 $219,957 3.0% 0.0%Fourth 12 months $1,355,622 $451,874 5.0% 0.0%Fifth 12 months $1,399,739 $466,580 6.0% 1.0%Sixth 12 months $1,440,091 $480,030 6.0% 1.5%Seventh 12 months $1,489,171 $496,390 6.0% 2.0%Eighth 12 months $1,526,375 $508,791 6.0% 3.0%Ninth 12 months $1,572,334 $524,111 6.0% 3.0%Tenth 12 months $1,618,789 $539,596 6.0% 3.0%Source: Denver International AirportE. DEVELOPMENT COSTSPresented in the following table is a summary of the development costs for the hotelpiece of the overall project. As can be noted, development costs for the proposedSubject, inclusive of capitalized interest during construction, a debt service reservefund, and the cost of issuing bonds, less operator key money of $3,500,000, isapproximately $221,100,000, or $426,000 per room.III-9
The Westin Denver International HotelProperty DescriptionThe Westin Denver International AirportDevelopment CostsHotel construction and development costs $ 180,000,000Hotel operating account 700,000Hotel operating reserve fund 1,500,000Capitalized interest during construction 27,106,111Debt service reserve fund 12,672,000Costs of issuing bonds 2,640,000Subtotal $ 224,618,111Operator key money (3,500,000)Total funding requirements $ 221,118,111Source: Piper JaffrayF. CONCLUSIONThe 519-room Westin will offer contemporary lodging services, surrounded bymodern furnishings, in a newly constructed facility built at the south terminal of DIA.Features and amenities at the property will include an all-purpose restaurant andbar, coffee express outlet, 29,000 square feet of meeting space, a 6,000 squarefoothealth club, featuring an indoor swimming pool and whirlpool, fitness center,and Kids Club, business center, and a gift shop.The proposed Subject will represent an upper upscale, full-service hotel located atthe south terminal of DIA. Upon completion of the development in August 2015, theproposed Subject will represent the highest quality and newest lodging product inthe Denver Airport lodging market and the newest in-terminal hotel in the U.S. Weare of the opinion that the proposed Subject will be well received in the competitivemarket, as will be detailed in Sections IV and V of this report.III-10
Page 2 and 3: September 18, 2012Mr. Patrick HeckD
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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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