Sheraton Hotel Redding At Sundial Bridge - Redding Record ...

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maintain databases on hotel investor criteria. According to the brokers interviewed, the current period from when a property is listed to when the sale closes is typically six to nine months. Brokers are able to electronically produce marketing materials, elicit interest, schedule property tours, accept offers, and select a buyer in approximately 90 to 120 days. Following the execution of a purchase and sale agreement, the due diligence and closing period is typically 90 days. Hotel properties are being actively sought after by investors. Since the economic downturn, a number of funds have been established to pursue hotel acquisitions. Quality assets often solicit numerous bids, and for willing buyers and willing sellers, the marketing process has resulted in the timely closing of transactions. We are also aware that some potential sellers are not actively marketing their hotels at this time. Although these sellers may bring their assets to market during a more robust financing period, their current lack of participation in the process does not impact our opinion concerning the exposure period. Published surveys report marketing time, not the exposure period. Marketing time is an opinion of the amount of time it might take to sell a property at the concluded market value level during the period immediately after the effective date of an appraisal. Currently, marketing time for full-service and luxury/upperupscale hotels is averaging 7.63 and 8.50 months, respectively, according to the Korpacz Real Estate Investor Survey - Third Quarter 2010, published by PricewaterhouseCoopers. Overall marketing time is averaging 8.0 months for hotels, as reported by the Real Estate Research Corporation’s Summer 2010 Real Estate Survey. The following table illustrates marketing periods reported in recent Korpacz Real Estate Investor Surveys. FIGURE 2-1 MARKETING PERIODS (MONTHS) Property Type Luxury/Upper-Upscale Full-Service Economy/Limited-Service Extended Stay 3rd Quarter '10 1st Quarter '10 Year Ago 2.0 to 20.0 4.0 to 20.0 1.0 to 18.0 8.50 10.38 8.21 2.0 to 24.0 3.0 to 24.0 4.0 to 18.0 7.63 9.31 8.22 4.0 to 12.0 4.0 to 12.0 4.0 to 12.0 7.60 7.40 7.83 2.0 to 24.0 3.0 to 24.0 4.0 to 12.0 8.20 9.50 7.00 Source: Korpacz Real Estate Investor Survey - Third Quarter 2010 February-2011 Nature of the Assignment Sheraton Hotel Redding At Sundial Bridge – Redding, California 14
Competency Scope of Work While marketing time refers to the amount of time necessary to market the hotel subsequent to our date of value to sell for the appraised value, the two concepts are similar and simply reflect different perspectives in time. Our qualifications are included as an addendum to this report. These qualifications reflect that we have the competence required to complete this engagement, in accordance with the competency provision of the Uniform Standards of Professional Appraisal Practice. Our knowledge and experience is appropriate for the complexity of this assignment. The methodology used to develop this appraisal is based on the market research and valuation techniques set forth in the textbooks authored by Hospitality Valuation Services for the American Institute of Real Estate Appraisers and the Appraisal Institute, entitled The Valuation of Hotels and Motels, 7 Hotels, Motels and Restaurants: Valuations and Market Studies, 8 The Computerized Income Approach to Hotel/Motel Market Studies and Valuations, 9 Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and Valuations, 10 and Hotels and Motels – Valuations and Market Studies. 11 1. All information was collected and analyzed by the staff of M&R Valuation Services, Inc. Information was supplied by the client and/or the property’s development team. 2. The subject site has been evaluated from the viewpoint of its physical utility for the future operation of a hotel, as well as access, visibility, and other relevant factors. 3. The subject property's proposed improvements have been reviewed for their expected quality of construction, design, and layout efficiency. 4. The surrounding economic environment, on both an area and neighborhood level, has been reviewed to identify specific hostelry-related 7 Stephen Rushmore, The Valuation of Hotels and Motels. (Chicago: American Institute of Real Estate Appraisers, 1978). 8 Stephen Rushmore, Hotels, Motels and Restaurants: Valuations and Market Studies. (Chicago: American Institute of Real Estate Appraisers, 1983). 9 Stephen Rushmore, The Computerized Income Approach to Hotel/Motel Market Studies and Valuations. (Chicago: American Institute of Real Estate Appraisers, 1990). 10 Stephen Rushmore, Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and Valuations (Chicago: Appraisal Institute, 1992). 11 Stephen Rushmore and Erich Baum, Hotels and Motels – Valuations and Market Studies. (Chicago: Appraisal Institute, 2001). February-2011 Nature of the Assignment Sheraton Hotel Redding At Sundial Bridge – Redding, California 15
Page 1 and 2: February-2011 SUMMARY APPRAISAL REP
Page 3 and 4: stabilization. Based on our analysi
Page 5 and 6: Table of Contents SECTION TITLE PAG
Page 7 and 8: SUMMARY OF VALUE PARAMETERS Number
Page 9 and 10: 2. Nature of the Assignment Subject
Page 11 and 12: Objective of the Appraisal an annua
Page 13: Exposure Period The hotel is expect
Page 17 and 18: 3. Description of the Site and Neig
Page 19 and 20: Physical Characteristics HOTEL SITE
Page 21 and 22: SUBJECT SITE RENDERING AND SHARED P
Page 23 and 24: Turtle Bay Exploration Park The sub
Page 25 and 26: 4. Description of the Proposed Proj
Page 27 and 28: Summary of the Facilities RENDERING
Page 29 and 30: Public Areas all signage will adequ
Page 31 and 32: Guestrooms Back-of-the-House ADA an
Page 33 and 34: 5. Market Area Analysis Market Area
Page 35 and 36: FIGURE 5-1 ECONOMIC AND DEMOGRAPHIC
Page 37 and 38: FIGURE 5-2 HISTORICAL AND PROJECTED
Page 39 and 40: Unemployment Statistics increased u
Page 41 and 42: Airport Traffic Airport passenger c
Page 43 and 44: Tourist Attractions Additionally, t
Page 45 and 46: Conclusion frontage is back to norm
Page 47 and 48: FIGURE 6-1 HISTORICAL SUPPLY AND DE
Page 49 and 50: FIGURE 6-2 MONTHLY OCCUPANCY TRENDS
Page 51 and 52: FIGURE 6-4 COMPETITORS - OPERATING
Page 53 and 54: FIGURE 6-5 NEW SUPPLY DEMAND Propos
Page 55 and 56: FIGURE 6-8 AVERAGE ANNUAL COMPOUNDE
Page 57 and 58: 7. Projection of Occupancy and Aver
Page 59 and 60: occupancy rate has been positioned
Page 61 and 62: Competitive Position calculated by
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8. Highest and Best Use As if Vacan
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9. Approaches to Value Income Capit
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10. Income Capitalization Approach
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FIGURE 10-1 COMPARABLE OPERATING ST
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FIGURE 10-3 COMPARABLE OPERATING ST
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FIGURE 10-4 DETAILED FORECAST OF IN
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Forecast of Income and Expense The
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available room. We expect the propo
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INCOME CAPITALIZATION Mortgage Comp
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Equity Component & Equity Yield Rat
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Terminal Capitalization Rate 20% fo
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Mathematical Proof of Value The val
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Our debt coverage ratio falls withi
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Derived Capitalization Rates FIGURE
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Discounted Cash Flow Analysis - “
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Discounted Cash Flow Analysis - “
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11. Sales Comparison Approach Compa
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FIGURE 11-2 SUMMARY OF SELECTED COM
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Sale#2 Sheraton Delfina Santa Monic
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Sale#4 Holiday Inn Laguna Hills Lag
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Conclusion the subject’s leasehol
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FIGURE 12-1 SUBJECT PROPERTY CONSTR
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FIGURE 12-2 SUMMARY OF HOTEL GROUND
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FIGURE 12-4 DISCOUNTED CASH FLOW AN
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Pre-Opening and Working Capital Cos
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13. Reconciliation of Value Indicat
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yet, in fact, exist as of the date
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9. The Americans with Disabilities
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proposed project and/or the market
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of Professional Ethics and the Stan
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calculating the hotel’s market sh
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COMMERCIAL SEGMENT PROJECTIONS (YEA
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NI = Net income available for debt
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NI 1 - (f x M x V) = de 1 NI 2 - (f
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Using these known variables, the fo
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Page 2 Suzanne R Mellen 01/10/2011
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Page 4 Suzanne R Mellen 01/10/2011
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Addenda Requirements - certificatio
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EXAMPLES OF CORPORATE AND INSTITUTI
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Elaine Sahlins EMPLOYMENT 1997 - pr
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EXAMPLES OF PROPERTIES APPRAISED OR
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PROFESSIONAL AFFILIATIONS EDUCATION
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APPEARANCE AS AN EXPERT WITNESS, CO
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