Sheraton Hotel Redding At Sundial Bridge - Redding Record ...
Sheraton Hotel Redding At Sundial Bridge - Redding Record ... Sheraton Hotel Redding At Sundial Bridge - Redding Record ...
period are converted to a present value by multiplying the cash flow by the chosen discount rate for that year in the forecast. The sum of the discounted cash flows equates to the value of the subject property. The following chart summarizes the averages presented for discount rates in various investor surveys during the past decade. FIGURE 10-18 OVERALL DISCOUNT RATES DERIVED FROM SALES AND INVESTOR SURVEYS Source Data Point Range Average HVS Hotel Sales - Full-Service 8.8% - 16.3% 12.00% Korpa cz Real Es ta te Investor Survey - 3rd Qua rter 2010 Full-Service Hotels 9.0% - 16.0% 12.15% Luxury Hotels 8.0% - 18.0% 11.41% CRE/RERC Rea l Es ta te Report - Summer 2010 First Tier Hotels 8.0% - 15.0% 11.57% We note that the averages illustrated in the previous table are derived from wide arrays of data points and a range of reasonableness extends both lower and higher than the indicated data points. Based on our review of these surveys, sales transactions (see total property yields shown in the table titled Sample of Hotels Sold), and interviewing market participants, we have selected a discount rate of 11.23% for our analysis. Similar to the developed total property yield, our selected discount rate considers the current market for hotel investments. Utilizing the discount rate set forth, the discounted cash flow procedure is summarized as follows. February-2011 Income Capitalization Approach Sheraton Hotel Redding At Sundial Bridge – Redding, California 94
Discounted Cash Flow Analysis – “When Stabilized” FIGURE 10-19 DISCOUNTED CASH FLOW ANALYSIS – WHEN COMPLETE Discount Factor Discounted Year Net Income @ 11.23% Cash Flow 2012/13 $1,065,835 0.89901 $958,192 2013/14 1,519,000 0.80821 1,227,675 2014/15 1,475,050 0.72659 1,071,754 2015/16 1,730,500 0.65321 1,130,375 2016/17 1,784,500 0.58724 1,047,925 2017/18 1,841,150 0.52793 971,999 2018/19 1,898,400 0.47461 901,005 2019/20 1,958,350 0.42668 835,588 2020/21 2,020,000 0.38359 774,848 2021/22 24,950,000 * 0.34485 8,603,940 Estimated Value $17,523,301 (SAY) $17,500,000 Reversion Analysis 11th Year's Net Income (before taxes a nd ground rent) $2,878,000 Les s Real Es tate Ta xes $304,338 Les s Griound Rent $452,000 11th Year's Net Income (after taxes a nd ground rent) $2,121,662 Ca pi ta l i za ti on Ra te 9.0% Total Sales Proceeds $23,574,026 Less: Transaction Costs @ 3.0% 707,221 Net Sales Proceeds $22,866,805 *10th year net income of $2,083,150 plus sales proceeds of $22,867,000 The preceding valuation process was repeated using the projected cash flows beginning as of the stabilized year. The discounted cash flow procedure is summarized as follows. February-2011 Income Capitalization Approach Sheraton Hotel Redding At Sundial Bridge – Redding, California 95
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- 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
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- Page 61 and 62: Competitive Position calculated by
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- Page 71 and 72: FIGURE 10-1 COMPARABLE OPERATING ST
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- Page 75 and 76: FIGURE 10-4 DETAILED FORECAST OF IN
- Page 77 and 78: Forecast of Income and Expense The
- Page 79 and 80: available room. We expect the propo
- Page 81 and 82: INCOME CAPITALIZATION Mortgage Comp
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- Page 85 and 86: Terminal Capitalization Rate 20% fo
- Page 87 and 88: Mathematical Proof of Value The val
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- Page 91 and 92: Derived Capitalization Rates FIGURE
- Page 93: Discounted Cash Flow Analysis - “
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- Page 103 and 104: Sale#4 Holiday Inn Laguna Hills Lag
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- Page 107 and 108: FIGURE 12-1 SUBJECT PROPERTY CONSTR
- Page 109 and 110: FIGURE 12-2 SUMMARY OF HOTEL GROUND
- Page 111 and 112: FIGURE 12-4 DISCOUNTED CASH FLOW AN
- Page 113 and 114: Pre-Opening and Working Capital Cos
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- Page 117 and 118: yet, in fact, exist as of the date
- Page 119 and 120: 9. The Americans with Disabilities
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- Page 127 and 128: COMMERCIAL SEGMENT PROJECTIONS (YEA
- Page 129 and 130: NI = Net income available for debt
- Page 131 and 132: NI 1 - (f x M x V) = de 1 NI 2 - (f
- Page 133 and 134: Using these known variables, the fo
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period are converted to a present value by multiplying the cash flow by the<br />
chosen discount rate for that year in the forecast. The sum of the<br />
discounted cash flows equates to the value of the subject property.<br />
The following chart summarizes the averages presented for discount rates in<br />
various investor surveys during the past decade.<br />
FIGURE 10-18 OVERALL DISCOUNT RATES DERIVED FROM SALES AND<br />
INVESTOR SURVEYS<br />
Source Data Point Range Average<br />
HVS <strong>Hotel</strong> Sales - Full-Service 8.8% - 16.3% 12.00%<br />
Korpa cz Real Es ta te Investor Survey - 3rd Qua rter 2010<br />
Full-Service <strong>Hotel</strong>s 9.0% - 16.0% 12.15%<br />
Luxury <strong>Hotel</strong>s 8.0% - 18.0% 11.41%<br />
CRE/RERC Rea l Es ta te Report - Summer 2010<br />
First Tier <strong>Hotel</strong>s 8.0% - 15.0% 11.57%<br />
We note that the averages illustrated in the previous table are derived from wide<br />
arrays of data points and a range of reasonableness extends both lower and higher<br />
than the indicated data points. Based on our review of these surveys, sales<br />
transactions (see total property yields shown in the table titled Sample of <strong>Hotel</strong>s<br />
Sold), and interviewing market participants, we have selected a discount rate of<br />
11.23% for our analysis. Similar to the developed total property yield, our selected<br />
discount rate considers the current market for hotel investments.<br />
Utilizing the discount rate set forth, the discounted cash flow procedure is<br />
summarized as follows.<br />
February-2011 Income Capitalization Approach<br />
<strong>Sheraton</strong> <strong>Hotel</strong> <strong>Redding</strong> <strong>At</strong> <strong>Sundial</strong> <strong>Bridge</strong> – <strong>Redding</strong>, California 94
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