University of Michigan-Dearborn World Headquarters

DEARBORN MICHIGANHOTEL DEVELOPMENT SITE

FAIRLANE TOWN CENTER OUTPARCEL

Confidential Offering Memorandum

DISCLAIMER

This Offering Memorandum has been prepared by HVS in partnership with Stokas Bieri Real Estate for use by a limited number of recipients. All information contained herein has been obtained from sources other than HVS in partnership with Stokas Bieri Real Estate, and neither the Owner nor HVS in partnership with Stokas Bieri Real Estate (nor their respective equity holders, officers, employees, and agents) makes any representations or warranties, expressed or implied, as to the accuracy or completeness of the information contained herein. Further, the Offering Memorandum does not constitute a representation that no change in the business or affairs of the Property or the Owner has occurred since the date of the preparation of the Offering Memorandum. All analysis and verification of the information contained in the Offering Memorandum is solely the responsibility of the Recipient. The Owner and HVS in partnership with Stokas Bieri Real Estate, as well as their respective officers, directors, employees, equity holders, and agents, expressly disclaim all liability that may be based upon or relate to the use of the information contained in this Offering Memorandum. Additional information and an opportunity to inspect the Property will be made available upon written request to interested and qualified prospective investors.

The Owner and HVS in partnership with Stokas Bieri Real Estate each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the Property and/or to terminate discussions with any entity at any time with or without notice. The Owner shall have no legal commitment or obligations to any Recipient reviewing this Offering Memorandum or making an offer to purchase the Property unless and until such offer is approved by the Owner; a written agreement for the purchase of the Property has been fully executed, delivered and approved by the Owner and its legal counsel; and any obligations set by the Owner thereunder have been satisfied or waived.

The Recipient agrees that (a) the Offering Memorandum and its contents are confidential information, except for such information contained in the Offering Memorandum, which is a matter of public record, or is provided from sources available to the public; (b) the Recipient, the Recipient’s employees, agents, and consultants (collectively, the “need to know parties”) will hold and treat it in the strictest of confidence, and the Recipient and the “need to know parties” will not, directly or indirectly, disclose or permit anyone else to disclose its contents to any other person, firm, or entity without the prior written authorization of HVS in partnership with Stokas Bieri Real Estate and the Owner; and (c) the Recipient and the “need to know parties” will not use or permit to be used this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Owner or HVS in partnership with Stokas Bieri Real Estate, or for any purpose other than use in considering whether to purchase the Property. The Recipient and the “need to know parties” agree to keep this Offering Memorandum and all confidential information contained herein permanently confidential and further agree to use this Offering Memorandum for the purpose set forth above. If the Recipient has no interest in the Property, or if the Recipient or the Owner discontinue negotiations in the future, the Recipient will return this Offering Memorandum to HVS in partnership with Stokas Bieri Real Estate.

TABLE OF CONTENTSEXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . 4

INVESTMENT HIGHLIGHTS . . . . . . . . . . . . . . . . . . 6

PROPERTY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . 8

AREA OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

ATTRACTIVE HOTEL MARKET STATISTICS . . . . . 16

LAND SURVEY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Executive Summary

HVS, as the sole and exclusive advisory firm to Ownership, is pleased to present the opportunity to acquire the fee-simple interest in a 1.05-acre site within the growing Dearborn submarket of Detroit (herein referred to as the “subject site”).

The subject site is located adjacent to the Fairlane Town Center “super-regional” mall, which includes 150 stores and is anchored by Macy’s and JCPenney. The mall is bordered by several restaurants, a Class-B office building, and a hospital. Overall, the subject site is located near a diverse mix of corporate, leisure, and group demand generators.

The Detroit suburb of Dearborn is home to the Ford Motor Company world headquarters, as well as The Henry Ford, the United States’ largest indoor-outdoor museum complex. Hotel performance in the Dearborn submarket has been exceedingly impressive recently. Despite the opening of three hotels in 2016, representing a 59% increase in supply, market-wide RevPAR increased by a strong 4.4% in 2017 and an astounding 14.4% through October in 2018.

Detroit is known as the world’s traditional automotive center, as the city was the home of the invention of the automobile and its mass production, headed by Henry Ford. Detroit also has a long history of producing groundbreaking and influential musical talent. These two historical legacies are celebrated by the city’s two familiar nicknames – Motor City and Motown. Detroit and the surrounding region constitute a manufacturing powerhouse, most notably as home to the Big Three automobile companies: General Motors, Ford Motor Company, and Fiat Chrysler Automobiles’ U.S. headquarters. Additionally, the region has become competitive in emerging technologies, such as driverless technology, biotechnology, nanotechnology, information technology, and hydrogen-fuel-cell (HFC) development.

An investor will have the opportunity to realize the substantial value of constructing a nationally branded hotel in a growing market, creating significant upside from current cash flow and upon exit of the investment.

ROBUST DEMAND GENERATORS

As the world’s traditional automotive center, Metro Detroit serves as the headquarters to America’s “Big Three” automakers: Fiat Chrysler Automobiles (FCA), Ford, and General Motors (GM). The Big Three each posted significant increases in both revenues and earnings from 2012 through 2016, which represented a record year for the U.S. auto industry, with the major Detroit automakers reporting their highest sales since the early 2000s. Moreover, each of the Big Three has announced plans of future investment in Detroit. In June 2018, Ford purchased the vacant Michigan Central Station as part of its plans to transform Corktown into its new campus for mobile technology and software development. In March 2018, GM announced plans to invest more than $100 million to upgrade manufacturing plants in Southeast Michigan to produce a self-driving Chevy Cruise. Moreover, in December 2018, FCA announced that it would convert a former Detroit engine plant to an assembly plant.

Just west of the subject site is the University of Michigan-Dearborn, a regional campus of University of Michigan. The university served over 9,000 students and employed roughly 1,100 faculty members during the academic year of 2017-2018. Enrollment has grown 6% over the last five years, as the university has continued to add new facilities and offer more degree programs.

Metro Detroit also ranks among the nation’s top five financial districts, with major financial service employers including KPMG, Fifth Third Bank, Comerica, Deloitte, Ernst & Young, and PricewaterhouseCoopers. Among the metro area’s leading information technology and computer software companies with a major presence or headquarters are Quicken Loans, Compuware, IBM, Google, and Computer Sciences Corporation.

The healthcare sector is also important in this area. Headquartered in Detroit, the Henry Ford Health System is one of the nation’s leading comprehensive, nonprofit healthcare organizations. With 8,800 employees in Detroit, the Henry Ford Health System is the third-largest employer in the city. The Henry Ford Health System has a roughly $6-billion economic impact on metro Detroit; an additional 11,500 jobs are indirectly supported by transactions with the Henry Ford Health System. The Detroit Medical Center is a leading academically integrated system in metropolitan Detroit and the largest healthcare provider in Southeast Michigan.

Investment Highlights

The subject site is located within the parking lot of the Fairlane Town Center mall. The regional shopping mall has over 1.2 million square feet of retail space housing over 125 stores and restaurants, major retail anchor tenants, and AMC theatres.

The subject site is proximate to a diverse mix of corporate and leisure demand generators, including the following:

• University of Michigan Dearborn – 0.6 miles• TPC Michigan – 1.2 miles• The Henry Ford (museum complex) – 1.2 miles• Ford Motor Company world headquarters – 1.7 miles• Downtown Detroit – 9 miles

EXCELLENT LOCATION AMONG DIVERSE DEMAND GENERATORS

Based on an October 2018 STR Trend Report, consisting of seven hotels ranging from upper-midscale to upscale limited-service, select-service, and extended-stay assets, the submarket achieved occupancy and average rate (ADR) levels of 81.4% and $124.45, respectively, resulting in RevPAR of $101.28 through October 2018.

• This represents an impressive 14.4% increase year-over-year.

VIBRANT MARKET PERFORMANCE

The subject site presents an opportunity for a developer to construct a limited-service, select-service, or extended-stay hotel in a major MSA, with an attractive exit capitalization rate. Following construction and stabilization of operations, this asset would be a desired investment for the comprehensive pool of area and regional investors interested in hotel products.

SIGNIFICANT UPSIDE FOR DEVELOPER TO EXIT

Address Fairlane Town Center Outparcel (former automotive repair building, to the north of JCPenney), 18900 Michigan Avenue, Dearborn, Michigan 48126

Market/Tract Detroit; submarket: Dearborn

Parcel Size 1.047 Acre (45,598 SF)

Parking Within the site, which satisfies current brand prototypes. If desired, also a to-be-determined easement or lease agreement with mall ownership

Brand Unencumbered

Management Unencumbered

Interest Fee Simple

Property Overview

DEARBORN, MI HOTEL DEVELOPMENT SITE

FAIRLANE TOWN CENTER OUTPARCEL

8 MILES

HVS has not directly contacted brand representatives in the market, but the list below includes branded, midscale to upscale hotels within a five-mile radius of the subject site. The potentially available franchises, which are not represented in the Dearborn submarket, include the following:

• AC Hotels by Marriott• Aloft Hotels• Avid by IHG• Candlewood Suites• Element by Westin• EVEN by IHG

FRANCHISE POSSIBILITIES

• Hyatt Place• Hyatt House• Residence Inn by Marriott• SpringHill Suites by Marriot• Tru by Hilton

• Fairfield Inn & Suites by Marriott• Four Points by Sheraton• Hilton Garden Inn• Home2 Suites by Hilton• Homewood Suites by Hilton

EXISTING ASSETS

Property Name Distance Rooms Chain Scale Date Opened FranchiseComfort Inn Near Greenfield Village 0.5 116 Upper Midscale Aug-90 Choice

Extended Stay America Detroit Dearborn 0.8 93 Economy Mar-02 Extended Stay Hotels

Autograph Collection, The Henry 0.8 308 Upper Upscale Feb-89 Marriott

Marriott The Dearborn Inn 0.9 230 Upper Upscale Jun-31 Marriott

Country Inn & Suites by Radisson Dearborn 1 100 Upper Midscale Sep-13 Radisson

Hampton Inn Detroit Dearborn 1.4 96 Upper Midscale Dec-16 Hilton

Courtyard by Marriott Detroit Dearborn 1.5 147 Upscale Dec-86 Marriott

DoubleTree by Hilton Detroit Dearborn 1.5 347 Upscale Aug-85 Hilton

Hawthorn Suites by Wyndham Dearborn Detroit 1.5 128 Midscale Oct-88 Wyndham

TownePlace Suites by Marriott Detroit Dearborn 1.8 148 Upper Midscale Jan-01 Marriott

Best Western Greenfield Inn 2.3 209 Midscale Jun-66 Best Western

A Victory Inn West Dearborn 2.3 77 Midscale Jun-65 Victory Hotels

Comfort Inn & Suites Allen Park 2.4 121 Upper Midscale Oct-99 Choice

Staybridge Suites Dearborn 2.7 99 Upscale Apr-16 IHG

Red Roof Inn Detroit Dearborn 2.7 111 Economy Jan-88 Westmont

Holiday Inn Express & Suites Dearborn Southwest Detroit Area

2.7 107 Upper Midscale Jun-16 IHG

Americas Best Value Inn Dearborn 2.7 71 Economy Jan-98 Red Lion

Red Roof Inn & Suites Melvindale 3.3 50 Economy Jan-10 Westmont

Holiday Inn Express & Suites Allen Park 3.3 106 Upper Midscale Jul-18 IHG

The following hotel assets are currently represented in the market:

EXISTING ASSETS

FUTURE SUPPLY PIPELINE (JULY 2018 STR)

Property Name Address City Postal Code

Room Count

Proj. Opening Date Project Phase

TownePlace Suites by Hilton Detroit Allen Park

Interstate 94 and Southfield Road Detroit, MI 48101 110 04/01/2020 Final Planning

The following hotel is anticipated in the market.

FUTURE SUPPLY PIPELINE ( JULY 2018 STR)

SOURCE: STR PIPELINE REPORT, JULY 2018

DEARBORN, MI HOTEL DEVELOPMENT SITE

FAIRLANE TOWN CENTER OUTPARCEL

Detroit is known as the world’s traditional automotive center, as the city was the home of the invention of the automobile and its mass production, headed by Henry Ford. Detroit also has a long history of producing groundbreaking and influential musical talent. These two historical legacies are celebrated by the city’s two familiar nicknames – Motor City and Motown. Detroit and the surrounding region constitute a manufacturing powerhouse, most notably as home to the Big Three automobile companies: General Motors, Ford Motor Company, and Fiat Chrysler Automobiles’ U.S. headquarters. Since the end of the Great Recession, the automotive industry has improved year-over-year. In 2016, the Big Three posted record sales, and each company has invested heavily in the region to ensure continued growth. Additionally, the region has become competitive in emerging technologies, such as driverless technology, biotechnology, nanotechnology, information technology, and hydrogen-fuel-cell (HFC) development.

Area Overview

DETROIT TOP 10 EMPLOYERSRank Firm Employees1 Ford Motor Company 48,000

2 General Motors Company 37,713

3 University of Michigan 32,749

4 FCA US LLC - Fiat Chrysler 32,514

5 Beaumont Health Systems 28,038

6 U.S. Government 18,920

7 Henry Ford Health Systems 17,608

8 Rock Ventures 16,617

9 Trinity Health Michigan 14,676

10 Ascension Michigan 11,893

SOURCE: WMUBRONCOS

13

As the world’s traditional automotive center, Metro Detroit serves as the headquarters to America’s “Big Three” automakers: Fiat Chrysler Automobiles (FCA), Ford, and General Motors (GM). Each of the Big Three has recently committed to the region, announcing plans for future investment in Detroit. In June 2018, Ford purchased the vacant Michigan Central Station as part of its plan to transform Corktown into its campus for mobile technology and software development. In March 2018, GM announced plans to invest more than $100 million to upgrade manufacturing plants in Southeast Michigan to produce a self-driving Chevy Cruise. The financial sector also plays a significant role in the Metro Detroit economy, with major financial service employers including Quicken Loans, KPMG, Fifth Third Bank, Comerica, Deloitte, Ernst & Young, and PricewaterhouseCoopers. In April 2016, Ally Financial, a Detroit-based auto lender and bank holding company, consolidated its regional offices and headquarters within the One Detroit Center office tower, while Fifth Third Bank relocated its headquarters to Downtown Detroit in October 2015. Furthermore, the healthcare sector is also important to the Detroit economy, as the city features over a dozen major hospitals, including the Detroit Medical Center and Henry Ford Health System hospitals. Headquartered in Detroit, the Henry Ford Health System is one of the nation’s leading comprehensive, nonprofit healthcare organizations and one of the largest employers in the city.

The subject market benefits from a variety of tourism and leisure attractions in the area. Leisure demand generators include Detroit Opera House, Comerica Park, Ford Field, Little Caesar’s Arena, and the Fox Theater. Special events also play a role during key weekends, such as concerts and sporting events. Major festivals include the North American International Auto Show, Movement Electronic Music Festival, Detroit Grand Prix, and America’s Thanksgiving Parade. Little Caesar’s Arena, which replaced Joe Louis Arena, opened in the city in 2017. The facility is home to the Detroit Red Wings and Detroit Pistons and is the city’s premier indoor concert venue. The arena anchors The District Detroit, which is an ongoing, $1.4 billion, 650,000-square-foot sports and entertainment district that will feature new retail outlets, restaurants, residences, and office space, including an expansion of Little Caesars world headquarters.

ECONOMY

TOURISM & LEISURE

SOURCE: DETROIT REGIONAL CHAMBER, 2017

SOURCE: CRAINSDETROIT WEBSITE

The primary convention facility serving the southeastern Michigan region is Detroit’s Cobo Center, which is the centerpiece of Downtown Detroit’s civic center. This facility comprises 2.4 million square feet and is located along the banks of the Detroit River. The facility offers 80 meeting rooms totaling 178,446 square feet, as well as 700,000 square feet of exhibit space. Additionally, the Cobo Center is attached to Cobo Hall, an entertainment venue. Prior to 2017, Cobo Center was also attached to Joe Louis Arena, a popular concert venue and home to the Detroit Red Wings. The arena closed after Little Caesar’s Arena (LCA) opened in September 2017. The Cobo Center is physically linked to major Downtown locations and entertainment districts via the Detroit People Mover, an elevated railway system. The Center underwent a three-phase, $279-million renovation that was completed in June 2015. Improvements included a variety of infrastructure, layout, and aesthetic upgrades to the facility. The Cobo Center remained partially open throughout the renovation efforts. The facility, which welcomed 1,321,976 delegates in 2016/17, is expected to attract major conventions and events going forward.

CONVENTION MARKET AND FACILITIES

TRANSPORTATION

Detroit Metro Airport (DTW) is served by a variety of domestic and international airlines. In 2008, a new, $418-million, 27-gate terminal opened and now accommodates all domestic and international carriers that previously operated out of the Smith and Berry Terminals. In 2012, the airport opened its $11-million Ground Run-Up Enclosure (GRE), which is designed to minimize noise pollution to the surrounding area when plane engines are tested after undergoing maintenance. The Airport Authority’s long-term plans include an airport rail system, a new runway, and terminal expansions; a number of proposed future developments are under consideration. A new maintenance hangar for Spirit Airlines was completed in 2017. The airport’s economic impact on the region is estimated at roughly $10.2 billion annually.

Source: Detroit Metro Airport

DETROIT METRO AIRPORT (DTW)

Year Passenger Traffic Percent Change*

Percent Change**

2008 35,135,828 — —

2009 31,357,388 (10.8) % (10.8) %

2010 32,377,064 3.3 (4.0)

2011 32,406,159 0.1 (2.7)

2012 32,242,473 (0.5) (2.1)

2013 32,389,544 0.5 (1.6)

2014 32,513,555 0.4 (1.3)

2015 33,440,112 2.8 (0.7)

2016 34,401,254 2.9 (0.3)

2017 34,701,497 0.9 (0.1)

Year-to-date, Sept

2017 26,119,106 — —

2018 26,557,644 1.7 % —

*Annual average compounded percentage change from the previous year**Annual average compounded percentage change from first year of data

10

15

20

25

30

35

40

20082009

20102011

20122013

20142015

20162017

YTD Sep 2017

YTD Sep 2018

Pass

enge

r Tra

ffic

(mill

ions

)

DETROIT METRO AIRPORT (DTW)

DEARBORN, MI HOTEL DEVELOPMENT SITE

FAIRLANE TOWN CENTER OUTPARCEL

Legend

Select Demand Generators

Retail

RestaurantSource: Detroit Metro Airport

*Annual average compounded percentage change from the previous year**Annual average compounded percentage change from first year of data

AERIAL OVERVIEW

LODGING MARKET OVERVIEW

The data presented in the table and chart below are based on a trailing-twelve-month (TTM) October 2018 STR Trend Report for seven upper-midscale to upscale hotels in Dearborn.

Hotels Included in Sample ClassNumber

of RoomsYear

AffiliatedYear

Opened

Courtyard Detroit Dearborn Upscale 147 Dec 1986 Dec 1986

Comfort Inn Near Greenfield Village Upper Midscale 116 Sep 2011 Aug 1990

TownePlace Suites Detroit Dearborn Upper Midscale 148 Jan 2001 Jan 2001

Country Inn & Suites Dearborn Upper Midscale 100 Sep 2013 Sep 2013

Staybridge Suites Dearborn Upscale 99 Apr 2016 Apr 2016

Holiday Inn Express & Suites Dearborn Southwest Detroit Area Upper Midscale 107 Jun 2016 Jun 2016

Hampton Inn Detroit Dearborn Upper Midscale 96 Dec 2016 Dec 2016

Total 1,475

Attractive Hotel Market Statistics

OCTOBER 2018 STR TREND REPORT SUMMARY

Year

Average Daily Room

Count

Available Room

Nights Change

Occupied Room

Nights Change OccupancyAverage

Rate Change RevPAR Change

2014 511 186,515 — 133,973 — 71.8 % $99.70 — $71.61 —

2015 511 186,515 0.0 % 142,275 6.2 % 76.3 107.53 7.8 % 82.02 14.5 %

2016 656 239,614 28.5 175,152 23.1 73.1 112.09 4.2 81.93 (0.1)

2017 813 296,745 23.8 215,957 23.3 72.8 117.34 4.7 85.40 4.2

Year-to-Date Through October

2017 813 247,152 — 185,201 — 74.9 % $118.17 — $88.55 —

2018 813 247,152 0.0 % 201,138 8.6 % 81.4 124.45 5.3 % 101.28 14.4 %

Average Annual Compounded Change:

2014-2017 16.7 17.3 5.6 6.0

65.0

67.0

69.0

71.0

73.0

75.0

77.0

79.0

65

75

85

95

105

115

2014 2015 2016 2017

Occ

upan

cy (%

)

Aver

age

Rate

/Rev

PAR

($)

Average Rate Occupied Room Nights Occupancy

17

POTENTIAL PERFORMANCE

The table below illustrates the possible performance that could be expected from a 97-key, upper-midscale, limited-service hotel. HVS used a proprietary forecasting model to extrapolate top-line performance and possible gross operating profit (GOP); thus, it is our opinion that a new developer would likely achieve similar results.

Assuming an asset could achieve these performance metrics, a developer could expect unlevered returns on cost of above 12% in a stabilized year three. Based on current industry metrics, a 12% unlevered return would be valuable to a local developer.

PERFORMANCE SUMMARY - PROPOSED UPPER-MIDSCALE HOTEL

2021 2022 Stabilized 2024 2025

Number of Rooms: 97 97 97 97 97

Occupied Rooms: 24,429 25,492 25,846 25,846 25,846

Occupancy: 69% 72% 73% 73% 73%

Occupancy Penetration 90% 97% 100% 100% 100%

Average Rate: $137.78 $143.36 $149.16 $153.63 $158.24

Average Rate Penetration 99% 100% 101% 101% 101%

RevPAR: $95.07 Gross $103.22 Gross $108.88 Gross $112.15 Gross $115.52 Gross

GROSS HOUSE PROFIT 1,462 42.8 1,664 44.8 1,794 45.8 1,848 45.8 1,904 45.8

Land Survey

You’ll find a wealth of hospitality knowledge at hvs.com

For more information contact:

DREW NOECKER Managing Director dnoecker@hvs.com+1 (972) 890-3348

ERIC GUERRERO Managing Director eguerrero@hvs.com+1 (713) 955-5665

JAMES REBULLIDA Associatejrebullida@hvs.com+1 (713) 955-5580

JAMES BIERIPrincipalStokas Bieri Real Estatejbieri@sbre1.com+1 (313) 962-2800