1. Hotel Feasibility Study Rutherford, 2007

2. The Site • Proper zoning • Master area development plans • Size in square feet/acres • Visibility from arterials/freeways • Traffic counts/patterns • Accessibility from streets, freeways, airports, train stations, etc. • Proximity to where potential guests live, travel, or work

3. • Barriers that discourage competition • coming into the market, if any • • How adjacent property and businesses are utilized • • Master area development plans • • Local permitting process and the degree • of difficulty for that particular city • • Impact fees charged by the city

4. The Economy of the Area • • Major employers, government agencies • • Business trends for each employer • • Hotel needs and the demand for each • • Leisure travel demand in the area • • Nearby tourist attractions • • Visitor counts • • Conventions, trade shows, and meetings • history

5. The Hotel Market • • The competitors, both existing and • planned • • Historical occupancy of hotels in the area • • Historical average rate • • Proprietary data on area travel

6. Identification of Which Hotel MarketSegment to Serve • • Full service • • Limited service • • Luxury • • Midprice • • Economy • • Budget

7. Selection of Appropriate Hotel Design • • High-rise • • Midrise • • Garden apartment style • • Hybrid design

8. Selection of Appropriate Hotel Brand • • Franchised (Marriott, Sheraton, Hyatt, etc.) • • Licensed (Best Western, Guest Suites,etc) • • Independent • • Independent with strategic market affiliation • (Luxury Hotels of America, Historic • Hotels of America, etc.)

9. Ten-year Projection • • Occupancy projection by year • • ADR by year • • Estimated cash generated for debt • • Estimated cash generated for distribution • to investors • • Estimated cash-on-cash return (after-tax • income divided by equity invested) • • Overall projected yield • • Projected internal rate of return • • Net present value of the project over each • of the next ten years

10. FINANCING THEPROJECT The following variables must be determined to qualify for financing: • The cost of the land • Design and construction cost of the building • The cost of furniture, fixtures, equipment, and opening supplies • Pre-opening marketing and labor costs • A six-month operating capital cash reserve