Robb Groupe | Hospitality | Alpharetta | Cambria Suites | Project Summary

Anthony Robinson
General Partner
Robb Groupe Development, LLC
360 Pharr Road, Suite 257
Atlanta, GA 30305
404-838-6995
robbgroupe@yahoo.com

Opening Date Sep-09 Project Costs $ 18,872,673

Land area: 4.1 Acres Appraised Value as of
Improvements: 175 Guests Rooms Cost Per Room $ 107,844

New Construction Choice Hotels Cambria Suites

Project Cost $ 18,872,673 Monthly Pmt $ 91,698

Costs not Financed in Loan $ 1,135,731 Annual PMT $ 1,100,380
75.00% $ 17,736,942 Int. Rate 6.56%
Total Loan Amount $ 13,302,706 Amortization 25
Required Owners Equity $ 4,434,235 Maturity 15-Jun-33

Quoted Rack Rate Year 1

Type No. Single Double
King Suite 99 $ 159.00 $ 169.00
Tower King Suite 7 $ 159.00 $ 169.00
Tower Deluxe King Suite 7 $ 159.00 $ 169.00
Double Queen Suite 31 $ 159.00 $ 169.00
One-Bedroom Suite (I) 4 $ 159.00 $ 169.00
One-Bedroom Suite (II) 4 $ 159.00 $ 169.00
Accessible King Suite 15 $ 159.00 $ 169.00
Accessible Double Queen Suite 5 $ 159.00 $ 169.00
Accessible One Bedroom Suite 3 $ 159.00 $ 169.00
175

Year Year 1 Year 2 Year 3 Year 4 Year 5

ADR $ 159.00 $ 164.23 $ 169.15 $ 172.53 $ 175.98
Occ 58.0% 65.0% 72.0% 72.0% 72.0%
Room Rev $ 6,264,732 $ 7,251,312 $ 8,273,189 $ 8,438,653 $ 8,607,426
Total Rev $ 9,586,041 $ 11,081,458 $ 12,627,206 $ 12,871,720 $ 13,121,052
Oper Exp. $ 9,645,039 $ 9,199,453 $ 10,025,899 $ 10,269,764 $ 10,516,882
NOI $ (58,998) $ 1,882,006 $ 2,601,307 $ 2,601,956 $ 2,604,170

NOI ADS Cash Flow Equity Return on Equity

Year 1 $ (58,998) $ 1,100,380 $ (1,159,378) $ 4,434,235 -26%
Year 2 $ 1,882,006 $ 1,100,380 $ 781,626 $ 4,434,235 18%
Year 3 $ 2,601,307 $ 1,100,380 $ 1,500,927 $ 4,434,235 34%
Year 4 $ 2,601,956 $ 1,100,380 $ 1,501,577 $ 4,434,235 34%
Year 5 $ 2,604,170 $ 1,100,380 $ 1,503,790 $ 4,434,235 34%
Robb Groupe | Hospitality | Alpharetta | Cambria Suites | Debt Coverage Ratio

Sources and Uses of Funds

Total Eligible Project Costs $ 17,736,942 75% Total Mortgage $ 13,302,706

Equity $ 4,434,235
Total Use of Funds $ 17,736,942 Total Source of Funds $ 17,736,942

Opened Sep-09
Capitalization Rate 9.0%
Total Cost per Room $101,354

Number of Rooms 175

First Mortgage

Mortgage Amount $ 13,302,706

Interest Prime plus 6.50%
Amortization/Term 25

Acquisition Yr Year 2 Year 3 Year 4 Year 5

Beginning Balance $ 13,302,706 $ 13,071,869 $ 12,825,425 $ 12,563,511 $ 12,284,135
Annual Payment $ 1,096,637 $ 1,096,637 $ 1,096,637 $ 1,096,637 $ 1,096,637
Interest $ 865,799 $ 850,192 $ 834,723 $ 817,261 $ 798,373
Principal $ 230,838 $ 246,444 $ 261,914 $ 279,375 $ 298,264
Ending Balance $ 13,071,869 $ 12,825,425 $ 12,563,511 $ 12,284,135 $ 11,985,871

Yearly Cash Flow Summary

Acquisition Yr Year 2 Year 3 Year 4 Year 5

Net Operating Income $ (58,998) $ 1,882,006 $ 2,601,307 $ 2,601,956 $ 2,604,170
First Mortgage Annual Payment $ 1,096,637 $ 1,096,637 $ 1,096,637 $ 1,096,637 $ 1,096,637
Cash Flow After Debt Service $ (1,155,635) $ 785,369 $ 1,504,670 $ 1,505,320 $ 1,507,533

Debt Coverage Ratio -0.05 1.72 2.37 2.37 2.37

Robb Groupe | Hospitality | Alpharetta | Cambria Suites | Internal Rate of Return

Capital Gain Caluculation

Year Five NOI $ 2,604,170

Terminal Cap Rate 9%
Gross Sales Price $ 28,935,217
Selling Cost 2% $ 578,704
Net Sales Price $ 28,356,513
Sales Price per Room $ 165,344
First Mortgage Balance $ 11,985,871
Return of Equity $ 4,434,235
Net Proceeds from Sale $ 11,936,406
Distribution
Investors 100% $ 11,936,406

Year Zero Aqcuisition Yr Year 2 Year 3 Year 4 Year 5 Year 5

Equity $ 4,434,235
Cash Flow after Debt Service $ (1,155,635) $ 785,369 $ 1,504,670 $ 1,505,320 $ 1,507,533
Cash Flow Preference
Application of Loan Carry
Preferred return 12% $ 532,108 $ 532,108 $ 532,108 $ 532,108
Cash flow available for distribution 0% $ (1,155,635) $ 253,261 $ 972,562 $ 973,211 $ 975,425
Cash flow participation
Cash flow to Investors 90% $ 30,391 $ 116,707 $ 116,785 $ 117,051
Cash flow to GP 10%

Total cash flow available to investors ** $ (1,155,635) $ 562,500 $ 648,816 $ 648,894 $ 649,159
** Return of Capital in year 1
Residual Distribution upon sale or refinance
Return of Investor Equity $ 4,434,235
Distribution of Residual proceeds $ 11,936,406
Investors 90% $ 10,742,765
GP 10% $ 1,193,641
Net Cash Flow to Investors $ (4,434,235) $ (1,155,635) $ 562,500 $ 648,816 $ 648,894 $ 649,159 $ 15,177,001

Cash on Cash Return -26.1% 12.7% 14.6% 14.6% 14.6%

Five Year IRR 24.05%

Robb Groupe | Hospitality | Alpharetta | Cambria Suites | Loan Table

Loan Structure SBA 504 Loan

Project Costs

Project Cost $ 18,872,673

Eligible Closing Costs $ 17,736,942
Total Financeable Costs $ 17,736,942
Advance Rate 75%
Net Financed Amount $ 13,302,706

Costs not Financed in Loan $ 1,135,731

Bank Term Loan - 1st Mortgege $ 12,062,706

Bank Term Loan - 2nd Mortgege
Bank Interim Loan $ 1,240,000
Required Owners Equity $ 4,434,235

Loan Structure

1st Mortgage Loan $ 12,062,706

Prime Index: Floating 5.25%
Spread 1.50%
Interest Rate 6.75%
Term (years) 25
Amoritization (years) 25
Monthly Loan Payment $ 83,343

2nd Mortgage Loan $ 1,240,000

Interest Rate: Fixed 5.25%
Term (years) 20
Amoritization (years) 20
Monthly Loan Payment $ 8,356

Loan Summary

Total Loan Amount $ 13,302,706

Total Monthly Loan Payment $ 91,698
Interest Rate (current) 6.56%

Minimum Owners Equity $ 4,434,235

Total Loan Costs $ 319,265

Costs Per Room $ 101,354

Loan Per Room $ 76,015
Robb Groupe | Hospitality | Alpharetta | Cambria Suites | Source Use of Funds
Sources

1st Mortgage Loan $ 12,062,706

2nd Mortgage Loan $ 1,240,000
Required Owners Equity $ 4,434,235
Costs not Financed in Loan $ 1,135,731

TOTAL SOURCE OF FUNDS $ 18,872,673

Use of Funds

1 Land Acquisition $ 3,200,000

2 General Conditions $ 768,989
3 Sitework $ 1,275,846
4 Concrete $ 447,858
5 Masonary $ 488,938
6 Steel $ 213,206
7 Woods and Plastics $ 1,896,888
8 Thermal and moisture protection $ 892,403
9 Doors and Windows $ 789,438
10 Finishes $ 1,728,809
11 Specialties $ 133,572
12 Swimming Pools $ 137,157
13 Elevators $ 262,883
14 Mechanical $ 2,494,062
15 Electrical $ 1,846,533
16 Developer Fee $ 828,829
17 Management Fee $ 331,532

Total $ 17,736,942

18 Architectural, Engineering and Accounting Fees $ 246,900

19 Interim Cost $ 262,381
20 Legal Fees $ 190,000
21 Miscellaneous Soft Cost $ 136,450
22 Permanent Financing Fees and Expenses $ 50,000
23 Project Reserves $ 250,000

Total Soft Costs $ 1,135,731

Total $ 18,872,673

Total Cost/Key $ 107,844

Robb Groupe | Hospitality | Alpharetta | Cambria Suites | Development Budget

% of
No. of Keys 175 Cost/Key total
1 Land Acquisition 3200000
18,286 18.04%

3,200,000

2 General Conditions 768989 4,394 4.34%

Summary - General Conditions 768,989

3 Sitework
Sitework - Earthwork 349853 1,999 1.97%
Site Utilities 241784 1,382 1.36%
Asphalt Pavement 261388 1,494 1.47%
Stamped Concrete 70737 404 0.40%
Site Concrete - Curb & Gutter 55066 315 0.31%
Site Concrete - Sidewalks 58259 333 0.33%
Flagpoles 10160 58 0.06%
Fencing 12255 70 0.07%
Retaining Walls 24190 138 0.14%
Site Signage 6350 36 0.04%
Landscaping 147704 844 0.83%
Site Irrigation 38099 218 0.21%
Summary - Sitework 1,275,846

4 Concrete
Building Foundations & Slab - Sub Labor 389085 2,223 2.19%
Misc Interior Concrete | Pads, Stairs, Others 0 0 0.00%
Pre-Cast Concrete - Walls & Floors 0 0 0.00%
Gypcrete Floor Decks 58773 336 0.33%
Summary - Concrete 447,858

5 Masonary 488938 2,794 2.76%

Summary - Masonary 488,938

6 Steel
Structural Steel Erection - Sub Labor 43084 246 0.24%
Structural Steel Materials Only 170122 972 0.96%
Summary - Steel 213,206
 7 Woods and Plastics
Furnish Framing Materials - Lumber, wall panels, trusses 273043 1,560 1.54%
Rough Carpentry Labor - Subcontractor 645582 3,689 3.64%
Furnish Interior Finish Carpentry - Furnish Only 363224 2,076 2.05%
Install Interior Finish Carpentry - Install Only 347745 1,987 1.96%
Furnish Interior Finish Carpentry - Vanities | Kitchenettes 188333 1,076 1.06%
Granite and Tub Surrounds 78962 451 0.45%
Granite Tub Surrounds - Furnish Only 0 0 0.00%
Summary - Woods and Plastics 1,896,888

8 Thermal and moisture protection

Waterproofing |Dampproofing | Caulking 24014 137 0.14%
Batt Insulation - Thermal & Sound 62228 356 0.35%
EIFS 203195 1,161 1.15%
ACM Panels @ Soffits |Col covers |Dec brackets 292093 1,669 1.65%
Membrane Roofing 266234 1,521 1.50%
Sheetmetal Flashings 32575 186 0.18%
Roof Accessories 12065 69 0.07%
Summary - Thermal and moisture protection 892,403

9 Doors and Windows

Doors, Frames & Hardware 282441 1,614 1.59%
Glass & Glazing - Windows & Storefronts 400319 2,288 2.26%
Wojan Windows 106677 610 0.60%
Summary - Doors and Windows 789,438

10 Finishes
Drywall & Taping | Finishing 773049 4,417 4.36%
Ceramic Tile (Flooring) 241318 1,379 1.36%
Acoustical Ceilings 42610 243 0.24%
Carpet - Tile 322591 1,843 1.82%
Painting & Wall Coverings 349241 1,996 1.97%
Summary - Finishes 1,728,809

11 Specialties
Toilet Accessories - Furnish only 81876 468 0.46%
Toilet Partitions - Furnish & Install 5976 34 0.03%
Laundry Chute 7772 44 0.04%
Wall & Corner Guards 34558 197 0.19%
Fire Extinguishers 3390 19 0.02%
Summary - Specialties 133,572

12 Swimming Pools 137157 784 0.77%

Summary - Swimming Pools 137,157

13 Elevators 262883 1,502 1.48%

Summary - Elevators 262,883

14 Mechanical
Fire Sprinkler Systems 310614 1,775 1.75%
Plumbing 1028674 5,878 5.80%
HVAC 1154774 6,599 6.51%
Summary - Mechanical 2,494,062

15 Electrical 1846533 10,552 10.41%

Summary - Electrical 1,846,533

Construction Total 16,576,581 94,723 93.46%

16 Developer Fee 828,829 4,736 4.67%

17 Management Fee 331,532 1,894 1.87%
Contract Total 17,736,942 101,354 100.00%
Robb Groupe | Hospitality | Alpharetta | Cambria Suites | Pro Forma

Year 2 Year 3 Year 4 Year 5

No. of Keys 175
Rooms Available 63,875 63,875 63,875 63,875 63,875
Percentage of Occupancy 58% 65% 72% 72% 72%
Rooms Occupied 37,048 41,519 45,990 45,990 45,990
Average Room Rate 159 164 169 173 176

Revenues
Rooms 6,264,732 65.4% 7,251,312 65.4% 8,273,189 65.5% 8,438,653 65.6% 8,607,426 65.6%
Food 1,803,843 18.8% 2,087,915 18.8% 2,382,150 18.9% 2,429,793 18.9% 2,478,389 18.9%
Beverage 885,435 9.2% 1,024,875 9.2% 1,169,303 9.3% 1,192,690 9.3% 1,216,543 9.3%
Telephone 73,354 0.8% 83,257 0.8% 93,146 0.7% 94,077 0.7% 95,018 0.7%
Other Operated Departments 343,060 3.6% 389,374 3.5% 435,623 3.4% 439,977 3.4% 444,379 3.4%
Rentals and Other Income 194,499 2.0% 220,758 2.0% 246,979 2.0% 249,447 1.9% 251,943 1.9%
Cancelation Fees 21,117 0.2% 23,968 0.2% 26,815 0.2% 27,083 0.2% 27,354 0.2%
Summary - Revenues 9,586,041 100% 11,081,458 100% 12,627,206 100.0% 12,871,720 100.0% 13,121,052 100.0%

Departmental Costs and Expenses

Payroll and Related 1,212,881 26.3%
Rooms Departmental 1,444,853 15.1% 1,583,278 14.3% 1,727,327 13.7% 1,779,147 13.8% 1,832,522 14.0%
Food and Beverage 1,959,072 20.4% 2,146,763 19.4% 2,342,079 18.5% 2,412,341 18.7% 2,484,712 18.9%
Telephone 81,505 0.9% 93,415 0.8% 105,550 0.8% 107,721 0.8% 109,946 0.8%
Other Operated Departments 267,483 2.8% 306,571 2.8% 346,396 2.7% 353,519 2.7% 360,823 2.7%
4,965,793
Summary - Departmental Costs and Expenses 65.4% 4,130,027 37.3% 4,521,351 35.8% 4,652,728 36.1% 4,788,003 36.5%

Total Operated Departmental Income 4,620,248 48.2% 6,951,431 62.7% 8,105,854 64.2% 8,218,993 63.9% 8,333,049 63.5%

Undistributed Opearting Expenses

Administrative and General 723,167 7.5% 729,120 6.6% 781,376 6.2% 804,818 6.3% 828,961 6.3%
Franshise Fees 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0%
Marketing and Guests Entertainment 610,172 6.4% 642,654 5.8% 664,017 5.3% 683,942 5.3% 704,457 5.4%
Property Operations and Maintenance 416,043 4.3% 462,392 4.2% 509,897 4.0% 525,196 4.1% 540,949 4.1%
Energy Costs 362,325 3.8% 414,261 3.7% 467,471 3.7% 477,971 3.7% 487,415 3.7%
Other Unallocated Operated Departments 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0%
2,111,708
Summary - Undistributed Opearting Expenses 22.0% 2,248,426 20.3% 2,422,762 19.2% 2,491,927 19.4% 2,561,782 19.5%

Total Income Before Fixed Charges 2,508,540 26.2% 4,703,005 42.4% 5,683,092 45.0% 5,727,066 44.5% 5,771,267 44.0%
Management Fees, Property Taxes, And Insurance
Management Fees 681,378 7.1% 788,135 7.1% 898,606 7.1% 916,856 7.1% 935,455 7.1%
Property Taxes and Other Muncipal Charges 622,694 6.5% 711,955 6.4% 803,396 6.4% 821,443 6.4% 837,672 6.4%
Insurance on Buildings and Contents 262,444 2.7% 303,567 2.7% 346,121 2.7% 353,147 2.7% 360,308 2.7%

Summary - Management Fees, Property 1,566,516 16.3%

Taxes, And Insurance 1,803,657 16.3% 2,048,123 16.2% 2,091,447 16.2% 2,133,435 16.3%

Total Income Before Other Fixed Charges 942,024 9.8% 2,899,348 26.2% 3,634,970 28.8% 3,635,619 28.2% 3,637,832 27.7%

Other Fixed Charges

Reserve for Capital Replacement 135,223 1.4% 151,543 1.6% 167,864 1.5% 167,864 1.3% 167,864 1.3%
Land and Building Rent
Equipment Rental
Interest 865,799 9.0% 865,799 9.0% 865,799 7.8% 865,799 6.9% 865,799 6.7%
Depreciation and Amortization
Other Fixed Charges
Summary - Other Fixed Charges 1,001,022 10.4% 1,017,342 10.6% 1,033,663 9.3% 1,033,663 8.2% 1,033,663 8.0%

Total Net Income (58,998) -0.6% 1,882,006 19.6% 2,601,307 23.5% 2,601,956 20.6% 2,604,170 20.2%