OVERVIEW

This hotel acquisition represents an opportunity to acquire and upwardly reposition this full service hotel in the heart of Boca Raton, one of Florida�s deepest commercial submarkets.

The full-service Holiday Inn contains 184 units in two wings.  One wing is a five-story, interior corridor building that houses 146 oversized (378 square feet) guest rooms.  The second wing is a three-story, exterior-corridor building that contains 38 two-room suites containing 555 square feet.  Amenities include 4,369 square feet of meeting space (including a 2,500-square foot ballroom), 7,000-square foot restaurant (leased to Roy�s), a lobby lounge/café, an outdoor swimming pool and spa.

Roy�s � a joint venture with Outback � leases 7,000 square feet of restaurant space along the east side of the building.  The initial term of the lease is twelve years at a base rent of $175,000 per year plus three consecutive renewal options of five years each.

LOCATION
 

The Holiday Inn Boca Raton Town Center, 1950 Glades Road, is strategically located just to the west of Interstate 95 on the south side of Glades Road in Boca Raton.  The property enjoys an excellent location in proximity to Boca Raton�s numerous corporate demand generators and other high end hotels.  The property is located within a one-half hour drive of both the Fort Lauderdale/Hollywood International Airport the West Palm Beach International Airport.  The hotel is less than one mile from the 1.5 million square foot Town Center Mall.

BOCA RATON-TOWN CENTER 1950 Glades Rd. BOCA RATON, FL 33431

MARKET OVERVIEW

Boca Raton is located 30 minutes south of West Palm Beach and 30 minutes north of Fort Lauderdale in southern Palm Beach County, the largest county in the southeast United States.  The Palm Beaches are known for a warm climate, beautiful beaches and multiple year-round outdoor activities including more than 150 golf courses. 

Perhaps best known as the birthplace of the personal computer, Boca Raton has a diverse base of industry, much of which focuses on technology. Boca Raton�s office submarket � the largest submarket in Palm Beach County � had a third quarter 2001 vacancy rate of 16.5 percent at a rental rate of $24.49 per square foot.  Some of the submarket�s largest tenants include BellSouth, Choice Point, National Council on Compensation Insurance, Tyco, IBM Corporation and Sensormatic Electronics Corporation. 

INVESTMENT HIGHLIGHTS

• Boca Raton�s first class hotel market is currently served by the Crocker Center Marriott, the recently-renovated Renaissance Hotel, Radisson Suites, Embassy Suites, an exterior corridor Doubletree Suites, a Courtyard and a Hilton.  Sheraton, Crowne Plaza, and Wyndham are potential conversion opportunities not currently represented.  Product Improvement Plans have been completed by these brands for conversion of the Holiday Inn and are available upon request.
• As of November 2001, the upscale competitive set recorded a market area RevPar of $68.89.  Comparatively, the unrenovated Holiday Inn�s RevPar of $52.93 represents only a 77 percent yield penetration.  Average rates at the Marriott and Radisson � the market leaders � are $130 to $140 as compared to the Holiday Inn�s $93.57 ADR.  By completing an upscale renovation, the hotel should be able to achieve a RevPar of at least $87 which represents a penetration rate of only 90 percent of the market leader.
• The Holiday Inn has been owned by a leading national insurance company since 1992.  Over $4.0 million in capital improvements has been invested recently including $1.2 million in tenant improvements for Roy�s, the hotel�s signature restaurant and one of Boca�s top dining destinations.
• Seller financing is available at market terms to be negotiated.
• Less than 20 percent of the Holiday Inn�s demand is from group business.  With the significant amount of corporate business in the area, the hotel should be able to increase this segment of demand for uses such as training sessions, small exhibits, product announcements, meetings and seminars.  Additionally, Florida Atlantic University and Lynn University, both within two miles of the Holiday Inn could generate significant group demand. 
• At an asking price of $11,000,000 or $60,000 per room, this pricing affords plenty of room for an extensive, market-justified renovation.  Assuming a $25,000 per room renovation infusion and reasonable leverage, the project yields a leveraged IRR of 25 percent.