Irreplaceable Real Estate: Each of the assets in the Portfolio are located on great real estate with high barriers to entry. These assets are in secondary and ancillary high-growth markets, in well-amenitized, urban infill locations, directly in front of the path of growth. Each asset is located near multiple resilient demand drivers, such as universities and medical centers, has been around since 2000+ and performed well through several downturns, including at the height of the pandemic.

Strong Cash Flow: Projected cash on cash is modeled at 11.1% five-year average cash on cash net to LPs. The assets in the Portfolio generated higher margins and achieved more stable profitability through Covid. Crescent’s contribution of 20% of the equity is indicative of their strong commitment to the Portfolio’s of the Hotel. Traditionally, hotel profitability has exceeded inflation given adjustable nightly rates and fixed-cost leverage.

Great Management Team: Crescent has immense experience with the Marriott, Hyatt and Hilton brands, of which all of the assets in the Portfolio are subsets. Crescent has proven success with optimizing operations to improve margins and generate additional NOI. Crescent and HEI have historically realized 94%-106% of under written cost savings for their Hotel assets.

Clear Exit Strategy: There is a readily available market in which these types of assets trade. The business plan is to continue aggregating PSS assets into a pool and sell the portfolio to an institutional buyer that will pay premium for the transaction. The cash-on-cash returns allow management to hold the assets until the right exit to generate the most benefit for our LPs.

Strong, Stable Demand: The Medical District delivers consistent, growing demand. The 8th largest hospital in the US, UAB is in the top 1% of NIH funding and boasts a premier transplant institute, cancer center, level 1 trauma center, and proton therapy center. The University of Alabama at Birmingham also saw an enrollment of 22,289 students in the fall of 2021.

Robust Historical Performance and Resilience: The Hotel averaged a 111% RevPAR index from 2018-19. During the pandemic-stricken TTM Sep- 2021 period, the Hotel recorded a RevPAR penetration of 122% and improved 2 ranks in its competitive set.

Superior Product: Built with concrete and steel construction in 2009, the Hotel is in excellent condition and 5 years newer than our competitive set’s baseline.

Post-Renovation Upside: We will conduct a $3.2M ($25k/key) guest-facing overhaul of the guest rooms, bathrooms and pool recreation area.

Favorable Supply Changes: Following the conversions of the Residence Inn (Student Housing) and Courtyard (Non-Profit Family House facility), the closest Marriott flag is now 3 miles away.

Quality Product in Thriving Submarket: Walnut developed the Hotel in 2010 as an anchor within its $135M Bakery Square mixed-use development. Overall, the site contains 90k sf retail, 2k parking spaces and three Class A office buildings comprising 950k sf.

Strong Demand Generators: Bakery Square’s 3 office buildings boast notable credit tenants Google, Philips, Dept of VA, Carnegie Mellon, Compass, UPMC Enterprises and University of Pittsburgh, and connect to the Hotel via skybridge.