Tim Cummings
July 23, 2018
e Based on the projected income stream for the Project, coupled with general development
costs and financing terms, coupled with required returns on investment, we will determine
the feasibility for hotel development. For the purpose of this analysis, we will ascribe no
value to the land assuming that the land is leased for $1.
® Upon completion of our market research and analysis, we will prepare a brief memo (6-8
pages) that that addresses the following:
1. Market conditions. We will describe current and projected market supply and
demand factors that are relevant to the Project.
2. Project projections. We will present financial projections for the proposed Project
noting that the projections are subject to change based on more specific facility
assumptions and management structure.
3. Project feasibility. We will describe the financial feasibility of the Project, and
quantify Project shortfalls (the investment needed by the City for the Project to be
feasible).
Our brief report will be for your internal use only. The report, and our findings, may not be relied
upon by prospective developers to obtain financing or investment.
ENGAGEMENT SCHEDULE
Based on our current schedules, we will require four weeks to complete the assignment.
PROFESSIONAL FEES
Our professional fees to complete the engagement described herein will be $15,000. In addition to
our professional fee, we expect to be reimbursed for reasonable out-of-pocket expenses including
the purchase of any STR Trend Reports and travel expenses. We will submit our final bill when we
submit the draft report. Payment will be due 14 days after receipt. Payment should be forwarded to
our administrative office in Boston for processing at the following address: Pinnacle Advisory Group,
98 North Washington Street, Suite 403, Boston, MA 02114. Wire transfer instructions can be
provided at your request.
Should the engagement be canceled at any time during the course of our work, we expect to be
reimbursed for our time, at our regular per diem rates, plus all reasonable out-of-pocket expenses
actually incurred through the date of termination.
LIMITATIONS OF THE STUDY
Our findings are subject to the following limitations:
e {tis expressly understood and agreed that Pinnacle’s study and reports do not include any
opinions or analysis regarding environmental, zoning, land use, licensing and/or other legal
and regulatory requirements for the project. Rather, such legal and regulatory issues are
beyond the scope of Pinnacle’s work and should be dealt with by the Client separately
through appropriate experts.
® Pinnacle offers no opinions that are legal in nature and expressly disclaims any responsibility
for same. The Client, and not Pinnacle, is responsible to ensure that the Project has all
necessary legal requirements to operate its business in accordance with the assumptions
made by Pinnacle in its reports.
Pinnacle Advisory Group
