The document is a financial report for the proposed Grant Hotel project presented by APEX Hospitality Group. It provides details on the construction costs, sources of funding, projected revenues, operating expenses and returns. The key points are: - The hotel will be a 282 room, 4-star boutique property located in downtown Chicago opening in March 2018. - Total development costs are $106 million to be funded through $20 million in equity from APEX, $19 million from partner SapMo, and a $60 million loan. - Revenue is projected to grow from $26 million in 2018 to $40 million in 2023 led by room sales. Food and beverage and retail will also

1. Grant
Hotel
Financial
Report
March 1
2016
Madelaine Baklayan, CFO
Hazel Sy, CEO
Emily Baker
Patrick Praxmarer
Michael Battaglia
Jasmine Love
Alex Rich
Chan Mi Kvak
Anna Broughton

2. GRANT HOTEL FINANCIAL REPORT
APEX HOSPITALITY GROUP 2
Executive Summary
1100 South Michigan will soon be known as The Grant Hotel: an independent boutique hotel
located in the southwest quadrant of the Michigan Avenue and 11th street; within the south loop
area. APEX Hospitality Group is the management company presenting The Grant Hotel project.
The sixteen-story building is a simple and functional space that emphasizes the idea of art,
self-expression, and modern Chicago culture. As a four star hotel we strive to offer excellent
customer service and service level in each of their stays.
 Construction and Development Period: 25 Months – Opening 1st of March of 2018
 Construction and Development Costs: $ 106,040,200
 Internal Rate of Return (IRR): 19.80%
 Annual Return on Investment (ROI): from 15.82% (2018) to 30.28% (2023)
Fact Sheet
The Grant Hotel will be a 4-star upper upscale hotel that will be managed by APEX
Hospitality Group. The property will include the following:
 Annual ADR: $260
 16-Story Building
o First 3 Floors: Common Areas
o Top 13 Floors: Guest Rooms
 Number of Rooms: 282
o Standard King and Double Rooms
o Family Double Rooms
o Junior Suites
o Full Suites
 F&B Outlets:
o MC Prime House
o The Crossing
o Banquets/Private Events: 2nd Floor & Rooftop
 Amenities
o Parking garage/valet parking
o In-house dry cleaning services
o Large fitness center, pool, hot tub and steam room
o 24-hour business lounge
o “Drew a Blank Box”
 Retail Outlets
o Pop-Up Retail Store
o Parking Lot
o Outsourced Restaurants

3. GRANT HOTEL FINANCIAL REPORT
APEX HOSPITALITY GROUP 3
Sources of Funds
The total Development and construction cost will be of $ 106,040,200. From this amount,
APEX Hospitality will be contributing $20,000,000 in equity. On the other hand, SapMo Real
Estate Development Company is being asked for a contribution of $19,000,000 (in addition to
the price of the land $6,972,000). The rest will be obtained through a commercial loan of
$60,068,200 with a 7% rate of interest.
 Breakdown of Contributions
o APEX Hospitality Group: $20,000,000
o SapMo Cash Contribution: $19,000,000
o SapMo Land Contribution: $6,972 000
o Land Preparation Costs: $4,000,000
o Commercial Loan: $60,068,200
$6.972 M
$19 M
$20 M
$60.068 M
The Grant Hotel
Sources of Funds
Equity contribution of Land by SapMo
Cash Equity contribution by SapMo
Equity Contribution by Development Group
Commercial Mortgage at 65% LTV

4. GRANT HOTEL FINANCIAL REPORT
APEX HOSPITALITY GROUP 4
Use of Funds
The Grant Hotel’s construction and development costs are broken down into building, soft
costs, FF&E and Pre Opening. Following you can find a more detailed explanation of what is
included in each of the mentioned categories.
 Land contribution by SapMo
 Building -
o Investment on Chicago feel architecture, will have
Chicago style windows as shown in the images.
o Flooring: Granite, Laminate, concrete and hardwood
floor
o Rooms: 8 feet tall walls, smallest rooms 350 sq. ft.,
large windows for view purposes, large
bathtubs/standup showers, granite countertops.
$74.73M
$4.79M
$8.74M
$5.16M
The Grant Hotels
Uses of Funds
Building
Soft Costs
FF & E
Pre open.

5. GRANT HOTEL FINANCIAL REPORT
APEX HOSPITALITY GROUP 5
 Soft Costs
o The 25-month construction period interest and costs
o Interior design fee – Artistic touch through the hotel
 FF&E
o Guestroom/guest bathroom furniture and fixtures
o Public space and meeting room furniture and fixtures
o Technology and telecommunication equipment
o Kitchen and Laundry equipment
o Soft goods including carpeting, drapes, room accessories
 Pre-Opening
o Supply inventories - linen, operating supplies, initial purchases
o Pre-opening recruiting, staffing, and training
o Operating reserves ,Technical services fees

6. GRANT HOTEL FINANCIAL REPORT
APEX HOSPITALITY GROUP 6
2018 2019 2020 2021 2022 2023
RETAIL $229,459.2 $406,498.4 $431,005.4 $424,544.1 $450,208.1 $443,353.3
F&B $11,285,00 $14,276,00 $15,041,00 $15,417,00 $15,802,00 $16,198,00
ROOMS $15,109,00 $20,823,00 $23,082,00 $23,931,00 $24,780,00 $25,630,00
$-
$5,000,000.00
$10,000,000.00
$15,000,000.00
$20,000,000.00
$25,000,000.00
$30,000,000.00
$35,000,000.00
$40,000,000.00
$45,000,000.00
TOTALREVENUE
The Grant Hotel
Revenue Breakdown
Revenue Breakdown
The revenue generated in the Grant Hotel will be generated mainly by the: Rooms Division
department, the Food and Beverage department, the Retail Outlets, and the Events department.
 Rooms Division
o Business Man & Women, DINKs and Chinese guests will appreciate
 Closeness to convention centers
 Closeness to tourist attractions
o ADR $260
o OCC 73%
 Food and Beverage
o The Crossing
o MC Prime House
o Banquets & Group Events
 Retail Outlets
o Pop Up Store: Chicago based retailers & artists can feature their products - related
to theme; self-expression
o Restaurant rented from local chefs
o Garage

7. GRANT HOTEL FINANCIAL REPORT
APEX HOSPITALITY GROUP 7
$15.109.000
$11,285,000
$229,459
YEAR 1
ROOMS
F&B
RETAIL
$25,630,000
$16,198,000
$443,353
YEAR 6
ROOMS
F&B
RETAIL
In the following graphs, you can see the comparison between the 1st year and the 6th
year. As the years go by the Rooms department becomes stronger in relation to the rest of the
departments and as you see, the total increases as well.

8. GRANT HOTEL FINANCIAL REPORT
APEX HOSPITALITY GROUP 8
Food & Beverage Revenue Breakdown
The F&B Department, being the second largest revenue-generating department after
Rooms Division, has a very important role towards the profitability of our hotel.
MC Prime House: 146 seats
Classic Chicago steak house made modern with Italian influences with high emphasis on the bar
featuring wine and premium spirits.
 Breakfast: 60 covers at $22.50
 Lunch: 50 covers at $30
 Dinner: 160 covers at $60
 Bar: 50 covers at $30
The Crossing: 40 seats
The concept is derived form the impact of railroads during the first World’s Exposition hosted in
Chicago creating a social lounge ambience with coffee and breakfast by day and cocktails and
small bites by night.
 Breakfast: 50 covers at $7
 Dinner: 60 covers at $30
 Bar: 40 covers at $30
Banquets & Group Events
We will encounter business meetings, conventions, group parties, and most importantly
weddings.
 $280 per sq. ft.
 $3,906,000 yearly Sales
$5.077 M
$1.638 M$263.165 M
$3.906 M
The Grant Hotel
F&B Revenue Breakdown
MC Prime House
The Crossing
Room Service
Banquets

9. GRANT HOTEL FINANCIAL REPORT
APEX HOSPITALITY GROUP 9
Net Operating Income
As shown in the graph above, the net operating income will grow as the years go by. The
first year starts low because of the low occupancy expected and due to the fact that the hotel will
open only 9 months from the 12 months that a full operating year consists. As the years go by it
evidently increases, as the operation increases its occupation and the years of operation are
composed of 12 months. With the established marketing plan, preopening promotional
investments and uniqueness of the property it is estimated that the occupancy rate will be of 73%
within the 3 first years of operation.
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6
Millions
The Grant Hotel
Net Operating Income

10. GRANT HOTEL FINANCIAL REPORT
APEX HOSPITALITY GROUP 10
Return on Investment
APEX Hospitality group knows that by maintaining high quality service, investing on
highly developed marketing strategies, a strong cost control management, and the competitive
advantage of The Grant Hotel, the operation will be able to obtain a solid 30.28% return on
investment by year 6.
As the graph explains the ROI will increase as the years go on. If we compare this graph
with the Net Operating Income graph, we can understand how both of them are related. If Net
Operating income increases the ROI will also increase.
In addition to this, the IRR will be of 19.80%. This high IRR because the land acquisition
costs are a bargain for the project hence increasing our IRR by 2-3 points over the average.
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6
Percentage
The Grant Hotel
Return on Investment

11. GRANT HOTEL FINANCIAL REPORT
APEX HOSPITALITY GROUP 11
Real Estate Tax Exemptions
APEX Hospitality group is applying tax abatement for The Grant Hotel based on the several
positive impacts that the project will have on the city of Chicago, which include:
 Offer employment opportunities
 Ecofriendly building and routine
 Increase development in the south loop
 Enhance tourism
 Transmit the Chicago culture to our guests through architecture, service and design.
 Allow self-expression and enhance the Local Chicago artist industry
The projected approval of tax exemption is of 1.1%. The expected annual tax payment is of
$2,250,000 encountering a 6.5% of the fixed charges or costs of the hotel. In the case of not
being approved, the taxes will be a 7.6% of the fixed charges making the IRR be a 19.38%
instead of the 19.80% estimated with the tax abatement.
Exit Strategy
At the end of the 6 years APEX Hospitality group will have a buy back agreement with
SapMo at an agreed upon appraised value of the property.

12. GRANT HOTEL FINANCIAL REPORT
APEX HOSPITALITY GROUP 12
Appendix

13. GRANT HOTEL FINANCIAL REPORT
APEX HOSPITALITY GROUP 13
Table 1

14. GRANT HOTEL FINANCIAL REPORT
APEX HOSPITALITY GROUP 14
Table 2

15. GRANT HOTEL FINANCIAL REPORT
APEX HOSPITALITY GROUP 15
Table 3