Proposal_Brokerage_Advisory_Services_CW

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Proposal for ARK INTERMEDIATE HOLDINGS LLC REAL ESTATE BROKERAGE & ADVISORY SERVICES MAY 17, 2019

Executive Summary HLT NY Hilton LLC (HLT), a subsidiary of Park Hotels & Resorts Inc., has issued an RFP for brokerage and advisory services for assistance in a very delicate and important assignment of negotiating a lease renewal for the two floors it occupies at 1325 Avenue of the Americas. Success for this project can be defined as the completion of a lease renewal at terms that are below current market rates and which provide the benefit of market concessions to HLT. We characterized this assignment as delicate because the subject space is as unique a space as exists in the Midtown market, is perceived to be accretive to the Hilton Hotel’s overall financial success and is important to the long suffering occupancy levels within 1325 Avenue of the Americas. From the Landlord’s (Paramount Group’s) perspective, HLT is fortunate that Paramount does not have an industry-leading track record of successfully reinventing challenging spaces as they trail their peer group in velocity of re-letting their inventory vacancy. Another factor that will benefit HLT is that the two key senior people at Paramount, Albert Behler and Peter Brindley, are consumed with their upcoming 1.4-million-square- foot (msf) vacancy at 60 Wall Street as Deutche Bank will be relocating its operations to Midtown in 2022. Paramount currently uses JLL, CBRE and Newmark Knight Frank as leasing agents within its portfolio, tasking these firms with sourcing tenants for its available inventory. As a matter of course Paramount should vigorously investigate all prospective users for the subject two floors including the major hospitals for ambulatory surgery centers, trading operations, co-working and event operators, and some select creative companies. All of these users would benefit from a ‘building within a building’, high ceiling heights, and lack of column congestion. The broker chosen to represent HLT should have great facility with these candidates so that at all times HLT has a material informational advantage over Paramount which would be translatable into negotiating leverage.

The Cushman & Wakefield Project Team, led by Mark Weiss and Ed Donnery, has extensive experience in like-kind transactions. This is not a negotiation that will be successful by using a one-size-fits-all, ‘threaten to move and bang on the table’ approach. Rather it will come from having a strong and respected relationship with Paramount, building a compelling argument to demonstrate the profitability threshold of HLT to Paramount (Cushman & Wakefield’s deep and unassailable knowledge of the hospitality industry will be mission critical in that regard), and a thoughtful market analysis showing Paramount the likely prospects for re-letting the space to another tenant including—but not limited—to the velocity of that process given the finite universe of candidates and a breakdown of what each of them are doing. Cushman & Wakefield has that specific knowledge in house and within the Project Team. We can also understand the material capital costs of separating the spaces from the hotel and the costs of creating direct, separate access from the ‘breezway’ between the buildings. Therefore, it is our strong feeling that Cushman & Wakefield is best suited to partner with Park Hotels & Resorts on this project as our depth, skill sets and track record of success in equally delicate projects gives us confidence for a successful outcome. In addition, from a corporate level, from our Global CEO, Brett White, our hotel team, including Jared Kelso and Stephen Michels, and each and every member of the Project Team, we are keenly interested in partnering with you, growing with you as you have grown (dramatically and recently!) and have priced our services aggressively and in a manner that speaks towards a larger relationship and with our mutual interests aligned. We are committed to developing and securing an excellent result for you.

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Table of Contents

Company Background and Organization

Experience

Project Team

Process Management

Compensation

Market Overview

Conflicts of Interest

References

Exclusive Brokerage Agreement

Appendix

Mark Weiss Executive Vice Chairman 212 841 7871 mark.weiss@cushwake.com

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Company BACKGROUND AND ORGANIZATION

Company Background and Organization

Provide full company name, type of organization (i.e., general partnership, limited partnership, Limited Liability Company, etc.) and headquarters office address.

Full Company Name: Cushman & Wakefield, Inc.

Organization Type: Public (NYSE: CWK) Global Headquarters: 225 W Wacker Drive, Suite 3000 Chicago, IL 60606 Americas Headquarters: 1290 Avenue of the Americas New York, NY 10104

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COMPANY BACKGROUND AND ORGANIZATION

Provide a brief historic background profile of your firm, including organizational structure and financial strength.

Confidently Global Cushman & Wakefield is one of the world’s largest real estate services firms with 51,000 employees spanning 400 offices and 70 countries. In 2018, the firm had a revenue of $8.2 billion across core services of leasing, property, facilities and project management, capital markets, valuation and other services.

400 OFFICES

70 COUNTRIES

51,000 EMPLOYEES

$8.2B 2018 REVENUE

Expertly Local As a company founded in New York City, Cushman & Wakefield has a unique understanding of its real estate dynamics. We have five offices throughout the City, including two in Manhattan, and more than 250 brokerage professionals dedicated to the market. In 2018, we completed over 1,700 lease and sale transactions in New York City alone, totaling approximately 25.3 msf and valued in excess of $18.3 billion. The results speak for themselves—Cushman & Wakefield is #1 in New York City for tenant representation transactions greater than 10,000 sf.

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COMPANY BACKGROUND AND ORGANIZATION

Our History Established in 1917 in New York City, Cushman & Wakefield combines a rich history with the energy and drive of a start-up. Over the past several years, we have evolved at a lightning pace, growing from 16,000 employees to 51,000 through a series of strategic mergers and acquisitions. But this is not growth for the sake of growth. Every move Cushman & Wakefield has made is with an eye to our clients, strategically selecting the talent and resources that will make our partnerships even better. In September 2018, Cushman & Wakefield became publicly listed on the New York Stock Exchange under the ticker CWK, and is currently over 50.0% owned by an investor group composed of TPG Capital (“TPG”), PAG Asia Capital (“PAG”) and Ontario Teachers’ Pension Plan (“OTPP”).

Our full company history and major milestones are outlined below.

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COMPANY BACKGROUND AND ORGANIZATION

Demonstrate commitment by your firm’s management to constant quality improvement by including your firm’s mission statement, values, ethical standards, culture, goals and strategic objectives for present and future operations of your services. Structure, Mission and Operating Philosophy Cushman & Wakefield’s operating model is engineered to deliver consistent, high-quality service and resources to our clients across all markets globally. Under our Global CEO Brett White, Cushman & Wakefield’s leadership is organized across geographies (Americas, EMEA, and APAC) and by service line. Our vision is to deliver industry-leading advisory, brokerage, and management solutions worldwide to meet and exceed the exacting requirements of occupiers, developers, owners, and investors, wherever our clients need us to be. Cushman & Wakefield has a mission statement and set of values that demonstrate our commitment to our clients and to excellence in everything we do. This company-wide message is a big part of who we are and how we operate. But, as we are sure you have noticed, it is difficult to distinguish between the major commercial real estate firms in any meaningful way based on corporate mission or vision statements alone. We believe that our corporate culture lies in the intangibles—the character and work ethic of our professionals and our amazing and inclusive culture that distinguishes us from other firms in our industry. We keep our promises, and we are a company that gives back. We are passionate about the clients we serve and the communities that our people call home. Our clients say that partnering with Cushman & Wakefield is truly an exceptional experience. We work harder. We approach problems more creatively. We care enormously about every client that chooses to entrust us with their business, and we are singularly devoted to honoring that trust. You could say that our firm’s operating philosophy boils down to one simple principle: grit. Cushman & Wakefield professionals never let up, never rest on “good enough,” and always set our sights on exceeding expectations. It’s our philosophy, our culture, and the driving force behind everything we do.

Corporate Commitment to Diversity As a 100-year-old public company, we have drawn strength in our diversity. A diverse team improves business outcomes by bringing together a rich tapestry of ideas and experiences and it is a commitment our collective team takes seriously. We are committed to being the industry leader in our diversity and inclusion efforts, by every measure.

Diversity and inclusion is something that I am deeply committed to. It is not just good for our people, but for our business. I am proud of the work we are doing and that we continue to do to embed this into Cushman & Wakefield’s DNA. - Brett White, Cushman & Wakefield Chairman & Global CEO

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COMPANY BACKGROUND AND ORGANIZATION

The Company is interested in forging a long-term relationship with a real estate advisor. Please provide examples of repeat business and strong client relationships that your team has developed over the years. The true measure of a trusted advisor is the time-tested tenure of its client relationships. Cushman & Wakefield has been advising its clients for over 100 years with a brand and culture that has remained streadfast. We pride ourselves on this longevity when it comes to serving our clients. We are proud that our high-profile client relationships are measured in decades, not years. We have earned our reputation as problems solvers. When the inevitable challenge arises, it is not the time to interview real estate companies, but the time to seek again your trusted advisor. Similar to how a company would retain legal counsel in advance of a situation, our clients choose Cushman & Wakefield to be their long-standing real estate advisor. The counsel we provide is not tactical, not reactionary, but strategic and forward thinking. Mark Weiss and Ed Donnery have established long-standing relationships with such venerable institutions as Memorial Sloan Kettering Cancer Center, the Federal Reserve Bank of New York, Weill Cornell Medicine, Columbia University Medical Center, Cleary Gottlieb, Moody’s Corporation, Service Employees International Union 32BJ (property workers) and Service Employees International Union 1199 (hospital workers) , among others. These diverse clients share a similar trait: their successes have been tested and measured over many decades, and they have retained the Project Team to be their long-term trusted advisor.

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COMPANY BACKGROUND AND ORGANIZATION

Describe your firm’s major lines of business and the percentage of total revenues generated from each.

Cushman & Wakefield’s expertise spans the full continuum of real estate services. Our core services are outlined below.

Leasing Tenant Representation • Strategic Consulting • Occupancy Workplace Strategy

Facility Services • Janitorial • Maintenance • Critical Environments • Landscaping • Office Services

• Acquisitions, Dispositions, & Build-To-Suits • Market, Demographic, & Labor Analysis • Lease Restructuring; Subleasing Services • Lease Auditing Agency Leasing • Strategic Asset Analysis • Comprehensive Property Positioning • Broker Relationship Campaigns • Prospective Tenant Analysis & Canvassing • Letter of Intent & Lease Negotiation • Regular Client Reporting • Coordination of Additional Services Property, Facilities & Project Management Asset Services • Engineering & Maintenance • Accounting & Financial Reporting • Contract & Vendor Maintenance • Lease Compliance & Administration • Property Management • Construction Management • Due Diligence • Strategic Account Management • Sustainability

Project & Development Services • Program & Construction Management • Development Services & Master Planning • Procurement & Bid Management • Schedule & Budget Management • Cost Consultancy & Value Engineering • Space & Occupancy Planning • Move Management • Sustainability • Workplace Consultancy

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COMPANY BACKGROUND AND ORGANIZATION

Capital Markets • Investment Sales • Equity, Debt, & Structured Finance • Corporate Finance & Investment Banking • Hotel Group Valuation & Other Services Valuation & Advisory • Appraisal Management • Diligence Advisory • Dispute Analysis & Litigation Support • Financial Reporting • Property Tax Services • Valuation/Portfolio Valuation

Investment & Asset Management • Segregated Portfolio Management • Asset Management • Fund Creation & Management • Indirect Investing • Fund Investment Strategy • Direct & Indirect Exposure on Both a Debt & Equity Basis

Global Occupier Services • Strategic Consulting • Portfolio Administration • Transaction Management

• Project & Development Services • Integrated Facilities Management

2018 Fee Revenue by Service Line Cushman & Wakefield tracks its fee revenue using the following service line groupings:

Services Leasing

Revenue ($M)

$1,921

Property, Facilities & Project Management

$2,622

Capital Markets

$960 $448

Valuation & Other Services

Total Fee Revenue*

$5,951

*The table above shows fee revenue (total revenue less gross contract costs) . Cushman & Wakefield’s revenue for the full year 2018 was $8.2 billion; its fee revenue was $5.95 billion.

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COMPANY BACKGROUND AND ORGANIZATION

Describe what differentiates your firm from other firms offering similar integrated real estate services, including your firm’s competitive advantage and why the firm is uniquely positioned to address the Company’s requirements.

Diligence & Decency As described in our Structure, Mission & Operating Philosophy on page 8, Cushman & Wakefield values the diligence and decency of its people above all else. Employees work tirelessly to deliver outstanding client service. This service is made possible by the time and attention given to every aspect of the service delivery process. For instance, we comb through public and proprietary research, conduct market analyses, and rehearse negotiation scenarios in preparation for the negotiations we conduct on behalf of our clients. We are fact-based, honest and respectful of all parties at the negotiating table. Diversity Through our focus on diverse talent and inclusive culture, Cushman & Wakefield is able to attract the best professionals in the industry to represent our clients. We develop an intimate understanding of each of our clients so as to clearly define client interests and gain alignment on the service delivery approach. We then advocate ethically and forcefully on their behalf, resulting in thoughtful solutions and optimal outcomes. Seamless Service Integration Cushman & Wakefield not only provides the full-suite of real estate services, but also seamlessly bundles these services to best meet client needs. Our proposed Project Team is specifically tailored to meet the needs of HLT. Many of our competitors also have well developed service lines, however, none have the track record of integrating these disciplines seamlessly for their client’s benefit. As demonstrated throughout this proposal, our client outcomes are a direct reflection of our integrated service platform and commitment to driving value. Market-Leading Hotel Group Cushman & Wakefield’s Equity, Debt & Structured Finance group has a full-time team focused on the lodging and leisure industry. Over recent years, they have advised on over $16 billion of hospitality debt, sale and equity transactions including acquisitions, asset sales, construction and renovation financing, asset recapitalization, refinancing, joint ventures and note sales. The Project Team will work closely with Jared Kelso and Stephen Michels of our New York hospitality group, leveraging their insight and real-time market data to facilitate negotiations. Tenant Representation Expertise Tenant Representation is Cushman & Wakefield’s most important service line and Mark Weiss is one of our global leaders in that practice. Our tenant representation experts look beyond the immediate transaction to find a big picture solution—developing an intimate understanding of our clients’ businesses to make real estate an asset that houses operations, attracts and retains top talent, promotes creativity and collaboration, and supports the company mission and brand.

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COMPANY BACKGROUND AND ORGANIZATION

We are never hesitant to advise our clients to “go short” in a superheated market and pride ourselves as being tenacious negotiators. Project Executive Mark Weiss has 35 years of pure tenant representation experience. This will ensure HLT receives completely unbiased, conflict-free advice, guidance and execution. Landlord Insight The Project Team will tap into Cushman & Wakefield’s extensive Landlord Representation group to aid in negotiations. The support of our Agency Leasing experts will provide invaluable Landlord insight and credibility, as well as the ability to best negotiate on behalf of HLT by understanding the Landlord’s point of indifference. We don’t represent Paramount Group but know them very well.

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Experience

Provide a list of major clients with projects of a similar structure and scope of work as set forth in this RFP for whom you are or have acted as an exclusive advisor, and describe the process and results achieved.

The Project Team has been involved with several material projects that were both delicate and complex. We used all of our considerable tools in order to create leverage where none was apparent all while preserving important occupancies for our clients. These projects include:

This 225,000-sf law firm restructured and restacked its lease at 1633 Broadway, a Paramount- owned building. Cushman & Wakefield convinced the Landlord to move forward with the transaction despite inordinate logistical and timing risks involved.

The Project Team successfully completed an intricate renewal at 1325 Avenue of the Americas. Our mandate was to extract value for Nikkei with the understanding that the capital cost of relocating would have been injurious to Nikkei. We were successful.

The Project Team created the Cornell University at 570 Lexington Avenue, housing several academic and administrative programs. We negotiated aggressively with a landlord who was also a major donor to Cornell. Mark Weiss is a board member of the Cornell Institute for Hospitality Labor and Employment Relations (CIHLER).

The Project Team represented New York City’s largest labor union in a complicated headquarters transaction which resulted in being awarded The Real Estate Board of New York’s Most Ingenious Deal of the Year Award in 2015.

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EXPERIENCE

We won the Real Estate Board of New York’s Most Ingenious Deal of the Year Award in 2017 for reinventing very challenging office space by converting its use. This is relevant for HLT’s assignment because we need to understand better than Paramount any other prospective users for the subject floors. We have a proven track record for doing just that.

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EXPERIENCE

Indicate whether your firm has had any recent experience (within the last five years) with organizations with a similar profile to the Company and/or recent experience with the Landlord. If so, please describe in what capacity.

Cushman & Wakefield has extensive experience within the hospitality industry. Our colleagues Jared Kelso and Stephen Michels have sterling reputations, are aware of this pursuit, and are available to us at every step along this process to make certain that we are constantly focused on the elements of advocacy that are important to you.

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EXPERIENCE

Please list the project team’s most significant leasing transactions (i.e., greater than 100,000 sf) as well as projects similar in size and scope to the Company’ project completed within the last five years.

The following is a list of recent projects in which Mark Weiss or Ed Donnery played a leadership role. We included only those projects with intricate and atypical elements.

TENANT

TRANSACTION(S)

Nine transactions (leases and purchases) totaling 2,000,000 sf

Memorial Sloan Kettering Cancer Center

Kasowitz Benson & Torres

250,000-sf lease

Hogan Lovells

206,000-sf lease

Hospitals Insurance Corporation

40,000-sf lease

Columbia University

140,000-sf lease

Hospital for Special Surgery

100,000-sf lease

Cleary Gottlieb

600,000-sf lease

AppNexus, Inc.

215,000-sf lease

Corning Incorporated

400,000-sf lease (Corning, NY)

New York Proton Center

120,000-sf lease

Moody’s Corporation

900,000-sf lease

Natixis

185,000-sf lease

Federal Reserve Bank of New York

625,000-sf lease

Weill Cornell Medical

200,000-sf lease

CV Starr

200,000-sf lease

Nomura

900,000-sf lease

Lazard

420,000-sf lease

VF Sportswear

120,000-sf lease

1199 SEIU

180,000-sf lease

Mastercard

210,000-sf lease

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Project TEAM

Project Team

Provide a list of the project team members (those who will be involved and accessible on a daily basis); along with how much time they will be able to dedicate to this assignment. Also please indicate the level of experience the proposed project team has working together as a team. Cushman & Wakefield is committed to establishing a strong, long-term partnership with HLT. Accordingly, we have assembled a team consisting of our most talented professionals, each with exceptional qualifications, a wide range of experience providing leasing and advisory services, and the ability to devote the time and attention necessary to represent HLT. Team Commitment The Project Team is fully committed to this project. All team members will be available to service HLT’s needs. In addition, HLT will receive the specialized attention and commitment of Project Executive Mark Weiss, one of the industry’s most successful brokers. Mark will ensure team member accountability and that all Cushman & Wakefield resources are brought to bear on HLT’s behalf.

Project Team leads, Mark Weiss and Ed Donnery, have worked together for three and a half years.

Project Team Organizational Chart

Strategic Advisory

Project Executive

ED DONNERY Executive Managing Director Strategic Advisory Group

MARK WEISS Executive Vice Chairman Brokerage Services

Market Research

BLAIR REVERCOMB Senior Associate Strategic Advisory Group

MICHAEL MONTESI Analyst Strategic Advisory Group

LAUREN HALE Associate Director New York City Research

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PROJECT TEAM

Please outline the roles and responsibilities of the respective team members, including designation of the “Project Executive” who will lead the assignment and serve as the primary point of contact for the Company.

Project Team Roles & Responsibilities

PROJECT EXECUTIVE

With 35 years of experience, Mark Weiss has established himself as a leading commercial broker/advisor/tactician within the real estate industry in New York City. Among his 2,400 completed deals are some of the market’s most noteworthy and complex transactions in leasing, sales and development. Mark was awarded REBNY’s “Most Ingenious Deal of the Year” Award in 2005, 2010, 2015 and 2017—the second most wins in the history of the Real Estate Board of New York. In addition, he won Long Island’s “Most Ingenious Deal of the Year” Award in 2006 and 2015 and New Jersey’s “Most Ingenious Deal of the Year” Award in 2015. Mark will serve as Project Executive and primary point of contact for HLT. He will be responsible for strategy development, and successful implementation and execution of the entire transaction. He will manage and coordinate all necessary resources throughout the assignment and provide guidance, direction and oversight to ensure consistent, quality service delivery and alignment with HLT’s objectives. Ed Donnery co-leads Cushman & Wakefield’s Strategic Advisory Group and is charged with developing and underwriting the execution of structured real estate transactions for a wide range of clients. Ed will lead all financial due diligence and analytics, project reporting, and the development of executive presentations for this assignment. He will work hand-in-hand with HLT and the broader project team help drive a diligent and effective negotiation process.

MARK WEISS Executive Vice Chairman Brokerage Services

STRATEGIC ADVISORY

ED DONNERY Executive Managing Director Strategic Advisory Group

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PROJECT TEAM

Blair Revercomb joined Cushman & Wakefield in 2018, bringing to the team an extensive real estate background in hospitality. Prior to joining Cushman & Wakefield, she worked in investment sales at Hunter Hotel Advisors , the nation’s leading investment advisory firm focused exclusively on the hotel industry. Blair will work with Ed to define project objectives and outline key project milestones, provide strategic planning and scenario development, prepare financial analyses, transaction underwriting, and ‘what-if’ sensitivity analyses, conduct due diligence on Landlord and building financial positions, and determine the optimal lease structure to align with HLT’s economic and accounting objectives. As an Analyst, Michael works closely with members of the Strategic Advisory and Brokerage teams to develop complex commercial real estate strategies for clients. Michael will play a critical role in project due diligence and assist Ed and Blair in the development of financial analyses. Lauren Hale utilizes her 10+ years of New York market research experience to act as a knowledgeable resource for clients. Her main responsibilities include tracking local real estate trends, forecasting market conditions, and developing and writing white papers and industry analyses. Lauren is an expert in the highly-nuanced Midtown market. She will provide oversight of dedicated, local market research professionals, track and forecast market trends that will impact strategy development, and provide potential feasibility and market studies.

BLAIR REVERCOMB Senior Associate Strategic Advisory Group

MICHAEL MONTESI Analyst Strategic Advisory Group

MARKET RESEARCH

LAUREN HALE Associate Director New York City Research

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PROJECT TEAM

Provide biographies/resumes of all team members.

Full biographies are included in the Appendix.

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PROJECT TEAM

Provide a description/summary of the project team’s (as opposed to the firm in general) past experience in comparable projects.

The Project Team’s comparable projects are detailed on pages 15–16.

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PROJECT TEAM

As an addendum to the response to this RFP, please include sample work product that has been generated by members of the project team which you think we would deem relevant considering the scope of this engagement.

Sample work product relevant to this assignment is provided throughout the following Process Management section.

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Process MANAGEMENT

Process Management

Provide a detailed description of how you would approach meeting the Company’s needs as stated above.

As the largest hotel in Manhattan, both in number of keys and event space square footage, Cushman & Wakefield recognizes the importance of maintaining HLT’s preeminent position in Manhattan and within its peer group. The Project Team understands the symbiotic nature of event space and room demand, which creates robust topline revenue that is further benefited from the cross-selling of other amenities, such as F&B. The event space leased at 1325 Avenue of the Americas will continue to provide a competitive advantage due to its ability to create room nights and to drive RevPAR from both Occupancy and Average Daily Rate.

Peer Group Locations

W 86 St

W 79 St

Sheraton NY Times Square 811 Seventh Avenue Keys: 1,780 Convention Space: 60,000 sf

W 72 St

AMA Conference Center 1601 Broadway Convention Space: 90,000 sf

NY Hilton Midtown 1325 Avenue of the Americas Keys: 1,980 Convention Space: ~140,000 sf

NY Marriott Marquis 1535 Broadway Keys: 1,966 Convention Space: 140,000 sf

W 57 St

W 50 St

Eighth Ave

W 42 St

Eleventh Ave

Jacob Javits Center 655 West 34th Street Convention Space: 844,780 sf

Park Ave Convene 530 Fifth Avenue Convention Space: 116,000 sf

W 34 St

Ninth Ave

Tenth Ave

Third Ave

Sixth Ave

W 23 St

Seventh Ave

Madison Ave

Lexington Ave

Grand Hyatt NY 109 East 42nd Street Keys: 1,311 Convention Space: 60,000 sf

Hotel Pennsylvania 401 Seventh Avenue Keys: 1,704

Eighth Ave

W 14 St

First Ave

Third Ave

Houston St

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Canal St

PROCESS MANAGEMENT

Our Strategic Approach Cushman & Wakefield will apply a highly effective three-step process to evaluate HLT’s event space requirements that addresses business, financial and operational objectives. This proven methodology is designed to ensure the optimal recommendation is achieved in an efficient and transparent manner. Our three-step process encompasses: Understand and clearly define the objective and parameters by which options will be evaluated. Share the current situation: costs, operational inefficiencies and challenges, utility, adjacency, logistics, egress, infrastructure, life/safety, power, mechanical—do these fulfill the renewed mission and vision for next generation event space? Understand competing interest for the event space from competitors, corporations, and different uses. Plan the set of viable alternatives that can fulfill the stated objectives from both HLT’s and the Landlord’s perspective, including timing, base building work, infrastructure upgrades, market conditions and availability of comparable event space. Align vision with opportunity. Will there be a Plan B? Execute by building consensus amongst internal stakeholders. Share diagnostic tools to validate the recommended solution. Create leverage with the Landlord by comparing HLT’s continued tenancy to different user requirements and attendant impact to 1325 Avenue of the America’s building services and infrastructure restraints. Drive savings to HLT.

Understand Approach: Understand HLT’s current situation, operations, culture, vision and goals for this project Deliverables: Information Request, Project Kick-off Book, Baseline Financial Analysis, Relevant Abstracts Discovery and Diagnostics • A visioning session with HLT to understand project goals, timing and costs • Interview senior leadership and key management and operations personnel to understand operational and financial objectives; We need to understand the incremental revenue thrown off by the “space” to maintain the appropriate rent-to-revenue ratios • Review current lease documents for rights granted and rent bills • Present HLT financial impact to HLT and Landlord’s point of indifference • Perform space utility analysis

PROJECTADMINISTRATION CUSHMAN&WAKEFIELDCOMMUNICATIONPROTOCOL:

YELLOWJACKET + CUSHMAN &WAKEFIELD | KICKOFFMEETING | NOV. 2015

CLIENT | InformationRequest

STATUS

SOURCE

YELLOWJACKET + CUSHMAN &WAKEFIELD | KICKOFFMEETING | NOV. 2015

CONFIDENTIALITY |PROJECTCODENAME:

FACILITIES |OccupancyData (ManhattanOfficeOnly) As-BuiltArchitecturalPlansIncludingIdentificationofSpecializedSpaces (i.e.DataCenter, Mailroom,Storage) Floorplansshowingofficeandworkstationoccupancy (incl. temp/contractors) Pastemployeesurveyresultsand/orbadge-swipingdata Criticalco-locations,adjacenciesand interdependencieswithin the facility Leases,Amendments&Modifications

THEOPPORTUNITY ScenariosUnder Consideration

N/A Baseline: AllRemain inPlace “DoNothing”scenario, againstwhich alternatives arecompared

CLIENT

RECEIVED

PHASE I:Consulting

NewYork

Eachmemberof themulti-disciplined teamwilloperate inconcert toprovideDueDiligence, MarketAssessmnt ndAalysis&Reporting.Thebelowsummarizesourapproach to the initialconsultingphaseof theassignment:

Chicago

CLIENTPROJECTLEADANDTEAM:

N/A

Dallas

CLIENT CLIENT

RECEIVED RECEIVED

Atlanta

DueDiligence

MarketAssessment

Analysis&Reporting

LeaseCommencementLettersand/orEstoppelCertificates

Name: Title: Role:

RentBillsand12MonthsofEscalationStatements,IncludingLandlordReconciliationofBase YearTaxesandOperatingExpenses

RECEIVED

CLIENT

PROFILE MARKET WORKFORCE Current&Target Markets

Scenario 1: Stay in NewYork

Kick-Off for RealEstatePlanning& TransactionServices November2015 Email: Phone:

LABOR& LOCATION STRATEGY

PREPARE FINANCIALMODEL

PREPARE DETAILED LABOR/MARKET REPORT

COMPILE&EVALUATE ClientLaborComposition

NewYork

LeveragingData ExpertiseBeyond RealEstate

FINANCE CostofFunds/DiscountRate forCorporateRealEstate Straight-LinedRentObligation (GAAP/IFRS)

LaborImpacton OverallProject

Chicago

Name: Title: Role: Email: Phone: SAMPLE TEAMUPDATECALLSCHEDULE StartDate: ___________________ Time: ______________________ Frequency: __________________________ December2015 Sun Mon Tue WedThu Fri Sat 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 January2016 Sun Mon Tue WedThu Fri Sat 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 February2016 Sun Mon Tue WedThu Fri Sat 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 HR |Policies/EmployeeData (anonymous) Pleasecomplete the tab titled 'HRDataRequest' JobDescriptions forpositionssubject topossiblerelocation Averagebasewges forpositionssubject topossiblerelocation HRseveranceandrelocationpolicies HR |Workplace Descriptionordocumentationofexistingworkplacepoliciesandprocedures Workplacestandards/spaceplanningmetrics/peoplevsspacemetrics DetailsofClient's technologystrategy (currentlyused) Existingmissionstatementsand/orculturesummaries (ifany) Relevantperformancemanagementpoliciesandsystems PROJECTSTATUSDASHBOARD&WEBSITE: https://cassidyturley.onehub.com/yellowjacket RECEIVED RECEIVED CLIENT CLIENT NetBookValuesandDepreciationSchedules forLeaseholdImprovements (GAAP/IFRS) HR |HeadcountData Expectedheadcountgrowthratesby function/businessunit Organizationalchartanddescriptionofbusinessunits (high level) AdditionalHeadcount tobeAccommodatedwithinOccupancy (i.e.compliance,regulatory, auditors,consultants) OTHER Scenario2-A: Atlanta Consolidation Scenario2-B: St.Louis Consolidation Scenario3: Bifurcation Atlanta Atlanta Dallas 8 22 40 Local Relocation NewYork Atlanta Atlanta Dallas Chicago 10 8 22 265 ASSESS CurrentSpace Utilization vs.MarketStandards Local Relocation 225 NewYork Atlanta St.Louis Atlanta Dallas Chicago 10 8 22 40 225 CONSOLIDATED INFORMATIONREQUEST CollectClient’sLabor,Space, Lease&FinancialData Local Relocation NewYork St.Louis Chicago 150 150 225 #Employees $/Employee WORKPLACE STRATEGY STRATEGIC CONSULTING BROKERAGE BUSINESS INCENTIVES ANALYZE IncentivesFeasibility CONDUCT Interviewsof KeyStakeholders& ToursofExistingSites DEVELOP DISPOSITION STRATEGY andProFormaTerms

ENGAGELOCAL AUTHORITIES

ASSEMBLE OVERVIEW Financial Impacts &Obligations

DOCUMENT QUALIFYING CRITERIA toSecureIncentives

(City,State,EconomicDevelopment) ValidationofAs-of-Right& DiscretionaryIncentives

CoordinatedEfforts> ConsolidatedReporti

SPACEPROGRAM OptimalConfiguration Requirements

FINAL REPORT

RABOBANK DECISION

SF/Employee

Pricing

ACQUISITION Scenario 1 Scenario2A Scenario2B Scenario3 DISPOSITION NewYork Chicago Dallas

PROVIDE LEASING ASSUMPTIONS Pricing&Concessions

FINDOPPORTUNITIES “Right-Sized”Space in EachMarket for EachScenario

SHORTLIST TourSelectSites in EachLocationtoRefine Candidates

Market Intel

DISPOSITION RESEARCH CompetitiveProperties, LandlordProfiles, Tenants intheMarket

ACQUISITION RESEARCH

Key ##

MARKET RESEARCH

Dallas

PositionsRelocated

Atlanta

115

ComparableProperties, LandlordProfiles,Lease Rolls,MarketStatistics

VacatedLocation

Local Relocation

Consulting&ExecutionSco isdetailedon the following ProjectTimeline ispresent in the followingsection

Atlanta

OccupiedLocation

TourSelectSites

DOCUMENT CurrentSpaceSystems, Infrastructureand Configuration

PREPARE CAPITALBUDGETS &SCHEDULES

PROJECT MANAGEMENT

Project Kick-off Commence the project with an orchestrated discussion of required information, project objectives, process, administration, and next steps

DRAFT

Printed:May8, 2019 at 2:59PM

Assumptions

Notes

1325Avenueof theAmericas

1325Avenueof theAmericas E2-E3 ProFormaNewTenant

1325Avenueof theAmericas

1325Avenueof theAmericas E2-E3 ProFormaNewTenant

Jan. 1, 2023AnalysisCommencement

E2-E3 ProFormaRenewal 70,000SF

E2-E3

ProFormaNewTenant

70,000SF Sep1,2023

70,000SF Apr 1, 2024

70,000SF

RentableArea LeaseCommencement Downtime LeaseTerm LeaseExpiration

15Years Dec 31,2037 NoDowntime Jan1,2023

Jan1,2025 24MonthsDowntime 16Years,3Months Mar 31, 2041

SquareFootage &KeyDates

16Years,3Months Nov30, 2039 8MonthsDowntime

Jun30, 2040 16Years,3Months 15MonthsDowntime

Start

Duration

Rent

Start

Duration 15Mo.

Rent Free

Start

Duration 15Mo.

Rent Free

Start

Duration 15Mo.

Rent Free

Rent

Sep 2023 Dec 2024 Dec 2029 Dec 2034

Apr 2024 Jul 2025 Jul 2030 Jul 2035

Jan 2025 Apr 2026 Apr 2031 Apr 2036

60Mo. $72.00/SF 60Mo. $77.00/SF 60Mo. $82.00/SF

Jan 2023 Jan 2028 Jan 2033

BaseRent

$14.60/SF

2023OperatingExpenses BaseOperatingExpenses 2023RealEstateTaxes BaseRealEstateTaxes

2023

2024

2025

$14.60/SF

$15.11/SF

$15.64/SF

Escalations

$17.99/SF

2023

2024

2025

$17.99/SF

$18.46/SF

$19.12/SF

- $40.00/SF $44.77/SF $84.77/SF

$50.00/SF $90.00/SF $46.75/SF $186.75/SF

$3,500K $6,300K $3,273K $13,073K

$186.75/SF $46.75/SF $90.00/SF $50.00/SF

$3,500K $6,300K $3,273K $13,073K

$50.00/SF $90.00/SF $46.75/SF $186.75/SF

$3,500K $6,300K $3,273K $13,073K

1XCosts

$2,800K $3,134K $5,934K

TIAllowance Commissions Total1XCosts

1XCosts

Notes

12Mos.FreeRentAmortized@7%

Summary |CashFlow Impact

12Mos. 2023

12Mos.

180Mos.

12Mos.

3Mos. 2041

219Mos. NPV

Total Truncated

NPV Truncated

Annuity Truncated

Total

Annuity

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

Jan. 1, 2023AnalysisCommencement

1325Avenueof the Americas

BaseRent

$4.5M

$4.5M $4.5M $4.5M $4.5M $4.8M $4.8M $4.8M $4.8M $4.8M $5.2M $5.2M $5.2M $5.2M $5.2M

$72.7M

$44.5M

$4.8M

$72.7M

$44.5M

$4.8M

Escalations

$0.0M

$0.1M $0.2M $0.2M $0.3M $0.4M $0.5M $0.6M $0.7M $0.8M $0.9M $1.0M $1.2M $1.3M $1.4M

$9.7M

$4.8M

$0.5M

$9.7M

$4.8M

$0.5M

E2-E3

1XCosts

($5.9M)

($0.6M)

($5.9M)

($0.6M)

ProFormaRenewal

($1.4M) $4.6M $4.7M $4.7M $4.8M $5.3M $5.4M $5.5M $5.6M $5.7M $6.1M $6.2M $6.4M $6.5M $6.6M $(20.42)/SF $65.26/SF $66.45/SF $67.68/SF $68.96/SF $75.27/SF $76.64/SF $78.05/SF $79.51/SF $81.03/SF $87.59/SF $89.21/SF $90.89/SF $92.63/SF $94.42/SF

$76.5M $43.4M $4.7M

Total

70,000SF

$1,093.18/SF

$619.83/SF

$66.47/SF

$1,093.18/SF

$619.83/SF

$66.47/SF

1325Avenueof the Americas E2-E3 ProFormaNewTenant 1325Avenueof the Americas E2-E3 ProFormaNewTenant 1325Avenueof the Americas E2-E3 ProFormaNewTenant

BaseRent

$0.4M $5.0M $5.0M $5.0M $5.0M $5.1M $5.4M $5.4M $5.4M $5.4M $5.4M $5.7M $5.7M $5.7M

$69.8M

$39.7M

$4.3M

$5.7M $5.3M

$80.9M

$43.3M

$4.7M

Escalations

$0.0M

$0.1M $0.2M $0.2M $0.3M $0.4M $0.5M $0.6M $0.7M $0.8M $0.9M $1.0M $1.2M $1.3M $1.4M

$9.7M

$4.8M

$0.5M

$1.5M $1.5M

$12.8M

$5.9M

$0.6M

1XCosts

($13.1M)

($12.5M)

($1.3M)

($13.1M)

($12.5M)

($1.3M)

($13.1M) $0.5M $5.2M $5.3M $5.4M $5.5M $5.6M $6.0M $6.1M $6.2M $6.3M $6.5M $6.9M $7.0M $7.2M $(186.70)/SF $6.98/SF $74.17/SF $75.40/SF $76.68/SF $77.99/SF $79.78/SF $85.77/SF $87.23/SF $88.75/SF $90.31/SF $92.35/SF $98.61/SF$100.35/SF$102.14/SF

$66.5M $32.1M $3.4M $7.3M $6.8M

$80.6M $36.7M $3.9M

Total

70,000SF

$949.82/SF

$457.96/SF

$49.11/SF $104.00/SF $97.06/SF

$1,150.88/SF

$524.18/SF

$56.34/SF

BaseRent

- $2.5M $5.0M $5.0M $5.0M $5.0M $5.2M $5.4M $5.4M $5.4M $5.4M $5.6M $5.7M $5.7M

$66.5M

$37.0M

$4.0M

$5.7M $5.7M $2.9M

$80.9M

$41.6M

$4.7M

Escalations

$0.0M $0.1M $0.2M $0.3M $0.4M $0.4M $0.5M $0.6M $0.8M $0.9M $1.0M $1.1M $1.2M $1.3M

$8.8M

$4.3M

$0.5M

$1.5M $1.6M $0.9M

$12.7M

$5.5M

$0.6M

1XCosts

($13.1M)

($12.0M)

($1.3M)

($13.1M)

($12.0M)

($1.3M)

- $2.6M $5.2M $5.3M $5.4M $5.5M $5.8M $6.0M $6.1M $6.3M $6.4M $6.7M $7.0M $7.1M - $(186.59)/SF $37.19/SF $74.42/SF $75.69/SF $77.01/SF $78.38/SF $82.29/SF $86.25/SF $87.76/SF $89.33/SF $90.95/SF $95.13/SF $99.36/SF$101.16/SF ($13.1M)

$62.2M $29.2M $3.1M $7.2M $7.3M $3.7M

$80.5M $35.1M $3.9M

Total

70,000SF

$888.34/SF

$417.83/SF

$44.81/SF $103.02/SF$104.95/SF $53.19/SF

$1,149.49/SF

$502.14/SF

$56.22/SF

BaseRent

- $3.8M $5.0M $5.0M $5.0M $5.0M $5.3M $5.4M $5.4M $5.4M $5.4M $5.7M $5.7M

$62.2M

$33.6M

$3.6M

$5.7M $5.7M $5.7M $1.4M

$80.9M

$39.5M

$4.7M

Escalations

- $0.0M $0.1M $0.2M $0.3M $0.4M $0.5M $0.6M $0.7M $0.8M $0.9M $1.0M $1.1M $1.3M

$7.7M

$3.7M

$0.4M

$1.4M $1.5M $1.7M $0.4M

$12.7M

$5.2M

$0.6M

1XCosts

($13.1M)

($11.4M)

($1.2M)

($13.1M)

($11.4M)

($1.3M)

- $3.9M $5.2M $5.3M $5.4M $5.5M $5.9M $6.1M $6.2M $6.3M $6.4M $6.8M $7.0M - $(186.59)/SF $55.23/SF $74.50/SF $75.82/SF $77.19/SF $78.60/SF $83.81/SF $86.57/SF $88.14/SF $89.76/SF $91.44/SF $96.93/SF $99.97/SF ($13.1M)

$56.8M $25.9M $2.8M $7.1M $7.3M $7.4M $1.9M

$80.5M $33.3M $3.9M

Total

70,000SF

$811.39/SF

$369.68/SF

$39.64/SF $101.83/SF$103.76/SF$105.75/SF $26.81/SF

$1,149.53/SF

$476.06/SF

$56.16/SF

Current Obligation Analysis Understand your current situation All information furnished is from sourcesdeemed reliable. Nowarrantyor representation ismade as to the accuracy thereof and same is submitted subject to errors,omissions, change inprice, rentalorother conditions,prior sale, lease,or financingorwithdrawalwithout notice.

Page 2of 2

• Technology and infrastructure assessment by Cushman & Wakefield’s Project & Development Services group (if deemed necessary by HLT): how can the existing space be improved? What will remain deficient?

K HLT NY HILTON LLC | CUSHMAN & WAKEFIELD | 28

PROCESS MANAGEMENT

Plan Approach: Develop the real estate strategy based on insights from the Understand phase Deliverables: Comparative Financial Models & Overview of Potential Alternative Structure, Landlord/Building Due Diligence Reports, Presentation of Recommendations & Timeline • Reconcile operational requirements with space, capital and ongoing costs • Evaluate space utilization • Identify (or not) a potential Plan B alternative that might be plausible (825 Seventh Avenue or 787 Seventh Avenue) • Understand restoration issues SAMPLE MaintainMidtown &Downtown Occupancies Consolidate into Midtown WithorWithout LeaseExtension Consolidate intoCurrent Configuration Consolidate into RestackedConfiguration Consolidate&Relocate withinBuilding Consolidate&Relocate withinRXRPortfolio Consolidate into NewLocation WithMidtownDisposition Consolidate&Relocate intoClassABuilding Consolidate&Relocate intoClassBBuilding RenewDowntown Capital Business Disruption Workplace Strategy Shared Resources OngoingCost Scenario Operational Financial Option A B C D A B A I II III Culture/Branding Lease Blend&Extend Lease LandlordTIAllowance Strategy AM L

SubleaseRisk

Scenario Overview Define and evaluate the universe of options that address project objectives

• Engage Landlord to discuss market breakeven constraints • Establish timeline and budget restraints for any space modifications • Retain other experts: engineers, audio visual, asset services, attorneys • Prepare comparative financial models • Develop presentation outlining final recommendation and timeline • Engage HLT leadership to secure recommendation consensus

SAMPLE

Park Hotels & Resorts Inc. | NYC

RenewalTimeline

2019

2020

2021

2022

MarketResearch& Analysis

Renewal IntenseNegotiations SAMPLE Timeline Identify critical dates and develop an action plan to proceed CommenceNegotiationswithLandlord All information furnished is from sourcesdeemed reliable. Nowarrantyor representation ismade as to the accuracy thereof and same is submitted subject toerrors,omissions, change inprice, rentalorother conditions,prior sale, lease,or financingorwithdrawal withoutnotice. Execute new leaseor exercise 5-year renewaloption ReviewBuilding&Events space Infrastructure Engage ThirdParty ifnecessary One-5YearRenewal Mustexercisebefore December31,2021 December31, 2020 TerminationOptionNoticeby June30, 2019

December31, 2022 LeaseExpiration

Execute Approach: Build consensus, create leverage, drive savings and secure the optimal real estate solution Deliverables: Requests for Proposal, Proposals & Counter Proposals, Refined Capital Budgets, Formal Presentation to Executive Committee for Final Approval, Fully-Negotiated Letter of Intent,

Printed:May8,2019at2:59PM

Assu

Notes Truncated NPV Cash

LandlordPerspective

Footprint

1XCapital Cash

AverageAnnualCashflow (Omitting 1XCapital)

Truncated Total Cash

Landlord Renewal BreakEven Rent

Scenario

2023-2025

2023-2027 2028-2032 2033-2037

2023-2037 2023-2037

A Renew|NoDowntime |$72/SF 70,000SF -$5.9M $4.7M/Yr $5.5M/Yr $6.4M/Yr

$76.5M $43.4M

B 8MonthsDowntime

70,000SF -$13.1M $3.3M/Yr $5.9M/Yr $6.8M/Yr

$66.5M $32.1M $51.08/SF

C 15MonthsDowntime

70,000SF -$13.1M $2.6M/Yr $5.8M/Yr $6.7M/Yr

$62.2M $29.2M $45.89/SF

D 24MonthsDowntime

70,000SF -$13.1M $1.8M/Yr $5.6M/Yr $6.5M/Yr

$56.8M $25.9M $39.67/SF

AverageAnnualCashflow (Omitting1XCapital)

All-InCosts

$0.0M $10.0M $20.0M $30.0M $40.0M $50.0M $60.0M $70.0M $80.0M

$0.0M/Yr $1.0M/Yr $2.0M/Yr $3.0M/Yr $4.0M/Yr $5.0M/Yr $6.0M/Yr $7.0M/Yr

$76.5M

$6.8M/Yr

$6.7M/Yr

$66.5M

$6.5M/Yr

$6.4M/Yr

$62.2M

$5.9M/Yr

$5.8M/Yr

$5.6M/Yr

$56.8M

$5.5M/Yr

$4.7M/Yr

$43.4M

$3.3M/Yr

$2.6M/Yr

$1.8M/Yr

$32.1M

$29.2M

$25.9M

Renew|No Downtime | $72/SF

8Months Downtime

15Months Downtime

24Months Downtime

Truncated Total Cash

Truncated NPV Cash

All information furnished is from sourcesdeemed reliable. Nowarrantyor representation ismade as to the accuracy thereof and same is submitted subject to errors,omissions, change inprice, rentalorother conditions,prior sale, lease,or financingorwithdrawalwithoutnotice.

Financial Underwriting Robust and clearly presented financial takeaways

Negotiations Evaluation

Detailed Lease Agreement Mark-Ups • Develop an RFP strategy to Landlord • Define evaluation criteria for the proper assessment of their response • Draft comprehensive final term sheet and LOI incorporating approved terms and conditions

• Review draft lease and insure all LOI terms are accurately reflected • Update construction timelines and budget, especially capital

K HLT NY HILTON LLC | CUSHMAN & WAKEFIELD | 29

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