Proposal_Brokerage_Advisory_Services_CW

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.

K HLT NY HILTON LLC | CUSHMAN & WAKEFIELD | 2

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