Proposal_Brokerage_Advisory_Services_CW

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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

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