Proposal_Brokerage_Advisory_Services_CW

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

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

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

StrategicAdvisoryGroup ©2019Cushman&Wakefield

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

©2019Cushman&Wakefield StrategicAdvisoryGroup

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