Executive Overview Westin Providence Hotel & Residences 564 Guest Rooms, 103 Luxury Residences
Executive Overview Founded in 1964, The Procaccianti Group (TPG) is a second generation, privately-held real estate investment and management company boasting a national platform that spans all sectors of real estate with a particular focus on quality full service hotels. Since 1992 the company has owned or managed over 200 real estate assets including 80 hotels with more than 18,000 guest rooms and throughout its history, TPG has owned or managed over 20 million square feet of real estate totaling nearly $4 billion. TPG has established an outstanding track record of creating value for lenders, servicers, portfolio owners and investors by maximizing operating efficiencies and turning around non-performing assets across multiple real estate sectors including hotels, condominium projects, restaurant and retail outlets, and convention centers. TPG s value-add model is achieved through a fully integrated approach, a combination of five separate companies, that drives deployment of the company s aggressive operations, sales and revenue management strategies. TPG is considered among the nation s elite hotel companies by evidence of its consistent national ranking as a top hospitality manager and top hospitality construction company. These results have earned TPG preferred status as an approved operator of all the major hotels brands including Hilton, Hyatt, InterContinental, Marriott, and Starwood. TPG s senior management team has worked side by side for over 20 years throughout several market cycles under the leadership of James and Elizabeth Procaccianti and has built a professional infrastructure capable of effectively managing its expanding national portfolio. Via TPG s proprietary value optimization process, TPG creates unprecedented value by exploiting a hotel s operational inefficiencies via techniques refined through years of hospitality management experience. Having sustained growth, invested, and operated through several market cycles, the company is able to position properties to prosper in up cycles and mitigate risk in down cycles through highly skilled hands-on management. Many of the Company s top performing properties were once non-performing distressed assets facing foreclosure, bankruptcy, REO or auction. It is through TPG s proven ability to tailor its value-add strategy, either as an owner/operator or third party hospitality manager, that lenders, servicers, portfolio owners and investors have repeatedly realized above market performance. REAL ESTATE TPG REAL ESTATE HOLDINGS $4 Billion in Assets 80 Real Estate assets Top 5 Hospitality Company 56 Hotels, 15,000 guestrooms 7 Opportunistic Investment Funds Nearly $1billion invested SERVICING COMPANIES TPG AFFILIATED SERVICE COMPANIES Nearly $1 Billion Annual Revenue TPG Hospitality TPG Asset Management TPG Construction TPG Finance TPG Development
Renaissance Boca Raton 189 Guest Rooms TPG at a Glance Founded in 1964, TPG is a privately held, second-generation real estate company TPG is a full-service, vertically integrated organization comprised of 5 affiliated companies TPG is experienced with all real estate sectors, over 20 years focusing on the hospitality sector TPG has owned, developed or managed 88 hotels totaling over 20,000 guest rooms Today, TPG owns interests in or manages 64 hotels, w/16,813 guest rooms in 23 states with 1 million square feet of meeting space with a market value approaching $3 billion TPG is an approved manager of all the industry s most respected hospitality brands TPG currently employs 7,300 people, with 120 people in management/construction/asset mgmt Senior management has been together for approximately 20 years Equity partners include; CalPERS (Pension), CMS (HNW), RFP (Endowments), InvestCorp (HNW) and others Lenders include; Bank of America, Merrill Lynch, Anglo Irish Bank, Wachovia, Bank of Scotland & CSFB
Westin Dallas Forth Worth Airport 506 Guest Rooms TPG Representative Performance Hospitality Management Examples Performance figures below demonstrate the immediate and dramatic impact of TPG s proprietary value creation process delivers to bottom line performance. Figures below indicate the hotels performance in the first 12 months under TPG management compared to previous operator. PROPERTY RevPAR IMPROVEMENT GOP INCREASE HOUSE PROFIT MARGIN INCREASE VALUE CREATION (9% cap) Holiday Inn Select - Orlando 12.7% 141% 117% $10.5m DoubleTree Paradise Valley 18.3% 47.5% 26.6% $22.2m Hyatt Lexington 18.3% 53.2% 37.8% $12.7m Marriott Palm Beach Gardens 11.1% 56.3% 37.2% $14.7m Sheraton Suites Kansas City 12.6% 29.1% 16.4% $11.4m Investment Management Examples As an owner/operator, TPG s philosophy of Buy Right, Brand Right, Renovate Right, and Manage Right, has proven time after time to preserve and enhance asset value producing investor returns that far exceed industry benchmarks. PROPERTY ALL-IN COST SALE PRICE IRR MULTIPLE Holiday Inn Providence $6.5m $31.0m 171% 30.7x Marriott Boston Newton $29.0 m $77.0m 163% 2.25x Marriott Palm Beach Gardens $16.13m $61.25m 106% 7.48x Westin Dallas Fort Worth Airport $69.5m $101.0m $64.1% 2.85x DoubleTree Tulsa $18.7m $31.0m 88.3% 4.35x
Westin Tysons Corner 398 Guest Rooms The TPG Difference TPG achieves above average results through vertical integration and a collection of companies whose sole objective is to control costs and speed execution. The Company boasts a proven, third party validated track record for delivering above benchmark performance and generating maximum NOI without increasing risk by utilizing it s proprietary value optimization program. Several key elements are: Operational Expertise TPG s core strength is managing hotels and producing above average gross operating profit through aggressive hands-on management and cost control. Upon commencement of management, TPG immediately implements a strategy that focuses on overhead reduction, payroll, expense management, and NOI growth. Additionally, TPG focuses on aggressive rate management strategies to maximize revenue, which results in greater flow-through due to improved operating margins. Asset Management The Asset Management team at TPG understands the priorities and responsibilities of asset management from years of experience owning and managing real estate assets ensuring that return objectives, product quality, and service goals are achieved. During the initial stage, TPG Asset Management will establish a business plan to exploit value-add opportunities such as; (i) leasing outlets, (ii) reworking operating contracts, (iii) evaluating revenue generating opportunities, (iv) redevelopment of existing space and/or development of excess land for compatible uses, (v) filing tax assessment appeals, (vi) investigating insurance cost reduction through inclusion in TPG s master insurance policy and (v) refinancing. TPG s ability to uncover revenue enhancement and cost containment opportunities during due diligence, through the annual budgeting process, or as part of an ongoing assessment, historically results in a significant impact to net operating profits translating directly into value. Asset Recovery Expertise TPG Advisory Services provides asset recovery services, turnaround consulting, and investment services. TPG creates customized solutions to non-performing real estate assets in a manner that will maximize returns via effective planning and efficient execution.
DoubleTree Resort Paradise Valley 378 Guest Rooms The TPG Difference Real Estate Advisory Service TPG provides a full range of asset recovery services to lenders and developers for stalled multi-family residential and commercial properties. TPG s turnaround practice provides consulting services and interim management to under-performing businesses and advisory services to company creditors. Skilled Assessment Strategy Unlike many companies new to the industry, TPG has a unique ability of unlocking untapped potential that exists in most under-performing hospitality and mixed use assets. Developed over decades of experience, TPG knows how to drive NOI by identifying the underlying inefficiencies to improve operations, product quality, sales force, and revenue while dramatically reducing overhead and expenses. TPG s best results are achieved with assets that are well located, within growing markets and have multiple stable demand generators, whereby, through TPG s expertise, the property or project would become or solidify its position as a market leader. Proven Renovation Performance TPG utilizes in-house resources to accelerate the renovation or repositioning process at a lower cost than third party general contractors or service providers. Renovation costs are considerably lower than those completed by a non-captive construction manager, which immediately results in value for the property owner. TPG has 20 years experience and has completed over 70 renovations and re-branding projects. TPG simply thinks like an owner, fostering better decisions which drive long-term value and sustainability.
National Hospitality Portfolio National Footprint & Brand Affiliations TPG Owner Operator TPG 3 rd Party Manager 64 Hotels 16,813 Rooms 23 States Brand Affiliations
InterContinental Kansas City at The Plaza 366 Guest Rooms Awards & Recognition CURRENT RANKINGS RECENT AWARDS TPG Ranked #4 2010 Best Conversion Hilton Manhattan East TPG Ranked #3 2008 Best Renovation Marriott Ft Lauderdale TPG Ranked #4 * 2007 Developer of the Year TPG Ranked #13 * Among private companies 2007 Renovation of the Year Holiday Inn S. Kingstown
Hilton Manhattan East New York City 300 Guest Rooms Executive Leadership JAMES A. PROCACCIANTI PRESIDENT, CEO Mr. Procaccianti is responsible for overall strategic planning, organizational development, new business development, investor relations, franchise relations and acquisitions. ELIZABETH PROCACCIANTI CHIEF OPERATING OFFICER Ms. Procaccianti is responsible for the overall management and performance of TPG s national hospitality portfolio. MARK BACON CHIEF CONSTRUCTION OFFICER Mr. Bacon is responsible for the implementation of all construction, renovation and capital expenditure projects ROBERT LEVEN CHIEF INVESTMENT OFFICER Mr. Leven is responsible for strategic planning and business development as well as evaluation, analysis and processing of all new acquisition opportunities. GREGORY VICKOWSKI CHIEF FINANCIAL OFFICER Mr. Vickowski is responsible for debt and equity placement, joint ventures, asset management, information technology, and all financial reporting and planning. RICHARD MacADAMS CHIEF LEGAL COUNSEL Mr. MacAdams is responsible for the administration and oversight of all legal matters relating to the business of TPG and its subsidiaries.
Hilton Suites Chicago Magnificent Mile 345 Guest Rooms Lenders and Investors/Partners Lenders Anglo Irish Bank Corporation GMAC Bank of America Merrill Lynch Investment Banking Credit Suisse First Boston Bank North Group Column Financial MetLife Real Estate KeyBank Real Estate Capital Stillwater National Bank & Trust Company Danvers Savings Bank Nomura Asset Capital Corp.-Servicer c/o Amresco Services, LP Lennar Funding Corp. Newport Federal Savings Bank Ocean Bank Starwood Hotels & Resorts International Bear Stearns Wachovia Bank, N.A. Sovereign Bank Protective Life Capmark Bank of Scotland Institutional Investors / Partners Realty Financial Partners California Public Employees Retirement System (CalPERS) CMS InvestCorp Rockpoint Group Charles River Realty Investors Atlas Capital
Regal Sun Resort at Downtown Disney 626 Guest Rooms Key Contacts James Procaccianti jprocaccianti@tpgcompanies.com Elizabeth Procaccianti eprocaccianti@tpgcompanies.com Gregory Vickowski gvickowski@tpgcompanies.com Mark Bacon mbacon@tpgcompanies.com Robert Leven rleven@tpgcompanies.com Richard MacAdams rmacadams@tpgcompanies.com President / Chief Executive Officer Chief Operations Officer Chief Financial Officer Chief Construction Officer Chief Investment Officer Chief Legal Counsel Corporate Headquarters South East Office West Coast Office 1140 Reservoir Avenue 6000 Lake Forest Drive NW 1707 4 th Street Cranston, Rhode Island 02920-6032 Suite 455 Santa Monica, California 90401 Phone: (401) 946-4600 Atlanta, Georgia 30328 Phone: (310) 899-1372 www.tpgcompanies.com Phone: (678) 349-5000 Facsimile: (310) 452-7399