Niagara Falls Stanley site brochure dec5 v2

DEVELOPMENTOPPORTUNITY

MIXED USEHOTEL / RESIDENTIAL / RETAIL

NIAGARA FALLSONTARIO, CANADA

INVESTMENT OPPORTUNITY

STANLEY AVENUE

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CUSHMAN & WAKEFIELD, Ltd. | NIAGARA FALLS MIXED USE INVESTMENT OPPORTUNITY

THE OPPORTUNITYCushman & Wakefield, Ltd. has been exclusively retained to offer for sale the fee simple interest in the 1.55 acre development site and existing substructure at the intersection of Stanley Avenue and Dunn Street, Niagara Falls (the ‘Property’ or ‘Site’). The offering represents an opportunity to acquire a pre-approved development site, that has already undergone years of hard work and millions of dollars in podium and underground parking construction. Designed and engineered by Cusimano Architects and Bremel International, the existing 5-level concrete substructure was built and designed to accommodate an extended vertical height to 40+ stories with a capacity to have approximately 500 parking spaces. The substructure was confirmed to be well-maintained and is structurally sound for development through a geotechnical study conducted this year. The Site is strategically situated on one of the major commercial and tourist arteries in central Niagara Falls just 500 metres from the Falls.

SITE DETAILSLocation: Northwest corner intersection of Stanley

Avenue and Dunn Street, Fallsview Tourist Area in between Fallsview Casino Resort (350 metres) and the Scotiabank Convention Centre (300 metres)

Site: 1.55 Acres (+HEPC corridor/access)

Legal: Part of Ranges 8, 9, and 10, Falls Company Plan, now known as Plan 1, City of Niagara Falls, Region of Niagara.

Uses: 30 to 40 Storey High Rise Hotel and/or Residential Building including Restaurants, Public & Meeting Space, Recreational Facilities, Retail and ample Underground Parking


OFFERING PROCESSThe Property is offered for sale at a price of $30,000,000 and is being sold free and clear of debt. Any interested and qualified investors who have executed and submitted the Confidentiality Agreement will be granted access to the Data Room. Among other pertinent information regarding the Property, the Data Room provides information to the third party reports. Offers are to be considered on an as-received basis, submitted to the attention of Moshe Elyovich, Cushman & Wakefield, Ltd., 33 Yonge Street, Suite 1000, Toronto, Ontario, M5E 1S9. All inquiries regarding the Property, or any information contained in this Marketing Summary or the Data Room, should be directed to Cushman & Wakefield, Ltd.

MARKETING SUMMARY CONTENTSThis Marketing Summary has been prepared by Cushman & Wakefield, Ltd. and is being delivered to a select group of qualified investors in order to assist them in deciding whether they wish to acquire the Property. This Marketing Summary does not purport to be all inclusive or to contain all the information that an investor may require in deciding whether or not to purchase the Property. This Marketing Summary provides information relating to certain characteristics of the Property. The information upon which this Marketing Summary is based has been obtained from various sources considered reliable. Neither the Owner, Manager nor Cushman & Wakefield, Ltd. make any representations, declarations or warranties, expressed or implied, as to the accuracy or completeness of the information or statements contained herein or otherwise, nor should such information or statements not be relied upon by investors without independent investigation and verification. The Owner, Manager and Cushman & Wakefield, Ltd. expressly disclaim any and all liability for any errors or omissions in the Marketing Summary or any other written or oral communication transmitted or made available to investors. If any information related to the Property, in addition to the information provided in the Marketing Summary, is provided at any time, orally or otherwise, by the Owner, Manager and/or Cushman & Wakefield, Ltd. such information is provided as a convenience, only without representation or warranty as to its accuracy or completeness and should not be relied upon by investors without independent investigation and verification.


SITUATED IN THE HEART OF THE CITY The Property is situated in the heart of the City and boasts magnificent views of Niagara Falls, one of the top ten most popular attractions in the world with over 12 million visitors annually. In addition, the Site is proximate to the Fallsview Casino, Canada’s largest gaming resort facility, and the newly-built Scotiabank Convention Center. With a new 7,000 seat Theatre/Entertainment complex planned for the Fallsview/Casino area, modern attractions, contemporary hotels and the beauty of the City, Niagara Falls continues to meet the visitation expectations of the world and most importantly, the 8,000,000 people of the Greater Toronto market.

Niagara Falls is a vibrant, internationally renowned city with a flourishing business sector, and tourism is one of the primary economic drivers for the City. Niagara Falls also has strong year-round demand from the Fallsview Casino and the Scotiabank Convention Centre. The $1 billion, 2.5 million-square-foot Casino is the largest gaming resort facility in Canada with over 3,000 slot machines, 136 gaming tables, and a 1,500-seat theater that hosts more than 250 shows per year. The $100 million Scotiabank Convention Centre opened in 2011 with over 288,000 square feet of meeting space, and has hosted over 300 events since. In the first full year of operation, the convention centre generated an additional $95 million to the local economy and spurred over $100 million in ancillary development.

Situated between two Great Lakes, Lake Ontario and Lake Erie, the City of Niagara Falls, Ontario, Canada is a “Gateway” to the North American marketplace. Niagara Falls businesses have the opportunity to serve 56% of the industrial North American marketplace and offer direct business opportunities to a market area of approximately 125 million people.

Niagara’s four international bridges are the most heavily travelled border crossings between Canada and the Unit-ed States, accounting for approximately 40% of the total bridge crossings between the two countries. Linked to the world by its transportation routes, state-of-the art communication technologies, and its diverse cultural roots, Niagara Falls is strategically located in the heart of a stabilized and affluent consumer market.

The rising economy has led to an increase in transportation options and city amenities, including new hospital projects and an expansion of the GO train Lakeshore corridor to Niagara. Work will begin in 2017 and continue to 2023, when construction in Niagara Falls will complete the expansion. Grimsby is the first stop that will be added to the new extended corridor. The current ridership is approximately 251,000 people, and is expected to grow by as much as 35% by 2021 as transit becomes viable to suburban centres.

Foreign investment has driven the regions development. Asian investors have had their eye on Niagara for quite some time now, which has helped to revamp the economy in Niagara. These investors are experienced business people who have brought their skills to boost the area. Many of the fine wineries and vintage hotels have been purchased by Asian investors in Niagara-on-the-Lake. Two development projects are being led by experienced Asian investors; One of these projects, the Paradise development is set to be a “city within a city,” with residenc-es, restaurants, entertainment options, and shopping all in one small resort-style village. The other development project will be Niagara Falls’ first luxury condominium building will also be a resort-style residence, with first class amenities on-site.

The Niagara region is a fast-growing area with a rapidly increasing retirement population. The region offers a slower pace of life while remaining in close proximity to the Greater Toronto Area. Affordable home prices in the region lend themselves to GTA residents looking to downsize from the city but upsize in a rural area. For entertainment, Niagara-on-the-Lake offers the Shaw Theatre Festival, wineries, golf courses and highly rated local restaurants and hotels. Residents also have access to multiple health care facilities in the St. Catherines and Niagara region with an additional south Niagara hospital to be built in Niagara Falls. With a close proximity to the U.S. border, travel south of the border is minutes away and residents can conveniently access Buffalo Niagara International Airport..

Fallsview Casino

Scotiabank Convention Centre


The Site holds pre-approved, yet flexible, zoning potential to develop a flagship mixed-use property of the City. Originally, the approved application was for a 30-storey high rise hotel and residential development, however the zoning can likely be negotiated to further the amount of storey’s and increase density. Designed and engineered by Cusimano Architects and Bremel International, the existing 5-level concrete substructure was built as the first construction phase to accommodate an extended vertical height to 40+ stories. The Site has ample space and potential for restaurants, meeting & public space, recreational facilities, retail and ample underground parking for approximately 500 spots.

The project was paused due to the economic and financial crisis of the late 2000’s, leaving the Site in the state that is in today. The owners of the Site have maintained the structural integrity of what exists, by ensuring the concrete is sealed, cleaned and drained of any water. Four geotechnical reports have been conducted since the project has started, the latest being 2016, to confirm that the structural integrity of the Site is still sound for development of up to 40 storey’s.

The financial savings of starting a development with the existing 5-level substructure in-place is substantial. Altus Group Limited underwent a high-level analysis in which they have calculated the estimated hard and soft construction costs in current dollars to construct this space to the same level of finish of the existing structure to be approximately $33,750,000 - $37,500,000. These construction savings by themselves are significantly higher than the $30,000,000 asking price of the Property, implying that there is a discount on the structure being sold and there is no price attributed to the land on which the structure sits on.

There is also substantial upside in the time savings in acquiring the development opportunity, as it would take a number of years to get the approvals, commence construction, and progress to the current state of the Site. Finishing this development should take less than two years, which is an expedited way to meet the current existing demands for new hotel rooms or residential units.

Three leading architectural firms have created different design/building options for the Site. Giannone Petricone Associates and Dejan Dikic proposed hotel development options, while DCYSA/Architects Alan Tregebov Architects considered two different designs, one with only residential and another with mixed hotel and residential. Detailed drawings and analyses are available for further review in the data room.

DEVELOPMENT OPTIONS


HotelAccording to Smith Travel reports conducted in 2015, the demand for upscale hotels in Niagara Falls have increased 16% since 2010, while supply has only increased 4%. This increase in demand and unmatched increase in supply presents an opportunity to grow the hotel market in Niagara Falls and has only continued to increase in 2016. Moreover, the absorption of new upscale hotel product has historically been absorbed well, with increases in supply having relatively little impact on its performance. The Site holds huge potential for new hotel rooms to capitalize an in-demand and an under-serviced market.

Giannone Petricone Associates proposed and underwent a deep level feasibility study in 2016 for a full-service 33-Storey, 405 guestroom, four to five star international hotel brand. The Property would include attractive amenities such as restaurants and lounges, an outdoor pool, a full-service spa facility, fitness centre, and business areas, along with additional vacant space to rent out to retail or restaurant use. This brand is still interested in the project, conditional of the owners being able to construct to this standard.

Dejan Dikic examined a 40-storey Crowne Plaza Hotel, preparing a proposal in 2013. It would be a slightly less stringent brand to develop, however it would still boast a significant amount of amenities and fulfill a great need for new full-service and upscale in the Niagara Falls market.

ResidentialThere is, presently, a solid need for residences in Niagara Falls, and the proposed residential high rise will meet this requirement as it can be delivered in less than two years’ time. Furthermore, Niagara Falls currently does not have any high-rise residential buildings, leaving a window to develop for those who would like to have a Condomimium Corporation look after the maintenance of their units. It would be a compelling place to live for many types of people looking to live full-time or part-time in the area.

Alan Tregebov Architects (YYZ Management/Toronto) created a plan for a residential development in 2009, consisting of a 30-storeys with 418 units and gross floor area of approximately 470,000 square feet. They considered approximately 51,000 square feet of retail and 18,000 square feet for a health club taking up the first five storey’s of the project. A detailed budget and proforma are available in the data room which showed attractive returns only grown more viable with increasing demand and housing prices rising.

Mixed Use DevelopmentThe proposal for mixed hotel and residential takes maximum advantage of the existing infrastructure already built at the Site. Alan Tregebov Architects created a similar proposal to their residential concept, except included a hotel encompassing floors 4-15. They recommended 156 hotel guestrooms and 265 residential units, along with the same amenities as the residential concept. The Proforma for this project is even more attractive than the residential concept, achieving exceptional returns for the developer.

As stated earlier, the aforementioned detailed drawings and analyses are available for reference, yet it is to be clarified that the Site is being offered free and clear of any development commitments. This permits new ownership to develop the Property in the way that they feel will maximize returns.

Rendering made in 2016 of the Site if developed as four to five-star international hotel brand with ground floor retail.

DEVELOPMENT OPTIONS


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CANADA (ONTARIO)

UNITED STATES (NEW YORK)

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DUNN ST.

FALLS AVE.

ROBINSON ST.

CENTRE ST.

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NIAGARA VETERAN MEMORIAL HWY.

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To Toronto 120 km

To Bu�alo 35 km

To New York City650 km

Niagara VintageWinery Tours10 km

Niagara Whirlpool8 km

Butterfly Museum10 km

Legends on the Niagara Golf Club6 km

Marineland2 km

Thundering Waters Golf Club3 km

FALLSVIEWCASINORESORT

CASINONIAGARA

FALLSVIEWINDOOR

WATERPARK

RIPLEY’SMUSEUM

GREGFREWINTHEATRE

NIAGARASKYWHEEL

IMAXTHEATRE

NIAGARAFALLSSTATEPARK

SCOTIABANKCONVENTION

CENTRE

JOURNEYBEHIND

THE FALLS

HORNBLOWERNIAGARACRUISES

MAID OF THE MIST

BOAT TOUR

FLORALSHOWHOUSE

SKYLONTOWER

QUEENVICTORIA

PARK

BIRDKINGDOM

FALLSVIEW CASINO RESORT

RAINBOWBRIDGE

JOURNEY BEHIND THE FALLS

HORNBLOWERNIAGARA CRUISE

CASINONIAGARA

FALLSVIEW INDOOR

WATERPARK

GREG FREWIN THEATRE

CLIFTON HILL

SKYLON TOWER

IMAX THEATRE

SCOTIABANK CONVENTION

CENTRE

KEY DEMAND GENERATORS

One of the Natural Wonders of the World

One of the Most Globally Recognizable Leisure Destinations

Proximity to 50+ Golf Courses

New Outlet Malls at Niagara-on-the-Lake with over 100 Stores

Over 50 wineries in the Niagara Region

SUBJECT SITE


LODGING OVERVIEWThe Niagara Falls lodging market has been continuously strengthening despite having aging product - There lies an opportunity for newer product to seize over market share. Within the large Niagara Falls Area lodging sub-market there are approximately 14,500 rooms which have experienced increased Revenues per Average Room over the past three years.

Based on Niagara Falls Area lodging market data from year end 2013 to 2015:

RevPAR has improved vastly over the past few years, increasing by 8.9% throughout 2014, and 14.6% in 2015.

Occupancy reached 65.2% by the end of 2015, a 10.1% increase over the same period of two years.

ADR reached $149.29, an increase of 13.3% over the same period of two years.

If the Property were to be developed as a hotel, it would compete in a submarket with eight other hotels, totalling 3,393 rooms. Hotels in the competitive set range in size from 232 to 1,006 rooms, and are affiliated with international hotel brands with strong reservations network either with Starwood, Hilton, Marriott, and Carlson Rezidor. These hotels, however, were all built before 2004, leaving significant space for newer product to present new opportunities to tourists. Hotels in this submarket near the Property directly benefit from lodging demand associated with Niagara Falls, the Fallsview Casino, and the Scotiabank Convention Centre. These hotels perform significantly better than the periphery Niagara Falls Metro Area.

FULL YEAR YEAR-TO-DATENiagara Peninsula 2013 2014 2015 % Change Oct-15 Oct-16 % ChangeOccupancy 59.2% 61.8% 65.2% 5.6% 68.1% 70.7% 3.8%

Average Daily Rate $131.73 $137.52 $149.29 8.6% $151.21 $161.93 7.1%

RevPAR $78.02 $84.98 $97.39 14.6% $102.95 $114.45 11.2%

Source: STR Canadian Hotel Review, Niagara Falls Metro Area

RevPAR is the Revenue per Available Room. It is calculated by multiplying the Occupancy and ADR together. It is a standard metric in comparing total hotel performance.


NIAGARA PENINSULA ECONOMY OUTLOOK2016 has brought a rush of optimism and opportunity to the Niagara Falls real estate market, primarily due to the prior two years’ hot housing market in the region. It joins a list of new activities that have given the local economy a boost. Niagara’s economy has been on the rise since 2015, according to the Ontario Chamber of Commerce. The labour force has grown 3.1% over the past three years, doubling the population growth of 1.5% over the same period, signifying that there has been job growth within the region. Niagara is becoming the place to be for business people, residents, and investors. The rise in the real estate market, successful local business opportunities, and promising new developments have all contributed to the promising future of Niagara.

The robust housing market activity is expected to expand into 2017, and possibly further in the future. Residential construction in Niagara has also been climbing, with an increase in building permits issued for the next year. Low interest rates, an improving economy and rising consumer confidence have generated double-digit sales gains across the region. The average sale price is up about eight percent to $380,000. This increase in residential options showcase the fact that more Niagara residents, as well as foreigners to the area, are looking to purchase property in the area.

Many industries benefit from the increase of building construction. Residential construction is on track this year to hit its highest level since 2006 at a predicted 6,000 units, according to building permits issued. Permits issued in the St. Catharines Niagara CMA will jump about 25 percent. As a result, the retail trade, transportation, and tourism industries will strengthen. Employment rates for the area are directly influenced by the success of local businesses. The employment rate for the Niagara region took a major hit after 2009, but has made an impressive comeback in the last few years. Since the end of 2014, the employment rate has grown by over 5 percent.

Source: Statistics Canada, CREA, Central 1 Credit Union forecasts.

Niagara Peninsula 2013 2014 2015 2016 2017Labour Force 752,000 756,000 770,000 779,000 786,000

% Change 0.6 1.9 1.2 0.9

Total Employment 698,000 706,000 722,000 734,000 744,000

% Change 1.3 2.2 1.7 1.4

Unemployment Rate 7.1 6.5 6.0 5.8 5.3

Residential Permits (Units) 4,975 5,091 6,000 6,500 7,000

% Change - 2.3 17.9 8.3 7.7

Non-Residential Permits ($ millions) 1,260 890 960 1,000 1,200

% Change -29.7 8.0 4.2 20.0

Population 1,435,000 1,445,900 1,456,200 1,467,900 1,483,100

% Change 0.8 0.7 0.8 1

Net International Migration 5,109 4,432 4,600 4,950 5,700

The Niagara Peninsula is the portion of Southern Ontario, Canada, lying between the south shore of Lake Ontario and the north shore of Lake Erie. It stretches from the Niagara River in the east to Hamilton, in the west.

NEW YORK

TORONTO

MONTREAL

DETROIT

CHICAGO

SUBJECT SITE

DEVELOPMENT OPPORTUNITYMIXED USEHOTEL / RESIDENTIAL / RETAIL

NIAGARA FALLSONTARIO, CANADA

Moshe Elyovich, MBA**Associate Vice PresidentO +1 (416) 359 2375 M +1 (416) 827 0175 [email protected]

James Wu* 吴冠洲Investment SalesO +1 (416) 359 2393 M +1 (647) 641 5678 [email protected]

Corbin Staniloff*Analyst - Hotel InvestmentsO +1 (416) 359 2420M +1 (647) 801 [email protected]

Cushman & Wakefield Ltd., Brokerage33 Yonge Street, Suite 1000Toronto ON M5E 1S9

These statements are based upon the information furnished by the principal and sources, which we deem reliable - for which we assume no responsibility and is subject to verification during a formal due diligence period. This submission is made subject to prior sale, change in price or terms, or withdrawal without notice. Prospective purchasers should not construe this information as legal or tax advice. Legal counsel, accountants or other advisors should be consulted, if desired, on matters related to this presentation.

*Sales Representative **Broker

INVESTMENT OPPORTUNITY

Documents

Niagara Falls Stanley site brochure dec5 v2