$20 MILLION PREFERRED EQUITY OFFERING

Transcription

1 $20 MILLION PREFERRED EQUITY OFFERING This is neither an offer to sell nor a solicitation of an offer to buy interests in L Auberge de Sonoma Resort Fund, LLC (the Fund ). An offering is made only by the L Auberge de Sonoma Resort Fund, LLC Private Placement Memorandum ( PPM ). Accordingly, this information must be preceded or accompanied by the PPM in order to understand fully all of the implications and risks of the offering. Neither the SEC nor any state securities commission or other regulatory agency have passed on or endorsed the merits of this offering. See back page for additional important risk factors.

2 LETTER FROM LAWRENCE BAIN Chief Executive Officer Our hospitality investment strategy is to acquire quality assets with room for improvement, in unique markets with high barriers to entry. Successful execution of this strategy requires careful planning, proper budgeting, an experienced team, and an incredible amount of hard work, to be sure. But perhaps above all else, you need the right property. We are pleased to present our latest project, the L Auberge de Sonoma Resort & Spa. In October 2017, we acquired the prestigious MacArthur Place Hotel & Spa, a 64-room, luxury boutique hotel located in the heart of Sonoma Valley Wine Country. Already consistently recognized as one of the nation s top hotels, under our leadership, the property will undergo a material renovation and rebranding using the iconic L Auberge name, further elevating the guest experience to Five-Star standards. Our highly-experienced management team will utilize L Auberge best-in-class practices, directing a multitude of both property-level and operational improvements. It is our belief and expectation that the resulting capture of higher room and occupancy rates, along with expense productivity improvement, will enhance the financial performance and greatly increase the asset value. To that end, we feel that this property offers a unique combination of both interim profitability advancement and the opportunity to achieve significant additional upside upon sale, which we anticipate to occur within the next five years. We are offering accredited investors the opportunity to participate alongside us in what we believe will be an economically rewarding endeavor. As a preferred equity member, you will receive a preferred return of 12% on your investment, with a current cash payment of no less than 7% per annum, paid monthly. Although we believe it to be unlikely, if the hotel should for any reason not deliver sufficient operational results to support the 7% current cash payment to investors, we as the Sponsor will make up the difference. Then, at such time as we sell the hotel, the proceeds from sale would be used in the following order: first to pay off the senior lender, then to pay back investor principal plus whatever amount is necessary for investors to achieve a 12% annual return. In so much as there is profit beyond that, investors would receive an additional 10% of that amount. In total, if we hit our projections, we expect you to realize an annualized 14%-16% return on your investment. In addition, while you are a preferred equity partner with us, you will receive the perks of hotel ownership, which includes discounts on food and beverage and spa services, as well as complimentary rooms, depending on investment amount. The details of this offering, including various risk factors, can be found in the accompanying Private Placement Memorandum. We sincerely thank you for your interest in this investment and we are here to answer any questions that you may have. You may us at info@laubergefund.com or call (480) and ask for Fund Investor Relations. We look forward to partnering with you on this exciting opportunity. MacArthur Place Hotel & Spa Chairman & CEO

3 OFFERING AT A GLANCE INVESTMENT OVERVIEW: The Fund will own the MacArthur Place Hotel, a luxury boutique hotel located in Sonoma CA. Directed by experienced leadership, the property will undergo a $10M+ renovation and be rebranded under the name, L Auberge de Sonoma Resort and Spa. After completing both property-level and operational improvements, we expect an increase in revenues, enhancement of asset value, and an opportunity to sell the property at a significant gain. FUND OBJECTIVES: - Provide monthly cash distributions from operations - Realize capital appreciation in the value of the investment - Preserve and return investors capital contributions INVESTOR SUITABILITY STANDARDS: The Offering is limited to Accredited Investors only. MINIMUM INVESTMENT: $25,000 ELIGIBLE FOR IRA ACCOUNTS: YES CURRENT PAY: MONTHLY - NO LESS THAN 7% PER ANNUM PREFERRED RETURN: 12% TARGETED INVESTOR ANNUALIZED RETURN: 14-16% EXPECTED HOLD: 3-5 YEARS AUDITED FINANCIALS: YES INVESTOR PERKS: DISCOUNTS FOR ROOMS, FOOD AND SPA SERVICES. COMPLIMENTARY ROOMS DEPENDING ON INVESTMENT AMOUNT.

4 DIVERSE AND PROVEN TEAM OF HOSPITALITY EXPERTS Sponsor Executives and Key Employees Lawrence Bain Chief Executive Officer and Chairman of the Board of Directors Under Mr. Bain s leadership, the Sponsor acquired the L Auberge de Sedona Resort and Spa in 2013, invested approximately $10 million to refurbish the property, and thereby transformed it into a world-class hospitality destination that received the Conde Nast Magazine reader s choice award for best hotel in the Southwestern United States for In early 2017, Mr. Bain successfully negotiated a sale of that asset to Diamondrock Hospitality for $97 million. Mr. Bain brings significant operating and board experience gained in roles as a chief executive officer and chairman over the last fourteen years. Greg Hanss Senior Vice President Director of Operations Mr. Hanss oversees the day-to-day operations, renovation and performance of the Sponsor s hospitality properties. Mr. Hanss is known in the hospitality industry for his accomplishments spearheading luxury hotel and resort openings, structuring effective leadership teams and developing and sustaining profitable assets. Mr. Hanss played a leading role in launching the award-winning InterContinental Montelucia Resort & Spa in Paradise Valley, Arizona. Due to the success of that opening, Mr. Hanss was recognized as the American Hotel & Lodging Association Manager of the Year in He was also on the opening teams at the Four Seasons Resort in Scottsdale, The Phoenician Resort in Phoenix, and the St. Regis in Aspen. Joseph Walsh Vice President of Development Mr. Walsh leads the hospitality renovation and expansion plans. Mr. Walsh brings over 20 years of hotel and resort development experience, and has successfully managed over $300 million in upscale resort and hotel development projects. Mr. Walsh s accomplishments include the successful development of the 180-residence Westin Verasa and La Toque restaurant in Napa, CA and the 220-room Westin Monache in Mammoth Lakes, CA. Furthermore, he managed the development of Intrawest s Winter Park, CO base village while overseeing the asset management of their resort hospitality real estate portfolio, including the 600-residence beachfront Honua Kai Resort and Spa in Maui, HI and their seven resort commercial villages throughout the U.S., British Colombia, and Ontario. Tina Littleman Director of Human Resources Mrs. Littleman s expertise is driving growth through effective Human Resources and people strategy through planning, staffing, talent management and succession processes, as well as compensation and benefits, employee relations, leadership development and training. Mrs. Littleman brings 30 years of Human Resources experience with luxury hotels and resorts that include L Auberge de Sedona, Hotel Bel-Air and the Jefferson Hotel in Richmond, Virginia. Cori Oles Director of Revenue Management Ms. Oles oversees hotel pricing and management of inventory for all Sponsor related hospitality assets. She brings 25 years of hospitality and revenue management to her current role, where her main focus is maximizing top line revenues across all of the properties. Ms. Oles manages and maintains inventory controls, while analyzing occupancy, rates and booking trends. She currently leads the daily operations and training of the revenue, reservations, front office and rooms divisions, all while implementing Forbes Five Star standards.

5 A HISTORY OF HOSPITALITY SUCCESS Sponsor Overview The Sponsor s professional management team is strong and has previously demonstrated quality performance and favorable results with similar hospitality assets. CASE STUDY: In 2013, the Sponsor acquired L Auberge de Sedona, an 88-room boutique, four-star luxury resort and spa in Sedona, Arizona. Immediately after acquiring the asset, the Sponsor s experienced hospitality management team began reorganizing and renovating the property, transforming L Auberge de Sedona into one of the premier resorts of its kind in the world. $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 L A UBE RG E DE S E DONA Net Income , 90.2% Growth $3,684,454 $4,497,849 $3,969,771 $5,323, $7,009,388 In early 2017, after just under four years of ownership, the Sponsor sold L Auberge de Sedona for $97 Million, representing a significant gain. The Sponsor retained the rights to the L Auberge name and the continued management of this property. Additional growth metrics from the successful transformation and sale of this luxury hotel asset are as follows: 57.3% Total Revenue growth 63.6% Room Revenue growth 43.8% Food & Beverage Revenue growth 74.4% Spa & Other Department Revenue growth 90.2% Increase in Net Operating Income (NOI) Average Daily Occupancy increased from 74.3% to 77.1% Average Daily Room Rate (ADR) increased from $ to $ Revenue Per Available Room (RevPAR) increased from $ to $ The Sponsor has worked to continually augment its hospitality management group, dedicating additional financial and operational resources to the same, as it seeks to uncover more opportunities in the luxury hotel space. Based on the results associated with the Sedona property, the team has embarked on a number of comprehensive feasibility studies and acquisition pursuits in order to further expand the L Auberge Collection. L'Auberge de Sedona Resort & Spa

6 There is no assurance that Fund will meet its stated objectives. Investing in the Fund includes significant risks. These risks include, but are not limited to: the possibility of losing your entire investment; no guarantees regarding future performance; upon sale or distribution of the Fund s asset(s) you may receive less than your initial investment; lack of a public market for interests in the Fund; limited liquidity; limited transferability of interests; reliance on L Auberge Fund Manager, LLC, the Fund's Manager, for all investment decisions and management of the Fund s financial and operational affairs. Guarantee of certain of the return is based on the strength of the Sponsor s balance sheet, you are advised to conduct your own due diligence. This document may contain forward-looking information or statements, as the term is defined by the Private Securities Litigation Reform Act of 1995, as amended, or by the Securities and Exchange Commission in its rules, regulations and releases. All forward-looking statements are based on the beliefs and assumptions of management relative to information currently available to it. There can be no assurance that such statements will be accurate and actual results and future events could differ materially from those anticipated in such statements. For purposes of this document, the words believe, anticipate, estimate, expect, intend and similar expressions are intended to identify forward-looking statements. Forward-looking statements are subject to certain risks, uncertainties and assumptions. Only accredited investors may invest in the Fund. Investors should consult with their tax, legal, and financial advisors to determine suitability before investing. The minimum suitability standards are more stringent for investors in certain states, as outlined in the PPM, as amended and supplemented. Please see the PPM for more information N. SCOTTSDALE ROAD SUITE 2050 SCOTTSDALE, AZ INFO@LAUBERGEFUND.COM