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Seaside Mariana Spa & Golf Resort Joint Venture Information Memorandum Phase 2 September 10.09


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Information Memorandum

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Seaside Mariana Spa & Golf Resort Joint Venture Information Memorandum Phase 2 September 10.09

  2. 2. Table of Contents Executive Summary 4-5 Company & Management 6-7 Market Snapshot 8-9 The Resort 10-11 Phase 2 Offering & Opportunities 12-13 Phase 2 Implementation 14-15 Financials: 75% JV Equity Shares 16-17 Financials: Overview 18-19 Real Estate Assumptions 20-21 Financials: Cash Flow 22-23 Key Assumptions 24-25 For Additional Details Contact: Kevin Fleming Chairman, Grupo Mariana Family of Resorts Managua, Nicaragua 786-245-6535 Direct Line 505-2-276-5938 Nicaragua Office Tel 888-484-4425 North America Tel 3
  3. 3. Seaside Mariana Spa & Golf Resort Phase 2 Information Memorandum, 17 July 2009 THE OPPORTUNITY: • Seaside Mariana Spa & Golf Resort brings a true and authentic • Implied Residual Land Value: US $110M (Real Estate • Investor Equity IRR% (Pre Tax) Nicaraguan flavor to every part of the overall resort experience. and Operating Income for 12 years) • Experienced Developer and Construction Partners • Phase 2 is focused in the Punta del Sur Neighborhood along • Gross Development Hard & Soft Costs: US $25M the 16th, 17th and 18th holes of the Jack Nicklaus Signature Golf • Freehold Title and Master Policy of Title Insurance Course, featuring El Madroño Golf Club and Plumeria Spa within • Owner Equity Already Invested: US $17M the 5-Star Luxury Hotel as key components. • 100 Key Luxury 5 Star Boutique Hotel (Developer and 5-Star • Equity Requirement of Project: US $14M. Remaining Brand have entered into letter of intent) • Phase 2 offers a strategic, market-based mix of lifestyle and funds will be derived from sales investment options for consumers, from Luxury Home Sites • Resort hotel will consist of between 80 deluxe units to the affordable luxury of Ocean Front Low-Rise Condominiums, • Equity Investment for 1%: $US $190,000, IRR 25% (financial projections prepared for 80 units) 5-Star Condotel Units, Casitas, and Luxury Golf Villas.
  4. 4. Executive Summary There is a new and special place where the land and sea merge gently beaches, inland lakes, dozens of active volcanoes and the largest tract beneath the tropical sun. It is from this magnificent natural setting that of primary-growth rain forest north of the Amazon. Overseas tour- Seaside Mariana Spa & Golf Resort is rising and creating the new stan- ism, especially from the US has grown significantly in the past few dard of excellence for exclusive luxury destinations in Latin America. years. Nicaragua is reminiscent of Costa Rica 15 to 20 years ago. It is also 50% cheaper than its neighbor for tourists. This vibrant na- Nestled on the Pacific Coast of Nicaragua, the resort’s 923 acres tion can now promote itself as The New Nicaragua, a distinction that rise smoothly from over a mile of unspoiled beach to the Tecola- Seaside Mariana will reinforce in all media and investor relations. pa River’s tree-lined banks, framed by distant rolling mountains. Seaside Mariana Spa & Golf Resort is now planning the re- Seaside Mariana is the jewel of The New Nicaragua, a country that under- lease of Phase 2, featuring a strategic, market-based mix of life- stands the past and embraces the future. Serving as the centerpiece of Sea- style and investment options for consumers, from Luxury Home side Mariana is El Madroño — a Jack Nicklaus Signature Golf Course, Sites to the affordable luxury of Ocean-Front Low-Rise Condo- while Plumeria Spa & Wellness Center will pamper the discriminating miniums, Condotel Units and Casitas under the umbrella of a individuals who choose to own property here in this tropical paradise. 5-Star Hospitality Brand, and Luxury Golf Villas along the 6th, 16th, 17th and 18th holes of the Jack Nicklaus Signature Course. The resort offers a broad selection of beachfront and golf course residences built to stringent North American standards, featuring This Information Memorandum briefly outlines the upcoming Phase 2 exquisite details and authenic Nicaraguan finishes wrapped in the Release, and the investment opportunities involved therein. The com- patina of old-world architecture. Our amenities, facilities and pro- grams offer a turnkey, resort-style approach for home purchsers, in- bination of a unique and differentiated brand and product offering, a cluding Concierge Services, a Managed Rental Service by Kemper 5-Star Hospitality Partner, an experienced planning and devlopment Sports Management, and the security of on-site Medical Facilities. team and an emerging market creates a potent investor proposition. Nicaragua is emerging quickly onto the world stage, and Seaside Detailed information for serious inquiries, including a full due dili- Mariana is the resounding star. Beachfront real estate maintains a gence package, may be obtained by contacting Grupo Mariana Family high yield on investment. Recognizing that history is a great teacher, of Resorts directly. an investment now in Seaside Mariana is likely to enjoy the remark- able returns witnessed in neighboring countries over the last decade. Nicaragua has emerged as a stable nation and is quickly evolving into one of the most varied and interesting destinations in Central Amer- ica. In the know travellers and eco-tourists are drawn to its pristine 5
  5. 5. Seaside Mariana Spa & Golf Resort Phase 2 Information Memorandum, 17 July 2009 “The mission of Grupo Mariana Family of Resorts S.A. is to create first class resorts catering to an international clientele, while simultaneously fostering growth, self-reliance and an increased standard of living for the people of Nicaragua.” GRUPO MARIANA FAMILY OF RESORTS Company & Management Seaside Mariana Spa & Golf Resort S.A. was formed under Nica- on fostering self-determination and raising the standard of living for raguan laws on September 11, 2006, registered with number 2,019, the people of Nicaragua. Developer has held discussions with the pages 380 to 393, Volume LI of the Second Mercantile Book and num- following government entities: Nicaragua’s Ministry of Tourism, ber 7,029 of the Book of Persons, both at the Public Registry of the Ministry of Transportation, Ministry of the Environment, the of- Department of Masaya, Nicaragua. The Company was incorporated fice of the President of Nicaragua, and local government officials. specifically to develop and sell real estate in the Seaside Mariana de- velopment located in the municipalities of Diriamba, Nicaragua and Grupo Mariana S.A. has compiled a team of internationally re- San Rafael Del Sur, Nicaragua, near the nation’s capital, Managua. nowned architects, engineers, golf course designers, site develop- ers, construction contractors, real estate marketing professionals, The Company is an affiliate of Grupo Mariana S.A., a corpora- master-planned management consultants and companies and ex- tion created on behalf of the developer to manage the Company’s perts in fields that are germane to the Seaside Mariana Spa & Golf projects. The Developer specializes in the planning and develop- Resort project, including Nicklaus Design, with Jack Nicklaus at ment of luxury Nicaraguan real estate. In addition to Seaside Mari- the helm in the design of El Madroño — the Jack Nicklaus Signa- ana, its projects include Isla Mariana Beach & Marina Resort near ture Golf Course. Seaside Mariana’s management philosophy is to Leon, Nicaragua which features over 1.5 kilometers of pristine retain the best consultants, experts and management needed to as- beachfront, Casa Mariana Hotels and an active lifestyle communi- sure the success of the Property’s development. A full description of ty just a few miles ourside the colonial city of Granada, Nicaragua. the management and consulting team can be provided upon request. Mr. Kevin Fleming is the Founder & Chairman of Grupo Mariana Seaside Mariana has also entered into a management and operating Family of Resorts and is responsible for directing all investment ac- agreement with Kemper Sports Management, a United States based tivity in Central America, including identification, evaluation and professional management company which will be responsible for the consummation of all new investments in the region. He founded the supervision of construction of the golf course, and once completed, Grupo Mariana Family of Resorts to acquire prime real estate in Ni- overall management of golf facilities. Kemper Sports Management is caragua and has established Fundacíon Mariana to support the lo- an organization of more than 3,000 employees and it has most recently cal population through various economic and social initiatives. been involved with the development of a number of high-end residen- tial and golf communities. With more than 70 courses under manage- Mr. Fleming, Grupo Mariana S.A. and Maria Rueda, Presi- ment, Kemper Sports Management offers complete turn-key services, dent of Grupo Mariana, S.A., believe that acting in the best in- taking responsibility for every detail in the successful design, construc- terest of the community is for the highest good of all concerned. tion, and profitable operation of a golf course & hospitality operations. Grupo Mariana S.A. is planning multiple programs geared toward education, health care and community enhancement projects. They are working with the Nicaraguan government on initiatives focused 6
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  7. 7. Seaside Mariana Spa & Golf Resort Phase 2 Information Memorandum, 17 July 2009 8
  8. 8. Market Snapshot Nicaragua is fast becoming the next great tourist destination in the thing less than 7 percent per year for up to the next five years. western hemisphere. Boasting beautiful, largely undeveloped Pacific and Caribbean coastlines, a tropical climate, rich historic culture, and Seaside Mariana Spa & Golf Resort is poised to be the pre- a ranking as the safest country in Latin America, Nicaragua’s growth mier development in the country. The strategic mix of resi- potential is better than any other emerging market in the world. dential product and home sites offered at Seaside Mariana are geared toward attracting both high-end and mid-income buy- Nicaragua currently hosts 800,000 visitors each year from the Ameri- ers, with lifestyle choices to suit both investment levels and desires: cas, Canada and European nations to experience its unique, unlim- ited ecological diversity and natural resources, and this figure has ~ Affluent Luxury Buyers seeking quality and authenticty been growing in leaps and bounds as the country makes the transi- ~ Adventure Travelers and Families seeking escape and excitement tion from an off-the-beaten-path destination to a recognized marquis ~ Golf Aficionados seeking the best play on the best course country. Nicaragua has been ranked as one of the top places to visit ~ Professional Investors seeking high ROI in the world by the Lonely Planet Guide Books for several years now. ~ United States There is projected to be a 5000-room deficit for Nicaraguan hotels in ~ Canada the coming years as tourism outstrips available lodging inventory. ~ European Nations ~ Latin America Foreign investment is now pouring into the country. In 2005, a total of about $241 million was invested by non-Nicaraguans. In 2006, that number grew to $268 million and then rose again in 2007 to $335 million. Meanwhile, tourist dollars are fast becoming a large part of the econ- omy that was once focused on agriculture exports. Tourism has in- creased by 300% in the last decade and even rental yields on Nicaraguan houses are reaching 7.7 percent. Yields on new luxury resorts could make double that, and will coast to around the 15-20 percent mark. As with any emerging market the biggest gains are made on off- plan property, and the tropical coastal regions are likely to prove the most lucrative. If Nicaragua is anything like the South Ameri- can coastal countries before it - Brazil, Argentina, Panama and Costa Rica - then capital growth on off-plan coastal property could increase from 10 to 15 percent a year, and is unlikely to be any- 9
  9. 9. Seaside Mariana Spa & Golf Resort Phase 2 Information Memorandum, 17 July 2009 The Resort Seaside Mariana Spa & Golf Resort offers 923 acres of ocean front El Madroño, the Jack Nicklaus Signature Golf Course awaits those who real estate on the Pacific coast of Nicaragua. The resort is located are seeking some more energetic activity. Edging through the natural grace near the town of San Rafael Del Sur and approximately one hour of the savannah and along the river, the course winds downward toward from the capitol city of Managua (11°43’45’’ N - 86°27’7’’ W). It is the ocean, touching the beach. After a round, El Madroño Club, a mag- approximately an hour’s drive from Managua’s modern interna- nificent clubhouse, awaits where players will be well fed and pampered. tional airport (MGA) to Seaside Mariana Spa & Golf Resort via state roads. The planned Coastal Highway, which will become the major For rejuvination of the mind and body, Plumeria Spa & Well- highway in the region, will enhance access when completed, and a ness Center offers authentic Nicaraguan body treatments, second International Airport is now in the planning stages in Masa- as well as ocean-view massage, facial, hair and nail services. chapa, making Seaside Mariana only 15 minutes away for travelers. Amidst the gently rolling hills on the east side of the property, Seaside The Property ranges in elevation from 18 feet above Sea Level to 800 Mariana Equestrian Club has carved out a piece of paradise within feet and commands views of the Pacific Ocean and the surrounding the 923 acre resort. A stately clubhouse serves as centre-piece. Large San Rafael Del Sur and Diriamba areas and Sierra Mountain Range. parcels of Equestrian Estate Residences will be soon be available for Located only 13 kilometers north, the Montelimar Private Air- purchase. port has a 3,000 foot runway that can accommodate private aircraft. The world is at a turning point and Seaside Mariana has taken ac- The Nicaraguan land, the people, the history and culture tion with the upcoming release of Phase 2. In addition to our exten- around it inspire the palette and amenities at Seaside Mariana. sive product offering, we are offering lifestyle and social solutions that are integral to the way we all choose to live today, and bring a Framed by Luxurious High Rise Condominiums that reach down to life of abundance to our residents. Offering a more private, intimate the beach, is Paseo Mariana, the heart of the resort. Within this town condominium lifestyle with the all of the style of the Mariana Brand, center are the unifying features that create a pulsing lifestyle— places the Punta del Sur Neighborhood offers Low Rise Condominiums, to eat and drink, be entertained, relax, shop and feel the unique beat Condotel Residences with a 5-Star Hospitality Brand, and Luxury that makes Seaside Mariana extraordinary. Connected to the central Golf Villas for the discerning golfer, beach enthusiast and investor. village is Club del Azucar where home owners, family and friends can lounge beneath the tropical sun and enjoy the refreshing waters With every purchase of Phase 2 Home Sites, Condominiums, of the infinity pool. Club del Azucar will offer a swim-up bar and or Condotel Units during our Phase 2 release, Seaside Mari- seating areas, cabanas, outdoor dining, fitness facilities, changing ana will donate 5% of the purchase price to Fundacíon Mari- rooms, water sports rentals, daycare and state of the art tennis courts. ana, which brings aid and education to Nicaraguans in need. 10
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  11. 11. Seaside Mariana Spa & Golf Resort Phase 2 Information Memorandum, 17 July 2009 5% For Futures Program: A purchase in Phase 2 is not only a smart, responsible investment, it is also an investment in the future of Nicaragua. 5% of the purchase price of every sale is donated to Fundacíon Mariana, our non-profit organiza- tion that was created expressly to organize and support socially responsible programs dedicated to fostering growth, self-reli- ance and sustainability in the New Nicaragua. This non-profit organization was founded by Grupo Mariana, S.A, which will provide financial support as part of its corporate commitment to have a positive influence on the communities that surround its properties. Phase 2 Offering and Opportunities Seaside Mariana Spa & Golf Resort is planning the release of Phase purchase of any product of any kind in future releases. 2 in December of 2009. Over the course of the year, fluctuations in the market and the economy prompted our development team to Jardín del Pacifico Condominiums: With just 12 units per building, re-evaluate our planned offering, based on consumer feedback and Jardin del Pacifico Low-Rise Ocean Front Condominiums overlook interests. In addition to our 252 Luxury Home Sites and 36 Condo- the preserved natural area in the trendy Punta del Sur neighbor- miniums released and sold with success in Phase 1, Seaside Mariana hood at Seaside Mariana, which features the dining and entertain- has also designed an enclave of Affordable Luxury, the success of ment choices offered at El Madrono Golf Club and our 5-Star Hospi- which is bolstered by the presence of a soon to be named 5-Star Hos- tality Partner, as well as the wellness offerings at our Plumeria Spa. pitality Brand with which we have just entered into a letter of intent. Offering a more private, intimate condominium lifestyle with the all of the style of the Mariana Brand, Jardin del Pacífico Condominiums The release of Phase 2 includes a smart and realistic product mix are the choice for the discerning golfer, beach enthusiast and investor. with investment and lifestyle opportunities at multiple levels of el- egance and return. The Punta del Norte neighborhood, at the north- Luxury Golf Villas: Phase 2 offers three-bedroom ocean-front golf ernmost corner of the property along the pristine Pacific Beach Front, villas strategically located within steps of El Madrono Golf Club. features a limited number of prime Beach Front Home Sites and a Overlooking the 6th hole of the Jack Nicklaus Signature Golf course, small pocket of magnificent high-rise 1, 2 and 3 bedroom Condomini- these villas are custom designed and appointed to reflect the fla- ums for the discriminating buyer. The Punta del Sur neighborhood at vor of Nicaragua with the Mariana Brand’s standard of elegance. Seaside Ocean Front Low-Rise Condominiums, Condotel Units and Casitas by our soon to be named 5-Star Hospitality Partner, and Lux- 5-Star Branded Condotel: 68 Condotel and 12 private eco-casita ury Golf Villas in a private, south-west facing enclave along the 6th, units are included in the Phase 2 release, allowing buyers to invest 16th and 18th holes of the El Madrono Golf Course by Jack Nicklaus. in a worry-free, hassle free lifestyle with the security of a 5-Star Hos- pitality brand. Our condotel units offer all of the amenities of the Home Sites: Our Phase 2 offering features 49 home sites within 4 dis- Mariana Brand with the convenience of professionally managed rent- tinct neighborhoods within the authentic, amenity-filled Nicaraguan ing, cleaning, and maintenance by Kemper Sports Management, in- landscape at Seaside Mariana. With ocean front, course-side and se- house wellness offerings at Plumeria Spa and the value of a managed cluded sites within the private serenity of tree-covered stillness, there rental program with a projected return potential at 60% occupancy. is a location for every buyer. There is a added advantage for owners of our home sites that others do not share: If a buyer decides they would like to have a condominium in Phase 3, purchasers of home sites in Phase 2 are exclusive members of our Trade Up Program – with their purchase, they have the freedom to trade their home site toward the Punta del Sur Neighborhood 12
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  13. 13. Seaside Mariana Spa & Golf Resort Phase 2 Information Memorandum, 17 July 2009 Phase 0 Permitting Process Water Survey & Wells Lot Surveys Phase 1 Temporary Landscaping Sales Center Phase 2 Implementation Jardín del Pacifico Condos Phase 2 The proposed schedule for the implementation of Phase Temporary Construction 2 and beyond is based on the success of the Phase 2 re- Condominium Hotel lease and further sales projections for 2009-2012. Ocean View Golf Villas Permitting, home site surveys, golf staking for El Madroño Golf Second Entrance Course by Jack Nicklaus and water wells began in 2007-2008, and Administration Area temporary construction and landscaping began in 2007. Plans for the construction of the Sales Centre, Jardín del Pacifico Ocean Front Con- dos and the Condominium Hotel are underway for late 2009-2011. Phase 3 Engineering and construction is being led by Castaneda Ing- Roads & Sidewalks enieros S.A., a Salvadorian General Contractor with 36 years Roadway Lighting of experience in major infrastructure work around Central Landscaping America, including bridges and overpasses, high rise build- ings and hotels, hospitals, malls and industrial projects. Earthwork & Bridges Power Disribution Castaneda’s projects are extensive and multifaceted, ranging from Irrigation $4M Hotels to $80M Multiplazas. For additional information about Castaneda Ingenieros, please visit Communications El Madroño Golf Club Phase 4 Landscaping Intercoastal Highway 14
  14. 14. 2008 2009 2010 2011 2012 15
  15. 15. Seaside Mariana Spa & Golf Resort Phase 2 Information Memorandum, 17 July 2009 Financials: 1% JV Equity Shares The time is NOW in Nicaragua. Seaside Mariana Spa & Golf Resort is planning for the launch of Phase 2, which includes the development of a new 5-Star Brand Hotel & Residences. We are seeking $14 Million US in preferred equity to partially fund Phase 2, which opens a joint venture opportunity allowing partners to invest in an equity share percentage. This is a special opportunity to purchase a 1% equity share with Sea- side Mariana and become a investor in Phase 2. Your investment is projected to return a 25% IRR — the open- ing of the hotel is scheduled for late 2011. Your cash flow rev- enue will deliver a projected US $46,000 growing at 5% annually. There are a limited number of these special opportunities available and we invite you to become a partner. Please con- tact us for more information. We understand the circumstanc- es of the economy and flexible to help you meet your needs. Seaside Mariana is offering a payment plan for the purchase of all equity shares in this joint venture opportunity. A refundable de- posit in escrow of 25% is required immediately to secure your own- ership share and review the due diligence documents over a period of 7 days. After the 7 days, the balance of the purchase price can be made by quarterly payments spread over 2 years. Full information regarding this opportunity, including finan- cial projections can be obtained by contacting Kevin Flem- ing, Chairman of Grupo Mariana Family of Resorts directly at: 16
  16. 16. Available Shares Payments and Funds Usage Contribution Units Total Equity % Capital Raise IRR Deposit 25% Balance # of Payments Payment Amount $190,000 75 75 $14,250,000 25% $47,500 $142,500 7 $20,357 Projected Funds Usage LAND ACQUISITION $2,000,000 14.04% BRAND FRANCHISE FEE $60,000 0.42% FUND RAISE COMMISSION 7% $997,500 7.00% LAND DEVELOPMENT COST $4,357,500 30.58% GOLF CLUB $600,000 4.21% SALE CENTER $435,000 3.05% JARDIN DEL PACIFICO CONDOMINIUM $1,000,000 7.02% SOFT COST EXPENSE $1,531,280 10.75% ADMINISTRATION $546,886 3.84% MARKETING EXPENSE $1,328,620 9.32% DEVELOPMENT FEE $1,393,214 9.78% TOTAL $14,250,000 100.00% 17
  17. 17. Seaside Mariana Spa & Golf Resort Phase 2 Information Memorandum, 17 July 2009 Resort Overview • Phase 1 Sold Out in 18 months • 252 Home Sites Sold • 128 Home Sites remaining • 36 Beach Front Condos Sold • 173 total Condos to be released in future phases 2009-2012 Financials: Overview The financial overview presented in this document is a mere Also in July 2009, The Barcelo Hotels group from Spain signed a Joint snapshot of Grupo Mariana’s extensive portfolio of experience Venture agreement with the Nicaraguan Government in order to de- in the acquisition and management of Nicaraguan Real Estate. velop an existing small local airfield into a second International Air- port. The airfield in question is located in Masachapa on the Pacific The success of Seaside Mariana Spa & Golf Resort since its launch Ocean of Nicaragua. This will place an International Airport and throughout Phase 1 — Despite the economic downturn that be- only 15 minutes from Seaside Mariana Spa & Golf Resort, mak- gan in 2008 — has placed the development in a prime situation for ing access for home owners and tourists easier than ever before. the release of Phase 2 to the buying market in December of 2009. The numers outlined are based on 2009 prices. An extended finan- Seaside Mariana Spa & Golf Resort is well positioned to take ad- cial overview including financial projections from 2009-2024 and a vantage of the current upswing in consumer confidence and in- due diligence package may be obtained by contacting Kevin Flem- vestment interests, and is planning an extensive marketing pro- ing, Chairman of Grupo Mariana Family of Resorts directly at: gram to reach buyers within its currently established market base as well as extending market reach to additional consum- ers througout the United States, Canada and European nations. New movement within the country of Nicaragua will add to the success of the Phase 2 Release. In June 2009, the long await- ed Coastal Law was approved, contributing to a more sta- ble and clear investment environment for residential real es- tate and tourism infrastructure to beach areas for development. In July 2009, the Pensioners Law was approved by the Ni- caraguan Legislature considerably improving the benefits and incentives for people considering retiring in Nicaragua. 18
  18. 18. Grupo Mariana Development Portfolio Summary Seaside Mariana Spa & Golf Resort Phase 1 Overview REAL ESTATE Development Home Sites Condos Villas Total Units Ave. Value Sales Since project launch in January, 2007 and throughout Phase 1, Seaside Mariana Spa & Golf Resort has developed a master plan for the Property, acquired projected cost estimates, obtained a preliminary design of the course from the Nicklaus De- Current: sign organization, and has recently completed construction plans with a budget for the costs of the development of Phase I. Seaside Mariana 380 600 100 1080 $350,000 $378,000,000 Isla Mariana 60 60 $100,000 $6,000,000 Development of the Property will require extensive infrastructure improvements, such as roads, electricity, water and sew- age facilities. Development of the Property requires issuance of a variety of permits and approvals from various govern- Future: Home Sites Casitas ment agencies. Many of these permits and approvals have been obtained, including the approval of the Major Use of Land Café Mariana 25 200 225 $200,000 $45,000,000 Permit form INETER, department of Managua, Nicaragua establishing good conditions for construction on the land and no Pacific Coast 25 200 225 $300,000 $67,500,000 fault lines or risk to development. Caribbean Coast 25 50 75 $250,000 $18,750,000 Granada 25 200 225 $200,000 $45,000,000 In addition, development permits have been obtained from the two local municipalities, as have the required water and Ometepe 25 100 125 $175,000 $21,875,000 cultural permits. Additionally, the Nicaragua Ministry of Tourism and the offices of PRO Nicaragua have signified their HOTELS support for the project in letters to the Developer. Development Rooms Casitas Total Units Ave. Value Sales As of July 2007, a well has been drilled 200 feet and water located. The results of the drilling have proven the well has an Granada 1 10 0 10 $250,000 $2,500,000 ability to deliver up to and over 33 gallons of water per minute. A second well was completed in September 2007, with re- Granada 2 80 0 80 $250,000 $20,000,000 sults of the drilling indicating the well has an ability to deliver up to 270 gallons of water per minute. Two more wells were Seaside Mariana (2) 100 40 140 $250,000 $35,000,000 drilled in the first and second quarters of 2008, each delivering an additional 250 gallons of water per minute. Isla Mariana 20 130 150 $250,000 $37,500,000 Café Mariana 20 20 $250,000 $5,000,000 Seaside Mariana Spa & Golf Resort sold out Phase 1 Home Sites and Residential Product offered in only 18 months and are Ometepe 20 20 $250,000 $5,000,000 preparing for the launch of the Phase 2 release, which includes a strategic mix of residential and lifestyle products based on consumer desires and current market influences. Pre-marketing for Phase 2 begins in August, 2009 leading to the world- PRIVATE RESIDENCE CLUB wide release in December, 2009. Houses Shares Total Units Ave. Value Sales 12 16 192 $150,000 $28,800,000 REAL ESTATE INVESTMENT CLUB Club Total Shares Ave. Value Sales 1 707,000 $15,000 $15,000,000 GRUPO MARIANA FAMILY OF RESORTS TOTAL REAL ESTATE VALUE: $730,925,000 Note: The investment opportunities outlined in this Information Memorandum apply only to Seaside Mariana Spa & Golf Resort. 19
  19. 19. Seaside Mariana Spa & Golf Resort Phase 2 Information Memorandum, 17 July 2009 Real Estate Assumptions Base assumptions regarding available real estate are shown to the right, outlining availble units, square footage and total con- struction costs for the 5-Star Brand Hotel and 8 Low Rise Con- dominium Buildings. A full breakdown of each unit, includ- ing financial projections can be obtained by contacting Kevin Fleming, Chairman of Grupo Mariana Family of Resorts directly at: 20
  20. 20. Real Estate Assumptions CONDOTEL SALES FACTORS CONSTRUCTION FACTORS RETURN ON INVESTMENT SALES COMMISSIONS DONATIONS MKTG/BRAND CONSTRUCTION LANDSCAPE SOFT COST ADMIN GROSS PROFIT TAXES NET PROFIT 12% 5% 7% 34.94% 1% 7% 5% 40.67% 15% 35% $18,135,040 $2,176,205 $344,095 $1,269,453 $5,701,500 $54,300 $380,100 $271,500 $7,375,230 $1,106,285 $6,268,946 HOTEL DESCRIPTION AVE INT. SQ/FT AVE EXT. SQ/FT TOTAL SQ/FT QTY UNITS COST PER SQ/FT TOTAL C.C. Interior Units 400 32,000 80 $60 $1,920,000 Balcony 100 8,000 80 $40 $320,000 Common Space 20,000 $100 $2,000,000 Furniture 80 $8,000 $640,000 Retail 5,000 $30 $150,000 Contingency 5% $271,500 Pre-Opening 80 $5,000 $400,000 TOTAL $5,701,500 LOW-RISE CONDOMINIUM SALES FACTORS CONSTRUCTION FACTORS RETURN ON INVESTMENT SALES COMMISSIONS DONATIONS MKTG/BRAND CONSTRUCTION LANDSCAPE SOFT COST ADMIN GROSS PROFIT TAXES NET PROFIT 12% 5% 7% 30.08% 1% 7% 5% 46.40% 15% 39% $35,009,766 $4,201,172 $1,750,488 $2,450,684 $9,220,503 $87,814 $614,700 $439,073 $16,254,334 $2,436,800 $13,808,534 CONDOS DESCRIPTION AVE INT.SQ/FT AVE EXT. SQ/FT TOTAL SQ/FT QTY UNITS COST PER SQ/FT TOTAL C.C. Interior Units 1100 105,600 96 $60 $6,336,000 Balcony 100 9,600 96 $40 $288,000 Common Space 10,560 $40 $422,400 Furniture 96 $13,500 $1,296,000 Contingency 5% $439,031 TOTAL $9,220,503 SUMMARY INT. SQ/FT EXT. SQ/FT TOTAL SQ/FT QTY UNITS AVE SQ/FT AVE SALE PRICE TOTAL SALES CONDOTEL 32,000 8,000 40,000 80 $458 $226,688 $18,135,040 LOW-RISE CONDOS 105,600 9,600 115,200 96 $304 $367,007 $35,009,766 TOTAL 137,600 17,600 155,200 176 $381 $296,847 $53,144,806 21
  21. 21. Seaside Mariana Spa & Golf Resort Phase 2 Information Memorandum, 17 July 2009 Financials: Cash Flow 22
  22. 22. Seaside Mariana Spa & Golf Resort Total Project Financial Projections 2009-2024 BRAND HOTEL & RESIDENCES (in 000s) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 OPERATIONS Operating Revenues Hotel Condo Rooms $0 $0 $0 $10,519 $11,476 $12,432 $13,053 $13,706 $14,391 $15,111 $15,867 $16,660 $17,493 $18,368 $19,286 $20,250 Hotel F&B (incl. Banquet) $0 $0 $0 $5,477 $5,751 $6,038 $6,340 $6,657 $6,990 $7,340 $7,707 $8,092 $8,497 $8,922 $9,368 $9,836 Commercial Space Rental $0 $0 $0 $126 $132 $139 $146 $153 $160 $168 $177 $186 $195 $205 $215 $226 Catering & Spa Income $0 $0 $0 $1,148 $1,206 $1,266 $1,329 $1,396 $1,466 $1,539 $1,616 $1,697 $1,781 $1,870 $1,964 $2,062 Total $0 $0 $0 $17,270 $18,564 $19,875 $20,869 $21,912 $23,008 $24,158 $25,366 $26,634 $27,966 $29,364 $30,833 $32,374 Operating Expenses - Hotel Condo Rooms $0 $0 $0 $10,204 $11,131 $12,059 $12,662 $13,295 $13,960 $14,658 $15,391 $16,160 $16,968 $17,817 $18,707 $19,643 Hotel Condo F&B (incl. Banquet) $0 $0 $0 $2,191 $2,300 $2,415 $2,536 $2,663 $2,796 $2,936 $3,083 $3,237 $3,399 $3,569 $3,747 $3,934 Commercial Space Rental $0 $0 $0 $50 $53 $55 $58 $61 $64 $67 $71 $74 $78 $82 $86 $90 Catering & Spa $0 $0 $0 $459 $482 $506 $532 $558 $586 $616 $646 $679 $713 $748 $786 $825 Total $0 $0 $0 $12,904 $13,967 $15,036 $15,788 $16,577 $17,406 $18,277 $19,190 $20,150 $21,157 $22,215 $23,326 $24,492 Net Avail. For Partner Distribution Hotel Rooms $0 $0 $0 $316 $344 $373 $392 $411 $432 $453 $476 $500 $525 $551 $579 $608 Hotel Condo F&B (incl. Banquet) $0 $0 $0 $3,286 $3,451 $3,623 $3,804 $3,994 $4,194 $4,404 $4,624 $4,855 $5,098 $5,353 $5,621 $5,902 Commercial Space Rental $0 $0 $0 $75 $79 $83 $87 $92 $96 $101 $106 $111 $117 $123 $129 $135 Catering & Spa $0 $0 $0 $689 $723 $760 $798 $837 $879 $923 $969 $1,018 $1,069 $1,122 $1,178 $1,237 Total $0 $0 $0 $4,366 $4,597 $4,839 $5,081 $5,335 $5,601 $5,882 $6,176 $6,484 $6,809 $7,149 $7,507 $7,882 SALES OF HOTEL CONO / INVESTOR Sale of Hotel Condo Units $2,657 $18,601 $23,915 $7,972 $0 Construction Costs/Commissions/Donations ($1,817) ($12,722) ($16,357) ($5,452) $0 Net Cash In/(Out) on Sales $840 $5,879 $7,558 $2,519 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Net Inflows / (Outflows) $840 $5,879 $7,558 $6,886 $4,597 $4,839 $5,081 $5,335 $5,601 $5,882 $6,176 $6,484 $6,809 $7,149 $7,507 $7,882 SPLITS TO OWNER / PARTNERS Operating Cash Flow Grupo Mariana - Owner $0 $0 $0 $1,092 $1,149 $1,210 $1,270 $1,334 $1,400 $1,470 $1,544 $1,621 $1,702 $1,787 $1,877 $1,970 Partner $0 $0 $0 $3,275 $3,448 $3,629 $3,811 $4,001 $4,201 $4,411 $4,632 $4,863 $5,106 $5,362 $5,630 $5,911 Total $0 $0 $0 $4,366 $4,597 $4,839 $5,081 $5,335 $5,601 $5,882 $6,176 $6,484 $6,809 $7,149 $7,507 $7,882 Sales of Hotel Units net of Construction Grupo Mariana - Owner $210 $1,470 $1,890 $630 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Partner $630 $4,409 $5,669 $1,890 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total $840 $5,879 $7,558 $2,519 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Cash Flow to Owner/Partner Grupo Mariana - Owner $210 $1,470 $1,890 $1,721 $1,149 $1,210 $1,270 $1,334 $1,400 $1,470 $1,544 $1,621 $1,702 $1,787 $1,877 $1,970 Partner $630 $4,409 $5,669 $5,164 $3,448 $3,629 $3,811 $4,001 $4,201 $4,411 $4,632 $4,863 $5,106 $5,362 $5,630 $5,911 Total $840 $5,879 $7,558 $6,886 $4,597 $4,839 $5,081 $5,335 $5,601 $5,882 $6,176 $6,484 $6,809 $7,149 $7,507 $7,882 IRR to Partner 25.9% (75% Equity Share) 23
  23. 23. Seaside Mariana Spa & Golf Resort Phase 2 Information Memorandum, 17 July 2009 General Assumptions Operational Assumptions Brand Hotel Operational Revenue Opening 2011 Average Daily Rate (Hotel & Condo) US $298 Number of Rooms 80 Occupancy Rate Year 1 55% Stabilized Occupancy 65% Occupancy Rate Year 2 60% Stabilized Year 2014 Occupancy Rate Year 3 65% Stabilized Average Daily Rate US $250 Food & Beverage & Other Spend per person US $60 Spa Occupancy Usage 25% Spa Per Person US $65 Brand Hotel & Residential Catering Occupancy Usage 25% Total Units to Sell 176 Catering Per Person US $25 Sales Start (in 4 Phases) 2010 Commercial Revenue per m2 US $22 Sales Completed (3 Years) 2012 Peak Velocity (Units per Week) 2 Average Velocity (Units per Week) 1 Average Sale Price per Square Foot US $358 Partner Equity $14,250,000 24
  24. 24. Key Assumptions 25
  25. 25. Seaside Mariana Spa & Golf Resort Phase 2 Information Memorandum, 17 July 2009 For Additional Details Contact: Kevin Fleming Chairman, Grupo Mariana Family of Resorts Managua, Nicaragua 786-245-6535 Direct Line 505-2-276-5938 Nicaragua Office Tel 888-484-4425 North America Tel 26