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Barcelona Sponsored Funds

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Mission Statement

In order to create a high-performance real estate property portfolio, our Mission at USA Barcelona Realty (“the Company”) is to invest mainly in mature, performing hotel and apartment properties.


Our growth objectives aim to preserve, protect and maximize the long-term value of these assets to meet the needs of our investors through revenue, asset and risk management.


To sustain profitability, we intend to maintain our properties with an institutional quality mindset and manage our capital structure with preservation of shareholder equity foremost in mind.

This is neither an offer to sell nor a solicitation of an offer to buy the Units; an offer can only be made by the Confidential Private Offering Memorandum dated April 12, 2013 and amendments thereto, which contains more complete information including Risk Factors and Forward Looking information. This material is qualified in its entirety by reference to the Confidential Private Offering Memorandum.
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USA Barcelona Realty has been created in response to investment opportunities in the hotel and apartment sectors. We seek opportunity, diversification and growth through acquisitions, investments and joint ventures. Our Hospitality and Residential Operating Partnership subsidiaries are planned to be employed for acquisitions, our Realty Holdings Operating Partnership is planned to engage in investments and joint ventures, and our Realty Operating Partnership is expected to conduct operating partnership unit transactions. This structure provides broad transaction flexibility and fosters the ability to achieve our core objectives of: (i) obtaining diverse opportunities through selection in proven markets, quality assets and top-tier property managers; (ii) balancing risk/reward in our capital structure; and (iii) operating under a “best business practices” dictum as a REIT.


We have created a business plan that addresses current opportunities and allows growth in an ever-changing economy. Of great importance, we must enable our Company to deal with opportunity in a manner that is sustainable and works toward ever increasing operating efficiencies and investment returns for our shareholders. To achieve these ends, we have assembled an excellent team comprised of executives, directors and advisors, who have an equity interest in our Company to foster and protect. Indeed! We are a team embracing opportunity through the execution of common goals and objectives.


Looking at the short-term, we plan to assemble a hotel and apartment portfolio of performing core properties through acquisitions and investments. Later, we may be involved in the development of new properties and redevelopments via joint ventures. Along the way, we intend to maintain the balance of portfolio capital mix to assure a substantial hedge against any unexpected market reversal. We expect that within approximately six to seven years the Company may either sell all or substantially all our assets, merge with another company, or conduct an initial public offering and listing of our shares on a national exchange or NASDAQ.


At the appropriate time, we intend to qualify as a Real Estate Investment Trust. Conducting win-win transactions with hotel and apartment owners is the Barcelona business model. We appreciate your interest and encourage you to explore the diverse investment and joint venture opportunities with us.


Best Reguards

USA Barcelona Realty

7025 North Scottsdale Road ♦ Suite160 ♦ Scottsdale, AZ 85253
Telephone: (480) 625-4355 ♦ Fax: (480) 625-4347
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We intend to acquire and invest in leading branded hotels and upscale apartments striving to create a diversified high quality property portfolio. Our plan is to grow through acquisitions, investments and joint ventures We strive to sustain our conservative investment strategy through a balanced risk/reward equation.
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USA Barcelona Realty
The initial business objective of USA Barcelona Realty focuses on hotel and apartment acquisitions, investments and joint ventures.

The organizational relationship of USA Barcelona Realty to its operating partnerships, all of which are administered by USA Barcelona Realty Advisors, is presented in the following chart. Neither USA Barcelona Realty nor the operating partnerships have employees or facility overhead. All employees and facilities are provided by USA Barcelona Realty Advisors under an advisory agreement with us. Our structure is characteristic of a traditional UPREIT.


The advisory arrangement is intended to avoid internal conflicts that prevail in self-administered REITs and allows for a practical approach to developing a broadly capable organization that serves the Company and its affiliates. Certain of the Company’s directors and executives will be in a manager or employee capacity with USA Barcelona Realty Advisors. Of importance in making balanced business decisions, our Board will be comprised of a majority of independent directors.

Notes regarding the Company organization chart:
  1. USA Barcelona Realty - the Company.
  2. USA Barcelona Realty OP i— the affiliate that controls the three specialty operating partnerships*.
  3. USA Barcelona Realty Residential OP i- the managing member of each of a group of Single Property LLCs formed to own apartment communities.
  4. USA Barcelona Realty Hospitality OP i - the managing member of each of a group of Single Property LLCs formed to own our hotels.
  5. USA Barcelona Realty Holdings OP i- the managing member or co-manager of each of a group of single purpose investment entities.
  6. USA Barcelona Taxable REIT Subsidiary(s)– the corporations that allow the Company to lease the properties from the Single Property LLCs, thereby assuring the REIT will have Good REIT Income through the lease structure.

i OP—Operating Partnership
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Timing Is Key
The old real estate adage says location, location, location - but in this economy even more paramount in the creation of value is timing.

We believe USA Barcelona Realty is commencing the acquisitions and investment activities at an ideal time. Now is an excellent point in this new cycle during which to acquire, invest and joint venture hotels and apartments. With minimal new supply coming online in the next few years, we believe recovery in the hotel and apartment sectors will continue its upward climb in occupancy and rates, and, therefore, in value.

Source:CBRE Torto Wheaton Research May 2013 and REIT.com July 2013
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Target Market and Property Objectives
The initial business objective of USA Barcelona Realty focuses on hotel and apartment acquisitions, investments and joint ventures.

We analyze past, present and forecasted geographic market economics to determine where we should invest. Our current focus is on nine geographic markets in the U.S., although we remain flexible to take advantage of attractive opportunities in other markets.


We analyze past, present and forecasted geographic market economics to determine where we should invest. Our current focus is on nine geographic markets in the U.S., although we remain flexible to take advantage of attractive opportunities in other markets.

Hotels
Invest in midscale to upper upscale properties, with primary focus on select/focus service brands in the upper chain scale
Apartments
Target communities in urban and suburban locations catering to upper income renters seeking high quality community experiences
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Investment Criteria & Management Alliances
USA Barcelona Realty applies five macro decision filters that are essential to the discipline of building a strong hotel and apartment portfolio.

We apply a rigorous analysis to each candidate property. For hotels, properties in markets with a balance of business and leisure travel are primary targets. We plan to invest in midscale to upper-upscale branded hotel properties, with greater focus on limited service brands. Apartments will be in the B+ and higher category and be located in urban and suburban locations catering to upper income renters seeking a high quality community experience.


Capital expenditure requirements directly affect our valuation of each property. Such expenditures must be clearly understood and formulated into our investment decision, including PIP i requirements for acquired hotels.


USA Barcelona Realty is creating alliances with established management companies that are approved operators of our targeted hotel brands and apartment properties. Hotels and apartments the Company acquires will be managed by top-tier third-party management companies. USA Barcelona Realty Advisors will serve as the asset manager for the Company’s property portfolio, employing intensive oversight of all top-tier third-party management companies.


i PIP—Property Improvement Plans
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Investment Results
USA Barcelona Realty strives to achieve its planned investment results by blending property selection, risk management and value enhancement
Property selection is essential to setting the stage for a portfolio’s balanced performance i. Risk management involves selecting the correct capital mix for financing the property portfolio and making post-acquisition shifts in capital balance as capital markets pose requirements and present opportunities. Value enhancement incorporates capital mix and seeking methods to better position the portfolio through capital investments, marketing and support of our properties’ managers.
Preferred Equity Investments in Property Owner Entities
  • Preferred return paid from gross property revenues
  • Built in annual percentage increases
  • Priority liquidation distributions
Owned Properties
  • Managed or leased by 3rd party top-tier management companies
  • Portfolio leverage up to 70%, constrained by 2:1 initial debt coverage ratio on new portfolio acquisitions and 1:5 on established portfolio assets
  • Asset appreciation value realized through refinance and/or liquidation.
  • Forecasted holding period: 6-7 years
Balanced performance would incorporate short term yield, mid-term growth in yield and long-term capital appreciation.
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Diversification, Adjustment & Exit
Through a disciplined acquisition and investment process, selection of top-tier management companies and our advisor’s vigilant asset management, we set the stage to achieve high quality overall returns for our shareholders.

We plan to increase the value of our investments and acquisitions by investing in property types and in markets we understand, prudently financing our property portfolio, thoughtfully re-investing capital received from refinance and asset sales, implementing profitable operating strategies in concert with our property management companies and conducting vigilant oversight of the companies managing our properties. Our plan is to provide our shareholders with reliable dividends and long-term capital appreciation achieved through core and value-added investments in high quality hotel and apartment properties.

Targeted Markets Page 7
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Keys To Success
USA Barcelona Realty plans to sustain its commitment to maximize benefits for our shareholders through adherence to our five building blocks of success.
  1. Maintain focus on our Mission Statement.
  2. Concentrate on the mid-and long-term growth after fortifying the short-term.
  3. Benefit from our advisors’ experience in all aspects of our business requirements.
  4. Apply mutually beneficial initiatives with top-tier management companies to create and maintain strategic alliances.
  5. Uphold strategic direction and governance through the oversight and guidance of our seven member Board.
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Proven Leadership
The leaders, directors and advisors of USA Barcelona Realty represent over two centuries of top-level experience across hospitality, real estate and other sectors.

Richard C Harkins

President and Director

Mr. Harkins’ focus is on the executive management, developing business relationships and the capital needs of the Company

His business career began with 13 years in equity finance, land acquisition and executive management with Gulf Oil Real Estate Development Corporation and Cardinal Industries. Since 1987, he has been involved in the real estate industry in the development of high-end daily fee golf courses, and from 2002 to 2009 in the executive management of a land investment and development company. Mr. Harkins took part in the acquisition of sites and the financing of over 170 limited service hotels, over 550 apartment communities, several golf properties and the assembly of over $2.5 billion dollars of public and private equity and debt capital

He is founder of various entities encompassing USA Barcelona Realty and has been active since 2009 in bringing the Barcelona entities forward to the operational stage

George T Simmons, III

Executive Vice President and Director

Mr. Simmons will also serve as a director.

His career spans 45 years in the semiconductor and electronic components industries, retail and restaurant establishments, and real estate holding companies. He currently serves as a director on three boards, two for profit and chairs one non-profit.

Mr. Simmons has over 20 years of executive management tenure in large corporations such as Intel, Motorola, Oki Electric (Japanese) and Daimler-Benz (German), as well as entrepreneurial experience from the co-founding of seven business enterprises between 1985 and 2005.


He is a business advisor, consultant, private investor and independent corporate director.

Dawn Berry

Director

Ms. Berry will serve as a director. She is President and CEO of Pyramid Hospitality and Development Company and has over 20 years experience in the hospitality industry.

Her expertise includes executive management of hotels in focused service, full service, destination resort hotels and franchise brand management ranging from 125-2,200 guest rooms in urban, suburban and destination markets across the U. S.

During her six year prior role as Vice President of Brand Management for Hilton Garden Inn, she earned the JD Power Award for brand experience during five of her six years, and was a contributing member in taking the brand from 58 to 310 properties.

Ms. Berry has proven results in customer satisfaction, profitability and overall asset management in maximizing investor returns.

Jeffrey S. Teets

Chief Financial Officer

Mr. Teets’ overall responsibilities include oversight of accounting, financial and tax reporting, investor relations, information technology systems and involvement with the capital markets operations of the company.  

Previously, he was CFO of several commercial real estate companies, as well as a certified public accountant with Ernst & Young from 1979 to 1990. From 1990 to 2003, as SVP & Treasurer, Mr. Teets was responsible for managing the corporate finance and accounting functions for Westcor/Macerich, a premier real estate developer /manager of regional malls, retail centers and resorts, along with property acquisitions/dispositions. He was responsible for the successful $1.5 billion merger and acquisition of various Westcor operations into a publicly traded national REIT’s infrastructure.

He has been successful in partnering finance and reporting with operations to drive long-term gains in business performance, revenues, company value and bottom-line profits.                              

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Demonstrated Results
Our people are the core of USA Barcelona Realty. We are committed to promoting an entrepreneurial culture where we engage the most capable and talented individuals.

Murray Dow

Advisor

Mr. Dow is President of the Dow Hotel Company (DHC), which controls 12 hotels that generated over $175 million in revenues in 2012. He has over 30 years’ experience as a hotel professional and prior to founding DHC was Executive Vice President and Chief Operating Officer of HEI Hotels, where he grew the company from one to 20 properties, with over $20 million in annual sales.

He was the first general manager in Interstate Hotel history to open a new hotel on time and under construction budget. Mr. Dow also was: Managing Director of Christensen Hotels, responsible for first-class properties in the Seattle area; spent over five years with the Four Seasons Hotels in Seattle and San Francisco, and The Ritz Carlton in Chicago.

Steve Gold

Advisor

Mr. Gold is Managing Director for Hotel Financial Strategies, responsible for development of debt and equity programs, where he has been involved in over $20 billion in real estate financing.

He has been the Chairman of the Real Estate Advisory Board at UCLA, Founder of the UCLA Hotel Conference (ALIS) and a member of the Dean's Council of the UCLA School of Architecture and Urban Planning.

Mr. Gold has been a Director of a public REIT, served as Chairman of Center Financial and was an Adjunct Professor at UCLA Business School. He specializes in the financing of major real estate developments and originates many joint ventures for developers with institutional partners.

Bob Kerrigan

Advisor

Mr. Kerrigan is the President and sole shareholder of Personal Wealth Management Group, Inc. He holds a designation of Certified Wealth Consultant.

For the past 45 years, Mr. Kerrigan has been active in the financial services industry both as a provider of financial services to private clients, and through ownership and management of several privately held companies both in manufacturing and service distribution

Bruce Orr

Advisor

Mr. Orr is currently President of Bruce Orr and Associates, LLC and a full partner in District Development Partners, LLC.

He has a background in corporate banking, and has been an active consultant to businesses throughout the Western U.S. for the last 22 years. Mr. Orr has significant experience in corporate finance, including merger and acquisition, ESOP and real estate finance. He has spent the last six years working in hotel development and has relationships with Hilton Choice and Marriott Hotels.

With District Development Partners, he is currently working on the expanded redevelopment of the Buena Park, California entertainment district.

Allen Weintraub

Advisor

Mr. Weintraub will facilitate the fund raising, marketing and investor relations functions for USA Barcelona Realty.

He has a distinguished career in the financial services industry. Over the course of 18 years, he managed over $120 million of assets for retail investment clients for Merrill Lynch, UBS and Prudential Securities.

In 2005, he branched out on his own, consulting with real estate, healthcare and technology companies to help in their efforts to build brand recognition, market and raise capital. In the past six years Mr. Weintraub has assisted in raising over $170 million for private ventures in these industries.

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Reference to Industry Trademarks and Trade Names

Marriott,” “Courtyard by Marriott,” “SpringHill Suites,” “Fairfield Inn,” “TownePlace Suites” and “Residence Inn” are each registered trademarks of Marriott International, Inc. or one of its affiliates. All references below to “Marriott” means Marriott International, Inc. and all of its affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and attorneys. Marriott is not responsible for the content of this Brochure, whether relating to hotel information, operating information, financial information, Marriott’s relationship with USA Barcelona Realty, Inc., or otherwise.

Hilton”, “Hampton Inn,” “Hilton Garden Inn” and “Homewood Suites” are each a registered trademark of Hilton Hotels Corporation or one of its affiliates. All references below to “Hilton” means Hilton Hotels Corporation and all of its affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and attorneys. Hilton is not responsible for the content of this Brochure, whether relating to hotel information, operating information, financial information, Hilton’s relationship with USA Barcelona Realty, Inc., or otherwise.

Lincoln Property Company” is a registered trademark of Lincoln Property Company. All references to “Lincoln” mean Lincoln Property Company and all of its affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and attorneys. Lincoln is not responsible for the content of this Brochure, whether relating to property information, operating information, financial information, Lincoln's relationship with USA Barcelona Realty, Inc., or otherwise.

Concord Hospitality Enterprises Company” is a registered trademark of Concord Hospitality Enterprises Company. All references below to “Concord” means Concord Hospitality Enterprises Company and all of its affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and attorneys. Concord is not responsible for the content of this Brochure, whether relating to property information, operating information, financial information, Concord’s relationship with USA Barcelona Realty, Inc., or otherwise.

PHD Hospitality & Development Services” is a registered trademark of PHD Hospitality & Development Services. All references below to “PHD” means PHD Hospitality & Development Services and all of its affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and attorneys. PHD is not responsible for the content of this Brochure, whether relating to property information, operating information, financial information, PHD’s relationship with USA Barcelona Realty, Inc., or otherwise.

The Dow Property Company” is a registered trademark of The Dow Property Company. All references below to “Dow” mean The Dow Property Company and all of its affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and attorneys. Dow is not responsible for the content of this Brochure, whether relating to property information, operating information, financial information, Dow’s relationship with USA Barcelona Realty, Inc., or otherwise.

Fidelity Investments” is a registered trademark of Fidelity Investments. All references below to “Fidelity” means Fidelity Investments and all of its affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and attorneys. Fidelity is not responsible for the content of this Brochure, whether relating to property information, operating information, financial information, Fidelity’s relationship with USA Barcelona Realty, Inc., or otherwise.