Dividend: Hotel Sustainability Improvements

SECURE AFFORDABLE CAPITAL FOR YOUR HOTEL’S

SUSTAINABILITY IMPROVEMENTS

Energy-efficient, zero-waste “green” hotels and resorts are in demand by consumers today.

Travelers are voting with their wallets. And hotel booking platforms are responding by using green star ratings to help travelers find eco-friendly hotels.

83%

53%

49%

of global travelers think sustainable travel is vital 1

of travelers say they would pay more for eco-friendly hotels 2

of travelers believe that they don’t have enough sustainable travel options 3

Plus, government requirements are tightening around commercial building efficiency and franchisors are demanding property upgrades. Now is the time to meet these stricter mandates.

Reduced carbon footprint

SUSTAINABLE IMPROVEMENTS DELIVER

Lower utility consumption & costs Increased bookings Higher average daily rate Healthier spaces Happier guests

1. Booking.com’s 2021 Sustainable Travel Report 2. The Deloitte Global 2021 Millennial and Gen Z Survey 3. Booking.com’s 2021 Sustainable Travel Report

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C-PACE Financing for

SUSTAINABLE UPGRADES Commercial Property Assessed Clean Energy (C-PACE) financing is $0 down long-term financing that funds improvements to reduce a property’s carbon footprint and utility consumption.

This solution can often replace higher cost mezzanine financing and preferred equity, and preserve working capital and future borrowing capacity.

NO LONG-TERM PERSONAL GUARANTEES Non-recourse and requires no personal guarantees.

INCREASES NOI Improves net operating income and property value.

CONVENIENT BILLING In most states, C-PACE is billed as a line item on your tax bill.

ZERO UPFRONT COSTS 100% financing of hard and soft costs.

RUNS WITH THE LAND It’s assumable by the next property owner.

PREPAY ANYTIME PACE assessments may be prepaid at any time.

Adding C-PACE to Your Capital Stack Can Generate Significant Savings.

Mezzanine Financing & Preferred Equity Vs. C-PACE Financing WITH C-PACE

TRADITIONAL Mezz/Pref $24M, 14%

100% — 90% —

C-PACE $8M, 5.5%

80% — 70% —

Using a $40 million project as an example: • C-PACE can routinely fund 20% of this project.

• C-PACE can reduce the total equity invested.

• The average blended rate drops by more than 1% with C-PACE.

Senior Debt $6M, 5%

60% — 50% —

Senior Debt $22M, 5%

40% — 30% — 20% — Equity $10M, 12%

8.10% WACC

10% — 0% —

Weighted Average Cost of Capital

Equity $10M, 12%

6.85% WACC

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All Project Lifecycles Qualify for C-PACE Financing NEW CONSTRUCTION | RETROFITS | COMPLETED PROJECTS & RECAPITALIZATIONS

Hotel owners turn to C-PACE financing when they want to build a new eco-friendly hotel, are planning sustainable upgrades for an existing one, need to meet mandated resiliency initiatives, need to conform to a franchisor PIP, or want to be reimbursed for recently implemented energy-saving measures on their property.

C-PACE FUNDS COVER Efficiency Upgrades

Renewable Energy

Geo-Specific Requirements

• HVAC & Air Handling Systems

• Solar

• Seismic Strengthening

• LED Lighting Systems & Controls

• Energy Storage

• Low-Flow Water Systems & Fixtures, Including Pool Systems

• EV Charging Stations

• Weatherproofing & Storm Resiliency

• Elevators • Boilers/Chillers

• Geothermal • Combined Heat & Power

• “Smart” Building Management Systems

• Irrigation Systems • Building Envelope Including Doors, Insulation, Roofing, Windows

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Why DIVIDEND? Dividend Finance was among the first C-PACE Program Administrators and lenders, with more than a decade in the business. Countless commercial property stakeholders trust us to finance their sustainable development projects. We’re backed by Fifth Third Bank, one of the nation’s largest banks, with $211B in assets.

WHEN YOU WORK WITH DIVIDEND, YOU’LL GET: FOCUS Committed to financing a sustainable future INSIGHTS Deep understanding of sustainability trends FLEXIBILITY Customizable commercial loan solutions RELATIONSHIPS Long-term solutions and partnerships EXPERIENCE Backed by one of the US’s most trusted banks

“Working with Dividend to fund a portion of the capital stack on our new hotel project was communicative and highly professional. The team was a pleasure to work with and I look forward to partnering with Dividend again in the future.”

-Dividend C-PACE Hotel Borrower

Is C-PACE Available in Your State?

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1. https://www.pacenation.org/pace-programs/

Today, 29 states plus Washington, DC have active programs. Several other states are currently developing guidelines.

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READY TO START

YOUR PROJECT? Join the savvy hotel owners who discovered this alternative to high-cost sources of funds.

Connect with Dividend Finance today to see if C-PACE is right for you.

Prequalify Your Project

ONE CALIFORNIA STREET | SUITE 1500 SAN FRANCISCO, CALIFORNIA 94111 844.577.7373 dividendfinance.com/CPACE