Annual ESG Report 2023
ANNUAL ESG REPORT 2023
Introduction from Ohana’s Founder and CEO, G. Christopher Smith Greetings, We are excited to share Ohana’s second annual Environmental, Social, and Governance (ESG) report, which reviews our achievements in 2022 and outlines our ambitious goals for 2023. While we have incorporated ESG considerations into our decision making for many years now, 2022 marked the first year of Ohana’s formal ESG policy. The results were consistent: we continued to identify and invest capital in projects that enhance the communities and natural environments in which we operate, including upgrading building management systems, seeking LEED certification, and donating to local charitable organizations. And it was a team effort – from implementing new internal processes to collaborating with on-property teams to actively participating in our ESG speaker series, it was great to see the entire Ohana team engaged along the way.
As you will see, for 2023 we have again set ambitious goals and spending targets across our four key ESG pillars – Energy, Water, Diversity, and Giving. In addition, we are excited to implement our Responsibly Ohana policy across new portfolio properties like the Claremont Club & Spa to continue to enhance our impact with regards to ESG. Onward,
G. Christopher Smith Chief Executive Officer
3 / 22
01
About Ohana Ohana is a vertically integrated real estate investment firm. Our team is comprised of experts in real estate operations, capital markets, development & construction, and brokerage. We put relationships at the center of everything we do, with a datadriven approach that allows us to identify risks and opportunities.
PA R K C I T Y, U TA H
BY THE NUMBERS
$4.1B
In total investments
2,646 Hotel keys / residential units currently owned and /or operated across 10 investments
41
Corporate employees
35+
Properties acquired, financed, operated, or developed
$2B+
Transacted by Ohana Realty across 5 residential projects
3,903
Employees across property portfolio All figures as of July 2023
4 / 22
02
Responsibly Ohana Each Ohana property is located in an exceptional community. Our Responsibly Ohana policy outlines our commitment to enhancing these communities, including how we incorporate ESG considerations across our firm and the entire investment lifecycle, from acquisition due diligence to realization.
LOS CABOS, MEXICO
ESG PILLARS Our ESG efforts are focused on four key impact areas.
Energy
Water
Diversity
Giving
Reduce overall carbon footprint by lowering energy consumption
Reduce water consumption across portfolio
Upgrade and optimize equipment / processes for efficient resource usage
Use reclaimed water for irrigation and landscaping
Require diverse candidate pools for positions where Ohana has control
Maintain annual charitable giving budgets for each property and at Ohana level
Explore on-site renewable energy generation
Pursue operational changes and efficiencies
Target a corporate workforce of >50% minority, female, and / or veteran
Focus charitable efforts on community-based causes such as youth development / education
Seek to hire individuals with special needs when possible
Encourage and support volunteering and giving opportunities for Ohana employees
5 / 22
ENVIRONMENTAL
03
Energy + Water Energy and water are the main natural resources consumed across our properties, providing ample opportunity for improvement. Through innovation, system / equipment upgrades, and dedicated operational initiatives, we continue to focus on reducing consumption and increasing efficiency. LOS CABOS, MEXICO
2022 HIGHLIGHTS
Monarch Beach Golf Links Turf Reduction Program
La Cantera Building Management System Upgrade
In 2021 and 2022, the golf course removed 50,000 ft2 of turf, reducing water usage by approximately 6 million gallons.
Automated HVAC system controls were installed across the property, including at the main building, spa, and golf clubhouse.
Waldorf Astoria Monarch Beach Resort HVAC Enhancements
349 Metric tons of CO2 saved in 2022 from the HVAC enhancements
$149,571 Cost savings to date
Twin Dolphin Solar Energy Production
2.3M D A N A P O I N T, C A L I F O R N I A
6 / 22
Number of kilowatt hours produced in 2022
ENVIRONMENTAL
2022 Initiatives vs. Results In 2022, Ohana’s owned-property portfolio targeted $4.1 million in environmental projects, including central plant upgrades at Waldorf Astoria Monarch Beach Resort and HVAC and building management systems enhancements at multiple properties. $2.2 million was spent during the year, while the remaining balance was approved and will be fulfilled in 2023 and 2024.
$3,000,000 Approved Expenditures to be Fulfilled in 2023 and 2024
$4,078,000
$ 2 ,1 5 1 ,0 0 0
Budget
Actual
2 02 2 E N V I R O N M E N TA L E X P E N D I T U R E S
7 / 22
ENVIRONMENTAL
2023 Initiatives In collaboration with our on-property teams and third-party consultants, Ohana has identified and is investing in additional environmental cap-ex projects. For properties acquired in 2023, Ohana is evaluating potential environmental initiatives for 2024.
Overall
$4,457,500 Total planned spending on water / energy projects in 2023
Waldorf Astoria Monarch Beach Resort & Club
$2,000,000
$367,500 Coral restoration, water infrastructure improvements, “smart” electricity, gas and water meters, and LEED certification pursuit
Hyatt Lost Pines
$252,000 Building control system upgrade and hot water return system
Replace chillers, cooling tower, and chilled water / condenser water pumps in central plant
La Cantera Resort
Montage Deer Valley
$130,000
$1,200,000 Complete the guestroom automated lighting project for better room energy control
Hotel Commonwealth
$387,000 Replace chiller points and air handling units to optimize HVAC efficiency
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Maravilla + Twin Dolphin Club
Complete the BAS upgrade work and add weather track irrigation controller
Montage Los Cabos
$121,000 Add spa water dispensers, filtration system for public areas, and bins for recycling program
ENVIRONMENTAL
C A S E S T U DY
LEED Pre-Certification at Twin Dolphin
The Twin Dolphin master-planned community in Los Cabos is the first community to become LEED pre-certified in Mexico. Being good stewards of its stunning natural environment has always been a top priority for the community, and the leadership and operations teams already had several LEED-approved programs and policies in place – but they wanted to do more. The team decided to extend their stewardship to officially become a LEED-certified community, and hired Revitaliza Conultores, a consulting firm from Mexico City specializing in LEED certification, to help them spearhead the process. Over many years, the Twin Dolphin team gained the pre-certification by investing in new projects and reviewing processes already in place, and anticipates gaining full LEED certification within the next year.
1 Number of LEED pre-certified communities in Mexico**
2.5M Gallons of water produced for community use this year from the onsite desalination plant
509,000 m2 Total dedicated open green space at Twin Dolphin (golf course not factored into this total) **First LEED Community v4.1 Existing Project certification in Mexico
9 / 22
SOCIAL
04
Diversity + Giving Ohana supports the communities where its properties are located by donating both capital and resources to local charitable organizations and by fostering diverse work environments.
LOS CABOS, MEXICO
2022 HIGHLIGHTS
$3,233,000 2022 charitable contribution total across Ohana portfolio (includes volunteer hours, in-kind donations, and cash donations).
Community Kitchen In Los Cabos, Maravilla funded the build of a new kitchen for the Dar Para Recibir Community Center, which serves meals to over 70 local children daily.
$111K
44
Amount donated by Ohana employees to support non-profit organizations.*
Organizations supported through employee donations.
*Includes Benevity match 10 / 22
LOS CABOS, MEXICO
SOCIAL
2022 Initiatives vs. Results Ohana’s 2022 social expenditures included cash and in-kind donations to local charitable organizations, employeerelated initiatives focused on wellness and working conditions, and more.
$3,022,000
$3,233,000
Budget
Actual
2022 SOCIAL EXPENDITURES
11 / 22
SOCIAL
2023 Initiatives At the majority of its properties, Ohana is committing to donate $1,000 per full-time employee to local charitable causes, non-profit organizations and other social initiatives, as well a significant investment in local charitable organizations on behalf of its private community and club in Los Cabos, MX.
Overall
$2,919,000
Hyatt Regency Lost Pines
$444,000 $1,000 social spend committed per FTE, 444 FTEs on property
Total planned social spend in 2023
La Cantera Waldorf Astoria Monarch Beach Resort & Club
$586,000 $1,000 committed per FTE for social spend, 586 FTEs on property
Hotel Commonwealth
$74,000
$550,000 $1,000 social spend committed per FTE, 550 FTEs on property
Montage Deer Valley
$404,000 $1,000 social spend committed per FTE, 404 FTEs on property
$1,000 committed per FTE for social spend, 74 FTEs on property
Montage Los Cabos
Maravilla + Twin Dolphin Club
$661,000
$200,000
$1,000 charitable donations committed per FTE, 661 FTEs on property
Donations to local charities and social causes in Los Cabos, MX LOS CABOS, MEXICO
12 / 22
SOCIAL
Diversity Across Ohana Portfolio
3,903 Total employees across all Ohana properties
89 Executive Team members across all Ohana properties
67%
51%
Minority**
Female
30% Minority**
66%
29% Female
of Ohana corporate team members identify as minority, under-represented minority, and / or female
**Percentage based on U.S. employees only.
C A S E S T U DY
Retail at Montage Los Cabos
The front drive retail corridor at Montage Los Cabos houses a store featuring a carefully curated collection of clothing, jewelry, accessories, and other unique products, all handmade by local Mexican artisans. The boutique offers a platform for local artisans to sell and showcase their work as they continue to preserve the traditions of making these items, many of which are created using techniques passed down over generations.
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GOVERNANCE
05
Commitment to Accountability Ohana’s ESG Committee helps ensure we live up to the high standards we have set for our company and our properties. The team, which meets quarterly, is responsible for the following:
Determining Ohana’s ESG priorities and focus areas at the beginning of each year
Working with the Asset Management team in setting annual propertylevel performance targets, tracking progress, and proactively addressing ESG risks and opportunities
Providing transparency to our stakeholders, including distribution of monthly performance tracking and annual reporting
PA R K C I T Y, U TA H
14 / 22
GOVERNANCE
Property Team Engagement In connection with the annual budgeting process, Ohana’s Asset Management team and ESG Committee work with the onproperty executive teams to establish ESG spending targets for the subsequent year. On a monthly basis, progress against the pre-established targets is reviewed alongside key property performance metrics, such as revenue, occupancy, and cash flow.
D A N A P O I N T, C A L I F O R N I A
C A S E S T U DY
General Managers Meeting
Each year, Ohana brings together property general managers from across the portfolio to network, share industry best practices and align wider objectives with ownership.
Led by Ohana’s Asset Management team, this collaborative meeting allows the team to share milestones of major capital projects (including ESG initiatives) and review industry trends, which fosters cross-pollination of ideas among our diverse set of general managers from a wide range of brands and companies.
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Appendix
APPENDIX
The Responsibly Ohana Policy Responsible Investment Culture
• Maintain and strengthen Ohana’s responsible investment culture • Ensure the Responsibly Ohana policy is available to all employees • Encourage involvement in internal and external research to inform Ohana’s ESG practices • Provide periodic ESG trainings and speaker series • Disclose ESG performance versus pre-established targets, internally and with investors and key stakeholders
Investment Due Diligence
• Assess material ESG issues, risks, and opportunities related to acquisition targets • Document ESG-related due diligence findings
Asset Management • Reduce carbon footprint by lowering energy consumption through energy efficiency projects • Reduce water consumption through operational changes and the use of technology • Hire employees from a diverse candidate pool for property-level positions where Ohana retains approval rights • Maintain annual charitable giving budgets directed toward youth development and education • Review ESG progress and outstanding items with on-site property teams
CEDAR CREEK, TEXAS 17 / 22
ESG POLICY
Responsibly Ohana in Action Adherence to our Responsibly Ohana policy will help ensure we make progress towards our goals.
Responsible Investment Culture
Investment Due Diligence
Asset Management
The Responsibly Ohana policy is readily available to all Ohana employees
Ohana deal teams are expected to follow a standardized ESG due diligence process tailored for each property
Establish property-level ESG goals across Ohana’s key impact areas
Employee involvement in research projects to inform ESG priorities is encouraged Trainings and programs on ESG topics and developments Transparency on ESG performance versus pre-established targets
Ohana proactively seeks to identify ESG risk areas and improvement opportunities Prioritized actions are documented and then recommended to the Investment Committee
Review ESG progress and outstanding items on a monthly basis with on-site property teams Focused on control-oriented equity investments where Ohana directly influences action Elements of the policy may be applied to credit investments when feasible
HEALDSBURG, CALIFORNIA
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ESG PARTNERSHIPS
Partnerships
While our ESG goals and initiatives for 2023 and beyond are ambitious, it is important to reflect on our positive impact thus far.
Tesla Partnership Ohana has partnered with Tesla to implement energy efficient systems at multiple properties. • At Twin Dolphin, a private master-planned community in Los Cabos, we installed a solar carport system, individual solar installations on several community amenities, and a complex battery storage and management system. The goal of this project is to provide 19.5 GWh of energy, thus bringing the entire community off the grid. • At Montage Healdsburg, we installed the first Tesla carport system at a hotel in the United States. Results: 5 solar installations have been completed and 1 is in the permitting phase.
Carbon Lighthouse
LOS CABOS, MEXICO
Ohana has partnered with Carbon Lighthouse, an energy-efficiency organization, to identify and implement energy-savings solutions at multiple properties. In addition, Ohana is a member of Carbon Lighthouse’s Advisory Board. Results: Ohana has implemented 27 energy efficiency measures, with an additional 17 measures in progress. Collectively, these measures are projected to deliver 3,375 tons of annual CO2 savings.
Audubon Partnership Twin Dolphin Club has worked with Audubon International to achieve recognition as an environmentally sensitive property, focused on protecting the natural resources of Baja California Sur. • Twin Dolphin Club has been designated as a Certified Bronze Audubon International Signature Sanctuary. • This prestigious certification verifies sustainable design, construction, and long-term management of golf courses, communities, and resorts. Results: Twin Dolphin Club is the only golf course in Mexico to achieve designation as a Certified Bronze Audubon International Signature Sanctuary. LOS CABOS, MEXICO
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APPENDIX
Our Portfolio
Claremont Club & Spa
Hotel Commonwealth
BERKELEY, CA
BOSTON, MA
Hyatt Regency Lost Pines
La Cantera Resort
CEDAR CREEK, TX
SAN ANTONIO, TX
Maravilla + Twin Dolphin Club
Montage Deer Valley
LOS CABOS, MX
PARK CITY, UT
Montage Los Cabos
60 Duffield Multifamily + The Tillary Hotel
LOS CABOS, MX
San Vicente Bungalows WEST HOLLYWOOD, CA 20 / 22
From urban markets to resort destinations, our portfolio spans across North America.
BROOKLYN, NY
Waldorf Astoria Monarch Beach Resort & Club DANA POINT, CA
ohanare.com Austin 401 Congress Avenue Suite 2750 Austin, TX 78701 650.681.0185 Park City 1389 Center Drive Suite 105 Park City, UT 84098 435.604.1850 Redwood City 1991 Broadway Street Suite 100 Redwood City, CA 94063 650.681.0185
HEALDSBURG, CALIFORNIA
The data and information in this report (“Report”), which has been prepared by Ohana Real Estate Investors (“Ohana”), are presented for informational purposes only. This Report shall not constitute an offer to sell or the solicitation of any offer to buy any interest, security, or investment product. The information in this Report is only as current as the date indicated and may be superseded by subsequent market events or for other reasons, and Ohana assumes no obligation to update the information herein. Nothing contained herein constitutes investment, legal, tax, or other advice nor is it to be relied on in making an investment or other decision. This Report should not be viewed as a current or past recommendation or a solicitation of an offer to buy or sell any securities or to adopt any investment strategy. Certain of the information contained in this Report contains “forward-looking statements” or information. Any statements that are not statements of historical facts may be deemed to be forward-looking statements. When used in this Report, the words “may,” “could,” “anticipate,” “target,” “plan,” “continue,” “goal,” “commit,” “achieve,” “project,” “intend,” “estimate,” “believe,” “expect” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. Furthermore, any projections or other estimates in this Report, including estimates of returns or performance, are “forward-looking statements” and are based upon certain assumptions that may change. Forward-looking statements are subject to a number of certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or anticipated results. The forward-looking statements speak only as of the date of this Report and undue reliance should not be placed on these statements. Investors should read this ESG Report in conjunction with investment fund quarterly reports, financial statements and other disclosures regarding the valuations and performance of the specific investments discussed herein. Ohana disclaims any obligation to update any forward-looking statements as a result of new information, future events or otherwise. In addition, unless the context otherwise requires, the words “include,” “includes,” “including,” and other words of similar import are meant to be illustrative rather than restrictive. Statistics and metrics relating to ESG factors or sustainability risks or impacts are estimates and may be based on assumptions or developing standards. Nothing contained herein is intended to predict the performance of any investment. There can be no assurance that actual outcomes will match the assumptions or that actual returns will match any expected returns. Goals are aspirational and not guarantees or promises that all goals will be met. Certain information contained herein relating to any goals, targets, intentions, outcomes or expectations is subject to change. The ESG or impact goals, targets, commitments, incentives, initiatives or outcomes contained herein are purely voluntary and are not binding on investment decisions and/or Ohana’s management or stewardship of investments. Ohana may in the future establish certain ESG or impact goals, targets, commitments, incentives, initiatives or outcomes. Similarly, there can be no assurance that Ohana’s ESG policies and procedures as described in this Report, including policies and procedures related to responsible investment or the application of ESG-related criteria or reviews to the investment process, will continue to be applied in the manner described; such policies and procedures could change, even materially, or may not be applied to a particular investment. Ohana is permitted to determine in its discretion that it is not feasible or practical to implement or complete certain of its ESG initiatives, policies, and procedures based on cost, timing, or other considerations. In addition, the act of selecting and evaluating material ESG factors is subjective by nature, and there is no guarantee that the criteria utilized or judgment exercised by Ohana will reflect the beliefs or values, internal policies or preferred practices of investors, other asset managers or with market trends. In this report, we are not using such terms “material” or as they are used under the securities or other laws of the U.S. or any other jurisdiction, or as they are used in the context of financial statements and financial reporting. Statements about ESG initiatives or practices related to portfolio investments do not apply in every instance and depend on factors including, but not limited to, the relevance or implementation status of an ESG initiative to or within the portfolio investment; the nature and/or extent of investment in, ownership of or, control or influence exercised by Ohana with respect to the portfolio investment; and other factors as determined by investment teams, corporate groups, asset management teams, portfolio operations teams, companies, investments, and/or businesses on a case-by-case basis. ESG factors, sustainability risks or impacts are only some of the many factors Ohana considers in making an investment, and there is no guarantee that Ohana will make investments in companies that create positive ESG impact or that consideration of ESG factors will enhance long- term value and financial returns for limited partners. To the extent Ohana engages with portfolio investments on ESG-related practices and potential enhancements thereto, there is no guarantee that such engagements will improve the financial or ESG performance of the investment. References to portfolio investments are intended to illustrate the application of Ohana’s investment process only and should not be viewed as a recommendation of any particular investment or security. The information provided about these portfolio investments is intended to be illustrative, and is not intended to be used as an indication of the current or future performance of Ohana’s portfolio investments. The investments described in the selected case studies were not made by any single fund or other product and do not represent all of the investments purchased or sold by any fund or other product. Descriptions of any ESG-related achievements or improved practices or outcomes of Ohana’s portfolio investments are not necessarily intended to indicate that Ohana has substantially contributed to any such achievements, practices or outcomes. For instance, Ohana’s ESG engagement may have been one of many factors, including other factors such as engagement by portfolio investment management and other key third parties and advisors, that may have contributed to the success described in each of the selected case studies. Certain information contained herein has been obtained from third parties, and in certain cases have not been updated through the date hereof. While these third party sources are believed to be reliable, Ohana makes no representation or warranty, express or implied, with respect to the accuracy, fairness, reasonableness or completeness of any of the information contained herein, and expressly disclaims any responsibility or liability therefor. Actual results may differ materially from any forward-looking statements. The receipt of any awards or certifications by Ohana or its portfolio investments described herein is no assurance that Ohana’s investment objectives have been achieved or successful. Further, such awards or certifications are not, and should not be deemed to be, a recommendation or evaluation of Ohana’s investment management business.