Annual2022 ESG Report
Introduction from
2 / 17 2022REPORTESGANNUAL WeGreetings,areexcited
Ohana’s Founder and CEO, G. Christopher Smith to share Ohana’s inaugural Environmental, Social, and Governance (ESG) report, which articulates our approach and commitment to our organizational ESG initiatives as well as how we will track our progress and hold ourselves accountable to our goals. Since Ohana’s inception in 2009, we have proactively sought out opportunities to enhance the communities and natural environments in which we operate. From partnering with Tesla on clean energy production to curating a diverse corporate team, we have demonstrated our commitment to ESG policies from the onset of our organization. In 2021, we created the Responsibly Ohana policy to formalize our ESG efforts, guiding how we think about and prioritize ESG considerations throughout the investment cycle and across the Ohana organization. In our first year of implementing this policy, we decided to focus on four impact areas: Energy, Water, Diverse Work Environments, and Community. We believe these impact areas are particularly relevant for hotels, which often span large geographic footprints and employ hundreds of Acrossindividuals.ourproperties, our objective for 2022 is to establish a baseline for each of these impact areas as a way to evaluate our performance and set goals moving forward. To that end, we have engaged Measurabl, the leading ESG software provider, to help us collect, manage, and report our ESG data. Over time, we will go deeper into our key impact areas, and are excited to share our progress with you as we move to a more sustainable and diverse Ohana.
Kind regards, G. Christopher Smith Chief Executive Officer
Our team is comprised of experts in hotel operations, hotel capital markets, hotel and residential development, and residential sales. We put relationships at the center of everything we do, with a data-driven approach that allows us to identify and analyze opportunities and risks. $2.4B $2B35+ 36 3,331 In assets managementunder Hotels acquired, financed, operated, or developed Transacted by Ohana Realty across 5 residential projects employeesCorporate Employees across property portfolio All figures are as of March 31, 2022 except hotel employees, which is as of December 31, 2021 Ohana Real Estate Investors is a vertically integrated investment firm. 3 / 17 01 OhanaAbout PARK CITY, UTAH BY THE NUMBERS 1,928 Hotel keys currently owned and/or operated across 7 properties
OhanaResponsibly
ESG POLICYOur Responsibly Ohana policy outlines our commitment to enhancing these communities, including how we incorporate Environmental, Social, and Governance (ESG) considerations across our firm and the entire investment lifecycle, from acquisition due diligence to realization. Each Ohana property is located in a community that is special and unique. ESG PILLARS Our ESG efforts are focused on four key impact areas. Reduce overall carbon footprint by lowering energy equipmentUpgradeconsumptionandoptimize/processes for efficient resource usage Explore on-site renewable energy generation Energy Reduce changesPursuelandscapingforUseportfolioconsumptionwateracrossreclaimedwaterhotelirrigationandoperationalandefficiencies Water Require candidatediversepools for positions where Ohana has Targetingcontrola corporate workforce of >50% minority, female, and / or Seekveteranto hire individuals with special needs when possible Diversity Maintain charitableannualgiving budgets for each property and at Ohana level Focus charitable efforts on employeesopportunitiesvolunteeringEncouragedevelopmentcausescommunity-basedsuchasyouth/educationandsupportandgivingforOhana GivingLOS CABOS, MEXICO 4 / 17
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InvestmentResponsibleCulture
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ESG POLICY HEALDSBURG,
Establish property-level ESG goals across Ohana’s key impact areas 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
DueInvestmentDiligence ManagementAsset CALIFORNIA
Responsibly Ohana in Action
The Responsibly Ohana policy is readily available to all Ohana Firm-wideemployeesparticipation in quarterly ESG Committee meetings is strongly encouraged Employee involvement in research projects to inform ESG priorities is encouraged Trainings and programs on ESG topics and pre-establishedperformanceTransparencydevelopmentsonESGversustargets
Ohana deal teams are expected to follow a standardized ESG due diligence process tailored for each Ohanapropertyproactively seeks to identify ESG risk areas and improvement opportunities Prioritized actions are documented and then recommended to the Investment Committee
Adherence to our Responsibly Ohana policy will help ensure we make progress towards our goals.
Ohana properties are often in locations with great natural beauty, providing inspiration to make our usage of natural resources as efficient as possible. We aim to reduce consumption through innovative and operational changes. HIGHLIGHTS 6 / 17 03 +EnergyWater Carbon PartnershipLighthouse LEED® Certification Ohana partners with the leading energy efficiency organization to improve energy usage at our properties through operational enhancements and corrective maintenance Two Ohana properties were among the first LEED certified hotels in the U.S.; since then another property has gained certification and another is in the certification process 1,190 Tons 19.5 318,000GWh Reduction in annual CO2 emissions expected at La Cantera Resort through efforts with Carbon AlternativeLighthouseenergyproduction target at the Twin Dolphin master-planned community, effectively making the property energy independent Gallons of anticipated water savings at Waldorf Astoria Monarch Beach Resort & Club after converting to drip irrigation ENVIRONMENTAL LOS CABOS, MEXICO LOS CABOS, MEXICO
7 / 17 2022 Initiatives In our first year of Responsibly Ohana, we have committed to customized investments for each property to reduce consumption of natural resources and enhance the efficiency of our water and energy usage. Hotel Commonwealth $200,000 Building management system upgrade, installation of water dispensers La Cantera Resort $408,000 Building management system upgrade to optimize HVAC controls Waldorf Astoria Monarch Beach Resort & Club $3,000,000 Cooling tower, water chillers, air-handling unit, boiler replacement Montage Deer Valley $80,000 Replacement of conveyor dishwashing machine in main kitchen Overall $4,077,900 Total planned spending on water / energy projects in 2022 Hyatt Regency Lost Pines $37,000 Mechanical and equipment upgrades and new installations ENVIRONMENTAL CASE +DolphinTwinSTUDYTesla Twin Dolphin is implementing a new energy system that leverages solar panels and Tesla batteries to provide renewable energy throughout the community. The eventual goal is to produce 100% of the energy used by the community. Numerous solar panel and battery storage Eventualinstallationsoutputof19.5 gigawatt hours Sophisticated monitoring software to optimize energy usage Clean backup power for community Maravilla + Twin Dolphin Club $316,400 Coral restoration, water infrastructure improvements, “smart” electricity, gas and water meters, LEED certification pursuit Montage Los Cabos $36,500 Replacement of lift station pumps, installation of pool filtration pump, purchase of pipeline cleaning equipment
Ohana acts as good stewards of the communities where we work and where our properties are located – giving back, getting involved, and being good neighbors. We also seek to provide opportunities to a broad range of individuals, hiring from diverse candidate pools, and creating teams that blend unique experiences and perspectives. HIGHLIGHTS 2022 GIVING GOALS 8 / 17 04 $3,022,000+DiversityGiving$81,902$7566% 2022 charitable contribution goal across Ohana portfolio (includes volunteer hours, in-kind donations, and cash donations) Donations, including company match, to COVID-19 relief efforts and initiatives related to diversity, equity, inclusion, and justice La Cantera Resort $634,000 Waldorf Astoria Monarch Beach Resort & Club $594,000 Hyatt Regency Lost Pines $584,000 Montage Los Cabos $564,000 Montage Deer Valley $390,000 Maravilla + Twin Dolphin $172,000 Hotel Commonwealth $84,000 Amount Ohana donates on behalf of corporate employees for each hour volunteered Ohana employees who identify as minority, under-represented minority, and / or female SOCIAL LOS CABOS, MEXICO
9 / 17 Diversity Across Ohana Portfolio 3,331 Total employees across all Ohana properties 66% of Ohana corporate team members identify as minority, under-represented minority, and / or female SOCIAL **Percentage based on U.S. employees only. 63 Executive Team members across all Ohana properties Percentages across all Ohana properties 61% Minority** 43% Female 40% Female and / or Minority
Commitment Accountabilityto
PARK
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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
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:
05
GOVERNANCE
Providing transparency, including stakeholderstoperformancequarterlyreporting,internalandexternalandinvestors CITY, UTAH
Appendix
CultureInvestmentResponsible
• Maintain and strengthen Ohana’s responsible investment culture • Ensure the Responsibly Ohana policy is available to all employees • Firm-wide participation in quarterly ESG Committee meetings • 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 12 / 17 APPENDIX The Responsibly Ohana Policy •ManagementAssetReducecarbonfootprintbylowering 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 DueInvestmentDiligence • Assess material ESG issues, risks, and opportunities related to acquisition targets • Document ESG-related due diligence findings
implement energy efficient systems at multiple properties.
TwinPartnershipAudubonDolphinClubhasworkedwith
Audubon International to achieve recognition as an environmentally sensitive property, focused on protecting the natural resources of Baja California Sur.
• 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.
13 / 17 LOS
While our ESG goals and initiatives for 2022 and beyond are ambitious, it is important to reflect on our positive impact thus far.
LOS
Results: Twin Dolphin Club is the only golf course in Mexico to achieve designation as a Certified Bronze Audubon International Signature Sanctuary. CABOS, MEXICO
OhanaPartnershipTeslahaspartneredwithTeslato
• Twin Dolphin Club has been designated as a Certified Bronze Audubon International Signature Sanctuary.
Results: 3 solar installations have been completed, 2 are under construction, and 1 is in the permitting phase. CABOS, MEXICO
• This prestigious certification verifies sustainable design, construction, and long-term management of golf courses, communities, and resorts.
APPENDIX Case Studies
• At Montage Healdsburg, we installed the first Tesla carport system at a hotel in the United States.
CertificationLEEDLighthouseCarbon
While our ESG goals and initiatives for 2022 and beyond are ambitious, it is important to reflect on our positive impact thus far.
Ohana has pursued LEED certification for every property it has developed.
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.
Ohana has intentionally built a diverse team with a wide range of backgrounds, experiences, and perspectives. For each posted position, Ohana requires a diverse slate of candidates be considered.
APPENDIX Case Studies
Results: Ohana has implemented 12 energy efficiency measures across 5 properties, with an additional 12 measures in progress. Collectively, these measures will deliver 1,462 tons of annual CO2 savings.
Results: Two-thirds of the Ohana corporate team self-identify as underrepresented minority and/or female. PARK CITY, UTAH
DiversityCorporate
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Results: Ohana developed the first hotel and residential project in California to earn LEED Gold certification (Montage Beverly Hills) and the first resort in Utah to earn LEED Silver certification (Montage Deer Valley).
Montage Healdsburg is also LEED Silver certified and Twin Dolphin is currently pursuing LEED certification.
15 / 17 Montage Deer Valley Hyatt Regency Lost Pines Twin Dolphin Club Hotel Commonwealth Montage Los Cabos La Cantera Resort BOSTON, MA SAN ANTONIO, TX PARK CITY, UT LOS CABOS, MX CEDAR CREEK, TX LOS CABOS, MX LOS CABOS, MX DANA POINT, CA Waldorf Astoria Monarch Beach Resort & Club Maravilla From urban markets to resort destinations, our portfolio spans across North America. APPENDIX Our Portfolio
401Austinohanare.comCongress Avenue Suite Austin,2750TX 650.681.0185RedwoodSuite1991Redwood435.604.1850ParkSuite1389Park650.681.018578701CityCenterDrive105City,UT84098CityBroadwayStreet100City,CA94063 HEALDSBURG, CALIFORNIA
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.
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.
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.
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.
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.