TOURISME MONTREAL PKF CONSULTING AND CBRE HOTELS’ OUTLOOK FOR THE CANADIAN LODGING SECTOR 2015/2016

September 17, 2015

Economic and Travel Outlooks

National Economic Outlook - 2015/16 1.4%

2.2%

2.4%

1.8

4.0% $1.80

1.75

3.0%

$1.77

1.7

2.0%

$1.74 $1.70

1.0%

$1.66

$1.63

1.6

0.0%

% Change

1.65

Real GDP % Change

$1.59

$1.58 1.55

-1.0% $1.54

1.5

-2.0%

1.45

-3.0% 2008

2009

2010

2011

2012

2013

2014

2015f

2016p

Source: Statistics Canada, Conference Board of Canada, Canadian Outlook Summer 2015, Scotiabank Group – Global Forecast Update 2015; CIBC World Markets – Monthly FX Outlook, 2015; RBC – Economic and Financial Market Outlook – 2015 Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

National Travel Outlook 2015/16 2014 Actual

2015 Forecast

2016 Projection

Business Travel Domestic

2.5%

0.3%

2.7%

Pleasure Travel Domestic

2.4%

2.7%

2.2%

Total Domestic Travel

2.0%

2.1%

2.1%

U.S. Travel

1.1%

7.5%

3.2%

Overseas Travel

9.3%

5.0%

4.1%

TOTAL OVERNIGHT TRAVEL

2.2%

2.7%

2.3%

National Accommodation Demand Growth

3.2%

1.0%

2.4%

Overnight Travel

Source: Canadian Tourism Research Institute, Conference Board of Canada, Fall 2015 Forecast Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Regional Travel Outlooks - % Growth 2017f

Western Canada

2.7%

2016f

2.4%

2015f

2.4%

2.2%

2.3%

2.4%

2.5%

2.6%

2017f

Central Canada

2.3%

2015f

3.0% 0.5%

1.0%

1.5%

2017f

Atlantic Canada

2.0%

2.5%

3.0%

2.5%

3.0%

3.5%

1.6%

2016f

1.9%

2015f 0.0%

2.8%

2.6%

2016f

0.0%

2.7%

1.7% 0.5%

1.0%

1.5%

2.0%

Source: Canadian Tourism Research Institute, Conference Board of Canada, Fall 2015 Forecast Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

3.5%

National Outlook 2014/2015

National Supply & Demand Outlook Supply & Demand Growth 3.5% 3.2% 3.0% 2.4%

Percent Growth

2.5%

2.0% 1.5%

1.5%

1.3%

National Occupancy 2014 Actual

64%

2015 Forecast

64%

2016 Projection

65%

1.0%

1.0% 0.6% 0.5%

0.0%

2014

2015p 2016f

Supply

2014

2015p

Demand

2016f

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

National ADR, RevPar & Bottom Line Outlook National ADR Growth

National RevPar Growth

2014 Actual

3.7%

2015 Forecast

3.9%

2014 Actual

6.3%

2016 Projection

3.5%

2015 Forecast

3.4%

2016 Projection

4.7%

Adjusted Net Operating Income per Available Room ($000's)

ANOI Growth $13.0 $12.5 $12.0 $11.5 $11.0 $10.5 $10.0 $9.5 $9.0 $8.5 $8.0

$12.5 $11.6 $10.8

2014

2015p

2016f

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Regional Market and Financial Outlooks

Regional RevPar Outlook 4.1%

2015 RevPar Growth

5.3%

Western

0.9%

$100

Central

6.1%

$95

Atlantic

1.8%

$97

$90

$96

$94

RevPAR ($)

$85

$92

4.4%

$92

$80

2016 RevPar Growth

$86

$75

$77

$70

$72

$65

Western

4.1%

Central

5.3%

Atlantic

4.4%

$73

$60 $55 $50 West

Central

Atlantic

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

2014 2015f 2016p

Regional Bottom Line Outlook 2015 ANOI Growth 6.0%

Adjusted Net Operating Income per Available Room ($000's)

$16.0

10.8%

$14.0

Western

(0.2%)

Central

16.7%

Atlantic

5.4%

$15.4 $14.5 $14.5

8.1%

$12.0 $10.0

$11.1 $10.1

$8.0

$8.6

$6.0

2016 ANOI Growth Western

6.0%

Central

10.8%

Atlantic

8.1%

$8.1 $7.1

$7.5

$4.0 $2.0 $0.0

West

Central

Atlantic

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

2014 2015f 2016p

Major Market Outlooks

Major Market Outlooks* RevPar Projection - 2016 2 - 4% RevPar Growth

2.0%

Regina

4.0%

Edmonton

6.0%

Calgary

< 2% RevPar Growth Saskatoon

> 5% RevPar Growth

-8.0%

St. John’s

Winnipeg

Quebec City

Montreal

Ottawa

Niagara Falls

-6.0%

Halifax

-4.0%

Toronto

-2.0%

Vancouver

0.0%

-10.0% * ‘Major Markets’ refer to Greater Metro Areas Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

2016 RevPAR Ranking Vancouver Ottawa Montreal Toronto St. John’s Quebec City Calgary Saskatoon Niagara Falls Halifax Edmonton Winnipeg Regina

$126 $116 $114 $107 $107 $105 $104 $99 $97 $87 $83 $81 $73

Economic and Travel Outlook for Montreal

Montreal Economic Indicators

2014 Actual

2015 Forecast

2016 Projection

Manufacturing Employment

(0.6%)

2.6%

3.7%

Construction Employment

(9.6%)

0.5%

0.4%

Service Sector Employment

0.3%

1.1%

1.7%

GDP Growth

2.2%

2.6%

2.7%

Source: Conference Board of Canada

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Montreal Travel Indicators 2014 Estimate

2015 Forecast

2016 Projection

Business Travel Overnight Domestic

2.3%

1.7%

2.3%

Pleasure Travel Overnight Domestic

1.4%

2.8%

2.2%

U.S. Overnight Travel

2.4%

4.0%

2.1%

Overseas Overnight Travel

6.0%

4.3%

4.3%

TOTAL OVERNIGHT TRAVEL

2.5%

2.8%

2.4%

DEMAND GROWTH

0.7%

2.1%

2.1%

Source: Canadian Tourism Research Institute, Conference Board of Canada, Spring 2015 Forecast

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Montreal Overall & SubMarkets Market & Financial Outlooks

Room Supply and Demand (000s)

Montreal Accommodation Supply & Demand 10 9 8 7 6 5 4 3 2 1 0 2011

2012

2013 Supply

2014

2015 (f)

Demand

Note: Room supply is year round supply greater than 29 rooms. Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

2016 (p)

Market Outlook – Montreal Overall 2013

2014

2015F

2016P

TOTAL MONTREAL Rooms Occupancy ADR RevPar

23,957 67% $140 $93

23,147 69% $146 $101

23,107 71% $153 $108

23,477 71% $160 $114

%chg

2013

2014

2015F

2016P

(0.4%) 2.2% 2.9% 5.6%

(3.4%) 0.7% 4.6% 9.0%

(0.2%) 2.1% 4.9% 7.3%

1.6% 2.1% 4.3% 4.8%

Supply Demand ADR RevPar

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Market Outlook – Downtown Montreal DOWNTOWN Rooms Occupancy ADR RevPar

%chg Supply Demand ADR RevPar

2013

2014

2015F

2016P

15,778 68% $153 $104

14,968 72% $164 $117

14,872 73% $174 $127

15,164 73% $182 $134

2013

2014

2015F

2016P

(0.6%) 2.9% 4.1% 7.7%

(5.1%) (0.1%) 6.8% 12.5%

(0.6%) 2.0% 6.0% 8.8%

2.0% 2.0% 5.0% 5.0%

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Market Outlook – Montreal Airport AIRPORT Rooms Occupancy ADR Revpar

%chg Supply Demand ADR Revpar

2013

2014

2015F

2016P

4,899 66% $117 $77

4,899 68% $118 $80

4,899 71% $119 $84

4,899 72% $122 $88

2013

2014

2015F

2016P

0.0% 1.7% (0.2%) 1.5%

0.0% 3.7% 0.2% 3.9%

0.0% 4.0% 1.5% 5.6%

0.0% 2.0% 2.0% 4.0%

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Market Outlook – Laval 2013

2014

2015F

2016P

LAVAL Rooms Occupancy ADR Revpar

1,610 65% $120 $78

1,610 65% $126 $82

1,610 63% $130 $82

1,610 64% $134 $86

%chg

2013

2014

2015F

2016P

0.0% 1.4% 0.4% 1.8%

0.0% 1.2% 4.8% 6.1%

0.0% (4.0%) 3.5% (0.6%)

0.0% 2.0% 3.0% 5.1%

Supply Demand ADR Revpar

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Market Outlook – Other Montreal OTHER Rooms Occupancy ADR RevPar

%chg Supply Demand ADR RevPar

2013

2014

2015F

2016P

1,699 60% $108 $65

1,699 61% $109 $66

1,755 61% $111 $68

1,833 60% $114 $68

2013

2014

2015F

2016P

0.0% 0.2% 2.6% 2.8%

0.0% 2.0% 0.8% 2.8%

3.3% 2.5% 2.5% 1.7%

4.4% 3.0% 2.5% 1.1%

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Financial Outlook – Montreal $14 $12 $10

$2 $0 2013 (a)

2014 (a) National

2015 (f) Central Canada

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

2016 (p) Montreal

$10.9

$11.2

$12.5

$9.8

$10.1

$11.6

$8.3

$6.4

$4

$7.3

$6

$8.6

$10.8

$8

$9.6

Net Income Per Available Room ($000's)

$16

Concluding Remarks

PKF Consulting Canada PKF CONSULTING David Larone Brian Stanford Fran Hohol Erin O’Brien Rebecca Godfrey David Ferguson Kirstin Hallett Nicole Nguyen Robert Sedore Gregory Hives Lauren Arnold Kailey Gomez Carol Lopes JoAnne Orr

CBRE HOTELS VALUATION & ADVISORY Brian Flood Cindy Schoenauer Vanessa Boland CBRE HOTELS BROKERAGE Bill Stone Greg Kwong Deborah Borotsik Karina Toome Marc-Aurele MaillouxGagnon

www.pkfcanada.com