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12 <br /> SECTION II <br />LRV OF THE PROJECT <br /> <br /> <br /> <br />Related Bristol at 3600 South Bristol Street September 27, 2023 <br />Land Residual Value Study Report <br /> <br />www.FinanceDTA.com <br />Table 10: Hotel Operating Expenses <br />Expenses % of <br />Income <br />Daily Rate <br />per Room <br />Daily <br />Revenue <br />Annual <br />Revenue % of Total <br />Department Expenses <br />Rooms 25.00% ($36.75) ($9,188) ($3,353,438) (18.32%) <br />Food Costs 50.00% ($11.76) ($2,940) ($1,073,100) (5.86%) <br />Beverage Costs 40.00% ($4.41) ($1,103) ($402,413) (2.20%) <br />Food and Beverage Labor Cost 20.00% ($6.91) ($1,727) ($630,446) (3.44%) <br />Technology Costs 15.00% ($0.66) ($165) ($60,362) (0.33%) <br />Minor Operated Department 20.00% ($2.94) ($735) ($268,275) (1.47%) <br />Total Department Expenses ($63.43) ($15,858) ($5,788,033) (31.61%) <br />Undistributed Operating Expenses <br />Administration and General Operating 10.00% ($14.70) ($3,675) ($1,341,375) (7.33%) <br />Marketing 6.00% ($8.82) ($2,205) ($804,825) (4.40%) <br />Management Fee 6.00% ($8.82) ($2,205) ($804,825) (4.40%) <br />Franchise Fee 8.00% ($11.76) ($2,940) ($1,073,100) (5.86%) <br />Energy 6.00% ($8.82) ($2,205) ($804,825) (4.40%) <br />Operations and Maintenance 5.00% ($7.35) ($1,838) ($670,688) (3.66%) <br />Total Undistributed Operating Expenses ($60.27) ($15,068) ($5,499,638) (30.04%) <br />It is our understanding that the proposed hotel will be comparable to the Westin South <br />Coast Plaza. According to CoStar, the cap rate for Luxury and Upper Upscale hotels in the <br />2-Mile Zone is 6.5%. <br />Figure 4: Hotel Market Cap Rate by Class <br /> <br /> <br /> <br />Exhibit 10 <br />  <br />  <br />City Council 22 – 497 9/17/2024