an innovative company - a timely opportunity

an innovative company - a timely opportunity
CREATE. GROW. SUSTAIN.
August 1, 2013
Mission Statement
In order to create a high-performance real estate property portfolio, our
Mission at USA Barcelona Realty (“the Company”) is to invest mainly in
mature, performing hotel and apartment properties.
Our growth objectives aim to preserve, protect and maximize the long-term
value of these assets to meet the needs of our investors through revenue, asset
and risk management.
To sustain profitability, we intend to maintain our properties with an
institutional quality mindset and manage our capital structure with
preservation of shareholder equity foremost in mind.
This is neither an offer to sell nor a solicitation to buy any securities. Any such offer can only be made by an Offering Memorandum or
Prospectus containing more complete disclosure information including Risk Factors and Forward Looking Information pertaining to an
offering made by USA Barcelona Realty Inc. or any of its affiliates.
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USA BARCELONA REALTY has been created in response to investment opportunities in the hotel and apartment sectors. We seek
opportunity, diversification and growth through acquisitions, investments and joint ventures. Our Hospitality and Residential Operating
Partnership subsidiaries are planned to be employed for acquisitions, our Realty Holdings Operating Partnership is planned to engage in
investments and joint ventures, and our Realty Operating Partnership is expected to conduct operating partnership unit transactions. This
structure provides broad transaction flexibility and fosters the ability to achieve our core objectives of: (i) obtaining diverse opportunities
through selection in proven markets, quality assets and top-tier property managers; (ii) balancing risk/reward in our capital structure; and (iii)
operating under a “best business practices” dictum as a REIT.
We have CREATED a business plan that addresses current opportunities and allows GROWTH in an ever-changing economy. Of great
importance, we must enable our Company to deal with opportunity in a manner that is SUSTAINABLE and works toward ever increasing
operating efficiencies and investment returns for our shareholders. To achieve these ends, we have assembled an excellent team comprised
of executives, directors and advisers, who have an equity interest in our Company to foster and protect. Indeed! We are a team embracing
opportunity through the execution of common goals and objectives.
Looking at the short-term, we plan to assemble a hotel and apartment portfolio of performing core properties through acquisitions and
investments. Later, we may be involved in the development of new properties and redevelopments via joint ventures. Along the way, we
intend to maintain the balance of portfolio capital mix to assure a substantial hedge against any unexpected market reversal. We expect that
within approximately six to seven years the Company may either sell all or substantially all our assets, merge with another company, or
conduct an initial public offering and listing of our shares on a national exchange or NASDAQ.
At the appropriate time, we intend to qualify as a Real Estate Investment Trust. Conducting win-win transactions with hotel and apartment
owners is the Barcelona business model. We appreciate your interest and encourage you to explore the diverse investment and joint
venture opportunities with us.
Best Regards,
USA BARCELONA REALTY
7025 North Scottsdale Road ♦ Suite160 ♦ Scottsdale, AZ 85253
Telephone: (480) 625-4355 ♦ Fax: (480) 625-4347
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We intend to acquire and invest in
leading branded hotels and upscale
apartments striving to create a
diversified high quality property
portfolio.
Our plan is to grow through
acquisitions, investments and joint
ventures.
We strive to sustain our
conservative investment strategy
through a balanced risk/reward
equation.
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USA Barcelona Realty
The initial business objective of USA Barcelona Realty focuses on hotel
and apartment acquisitions, investments and joint ventures.
The organizational relationship of USA Barcelona Realty to its operating partnerships, all of which are administered by USA
Barcelona Realty Advisors, is presented in the following chart. Neither USA Barcelona Realty nor the operating partnerships have
employees or facility overhead. All employees and facilities are provided by USA Barcelona Realty Advisors under an advisory
agreement. Our organizational structure is characteristic of a traditional UPREIT.
The advisory arrangement is intended to avoid internal conflicts that prevail in self-administered REITs and allows for a practical
approach to developing a broadly capable organization that serves the Company and its affiliates. Certain of the Company’s
directors and executives will be in a manager or employee capacity with USA Barcelona Realty Advisors. Of importance in making
balanced business decisions, our Board will be comprised of a majority of independent directors.
Notes regarding the Company organization chart:
1.
USA Barcelona Realty - the Company.
2.
USA Barcelona Realty OP i— the affiliate that
controls the three specialty operating
partnerships*.
3.
USA Barcelona Realty Residential OP i- the
managing member of each of a group of Single
Property LLCs formed to own apartment
communities.
4.
USA Barcelona Realty Hospitality OP i - the
managing member of each of a group of Single
Property LLCs formed to own our hotels.
5.
USA Barcelona Realty Holdings OP i- the
managing member or co-manager of each of a
group of single purpose investment entities.
6.
USA Barcelona Taxable REIT Subsidiary(s)– the
corporations that allow the Company to lease the
properties from the Single Property LLCs, thereby
assuring the REIT will have Good REIT Income
through the lease structure.
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OP—Operating Partnership
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Timing Is Key
The old real estate adage says location, location, location - but in this economy
even more paramount in the creation of value is TIMING.
We believe USA Barcelona Realty is commencing the acquisitions and investment activities at an ideal time. Now is an excellent
point in this new cycle during which to acquire, invest and joint venture hotels and apartments. With minimal new supply coming
online in the next few years, we believe recovery in the hotel and apartment sectors will continue its upward climb in occupancy and
rates, and, therefore, in value.
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Source: CBRE Torto Wheaton Research May 2013 and REIT.com July 2013
Target Markets and Property Objectives
USA Barcelona Realty seeks geographic diversification for its property portfolio— one of the key
ingredients in risk management.
We analyze past, present and forecasted geographic market
economics to determine where we should invest. Our
current focus is on nine geographic markets in the U.S.,
although we remain flexible to take advantage of attractive
opportunities in other markets.
Our work over the past four years has lead us to select the
markets indicated on the adjacent U. S. map and the pins
represent hotel and apartment sub-markets we have studied.
Hotels
Apartments
Invest in midscale to upper upscale properties, with primary
focus on select/focus service brands in the upper chain scale.
Target communities in urban and suburban locations catering to
upper income renters seeking high quality community experiences.
i
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See Page 15 - Reference to Industry Trademarks and Trade Names
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A Series of Offerings
This organizational arrangement is in anticipation of USA Barcelona Realty conducting a
series of equity offerings.
2013-2014
2015 i
2016 i
Initial Offering
Secondary Offering (1)
Secondary Offering (2)
$70,000,000 Stock Offering
$110,000,000 Stock Offering
$175,000,000 Stock Offering
$200,000,000 Assets
$300,000,000 Assets
$500,000,000 Assets
Targeted Offerings
$1,000,000,000 of Assets
Certain of the Company directors
and executives will be in an
executive or manager capacity with
our advisor, USA Barcelona
Realty Advisors.
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USA Barcelona Realty plans for additional offerings upon completion of the initial offering.
We intend to acquire hotels,
apartment communities and
possibly other income-producing
properties. We seek opportunity,
diversification and growth through
acquisitions, investments and joint
ventures. We will navigate our way
through the business cycle(s)
through solid planning, flexibility
and execution.
Investment Criteria & Management Alliances
USA Barcelona Realty applies five macro decision filters that are essential
to the discipline of building a strong hotel and apartment portfolio.
We apply a rigorous analysis to each candidate property. For hotels, properties in markets with a balance of business and leisure travel are
primary targets. We plan to invest in midscale to upper-upscale branded hotel properties, with greater focus on limited service brands.
Apartments will be in the B+ and higher category and be located in urban and suburban locations catering to upper income renters seeking
a high quality community experience.
Capital expenditure requirements directly affect our valuation of each property. Such expenditures must be clearly understood and
formulated into our investment decision, including PIP i requirements for acquired hotels.
USA Barcelona Realty is creating alliances with established management companies that are approved operators of our targeted hotel
brands and apartment properties. Hotels and apartments the Company acquires will be managed by top-tier third-party management
companies. USA Barcelona Realty Advisors will serve as the asset manager for the Company’s property portfolio, employing intensive
oversight of all top-tier third-party management companies.
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PIP—Property Improvement Plans
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Investment Results
USA Barcelona Realty strives to achieve its planned investment results by blending
property selection, risk management and value enhancement.
Property selection is essential to setting the stage for a portfolio’s balanced performance i. Risk management involves selecting the
correct capital mix for financing the property portfolio and making post-acquisition shifts in capital balance as capital markets pose
requirements and present opportunities. Value enhancement incorporates capital mix and seeking methods to better position the
portfolio through capital investments, marketing and support of our properties’ managers.
Preferred Equity
Investments in Property
Owner Entities

Preferred return paid
from gross property
revenues
 Built in annual
percentage increases
 Priority liquidation
distributions
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Balanced performance would incorporate short term yield, mid-term growth in yield and long-term capital appreciation.
Owned Properties

Managed or leased by
3rd party top-tier
management
companies
 Portfolio leverage up to
70%, constrained by 2:1
initial debt coverage
ratio on new portfolio
acquisitions and 1:5 on
established portfolio
assets
 Asset appreciation value
realized through
refinance and/or
liquidation.
 Forecasted holding
period: 6-7 years.
Diversification, Adjustment & Exit
Through a disciplined acquisition and investment process, selection of top-tier management
companies and our advisor’s vigilant asset management, we set the stage to achieve
high quality overall returns for our shareholders.
We plan to increase the value of our investments and acquisitions by investing in property types and in markets we understand,
prudently financing our property portfolio, thoughtfully re-investing capital received from refinance and asset sales, implementing
profitable operating strategies in concert with our property management companies and conducting vigilant oversight of the
companies managing our properties. Our plan is to provide our shareholders with reliable dividends and long-term capital
appreciation achieved through core and value-added investments in high quality hotel and apartment properties.
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Targeted Markets Page 7
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Keys to Success
USA Barcelona Realty plans to sustain its commitment to maximize benefits for our shareholders
through adherence to our five building blocks of success.
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1
Maintain focus on our Mission Statement.
2
Concentrate on the mid-and long-term growth after fortifying the short-term.
3
Benefit from our advisors’ experience in all aspects of our business requirements.
4
Apply mutually beneficial initiatives with top-tier management companies to create and
maintain strategic alliances.
5
Uphold strategic direction and governance through the oversight and guidance of our
seven member Board.
Proven Leadership
The leaders, directors and advisers of USA Barcelona Realty represent over
two centuries of top-level experience across hospitality, real estate and other sectors.
Richard C. Harkins
George T. Simmons, III
Dawn Berry
President and Director
Executive Vice President and Director
Director
Mr. Harkins’ focus is on the executive
management, developing business
relationships and the capital needs of the
Company.
Mr. Simmons will also serve as a
director.
Ms. Berry will serve as a director. She is
President and CEO of Pyramid
Hospitality and Development Company
and has over 20 years experience in the
hospitality industry.
His business career began with 13 years
in equity finance, land acquisition and
executive management with Gulf Oil
Real Estate Development Corporation
and Cardinal Industries. Since 1987, he
has been involved in the real estate
industry in the development of high-end
daily fee golf courses, and from 2002 to
2009 in the executive management of a
land investment and development
company. Mr. Harkins took part in the
acquisition of sites and the financing of
over 170 limited service hotels, over 550
apartment communities, several golf
properties and the assembly of over $2.5
billion dollars of public and private
equity and debt capital.
He is founder of various entities
encompassing USA Barcelona Realty
and has been active since 2009 in
bringing the Barcelona entities forward
to the operational stage.
His career spans 45 years in the
semiconductor and electronic
components industries, retail and
restaurant establishments, and real estate
holding companies. He currently serves
as a director on three boards, two for
profit and chairs one non-profit.
Mr. Simmons has over 20 years of
executive management tenure in large
corporations such as Intel, Motorola,
Oki Electric (Japanese) and DaimlerBenz (German), as well as
entrepreneurial experience from the cofounding of seven business enterprises
between 1985 and 2005.
He is a business advisor, consultant,
private investor and independent
corporate director.
Her expertise includes executive
management of hotels in focused
service, full service, destination resort
hotels and franchise brand management
ranging from 125-2,200 guest rooms in
urban, suburban and destination
markets across the U. S.
During her six year prior role as Vice
President of Brand Management for
Hilton Garden Inn, she earned the JD
Power Award for brand experience
during five of her six years, and was a
contributing member in taking the brand
from 58 to 310 properties.
Ms. Berry has proven results in
customer satisfaction, profitability and
overall asset management in maximizing
investor returns.
Jeffrey S. Teets
Chief Financial Officer
Mr. Teets’ overall responsibilities
include oversight of accounting, financial
and tax reporting, investor relations,
information technology systems and
involvement with the capital markets
operations of the company.
Previously, he was CFO of several
commercial real estate companies, as
well as a certified public accountant with
Ernst & Young from 1979 to 1990.
From 1990 to 2003, as SVP &
Treasurer, Mr. Teets was responsible for
managing the corporate finance and
accounting functions for Westcor/
Macerich, a premier real estate
developer /manager of regional malls,
retail centers and resorts, along with
property acquisitions/dispositions. He
was responsible for the successful $1.5
billion merger and acquisition of various
Westcor operations into a publicly
traded national REIT’s infrastructure.
He has been successful in partnering
finance and reporting with operations to
drive long-term gains in business
performance, revenues, company value
and bottom-line
profits.
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Demonstrated Results
Our people are the core of USA Barcelona Realty. We are committed to promoting
an entrepreneurial culture where we engage the most capable and talented individuals.
Murray Dow
Steve Gold
Advisor
Advisor
Mr. Dow is President of the
Dow Hotel Company (DHC),
which controls 12 hotels that
generated over $175 million in
revenues in 2012. He has over
30 years’ experience as a hotel
professional and prior to
founding DHC was Executive
Vice President and Chief
Operating Officer of HEI
Hotels, where he grew the
company from one to 20
properties, with over $20
million in annual sales.
Mr. Gold is Managing Director
for Hotel Financial Strategies,
responsible for development of
debt and equity programs,
where he has been involved in
over $20 billion in real estate
financing.
He was the first general
manager in Interstate Hotel
history to open a new hotel on
time and under construction
budget. Mr. Dow also was:
Managing Director of
Christensen Hotels,
responsible for first-class
properties in the Seattle area;
spent over five years with the
Four Seasons Hotels in Seattle
and San Francisco, and The
Ritz Carlton in Chicago.
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He has been the Chairman of
the Real Estate Advisory Board
at UCLA, Founder of the
UCLA Hotel Conference
(ALIS) and a member of the
Dean's Council of the UCLA
School of Architecture and
Urban Planning.
Mr. Gold has been a Director
of a public REIT, served as
Chairman of Center Financial
and was an Adjunct Professor
at UCLA Business School. He
specializes in the financing of
major real estate developments
and originates many joint
ventures for developers with
institutional partners.
Allen Weintraub
Bob Kerrigan
Bruce Orr
Advisor
Advisor
Advisor
Mr. Kerrigan is the President
and sole shareholder of
Personal Wealth
Management Group, Inc. He
holds a designation of
Certified Wealth Consultant.
Mr. Orr is currently President
of Bruce Orr and Associates,
LLC and a full partner in
District Development
Partners, LLC.
Mr. Weintraub will facilitate
the fund raising, marketing
and investor relations
functions for USA Barcelona
Realty.
He has a background in
corporate banking, and has
been an active consultant to
businesses throughout the
Western U.S. for the last 22
years. Mr. Orr has significant
experience in corporate
finance, including merger and
acquisition, ESOP and real
estate finance. He has spent
the last six years working in
hotel development and has
relationships with Hilton
Choice and Marriott Hotels.
He has a distinguished career
in the financial services
industry. Over the course of
18 years, he managed over
$120 million of assets for
retail investment clients for
Merrill Lynch, UBS and
Prudential Securities.
For the past 45 years, Mr.
Kerrigan has been active in
the financial services industry
both as a provider of financial
services to private clients, and
through ownership and
management of several
privately held companies both
in manufacturing and service
distribution.
With District Development
Partners, he is currently
working on the expanded
redevelopment of the Buena
Park, California
entertainment district.
In 2005, he branched out on
his own, consulting with real
estate, healthcare and
technology companies to help
in their efforts to build brand
recognition, market and raise
capital. In the past six years
Mr. Weintraub has assisted in
raising over $170 million for
private ventures in these
industries.
Reference to Industry Trademarks and Trade Names
“Marriott,” “Courtyard by Marriott,” “SpringHill Suites,” “Fairfield Inn,” “TownePlace Suites” and “Residence Inn” are each registered trademarks of Marriott
International, Inc. or one of its affiliates. All references below to “Marriott” means Marriott International, Inc. and all of its affiliates and subsidiaries, and their
respective officers, directors, agents, employees, accountants and attorneys. Marriott is not responsible for the content of this Brochure, whether relating to
hotel information, operating information, financial information, Marriott’s relationship with USA Barcelona Realty, Inc., or otherwise.
“Hilton”, “Hampton Inn,” “Hilton Garden Inn” and “Homewood Suites” are each a registered trademark of Hilton Hotels Corporation or one of its affiliates. All
references below to “Hilton” means Hilton Hotels Corporation and all of its affiliates and subsidiaries, and their respective officers, directors, agents,
employees, accountants and attorneys. Hilton is not responsible for the content of this Brochure, whether relating to hotel information, operating information,
financial information, Hilton’s relationship with USA Barcelona Realty, Inc., or otherwise.
“Lincoln Property Company” is a registered trademark of Lincoln Property Company. All references to “Lincoln” mean Lincoln Property Company and all of its
affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and attorneys. Lincoln is not responsible for the content of
this Brochure, whether relating to property information, operating information, financial information, Lincoln's relationship with USA Barcelona Realty, Inc., or
otherwise.
“Concord Hospitality Enterprises Company” is a registered trademark of Concord Hospitality Enterprises Company. All references below to “Concord” means
Concord Hospitality Enterprises Company and all of its affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and
attorneys. Concord is not responsible for the content of this Brochure, whether relating to property information, operating information, financial information,
Concord’s relationship with USA Barcelona Realty, Inc., or otherwise.
“PHD Hospitality & Development Services” is a registered trademark of PHD Hospitality & Development Services. All references below to “PHD” means PHD
Hospitality & Development Services and all of its affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and
attorneys. PHD is not responsible for the content of this Brochure, whether relating to property information, operating information, financial information, PHD’s
relationship with USA Barcelona Realty, Inc., or otherwise.
“The Dow Property Company” is a registered trademark of The Dow Property Company. All references below to “Dow” mean The Dow Property Company and
all of its affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and attorneys. Dow is not responsible for the
content of this Brochure, whether relating to property information, operating information, financial information, Dow’s relationship with USA Barcelona Realty,
Inc., or otherwise.
“Fidelity Investments” is a registered trademark of Fidelity Investments. All references below to “Fidelity” means Fidelity Investments and all of its affiliates and
subsidiaries, and their respective officers, directors, agents, employees, accountants and attorneys. Fidelity is not responsible for the content of this Brochure,
whether relating to property information, operating information, financial information, Fidelity’s relationship with USA Barcelona Realty, Inc., or otherwise.
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7025 North Scottsdale Road, Suite 160  Scottsdale, AZ 85253
Telephone: (480) 625 -4355 ♦ Fax: (480) 625 -4347