Groupstay Hospitality - Investment Analysis

Groupstay Hospitality: Guesthouse Campus

Investment opportunity at the 50-yard line of places where people come together

$5,323

TRevPOR

Total revenue per room

44.8%

NOI Margin

Property level

13%

Net Yield

On development cost

22%

Target IRR

Unlevered

Investment Highlights

Business Model:Hub-and-spoke campus at 50-yard line destinations where groups gather
Market Position:First mover in groupstay hospitality addressing underserved segment
Revenue Model:$2,887 accommodation plus $2,436 hospitality services equals $5,323 TRevPOR
DMUR Advantage:Asymmetric play - residential liquidity with commercial upside potential
Scale Trajectory:Path to 85 properties generating $78.8M annual revenue by Year 10

Financial Projections

Year 1:$0.4M revenue
Year 5:$24.8M (35 properties)
Year 10:$78.8M (85 properties)
Break-even:25.7% occupancy

Return Profile

Net Yield:13% on development cost
IRR:22% unlevered
Cash Multiple:2.8x at Year 10
NOI Margin:44.8% at property level
Cash Flow Positive:Year 2 at property level

Addressable Market Analysis

Group stay segment at 50-yard line destinations

$500B

STR Market 2030

Global projection

40%+

Group Bookings

Multi-room stays

$795M

Target TAM

14 markets

13.9%

Capture Rate

Market share target

Market Segment	Total Size	Group Component	Target Market	Capture Rate
Global STR Market	$500B (2030)	~$200B (40%)	Premium segment	N/A
14 Lifestyle Markets	$2B estimate	$795M identified	$111M by 2035	13.9%
50-Yard Line Example*	$60M TAM	$15M (25% corporate)	8 properties	~15%

*Representative destination market where groups gather for sport, creativity, or academia

Market Dynamics

STR Growth:Projected to surpass traditional hotels by 2030
Group Segment:40% of premium bookings involve multiple units
Corporate Mix:25% of lifestyle market bookings from corporate
Platform Fees:30% OTA commissions create direct booking opportunity

Competitive Landscape

Current State:Fragmented market with no dominant operator
Hotel Limitations:Lack privacy and authentic local experience
VRBO Gap:No professional hospitality services
Opportunity:First integrated solution for group stays

TRevPOR Economics

Total revenue per occupied room analysis

$5,323

Guesthouse

TRevPOR

$3,896

4 Hotel Rooms

Room only

$2,089

Premium VRBO

No services

+300bps

Margin Advantage

vs hotels

Revenue Model	Accommodation	Hospitality Services	Total Revenue	NOI Margin
Guesthouse Distributed Hotel	$2,887	$2,436	$5,323	44.8%
4 Hotel Rooms (Comparable)	$3,896	Lost to competitors	$3,896	~42%
Premium VRBO	$2,089	Guest responsibility	$2,089	~35%

Margin Driver Analysis

Base ADR:$2,887 is 26% below comparable hotel rooms at $3,896
Service Capture:$406 per guest per day across 6 guests equals $2,436 incremental revenue
Margin Profile:Hospitality services operate at 60%+ gross margin versus 25% for hotels
DMUR Advantage:Downtown mixed-use provides commercial returns with residential exit options
Wallet Share:100% capture versus hotels losing F&B revenue to local establishments

Hub-and-Spoke Operations

The Hall anchoring 50-yard line destinations where people gather

1:8

Hub Ratio

Hall to houses

500m

Service Radius

Walking distance

2x

Staff Efficiency

vs traditional model

60%+

Service Margin

F&B and transport

Operational Metric	Traditional Hotel	Guesthouse Model	Efficiency Gain
Kitchen Utilization	40% (3 services)	85% (all day)	2.1x
F&B Labor Ratio	1:2 staff to guests	Hub enables multi-property coverage	50% reduction
Revenue per Kitchen	$1.2M	$2.4M	2.0x
CAPEX per Key	$350K	$180K	49% lower

Hall Functions

Central Kitchen:Commercial facility serving all campus houses
Guest Reception:Single check-in for entire group
Social Hub:Bar and gathering spaces
Operations Base:Staff, inventory, fleet management

Community Impact

Public-Private Asset:Hall operates as town amenity, not just guest facility
Economic Driver:Brings creativity and collaboration to town centers
Local Integration:Creates jobs, partners with local vendors
Town Enhancement:Activates downtown cores with year-round vitality

Game-Changing Operational Model

Multi-Property Support:One Hall efficiently serves 5-8 houses, creating unprecedented economies of scale
Integrated Hospitality:300bps margin above traditional STR with better capture than hotels
DMUR Asymmetry:Downtown mixed-use zoning provides liquidity of residential with upside of commercial
Social Capital:Creates gathering spaces that benefit both guests and local community

Scalable Unit Economics

Path to $78.8M annual revenue

Metric	Year 1	Year 3	Year 5	Year 10
Properties	1	8	35	85
Revenue ($M)	$0.4	$2.7	$24.8	$78.8
NOI ($M)	$0.2	$1.2	$6.6	$19.9
NOI Margin	45%	44%	27%	25%
Markets	1	2	5	10

Development Pipeline

Flagship CAPEX:$4M per property
House CAPEX:$2.5M per property
Occupancy Target:25.7% break-even
Peak Growth:Year 3-5 expansion

Operating Leverage

Revenue Growth:200x from Year 1 to Year 10
Margin Profile:25% NOI at stabilization
Cash Flow Positive:Year 2 at property level
Exit Multiple:2.8x at Year 10

Key Investment Considerations

The distributed hotel model at 50-yard line destinations demonstrates scalable economics with property-level NOI margins of 44.8%. DMUR zoning provides asymmetric returns - liquidity of residential assets with upside potential of commercial properties. Break-even occupancy of 25.7% provides downside protection while the hub-and-spoke model creates operational efficiencies unavailable to traditional hotels.

Investment Thesis

Asymmetric risk-return at 50-yard line destinations

$5,323

TRevPOR

Revenue capture

13%

Net Yield

On development

22%

Target IRR

Unlevered

2.8x

Multiple

10-year return

Investment Merits

Market Position:First mover at 50-yard line where groups gather
Unit Economics:44.8% NOI margins at property level
DMUR Asymmetry:Residential liquidity with commercial upside
Community Asset:Hall enhances towns as public-private amenity
Exit Flexibility:Multiple paths via residential or commercial sale

Strategic Catalysts

Scalable Anchor:Hall creates town center gravity enabling campus expansion
Dynamic Campus:Curated collection of people and places drives premium
Hybrid Work Era:Creativity, sport, academia define why groups gather
Purpose-Driven:Generation seeking reasons to be together in person
Experience Economy:Shift from accommodation to transformation

Conclusion

Groupstay hospitality captures 40%+ of $500B STR market at 50-yard line destinations where people gather
DMUR strategy provides asymmetric returns - liquidity of residential with upside potential of commercial
Game-changing Hall model enables one facility to serve 5-8 houses with 2x operational efficiency
Integrated hospitality delivers 300bps margin advantage over traditional STR with better capture than hotels
13% net yield with 44.8% NOI margins demonstrates superior unit economics and cash flow by Year 2
22% IRR with 2.8x multiple delivers returns while building community assets at places people come together