Hilton Garden Inn, Fort Myers, Florida

On November 5, 1999, Accord Real Estate Group, Inc. formed University Commons Hotel L.P ("Partnership") as a Delaware limited partnership. The General Partners of the Partnership included Alliance Financial Group, Inc. ("Alliance"), an affiliate of Accord. Scott R. Lodde is a stockholder of Alliance.

In April, 2000, the Partnership purchased a 2.8-acre site located at the intersection of Summerlain Road and College Parkway in Fort Myers, Florida and began construction of a 126-unit five-story Hilton Garden Inn. Hotel management services were provided by True North Hotel Group, LLC. The hotel opened on September 17, 2001.

Hilton Garden Inn is an upscale mid-priced, focused-service hotel concept developed by Hilton Hotels Corporation. Hilton Garden Inn was designed by Hilton to provide only what their guests said they need, and eliminates what they've said they don't use. The Hilton Garden Inn brand is targeted toward the individual business traveler and the weekend leisure segment. The brand competes primarily with Courtyard by Marriott.

The project was financed through a combination of debt and equity. Debt financing was provided through a construction/mini-perm first mortgage loan from Miller & Schroeder Investments Corporation in the amount of $7,928,000. Equity for the project, in the amount of $2,001,000 was provided by twenty-two individual limited partners including stockholders of the General Partners. The hotel was refinanced with Florida Community Bank in March, 2004.

Total development costs for the project were approximately $10,060,000 or $79, 840 per room.

The impact of the events surrounding the 9-11 terrorist attacks was devastating to the hotel's occupancy during the years following its opening. As a result, the Partnership was unable to make distributions to the investors during the initial years from operations. On March 1, 2005 the hotel was sold to Equity Inns, Inc., a real estate investment trust (REIT) based in Memphis, Tennessee for $14,500,000 or approximately $115,000 per room.

During the five year holding period beginning at the start of construction and ending at the sale of the property on March 1, 2005, each $100,000 invested in the Partnership, received distributions averaging $319,722 which were generated from operating cash and proceeds from the sale of the hotel. These results were calculated using the total distributions achieved by both classes of limited partner investors. The two separate classes of investors received varying proceeds from cash from operation and sale proceeds based upon the allocation terms in the limited partnership agreement. These results produced an internal rate of return of 26.2% during the holding period of the investment.

The detailed results achieved by the investors in University Commons Hotel L.P. are shown in the Prior Performance Table document below.