We expect the majority of our direct real property investments to consist of stabilized, income-producing select-service hotel properties with premier brands, including, but not limited to, Marriott, Hilton, and Hyatt. Select-service hotels target business oriented travelers by providing clean rooms with basic amenities. In contrast to lower-cost budget motels, select-service hotels provide amenities such as an exercise room, business facilities and breakfast buffets. Unlike full-service hotels, select-service hotels typically do not have a full-service restaurant, which are relatively costly to operate. What Hotels? We anticipate that the majority of our direct hotel property investments will be made in major metropolitan markets that are located in the East Coast, West Coast and the Sunbelt regions of the United States. Hotels located in large metropolitan areas projected occupancy rate versus small metro’s*: Major Metro: Suburb of Major Metro: Small Metro/Town: 2015- 73% 66.7% 57% *CBRE Hotels– Hotel Horizons September-November 2016 Edition Absolute Levels ADR (Average Daily Rate), Twelve Month Moving Average- 1997 to June 2014*: Top 25 U.S. Markets- $137.68 All Other- $98.78 *STR, Inc. Where? If REIT II does not successfully attract and retain franchise flagships for premier-brand, select-service hotel properties, our business will suffer, and this result will reduce the value of a stockholder’s investment. *Moody National Companies has contractual relationships with each of the brands listed above. Moody National Companies expects to develop contractual relationships with other brands affiliated with Marriott, Hilton and Hyatt in the future, in addition to those listed above. M O O D Y N A T I O N A L R E I T I I , I N C . M O O D Y N A T I O N A L R E I T I I , I N C .