Q3 HOTEL TRANSACTIONS UPDATE

Not as robust as earlier in the year but much higher than 2010

Market M&A Trends for Q3

• Q3 US hotel transaction volume fell to $3BN from $4BN in Q2 and $5BN in Q1. But 2011 YTD volume is almost double that of 2010’s total.
• Q3 US Upper Upscale Hotel Volume tumbled 65% QoQ as there were fewer transactions and a couple of fire-sales.  Average Price per Key fell to $250k in Q3.
• REITs were not as active; JVs controlled much of the market
• Portfolio deals picked up steam
• The most prominent deal was the sale of W London at an average price per key of $1.6MM
• Hotel delinquencies continue to trend around the 14% level. 
• According to SHO CEO Kenneth Cruse, CMBS spreads have widened by 60-100bps from a rate of LIBOR+242bps a year ago

 Luxury Segment

• Average Price per Key
  • Q3 2011
    • US average: $632,270  (2 transactions)
    • Other average: $858,612 (2 transactions)
  • Q2 2011
    • US average: $406,250 (4 transactions)
    • Other average:  $788,461 (3 transactions)

Upper Upscale Segment

• Average Price per Key
  • Q3 2011
    • US average: $253,736 (8 transactions)
    • Other average: $338,661 (4 transactions)
  • Q2 2011
    • US average: $355,382 (13 transactions)
    • Other average: $250,152 (2 transactions)