Pinnacle Advisory Group Rachel J. Roginsky, ISHC Pinnacle Advisory Group 76 Canal Street Boston, MA 02114 Telephone: 617-722-9916 Fax: 617-722-9917 rroginsky@pinnacle-advisory.com Outlook 2004 Pinnacle Realty Investments Pinnacle Advisory Group

National Lodging Market Top 25 Markets – 2002 Total U.S. Market Through April 2003 National Projections

National Lodging Market Top 25 Markets – 2002

Top 25 Markets Room Supply Percent Change - 2002 INDUSTRY AVERAGE 1.8 % Source: Smith Travel Research / Pinnacle Advisory Group

Top 25 Markets ADR Percent Change - 2002 INDUSTRY AVERAGE -1.5 % Source: Smith Travel Research / Pinnacle Advisory Group

Top 25 Markets Occupancy 2002 Source: Smith Travel Research INDUSTRY AVERAGE 59.2 % Source: Smith Travel Research

Top 25 Markets RevPAR 2002 Source: Smith Travel Research / Pinnacle Advisory Group

National Lodging Market Total U.S. Market Through April 2003

Total United States Room Supply/Demand Percent Change Twelve Month Moving Average To April 2003 Source: Smith Travel Research / Pinnacle Advisory Group

Total United States Occupancy and ADR Twelve Month Moving Average To Apr 2003 Source: Smith Travel Research / Pinnacle Advisory Group

Total United States Key Performance Indicators Percent Change Twelve Months Ending April Source: Smith Travel Research / Pinnacle Advisory Group

Chain Scales Occupancy/ADR Percent Change Twelve Months Ended April 2003 Source: Smith Travel Research / Pinnacle Advisory Group

National Lodging Market National Projections

U.S. Lodging Outlook * Supply Growth Significantly Lower * Demand Lags, Then Recovers * Occupancy Flat * Pressure on Room Rates * Slow RevPAR Growth * Potential Threat – War/Terrorism

Total United States Supply/Demand Percent Change 1996 – 2003P Source: Smith Travel Research / Pinnacle Advisory Group

Total United States Occupancy Percent 1996 – 2003P Source: Smith Travel Research / Pinnacle Advisory Group

Total United States Average Daily Rate 1996 – 2003P Source: Smith Travel Research / Pinnacle Advisory Group

Total United States RevPAR Percent Change 1996 – 2003P Source: Smith Travel Research / Pinnacle Advisory Group

New England Lodging Market

New England Occupancy - 2002 Source: Smith Travel Research / Pinnacle Advisory Group

New England Average Daily Rate – 2002 Source: Smith Travel Research / Pinnacle Advisory Group

New England RevPAR – 2002 Source: Smith Travel Research / Pinnacle Advisory Group

New England Change in Performance - 2002 Source: Smith Travel Research / Pinnacle Advisory Group

New England Change in Performance – YTD June 2003 Source: Smith Travel Research / Pinnacle Advisory Group

Suburban Boston Lodging Market Statistics Projections

Suburban Boston Lodging Market Statistics

Suburban Boston Statistics

Suburban Boston Occupancy 1995-2002 Source: Smith Travel Research / Pinnacle Advisory Group

Suburban Boston Average Room Rate 1995 - 2002 Source: Smith Travel Research / Pinnacle Advisory Group

Suburban Boston RevPAR 1995 - 2002 Source: Smith Travel Research / Pinnacle Advisory Group

Suburban Boston Lodging Supply 1995 - 2002 Source: Smith Travel Research / Pinnacle Advisory Group

Suburban Boston Occupancy YTD June 2001 - 2003 Source: Smith Travel Research / Pinnacle Advisory Group

Suburban Boston Average Daily Rate YTD 2001 - 2003 Source: Smith Travel Research / Pinnacle Advisory Group

Suburban Boston RevPAR YTD 2001 - 2003 Source: Smith Travel Research / Pinnacle Advisory Group

Suburban Boston Lodging Market Projections

Suburban Boston 2003 Continued Lack of Overflow from Boston Major Demand Generators Report only limited increases in demand Shorter Booking Window New Supply Less but Still a Factor Pent-up demand

Pinnacle Projections Suburban Boston 2003 2002 2003 Change Occupancy 58.3% 55.0% -5.7% Average Rate $97.20 $92.75 -4.6% RevPAR $56.69 $51.01 -10.0%

Suburban Boston 2004 Stronger Convention Year for Boston Improving economy Limited New Supply Stable Geopolitical Situation Weak Dollar

Pinnacle Projections Suburban Boston 2004 2002 2003 Change Occupancy 55.0% 57.0% 3.6% Average Rate $92.75 $93.75 1.1% RevPAR $51.01 $53.44 4.8%

Boston / Cambridge Lodging Market Statistics New Supply Demand Trends Projections

Boston / Cambridge Lodging Market Statistics

Boston / Cambridge Occupancy 1989 – 2002 Source: Pinnacle Advisory Group

Boston / Cambridge Average Room Rate 1989-2002 Source: Pinnacle Advisory Group

Boston / Cambridge RevPAR 1989-2002 Source: Pinnacle Advisory Group

Boston / Cambridge Lodging Supply 1989 - 2002 Source: Pinnacle Advisory Group

Boston / Cambridge Occupancy YTD June 2001-2003 Source: Pinnacle Advisory Group

Boston / Cambridge Average Room Rate YTD June 2001-2003 Source: Pinnacle Advisory Group

Boston / Cambridge RevPAR YTD June 2001-2003 Source: Pinnacle Advisory Group

Boston / Cambridge Change in RevPAR 1996 – YTD June 2003 Source: Pinnacle Advisory Group

Boston / Cambridge Change in Performance By Market Area - 2002 Source: Pinnacle Advisory Group

Boston / Cambridge Change in Performance By Market Area – YTD June 2003 Source: Pinnacle Advisory Group

Boston / Cambridge Lodging Market New Supply

Boston / Cambridge New Supply 2003 Embassy Suites - Airport – 273 Rooms - April Residence Inn – Charlestown – 168 Rooms – May Hotel Marlowe – E. Cambridge – 236 Rooms – May Commonwealth Hotel – Kenmore Square 149 - Rooms - May Courtyard Hotel – Back Bay - 90 - Rooms -September/October

Boston / Cambridge New Supply 2004 Hotel Onyx – N. Station – 112 Rooms – Winter/Spring Jurys Doyle – Back Bay – 220 Rooms – Spring Clarion – N. Station – 88 Rooms – Summer Hampton Inn and Suites – Crosstown – 175 Rooms – Summer

Boston / Cambridge Lodging Market Demand Trends

Boston / Cambridge Demand Trends Declining Corporate Demand Economy Geopolitical Situation Declining Group Demand Weak Corporate Demand Off Convention Years Declining Airline Crew Demand Airline Industry Woes

Boston / Cambridge Demand Trends Increasing Leisure Demand “Buying” Demand Through Lower Rates Increasing Use of the Internet Increasing Government Demand Increased Per Diem Homeland Security

Factors Affecting Boston / Cambridge Performance vs Factors Affecting Boston / Cambridge Performance vs. National Performance Stronger Supply Increases Heavy Reliance on Technology and Financial Services Industries Popular Destination with International Travelers

Boston / Cambridge Lodging Market Projections

Factors Affecting Demand 2H 2003 Fewer Conventions than 2H 2002 New Supply Shorter Booking Window Improving Economy More Stable Geopolitical Situation Weak Dollar

Pinnacle Operators Survey 2003 18 Hotels, 7,900 Rooms Occupancy Down 2.4 Points Average Rate Down 7.3 Percent RevPAR Down 10.2 Percent

Pinnacle Projections Boston / Cambridge 2003 2002 2003 Change Occupancy 72.3% 68.8% -4.8% Average Rate $165.04 $151.84 -8.0% RevPAR $119.32 $104.46 -12.4%

Factors Affecting Demand 2004 Strong Convention Year New Supply Improving Economy More Stable Geopolitical Situation Weak Dollar MOTT Budget Reduction

Pinnacle Operators Survey 2004 18 Hotels, 7,900 Rooms Occupancy Up 1.4 Points Average Rate Up 2.5 Percent RevPAR Up 4.8 Percent

Pinnacle Projections Boston / Cambridge 2004 2003 2004 Change Occupancy 68.8% 70.5% 2.5% Average Rate $151.84 $155.63 RevPAR $104.46 $109.72 5.0%

Pinnacle Advisory Group Rachel J. Roginsky, ISHC Pinnacle Advisory Group 76 Canal Street Boston, MA 02114 Telephone: 617-722-9916 Fax: 617-722-9917 rroginsky@pinnacle-advisory.com Outlook 2004 Pinnacle Realty Investments Pinnacle Advisory Group