1. Hotel Capital Markets Hodges Ward Elliott Presented to
Hotel Asset Managers Association
Hodges Ward Elliott
Mark W. Elliott
Senior Managing Director

2. Current EBITDA Multiples

3. Current Multiples of Public Lodging REITS
Company (as of 10/4/10)
2010E EBITDA X
2011E EBITDA X
Host Hotels & Resorts
18.3x
16.4x
Sunstone Hotel Investors
14.6x
13.5x
LaSalle Hotel Properties
17.0x
14.1x
Strategic Hotels & Resorts
20.5x
18.8x
DiamondRock Hospitality
15.8x
13.0x
Hersha Hospitality
14.2x
12.6x
FelCor Lodging Trust
12.0x
10.5x
Ashford Hospitality Trust
15.3x
12.8x
Lodging REITS
15.2x
13.4x
Source: Hodges Ward Elliott; Bloomberg

4. Current Transactions

5. Current Transactions Asset Rooms Price Price Per Room
Westin Philadelphia
294
$145,000,000
$493,197
Royal Palm
409
$117,000,000
$286,063
Sir Francis Drake
416
$90,000,000
$216,346
Tampa Embassy Suites
360
$77,000,000
$213,889
Cap Rates range from 1.88% to 6.48% and EBITDA Multiples range from to X.
Source: Hodges Ward Elliott

6. Rationale

7. Demand vs. GDP
1988 – 2010E
Source: Bureau of Economic Analysis; Smith Travel Research; Hodges Ward Elliott; Bloomberg Contributor Composite

8. Source: Smith Travel Research; Bloomberg
Demand vs. GDP
October 2009 – July 2010
Source: Smith Travel Research; Bloomberg

9. Source: Smith Travel Research, Hodges Ward Elliott
US Market RevPAR
RevPAR (1988 – 2010E)
Source: Smith Travel Research, Hodges Ward Elliott

10. Source: Smith Travel Research, Hodges Ward Elliott
US Market Supply
Supply (1988 – 2010E)
23-Year Average, , 2.1%
Source: Smith Travel Research, Hodges Ward Elliott

11. Trough-to-Peak RevPAR/NOI:
Review of Past Cycles
Trough-to-Peak RevPAR/NOI:
The sample below contains statistics for full-service hotels from 2003 – 2007:
Years
CAGR in RevPAR
CAGR in NOI
2003 – 2007
7.4%
17.9%
Source: Hodges Ward Elliott

12. Impact of EBITDA Growth
Assumptions/Scenarios:
2010E EBITDA grows at 17.9% over the next 5 years.
Corresponding EBITDA multiple if the growth rate is 17.9% and the stock price remains constant.
Value of stock if balance sheet remains the same and company is valued at 10.7 X EBITDA.

13. Impact of EBITDA Growth
Company
Stock Price – 10/4/10
2010E EBITDA
2010E EBITDA X
2015E EBITDA (Growing at 17.9% annually)
EBITDA X with same stock price (EV)
Stock price % change if balance sheet remains the same & company is valued at 10.7 X EBITDA
Host Hotels & Resorts
$14.64
$769
18.3 X
$1,752
8.1 X
24.20%
Sunstone Hotel Investors
$9.47
$153
14.6 X
$348
6.4 X
107.69%
LaSalle Hotel Properties
$23.15
$156
17.0 X
$355
7.5 X
71.37%
Strategic Hotels & Resorts
$4.25
$119
20.5 X
$270
9.1 X
44.76%
DiamondRock Hospitality
$9.70
$133
15.8 X
$302
6.9 X
52.99%
Hersha Hospitality
$5.10
$112
14.2 X
$256
6.3 X
159.31%
FelCor Lodging Trust
$4.55
 185
12.0 X
$421
5.3 X
385.82%
Ashford Hospitality Trust
$9.29
219
15.3 X
$498
6.7 X
357.23%
Source: Hodges Ward Elliott; Bloomberg

14. Sources of Capital
Public Issuance
Private Equity
Debt Markets

15. Lodging Stock Issuance
1995 – Year-to-Date 2010
Source: Bloomberg

16. Global CMBS Issuance for Hotels
1995 – Year-to-Date 2010
Source: Bloomberg

17. Identified Hotel Private Equity Availability
Capital
Identified Hotel Private Equity Availability
Equity
Equity Allocation
Total Buying
Raised
% Allocated
for Hotels
Power
Company
(in Billions)
to Hotels
RLJ Development
$1.1
100%
$1.10
$2.20
Rockpoint
$2.3
35%
$0.81
$1.61
Westbrook
$2.2
$0.77
$1.54
Northwood
$1.2
60%
$0.72
$1.44
HEI
$0.5
$0.50
$1.00
Lubert-Adler
$1.3
$0.46
$0.91
Walton Street Capital
MSREF (US)
$0.42
$0.84
Paulson & Company
$1.0
$0.35
$0.70
Rockwood
Starwood Capital
$2.00
Cornerstone
Total
$14.6
$7.4
$14.9
Source: Hodges Ward Elliott

18. Estimated Impaired Hotel Debt (Billions)
Capital
Estimated Impaired Hotel Debt (Billions)
CMBS
Bank
Life Co
Other
Total
2005
$17.9
$7.0
$4.6
$9.8
$39.3
2006
$22.4
$10.2
$5.8
$48.7
2007
$30.0
$16.4
$7.9
$22.9
$77.1
2008
$0.2
$3.8
$1.7
$5.0
$10.8
$70.5
$37.5
$20.0
$47.9
$175.9
Available Equity
$14.9
Potential Capital Gap Amount
$160.8
Source: MBA; Hodges Ward Elliott

19. Hotel Asset Managers Association
Hodges Ward Elliott, Inc Mark W. Elliott Senior Managing Director Sovereign Building, 25th Floor 3344 Peachtree Road NE Atlanta GA (404)
Hotel Asset Managers Association