Valuation of the Hotel Real Estate & Intangibles by Thomas Dolan Managing Director HVS Property Tax Services - 1 -

Components of a Going Concern - 4 -

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Superior/Inferior Management/Brand Adjustments for Management/Brand RevPAR Brand and Management Expenses Management Example Westin Hotel, St. Louis Penetrated its competitive set at 150% revpar - Partially due to location and physical - Primarily due to Management and Brand - 31 -

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Examples of Intangibles Westin Major market Operating at 150% of market RevPAR versus Marriott, Hilton, Hyatt, Ritz, Independent luxury We made adjustments down to 125% of the market Residence Inn flag loss Tertiary market Year end 2009 70% @$100 Flag removed March 1, 2010 Year end 2010 58% @ $79-46 -

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Sales Comparison Approach Sales occurring today at historically Low cap rates Reason #1: income still remains below historically levels (inflation adjusted), and buyers still seeing upside Reason #2: Cost of capital is at historically low levels Debt interest rates remain at all time low for hotels Equity new capital (foreign) sources entering the market looking for opportunity in the US - 48 -

Market Value Assessed versus Appraised Assessed Value is Value in Use most places; HBU is not considered I believe that there are differences Value of brand adds to real estate value when leveraging with a mortgage - Extraordinary assumption Assessed valuation any and all impact of branding needs to be removed from value of real estate - No assumption necessary - 49 -

Capitalization Rates and Sales Sales of well branded hotels typically include intangibles, which can often be found in the cap rate Branding assumptions Therefore market extracted cap rates are not always ideal unless you have all details of the sale Personal property is an ambiguous number Property Improvement Plan (PIP) Many factors can affect cap rates Buyer s motivation 1031 REITs - 50 -

Approaches for Mass Valuation Bucket approach Put hotels into different buckets i.e. independents Upscale, Mid scale, economy i.e. branded upscale, midscale, economy - 51 -

Massachusetts Sales Real Capital Analytics HVS Database - 52 -

Massachusetts Sales Property Name Address City Price in $ $/Units Liberty Hotel 215 Charles St Boston 170,000,000 570,470 Hotel Commonwealth 500 CommonweBoston 78,375,000 526,007 Hilton Boston Financial District 89 Broad St Boston 160,000,000 441,989 Veritas at Harvard Square 1 Remington StCambridge 13,000,000 419,355 Copley Square 47 Huntington ABoston 60,750,000 410,473 W Hotel & Condos 100 Stuart St Boston 89,500,000 380,851 The Back Bay Hotel 350 Stuart St Boston 84,387,000 375,053 Boston Common Hotel & Conference Ctr 40 Trinity Pl Boston 22,550,000 352,344 Boston Harbor Hotel at Rowes Wharf 70 Rowes WhaBoston 77,465,767 336,808 Courtyard Boston Copley Square 88-90 Exeter S Boston 25,000,000 308,642 Renaissance Boston Waterfront Hotel 606 Congress SBoston 132,000,000 280,255 Bulfinch Hotel 107 Merrimac SBoston 21,810,176 272,627 Royal Sonesta 23 Cambridge PCambridge 97,827,155 244,568 Park Plaza Hotel 50 Park Plz Boston 250,000,000 237,417 envision Hotel Boston 81 S HuntingtonBoston 9,200,000 235,897 Embassy Suites Boston 550 Winter St Waltham 64,500,000 234,545 Bulfinch Hotel 107 Merrimac SBoston 18,200,000 227,500 Homewood Suites 1 MassachusetArlington 22,100,000 221,000 Courtyard Boston Cambridge 777 Memorial DCambridge 42,000,000 204,878 463 Beacon Street Guest House 463 Beacon St Boston 3,800,000 190,000 Hyatt Summerfield Suites Burlington/Boston 2 Van De GraafBurlington 27,485,872 183,239 Residence Inn Woburn 300 PresidentiaWoburn 27,000,000 181,208 Best Western Roundhouse Suites 891 MassachusBoston 16,450,000 178,804 Burlington Marriott One Mall Rd Burlington 73,350,000 175,478 Park Plaza Hotel 50 Park Plz Boston 132,468,441 140,774 Aloft and Element Hotels 727 Marrett Rd Lexington 36,000,000 138,996 Hampton Inn 215 Wood Rd Braintree 13,600,000 132,039 Residence Inn 181 Faunce CoNorth Dartmout 11,692,983 121,802 Hilton Garden Inn 420 Totten PonWaltham 18,000,000 121,622 Americas Vest Value Inn 1800 Soldiers FBoston 6,657,500 121,045 Boston Marlborough Courtyard by Marriott 75 Felton St Marlborough 23,980,000 118,713-53 -

Massachusetts Sales (Cont.) Property Name Address City Price in $ $/Units Summerfield Suites 54 4th Ave Waltham 15,600,000 114,706 Hampton Inn Boston/Woburn 315 Mishawum Woburn 10,458,790 105,644 Doubletree Westborough 5400 ComputerWestborough 21,900,000 98,206 Doubletree Bedford Glen 44 Middlesex TBedford 27,759,500 93,466 Homewood Suites 57 Newbury St Peabody 7,846,262 92,309 Hampton Inn 59 Newbury St Peabody 11,077,075 92,309 40 Berkeley St 40 Berkeley St Boston 17,230,000 86,150 Holiday Inn Express 50 Fortune BlvdMilford 9,800,000 83,761 Sheraton 1657 WorcesteFramingham 27,225,000 72,989 95 Main St 95 Main St Tewksbury 7,500,000 62,500 65 Newbury St 65 Newbury St Danvers 6,300,000 58,879 Quality Inn 1005 Belmont SBrockton 3,900,000 56,522 Springhill Suites - Peabody 43 Newbury St Peabody 9,250,000 56,402 Red Roof Inn Boston Woburn 19 Commerce Woburn 8,959,400 56,348 Best Western Plus 740 Elm St Concord 5,792,000 55,162 Holiday Inn Express 50 Fortune BlvdMilford 6,300,000 53,846 Best Western Plus Merrimack Valley 401 Lowell Ave Haverhill 6,380,000 50,635 Best Western 909 Hingham SRockland 3,810,000 50,132 1668 Worcester Rd 1668 WorcesteFramingham 5,300,000 50,000 125 Union St 125 Union St Braintree 4,200,000 45,652 Comfort Inn - Danvers 50 Dayton St Danvers 6,350,000 45,357 Red Roof Inn Boston Northeast Saugus 920 Broadway Saugus 4,900,000 41,880 Radisson 10 IndependencChelmsford 8,000,000 37,736 fmr Courtyard By Marriott 150 Royal Plaz Fitchburg 9,178,400 37,463 Westford Regency Inn & Conf Ctr 219 Littleton RdWestford 7,000,000 36,269 Hampton Inn Boston/Woburn 315 Mishawum Woburn 3,000,000 30,303 48 Commercial Rd 48 Commercial Leominster 3,300,000 28,947 Crowne Plaza Boston North Shore 50 Ferncroft RdDanvers 9,575,018 26,090 Comfort Suites 106 Bank Rd Haverhill 3,208,500 24,492-54 -

My Prediction on next downturn Hotel operations will remain strong through 2019 However, cap rates will begin to rise in 2015 and upside in market diminishes due to cap rate increases New supply to outpace demand - 55 -

Thank you - 56 -