Ashford adds San Francisco hotel

Ashford Hospitality Trust has announced it has completed the acquisition of the Pan Pacific San
Francisco Hotel in San Francisco, CA, for $95 million in cash.Ashford purchased the hotel from a partnership between Oxford Lodging Advisory &
Investment Group, LLC and Whitehall Street Global Real Estate Limited
Partnership 2001 and affiliates which acquired the hotel in August 2003.
The Company also announced it has signed an agreement with Marriott
International, Inc. to re-brand the 338-room hotel as the JW Marriott
Hotel San Francisco. Marriott will manage the hotel under a long-term
incentive-based management agreement.

Re-branding of the hotel to JW Marriott and other renovation work, which
will consist of revenue enhancing upgrades to meeting space, rooms and
food and beverage facilities, will commence immediately. Ashford expects
to invest approximately $10 million in the re-branding and renovation of
the hotel, which is expected to be completed by December 2007. The
Company also intends to explore the value-added possibility of
converting the hotel’s existing Executive Conference Center to a
high-end bar/restaurant, retail or downtown day spa concept later in the
year.

On a forward twelve-month basis, the purchase price equates to a 12.2x
EBITDA multiple, an EBITDA yield of 8.2% and a net operating income
capitalization rate of 6.5% with projected revenues of $32 million. The
purchase price equates to a trailing twelve-month net operating income
capitalization rate of 3.9% and a 5.0% EBITDA yield. The property
generated revenues of $25.5 million for the calendar year 2005.

Located at the corner of Post and Mason Streets in the Union Square
district, the Mobil four-star, AAA four-diamond hotel is within walking
distance to world famous San Francisco destinations such as the
Financial District, Chinatown, theaters, upscale shopping, Embarcadero
Center, Nob Hill, and the Moscone Convention Center. Built in 1987 and
renovated in 2004, the property features 338 luxury rooms, 17,500 square
feet of meeting space, a state-of-the-art conference center and two food
and beverage facilities. The property is owned under a ground lease
which has a term expiring in 2083.

Monty J. Bennett, President and CEO of Ashford Hospitality Trust, said,
“Throughout its storied history, San Francisco has been known for
fabulous luxury hotels and destinations. Our agreement with Marriott to
re-brand this hotel as JW Marriott opens a new and exciting chapter in
the city’s history as San Francisco joins an exclusive group of fourteen
other cities in the United States that can boast of a JW Marriott hotel.
With Marriott’s proven reservation system and honored guest program, as
well as the luxury appeal of the JW Marriott brand worldwide, we are
confident this combination will help us tap into the tremendous
potential of this asset. The renovation and re- branding to one of the
world’s preeminent luxury brands will position us to outpace the
dramatic turnaround we are expecting in the San Francisco hotel market.”
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