Thayer Lodging Group Completes Fifth Investment Fund

Seeks to Acquire up to $700 Million in Hotels/Resorts over Next Three Years

ANNAPOLIS, MD—Thayer Lodging Group, a privately held, real estate investment company, announced the final closing of Thayer Hotel Investors V LP and a parallel fund, Thayer Hotel Investors V-A LP.

With approximately $280 million in equity commitments, the new discretionary equity funds for lodging investments expect to selectively acquire between $600 and $700 million in hospitality assets over the next 36 months. Since 1991, the company has acquired approximately $1.8 billion in hotels and resorts. Funds V and V-A are the largest in the company’s history.

“Given the current economic environment, we are particularly gratified that more than 70 percent of Fund V investors also were participants in our previous funds,” said Frederic V. Malek (top right photo) , Thayer’s co-chairman. Historically, Thayer’s funds combined have realized a 29 percent internal rate of return and a 2.6 multiple on invested equity.

Added Leland C. Pillsbury, (middle left photo) Thayer’s co-chairman and chief executive officer, “We believe the next few years will present the best hotel investment opportunity in a generation.

"Hotel cash flows are being dramatically impacted by record declines in revenue per available room (RevPAR) due to the worst recession since the Great Depression. The current credit market dislocations, combined with the severe deterioration in hotel fundamentals, will create a wide array of acquisition opportunities.”

Fund V will employ Thayer’s time-tested, value-add strategy of acquiring upper-upscale and luxury hotels that require extensive renovations, market repositioning, asset rebranding and operating cost reduction. Target acquisitions, primarily in markets with high barriers to entry, will be concentrated in the U.S. The company expects to source transactions from owners, management companies, lenders and brokers.

“We don’t anticipate that the U.S. hotel industry will experience a meaningful recovery until 2011, which will result in more assets coming to the market in the immediate future,” said officer Bruce Wiles, (bottom right photo) Thayer’s chief operating officer.

“We expect the acquisition market to accelerate substantially in 2010 and intend to capitalize on our reputation for a creative, collaborative approach to working with lenders and owners to structure transactions where we can create value through our extensive lodging expertise, our innovations and creative strategies, and our strategic relationships with major hotel brands.”

Jin Lee, Thayer’s chief investment officer and managing director, noted that the company has an active pipeline that includes both asset acquisitions and equity recapitalizations. “In addition to traditional acquisitions, we are looking at opportunities where we can participate in recapitalizations and other structured equity investments. For quality assets that have debt issues, we can provide fresh equity to help facilitate a workout and restructuring of the debt and equity.”

Contact: Chris Daly or Jerry Daly, (703) 435-6293, chris@dalygray.com

Jin Lee Joins Thayer Lodging Group as Managing Director and Chief Investment Officer

ANNAPOLIS, MD—Thayer Lodging Group announces that Jin Lee (top right photo) has joined the company as a managing director and will serve as its chief investment officer.

In his new role, he will be responsible for sourcing, due diligence, negotiating and structuring transactions.

“Jin brings extensive hotel investment expertise, with 19 years in the industry, in acquisitions, financing, development and dispositions, having been involved in more than $2 billion of transactions in his career,” said Leland Pillsbury, (top left photo) Thayer Lodging’s CEO and co-chairman.

“He will play a major role in our growth as we seek ways to take advantage of the current economic climate. We have considerable equity available, and believe we will be one of only a small group of serious investors in 2009.”

“We believe the opportunity for hotel acquisitions will increase substantially over the next 12 to 18 months, and we intend to be a major investor,” added Bruce Wiles, (middle right photo) Thayer’s chief operating officer.

“Our focus remains on finding complex projects where we believe we can add substantial value through repositioning, rebranding and possibly changing management."

Prior to joining Thayer Lodging Group, Lee was senior vice president of acquisitions and development at HEI Hotels & Resorts, where he was involved in $1.5 billion of transactions, personally closing on $500 million in acquisitions.

Previously, he served as vice president of acquisitions and development at Kimpton Hotel & Restaurant Group. Before that, he served as director of development planning and feasibility at Marriott International and vice president at HVS International.

Lee is a graduate of Cornell University’s School of Hotel Administration and has an MBA from the University of California, Irvine. He is a member of the Urban Land Institute and the Cornell Hotel Society.

Lee will fill the role formerly held by Bill Reynolds (bottom left photo) who remains an advisory director and will maintain an advisory role with the company. “Bill has taken on development responsibilities for his alma mater, Trinity College. He added value to our portfolio during his tenure and we applaud him for his commitment to Trinity,” Pillsbury noted.

About Thayer Lodging Group

Annapolis, Maryland-based Thayer Lodging Group is a privately held, real estate venture capital operating company with a portfolio of 14 hotels consisting of more than 2,800 guest rooms.

Formed in 1991, the firm has sponsored five hotel investment funds for investors and has a portfolio of hotels operating under the Marriott, Hilton, Wyndham and Six Continents brands.

Additional information about the company may be found at http://www.thayerlodging.com/.

Contact: Chris Daly or Jerry Daly 703 435-6293, chris@dalygray.com, jerry@dalygray.com