WILL TOMORROW BE BETTER THAN YESTERDAY?

CBRE HOTELS The World s Leading Hotel Experts. WILL TOMORROW BE BETTER THAN YESTERDAY? HOTEL SECTOR UPDATE OCTOBER 31, 2017

THE AGENDA 1. U.S. Lodging Market The Macro-Economy and Hotels The Changing Traveler Our Performance Forecasts Cap Rates 2 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

THE MACRO ECONOMY AND HOTELS

A THOUGHT: Prediction is very difficult, especially if it's about the future. - Niels Bohr, Nobel laureate in Physics "Generally speaking, the recent past is a good predictor of the near term future. - Me 4 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

MARKET OUTLOOK THE ECONOMY 2018 VS. THE 2012 2016 AVERAGE: INCOME: Leading Markets: 16 of 60 (Tampa, Jacksonville, West Palm Beach) Lagging Markets: 44 of 60 (Oakland, San Jose, Sacramento) EMPLOYMENT: Leading Markets: 5 of 60 (Tampa, Pittsburgh, Dayton, Cleveland) Lagging Markets: 55 of 60 (San Francisco, San Jose, Nashville) POPULATION: Leading Markets: 13 of 60 (West Palm Beach, Raleigh-Durham, Tucson) Lagging Markets: 47 of 60 (San Jose, Charleston, Oakland) 5 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

HOW IS THE ECONOMY TODAY? 6 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

HOW WILL THE ECONOMY BE IN 2018? 7 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

THE OUTLOOK FOR THE DRIVERS THAT ARE MOST IMPORTANT TO HOTELS REMAINS FAVORABLE 6 5 4 GDP Component Forecast 3 2 1 0-1 -2 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 2014 2015 2016 2017 2018 2019-3 (GOVERNMENT) Government consumption expenditures and gross investment BUSINESS (Gross private domestic investment) TRADE (Net exports of goods and services) CONSUMERS (Personal consumption expenditures) Lodging Demand These matter the most. Source: BEA, Moody s Analytics, CBRE Hotels Americas Research Hotel Horizons: October 2017, STR, Inc. 8 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

THE CHANGING TRAVELER

QUESTIONS: 10 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

ROOM TO GROW? COMPARING WEEKDAY VS. WEEKEND PERFORMANCE Occupancy Level Year Weekday % Weekend % Total % 2000 60.5% 68.3% 62.8% 2005 60.2% -0.6% 68.3% 0.0% 62.5% -0.4% 2010 54.8% -8.9% 62.5% -8.5% 57.0% -8.8% 2016 62.3% 13.8% 71.3% 14.0% 64.9% 13.9% 2000-16 Change 1.4% 1.8% 1.6% Source: STR Weekend Occupancy Level is 9.0 points Higher than the Weekday Level 11 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

LEISURE TRAVEL GAINS COMPARING WEEKDAY VS. WEEKEND PERFORMANCE Average Daily Rate Year Weekday % Weekend % Total % 2000 $82.41 $79.74 $81.57 2005 $87.73 6.5% $87.92 10.3% $87.79 7.6% 2010 $94.02 7.2% $93.18 6.0% $93.75 6.8% 2016 $118.54 26.1% $120.87 29.7% $119.28 27.2% 2000-16 Change 2% 2.6% 2.4% Source: STR ADR is Now Higher on the Weekend 12 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

MORE PEOPLE RENTING ROOMS WELL IN EXCESS OF WHAT HISTORICAL TRENDS WOULD SUGGEST RATIO OF ANNUAL ROOMS SOLD TO WORKING-AGE POPULATION OF THE U.S. 5.5 Rooms sold including Airbnb Rooms sold Linear (Rooms sold) 5 4.5 4 3.5 3 Mar-88 Dec-88 Sep-89 Jun-90 Mar-91 Dec-91 Sep-92 Jun-93 Mar-94 Dec-94 Sep-95 Jun-96 Mar-97 Dec-97 Sep-98 Jun-99 Mar-00 Dec-00 Sep-01 Jun-02 Mar-03 Dec-03 Sep-04 Jun-05 Mar-06 Dec-06 Sep-07 Jun-08 Mar-09 Dec-09 Sep-10 Jun-11 Mar-12 Dec-12 Sep-13 Jun-14 Mar-15 Dec-15 Sep-16 Jun-17 Source: STR, Airdna, U.S. Census, CBRE Hotels Americas Research, Q2 2017. 13 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

SENIORS REPRESENT GREATER SHARE OF HOUSEHOLDS AND SPENDING 14 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

EFFECT OF STRONG DOLLAR Exchange Rate Index and International Tourism Spending 25,000 Total Travel and Tourism-Related Exports(Left) FRB Broad Currency Index (Right) 130 120 20,000 110 15,000 100 90 10,000 80 5,000 70 1999 2000 2001 2002 2003 Source: Federal Reserve Board, International Trade Association, Q2 2017 Note: Quarterly data in real terms, '97 = 100 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 15 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

INTERNATIONAL TRAVEL TO THE US RATIO OF INTERNATIONAL HOTEL STAYS AS A SHARE OF ROOM NIGHTS - 2015 % of Total 0 10 20 30 40 50 60 70 Miami New York Oahu San Francisco Los Angeles Orlando Boston Ft. Lauderdale San Diego Washington DC Seattle Philadelphia Chicago Tampa San Jose-Santa Cruz U.S. Average New Orleans Houston Anaheim Atlanta Dallas Source: U.S. Department of Commerce ITA, STR, City Visitor Reports, CBRE Hotels Americas Research. 16 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

OUR FORECASTS

TIMES ARE GOOD...WILL THEY GET BETTER? U.S. NATIONAL FORECAST FORECAST CALLS FOR A CONTINUAL DECLINE IN REVPAR GROWTH Long Run Average 2014 2015 2016 2017F 2018F Supply 1.9% 0.6% 1.0% 1.5% 1.9% 2.6% Demand 2.0% 4.0% 2.6% 1.6% 2.2% 2.0% Occupa ncy 62.2% 64.4% 65.4% 65.4% 65.9% 65.9% ADR 3.1% 4.6% 4.5% 3.1% 2.2% 2.5% RevPAR 3.3% 8.2% 6.2% 3.2% 2.9% 2.5% Source: STR CBRE Hotels Americas Research, Q3 2017 Preliminary Update. 18 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

REVPAR FORECAST BY CHAIN-SCALE ECONOMY HOTELS CONTINUE UP THE RECOVERY CURVE OUTPACING ALL OTHERS Chain Scales 2016 2017F 2018F Luxury 1.3% 2.1% 2.5% Upper Upscale 1.9% 1.0% 1.0% Upscale 2.2% 0.7% 1.2% Upper Midscale 2.2% 1.6% 2.8% Midscale 2.4% 3.1% 1.8% Economy 3.0% 3.1% 3.4% All Hotels 3.2% 2.9% 2.5% Source: STR CBRE Hotels Americas Research, Q3 2017 Preliminary Update. 19 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

LOCAL MARKET POSITION IN THE CURRENT CYCLE VARIES REAL REVPAR CHANGE FROM PRE-RECESSION PEAK Expansion Recovery Recession 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% Houston Pittsburgh Miami Cleveland Louisville San Francisco New York Baltimore Tucson Norfolk-VA Beach San Antonio Omaha Phoenix Albuquerque Newark Philadelphia Washington DC Hartford Long Island Albany Richmond West Palm Beach Milwaukee Chicago San Diego New Orleans Salt Lake City Memphis Fort Worth Minneapolis Raleigh-Durham Columbia Jacksonville Savannah Atlanta Saint Louis Charleston Orlando Fort Lauderdale Tampa Kansas City Dallas Columbus Denver Indianapolis Seattle Oahu Detroit Austin Cincinnati Boston Anaheim Dayton Sacramento Charlotte Portland Los Angeles Nashville Oakland San Jose-Santa Cruz Source: STR CBRE Hotels Americas Research, Q3 2017. 20 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

TOP 60 MARKET OUTLOOK U.S. HOTELS 2018 VS. 2017: OCCUPANCY LEVELS: (65.9% - FLAT) Up in 8 Flat in 4 Down in 48 AVERAGE DAILY RATE LEVELS: ($129.94 - UP 2.5%) Up in 59 Down in 1 REVPAR LEVELS: ($85.59 UP 2.5%) Up in 53 Down in 7 21 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

9.0% SUPPLY CHANGE 2018 - FORECAST 2017 TO 2018 8.0% 7.0% 45 Markets where the Average Supply Growth is Forecast to be Greater than 2%. 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Nashville New York Austin Miami Savannah Seattle Dallas Charlotte Denver Charleston Fort Lauderdale Louisville Portland Houston Pittsburgh Kansas City Columbus Fort Worth Raleigh-Durham Minneapolis Boston Cincinnati San Jose-Santa Cruz Hartford San Francisco Detroit Memphis Philadelphia Tampa Milwaukee Indianapolis Atlanta Baltimore Chicago Omaha Los Angeles Washington DC Dayton Newark Long Island Phoenix Sacramento Albany San Diego San Antonio Anaheim Jacksonville Orlando Salt Lake City Cleveland New Orleans Richmond Columbia Norfolk-VA Beach Oahu Saint Louis Albuquerque Tucson Oakland West Palm Beach Source:, CBRE Hotels Americas Research, Q2 2017. 22 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

PIPELINE PEAKING U.S. ROOMS UNDER CONSTRUCTION 210,000 194,455 190,000 192,132 170,000 150,000 130,000 110,000 90,000 2014 2015 2016 2017 Source: STR, CBRE Hotels Americas Research, Q2 2017. 23 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

RECENT NEW U.S. SUPPLY New Rooms Jan'16 - June '17 Class Airport Interstate Small Metro Resort Suburban Urban Total Luxury 0.0% 0.0% 0.4% 2.0% 0.5% 2.2% 5.1% Upper Upscale 0.7% 0.3% 0.3% 1.1% 1.9% 7.3% 11.6% Upscale 1.9% 1.5% 3.3% 2.9% 14.0% 9.9% 33.5% Upper Midscale 1.9% 5.7% 8.3% 1.5% 16.4% 5.3% 39.1% Midscale 0.2% 0.9% 1.5% 0.1% 2.1% 0.7% 5.5% Economy 0.5% 0.8% 0.7% 0.2% 2.6% 0.4% 5.2% Total 5.2% 9.2% 14.5% 7.8% 37.5% 25.8% Source: STR, CBRE Hotels Americas Research, Q2 2017. 24 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

QUESTION: Record Occupancies Leads to Scarcity in Many Markets. Why has Real ADR Growth Been Just Okay, and Not Great? 25 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

CONUNDRUM A question or problem having only a conjectural answer. Conjecture: Without Evidence 26 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

REAL REVPAR CHANGE WHAT WE LEARN FROM PAST CYCLES STRONG DEMAND GROWTH HAS CHARACTERIZED THIS CYCLE SINCE 2010 10.0% 8.0% demand^ 6.0% 4.0% Forecast 2.0% 0% (2.0)% (4.0)% (6.0)% (8.0)% 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 demand^ 27 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

REAL REVPAR CHANGE WHAT WE LEARN FROM PAST CYCLES MODEST SUPPLY RESPONSE IN THE CURRENT CYCLE 5.0% supply^ 4.0% 3.0% Forecast 2.0% 1.0% 0% (1.0)% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 supply^ 28 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

REAL REVPAR CHANGE WHAT WE LEARN FROM PAST CYCLES PRICING POWER IS ABSENT THIS TIME AROUND U.S. Occupancy and ADR Change Occupancy Level (%) Year-over-Year Change (%) 10 70 8 68 6 66 4 64 2 62 0-2 60-4 58-6 56-8 54-10 52-12 50 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ADR (L) Occupancy - 4 Quarter Moving Average(R) Source: CBRE Hotels' Americas Research, STR, Q3 2017. 29 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

WHAT EXPLAINS LACKLUSTER ADR GROWTH? SHORTENED BOOKING LEAD TIMES. GROWTH OF THE SHARING ECONOMY AND THEIR IMPACT ON PRICING POWER DURING PEAK DEMAND PERIODS. CHAINS INCENT MANAGERS TO MAXIMIZE OCCUPANCY AND NOT NECESSARILY REVENUE. INTERMEDIARIES CAPTURING A GREATER PORTION OF THE PRICE INCREASES THAT THE CONSUMER PAYS (YET THE HOTEL DOES NOT RECEIVE). NEW SUPPLY IN MANY OF THE LARGER MARKETS ERODES PRICING POWER. 30 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

12 THE JOB MARKET - GETTING TIGHT! 10 8 6 4 2 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1000 900 800 700 600 500 400 300 200 100 0 Source: BLS, Q3 2017. U.S. Unemployment Rate (Left) L&H Job Openings (Right) 31 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

MANAGEMENT REACTS Annual Change in Components to Total Labor Costs 10% 5% 0% -5% -10% -15% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 CBRE - Change in Total Hours Worked BLS - Change in Average Hourly Compensation for Hospitality Employees CBRE - Annual Change in Total Labor Costs Source: 2017 Trends in the Hotel Industry, Bureau of Labor Statistics 32 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

HOTELS ARE MAKING MONEY GROSS OPERATING PROFIT* - DOLLARS PER AVAILABLE ROOM $32,000 $24,000 69.7% from 2009 to 2016 3.0% 1.8% $16,000 $8,000 $22,141 $21,896 $15,630 $16,721 $18,359 $19,957 $21,733 $24,058 $25,574 $26,520 $27,323 $27,818 $0 Note: * Before deduction for Management Fees and Non-Operating Income and Expenses ** Earnings before Interest, Taxes, Depreciation, and Amortization Source: 2017 Trends in the Hotel Industry 33 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

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AIRBNB Source Airbnb As many guest arrivals in 2016 as all other previous years combined 35 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

BUSINESS TRAVEL ON AIRBNB? 11% of all Airbnb Guests are business travelers 30% of Airbnb Guests in Urban Markets are business travelers Source Airbnb 36 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

% OF UNITS THAT ARE BUSINESS READY (TOP 10) MARKET SUBMARKET % BUSINESS READY Sacramento Central Business District 30.3% San Antonio Central Business District 30.2% Des Moines, IA Des Moines Airport/West, IA 28.4% Nashville Central Business District 27.2% Texas North Amarillo, TX 26.9% Seattle Central Business District 26.7% Nashville Airport 25.4% Denver Central Business District 25.1% Charlotte CBD / Airport 25.0% Source: Airdna, CBRE Hotels Americas Research, Q2 2017. 37 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

CAP RATES

HOTEL CAP RATE FORECASTING MODEL MARKET RETURN, RISK, AND INCOME GROWTH (FROM GORDON GROWTH MODEL) Data RERC Survey/ RCA Trans. Futures Markets/CBRE EA/Moody s Analytics Hotel Horizons/ STR Variables Hotel Cap Rate (R hotel ) Risk Free Rate (10-Year Treasury) Risk Premium (Moody s Baa 10-Year Treasury) Income Growth ( NOI) Contribution*: 31% 27% 36% *2005-2016 *other variables such as debt/gdp ratio are used which contribute <5% in predictive power 39 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

WHERE ARE CAP RATES GOING? Year 10 Year Treasury Risk Premium (Aaa - 10 Yr Treasury) Real Estate Risk Premium (Hotel Cap Rate - Aaa) Hotel Cap Rate 2012 1.8 1.87 4.85 8.25 2013 2.35 1.89 3.91 8.15 2014 2.54 1.62 3.98 8.15 2015 2.14 1.75 4.49 8.38 2016 1.84 1.83 4.85 8.52 2017F 2.53 Forecast 1.52 Slightly 4.84 8.89 show that 2018F 3.18 1.55 overshooting treasuries 4.14 8.86 LRA 2019F 1.85 will rise 1.84 4.8 8.91 L.R.A (1995-2016) 3.99 1.51 3.89 9.39 Source: CBRE Hotels Americas Research, Q3 2017, RERC, RCA. Cap rates will remain below LRA 40 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

SUMMARY THOUGHTS

SUMMARY THOUGHTS WILL TOMORROW BE BETTER THAN YESTERDAY? 1. THE FUNDAMENTALS REMAIN ATTRACTIVE ACROSS THE VAST MAJORITY OF MARKETS. 2. GROWING LEVELS OF DISPOSABLE INCOME AND WEALTH WILL CONTINUE TO DRIVE INCREASES IN DOMESTIC AND INTERNATIONAL TRAVEL. 3. HIGH OCCUPANCY LEVELS PROVIDE LEVERAGE TO ACHIEVE ADR INCREASES FOR THE NEXT TWO-THREE YEARS. 4. HOTEL CONSTRUCTION LEVELS OFF. SCALE OF NEW SUPPLY IN SOME MARKETS RETARDS PERFORMANCE. 5. ABOVE LONG RUN AVERAGE OCCUPANCY LEADS TO REVENUE GROWTH. INCREASING LABOR COSTS WILL PRESSURE PERFORMANCE. PROFIT GROWTH TO REMAIN BUT DURABLE. 6. OUTLOOK FOR U.S. LODGING IN MOST MARKETS REMAINS FAVORABLE. 42 THE LODGING CONFERENCE 2017 OCTOBER 31, 2017

CBRE HOTELS The World s Leading Hotel Experts. MARK WOODWORTH Senior Managing Director + 1 404 812 5085 mark.woodworth@cbre.com CBRE Hotels Americas Research 3280 Peachtree Road, Suite 1400 Atlanta, GA 30305 CBRE 2017 All Rights Reserved. All information included in this proposal pertaining to CBRE including but not limited to its operations, employees, technology and clients are proprietary and confidential, and are supplied with the understanding that they will be held in confidence and not disclosed to third parties without the prior written consent of CBRE. This proposal is intended solely as a preliminary expression of general intentions and is to be used for discussion purposes only. The parties intend that neither shall have any contractual obligations to the other with respect to the matters referred herein unless and until a definitive agreement has been fully executed and delivered by the parties. The parties agree that this proposal is not intended to create any agreement or obligation by either party to negotiate a definitive lease/purchase and sale agreement and imposes no duty whatsoever on either party to continue negotiations, including without limitation any obligation to negotiate in good faith or in any way other than at arm s length. Prior to delivery of a definitive executed agreement, and without any liability to the other party, either party may (1) propose different terms from those summarized herein, (2) enter into negotiations with other parties and/or (3) unilaterally terminate all negotiations with the other party hereto. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.