San Francisco Hotel Market ADR Growth at 3% per Year Based on Performance in 2011 12
San Francisco Major Hotels: Projected Net Operating Income Dollars per Room and Ratio to Total Revenue 13
San Francisco Historical Performance Occupancy and RevPAR Correlation 14
2011 and 2012 Major San Francisco Transactions 15 Hotel PropertySale Date Sales Price Price per Room Cap. Rate Hotel Milano4/12$30.0 M$277,7781.5% Marriott SFO3/12$112.7 M$164,5266.0% Hotel Abri1/12$21.9 M$240,0003.8% Huntington Hotel11/11$52.5 M$303,571- Crescent Hotel11/11$14.0 M$168,6755.7% Villa Florence10/11$67.2 M$369,2315.0% Mandarin Oriental8/11$63.0 M$398,7343.5% Hotel Adagio7/11$42.3 M$247,0763.9% The Opal Hotel5/11$12.8 M$83,8827.8% Westin Market Street3/11$170.0 M$254,873- JW Marriott2/11$96.0 M$284,8662.0% Tuscan Inn2/11$52.3 M$236,4256.7% Argonaut Hotel2/11$84.0 M$333,3335.0%
17 1.Personal incomes and corporate profit growth will continue, but at less robust levels. Lodging demand growth in 2012, while still positive, will pale relative to the past two years. Higher room rates will impede demand growth as well. 2.Unemployment will remain high – helps to keep labor costs in check and profit growth up. 3.Oil is a wild card for 2012 – too big an increase will undermine the economy – lodging demand will suffer as a result. 4.Overall, the second half of 2012 will be better than the first half as the future political leadership of the U.S. becomes clear.