Rachel J Roginsky ISHC Daniel C Hanrahan II

Rachel J. Roginsky, ISHC Daniel C. Hanrahan II, MAI, CRE Gregory T. Bohan 76 Canal Street, Boston, MA 02114 ~ 617/722 -9916 238 South State Street, Newtown, PA 18940 ~ 215/579 -1804 3418 Norfolk Street, Pompano Beach, FL. ~ 954/786 -2019 www. pinnacle-advisory. com

National Trends – Occupancy and ADR

Top and Bottom 5 Markets – Percent Rev. PAR Change 2003 Bottom 5 Top 5

Boston / Cambridge Historical Trends • Occupancy • ADR • Rev. PAR Historical Trends by Area

Boston / Cambridge Occupancy 1990 – 2003

Boston / Cambridge ADR 1990 – 2003

Boston / Cambridge Rev. PAR 1990 – 2003

Boston/Cambridge 2003 by Area 5. 0% Back Bay Downtown Other Cambridge 0. 0% -5. 0% Occupancy Avg Rate -10. 0% -15. 0% -20. 0% Rev. PAR

Boston / Cambridge Outlook 2004 • Commercial Demand • Leisure Demand • Group Demand • New Supply • Projections

Commercial Demand • Improving Economy • Growth in High Tech Industries • Financial Services ØImproving Stock Market ØConsolidation • Pharmaceutical and Biotech

Leisure Demand • Improving Economy • Weak Dollar • More Stable Geopolitical Situation • New Low-Cost Air Carriers

Group Demand • Strong Citywide Demand Ø 18 vs 15 in 2003 • Strong Short Term Pick-up ØAdded 2 Large Groups (1, 500+ on Peak) • Group Definites at the “Big 6” are 14% above last year

Boston/Cambridge New Supply 2004 • Courtyard at 88 Exeter – Back Bay – 81 Rooms - April • Hotel Onyx – N. Station – 112 Rooms – May • Jurys Doyle – Back Bay – 220 Rooms – June • Clarion – N. Station – 88 Rooms – June • Hampton Inn and Suites – Crosstown – 175 Rooms – June

New Supply 2005 -2007 2005 Hotels 1 Rooms 164 2006 5 1, 841 2007 & Beyond 13 4, 953

PAG Projections 2004 2003 2004 Change Occupancy 70. 3% 72. 3% 2. 8% Average Rate $152. 71 $155. 76 2. 0% Rev. PAR $107. 36 $112. 61 4. 9%

Boston Convention and Exhibition Center 1. 6 million square feet Third largest in the Mid Atlantic and Northeast Grand Opening June 24, 2004 Westin Headquarters Hotel Open June 2006

The Future Of the Boston Convention Market • Closure of the Hynes ØCould be sold July 1, 2006 • Room Blocks ØBCEC Groups will be required to use Back Bay Hotels • Marketing Leadership • Facility • Location

The Changing Face of Boston is no longer a “Backwater” Completion of the Big Dig is already having a positive effect World-Class Convention Center Excellent Transportation Infrastructure $14. 6 Billion on Big Dig $1. 2 Billion on Logan Modernization

Capital Markets Nationally: the floodgates are wide open Boston: the gates are still closed

PINNACLE ADVISORY GROUP 76 Canal Street Boston, MA 02114 ~ 617/722 -9916 238 South State Street, Newtown, PA 18940 ~ 215/579 -1804 3418 Norfolk Street, Pompano Beach, FL 33062 ~ 954/786 -2019 www. pinnacle-advisory. com