Third Quarter 2012 Operating Results

An explanation of Funds from Operations (“FFO”), AFFO, Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted EBITDA and Hotel EBITDA, as well as reconciliations of FFO, AFFO, EBITDA and Adjusted EBITDA to net income or loss, the most directly comparable U.S. GAAP measures, is included at the end of this release.

For the quarter ended September 30, 2012, revenue per available room (“RevPAR”) for the Company's consolidated hotels, 56 hotels at September 30, 2012 compared to 50 hotels as of September 30, 2011, was up 2.1% to $130.17 compared to $127.48 in the prior year period. The Company’s ADR for its consolidated hotels increased by 2.3% to $161.58, while occupancy for its consolidated hotels decreased by 19 basis points to 80.56%.

Hotel EBITDA for the Company’s consolidated hotels grew approximately 11.7% or $3.9 million to $37.3 million for the quarter ended September 30, 2012 compared to the same period in 2011. Hotel EBITDA margins were 38.6% in the third quarter of 2012 compared to 41.7% in the same quarter of 2011. Hotel EBITDA margins decreased 1.1% year over year excluding the Rittenhouse Hotel in Philadelphia and the Sheraton Wilmington South in Delaware. Both hotels were acquired or opened within the past year and are full service hotels with a meaningfully lower average operating margin than the Company average.

On a same-store basis (52 hotels), RevPAR for the Company’s consolidated hotels for the quarter ended September 30, 2012 was up 1.3% to $130.34 compared to $128.65 in the prior year period. ADR for the Company’s same-store consolidated hotels increased by 0.9% to $160.91, while occupancy for its same-store consolidated hotels increased by 0.3% to 81.00%.

Hotel EBITDA for the Company’s same-store consolidated hotels for the quarter ended September 30, 2012 decreased approximately 1.1% or $0.4 million to $35.3 million compared to the quarter ended September 30, 2011. Hotel EBITDA margins for the Company’s same-store consolidated hotels decreased by 110 basis points to a 40.9% in the third quarter of 2012 compared to 42.0% in the third quarter of 2011 driven largely by lower ADR.

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