LaSalle Hotel Properties Acquires the Villa Florence in San Francisco

The Villa Florence benefits from an excellent location, which allows it to generate significant demand as a result of its numerous well regarded restaurants, robust retail offerings, vibrant nightlife and the adjacent San Francisco Theater District. The hotel fronts the famed Cable Car Line just one block south of Union Square, San Francisco's most popular retail and visitor attraction. The Financial District, Chinatown, Grace Cathedral, Nob Hill, Westfield San Francisco Centre, Sony Metreon, Yerba Buena Park and the Moscone Convention Center are all within walking distance of the hotel.

"We are very excited about the purchase of the Villa Florence," said Michael D. Barnello, President and Chief Executive Officer of LaSalle Hotel Properties. "This hotel has a terrific location in a supply-constrained market. As a result of favorable supply and demand trends, San Francisco has had the strongest RevPAR improvement among the top 25 US markets so far in 2011."

The hotel features 182 guestrooms, including 23 suites. Additionally, the property contains 6,955 square feet of fully leased retail space. The property also features two food and beverage outlets: Kuleto's Italian Restaurant and Bar Norcini. Kuleto's is one of San Francisco's most popular and well regarded dining establishments. Additionally, the hotel includes 1,625 square feet of meeting space, a fitness center, business center and concierge service.

The hotel was originally built in 1908. The hotel's most recent renovation, an investment of $10.0 million, occurred in 2008 and encompassed upgrades to the guestrooms, corridors and the lobby, as well as the construction of Bar Norcini.

San Francisco is a premier destination for both corporate and leisure travelers due to a variety of demand generators. The city has been named Conde Nast's "Best US City" for 18 consecutive years. As the financial capital of the West Coast, San Francisco is the national headquarters for seven Fortune 500 companies, while another twenty-one Fortune 500 companies are located throughout the Bay Area. Leading internet companies such as eBay, Google, and Yahoo! maintain their headquarters in the Bay Area and Twitter recently announced that its headquarters is moving and will occupy 200,000 square feet at Market Square, only five blocks from the Villa Florence.

The property will be managed by JRK Hotel Group, Inc. which currently manages the Company's Hotel Roger Williams in New York City.

"We have been pleased with JRK Hotel Group's performance at Hotel Roger Williams and we are confident that JRK's appointment as manager of the Villa Florence and the implementation of our asset management practices will create significant value for this asset," noted Mr. Barnello.

John Flannigan, President of JRK Hotel Group said, "We are delighted to add the Villa Florence to our independent hotel collection and expand JRK's presence into the San Francisco market. Furthermore, we are extremely excited to expand our relationship with LaSalle."

LaSalle Hotel Properties is a leading multi-operator real estate investment trust owning 36 upscale full-service hotels, totaling approximately 8,900 guest rooms in 13 markets in 9 states and the District of Columbia. The Company focuses on owning, redeveloping and repositioning upscale full-service hotels located in urban, resort and convention markets. LaSalle Hotel Properties seeks to grow through strategic relationships with premier lodging companies, including Westin Hotels and Resorts, Hilton Hotels Corporation, Outrigger Lodging Services, Noble House Hotels & Resorts, Hyatt Hotels Corporation, Benchmark Hospitality, White Lodging Services Corporation, Thompson Hotels, Sandcastle Resorts & Hotels, Davidson Hotel Company, Denihan Hospitality Group, the Kimpton Hotel & Restaurant Group, LLC, Accor, Destination Hotels & Resorts, HEI Hotels & Resorts, JRK Hotel Group, Inc and Viceroy Hotel Group.


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