Thayer Lodging Group, based in Annapolis, Maryland, is a privately held hotel investment company that was formed in 1991 by Frederic V. Malek and Leland Pillsbury. Thayer has a lengthy and successful track record that spans multiple investment cycles. Since forming its first private equity fund in 1991, Thayer has completed 37 hotel investments with a total acquisition cost of approximately $1.8 billion. Thayer’s Realized and Substantially Realized investments, which represent 26 hotels and approximately 66% of Invested Equity, have cumulatively returned a Realized Multiple on Invested Equity of 2.6x.

Thayer's currently owns a portfolio of 15 hotels and 3,391 guest rooms.

Thayer employs a disciplined approach to asset selection and targets investments with significant value-add opportunities. Thayer seeks to invest in hotels where the Company’s expertise can add value through its time-tested strategies which include extensive renovation, market repositioning, expense reduction and rebranding as methods of improving net operating incomes.

Thayer believes that the current economic environment, more stringent loan underwriting standards and reduced availability of debt financing combine to create a compelling investment opportunity to acquire hotels with significant value-add opportunities at favorable prices.

Thayer is currently seeking acquisition opportunities for hotels that would benefit from the application of its repositioning strategies. Thayer will focus on North American hotel assets, with a continuing, primary emphasis on properties in the United States. The Company will target primarily full-service hotels, as it believes that the complex operating dynamics of these properties, together with a supply-demand imbalance, present substantial opportunities.

Frederic V. Malek and Leland C. Pillsbury are the “Managing Principals”, and have worked together for over 27 years. Prior to Thayer’s formation in 1991, both Managing Principals had long and successful careers in the hotel industry. Mr. Malek joined Marriott Corporation in 1975 and between 1980 and 1988, served as President of Marriott Hotels and Resorts. During this time, Marriott Corporation’s shares delivered an average annual total return of approximately 22%. Mr. Malek subsequently led the successful buyouts of CB Commercial, where he served as Chairman, and Northwest Airlines, where he served as President and later as Vice Chairman. In 1995, Mr. Malek led the acquisition of the Ritz-Carlton Hotel Company with Marriott International as the lead equity partner. Mr. Malek is also the founder and Chairman of Thayer Capital Partners (now known as Thayer Hidden Creek), a private equity firm that has sponsored three funds with total commitments of $1.5 billion.

During Mr. Pillsbury’s career in lodging/hospitality real estate, he has overseen the launch, acquisition and operation of over 250 hotels throughout the U.S. Between 1980 and 1988, he worked alongside Mr. Malek as an Executive Vice President and corporate officer of Marriott Corporation, responsible for strategic planning, product planning and market development. Together, Messrs. Malek and Pillsbury launched or acquired Courtyard by Marriott, Marriott Vacation Club International, Marriott Suites, Fairfield Inns and Residence Inns. They also developed and implemented the hotel industry’s first awards program for frequent travelers and launched innovations such as “under the door bills” that have become industry standards.

Thayer’s senior management team also includes Bruce Wiles, Chief Operating Officer; Jin Lee, Chief Investment Officer; Carroll Warfield, Asset Management; Tom Kammerer, Strategic Initiatives; and George Dabney, Finance and Investor Relations. The senior management team has substantial experience in the hotel investment, operations and finance disciplines and have served as senior officers in both public and private hotel companies.

Summary Fund Performance

Thayer's initial Fund ("Fund I") was formed in 1991. This investment fund acquired eight properties including the Annapolis Marriott, Bethesda Residence Inn, Fort Lauderdale and Plymouth Meeting DoubleTree Guest Suites, three Residence Inns in the southwest, and the Richmond Embassy Suites. Fund I has two remaining assets: the Annapolis Marriott hotel and the Bethesda Residence Inn. The Annapolis Marriott is managed by Thayer Lodging Group under a franchise agreement with Marriott and the Bethesda Residence Inn is managed by Marriott Realized and Substantially Realized Proceeds from Fund I assets (including six hotels which were sold) have generated a Realized Multiple on Invested Equity of 3.8x and a Gross Annual IRR of 34.7%.

Thayer Hotel Investors II, L.P. ("Fund II") was formed in 1995 with commitments of $116 million of equity from ten investors. Between January 1995 and November 1997, Fund II completed nine hotel investments with an aggregate acquisition cost of approximately $199 million, including leverage. Fund II was sold in portfolio transaction in 2005, producing a 29.7% Gross Annual IRR and 2.5x Realized Multiple on Invested Equity.

In 1999 Thayer acquired the Marriott Wardman Park Hotel, Washington D.C.'s largest hotel, with a newly formed limited liability company. Thayer sold the 1,340-room Marriott Wardman Park Hotel in July of 2005 for $300 million representing a 2.6x Multiple on Invested Equity of a 18.1% Gross Annual IRR.

Thayer Hotel Investors III ("Fund III") was formed in 2000 and acquired two hotels during 2001, the RIHGA Royal in New York City and the Grande Lakes Resort in Orlando. In 2004, Thayer acquired the Wyndham Conference Center in Peachtree City, GA. Thayer sold the RIHGA in May of 2005 for $190 million and the 1,582-room Grande Lakes Resort for $753 million representing a 3.9x Multiple on Invested Equity and 47.9% Gross Annual IRR.

Thayer Hotel Investors IV was formed in 2004 with $233 million of equity from 13 investors. Fund IV has completed its investment cycle acquiring 11 investments (totaling 13 hotels) with aggregate acquisition and renovation costs totaling approximately $487 million (approximately $155,000 per key), including leverage. In Fund IV, Thayer has capitalized on its value-add strategy of acquiring under-managed hotels in strong growth markets and increasing profitability and asset value through renovation, repositioning, rebranding and revenue/expense management. 10 of the 11 investments in Fund IV were off-market transactions sourced directly through Thayer’s extensive industry relationships. Fund IV has sold two hotels, the Wyndham Colorado Springs, realizing 39.2% Gross Annual IRR and a 1.6x Multiple on Invested Equity and the Holiday Inn Express Sarasota-Siesta Key Area, realizing a -18.6% Gross Annual IRR and a 0.5x Multiple on Equity.