REITs - Lodging...•International: April European RevPAR growth was up 3.3% in euros but up 6.8% in US $ due to the strengthening of the euro. Asia Pacific was down 0.4% in US$ in

REITs - Lodging

Canaccord Genuity is the global capital markets group of Canaccord Genuity Group Inc. (CF : TSX)The recommendations and opinions expressed in this research report accurately reflect the research analyst's personal, independent and objective views about any and allthe companies and securities that are the subject of this report discussed herein.

US Equity Research2 June 2016

Company Rating Price TargetREITs - LodgingAHP-NYSE Hold US$10.89 US$12.00AHT-NYSE Hold US$4.90 US$6.00APLE-NYSE Buy US$18.45 US$21.00DRH-NYSE Buy US$8.98 US$12.00HOT-NYSE Hold US$74.34 US$86.00HPT-NYSE Hold US$25.57 US$28.00HST-NYSE Hold US$15.44 US$17.00HT-NYSE Hold US$17.71 US$21.00INN-NYSE Buy US$11.72 US$14.00LHO-NYSE Hold US$22.99 US$26.00MAR-NASDAQ

Buy US$67.15 US$84.00

RLJ-NYSE Buy US$20.83 US$25.00SHO-NYSE Hold US$12.07 US$14.00Share price as of Jun 1, 2016

Ryan Meliker | Analyst | Canaccord Genuity Inc. (US) | [email protected] | 212.389.8094Michael Kodesch | Associate | Canaccord Genuity Inc. (US) | [email protected] | 212-389-8095

Industry Overview

The Lodging Chartbook: June editionThe Lodging Chartbook is a monthly report providing a comprehensive view of lodgingindustry fundamentals, as well as relative valuation and stock performance through aseries of charts.

Key takeaways in this month's report:• Stock performance: CG's Lodging Stock Index was down 6.8% in May but down only

2.3% over the past three months. This compares to the RMZ and S&P 500, which wereup 2.1% and up 1.5% in May, respectively. Among Lodging REITs, INN was the bestperformer of the month, up 3.7%, while AHT was the worst, down 10.0%.• REIT valuation: On consensus estimates, REITs are now trading at a 0.9x discount

to their long-run average NTM EBITDA multiples and at a 2.2x discount to their LRAFFO multiples. We estimate that the REITs are trading at a 21% discount to NAV. Withregard to implied cap rates, the REITs are now trading 89 bps wider than their LRAs,while on implied cap rate spreads over Baa bond yields, the stocks are trading 182 bpswider than their LRAs. HPT, DRH and HST are trading at the biggest discounts to peerswhen comparing implied cap rate spreads over Baa bonds to historical spreads.• C-corp valuation: EBITDA multiples are 1.0x below long-run averages, while P/E

multiples are 0.1x above historical levels. On EBITDA multiples, WYN is trading at thebiggest historical discount relative to the sector. At month's end, the C-corps weretrading at a 10.0x EBITDA multiple, roughly a full turn below the 10.9x multiple postedby the REITs.• Industry fundamentals: US Industry RevPAR increased 5.0% in April, according to STR,

and is tracking up 1% as of 5/21 in May. In 2015, RevPAR was up 6.3%, while weestimate 1Q16 RevPAR was up 2.7%. On a rolling 12-month basis, ADR accounts for79% of total RevPAR growth.• Demand segments: On a three-month rolling basis, transient demand growth is

+3.2%,ahead of the average growth of 2.6% since the start of 2014. Group demand isdown 2.2% on a three-month rolling basis, a dynamic we expect to revert back to theaverage growth of 2.8% since the start of 2014, which should drive RevPAR growth toreaccelerate in 2Q.• International: April European RevPAR growth was up 3.3% in euros but up 6.8% in US

$ due to the strengthening of the euro. Asia Pacific was down 0.4% in US$ in April, asChina RevPAR was up 2.7% in local currency.

Investment thesis: We believe the lodging sector is a binary call. As we don’t believethe US is entering a near-term recession, we are comfortable on the more bullish side ofthis debate. As such, while we think the entire sector is poised to move up materially in2016, we prefer names with more attractive growth profiles primarily driven by heavierexposure to select-service and suburban or secondary market properties (INN, APLE, RLJand MAR) and those names with unique catalysts (DRH).

For important information, please see the Important Disclosures beginning on page 42 of this document.

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Table of Contents Page

Comps sheet ................................................................................................................................................................... 3

Stock performance ......................................................................................................................................................... 4

Valuation multiples ........................................................................................................................................................ 6

Implied cap rates, spreads and price per room ........................................................................................................... 7

Stock charts

Ashford Hospitality Prime............................................................................................................................................ 10

Ashford Hospitality Trust ............................................................................................................................................. 12

Apple Hospitality REIT ................................................................................................................................................. 14

DiamondRock Hospitality ............................................................................................................................................ 15

Hersha Hospitality Trust .............................................................................................................................................. 17

Hospitality Properties Trust ........................................................................................................................................ 19

Host Hotels and Resorts ............................................................................................................................................. 21

LaSalle Hotel Properties ............................................................................................................................................. 23

Marriott International .................................................................................................................................................. 25

RLJ Lodging Trust ........................................................................................................................................................ 26

Starwood Hotels and Resorts ..................................................................................................................................... 28

Summit Hotel Properties ............................................................................................................................................. 29

Sunstone Hotel Investors ............................................................................................................................................ 31

Industry charts

US operating fundamentals ........................................................................................................................................ 34

Demand segments ...................................................................................................................................................... 37

International fundamentals ........................................................................................................................................ 39

REITs - Lodging

Industry Overview

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Figure 1: Lodging comps table

Source: Company reports, FactSet, SNL, Canaccord Genuity estimates (for rated companies under coverage). Total return indicates potential appreciation to price target plus current dividend yield. Past performance does not predict future results.

Price/NAVCompany Rating 5/31/16 Current LRA Prem. Current LRA Prem. CG Cons.Lodging C-CorpsMAR BUY $66.04 -14.0% $17,289 $21,187 2.0x 66.5% $84 1.2% 28.4% - - - - - - - - - -HOT HOLD $73.43 -1.7% 12,336 13,224 0.8x 26.1% $86 2.0% 19.2% - - - - - - - - - -CHH NR $45.38 -18.5% 2,557 3,256 2.8x 113.5% - 1.8% - - - - - - - - - - -H NR $45.91 -20.1% 6,240 7,047 1.0x 18.1% - 0.0% - - - - - - - - - - -HLT NR $20.78 -27.4% 20,551 31,600 3.6x 55.7% - 0.3% - - - - - - - - - - -IHG NR $38.71 -6.1% 9,140 10,253 1.4x 44.2% - 0.6% - - - - - - - - - - -LQ NR $11.88 -52.2% 1,469 3,094 2.1x 55.7% - 0.0% - - - - - - - - - - -STAY NR $14.26 -23.0% 2,918 5,325 3.9x 61.0% - 1.3% - - - - - - - - - - -BEL NR $9.51 -22.0% 992 1,437 0.3x 38.6% - 0.0% - - - - - - - - - - -MHGC NR $2.19 -68.1% 76 623 2.1x 116.4% - 0.0% - - - - - - - - - - -WYN NR $67.39 -18.6% 7,682 12,628 3.6x 51.3% - 0.7% - - - - - - - - - - -Lodging C-corp Average 2.5x 50.9% 0.9%

Lodging REITsAPLE BUY $18.23 5.3% $3,184 $4,205 2.9x 25.2% $21 6.6% 21.8% 7.6% NA NA 182 205 NA NA $16.91 $17 8% -100.0% -100.0% #DIV/0!DRH BUY $8.94 -28.9% 1,802 2,570 2.9x 23.7% $12 5.6% 39.8% 8.8% 6.3% 251 258 327 27 299 $12.92 $12 -31% -100.0% -100.0% #DIV/0!INN BUY $11.70 -8.7% 1,020 1,893 5.2x 43.6% $14 4.0% 23.7% 8.5% 8.6% (18) 158 296 332 (36) $12.89 $14 -9% -100.0% -100.0% #DIV/0!RLJ BUY $20.49 -28.5% 2,561 4,021 3.5x 33.5% $25 6.4% 28.5% 9.1% 8.9% 19 194 356 337 19 $25.99 $26 -21% -100.0% -100.0% #DIV/0!AHP HOLD $10.82 -29.2% 397 1,084 6.0x 47.0% $12 3.7% 14.6% 10.2% 7.5% 263 256 465 NA NA $22.80 $19 -53% -100.0% -100.0% #DIV/0!AHT HOLD $5.03 -32.7% 585 4,601 8.9x 73.5% $6 9.5% 28.8% 9.1% 6.9% 218 166 356 103 253 $10.30 $8 -51% -100.0% -100.0% #DIV/0!HPT HOLD $25.60 -7.7% 3,880 7,885 5.0x 40.1% $27 7.8% 13.3% 13.0% 10.8% 222 125 751 475 276 $39.72 $32 -36% -100.0% -100.0% #DIV/0!HST HOLD $15.40 -19.0% 11,545 15,533 2.7x 22.8% $17 5.2% 15.6% 8.0% 6.3% 166 259 247 24 224 $19.21 $18 -20% -100.0% -100.0% #DIV/0!HT HOLD $17.72 -26.9% 831 2,051 6.9x 49.5% $21 6.3% 24.8% 8.2% 7.7% 52 255 272 175 97 $24.47 $25 -28% -100.0% -100.0% #DIV/0!LHO HOLD $23.11 -32.5% 2,615 4,218 4.0x 30.1% $26 7.8% 20.3% 8.0% 7.1% 86 359 250 115 135 $30.25 $28 -24% -100.0% -100.0% #DIV/0!SHO HOLD $12.04 -12.3% 2,607 3,371 2.3x 25.6% $14 3.7% 20.0% 8.1% 7.1% 97 250 260 112 148 $14.56 $14 -17% -100.0% -100.0% #DIV/0!CHSP NR $23.84 -18.8% 1,412 2,225 4.1x 42.2% - 6.7% - 7.8% 9.5% (176) - 226 446 (221) $29 -18%CLDT NR $21.69 -17.6% 839 1,408 4.2x 45.4% - 6.1% - NA NA NA - NA NA NA $25 -12% -100.0% -100.0% #DIV/0!FCH NR $6.61 -36.8% 923 2,638 6.9x 61.2% - 2.4% - 8.4% 9.0% (63) - 285 307 (22) NA NAPEB NR $25.22 -38.8% 1,824 3,403 5.7x 49.2% - 6.0% - 7.2% 7.6% (41) - 171 261 (90) $31 -17%RHP NR $49.06 -6.0% 2,522 3,915 5.0x 40.0% - 6.1% - 7.5% NA NA - 204 NA NA $50 -1%Lodging REIT Average 4.4x 36.9% 6.1% 8.6% 6.6% 98 319 162 156 -21.0%Lodging Average 3.4x 43.9% 3.5%

Company Rating NTME 2015 2016E 2017E 2015 2016E 2017E NTM 2015 2016E 2017E LRA NTME 2015 2016E 2017E 2015 2016E 2017E NTM 2015 2016E 2017E LRALodging C-CorpsMAR BUY $3.75 $3.15 $3.75 $4.10 24% 19% 9% 17.6x 21.0x 17.6x 16.1x 24.0x $1,941 $1,728 $1,941 $2,106 13% 12% 9% 10.9x 12.3x 10.9x 10.1x 11.4xHOT HOLD 3.06 3.13 3.06 2.88 4% -2% -6% 24.0x 23.5x 24.0x 25.5x 25.9x 1158 1197 1158 1117 -3% -3% -3% 11.4x 11.0x 11.4x 11.8x 10.1xCHH NR 2.42 2.22 2.32 2.56 7% 5% 10% 18.7x 20.4x 19.6x 17.7x 18.9x 260 237 254 270 7% 7% 6% 12.5x 13.7x 12.8x 12.1x 13.2xH NR 1.42 0.90 1.33 1.54 -17% 48% 16% 32.4x 51.0x 34.6x 29.7x 41.0x 822 726 804 848 -1% 11% 5% 8.6x 9.7x 8.8x 8.3x 11.1xHLT NR 1.02 0.81 0.95 1.11 17% 17% 17% 20.4x NA 21.8x 18.7x 29.3x 3,137 2,879 3,053 3,255 15% 6% 7% 10.1x 11.0x 10.4x 9.7x 12.1xIHG NR 2.44 2.08 2.28 2.67 10% 10% 17% 15.8x 18.6x 17.0x 14.5x 24.5x 802 775 776 838 4% 0% 8% 12.8x 13.2x 13.2x 12.2x 11.4xLQ NR 0.58 0.54 0.56 0.61 NA 4% 8% 20.5x NA 21.2x 19.6x 29.3x 373 394 370 377 5% -6% 2% 8.3x 7.9x 8.4x 8.2x 9.8xSTAY NR 0.96 0.95 0.91 1.04 NA -4% 14% 14.8x NA 15.7x 13.7x 20.2x 623 603 610 641 8% 1% 5% 8.6x 8.8x 8.7x 8.3x 10.9xBEL NR 0.26 0.18 0.25 0.29 0% 36% 18% 36.1x 52.8x 38.8x 32.8x 62.1x 135 120 131 139 1% 10% 6% 10.7x 12.0x 10.9x 10.3x 13.0xMHGC NR (1.37) 0.15 -1.36 -1.38 NA NA 1% -1.6x 14.6x -1.6x -1.6x 4.1x 45 47 44 46 -16% -6% 4% 13.9x 13.3x 14.1x 13.6x 15.2xWYN NR 5.92 5.11 5.69 6.24 13% 11% 10% 11.4x 13.2x 11.8x 10.8x 13.4x 1408 1297 1380 1447 5% 6% 5% 9.0x 9.7x 9.2x 8.7x 9.5xLodging C-corp Average 11.9% 14.0% 11.1% 19.3x 14.3x 20.1x 18.2x 25.5x 8.2% 5.4% 5.4% 10.4x 11.1x 10.6x 10.0x 11.2x

Lodging REITsAPLE BUY $1.81 $1.59 $1.81 $1.91 NA 14% 14% 10.1x 11.5x 10.1x 9.6x NA $355 $321 $355 $377 NA 10% 6% 11.9x 13.1x 11.9x 11.1x NADRH BUY 1.08 1.01 1.08 1.12 16% 7% 3% 8.3x 8.8x 8.3x 8.0x 11.4x 269 266 269 276 13% 1% 3% 9.5x 9.7x 9.5x 9.3x 11.8xINN BUY 1.36 1.25 1.36 1.43 29% 9% 5% 8.6x 9.4x 8.6x 8.2x 10.2x 168 154 168 172 20% 10% 2% 11.3x 12.3x 11.3x 11.0x 11.9xRLJ BUY 2.79 2.50 2.79 2.82 12% 12% 1% 7.3x 8.2x 7.3x 7.3x 10.4x 414 380 414 418 4% 9% 1% 9.7x 10.6x 9.7x 9.6x 11.7xAHP HOLD 1.98 1.47 1.99 2.16 17% 35% 9% 5.5x 7.4x 5.4x 5.0x 9.7x 114 91 114 120 10% 25% 5% 9.5x 11.9x 9.5x 9.0x 11.5xAHT HOLD 1.71 1.41 1.72 1.71 77% 22% -1% 2.9x 3.6x 2.9x 2.9x 3.7x 453 407 453 463 24% 11% 2% 10.2x 11.3x 10.2x 9.9x 10.5xHPT HOLD 3.85 3.34 3.84 3.89 1% 15% 1% 6.6x 7.7x 6.7x 6.6x 8.3x 799 675 799 855 3% 18% 7% 9.9x 11.7x 9.9x 9.2x 9.7xHST HOLD 1.69 1.55 1.69 1.74 -1% 9% 3% 9.1x 9.9x 9.1x 8.8x 11.3x 1,477 1,409 1,477 1,473 0% 5% 0% 10.5x 11.0x 10.5x 10.5x 12.4xHT HOLD 2.55 2.35 2.55 2.44 20% 8% -4% 7.0x 7.5x 7.0x 7.3x 10.1x 177 177 177 168 9% 0% -5% 11.6x 11.6x 11.6x 12.2x 10.2xLHO HOLD 3.08 2.83 3.08 3.01 10% 9% -2% 7.5x 8.2x 7.5x 7.7x 10.5x 404 387 404 408 13% 4% 1% 10.5x 10.9x 10.5x 10.3x 12.4xSHO HOLD 1.23 1.26 1.23 1.33 5% -3% 8% 9.8x 9.5x 9.8x 9.0x 10.2x 337 351 337 359 12% -4% 6% 10.0x 9.6x 10.0x 9.4x 11.9xCHSP NR 2.54 2.19 2.53 2.56 17% 16% 1% 9.4x 10.9x 9.4x 9.3x 12.6x 196 173 196 197 24% 14% 0% 11.3x 12.9x 11.4x 11.3x 11.8xCLDT NR 2.51 2.29 2.45 2.60 63% 7% 6% 8.6x 9.5x 8.8x 8.3x 10.9x 139 126 136 142 49% 8% 5% 10.1x 11.1x 10.3x 9.9x 11.0xFCH NR 0.98 0.83 0.96 1.02 73% 16% 6% 6.7x 8.0x 6.9x 6.5x 8.0x 249 235 248 251 8% 6% 1% 10.6x 11.2x 10.6x 10.5x 11.9xPEB NR 2.84 2.50 2.81 2.88 28% 12% 2% 8.9x 10.1x 9.0x 8.8x 15.2x 277 260 277 278 32% 7% 0% 12.3x 13.1x 12.3x 12.3x 14.7xRHP NR 5.49 4.38 5.37 5.65 NA 23% 5% 8.9x NA 9.1x 8.7x NA 353 325 346 364 9% 6% 5% 11.1x 12.0x 11.3x 10.8x 12.5xLodging REIT Average 15.7% 12.2% 3.3% 8.0x 8.2x 8.0x 7.8x 8.8x 9.8% 7.8% 2.4% 10.6x 11.4x 10.6x 10.4x 11.0xLodging Average 13.8% 13.1% 7.2% 13.6x 11.3x 14.0x 13.0x 17.2x 9.0% 6.6% 3.9% 10.5x 11.3x 10.6x 10.2x 11.1x

Capitalization

Projected Total Return

TTM Total Return

Cap Rate Spread to Baa YieldsImplied Cap RateImplied $/Room

(000)

Real Estate Valuation

Total Debt (w/ Pref)/

AssetsYE 2016

Price TargetNAV/sh Estimates

Current Dividend

YieldDiluted Mkt

Cap (mm)Ent. Value

(mm)

Net Debt (w/ Pref)/ '16 EBITDA

EBITDA (mm) EBIDTA GrowthEBITDA MultiplesEPS/FFO Multiples

EPS/FFO EPS/FFO Growth P/EPS/ FFO EV/EBITDA

REITs - Lodging

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Figure 2: Lodging stock performance (based on 5-31-16 close prices)

Figure 3: Lodging stock total returns (based on 5-31-16 close prices)

Source: FactSet. Past performance does not predict future results.

The CG Lodging Index is composed of the companies included in Figure 1 Source: FactSet. Total return indicates appreciation plus dividend. Past performance does not predict future results.

1 Month 3 Month YTD 1 Year 3 Year 5 YearINN 2.6% 8.2% -2.1% -12.4% 18.5% NACLDT 1.8% 8.1% 5.9% -22.4% 16.9% 32.3%DRH 0.3% 0.4% -7.4% -32.1% -6.0% -22.3%HPT 0.0% 5.4% -2.1% -14.6% -11.6% 4.5%HST -2.7% 0.6% 0.4% -22.7% -13.4% -12.4%RLJ -2.8% -2.3% -5.3% -32.2% -11.5% NAHOT -3.1% 14.8% 14.5% -4.1% 16.2% 30.1%CHSP -3.2% -6.2% -5.2% -23.3% 5.7% 33.9%LHO -3.3% -5.1% -8.1% -36.6% -12.5% -17.4%AHP -3.3% 10.1% -25.4% -31.3% NA NAAPLE -3.7% -4.1% -8.7% NA NA NAH -4.1% -0.5% -2.4% -20.1% 11.6% 3.0%RHP -4.8% 2.5% -5.0% -11.0% 28.2% 52.1%WYN -5.0% -7.5% -7.2% -20.6% 15.9% 93.6%HLT -5.8% 0.0% -2.9% -28.2% NA NAMAR -5.8% -3.1% -1.5% -15.3% 57.2% 85.3%SHO -6.0% -6.7% -3.6% -21.1% -0.2% 18.4%LQ -7.0% 9.4% -12.7% -52.2% NA NAFCH -7.7% -10.7% -9.5% -38.5% 7.3% 6.1%HT -8.1% -12.0% -18.6% -30.3% -22.6% -26.4%PEB -8.8% -7.1% -10.0% -41.2% -3.9% 16.0%STAY -8.9% -3.5% -10.3% -27.3% NA NAAHT -10.0% -9.0% -20.3% -37.3% -35.6% -40.4%CHH -10.4% -12.4% -10.0% -19.8% 14.9% 27.3%IHG -19.6% -14.6% -16.7% -22.9% 3.7% 29.1%CG Lodging Index -6.8% -2.3% -4.3% -22.4% 8.5% 24.3%RMZ 2.1% 9.2% 4.7% 6.2% 19.0% 34.6%S&P500 1.5% 8.5% 2.6% -0.5% 28.6% 55.9%

1 Month 3 Month YTD 1 Year 3 Year 5 YearINN 3.7% 9.4% 0.2% -8.7% 34.9% NACLDT 2.3% 9.8% 9.1% -17.6% 35.0% 72.4%DRH 0.3% 1.7% -6.2% -28.9% 5.0% -7.0%HPT 0.0% 7.5% 2.1% -7.7% 8.9% 48.9%HST -2.7% 1.8% 1.6% -19.0% -3.3% 1.2%RLJ -2.8% -0.8% -3.9% -28.5% 0.4% NAHOT -2.6% 16.0% 15.7% -1.7% 28.1% 48.4%CHSP -3.2% -4.8% -3.8% -18.8% 21.6% 70.0%LHO -3.3% -3.4% -6.5% -32.5% 0.6% -0.3%AHP -3.3% 11.0% -24.7% -29.2% NA NAAPLE -3.2% -2.6% -6.3% NA NA NAH -4.1% -0.5% -2.4% -20.1% 11.6% 3.0%RHP -4.8% 4.0% -3.6% -6.0% 49.1% 117.9%WYN -4.3% -6.2% -5.9% -18.6% 23.3% 113.9%HLT -5.4% 0.7% -2.3% -27.4% NA NAMAR -5.3% -2.7% -0.7% -14.0% 63.7% 98.4%SHO -6.0% -6.3% -3.3% -12.3% 15.8% 37.3%LQ -7.0% 9.4% -12.7% -52.2% NA NAFCH -7.7% -10.0% -7.8% -36.8% 12.0% 10.7%HT -8.1% -10.8% -17.5% -26.9% -11.6% -7.5%PEB -8.8% -5.9% -8.8% -38.8% 4.9% 32.8%STAY -7.7% -1.2% -8.1% -23.0% NA NAAHT -10.0% -7.2% -18.7% -32.7% -24.3% -23.1%CHH -10.4% -12.1% -9.6% -18.5% 20.4% 84.9%IHG -4.1% 3.3% 0.7% -6.1% 48.2% 107.1%CG Lodging Index -4.6% 0.8% -1.1% -18.3% 21.5% 50.3%RMZ 2.1% 9.2% 4.7% 6.2% 19.0% 34.6%S&P500 1.8% 9.1% 3.6% 1.7% 37.0% 73.6%

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Figure 4: MLV Lodging index performance in recent cycles - returns are peak to peak

Source: FactSet, SNL, Canaccord Genuity. Past performance does not predict future results.

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Months from Prior Peak

Stock Returns Peak to Peak

90's Cycle Stock Index

2000's Cycle Stock Index

Current Cycle Stock Index

The current cycle is 86% of the prior peak (recorded in May 2007), while both the 90s and 2000s peaks finished 185% and 190% above the previous respective peaks, respectively.

REITs - Lodging

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Figure 5: EV / EBITDA multiples on consensus estimates

Source: FactSet estimates, SNL, Canaccord Genuity

Figure 6: Price/ earnings/FFO multiples on consensus estimates

Source: FactSet estimates, SNL, Canaccord Genuity

5/31/2016 4/30/2016 Change LRA 5/31/2016 4/30/2016 Change 5/31/2016 LRA DifferenceC-CorpsCHH 12.2x 13.3x -1.1x 10.2x 2.0x 3.1x -1.1x 2.2x -0.9x 3.0xIHG 12.1x 14.9x -2.8x 11.3x 0.8x 3.6x -2.8x 2.1x 0.3x 1.8xHOT 11.9x 13.3x -1.4x 10.1x 1.8x 3.2x -1.4x 1.9x -0.9x 2.8xMAR 10.3x 10.8x -0.6x 11.4x -1.2x -0.6x -0.6x 0.3x 0.4x -0.1xHLT 9.3x 9.7x -0.4x 11.4x -2.1x -1.7x -0.4x -0.7x 0.4x -1.1xWYN 8.8x 9.1x -0.3x 13.2x -4.3x -4.1x -0.3x -1.2x 2.1x -3.3xSTAY 8.6x 9.0x -0.4x 9.5x -0.9x -0.4x -0.4x -1.4x -1.6x 0.2xH 8.5x 8.9x -0.4x 11.4x -2.9x -2.5x -0.4x -1.5x 0.4x -1.9xLQ 8.2x 8.5x -0.3x 10.8x -2.5x -2.2x -0.3x -1.7x -0.3x -1.5xBasic Average 10.0x 10.9x -0.9x 11.0x -1.0x -0.2x -0.9x

REITsHT 12.6x 12.6x 0.0x 10.1x 2.5x 2.5x 0.0x 1.7x -1.6x 3.3xPEB 11.9x 12.6x -0.7x 14.6x -2.7x -2.0x -0.7x 1.1x 2.9x -1.9xCHSP 11.5x 11.8x -0.3x 11.8x -0.2x 0.0x -0.3x 0.7x 0.0x 0.6xINN 11.4x 11.6x -0.2x 11.9x -0.5x -0.3x -0.2x 0.5x 0.2x 0.4xAPLE 11.3x 11.8x -0.5x 12.0x -0.8x -0.2x -0.5x 0.4x 0.3x 0.1xRHP 11.2x 11.5x -0.3x 12.4x -1.2x -0.9x -0.3x 1.2x 1.4x -0.2xSHO 10.9x 11.6x -0.7x 11.8x -0.8x -0.2x -0.7x 0.1x 0.1x 0.0xLHO 10.8x 11.0x -0.2x 12.4x -1.6x -1.4x -0.2x -0.1x 0.7x -0.7xFCH 10.6x 11.0x -0.3x 11.9x -1.2x -0.9x -0.3x -0.2x 0.1x -0.4xHST 10.6x 10.8x -0.2x 12.4x -1.8x -1.6x -0.2x -0.3x 0.7x -1.0xAHP 10.5x 10.5x 0.0x 11.5x -1.0x -1.0x 0.0x -0.4x -0.3x -0.1xAHT 10.4x 10.5x -0.1x 10.6x -0.1x -0.1x -0.1x -0.5x -1.2x 0.7xCLDT 10.3x 10.1x 0.2x 11.0x -0.7x -0.9x 0.2x -0.6x -0.7x 0.2xDRH 10.1x 10.0x 0.1x 11.8x -1.7x -1.8x 0.1x -0.7x 0.1x -0.8xRLJ 10.0x 10.3x -0.3x 11.7x -1.6x -1.4x -0.3x -0.8x -0.1x -0.8xHPT 9.7x 9.8x -0.1x 9.7x 0.0x 0.0x -0.1x -1.2x -2.0x 0.8xBasic Average 10.9x 11.1x -0.2x 11.7x -0.9x -0.6x -0.2x

NTM EBITDA Multiples Premium/ Discount vs. LRA Premium/ Discount vs. Sector

5/31/2016 4/30/2016 Change LRA 5/31/2016 4/30/2016 Change 5/31/2016 LRA DifferenceC-CorpsH 32.4x 31.4x 1.0x 39.7x -7.3x -8.3x 1.0x 22.4x 10.2x 12.1xHOT 24.2x 28.4x -4.2x 25.9x -1.7x 2.5x -4.2x 14.2x 7.3x 7.0xLQ 20.5x 22.3x -1.8x 11.9x 8.6x 10.4x -1.8x 10.5x 1.2x 9.3xHLT 20.4x 21.9x -1.5x 10.8x 9.7x 11.2x -1.5x 10.4x 0.8x 9.6xCHH 18.8x 20.8x -2.1x 18.9x -0.2x 1.9x -2.1x 8.8x -0.3x 9.0xIHG 18.2x 19.0x -0.8x 20.3x -2.1x -1.3x -0.8x 8.2x -2.1x 10.3xMAR 16.5x 17.8x -1.3x 23.7x -7.2x -5.9x -1.3x 6.5x -3.3x 9.8xSTAY 14.8x 16.4x -1.5x 11.4x 3.4x 4.9x -1.5x 4.8x -4.8x 9.6xWYN 11.4x 12.0x -0.6x 13.4x -2.0x -1.4x -0.6x 1.4x -9.1x 10.5xBasic Average 19.7x 21.1x -1.4x 19.6x 0.1x 1.6x -1.4x

REITsAPLE 10.1x 10.7x -0.5x 10.7x -0.6x -0.1x -0.5x -0.7x 2.5x -3.3xSHO 9.6x 10.0x -0.4x 10.2x -0.6x -0.2x -0.4x -1.3x 1.9x -3.2xCHSP 9.4x 9.7x -0.3x 12.5x -3.2x -2.8x -0.3x -1.5x 1.6x -3.1xHST 9.1x 9.3x -0.3x 11.3x -2.3x -2.0x -0.3x -1.8x 1.2x -3.0xRHP 8.9x 9.5x -0.5x 10.0x -1.1x -0.5x -0.5x -1.9x 1.3x -3.3xPEB 8.9x 9.8x -0.9x 14.4x -5.5x -4.6x -0.9x -2.0x 1.7x -3.7xCLDT 8.6x 8.3x 0.3x 10.8x -2.2x -2.5x 0.3x -2.2x 0.2x -2.4xINN 8.6x 8.5x 0.1x 10.1x -1.5x -1.6x 0.1x -2.3x 0.4x -2.6xDRH 8.2x 8.1x 0.0x 11.4x -3.2x -3.3x 0.0x -2.7x 0.0x -2.7xLHO 7.7x 8.0x -0.3x 10.5x -2.8x -2.5x -0.3x -3.2x -0.1x -3.1xRLJ 7.4x 7.6x -0.3x 10.3x -2.9x -2.7x -0.3x -3.5x -0.5x -3.0xFCH 6.7x 7.3x -0.6x 8.0x -1.3x -0.7x -0.6x -4.2x -0.8x -3.3xHT 6.7x 7.0x -0.4x 10.0x -3.4x -3.0x -0.4x -4.2x -1.1x -3.1xHPT 6.5x 6.6x 0.0x 8.3x -1.7x -1.7x 0.0x -4.3x -1.6x -2.8xAHP 6.0x 6.3x -0.2x 9.5x -3.4x -3.2x -0.2x -4.8x -1.9x -3.0xAHT 3.2x 3.4x -0.2x 3.4x -0.2x 0.0x -0.2x -7.7x -4.8x -2.9xBasic Average 7.8x 8.1x -0.3x 10.1x -2.2x -2.0x -0.3x

Premium/ Discount vs. SectorNTM P/ E/FFO Multiples Premium/ Discount vs. LRA

REITs - Lodging

Industry Overview

2 June 2016 6

3

Figure 7: Implied cap rates

Source: FactSet estimates, SNL, Canaccord Genuity estimates

Figure 8: Implied cap rates vs. Moody’s Baa corporate bond index


Figure 9: Implied price per room valuation


5/31/2016 4/30/2016 Change (bps) LRA 5/31/2016 4/30/2016 Change (bps) 5/31/2016 LRA Difference (bps)PEB 7.2% 6.5% 75 7.2% (2) (77) 75 (148) (57) (91)APLE 7.6% 7.3% 21 NA NA NA NA (114) NA NACHSP 7.8% 7.7% 8 9.1% (132) (139) 8 (93) 127 (220)HST 8.0% 7.8% 16 6.3% 166 150 16 (72) (149) 77LHO 8.0% 7.8% 16 7.1% 86 70 16 (69) (67) (2)SHO 8.1% 7.7% 37 7.1% 97 59 37 (59) (67) 8HT 8.2% 7.9% 33 7.7% 52 19 33 (47) (10) (37)FCH 8.4% 7.9% 43 8.9% (49) (92) 43 (34) 104 (138)INN 8.5% 8.6% (13) 8.6% (18) (5) (13) (23) 83 (106)DRH 8.8% 8.8% (2) 6.3% 251 253 (2) 8 (155) 163RLJ 9.1% 8.9% 16 7.8% 124 108 16 37 1 35AHT 9.1% 8.9% 13 6.9% 218 205 13 37 (92) 129AHP 10.2% 10.0% 14 7.6% 252 238 14 146 NA NAHPT 13.0% 13.0% (0) 10.8% 222 222 (0) 432 299 133CLDT NA NA NA NA NA NA NA NA NA NABasic Average 8.7% 8.5% 20 7.8% 89 69 20

Implied Cap Rates Premium/ Discount vs. LRA Premium/ Discount vs. Sector

5/31/2016 4/30/2016 Change (bps) LRA 5/31/2016 4/30/2016 Change (bps) 5/31/2016 LRA Difference (bps)PEB 252 148 104 226 26 (78) 104 (148) 8 (156)APLE 286 236 50 NA NA NA NA (114) NA NACHSP 307 270 37 406 (100) (136) 37 (93) 188 (282)HST 328 283 45 13 315 270 45 (72) (204) 133LHO 331 286 45 85 246 200 45 (69) (133) 63SHO 341 274 66 183 158 91 66 (59) (35) (24)HT 353 292 62 139 214 152 62 (47) (78) 32FCH 366 294 72 297 70 (2) 72 (34) 79 (113)INN 377 360 16 300 77 60 16 (23) 82 (106)DRH 408 381 27 50 357 330 27 8 (167) 175RLJ 437 392 45 271 165 120 45 37 53 (17)AHT 437 396 42 138 299 258 42 37 (80) 117AHP 546 503 43 267 279 236 43 146 NA NAHPT 832 804 29 455 378 349 29 432 237 195CLDT NA NA NA NA NA NA NA NA NA NABasic Average 400 351 49 218 182 133 49

Premium/ Discount vs. SectorImplied Cap Rate Spread vs. Baa Corporate Bonds Premium/ Discount vs. LRA

5/31/2016 4/30/2016 Change LRA 5/31/2016 4/30/2016 Change 5/31/2016 LRA Difference (bps)LHO $359 $367 ($7) $325 $34 $42 ($7) $114 $80 $35CLDT 341 326 15 341 0 (15) 15 96 96 0PEB 332 302 31 495 (163) (193) 31 87 249 (162)CHSP 325 316 8 371 (46) (54) 8 80 125 (46)HST 259 265 (5) 225 34 39 (5) 14 (20) 35DRH 258 257 1 238 20 19 1 13 (7) 20AHP 256 259 (4) 283 (28) (24) (4) 10 38 (27)HT 255 266 (11) 206 50 60 (11) 10 (40) 50SHO 250 262 (12) 209 41 53 (12) 5 (37) 41RLJ 194 196 (2) 186 8 10 (2) (51) (59) 9AHT 166 168 (2) 155 11 13 (2) (79) (91) 11INN 158 156 2 119 39 36 2 (87) (126) 39FCH 153 213 (59) 179 (26) 34 (59) (92) (67) (25)HPT 125 124 0 106 19 19 0 (121) (140) 19Basic Average $245 $248 ($3) $246 ($0) $3 ($3)

Premium/ Discount vs. Sector ($000)Implied Price per Room ($000) Premium/ Discount vs. LRA ($000)

REITs - Lodging

Industry Overview

2 June 2016 7

2

Figure 10: 2016E RevPAR vs. NTM EBITDA multiples and regressed multiple trend line

*NOTE: Non-covered companies use consensus NTM EBITDA and the 2016E RevPAR is also based on consensus estimates

Source: FactSet, SNL, Canaccord Genuity estimates

DRH

MAR

RLJ

AHT

LHOHST

INNHOT

HT

SHOHPT

AHP

FCH

RHP

CLDT

PEB

CHSP

APLE

9.0x

9.5x

10.0x

10.5x

11.0x

11.5x

12.0x

12.5x

13.0x

13.5x

14.0x

$75 $95 $115 $135 $155 $175 $195 $215 $235

t

The relationship between RevPAR and EBITDA mutliples has disconnected, as higher growth stocks like APLE and net sellers like HT are receiving premium multiples

REITs - Lodging

Industry Overview

2 June 2016 8

2

STOCK CHARTS

REITs - Lodging

Industry Overview

2 June 2016 9

2

Ashford Hospitality Prime (NYSE: AHP) Figure 11: Stock performance, price target, bull and bear cases Figure 12: Forward consensus price/ FFO multiple

Source: FactSet, SNL, Canaccord Genuity estimates. Past performance does not predict future results. Source: FactSet, SNL, Canaccord Genuity estimates. Past performance does not predict future results.

Figure 13: Forward consensus EV/ EBITDA multiple Figure 14: Implied price per room ($000)

Source: FactSet, SNL, Canaccord Genuity estimates. Past performance does not predict future results. Source: FactSet, SNL, Canaccord Genuity estimates

$12

$8

$24

$0

$5

$10

$15

$20

$25

$30

Dec-

13

Feb-

14

Apr-

14

Jun-

14

Aug-

14

Oct

-14

Dec-

14

Feb-

15

Apr-

15

Jun-

15

Aug-

15

Oct

-15

Dec-

15

Feb-

16

Apr-

16

Jun-

16

Aug-

16

Oct

-16

Dec-

16

0x

2x

4x

6x

8x

10x

12x

14x

11/2

9/20

1312

/31/

2013

01/3

1/20

1402

/28/

2014

03/3

1/20

1404

/30/

2014

05/3

0/20

1406

/30/

2014

07/3

1/20

1408

/29/

2014

09/3

0/20

1410

/31/

2014

11/2

8/20

1412

/31/

2014

01/3

0/20

1502

/27/

2015

03/3

1/20

1504

/30/

2015

05/2

9/20

1506

/30/

2015

07/3

1/20

1508

/31/

2015

09/3

0/20

1510

/30/

2015

11/3

0/20

1512

/31/

2015

01/2

9/20

1602

/29/

2016

03/3

1/20

1604

/29/

2016

05/3

1/20

16

FFO MultipleAverage+1 St Dev-1 St Dev

6x

7x

8x

9x

10x

11x

12x

13x

14x

5/31

/201

6

4/30

/201

6

3/31

/201

6

2/29

/201

6

1/31

/201

6

12/3

1/20

15

11/3

0/20

15

10/3

0/20

15

09/3

0/20

15

08/3

1/20

15

07/3

1/20

15

06/3

0/20

15

05/2

9/20

15

04/3

0/20

15

03/3

1/20

15

02/2

7/20

15

01/3

0/20

15

12/3

1/20

14

11/2

8/20

14

10/3

1/20

14

09/3

0/20

14

08/2

9/20

14

07/3

1/20

14

06/3

0/20

14

05/3

0/20

14

04/3

0/20

14

03/3

1/20

14

02/2

8/20

14

EBITDA MultipleAverage+1 St Dev-1 St Dev

$230

$250

$270

$290

$310

$330

$350

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

Curr

ent

Price per RoomAverage+1 St Dev-1 St Dev

REITs - Lodging

Industry Overview

2 June 2016 10

2

Ashford Hospitality Prime (continued) Figure 15: Implied cap rate Figure 16: Implied cap rate spread vs. Moody’s Baa corporate bonds

Source: FactSet, SNL, Canaccord Genuity estimates Source: FactSet, SNL, Canaccord Genuity estimates

Figure 17: Implied cap rate spread vs. universe average Figure 18: Relative spread over Baa bonds vs. universe average


6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

9.5%

10.0%

10.5%

11.0%

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

Curr

ent

Implied Cap RateAverage+1 St Dev-1 St Dev

0

100

200

300

400

500

600

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

Curr

ent

Spread vs. Baa CorporatesAverage Spread+1 St Dev-1 St Dev

(80)

(30)

20

70

120

170

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

Curr

ent

Spread vs. Universe AverageAverage Spread+1 St Dev-1 St Dev

(100)

(50)

0

50

100

150

200

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

Curr

ent

Relative Spread vs. Baa vs. UniverseAverage Spread+1 St Dev-1 St Dev

REITs - Lodging

Industry Overview

2 June 2016 11

3

Ashford Hospitality Trust (NYSE: AHT) Figure 19: Stock performance, price target, bull and bear cases Figure 20: Forward consensus price/ FFO multiple




$6

$4

$11

$0

$2

$4

$6

$8

$10

$12

$14

$16

Apr-

10

Sep-

10

Feb-

11

Jul-1

1

Dec-

11

May

-12

Oct

-12

Mar

-13

Aug-

13

Jan-

14

Jun-

14

Nov

-14

Apr-

15

Sep-

15

Feb-

16

Jul-1

6

Dec-

16

0x2x4x6x8x

10x12x14x16x18x20x

05/2

8/20

0411

/30/

2004

05/3

1/20

0511

/30/

2005

05/3

1/20

0611

/30/

2006

05/3

1/20

0711

/30/

2007

05/3

0/20

0811

/28/

2008

05/2

9/20

0911

/30/

2009

05/2

8/20

1011

/30/

2010

05/3

1/20

1111

/30/

2011

05/3

1/20

1211

/30/

2012

05/3

1/20

1311

/29/

2013

05/3

0/20

1411

/28/

2014

05/2

9/20

1511

/30/

2015

05/3

1/20

16


6x

8x

10x

12x

14x

16x

5/31

/201

61/

31/2

016

09/3

0/20

1505

/29/

2015

01/3

0/20

1509

/30/

2014

05/3

0/20

1401

/31/

2014

09/3

0/20

1305

/31/

2013

01/3

1/20

1309

/28/

2012

05/3

1/20

1201

/31/

2012

09/3

0/20

1105

/31/

2011

01/3

1/20

1109

/30/

2010

05/2

8/20

1012

/31/

2009

8/31

/200

94/

30/2

009

12/3

1/20

088/

31/2

008


$50

$100

$150

$200

$250

$300

2Q04

4Q04

2Q05

4Q05

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curre

nt


REITs - Lodging

Industry Overview

2 June 2016 12

2

Ashford Hospitality Trust (continued) Figure 23: Implied cap rate Figure 24: Implied cap rate spread vs. Moody’s Baa corporate bonds




4%

5%

6%

7%

8%

9%

10%

11%

12%

2Q04

4Q04

2Q05

4Q05

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent

Implied Cap Rate Average+1 St Dev -1 St Dev

(400)

(200)

0

200

400

600

800

2Q04

4Q04

2Q05

4Q05

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(300)

(200)

(100)

0

100

200

300

400

500

2Q04

4Q04

2Q05

4Q05

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(300)

(200)

(100)

0

100

200

300

400

500

600

700

2Q04

4Q04

2Q05

4Q05

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


REITs - Lodging

Industry Overview

2 June 2016 13

2

Apple Hospitality REIT (NYSE: APLE) Figure 19: Stock performance, price target, bull and bear cases Figure 20: Forward consensus price/ FFO multiple


Figure 21: Forward consensus EV/ EBITDA multiple

Source: FactSet, SNL, Canaccord Genuity estimates. Past performance does not predict future results.

$21

$12

$27

$0

$5

$10

$15

$20

$25

$30

May

-15

Jul-1

5

Sep-

15

Nov

-15

Jan-

16

Mar

-16

May

-16

Jul-1

6

Sep-

16

Nov

-16

8.0x

8.5x

9.0x

9.5x

10.0x

10.5x

11.0x

11.5x

12.0x

12.5x

13.0x

08/3

1/20

15

09/3

0/20

15

10/3

0/20

15

11/3

0/20

15

12/3

1/20

15

01/2

9/20

16

02/2

9/20

16

03/3

1/20

16

04/2

9/20

16

05/3

1/20

16


11.0x

11.2x

11.4x

11.6x

11.8x

12.0x

12.2x

12.4x

12.6x

12.8x

13.0x

5/31

/201

6

4/30

/201

6

3/31

/201

6

2/29

/201

6

1/31

/201

6

12/3

1/20

15

11/3

0/20

15

10/3

0/20

15

09/3

0/20

15

08/3

1/20

15

EBITDA Multiple Average+1 St Dev -1 St Dev

REITs - Lodging

Industry Overview

2 June 2016 14

3

DiamondRock Hospitality Trust (NYSE: DRH) Figure 27: Stock performance, price target, bull and bear cases Figure 28: Forward consensus price/ FFO multiple




$12

$16

$7

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

Dec-

09

Jun-

10

Dec-

10

Jun-

11

Dec-

11

Jun-

12

Dec-

12

Jun-

13

Dec-

13

Jun-

14

Dec-

14

Jun-

15

Dec-

15

Jun-

16

Dec-

16

0x2x4x6x8x

10x12x14x16x18x20x

12/3

0/20

0505

/31/

2006

10/3

1/20

0603

/30/

2007

08/3

1/20

0701

/31/

2008

06/3

0/20

0811

/28/

2008

04/3

0/20

0909

/30/

2009

02/2

6/20

1007

/30/

2010

12/3

1/20

1005

/31/

2011

10/3

1/20

1103

/30/

2012

08/3

1/20

1201

/31/

2013

06/2

8/20

1311

/29/

2013

04/3

0/20

1409

/30/

2014

02/2

7/20

1507

/31/

2015

12/3

1/20

1505

/31/

2016


6x

8x

10x

12x

14x

16x

18x

20x5/

31/2

016

2/29

/201

610

/30/

2015

06/3

0/20

1502

/27/

2015

10/3

1/20

1406

/30/

2014

02/2

8/20

1410

/31/

2013

06/2

8/20

1302

/28/

2013

10/3

1/20

1206

/29/

2012

02/2

9/20

1210

/31/

2011

06/3

0/20

1102

/28/

2011

10/2

9/20

1006

/30/

2010

02/2

6/20

109/

30/2

009

5/31

/200

91/

31/2

009

9/30

/200

85/

31/2

008


$50

$100

$150

$200

$250

$300

$350

$400

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


REITs - Lodging

Industry Overview

2 June 2016 15

2

DiamondRock Hospitality Trust (continued) Figure 31: Implied cap rate Figure 32: Implied cap rate spread vs. Moody’s Baa corporate bonds




4%

5%

6%

7%

8%

9%

10%

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent

Implied Cap Rate Average+1 St Dev -1 St Dev

(300)

(200)

(100)

0

100

200

300

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(300)

(250)

(200)

(150)

(100)

(50)

0

50

100

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(350)

(250)

(150)

(50)

50

150

250

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


REITs - Lodging

Industry Overview

2 June 2016 16

2

Hersha Hospitality Trust (NYSE: HT) Figure 35: Stock performance, price target, bull and bear cases Figure 36: Forward consensus price/ FFO multiple




$21

$34

$14

$0

$5

$10

$15

$20

$25

$30

$35

$40

Apr-

10Au

g-10

Dec-

10Ap

r-11

Aug-

11De

c-11

Apr-

12Au

g-12

Dec-

12Ap

r-13

Aug-

13De

c-13

Apr-

14Au

g-14

Dec-

14Ap

r-15

Aug-

15De

c-15

Apr-

16Au

g-16

Dec-

16

0x

2x

4x

6x

8x

10x

12x

14x

16x

18x

02/2

8/20

0507

/29/

2005

12/3

0/20

0505

/31/

2006

10/3

1/20

0603

/30/

2007

08/3

1/20

0701

/31/

2008

06/3

0/20

0811

/28/

2008

04/3

0/20

0909

/30/

2009

02/2

6/20

1007

/30/

2010

12/3

1/20

1005

/31/

2011

10/3

1/20

1103

/30/

2012

08/3

1/20

1201

/31/

2013

06/2

8/20

1311

/29/

2013

04/3

0/20

1409

/30/

2014

02/2

7/20

1507

/31/

2015

12/3

1/20

1505

/31/

2016


0x

2x

4x

6x

8x

10x

12x

14x

16x5/

31/2

016

2/29

/201

610

/30/

2015

06/3

0/20

1502

/27/

2015

10/3

1/20

1406

/30/

2014

02/2

8/20

1410

/31/

2013

06/2

8/20

1302

/28/

2013

10/3

1/20

1206

/29/

2012

02/2

9/20

1210

/31/

2011

06/3

0/20

1102

/28/

2011

10/2

9/20

1006

/30/

2010

02/2

6/20

109/

30/2

009

5/31

/200

91/

31/2

009

9/30

/200

85/

31/2

008

1/31

/200

89/

30/2

007


$0

$50

$100

$150

$200

$250

$300

$350

$400

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curre

nt


REITs - Lodging

Industry Overview

2 June 2016 17

2

Hersha Hospitality Trust (continued) Figure 39: Implied cap rate Figure 40: Implied cap rate spread vs. Moody’s Baa corporate bonds




4%

5%

6%

7%

8%

9%

10%

11%

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(200)

(100)

0

100

200

300

400

500

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(200)(150)(100)

(50)0

50100150200250300350

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(300)

(200)

(100)

0

100

200

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


REITs - Lodging

Industry Overview

2 June 2016 18

3

Hospitality Properties Trust (NYSE: HPT) Figure 70: Stock performance, price target, bull and bear cases Figure 71: Forward consensus price/ FFO multiple




$28

$33

$20

$0

$5

$10

$15

$20

$25

$30

$35

Apr-

10Au

g-10

Dec-

10Ap

r-11

Aug-

11De

c-11

Apr-

12Au

g-12

Dec-

12Ap

r-13

Aug-

13De

c-13

Apr-

14Au

g-14

Dec-

14Ap

r-15

Aug-

15De

c-15

Apr-

16Au

g-16

Dec-

16

0x

2x

4x

6x

8x

10x

12x

14x

16x

11/3

0/19

9805

/28/

1999

11/3

0/19

9905

/31/

2000

11/3

0/20

0005

/31/

2001

11/3

0/20

0105

/31/

2002

11/2

9/20

0205

/30/

2003

11/2

8/20

0305

/28/

2004

11/3

0/20

0405

/31/

2005

11/3

0/20

0505

/31/

2006

11/3

0/20

0605

/31/

2007

11/3

0/20

0705

/30/

2008

11/2

8/20

0805

/29/

2009

11/3

0/20

0905

/28/

2010

11/3

0/20

1005

/31/

2011

11/3

0/20

1105

/31/

2012

11/3

0/20

1205

/31/

2013

11/2

9/20

1305

/30/

2014

11/2

8/20

1405

/29/

2015

11/3

0/20

1505

/31/

2016


4x

5x

6x

7x

8x

9x

10x

11x

12x5/

31/2

016

2/29

/201

6

10/3

0/20

15

06/3

0/20

15

02/2

7/20

15

10/3

1/20

14

06/3

0/20

14

02/2

8/20

14

10/3

1/20

13

06/2

8/20

13

02/2

8/20

13

10/3

1/20

12

06/2

9/20

12

02/2

9/20

12

10/3

1/20

11

06/3

0/20

11

02/2

8/20

11

10/2

9/20

10

06/3

0/20

10

02/2

6/20

10

9/30

/200

9

5/31

/200

9

1/31

/200

9

9/30

/200

8


$50

$70

$90

$110

$130

$150

$170

4Q01

2Q02

4Q02

2Q03

4Q03

2Q04

4Q04

2Q05

4Q05

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


REITs - Lodging

Industry Overview

2 June 2016 19

2

Hospitality Properties Trust (continued) Figure 74: Implied cap rate Figure 75: Implied cap rate spread vs. Moody’s Baa corporate bonds




4%

6%

8%

10%

12%

14%

16%

18%

20%

4Q01

2Q02

4Q02

2Q03

4Q03

2Q04

4Q04

2Q05

4Q05

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


0

200

400

600

800

1,000

1,200

4Q01

2Q02

4Q02

2Q03

4Q03

2Q04

4Q04

2Q05

4Q05

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(400)

(200)

0

200

400

600

800

1,000

1,200

4Q01

2Q02

4Q02

2Q03

4Q03

2Q04

4Q04

2Q05

4Q05

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


0

100

200

300

400

500

600

700

800

900

1,000

4Q01

2Q02

4Q02

2Q03

4Q03

2Q04

4Q04

2Q05

4Q05

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curre

nt


REITs - Lodging

Industry Overview

2 June 2016 20

2

Host Hotels and Resorts (NYSE: HST) Figure 78: Stock performance, price target, bull and bear cases Figure 79: Forward consensus price/ FFO multiple




$17

$12

$26

$5

$10

$15

$20

$25

$30

Apr-

10Au

g-10

Dec-

10Ap

r-11

Aug-

11De

c-11

Apr-

12Au

g-12

Dec-

12Ap

r-13

Aug-

13De

c-13

Apr-

14Au

g-14

Dec-

14Ap

r-15

Aug-

15De

c-15

Apr-

16Au

g-16

Dec-

16

0x

5x

10x

15x

20x

25x

30x

05/2

9/19

9802

/26/

1999

11/3

0/19

9908

/31/

2000

05/3

1/20

0102

/28/

2002

11/2

9/20

0208

/29/

2003

05/2

8/20

0402

/28/

2005

11/3

0/20

0508

/31/

2006

05/3

1/20

0702

/29/

2008

11/2

8/20

0808

/31/

2009

05/2

8/20

1002

/28/

2011

11/3

0/20

1108

/31/

2012

05/3

1/20

1302

/28/

2014

11/2

8/20

1408

/31/

2015

05/3

1/20

16


6x

8x

10x

12x

14x

16x

18x

20x5/

31/2

016

1/31

/201

608

/31/

2015

03/3

1/20

1510

/31/

2014

05/3

0/20

1412

/31/

2013

07/3

1/20

1302

/28/

2013

09/2

8/20

1204

/30/

2012

11/3

0/20

1106

/30/

2011

01/3

1/20

1108

/31/

2010

03/3

1/20

109/

30/2

009

4/30

/200

911

/30/

2008

6/30

/200

81/

31/2

008

8/31

/200

73/

31/2

007

10/3

1/20

065/

31/2

006


$100

$150

$200

$250

$300

$350

$400

1Q03

3Q03

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

1Q07

3Q07

1Q08

3Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


REITs - Lodging

Industry Overview

2 June 2016 21

2

Host Hotels and Resorts (continued) Figure 82: Implied cap rate Figure 83: Implied cap rate spread vs. Moody’s Baa corporate bonds




4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

3Q01

1Q02

3Q02

1Q03

3Q03

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

1Q07

3Q07

1Q08

3Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(300)

(200)

(100)

0

100

200

300

400

3Q01

1Q02

3Q02

1Q03

3Q03

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

1Q07

3Q07

1Q08

3Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent

Spread vs. Baa Corporates Average Spread+1 St Dev -1 St Dev

(350)

(300)

(250)

(200)

(150)

(100)

(50)

0

50

100

150

3Q01

1Q02

3Q02

1Q03

3Q03

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

1Q07

3Q07

1Q08

3Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(300)

(250)

(200)

(150)

(100)

(50)

0

50

100

3Q01

1Q02

3Q02

1Q03

3Q03

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

1Q07

3Q07

1Q08

3Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curre

nt


REITs - Lodging

Industry Overview

2 June 2016 22

3

LaSalle Hotel Properties (NYSE: LHO) Figure 86: Stock performance, price target, bull and bear cases Figure 87: Forward consensus price/ FFO multiple




$26

$17

$42

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

Apr-

10Au

g-10

Dec-

10Ap

r-11

Aug-

11De

c-11

Apr-

12Au

g-12

Dec-

12Ap

r-13

Aug-

13De

c-13

Apr-

14Au

g-14

Dec-

14Ap

r-15

Aug-

15De

c-15

Apr-

16Au

g-16

Dec-

16

0x

5x

10x

15x

20x

25x

08/3

1/19

98

08/3

1/19

99

08/3

1/20

00

08/3

1/20

01

08/3

0/20

02

08/2

9/20

03

08/3

1/20

04

08/3

1/20

05

08/3

1/20

06

08/3

1/20

07

08/2

9/20

08

08/3

1/20

09

08/3

1/20

10

08/3

1/20

11

08/3

1/20

12

08/3

0/20

13

08/2

9/20

14

08/3

1/20

15


5x

7x

9x

11x

13x

15x

17x

19x

21x5/

31/2

016

1/31

/201

608

/31/

2015

03/3

1/20

1510

/31/

2014

05/3

0/20

1412

/31/

2013

07/3

1/20

1302

/28/

2013

09/2

8/20

1204

/30/

2012

11/3

0/20

1106

/30/

2011

01/3

1/20

1108

/31/

2010

03/3

1/20

109/

30/2

009

4/30

/200

911

/30/

2008

6/30

/200

81/

31/2

008

8/31

/200

73/

31/2

007

10/3

1/20

065/

31/2

006


$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

$550

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent

Price per Room Average

+1 St Dev -1 St Dev

REITs - Lodging

Industry Overview

2 June 2016 23

2

LaSalle Hotel Properties (continued) Figure 90: Implied cap rate Figure 91: Implied cap rate spread vs. Moody’s Baa corporate bonds




4%

5%

6%

7%

8%

9%

10%

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(300)

(200)

(100)

0

100

200

300

400

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(200)

(150)

(100)

(50)

0

50

100

150

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(200)

(150)

(100)

(50)

0

50

100

150

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curre

nt


REITs - Lodging

Industry Overview

2 June 2016 24

3

Marriott International (NYSE: MAR) Figure 94: Stock performance, price target, bull and bear cases Figure 95: Forward consensus price/ EPS multiple




$84

$109

$51

$10

$30

$50

$70

$90

$110

$130

Apr-

10Au

g-10

Dec-

10Ap

r-11

Aug-

11De

c-11

Apr-

12Au

g-12

Dec-

12Ap

r-13

Aug-

13De

c-13

Apr-

14Au

g-14

Dec-

14Ap

r-15

Aug-

15De

c-15

Apr-

16Au

g-16

Dec-

16

4x

9x

14x

19x

24x

29x

34x

39x

05/2

8/20

0411

/30/

2004

05/3

1/20

0511

/30/

2005

05/3

1/20

0611

/30/

2006

05/3

1/20

0711

/30/

2007

05/3

0/20

0811

/28/

2008

05/2

9/20

0911

/30/

2009

05/2

8/20

1011

/30/

2010

05/3

1/20

1111

/30/

2011

05/3

1/20

1211

/30/

2012

05/3

1/20

1311

/29/

2013

05/3

0/20

1411

/28/

2014

05/2

9/20

1511

/30/

2015

05/3

1/20

16

EPS MultipleAverage+1 St Dev-1 St Dev

4x

6x

8x

10x

12x

14x

16x

18x5/

31/2

016

1/31

/201

608

/31/

2015

03/3

1/20

1510

/31/

2014

05/3

0/20

1412

/31/

2013

07/3

1/20

1302

/28/

2013

09/2

8/20

1204

/30/

2012

11/3

0/20

1106

/30/

2011

01/3

1/20

1108

/31/

2010

03/3

1/20

109/

30/2

009

4/30

/200

911

/30/

2008

6/30

/200

81/

31/2

008

8/31

/200

73/

31/2

007

10/3

1/20

065/

31/2

006

12/3

1/20

057/

31/2

005


REITs - Lodging

Industry Overview

2 June 2016 25

2

RLJ Lodging Trust (NYSE: RLJ) Figure 43: Stock performance, price target, bull and bear cases Figure 44: Forward consensus price/ FFO multiple




$25

$16

$36

$0

$5

$10

$15

$20

$25

$30

$35

$40

Aug-

11

Dec-

11

Apr-

12

Aug-

12

Dec-

12

Apr-

13

Aug-

13

Dec-

13

Apr-

14

Aug-

14

Dec-

14

Apr-

15

Aug-

15

Dec-

15

Apr-

16

Aug-

16

Dec-

16

6x

7x

8x

9x

10x

11x

12x

13x

07/2

9/20

1109

/30/

2011

11/3

0/20

1101

/31/

2012

03/3

0/20

1205

/31/

2012

07/3

1/20

1209

/28/

2012

11/3

0/20

1201

/31/

2013

03/2

8/20

1305

/31/

2013

07/3

1/20

1309

/30/

2013

11/2

9/20

1301

/31/

2014

03/3

1/20

1405

/30/

2014

07/3

1/20

1409

/30/

2014

11/2

8/20

1401

/30/

2015

03/3

1/20

1505

/29/

2015

07/3

1/20

1509

/30/

2015

11/3

0/20

1501

/29/

2016

03/3

1/20

1605

/31/

2016


7x

8x

9x

10x

11x

12x

13x

14x

15x5/

31/2

016

4/30

/201

62/

29/2

016

12/3

1/20

1510

/30/

2015

08/3

1/20

1506

/30/

2015

04/3

0/20

1502

/27/

2015

12/3

1/20

1410

/31/

2014

08/2

9/20

1406

/30/

2014

04/3

0/20

1402

/28/

2014

12/3

1/20

1310

/31/

2013

08/3

0/20

1306

/28/

2013

04/3

0/20

1302

/28/

2013

12/3

1/20

1210

/31/

2012

08/3

1/20

1206

/29/

2012

04/3

0/20

1202

/29/

2012


$50

$100

$150

$200

$250

$300

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

Curr

ent


REITs - Lodging

Industry Overview

2 June 2016 26

2

RLJ Lodging Trust (continued) Figure 47: Implied cap rate Figure 48: Implied cap rate spread vs. Moody’s Baa corporate bonds




4%

5%

6%

7%

8%

9%

10%

11%

12%

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

Curr

ent


0

50

100

150

200

250

300

350

400

450

500

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

Curr

ent


(50)

0

50

100

150

200

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

Curr

ent


(50)

0

50

100

150

200

250

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

Curr

ent


REITs - Lodging

Industry Overview

2 June 2016 27

3

Starwood Hotels & Resorts (NYSE: HOT) Figure 51: Stock performance, price target, bull and bear cases Figure 52: Forward consensus price/ EPS multiple




$86

$75

$87

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

Apr-

10

Sep-

10

Feb-

11

Jul-1

1

Dec-

11

May

-12

Oct

-12

Mar

-13

Aug-

13

Jan-

14

Jun-

14

Nov

-14

Apr-

15

Sep-

15

Feb-

16

Jul-1

6

Dec-

16

4x

14x

24x

34x

44x

54x

64x

74x

09/3

0/20

0502

/28/

2006

07/3

1/20

0612

/29/

2006

05/3

1/20

0710

/31/

2007

03/3

1/20

0808

/29/

2008

01/3

0/20

0906

/30/

2009

11/3

0/20

0904

/30/

2010

09/3

0/20

1002

/28/

2011

07/2

9/20

1112

/30/

2011

05/3

1/20

1210

/31/

2012

03/2

8/20

1308

/30/

2013

01/3

1/20

1406

/30/

2014

11/2

8/20

1404

/30/

2015

09/3

0/20

1502

/29/

2016

EPS MultipleAverage+1 St Dev-1 St Dev

6x7x8x9x

10x11x12x13x14x15x16x

5/31

/201

61/

31/2

016

08/3

1/20

1503

/31/

2015

10/3

1/20

1405

/30/

2014

12/3

1/20

1307

/31/

2013

02/2

8/20

1309

/28/

2012

04/3

0/20

1211

/30/

2011

06/3

0/20

1101

/31/

2011

08/3

1/20

1003

/31/

2010

9/30

/200

94/

30/2

009

11/3

0/20

086/

30/2

008

1/31

/200

88/

31/2

007

3/31

/200

710

/31/

2006

5/31

/200

612

/31/

2005

7/31

/200

5


REITs - Lodging

Industry Overview

2 June 2016 28

2

Summit Hotel Properties (NYSE: INN) Figure 62: Stock performance, price target, bull and bear cases Figure 63: Forward consensus price/ FFO multiple




$14

$19

$9

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

Apr-

11

Aug-

11

Dec-

11

Apr-

12

Aug-

12

Dec-

12

Apr-

13

Aug-

13

Dec-

13

Apr-

14

Aug-

14

Dec-

14

Apr-

15

Aug-

15

Dec-

15

Apr-

16

Aug-

16

Dec-

16

5x

6x

7x

8x

9x

10x

11x

12x

13x

03/3

1/20

1105

/31/

2011

07/2

9/20

1109

/30/

2011

11/3

0/20

1101

/31/

2012

03/3

0/20

1205

/31/

2012

07/3

1/20

1209

/28/

2012

11/3

0/20

1201

/31/

2013

03/2

8/20

1305

/31/

2013

07/3

1/20

1309

/30/

2013

11/2

9/20

1301

/31/

2014

03/3

1/20

1405

/30/

2014

07/3

1/20

1409

/30/

2014

11/2

8/20

1401

/30/

2015

03/3

1/20

1505

/29/

2015

07/3

1/20

1509

/30/

2015

11/3

0/20

1501

/29/

2016

03/3

1/20

1605

/31/

2016


8x

9x

10x

11x

12x

13x

14x

5/31

/201

6

4/30

/201

6

2/29

/201

6

12/3

1/20

15

10/3

0/20

15

08/3

1/20

15

06/3

0/20

15

04/3

0/20

15

02/2

7/20

15

12/3

1/20

14

10/3

1/20

14

08/2

9/20

14

06/3

0/20

14

04/3

0/20

14

02/2

8/20

14

12/3

1/20

13

10/3

1/20

13

08/3

0/20

13

06/2

8/20

13

04/3

0/20

13

02/2

8/20

13

12/3

1/20

12

10/3

1/20

12

08/3

1/20

12

06/2

9/20

12

04/3

0/20

12

02/2

9/20

12

12/3

0/20

11

10/3

1/20

11


$50

$70

$90

$110

$130

$150

$170

$190

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

Curre

nt


REITs - Lodging

Industry Overview

2 June 2016 29

2

Summit Hotel Properties (continued) Figure 66: Implied cap rate Figure 67: Implied cap rate spread vs. Moody’s Baa corporate bonds




4%

5%

6%

7%

8%

9%

10%

11%

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

Curr

ent


100

150

200

250

300

350

400

450

500

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

Curr

ent


(150)

(100)

(50)

0

50

100

150

200

250

300

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

Curr

ent

Spread vs. Universe AverageAverage Spread+1 St Dev-1 St Dev (50)

0

50

100

150

200

250

300

350

400

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

Curr

ent


REITs - Lodging

Industry Overview

2 June 2016 30

2

Sunstone Hotel Investors (NYSE: SHO) Figure 97: Stock performance, price target, bull and bear cases Figure 98: Forward consensus price/ FFO multiple




$14

$10

$21

$0

$5

$10

$15

$20

$25

Apr-

10Au

g-10

Dec-

10Ap

r-11

Aug-

11De

c-11

Apr-

12Au

g-12

Dec-

12Ap

r-13

Aug-

13De

c-13

Apr-

14Au

g-14

Dec-

14Ap

r-15

Aug-

15De

c-15

Apr-

16Au

g-16

Dec-

16

0x

5x

10x

15x

20x

25x

30x

02/2

8/20

0507

/29/

2005

12/3

0/20

0505

/31/

2006

10/3

1/20

0603

/30/

2007

08/3

1/20

0701

/31/

2008

06/3

0/20

0811

/28/

2008

04/3

0/20

0909

/30/

2009

02/2

6/20

1007

/30/

2010

12/3

1/20

1005

/31/

2011

10/3

1/20

1103

/30/

2012

08/3

1/20

1201

/31/

2013

06/2

8/20

1311

/29/

2013

04/3

0/20

1409

/30/

2014

02/2

7/20

1507

/31/

2015

12/3

1/20

1505

/31/

2016


8x

10x

12x

14x

16x

18x

20x5/

31/2

016

2/29

/201

610

/30/

2015

06/3

0/20

1502

/27/

2015

10/3

1/20

1406

/30/

2014

02/2

8/20

1410

/31/

2013

06/2

8/20

1302

/28/

2013

10/3

1/20

1206

/29/

2012

02/2

9/20

1210

/31/

2011

06/3

0/20

1102

/28/

2011

10/2

9/20

1006

/30/

2010

02/2

6/20

109/

30/2

009

5/31

/200

91/

31/2

009

9/30

/200

85/

31/2

008


(200)

(100)

0

100

200

300

400

500

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


REITs - Lodging

Industry Overview

2 June 2016 31

2

Sunstone Hotel Investors (continued) Figure 101: Implied cap rate Figure 102: Implied cap rate spread vs. Moody’s Baa corporate bonds




4%

5%

6%

7%

8%

9%

10%

11%

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(200)

(100)

0

100

200

300

400

500

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(200)

(100)

0

100

200

300

400

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curr

ent


(200)

(100)

0

100

200

300

400

4Q06

2Q07

4Q07

2Q08

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Curre

nt


REITs - Lodging

Industry Overview

2 June 2016 32

2

INDUSTRY FUNDAMENTALS

REITs - Lodging

Industry Overview

2 June 2016 33

2

Figure 105: US occupancy, ADR, and RevPAR growth Figure 106: Top 25 markets: distance above prior peak

Source: Smith Travel Research, Canaccord Genuity estimates Source: Smith Travel Research, Canaccord Genuity estimates

Figure 107: Chainscale: distance above prior peak Figure 108: Submarkets: distance above prior peak


-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

Jan-

07Ap

r-07

Jul-0

7O

ct-0

7Ja

n-08

Apr-0

8Ju

l-08

Oct

-08

Jan-

09Ap

r-09

Jul-0

9O

ct-0

9Ja

n-10

Apr-1

0Ju

l-10

Oct

-10

Jan-

11Ap

r-11

Jul-1

1O

ct-1

1Ja

n-12

Apr-1

2Ju

l-12

Oct

-12

Jan-

13Ap

r-13

Jul-1

3O

ct-1

3Ja

n-14

Apr-1

4Ju

l-14

Oct

-14

Jan-

15Ap

r-15

Jul-1

5O

ct-1

5Ja

n-16

Apr-1

6

Occupancy

ADR

RevPAR

Market Occupancy ADR RevPARSan Francisco/San Mateo, CA 8.3% 31.5% 38.3%Nashville, TN 7.6% 25.5% 36.1%Oahu Island, HI 0.1% 22.1% 30.2%Los Angeles-Long Beach, CA 5.5% 21.8% 29.2%Boston, MA 6.9% 17.4% 25.8%Denver, CO 8.6% 13.8% 25.4%Anaheim-Santa Ana, CA 4.1% 15.4% 23.5%Tampa-St Petersburg, FL 5.0% 9.0% 23.3%Miami-Hialeah, FL 4.8% 16.9% 22.0%Seattle, WA 4.0% 14.2% 21.9%New Orleans, LA 3.7% 18.2% 21.9%Dallas, TX 7.8% 6.5% 21.6%St Louis, MO-IL 4.7% 12.3% 21.4%Detroit, MI 7.2% 8.6% 20.3%Atlanta, GA 3.1% 8.5% 18.5%US Industry Overall 1.8% 11.8% 16.9%Orlando, FL 5.8% 6.3% 16.6%Minneapolis-St Paul, MN-WI 1.1% 9.1% 15.0%San Diego, CA 2.7% 6.2% 10.8%Chicago, IL 1.6% 5.8% 10.4%Houston, TX -2.9% 8.0% 7.1%Philadelphia, PA-NJ -1.6% 3.8% 5.4%Norfolk-Virginia Beach, VA -2.9% 5.9% 2.5%Washington, DC-MD-VA 0.0% -4.5% 2.1%Phoenix, AZ -2.1% -4.3% -1.4%New York, NY 1.3% -10.5% -8.0%

Chainscale Occupancy ADR RevPARUpscale 3.4% 10.7% 17.8%Upper Midscale 1.2% 11.3% 17.0%US Industry 1.8% 11.8% 16.9%Luxury 3.9% 6.8% 12.9%Upper Upscale 2.8% 8.2% 12.8%Economy 0.3% 8.5% 11.2%Midscale -0.2% 5.1% 8.8%

Market Type Occupancy ADR RevPARUrban 4.3% 11.1% 17.7%Small Town / Metro -0.4% 15.6% 17.2%US Industry 1.8% 11.8% 16.9%Suburban 2.2% 10.2% 16.7%Highway -1.1% 14.0% 15.8%Resort 1.6% 11.4% 15.6%Airport 3.8% 7.5% 14.2%

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2 June 2016 34

2

Figure 109: Seasonally adjusted nominal US RevPAR Figure 110: US RevPAR growth


Figure 111: Seasonally adjusted real US RevPAR Figure 112: Seasonally adjusted US occupancy


$30

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Occupancy T3M, SA

Average

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2 June 2016 35

2

Figure 113: US occupancy growth Figure 114: Seasonally adjusted real US ADR


Figure 115: Seasonally adjusted nominal US ADR Figure 116: US ADR growth


-15%

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Occupancy Growth, T3M

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ADR Growth, T3M

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Industry Overview

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2

Figure 117: Demand segment indexed volumes Figure 118: Demand segment indexed revenues


Figure 119: Demand segment indexed real rates Figure 120: Transient demand growth on trailing 3-month rolling average not slowing yet

Source: Smith Travel Research, Canaccord Genuity estimates


70

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Corporate Transient

Leisure

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Indexed Segment Real Rates, SA

GroupLeisureCorporate Transient

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16

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3

Figure 121: Demand segment volume growth levels Figure 122: Demand segment revenue growth levels


Figure 123: Demand segment real rate growth levels Figure 124: Demand segment seasonality


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Segment Volume Growth, SA

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Leisure

Corporate Transient

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Segment Rate Growth, Real, SA


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ary

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ust

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ober

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r

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r

Demand Segment SeasonalityGroupLeisureCorporate Transient

`

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2 June 2016 38

2

International Lodging Fundamentals Figure 125: TTM Europe operating fundamentals Figure 126: TTM Middle East/ Africa operating fundamentals


Figure 127: TTM Asia Pacific operating fundamentals Figure 128: TTM Americas operating fundamentals


-40%

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OccupancyADRRevPAR

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OccupancyADRRevPAR

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OccupancyADRRevPAR

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Industry Overview

2 June 2016 39

2

International Lodging Fundamentals (continued) Figure 129: TTM regional occupancy levels Figure 130: TTM regional RevPARs (in $USD)


Figure 131: TTM regional average daily rates (in $USD)


50%

55%

60%

65%

70%

75%

Mar

-02

Nov

-02

Jul-0

3M

ar-0

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ov-0

4Ju

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Mar

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ov-0

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2N

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-14

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5M

ar-1

6

Europe MEA

Asia Pacific Americas$20

$40

$60

$80

$100

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$140

Apr-

02De

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Aug-

03Ap

r-04

Dec-

04Au

g-05

Apr-

06De

c-06

Aug-

07Ap

r-08

Dec-

08Au

g-09

Apr-

10De

c-10

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11Ap

r-12

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r-16

Europe MEA

Asia Pacific Americas

$60

$80

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$140

$160

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-02

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ar-0

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ov-0

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Jul-0

7M

ar-0

8N

ov-0

8Ju

l-09

Mar

-10

Nov

-10

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1M

ar-1

2N

ov-1

2Ju

l-13

Mar

-14

Nov

-14

Jul-1

5M

ar-1

6

Europe MEA

Asia Pacific Americas

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Industry Overview

2 June 2016 40

2

A note on price targets

Our price targets are based on our NAV estimates, which are driven by our cap rate calculations. These price target valuations are supported by DCF analyses in which we risk-adjust our assumptions on cost of equity and terminal growth rates. When setting price targets, we also conduct a sensitivity analysis, adjusting our assumptions for factors such as RevPar growth, flow-though and net acquisitions. From that analysis, we also present potential stock prices in bear and bull cases. Our price targets and the recommendations they underpin, however, are based on our base-case analyses.

Please see our disclosures for further details on our price target valuations and risks. Further details on our bear and bull case scenarios can be found in our research notes, available on our Canaccord Genuity website or by request.

Charts and tables are based on data as of May 31, 2016, unless otherwise indicated

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2 June 2016 41

Appendix: Important DisclosuresAnalyst CertificationEach authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) therecommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent andobjective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoringanalyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to thespecific recommendations or views expressed by the authoring analyst in the research.Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons ofCanaccord Genuity Inc. and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions on communicationswith a subject company, public appearances and trading securities held by a research analyst account.Sector CoverageIndividuals identified as “Sector Coverage” cover a subject company’s industry in the identified jurisdiction, but are not authoringanalysts of the report.Compendium ReportThis report covers six or more subject companies and therefore is a compendium report and Canaccord Genuity and itsaffiliated companies hereby direct the reader to the specific disclosures related to the subject companies discussed in thisreport, which may be obtained at the following website (provided as a hyperlink if this report is being read electronically) http://disclosures.canaccordgenuity.com/EN/Pages/default.aspx; or by sending a request to Canaccord Genuity Corp. Research, Attn:Disclosures, P.O. Box 10337 Pacific Centre, 2200-609 Granville Street, Vancouver, BC, Canada V7Y 1H2; or by sending a requestby email to [email protected]. The reader may also obtain a copy of Canaccord Genuity’s policies and proceduresregarding the dissemination of research by following the steps outlined above.

Distribution of Ratings:Global Stock Ratings (as of 06/02/16)Rating Coverage Universe IB Clients

# % %Buy 521 59.14% 34.36%Hold 276 31.33% 17.75%Sell 27 3.06% 3.70%Speculative Buy 57 6.47% 66.67%

881* 100.0%*Total includes stocks that are Under Review

Canaccord Genuity Ratings SystemBUY: The stock is expected to generate risk-adjusted returns of over 10% during the next 12 months.

HOLD: The stock is expected to generate risk-adjusted returns of 0-10% during the next 12 months.

SELL: The stock is expected to generate negative risk-adjusted returns during the next 12 months.

NOT RATED: Canaccord Genuity does not provide research coverage of the relevant issuer.“Risk-adjusted return” refers to the expected return in relation to the amount of risk associated with the designated investment or therelevant issuer.Risk QualifierSPECULATIVE: Stocks bear significantly higher risk that typically cannot be valued by normal fundamental criteria. Investments in thestock may result in material loss.General Disclosures“Canaccord Genuity” is the business name used by certain wholly owned subsidiaries of Canaccord Genuity Group Inc., includingCanaccord Genuity Inc., Canaccord Genuity Limited, Canaccord Genuity Corp., and Canaccord Genuity (Australia) Limited, an affiliatedcompany that is 50%-owned by Canaccord Genuity Group Inc.The authoring analysts who are responsible for the preparation of this research are employed by Canaccord Genuity Corp. a Canadianbroker-dealer with principal offices located in Vancouver, Calgary, Toronto, Montreal, or Canaccord Genuity Inc., a US broker-dealerwith principal offices located in New York, Boston, San Francisco and Houston, or Canaccord Genuity Limited., a UK broker-dealer with

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Industry Overview

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Short-Term Trade Ideas

Research Analysts may, from time to time, include “short-term trade ideas” in research reports. A short-term trade idea offers a short-term view on how a security may trade, based on market and trading events, and the resulting trading opportunity that may be available.A short-term trade idea may differ from the price targets and recommendations in our published research reports that reflect theresearch analyst's views of the longer-term (one-year) prospects of the subject company, as a result of the differing time horizons,methodologies and/or other factors. It is possible, for example, that a subject company's common equity that is considered a long-term ‘Hold' or 'Sell' might present a short-term buying opportunity as a result of temporary selling pressure in the market or for otherreasons described in the research report; conversely, a subject company's stock rated a long-term 'Buy' or “Speculative Buy’ could beconsidered susceptible to a downward price correction, or other factors may exist that lead the research analyst to suggest a sale overthe short-term. Short-term trade ideas will be identified as such in the research report and the factors underlying those ideas and therisks associated with them will be described in the research report. Short-term trade ideas are not ratings, nor are they part of anyratings system, and the firm generally does not intend, and does not undertake any obligation, to maintain or update short-term tradeideas. Short-term trade ideas may not be suitable for all investors and have not been tailored to individual investor circumstances and

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Industry Overview

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Documents

REITs - Lodging...•International: April European RevPAR growth was up 3.3% in euros but up 6.8% in US $ due to the strengthening of the euro. Asia Pacific was down 0.4% in US$ in