The following table illustrates aggregate occupancies and average rates for contributing Manhattan hotels since 1987, as compiled by Smith Travel Research (STR). The table also summarizes marketwide rooms revenue per available room (RevPAR); this figure, which is calculated by multiplying occupancy by average rate, provides an indication of how well rooms revenue is being maximized.

Year	No. of Rooms	% Change	Occupied Rooms	% Change	Occupancy (%)	% Change	Average Rate ($)	% Change	RevPAR ($)	% Change
1987	52,683	�-	14,624,039	-	76.1	-	113.05	-	85.98	-
1988	52,768	0.2	14,634,194	0.1	76.0	(0.1)	120.11	6.2	91.26	6.1
1989	52,724	(0.1)	13,873,898	(5.2)	72.1	(5.1)	132.09	10.0	95.23	4.3
1990	54,421	3.2	14,139,816	1.9	71.2	(1.3)	132.34	0.2	94.21	(1.1)
1991	55,058	1.2	13,442,624	(4.9)	66.9	(6.0)	127.54	(3.6)	85.31	(9.4)
1992	56,235	2.1	13,871,555	3.2	67.6	1.0	126.27	(1.0)	85.33	0.0
1993	56,190	(0.1)	14,494,889	4.5	70.7	4.6	126.33	0.1	89.28	4.6
1994	56,083	(0.2)	15,156,219	4.6	74.0	4.8	136.12	7.7	100.78	12.9
1995	57,205	2.0	16,240,921	7.2	77.8	5.1	145.44	6.8	113.12	12.2
1996	57,372	0.3	16,906,189	4.1	80.7	3.8	160.98	10.7	129.97	14.9
1997	58,245	1.5	17,416,819	3.0	81.9	1.5	177.31	10.1	145.26	11.8
1998	58,586	0.6	17,609,297	1.1	82.3	0.5	198.31	11.8	163.31	12.4
1999	59,911	2.3	17,730,575	0.7	81.1	(1.5)	208.64	5.2	169.17	3.6
2000	61,464	2.6	18,771,462	5.9	83.7	3.2	222.73	6.8	186.37	10.2
2001	63,269	2.9	17,187,993	(8.4)	74.4	�� (11.0)	195.86	(12.1)	145.77	(21.8)
2002	63,773	0.8	17,460,275	1.6	75.0	0.8	186.04	(5.0)	139.55	(4.3)
2003	64,899	1.8	17,969,358	2.9	75.9	1.1	181.37	(2.5)	137.58	(1.4)
2004	64,664	(0.4)	19,598,548	9.1	83.0	9.5	201.43	11.1	167.26	21.6
2005	63,719	(1.5)	19,736,444	0.7	84.9	2.2	232.77	15.6	197.54	18.1
2006	63,174	(0.9)	19,610,998	(0.6)	85.0	0.2	263.40	13.2	224.02	13.4
Average Annual Compounded Change
��� 1987-2006:		1.0		1.6		0.6		4.6		5.2

The Manhattan hotel market has experienced dramatic cycles since the late 1980s. A significant downturn occurred in the early 1990s, reflecting the combined impact of supply additions, the nationwide recession, several disappointing years in the financial markets, and the Persian Gulf War; the result was a substantial decline in both occupancy and RevPAR. Signs of true recovery began to appear in 1993, and by the end of 1994, it was clear that a dramatic improvement in the market was underway.

With the exception of 1999, overall RevPAR registered double-digit growth each year from 1994 through 2000. A second significant downturn started in 2001, as a result of the slowdown in the national and regional economies, as well as the September 11 terrorist attacks; the result was even more dramatic than that of the previous recession, with double-digit declines in occupancy and average rate contributing to a RevPAR decline of 21.8% in 2001.

In 2002, marketwide occupancy rose slightly, as many hotels in the market employed a strategy of aggressive rate discounts to stimulate demand and maintain occupancy levels; marketwide average rate decreased further, resulting in a RevPAR decline of 4.3%, compared to 2001. Despite a RevPAR decline of 1.4% in 2003, composed of a 1.1% gain in occupancy and a 2.5% decline in average rate, 2004 and 2005 ended on very positive notes for the Manhattan lodging market, which recorded RevPAR increases of 21.6% and 18.1%, respectively. Between 2003 and 2005, average rate rose by more than $50.00, or an increase of 28.3%, while occupancy improved by nine percentage points, from 75.9% in 2003 to 84.9% in 2005.

Occupancy in Manhattan remained relatively stable in 2006, which was not a result of an economic slowdown but reflective of the extraordinarily high occupancy levels registered during the first three months of 2005. This strong demand was caused by an art installation in Central Park that took place in February and March 2005, and attracted a significant number of visitors to New York City, which resulted in occupancies of 80.6% in February and 87.5% in March 2005, which is unusually high for the city�s low-season first quarter. Thus, occupancy declined during the first quarter of 2006. In addition, due to continued strong demand levels in the market in 2006, hotel operators focused primarily on average rate growth rather than volume by accommodating greater numbers of higher-rated commercial travelers, which caused average rate to grow by double-digit numbers every month in 2006 (with the exception of December). Marketwide average rate rose by 13.2% in 2006, causing RevPAR to increase by a significant 13.4%. We note that marketwide occupancy and average rate both achieved new record levels in 2006.

The following table sets forth monthly changes in occupancy, average rate, and RevPAR for 2004, 2005, and 2006.

	Occupancy			Average Rate			RevPAR
Month	2004	2005	2006	2004	2005	2006	2004	2005	2006
January	10.8%	6.4%	2.2%	(0.5)%	7.4%	14.9%	10.3%	14.3%	17.4%
February	8.2%	8.3%	(4.9)%	0.3%	10.9%	10.6%	8.5%	20.1%	5.2%
March	23.8%	3.4%	(2.8)%	7.8%	11.1%	12.6%	33.5%	14.9%	9.5%
April	28.3%	1.5%	1.1%	9.5%	16.2%	13.5%	40.4%	17.9%	14.8%
May	13.6%	2.5%	(1.2)%	14.3%	13.0%	15.9%	29.8%	15.8%	14.5%
June	8.6%	0.8%	(1.3)%	14.7%	17.3%	14.9%	24.5%	18.3%	13.5%
July	9.1%	3.7%	(0.3)%	12.2%	13.9%	11.5%	22.4%	18.1%	11.1%
August	1.8%	4.1%	2.8%	15.4%	12.1%	12.0%	17.5%	16.8%	15.2%
September	6.8%	2.5%	(0.1)%	14.2%	24.7%	12.8%	22.0%	27.7%	12.6%
October	3.1%	(1.7)%	2.0%	13.4%	18.3%	13.8%	16.8%	16.3%	16.1%
November	3.3%	0.7%	1.4%	14.9%	20.6%	13.0%	18.7%	21.5%	14.7%
December	3.4%	(3.0)%	3.4%	14.2%	19.4%	9.0%	18.1%	15.8%	12.7%
Total	9.5%	2.2%	0.2%	11.1%	15.6%	13.2%	21.6%	18.1%	13.4%

The combination of an improved economic climate in 2004, and the market�s poor performance during the first four months of 2003 owing to the war in Iraq and the outbreak of the SARS epidemic, resulted in an exceptionally strong 21.6% RevPAR increase in 2004, compared to 2003. Monthly statistics for 2004 indicate that year-over-year RevPAR increases ranged from a low of 8.5% in February to a high of 40.4% in April. While RevPAR growth during the first four months of 2004 was paced primarily by strong increases in occupancy, average rate growth exceeded the corresponding occupancy growth from May through December, suggesting that the heightened demand compression in the market enabled hoteliers to achieve robust year-over-year room rate increases. For the first time since 1994, supply declined slightly in Manhattan from 2004 to 2006 as a result of the closing of several hotels for conversion to condominiums. In 2005, the positive trends prevailing in the market continued, and RevPAR grew by roundly 18.1%, compared to 2004. With overall occupancy near a maximum-capacity level in 2005, year-over-year monthly RevPAR increases ranged from roundly 14.3% to 27.7%.

October and December 2005 registered minor declines in occupancy. Slightly higher decreases occurred in February and March 2006 compared to the corresponding periods in 2005, attributable primarily to the relatively stable demand growth in 2006; as mentioned previously, these declines in 2006 were the result primarily of the exceptionally high occupancy levels, in the high-80s, registered during the prior year�s first quarter, which is typically Manhattan�s low-season period. Average rate continued its upswing in 2006, at a strong rate of 13.2%, contributing to a RevPAR gain of 13.4%, indicative of the continued strength of the Manhattan lodging market.

The following chart illustrates Manhattan�s lodging market performance from 1987 through 2006.