The following table sets forth an overview of major hotel sales transactions (defined as those with a purchase price in excess of $10 million) in Manhattan during the past nine years.

*Leasehold Interest
Note: Price for the Rihga Royal includes termination fees paid to Marriott
**Property under contract before pre-recession period. Sold as turnkey.

Following the events of September 11, 2001, hotel transaction activity declined due to the uncertainty regarding hotel operating performance and stricter underwriting by lenders. Well-capitalized owners generally held on to their assets until market conditions normalized. Those owners facing debt-service shortfalls modified loan payment terms with their lenders or brought in new equity to the investment. Few owners were forced to sell their assets.

During this period, numerous buyers raised capital to purchase hotels at levels below replacement cost. Declining hotel performance in 2002, followed by the war in Iraq and the SARS epidemic in the first half of 2003, caused many transactions to stall due to a gap between seller and buyer expectations.

As 2003 unfolded, hotel investors started to perceive the hotel industry in Manhattan as very attractive, with expectations of increases in occupancy as well as average rate; buyers started to meet seller expectations. We note that all seven sales that occurred in 2003 took place during the second half of the year, as the Manhattan lodging market was starting to turn around.

Sales activity intensified in 2004 as the market rebounded at a tremendous pace. In total, 13 hotels were sold during the year.

Fifteen hotels were sold in 2005, exceeding the previous peak in transactions achieved in 2004. Hotel investors continued to have an upbeat perspective of the Manhattan lodging market, as average rate was expected to experience significant growth over the next few years. In addition, financing continued to be readily available in 2005, as lenders also seemed to be optimistic about the Manhattan lodging market.

During 2006 and 2007, Manhattan registered 14 hotel transactions, two of which exceeded the $1 million mark per key. In October 2006, Istithmar acquired the W Union Square for roundly $1.1 million per room. This record was broken a few months later, in February 2007, as the same buyer, Istithmar, acquired an interest in the Mandarin Oriental for the highest per-room price ever recorded in Manhattan, at roundly $1,371,000 per room. In 2007, the volume of hotel sales in Manhattan soared to over $1.4 billion, excluding the sale of the Hilton New York and the Waldorf=Astoria as part of the Hilton acquisition by Blackstone.

In 2008, seven transactions were identified; the following is a synopsis of each of these sales.