The JBG Companies Acquires Washington, DC's Largest Hotel; Significant upgrades planned for Marriott Wardman Park Hotel.

CHEVY CHASE, Md. -- An affiliate of The JBG Companies, L.L.C. (www.jbg.com), together with its partner, CIM Group (www.cimgroup.com), has purchased the Marriott Wardman Park Hotel, the largest hotel property in Washington, DC, from Thayer Lodging Group (www.thayerlodging.com). This latest acquisition expands JBG's hotel portfolio to seven properties in operation or under construction, totaling over 3,000 rooms, making JBG one of the largest independent hotel operators in the metropolitan area. JBG's plans for the hotel include a $50 million dollar renovation that will improve and reposition the property for the future, with Marriott International continuing to manage the property.

"The acquisition of the Marriott Wardman Park Hotel is a singular opportunity for JBG and CIM, and we are committed to enhancing and improving the hotel and its surrounding property in a manner consistent with its unique setting and responsive to the issues raised by our neighbors. Our strategy is to upgrade and reconfigure the hotel so as to position it for long term success in the Washington market," said Ken Finkelstein, a partner at JBG.

Built in 1918 and located on 16 beautifully landscaped acres at Woodley Road and Connecticut Avenue in Northwest Washington, DC, the Marriott Wardman Park Hotel is one of the city's most prominent and historic hotels. With over 1,300 guest rooms, it is within walking distance of the National Zoo and close to the downtown central business district, tourist attractions and National Airport. It is comprised of the 202-room Wardman Tower, the 933-room Center Tower and the 199-room Park Tower. It includes more than 173,000 square feet of flexible meeting space. The hotel also enjoys a convenient on-site Metro stop. It was purchased by Thayer Lodging Group in 1999, which, along with its managers, Marriott International, successfully guided the hotel through the challenging times following Sept. 11th.

According to Frederick V. Malek, who in 1991 co-founded Thayer, Wardman Park has been an excellent investment for Thayer, netting 2.4 times the invested equity, representing a 17% compound annual return since 1999. "Thayer Lodging Group is especially pleased that this trophy hotel and Washington landmark is being passed to such a respected and responsible firm as JBG," said Mr. Malek. Thayer has sponsored five hotel investment funds for a small group of institutional investors, and has acquired 30 hotels and invested over $330 million in equity in hotel investments. The sale of the Marriott Wardman Park Hotel coincides with Thayer's sale of an eight hotel portfolio for a 29% compound return since 1995 and two times the return on invested equity. Eastdil Realty Company represented Thayer in the sale of the hotel.

Renovation & Construction

According to Mr. Finkelstein, a phased renovation to the hotel is planned that will include upgrades and renovations to all guest rooms, enhanced exhibition and meeting space, new restaurant concepts, a new fitness center, and the elimination of an existing above-grade ballroom and parking garage. This parking will be replaced through the addition of below-grade parking to the project. JBG also plans to reorganize the service access and parking to mitigate traffic and neighborhood impact, and incrementally reduce hotel room count while significantly upgrading the hotel element for a new Marriott Wardman. A portion of the property is planned to be converted to residential condominiums through the conversion of approximately 199 hotel rooms currently located in the Park Tower. JBG is also considering the possibility of additional residential units on the site of the to-be-demolished parking garage.

Headquartered in Chevy Chase, Maryland, JBG is an active developer, owner and operator of office, residential, retail and hotel properties. Founded in 1962, JBG has established a reputation as one of the leading real estate companies in the Washington metropolitan area. In addition to the Marriott Wardman Park Hotel, JBG owns and operates the following hotel properties: L'Enfant Plaza Hotel, Sheraton Four Points and the Hampton Inn (all in Washington, DC) and the Reston Sheraton in Reston, VA. The Westin Arlington Gateway in Ballston, VA and Hotel Palomar Waterview in Rosslyn, VA are currently under construction.

The CIM Group, based in Los Angeles, is a full service real estate investor and operator focused on urban districts, and manages the $676 million CIM Urban Real Estate Fund, which was formed in 2001 with initial investments from the California Public Employees' Retirement System and the California State Teachers' Retirement System. The Wardman represents the third joint venture CIM and JBG are pursuing in the Metro area.

Images available upon request.

Marriott Wardman Park Hotel
Q&A Fact Sheet

1.  Who are the new owners of the Marriott Wardman Park Hotel? Who
    sold the property?

    The hotel was purchased by an affiliate of The JBG Companies, LLC
    (www.jbg.com), a long-term investor, owner and developer of real
    estate in the Washington, DC market and CIM Group
    (www.cimgroup.com), a full service real estate investor and
    operator focused on urban districts. The seller is Thayer Lodging
    Group, an Annapolis, MD-based venture capital operating company
    focused on investment in the lodging industry.

2.  Where is the Marriott Wardman Hotel located and how large is it?

    The 1,334-room hotel sits atop a 16-acre site at the intersection
    of Connecticut Avenue and Woodley Road in Northwest Washington, DC
    near the National Zoo. It is comprised of the 202-room Wardman
    Tower, the 933-room Center Tower and the 199-room Park Tower. It
    also features more than 173,000 square feet of flexible meeting
    space. Marriott Wardman is currently the largest hotel and private
    exhibit facility in the metro area.

3.  Will the property continue to operate as a hotel and who will
    manage it?

    The Marriott Wardman Park Hotel will continue its great tradition
    as Washington, DC's largest hotel in terms of both rooms and
    meeting space, and will continue to be operated under the Marriott
    flag and managed by Marriott International.

4.  Do the new owners plan any changes to the hotel?

    A phased renovation to the hotel is planned that will include
    upgrades and renovations to all guest rooms in the Center and
    Wardman Towers, enhanced exhibition space, new below grade
    parking, ballroom and improved service access (to reduce impact on
    neighbors) and meeting space, new restaurant concepts, and a new
    fitness center.

5.  When are the renovations scheduled?

    Hotel renovations will commence during the first quarter of 2006
    and will be completed in phases over the next two years.

6.  Do the new owners plan to introduce a residential component to the
    property?

    Residential condominiums may be integrated into the complex
    through the conversion of 199 hotel rooms currently located in the
    Park Tower. JBG is also considering development of additional
    residential units.

7.  Would Marriott handle development of the condo units?

    JBG will manage the development of the entire project including
    any condominium program and the construction and marketing of
    units.

8.  How will renovations and construction impact hotel operations?

    The renovation and condominium construction will be phased as a
    gradual process to help ensure the least amount of disruption to
    guests and neighbors. This gradual approach also ensures that the
    hotel will remain open during all phases of renovation and
    construction.

9.  Will the renovation and construction affect the green space and
    landscaping on the hotel property?

    The green space and landscaping are an important component of the
    hotel's property, and JBG plans to further enhance this area. JBG
    will be working closely with the community and a nationally
    renowned landscape architect during this process. JBG's goal is to
    improve the value of green space to guests and neighbors and
    reduce the impact of hotel operations on the neighborhood.

10. Will there be any reduction in hotel staff?

    No service reductions are planned. In the long term, it is
    expected that the complex's reconfiguration combined with the
    hotel's new restaurant concepts could result in the creation of
    new jobs.

11. What is the history of the Wardman Park Hotel and who built it?

    The original Wardman Park Hotel was built in 1918 by Harry
    Wardman, who became one of the most prolific builders in the
    history of Washington, DC. The landmark Wardman Tower has been
    home to more historical figures than any building in Washington,
    DC. Its guests have gone on to serve as Presidents, Vice
    Presidents, Supreme Court Justices, Cabinet Officers, and members
    of Congress.