|CHEVY CHASE, Md - June 30, 2005 -- An affiliate of The JBG Companies,
L.L.C. together with its partner CIM Group has purchased the Marriott Wardman
Park Hotel, the largest hotel property in Washington, DC, from Thayer Lodging
Group . 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.
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.
Thayer Lodging Group Sells Washington's Marriott Wardman
Park Hotel for a Record $300 Million; Firm also Sells
Single Portfolio of Eight Hotels
WASHINGTON, D.C. July 1, 2005 --Thayer Lodging Group has sold the Marriott
Wardman Park, Washington's largest hotel, to The JGB Companies and its
partner the CIM Group for $300 million, believed to be a record price for
a Washington hotel.
Separately, Thayer Lodging Group also closed the sale of its Thayer
Hotel Investors II Fund to Pyramid Hotel Opportunity Venture Fund of Boston,
capping another successful series of transactions for the investment firm.
"These sales represent liquidations of two funds in a manner consistent
with our holding period expectations and our investment strategy at prices
that are extremely attractive," said Thayer co-founder Frederick V. Malek.
"In particular, the sale of Wardman Park, capitalizes on pricing that is
reflective of the best performing major hotel market in the US."
Marriott Wardman Park
The Wardman Park sale marks the end of an investment that has come
full-circle. Thayer purchased the hotel in January 1999. Recognizing the
hotel's long-term viability, along with Marriott International, it continued
to invest in the financial structure of the hotel through the significant
decline in tourism following the tragedy of September 11, 2001, which included
a 40-day stretch at 4% occupancy and cancellations of significant conferences.
Despite these challenges, the investment generated a 2.4 times the return
on invested equity and a 17% compound return.
Eastdil Realty was retained by Thayer as an adviser on the deal and
Marriott International will continue to manage the property.
Thayer Hotel Investors II
Thayer Lodging's sale of its portfolio, Thayer Hotel Investors II,
a private equity fund launched in 1995, to Pyramid marks another highly
successful investment for the firm, yielding two times the return on invested
equity and a 29% compound return.
The portfolio sale included eight hotels totaling more than 2,200 hotel
rooms nationwide. The portfolio includes: DoubleTree Hotels in Fort Lauderdale,
New Orleans, Washington, DC, and Somerset, New Jersey; the Austin Crowne
Plaza; Sheraton Suites Plantation in Florida; and the Maison DuPuy Hotel
in New Orleans. The Maison DuPuy and its gourmet restaurant, Dominique's,
were managed by Thayer as well as the Crowne Plaza, while the remainder
of the portfolio is managed by DoubleTree and Sheraton.
"We are quite pleased with the results of these investments, particularly
the yields we've produced for our investors," said Managing Director Martin
A. Reid. "These sales will allow us to focus more exclusively on investing
the uncommitted capital in our current $238 million hotel investment fund,
Thayer Hotel Investors IV."
About Thayer Lodging Group
Based in Annapolis, Maryland, Thayer Lodging Group is a privately held
real estate investment company with total assets of more than $1 billion
and a portfolio of 16 hotels, including those currently under contract.
Thayer has sponsored five hotel investment funds for a small group of institutional
investors. The firm's strategy seeks to drive operating results through
a combination of repositioning assets, re-branding, changing management,
and making capital investments in owned hotels. Its nationwide portfolio
includes hotels operating under the Ritz Carlton, Marriott, DoubleTree,
Embassy Suites, Residence Inn and Fairfield Inn flags.
Thayer Lodging Group
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.
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
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
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
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
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.
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.