According to LaSalle, the hotel's revenue per available room is expected to grow 8% this year. Its average daily rate of more than $140 is slightly less than its competitors, but because of its higher occupancy is able to maintain the same revenue levels as its competitive set, which LaSalle officials say consists of the Hyatt Regency Capital Hill, Washington Court, Hotel George and Phoenix Park.

LaSalle officials say they are studying ways to improve the hotel's value. A $4- to $5-million room and public space renovation is planned to coincide with the opening of the new Washington Convention Center in March 2003. Before beginning the renovations, LaSalle will weigh the benefits of up-branding the property, as well as adding more hotel rooms.

"We are extremely excited to increase our investment in Downtown Washington, DC with the purchase of this property on Capital Hill," said Jon Bortz, Chairman and Chief Executive Officer of LaSalle Hotel Properties. "Washington, DC is a high-growth urban market with significant barriers to entry and strong growth in room demand in all segments, including commercial transient, group and leisure/tourism. The significant diversification of visitors to the city and the large demand created from government, union and lobbying activities provide support even in an economic downturn."

At the same time it announced the purchase, LaSalle officials revised their funds from operations expectations because of what they called continued weakness in the economy and further deterioration of the lodging sector. They downgraded their FFO from $2.52 and $2.62 per share to $2.50 and $2.60 per share. The company projects its 2001 revenue per available room to be -4% to –2%, versus the earlier project of flat to –2% growth.

LaSalle Hotel Properties is a multi-tenant, multi-operator REIT. It owns 18 upscale and luxury full-service hotels, totaling approximately 6,150 guest rooms in 14 markets in 11 states and the District of Columbia.