Starwood Capital Group to Acquire TMI Hospitality

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. June 20, 2014

GREENWICH, CONNECTICUT/FARGO, NORTH DAKOTA - June 20, 2014) - Starwood Capital Group (“Starwood Capital”), a leading global private investment firm, and TMI Hospitality, Inc. today announced that Starwood Capital, through a controlled affiliate of Starwood Global Opportunity Fund X, has entered into an agreement to acquire all of the outstanding stock of TMI Hospitality from the TMI Hospitality Employee Stock Ownership Plan. The acquisition includes 188 hotels, the management company and the development platform. The transaction is subject to customary closing conditions, including certain franchisor and lender approvals.

“From its inception, TMI has developed and operated more than 400 hotels, and I am pleased Starwood Capital recognizes the value created by our extensive experience and talented team members,” said Lauris Molbert, chairman and CEO of TMI Hospitality. “With Starwood Capital, TMI will be able to continue pursuing its growth strategy while fulfilling its mission of impressing guests.”

“The acquisition of TMI Hospitality, a proven and trusted property manager, offers Starwood Capital the exciting opportunity to build on our investments in select-service and extended-stay lodging,” said Suril Shah, senior vice president, acquisitions of Starwood Capital. “We are looking forward to continuing the legacy of TMI's development and management platform.”

Starwood Capital and its investors currently own 103 select-service hotels covering two-thirds of the United States. Following the close of the acquisition, the firm will control 291 select-service and extended stay hotels across 39 states in the United States.

TMI Hospitality is a developer, owner and operator of more than 180 select-service and extended-stay hotels across 26 states. The Fargo, North Dakota-based company employs more than 4,000 team members.

Citigroup Global Markets Inc. acted as lead financial advisor to TMI Hospitality and Butcher Joseph Hayes also acted as financial advisor to TMI. Hentschel & Company provided a fairness opinion to TMI Hospitality's Board of Directors. Morrison & Foerster LLP and Morgan, Lewis & Bockius LLP are serving as legal counsel to TMI Hospitality. Starwood Capital received legal counsel from Latham & Watkins LLP and financial advice from BofA Merrill Lynch and Barclays.

About Starwood Capital

Starwood Capital is a private, U.S.-based investment firm with a core focus on global real estate. Since the group's inception in 1991, the firm has raised nearly $25 billion of equity capital and acquired over $52 billion in assets. Starwood Capital currently has $36 billion of assets under management. Starwood Capital maintains offices in Greenwich, Atlanta, San Francisco, Washington, D.C., Los Angeles, Chicago and Miami, and affiliated offices in London, Luxembourg, Paris, Frankfurt and Sao Paulo. Starwood Capital has invested in nearly every class of real estate on a global basis, including office, retail, residential, senior housing, golf, hotels, resorts and industrial assets. Starwood Capital and its affiliates have successfully executed an investment strategy that includes building enterprises around core real estate portfolios in both the private and public markets. Additional information about Starwood Capital can be found at www.starwoodcapital.com.

About TMI Hospitality

Headquartered in Fargo, North Dakota, TMI Hospitality is a developer and operator of more than 180 select service and extended stay hotels across 26 states. The multiple divisions of TMI support the expanding portfolio through development, construction, services and management of its hotels. More information is available at www.tmihospitality.com.

About Morrison & Foerster

Morrison & Foerster is representing Fargo, ND-based TMI Hospitality, which operates approximately 188 hotels across 26 states, in its sale to funds managed by Starwood Capital Group announced today.

Morrison & Foerster Washington, D.C. corporate partner David Slotkin, co-chair of the firm's Corporate Finance Practice, and Northern Virginia corporate associate Jeremy Schropp lead the deal team representing TMI Hospitality. Additional team members include New York corporate partner Spencer Klein, real estate partner Thomas Fileti and real estate of counsel Susannah Cupp in Los Angeles, tax partner Paul Borden in San Francisco, tax associate Shane Shelley in San Diego and corporate associates Christina Valencia in Northern Virginia and Daniel Hannon and Louisa Zhou in New York.

The firm has been involved in other recent high profile deals in the real estate, hospitality, entertainment, and resorts sector, including representing Equity Residential in the $16 billion acquisition of Archstone, representing Pinnacle Entertainment in its $2.8 billion acquisition of Ameristar Casinos, Inc. and representing Boyd Gaming Corp. in its $1.55 billion acquisition of Peninsula Gaming. The firm's work advising SoftBank in its highly complex and hotly contested $21.6 billion acquisition of Sprint earned the firm top honors as Global M&A Deal of the Year in The American Lawyer's inaugural Global Legal Awards in 2013. Chambers USA has honored the firm with the only 2014 Corporate/M&A Client Service Award and Law360 named Morrison & Foerster its M&A Group of the Year.