Hotel Palomar San Francisco Sold

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. October 14, 2008

SAN FRANCISCO, CA, August 20, 2007. On behalf of Kimpton Group Holding LLC, Jones Lang LaSalle Hotels has arranged the sale of the 195-room Hotel Palomar, located at 4th and Market Streets, in downtown San Francisco, California. The property was sold to Griffin Capital, a Los Angeles-headquartered, privately-owned real estate investment company, who has had tremendous success with its commercial investment products targeted at individual investors seeking fractional 1031 opportunities, or TICs. While the Palomar is Griffin's first acquisition of a hotel, it is the fifth recent acquisition in the Bay Area.

The Hotel Palomar's residential-style lobby reflects the overall theme of the hotel, "Art in Motion," boasting a wood parquet floor modeled after MC Escher's famous drawings. The hotel's 195 guestrooms reflect a modern elegance and have recently undergone a substantial soft goods renovation to allow the property to further penetrate its competitive supply. One of the hotel's prized attributes is the Fifth Floor, the Hotel Palomar's Michelin rated fine-dining restaurant. This signature restaurant is scheduled for a substantial renovation that will enhance the hotel's position as the premier, luxury boutique hotel in the market.

"The Hotel Palomar is one of the leading hotels in San Francisco," said Arthur Buser, president - lodging capital markets-Americas for Jones Lang LaSalle Hotels. "The hotel's location at 4th and Market places it in the vibrant South of Market district - which is rapidly becoming the new heart of San Francisco - and a few blocks from the popular tourist hub of Union Square. The development of Westfield's nearby retail megaplex, the San Francisco Centre, and a number of luxury residences is evidence of the influx of notable, high-end development right in the Palomar's neighborhood."

"Investors respond very well to Kimpton's management expertise and the results that they deliver for their owners. Kimpton was the original lifestyle boutique hotel brand, and they have built on the last 26 years of experience to develop a world-class management team," said Arthur Adler, managing director and CEO- Americas for Jones Lang LaSalle Hotels. "Similar to their tremendous success with the Hotel Monaco style of hotels, the Hotel Palomar San Francisco and the growing ranks of additional Hotel Palomar properties are already beginning to redefine success in the boutique hotel segment."

"The Palomar San Francisco holds a special significance for Kimpton, and we're pleased to see it under ownership of Griffin Capital," said Michael Depatie, Kimpton's president and CEO. "It was the prototype for what's become one of our most successful styles of hotels and has driven demand for Palomars in other cities. We look forward to continuing to deliver the Kimpton brand of service, amenities and unique guest experiences that set us apart from other hotel companies.

"We are also pleased to add yet another high-quality investor to our growing list of third-party owners and look forward to expanding our relationship with Griffin Capital to additional Kimpton branded hotels," Depatie said.