Key West Hotel Acquisition » » Opportunity to convert Sheraton Suites to independent Attractive Deal Metrics: $511K per key 7.1% Cap Rate on 2015F NOI 12.8x multiple on 2015F EBITDA 2 1 » » » » » » One of the only hotels in Key West with direct beach access Rooms among largest on the island at average size of approximately 480 sq ft $50 (approx. 30%) RevPAR premium to Company’s 2015 portfolio average Increases third-party managed hotels to over 50% of portfolio Underwriting 500bps margin expansion 193 parking spaces 1) Smathers Beach 2) Duval Street 1. 2. 3. Rebrand hotel as independent, lifestyle resort eliminating franchise fees Implement fee for parking Re-concept F&B offerings to enhance profitability $10.0 $300K–$400K $9.5M–$10.0M $300K–$400K $8.0 $6.0 $4.0 2015F EBITDA Independent Conversion F&B Re-Concepting Parking Stabilized EBITDA POTENTIAL UPSIDE TO UNDERWRITING » » » » » Re-categorize room types to capture higher rate from premium room types Increase resort fee Optimize group/transient mix to yield higher average rate Implement optimal labor and staffing model Reduce costs associated with operational efficiencies » Development of additional hotel rooms on the island is prohibited by a Rate of Growth Ordinance (“ROGO”), significantly mitigating supply risk Key West has proven to be one of the most stable markets outperforming the US average in both the last downturns Over the last 25 years, Key West has had a supply CAGR of 0.5% (the lowest of any major market) with a RevPAR CAGR of 5.0% (the second highest of any major market) Key West is the highest RevPAR market in the US Average recent sales price per key: $639,000 » » » » Source: Smith Travel Research This summary information sheet contains certain “forward-looking statements” relating to, among other things, hotel EBITDA and hotel net operating income after capital reserves. The forward-looking statements made are based on our beliefs, assumptions and expectations of future performance, taking into account all information currently available to us. Actual results could differ materially from the forward-looking statements made on this summary information sheet. When we use the words “projected,” “expected,” “planned” and “estimated” or other similar expressions, we are identifying forward-looking statements. The forward-looking statements on this summary information sheet are subject to the safe harbor of the Private Securities Litigation Reform Act of 1995. All information on this sheet is as of July 15, 2015. We undertake no duty to update the information to conform to actual results or changes in our expectations. This fact sheet contains statistics and other data that has been obtained from information available from public sources. For additional information, please visit our website at www.drhc.com. 2014 MARKET REVPAR GROWTH MarketOcc.ADRRevPAR Key West, FL87.1%$279.72$243.60 New York, NY84.8%$263.45$223.53 Oahu Island, HI84.4%$221.18$186.68 San Francisco, CA84.1%$207.81$174.81 Miami, FL78.3%$185.12$144.87 MARKET HIGHLIGHTS TRANSACTION COMPS PropertyRoomsPrice (000s) Key (000s) Price/ The Marker96$96,300$1,003 Hawks Cay177$133,812$756 Southernmost Hotel260$184,500$710 Parrot Key Hotel & Resort 148$100,000$676 Hyatt Key West Resort & Spa118$75,992$644 Pier House Resort & Spa142$90,000$634 Inn at Key West106$47,500$448 Doubletree Grand Key215$77,000$358 $1.6M–$1.9M $7.3M ASSET MANAGEMENT GAME PLAN: $9.5M - $10.0M OF UNDERWRITTEN HOTEL EBITDA Acquisition Price $94.0M ($511K per key) Location Key West, FL Acquisition Date June 30, 2015 Rooms 184 (480 square feet) Sheraton Suites Key West KEY DEAL CHARACTERISTICS