LaSalle Hotel Properties Declares Monthly Dividend

BETHESDA, Md.--(BUSINESS WIRE)--LaSalle Hotel Properties (NYSE:LHO) today declared a monthly dividend of $0.085 per common share of beneficial interest for each of the months of October, November and December 2008. The October dividend will be paid on November 14, 2008 to common shareholders of record on November 3, 2008; the November dividend will be paid on December 15, 2008 to common shareholders of record on November 28, 2008; and the December dividend will be paid on January 15, 2009 to common shareholders of record on December 31, 2008. This monthly dividend results in an annualized rate of $1.02 per common share which is a reduction from the prior declared dividend’s annualized rate of $2.10 per common share. The $1.02 per common share annualized rate represents a 9.1 percent yield based on today’s closing share price.

“The Board of Trustees took this action to reduce the dividend based on the recommendation of management, the current challenging economic environment and the view that the U.S. economy, as well as the lodging industry, will likely continue to face declining economic trends through 2009”

“The Board of Trustees took this action to reduce the dividend based on the recommendation of management, the current challenging economic environment and the view that the U.S. economy, as well as the lodging industry, will likely continue to face declining economic trends through 2009,” said Hans Weger, Chief Financial Officer. “This reduction will further strengthen the balance sheet, provide over $100 million of additional liquidity over the next 26 months and position the Company to take advantage of future investment opportunities.”

Given sluggish operating fundamentals since the fourth quarter of 2007, combined with the current rapidly deteriorating economic environment and the expectation that the lodging industry will face a challenging operating environment through at least 2009, the Company has also taken the following additional steps to further strengthen its balance sheet and liquidity:

Limit capital investments at the hotels in 2009 to those related to life safety, emergency capital maintenance and a few minor projects that are currently underway;
Modified the fast-track schedule for the IBM Building conversion in Chicago to a normal development schedule with major construction commencing in 2010 and the super-luxury hotel opening in 2011; and
Continue to work aggressively with our operators to improve efficiencies, reduce costs and enhance revenues at our properties.

LaSalle Hotel Properties is a leading multi-operator real estate investment trust owning 31 upscale and luxury full-service hotels, totaling approximately 8,500 guest rooms in 14 markets in 11 states and the District of Columbia. The Company focuses on owning, redeveloping and repositioning upscale and luxury full-service hotels located in urban, resort and convention markets. LaSalle Hotel Properties seeks to grow through strategic relationships with premier lodging companies, including Westin Hotels and Resorts, Sheraton Hotels & Resorts Worldwide, Inc., Hilton Hotels Corporation, Outrigger Lodging Services, Noble House Hotels & Resorts, Hyatt Hotels Corporation, Benchmark Hospitality, White Lodging Services Corporation, Gemstone Hotels & Resorts, LLC, Thompson Hotels, Sandcastle Resorts & Hotels, Davidson Hotel Company, Denihan Hospitality Group and the Kimpton Hotel & Restaurant Group, LLC.

This press release, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company's future plans, strategies and expectations, are generally identifiable by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project" or similar expressions. Forward-looking statements in this press release include, among others, statements about the economy, industry fundamentals, 2009 capital investment plans, IBM building timeline, balance sheet and liquidity. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company's control and which could materially affect actual results, performances or achievements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, (i) the Company’s dependence on third-party managers of its hotels, including its inability to implement strategic business decisions directly, (ii) risks associated with the hotel industry, including competition, increases in wages, energy costs and other operating costs, actual or threatened terrorist attacks, downturns in general and local economic conditions and cancellation of or delays in the completion of anticipated demand generators, (iii) the availability and terms of financing and capital and the general volatility of securities markets, (iv) risks associated with the real estate industry, including environmental contamination and costs of complying with the Americans with Disabilities Act and similar laws, (v) interest rate increases, (vi) the possible failure of the Company to qualify as a REIT and the risk of changes in laws affecting REITs, (vii) the possibility of uninsured losses, (viii) risks associated with redevelopment and repositioning projects, including delays and cost overruns, and (ix) the risk factors discussed in the Company’s Annual Report on Form 10-K as updated in its Quarterly Reports. Accordingly, there is no assurance that the Company's expectations will be realized. Except as otherwise required by the federal securities laws, the Company disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

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