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LaSalle Hotel Properties (NYSE:LHO)

Q2 2008 Earnings Conference Call

July 24, 2008 9:00AM ET

Executives

Jon Bortz - Chairman and CEO

Hans Weger - CFO

Analysts

David Loeb - Robert W. Baird

William Truelove - UBS

Bill Crow - Raymond James

Craig Kucera - BB&T Capital Markets

Ken Ho - KeyBanc

Michael Salinsky - RBC Capital Markets

Chris Woronka - Deutsche Bank

Operator

Good day, ladies and gentlemen and welcome to the LaSalle Hotel Properties Second Quarter 2008 Conference Call. One note, that today's call is being recorded. At this time I would like to turn the conference over to Mr. Jon Bortz, Chairman and Chief Executive Officer. Please go ahead, sir.

Jon Bortz

Thank you, operator. Good morning, everyone and welcome to the second quarter earnings call and webcast for LaSalle Hotel Properties. Here with me today is Hans Weger our Chief Financial Officer, as we do each quarter, in addition to providing the financial results of our second quarter, Hans and I will discuss the Company's activities in the quarter, the performance of our assets and the trends that are affecting them, the status of our ongoing reinvestment program, with particular focus this quarter on the performance of the recently redeveloped properties, and our outlook for the remainder of 2008 on both the macro basis for the lodging industry and for LaSalle Hotel Properties. Hans?

Hans Weger

Thanks, Jon. Good morning. Before we begin, I, first, would like to make the following remarks. Any statement that we make today about future results and performance or plans and objectives are forward-looking statements. Actual results may differ as a result of factors, risks and uncertainties over which the Company may have no control. Factors that may cause actual results to differ materially are discussed in the Company's 10-K for 2007, quarterly reports, and its other reports filed with the SEC. The company disclaims any obligation or undertaking to update or revise any forward-looking statements. Our SEC reports as well as our Press Releases are available at our website, www.LaSalleHotels.com. Our most recent 8-K and yesterday’s press release include reconciliations of non-GAAP measures such as funds from operations to the most comparable GAAP measures.

Second quarter funds from operation to our FFO was $47.4 million as compared to $42.3 million in the prior year. FFO per diluted share was $1.18, compared to $1.05 in the first quarter of 2007. A year-over-year increase of 12.6%. EBITDA for the second quarter increased 8.4% to $70.5 million from $65 million in the prior year period.

RevPAR for the total portfolio increased 5.3% in the second quarter. The RevPAR increase was a result of a 2.6% increase in both occupancy and ADR to 81.3% and $214.38, respectively. Our hotel portfolio generated $73.1 million of EBITDA in the second quarter of 2008 versus prior year EBITDA of $68 million. 2008 second quarter hotel EBITDA benefited from the Company's numerous redevelopments, repositioning’s and renovation projects that have been completed and our cost saving initiatives implemented throughout the portfolio, generating a healthy 69 basis points of growth over the prior year period.

For the six months ended June 30, 2008, FFO increased to $57.2 million, from $49.9 million or $1.43 per diluted share from $1.24 per diluted share for the prior year period. FFO for 2007 included a negative impact from the $3.9 million, non-cash write-off or the initial issuance cost of the series A Preferred Shares due their redemption in March of 2007.

EBITDA for the six months, ended June 30, 2008 decreased to $95 million from $123.8 million for the prior year period. Our weakest properties included the C.V. Marriott Resort outside Atlantic City and the Indianapolis Marriott, both of which were negatively impacted by poor Group business while Indy office suffered from the loss of the Formula One race, which was there in all years up to 2008.

Portfolio-wide, non-room revenues for the quarter increased 5.7% led by a 6.3% increase in food and beverage revenues, due primarily to strong group. Total revenues portfolio-wide increased 5.5% in the quarter. On the cost side, expenses were well controlled in the quarter, given the 2.6% increase in occupancy, a 17.6% increase in real estate taxes and pre-opening expenses of $1 million related to our repositionings.

Total hotel expenses portfolio-wide grew 4.3% from last year. Departmental expenses rose by 6%, driven by increases in wages and benefits, higher room expenses due to repositionings and certain pre-opening costs, and food and beverage expenses that grew along with increased food and beverage volume.

Undistributed expenses rose just 0.7% with a 4.2% decline in property operations and maintenance, a 1.5% decline in energy and other utilities, and a 20.5% decline in franchise frees due to the deflagging of the two properties that became Liaison Capitol Hill and Gild Hall in New York. Energy and other utility usage was down due to significant efficiency driven capital investments over the last year and implementation of best energy operating practices.

Sales and marketing expenses, excluding franchise fees, were up 5.1% due to additional sales staff and one-time marketing and sales cost related to a number of our repositioned hotels. Fixed expenses increased 10.1% due primarily to a 17.6% increase in property taxes of which two-thirds of the increase related to the Marriott Indianapolis hotel. We are appealing the assessment in Indy as we have at many other properties that have seen significant increases in property taxes. These increases were partially offset by our previous initiatives in insurance, which led to property and casualty expenses declining 21.8%, and general liability declining 35.2%. In the second quarter, portfolio-wide hotel EBITDA increased 7.5% with EBITDA margins climbing 69 basis points.

Turning to our capital initiatives, we invested $24 million in the second quarter with the bulk of the dollars primarily related to paying for redevelopment projects previously completed. Total capital investments to date totaled $52 million excluding the 330 North Wabash redevelopment. As for 330 North Wabash, we are in the process of completing construction drawings and the model room is currently under construction. As discussed last quarter, our extensive program of redevelopments and repositionings is essentially complete with only minor non-impactful work left to be completed, except for new restaurants at Liaison Capitol Hill, Gild Hall and Donovan House, two of which are scheduled to open later this quarter, with the one at Donovan House slated to open before the end of the year.

We continue to project capital investments of $80 to $90 million for the year excluding the Chicago redevelopment where we expect an additional $5 to $10 million dollars this year. Now let me turn to our outlook for 2008.

Forecasting performance of the lodging industry and our own performance this year continues to be extremely challenging. Since our last report to you, economic conditions have worsened, and it seems clear that consumers and many industries and companies are facing significant economic headwinds. In addition, extremely high oil prices have put the airline industry in crisis mode, resulting in unprecedented reductions in capacity and increases in fares and charges. This will certainly result in fewer airline passengers and hotel room nights sold. However, alterative modes of travel and more overnight stays due to less frequency, as well as, re-instituted overnight stay requirements for discounted fares are likely to somewhat mitigate these demand reductions. Most importantly, demand will continue to be negatively impacted by a very weak economic climate.

The four economic indicators that we utilize to forecast lodging demand: Employment growth, corporate profits, consumer confidence and airline employments continue in worsening trends. As a result, we expect lodging demand trends to weaken further and put additional pressure on occupancies as the year progresses. While we don't have a lot of economic visibility, we haven't seen anything positive that would suggest the onset of an economic recovery any time in the near future. Due to the economic fundamentals that have worsened faster than we expected we're revising industry RevPAR forecast lower at this time.

We are now projecting that industry demand for rooms will decline between 1% and 2% for the year, despite it being down only 0.3% through the first six months. With an expected 2.5% increase in supply, we are forecasting industry-wide occupancy to decline by 3.5 to 4.5 percent for the year. ADRs should increase 2.5% to 3% to 3.5% resulting in an industry-wide RevPAR between flat and a decline of 2% as compared to 2007.

We caution that the speed at which the economy and industry weakens, is very difficult to predict at this time. For our portfolio, given the industry range, we continue to forecast we'll outperform by a couple of hundred basis points meaning a range for RevPAR of between no change and growth of 2%.

If the economy and industry do better, than our lodging outlook, then we would expect to do better than these numbers. And if the economy and lodging do worse then we would expect to do worse than these numbers. The 200 basis points of expected outperformance is projected to come primarily from our properties that have been redeveloped and repositioned in the last couple of years, including those completed this year, as evidenced by the over 400 basis points outperformance in the second quarter.

Our outlook is supported by our group pace data, which continues to be encouraging for the remainder of 2008. As of July 1, group pays for the second half of the year was up 5.6% in room nights, and 3.2% in ADR, for an 8.8% improvement over same time last year benefiting significantly from our strategic shift to more groups. We currently have a little over a little over 90% of targeted group rooms on the books for the year, and group represents roughly 39% of our targeted occupancy.

On the negative side, tangent pace for the second half of the year is currently down 0.9% in room nights and 1.8% in ADR. 2009 group pace also continues to be positive, up 4.9% in room nights and 4.5% in ADR. While this is very encouraging, we caution that group on the books for 2009 currently represents only 37% of our targeted group room nights for the year.

For the third quarter, we are currently forecasting that RevPAR will range between a 1.5% decline and a 1.5% increase as compared to last quarter's third quarter, with the summer months the weakest due to greater softness in leisure travel. Facing a challenging and uncertain economic environment, we have worked very closely with our operators since the beginning of the year, to implement extensive cost containment programs at all of our properties. Should trends continue to worsen, we are fully prepared to initiate even more stringent cost-saving measures throughout our portfolio. Due to the success of our aggressive asset management efforts and the excellent work of our operators, we now believe that total expenses on a comparable basis throughout the portfolio can likely be limited to a 3% increase for the year, and probably slightly lower at the bottom of our forecasted RevPAR range. This is in spite of an expected double-digit increase in portfolio-wide real estate taxes and significant pre-opening expenses. As a result, we expect that our EBITDA margins for the year will decline between 50 and a 100 basis points.

Based upon these assumptions, we are currently forecasting EBITDA for the year in a range of $199.8 million, to $205.4 million, and FFO per diluted share in the range of $3.02 to $3.16. A breakdown of both EBITDA and FFO per diluted share for the remaining quarters and other assumptions can be found in our press release.

To conclude, the remainder of 2008 will certainly be challenging, with an economy that is weakening and a lack of clarity as to the depth and breadth of its decline. Nevertheless, we just completed the last of our major redevelopments and repositionings with significant upside to come over the next three to four years. We're in great financial condition, we are aggressively working with our operators to contain operating cost. We have a well-covered dividend and our team is well-prepared to deal with whatever the economic environment throws our way.

Before we proceed to the Q&A, I'd like to discuss one final matter. Earlier this quarter, as many of you know, the company announced the plan of succession that ensures that the company is in good hands for a long time to come.

On July 1, 2010, I will be stepping down as CEO and turning the reigns over to Michael Barnello, our Chief Operating Officer and Head of Acquisitions since our IPO 10 years ago. At that time I'll continue on in my role as Chairman of the Board. You should expect no change in the strategies or execution that have driven our success, since it’s a product of the collective wisdom and experience of Mike, Hans and me, as well as our Board. I am committed to my role as CEO for these next two years and helping Mike prepare fully for his new responsibilities. You will see and hear more from Mike as time goes on, but in the meantime he continues to have full time responsibilities in his current role.

That completes our remarks, and Hans and I would now be happy to answer any questions that you may have, operator?

Question-and-Answer Session

Operator

(Operator Instructions). And from Baird we will go to David Loeb?

David Loeb - Robert W. Baird

Hi, Jon, can you just give us an estimate of where you see market Cap rates for upper upscale independent hotels like the ones that you currently own?

Jon Bortz

Sure, that's a tough question since there's not a whole lot of trading in the marketplace. Our guess at this point in time would be that these types of properties would be trading somewhere in the sevens, probably at the lower end for small properties and perhaps in the middle end or maybe in the upper end for much larger properties. But it’s really difficult to estimate at this point, David, because there just is not much trading in the marketplace.

David Loeb - Robert W. Baird

Where do you see opportunities to invest capital in the next couple of years? Is that your hotels are clearly in great shape. Do you think there will be buying opportunities for the kind of hotels that you like either for on balance sheet or in the joint venture?

Jon Bortz

Well, we think there will be opportunities. It’s difficult to predict when that maybe, our guess right now would be somewhere in the later half or the second half of next year or possibly into early 2010. We do think there will likely be distress in this cycle and that will create some opportunities in the marketplace. But even despite that, we think that the next cycle, particularly the first three to five years, we think it’s going to be extremely strong because we believe that construction starts in the urban markets and in the resort markets will be extremely limited between, really last year and all the way into 2011 or 2012, which means very, very low supply growth for the first three to five years of the next cycle.

David Loeb - Robert W. Baird

Great, so you'll be looking to take advantage of that by buying into the distress?

Jon Bortz

Yes, that would be our hope.

David Loeb - Robert W. Baird

Okay, one final question, any more progress on the brand decision at 330 North Wabash?

Jon Bortz

Yes, we have finalized our contracts, we have selected Noble House Hotels and Resorts to manage the property as an independent hotel with a name to be determined. Noble House manages a number of a very high-quality properties including Little Palm Island, in Key West, where they averaged $1000 a night at that property in ADR. And then they manage four properties for us, which include Paradise Point, The Hilton, San Diego Resort, the Hotel Viking and the Hotel Deka.

David Loeb - Robert W. Baird

Great. Thank you.

Jon Bortz

Thank you.

Operator

And we will now move onto William Truelove from UBS.

William Truelove - UBS

Hi, could you give us a sense about CapEx spending as we go through this downturn? Given that you also have very renovated assets. And how does that play out given the dividend increase we are a little bit surprise to see the dividend increase given the kind of outlook that you have. Thanks.

Jon Bortz

Well, the CapEx spending outside of the 330 North Wabash property is likely to be extremely low over the next couple of years. Primarily because we have redone, renovated, repositioned the bulk of our properties. We have a couple of properties over the next couple of years that will likely do some soft goods in the rooms, but beyond that, our plans are pretty limited. We are looking at a ballroom addition, ultimately, at the Hilton, San Diego Resort with timing undetermined at this point, as we're in the entitlement process, additional 48 bungalows at the Paradise Point Resort, also in entitlement. We did just receive approval in Burbank from the City Council subject to a two-week wait period to add a 32 rooms and a pool and fitness center to our Amarano property, but again timing un-determined at this point as to when we would move forward with that project.

So, we would expect CapEx to be pretty limited over the next couple of years. As it relates to the dividend, you know, we've stated really for the past 10 years, that we're an income company first, the cash dividend follows cash flow and in the up part of the cycle, we build large coverage of our dividend so that in the down part of the cycle, we can continue to grow the dividend through the down part of the cycle, even though at a nominal increase, such as the one that we just made, which was a 3% increase or $0.06 a year, which is $2.4 million a year.

William Truelove - UBS

Alright, thank you very much, Jon.

Operator

And from Raymond James we will move on to Bill Crow?

Bill Crow - Raymond James

Good morning, guys. Couple of follow-up questions from those that have been asked. Jon, on the CapEx, when you think about maintenance CapEx, so they keep in running around $30 million a year. Any reason to think that’s going to change materially? Maybe even go down over the next couple of years given the renovation activity?

Jon Bortz

Yeah Bill, we think it's probably likely to be lower than those than that number.

Bill Crow - Raymond James

Okay. So that would help your cushion for the dividend. Going back to the question of acquisitions, Jon, you think that there's going to be an opportunity for LaSalle at some point to get into the development game at all from distressed, people that may have distressed properties that can't get financing to act on them?

Jon Bortz

No.

Bill Crow - Raymond James

Stay out of that arena?

Jon Bortz

Yeah. I think there going to be plenty of opportunities to buy existing assets at very, very, very significant discounts to replacement costs. As we've continued to see replacement costs go up, and we're beginning to see values come down.

Bill Crow - Raymond James

Are you out there shopping for joint venture acquisitions since that was announced, and you just not seeing anything in the market? Or you just kind of put the brakes on everything and thinking that the opportunities will get better?

Jon Bortz

Well, we always look, Bill, but I would say it’s unlikely that we are going to acquire anything this year for the joint venture unless some great opportunity shows up on our doorstep. Our view right now as we think values will be more attractive next year, and so there's really no rush to buy.

Bill Crow - Raymond James

Alright. Two more quick questions, first of all pre-opening costs, how much do you anticipate that will be for the full year ’08?

Jon Bortz

We are looking at those, roughly, about $3 million, give or take a few hundred thousand dollars.

Bill Crow - Raymond James

And zero next year I assume?

Jon Bortz

No. There will be some minor relatively minor pre-opening related to the properties that have newly-opened restaurants, and that are really awaiting, sort of, pre-opening parties for the full completion of the properties. As well as, as we move forward with 330 North Wabash, there would be pre-opening costs in the latter half or the second half of next year as we build the sales and marketing staff and marketing materials for that property.

Bill Crow - Raymond James

Would that get capitalized, though or would that be expensed?

Jon Bortz

No. Those have to be expensed.

Bill Crow - Raymond James

Expensed. Okay. Finally, Jon, you mentioned that 39% of your targeted group bookings are now on the books for '09. Can you go back a year and give us a metric for what '08 look like at this point?

Jon Bortz

Well, I think the number was 37%.

Bill Crow - Raymond James

That's right. 37.

Jon Bortz

That's okay. The 39 was what percentage of our total occupancy as group?

Bill Crow - Raymond James

Yes.

Jon Bortz

But I think as I mentioned, we're running, right now, about -- let me just find that number. We're running 4.9% ahead in group rooms than we were at last year. So, you would be looking at something on the order of, I guess about, 34% to 35%. As to what was on the books a year ago.

Bill Crow - Raymond James

Perfect. Thanks, Jon.

Operator

And next we'll hear from Craig Kucera with BB&T Capital Markets.

Craig Kucera - BB&T Capital Markets

Hi. Good morning. I had a question just relates the some of the assets that you have reporting on a participating lease basis. They didn't appear to be any seasonality this quarter. Do you have any comments on what happened at those assets, as it really didn't appear to be any sort of pickup in the second quarter?

Hans Weger

Well, the thing that happened on a year-over-year basis, is that we brought Paradise Point in from a third party Lessee (inaudible). On the participating lease revenues, the sort of decline on a year-over-year basis, which sort of stopped the seasonality piece was impacted by the fact for the month of June. Paradise Point was actually leased to LHO. So, right now we only have one lease left at third party Lessee, and that is with La Montrose.

Craig Kucera - BB&T Capital Markets

Okay.

Jon Bortz

And that’s actually a little stronger in the first quarter because of all of the events that take place in Hollywood in the first quarter.

Craig Kucera - BB&T Capital Markets

Okay. And my other question, I don't know if I missed this or not, did you give any color on sort of your higher G&A expectation for the remainder of the year in your earlier comments as it relates to guidance?

Hans Weger

No. but the primarily factor in the increased G&A is the incremental non-cash expense related to stock awards are to the executive team.

Jon Bortz

And we did provide the full year G&A outlook in the press release.

Craig Kucera - BB&T Capital Markets

Right. Okay. So, that's basically about $2 million, let's say, of additional stock compensation?

Hans Weger

It’s about 1.6 million for this year.

Craig Kucera - BB&T Capital Markets

Okay. Thanks.

Operator

(Operator Instructions). And from KeyBanc, Ken Ho.

Ken Ho - KeyBanc

Hey Guys, I just have a quick question. I am trying to work on my model right now and I am trying to figure out the available rooms for the second quarter and the third quarter of this year? Do you guys have that number?

Hans Weger

Sure. Okay. Available rooms for the second quarter were 753,312. Available rooms for the third quarter, our forecast is at 761,316. And I'll give you the fourth quarter. Those are forecasted at 764,796.

Ken Ho - KeyBanc

Okay. Great. Thanks a lot.

Jon Bortz

And by the way, that includes the third party Lessee rooms. So that's all the whole portfolio.

Ken Ho - KeyBanc

Okay. That's exactly what I was looking for. Thank you.

Operator

The next from RBC Capital Markets, Michael Salinsky.

Michael Salinsky - RBC Capital Markets

Hi. Good morning, guys.

Jon Bortz

Good morning, Mike.

Michael Salinsky - RBC Capital Markets

With the group booking pace, you mentioned that’s up for the year heading into 2009, can you talk about how that pace is moderated throughout 2008 thus far?

Hans Weger

Yeah, for 2008 or 2009?

Michael Salinsky - RBC Capital Markets

The booking pace for 2009, how thus far in 2008, maybe the first quarter, second, how its moderated thus far this year?

Hans Weger

Sure, let me take a quick peek. In total, it's pretty much stayed the same in terms of percentage. It changed a little bit from the last quarter from the end of March in terms of the breakdown. We've seen a slight increase, about 1% in the number of room nights that we are ahead. But our rate is moderated about half a percent. So, it's kind a little bit better. But I tell you, it's not a big difference.

Michael Salinsky - RBC Capital Markets

Secondly, on the last conference call you talked about supply across your various markets, obviously, financing is really tight right now. Economic conditions are softening. Can you talk about whether you are seeing any of your prior projections moderating? And how expect supply to shape out relative to three months ago, at this point?

Jon Bortz

Yeah. They're moderating two ways. One is that projects continue to take longer to get completed. There have been a few projects that have stalled at various stages of construction, either dirt moving or in the ground because they were doing land prep work on different financing then a full construction loan that they didn't have yet. And, then, we've seen a couple of projects, as an example, The Shangri-La in Chicago which has stopped construction pending, a lack of financing that they claim that they're in the process of achieving.

So, we have seen the numbers moderate. And our own forecast have always been based upon a percentage likelihood of projects that have been announced to actually get completed and we've lowered those percentages because of the lack of financing. So, we're seeing a moderation in our completions for 2009 and for 2010. But I would tell you from an industry perspective, we still think 2009 is likely to be in the 3% range for the industry, but lesser in the urban markets.

Michael Salinsky - RBC Capital Markets

Okay. In terms, can you talk specifically about D.C. next year? Specifically in the first quarter and how that's progressing with the inauguration?

Jon Bortz

Well, for D.C., we're going to have an inauguration. Those rooms tend to be tentative at this point because neither party knows, which one is going to win. So, we don't get firm contracts until after the election. So, they remained tentative at this point. Demand is good for those, and we're seeing demand for that at all of our properties. And we saw a very significant increase, I think it was something like a 44% increase in RevPAR in January, four years ago. So, we would think it will be a good month, and we just don't know who the users of the property are going to be yet.

Michael Salinsky - RBC Capital Markets

Okay. And finally, having been through a couple of cycles, I mean, what is your gut feel at this point? When do things start to pick up? When do we start to see, you know, trends start to improve here?

Jon Bortz

Well, there's nothing that we see right now that gives us any confidence in what we would speculate. But, I would say, based upon, you know, some rationale guess about the economy, and that it begins to improve sometime, perhaps, in the second or third quarter of next year, that we would expect to see a pick up in demand sometime in the second half of next year, and that should begin to mitigate the down side of the current cycle.

Michael Salinsky - RBC Capital Markets

Okay.

Operator

And Chris Woronka from Deutsche Bank, have a next question.

Chris Woronka - Deutsche Bank

Hey good morning, guys. For the group that you have got so far for '09 and then kind of business you're pursuing. Do the groups look any different? Are they smaller? Are they bigger? Are they giving you more or less food and beverage? Are you having to incentivise it all, just kind of curious as to what that looks like and obviously good decision on your part to begin grouping up this year.

Jon Bortz

Chris, they really don't look any different than they have in the past. Same kinds of groups, same sizes, same booking periods, same commitments on food and beverage. We really haven't seen changes, but the one thing I caution is the food and beverage commitments don’t mean a whole lot until you get pretty close to the final date, because it really doesn't get finalized. So, they were typically being contracting for the minimums at this point that we require in order to book those rooms. But the actual amount, which is often very different than the minimums, is undetermined at this point.

Chris Woronka - Deutsche Bank

Okay. Great. And then, kind of as we just begin thinking about property tax for next year, should your final revenue growth for '08 be somewhat of a proxy?

Jon Bortz

We really think they should moderate very significantly next year. Some of the increases we've seen like Indianapolis, was actually a final assessment for 2006. So some of these are in arrears. So they're following sort of lagging increased valuations. So, as we begin to see flattening out of property bottom lines, we should begin to see flattening out of property tax increases. I mean, one of the benefits we have, which is actually, believe it or not, helping moderate our property tax increases, is that we have a lot of properties in California. I mean, we have nine properties in California that are subject to Proposition 13. So the increases are very, very minor in the 2% to 3% range for those properties.

Chris Woronka - Deutsche Bank

Okay. Great. Final one, would you kind of agree the west Hollywood market is probably, a little bit more stable through the economic cycles? Kind of given the, I guess, profile of the typical user? Is that right? Or is it not?

Jon Bortz

Historically, it really follows whatever the cycle is in the movie and TV production businesses. So we've had prior years where production has gone abroad because of a strong dollar. And what we've seen is, production returning to the US, including L.A. because of a weak dollar. The biggest question we have is that, there's been a lot of labor uncertainty in the market with, currently facing a potential screen actor's guild strike, although we think it is likely not to happen, and if it did happen, it would be very, very short. The problem is, it is actually halted a lot of startups of new production in the market, pending a resolution of the two actor guild contracts out there.

Historically, it is pretty stable, but since a lot of our business is corporate account, we do tend to get a lot more pressure from corporate entities in down periods, about what kind of increases we might be able to obtain in the market. It is a market that is currently running in the upper 70s in overall occupancy. All of our properties are running well into the 80s.

Chris Woronka - Deutsche Bank

Okay. That's helpful. Thanks, guys.

Operator

Mr. Bortz there are no further questions at this time.

Jon Bortz

Thank you, operator. And thank you all for participating with us today. We appreciate your interest and confidence in our company. We look forward to updating you on our third quarter in about 90 days. Thank you.

Operator

Ladies and Gentlemen, that does conclude today's conference. We thank you for your participation. Have a great rest of your day.

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Source: LaSalle Hotel Properties, Q2 2008 Earnings Transcript Call
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