Pebblebrook Hotel Trust Announces Increased Ownership Position in LaSalle Hotel Properties and Reiterates Its Offer with Downside Protection and Upside Potential

Pebblebrook Hotel Trust (NYSE: PEB) (“Pebblebrook”) today announced it
has almost doubled its ownership of common shares of LaSalle Hotel
Properties (NYSE: LHO) (“LaSalle) to 10.0 million common shares, or
approximately 9.0% of LaSalle’s outstanding common shares. Pebblebrook
is now one of the largest shareholders of LaSalle.

“The Board of Pebblebrook continues to believe that a strategic
combination with LaSalle represents the greatest value-maximizing
opportunity for the shareholders of both LaSalle and Pebblebrook,” said
Jon E. Bortz, Chairman, President and Chief Executive Officer of
Pebblebrook Hotel Trust. “Our large, increased ownership position
further demonstrates our commitment and determination to complete this
combination. We are not surprised by the broad support we have received
from shareholders, who have told us and LaSalle that our current
proposal is clearly superior to LaSalle’s agreement with Blackstone. We
are surprised that LaSalle’s Board does not recognize our proposal to be
superior. Our cash and shares offer provides LaSalle’s shareholders with
approximately $375 million of incremental value1 compared to
the Blackstone agreement. Given that the LaSalle Board continues to
recommend the Blackstone agreement, this would be an egregious transfer
of value to Blackstone that would be a gross disservice to all LaSalle
shareholders, especially given the upside potential of owning shares in
a combined entity that will benefit from the growth and the meaningful
operational and investment synergies that would result from bringing
these two highly similar companies together. Pebblebrook remains
prepared to make sure the incremental value of our June 11, 2018 offer
does not go to Blackstone, and our offer remains outstanding. We request
that the LaSalle Board listen to its shareholders and exercise its
fiduciary duty to act in the best interests of all of its shareholders
by finalizing a merger agreement with Pebblebrook.”

Pebblebrook submitted its increased offer to the Board of Trustees of
LaSalle on June 11, 2018. To date, Pebblebrook has not been contacted by
LaSalle or its advisors regarding the June 11, 2018 increased offer.
Pebblebrook’s offer provides LaSalle’s common shareholders with the
option for each share to elect to receive $37.80 in cash instead of 0.92
Pebblebrook share, subject to a cap of 20% of LaSalle shares in
aggregate receiving cash and customary pro ration if the number of
LaSalle holders electing to receive cash instead of stock is
oversubscribed. LaSalle’s shareholders may elect to receive a mix of
cash and Pebblebrook shares, and can receive up to 100% in cash if no
more than 20% of shares in the aggregate elect the cash option. The per
share cash amount is fixed at $37.80, which provides downside protection
for LaSalle shareholders by anchoring approximately $834 million of the
offer in cash, and was calculated by multiplying the fixed exchange
ratio of 0.92 and Pebblebrook’s 5-day VWAP of $41.09 as of June 8, 2018.
In the face of steadily improving industry fundamentals, the value of
Pebblebrook’s stock would have to decline to $35.24 in order to equal
LaSalle’s agreement with Blackstone. Our offer is net of the $112
million termination fee LaSalle agreed to pay Blackstone, which will be
payable by Pebblebrook and not borne by LaSalle’s shareholders. In
compliance with federal law, Pebblebrook will file a Schedule 13D
regarding its ownership of LaSalle common shares.

1 Incremental value based on Pebblebrook’s 5-day VWAP of
$39.83 as of June 15, 2018.

About Pebblebrook Hotel Trust

Pebblebrook Hotel Trust is a publicly traded real estate investment
trust (“REIT”) organized to opportunistically acquire and invest
primarily in upper upscale, full-service hotels located in urban markets
in major gateway cities. The Company owns 28 hotels, with a total of
6,973 guest rooms. The Company owns hotels located in 9 states and the
District of Columbia, including: Los Angeles, California (Beverly Hills,
Santa Monica and West Hollywood); San Diego, California; San Francisco,
California; Washington, DC; Coral Gables, Florida; Naples, Florida;
Buckhead, Georgia; Boston, Massachusetts; Minneapolis, Minnesota;
Portland, Oregon; Philadelphia, Pennsylvania; Nashville, Tennessee;
Columbia River Gorge, Washington; and Seattle, Washington. For more
information, please visit us at www.pebblebrookhotels.com
and follow us on Twitter at @PebblebrookPEB.


This communication does not constitute an offer to buy or solicitation
of an offer to sell any securities. This communication relates to a
proposal which Pebblebrook has made for a business combination
transaction with LaSalle. In furtherance of this proposal and subject to
future developments, Pebblebrook (and, if a negotiated transaction is
agreed, LaSalle) may file one or more registration statements, proxy
statements, tender or exchange offer statements, prospectuses or other
documents with the United States Securities and Exchange Commission (the
“SEC”). This communication is not a substitute for any proxy statement,
registration statement, tender or exchange offer statement, prospectus
or other document Pebblebrook or LaSalle may file with the SEC in
connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS
statement or prospectus (if and when available) will be delivered to
shareholders of LaSalle or Pebblebrook, as applicable. Investors and
security holders will be able to obtain free copies of these documents
(if and when available) and other documents filed with the SEC by
Pebblebrook through the website maintained by the SEC at http://www.sec.gov.

Pebblebrook or LaSalle and their respective trustees and executive
officers and other members of management and employees may be deemed to
be participants in the solicitation of proxies in respect of the
proposed transaction. You can find information about Pebblebrook’s
executive officers and trustees in Pebblebrook’s definitive proxy
statement filed with the SEC on April 27, 2018. You can find information
about LaSalle’s executive officers and trustees in LaSalle’s definitive
proxy statement filed with the SEC on March 22, 2018. Additional
information regarding the interests of such potential participants will
be included in one or more registration statements, proxy statements,
tender or exchange offer statements or other documents filed with the
SEC if and when they become available. You may obtain free copies of
these documents using the sources indicated above.

This document shall not constitute an offer to sell or the solicitation
of an offer to buy any securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the requirements
of Section 10 of the Securities Act of 1933, as amended.

Forward-Looking Statements

This communication may include “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, but are not limited to, statements
regarding Pebblebrook’s offer to acquire LaSalle, its financing of the
proposed transaction, its expected future performance (including
expected results of operations and financial guidance), and the combined
company’s future financial condition, operating results, strategy and
plans. Forward-looking statements may be identified by the use of the
words “anticipates,” “expects,” “intends,” “plans,” “should,” “could,”
“would,” “may,” “will,” “believes,” “estimates,” “potential,” “target,”
“opportunity,” “tentative,” “positioning,” “designed,” “create,”
“predict,” “project,” “seek,” “ongoing,” “upside,” “increases” or
“continue” and variations or similar expressions. These statements are
based upon the current expectations and beliefs of management and are
subject to numerous assumptions, risks and uncertainties that change
over time and could cause actual results to differ materially from those
described in the forward-looking statements. These assumptions, risks
and uncertainties include, but are not limited to, assumptions, risks
and uncertainties discussed in Pebblebrook’s most recent annual or
quarterly report filed with the SEC and assumptions, risks and
uncertainties relating to the proposed transaction, as detailed from
time to time in Pebblebrook’s and LaSalle’s filings with the SEC, which
factors are incorporated herein by reference. Important factors that
could cause actual results to differ materially from the forward-looking
statements made in this communication are set forth in other reports or
documents that Pebblebrook may file from time to time with the SEC, and
include, but are not limited to: (i) the ultimate outcome of any
possible transaction between Pebblebrook and LaSalle, including the
possibilities that LaSalle will reject a transaction with Pebblebrook,
(ii) the ultimate outcome and results of integrating the operations of
Pebblebrook and LaSalle if a transaction is consummated, (iii) the
ability to obtain regulatory approvals and meet other closing conditions
to any possible transaction, including the necessary shareholder
approvals, and (iv) the risks and uncertainties detailed by LaSalle with
respect to its business as described in its reports and documents filed
with the SEC. All forward-looking statements attributable to Pebblebrook
or any person acting on Pebblebrook’s behalf are expressly qualified in
their entirety by this cautionary statement. Readers are cautioned not
to place undue reliance on any of these forward-looking statements.
These forward-looking statements speak only as of the date hereof.
Pebblebrook undertakes no obligation to update any of these
forward-looking statements to reflect events or circumstances after the
date of this communication or to reflect actual outcomes.

For additional information or to receive press releases via email,
please visit our website at www.pebblebrookhotels.com.

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