Thayer Partners with Shanghai Tower Ownership Group to Develop World’s Tallest Hotel 

Thayer Partners with Shanghai Tower Ownership Group to Develop World’s Tallest Hotel "Shanghai J Hotel"

Collaboration with Jinjiang (China) to create the ultra-luxurious "J Hotel" brand

(December 18, 2010 - Shanghai, China) - Today, the Shanghai Tower Ownership Group proudly appointed Interstate Hotels & Resorts (Interstate China) as the management company for the world's highest luxury hotel, the Shanghai Center J Hotel. Interstate China is a wholly-owned subsidiary of Thayer International Group, a joint venture between the American real estate private equity firm Thayer Lodging Group ("Thayer") and China's leading hotel group, Shanghai Jinjiang International Hotels (Group) Company Limited ("Jinjiang"). Adjacent to the Shanghai World Financial Center and Jin Mao Tower, the brand-new J Hotel, set to open in 2014, is a standout feature of the Shanghai Center currently under construction in Pudong's Lujiazui area. Upon completion, the Shanghai Center will rise to a staggering 121 floors (2,073 feet) in height, with a total floor area of 6 million square feet, making it China's tallest building and the second tallest in the world. Symbolizing modern China, the Shanghai Center will be the world's second tallest LEED-certified building, akin to a "vertical city" that offers a wide array of amenities and conveniences, setting new standards in design.

The Shanghai Center J Hotel will introduce a new ultra-luxury brand by Jinjiang, a leading hotel management group in China. With 258 rooms spanning from the 81st to the 110th floors, the hotel lobby will be situated on the 111th floor of the Shanghai Center. The top-notch design of global luxury hotels will compete to emulate the distinctive features of the J Hotel brand, attracting tech-savvy and forward-thinking travelers. Another hallmark of the Chinese J brand is its reflection of culture and reality, embodied through opulent interior design and service offerings.

Interstate Hotels & Resorts, with over 50 years of experience in hotel management globally, enjoys a stellar reputation. Today, Interstate operates in 36 states in the United States, including Washington, D.C., as well as in China, Russia, India, Ireland, the United Kingdom, Belgium, Canada, Mexico, and the Commonwealth of Puerto Rico, and is still rapidly expanding. As Thomas F. Hewitt, Chairman of the Board and Chief Executive Officer of Interstate Hotels & Resorts, remarks, "I am immensely proud of the reputation that Interstate Hotels & Resorts has built over the past 50 years. This reputation represents outstanding performance, the best in service and quality, and the most professional employees in the industry."

In March 2010, Thayer's private equity fund, THI V-A, and Jinjiang Hotels jointly acquired Interstate Hotels & Resorts, with a total transaction value of approximately $400 million. This transaction marked several milestones: firstly, it was the first time a Chinese state-owned enterprise acquired a foreign hotel management company overseas; secondly, it was the first time a Chinese state-owned enterprise acquired a publicly traded U.S. company; and finally, the transaction led to the establishment of a private equity firm focused on acquiring overseas real estate properties. As part of this partnership, Jinjiang will send 100 executives to the United States for training in western hotel management companies and Thayer’s US headquarter in Annapolis; finishing at the esteemed Cornell University School of Hotel Administration and the Leland C. and Mary M. Pillsbury Institute for Hospitality Entrepreneurship.

The signing of this agreement represents the latest development in the series of transactions between Thayer and Jinjiang Hotels. In 2004, the two companies collaborated to introduce 21st-century technology and management practices into China's rapidly expanding hotel industry, giving rise to "Hubs1," the largest enterprise-to-enterprise hotel booking platform in China. Hubs1 is currently the only web-based, fully automated, and Chinese-language booking system in operation in China. Hubs1 also served as the exclusive booking service provider for the 2010 Shanghai World Expo, catering to over 73 million visitors from more than 240 countries during the six-month event. The J brand will collaborate with Hubs1. Teddy Zhang, Founder, Chairman and CEO of Hubs1, the managing partner at Thayer, was recently named one of the Top 10 Best CEOs in China in 2010.

In addition to the recent hotel announcement, Thayer and Jinjiang have initiated the establishment of the Thayer-Jinjiang Real Estate Fund as an investment fund for the hotel and tourism sectors in China, and have launched other new initiatives in China. "We look forward to deepening our collaboration with Jinjiang, a shining example of win-win cooperation between Chinese and American enterprises," said Leland C. Pillsbury, Co-Chairman and CEO of Thayer Lodging Group. "Interstate Hotels & Resorts is a testament to this cooperation, and we are optimistic about the future as we continue to explore more opportunities together."

Interstate Hotels & Resorts

Interstate Hotels & Resorts is the nation's largest independent third-party hotel management company. The company and its affiliates manage or have ownership interests in 246 hospitality properties with more than 51,000 rooms in 36 states, the District of Columbia, China, Canada, the United Kingdom, Ireland, Belgium, Russia, Mexico, India, and Puerto Rico. Interstate also has contracts to manage 54 properties with 6,500 rooms under construction or development in the United States. As a leading hotel real estate investor, Interstate has ownership interests in 54 hotels, including six wholly owned hotels. The company is a wholly owned subsidiary of Thayer Lodging Group, a private real estate investment company.