Red Lion Purchases Denver Hotel for $25.3 Million

Nelms Hospitality Facilitates Transaction

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. October 14, 2008

JULY 9, 2008. Red Lion Hotel Corporation's (NYSE:RLH) recent acquisition of the 467 room Radisson Hotel Denver Southeast adds a key link to the marketing network of the reburgeoning Red Lion Chain. Re-branding the hotel as a Red Lion is the first order of business according to John Taffin, Executive Vice President of Red Lion Hotels speaking from the chain's Spokane Washington headquarters.

Taffin reports that in addition to the $25.3 million acquisition price, Red Lion will immediately commence an $8.0 million renovation to the guest rooms and 25,000 square feet of public space. "...when we are finished with our renovation, it is going to represent the brand very, very well."

"Upon completion, it will be a marquee hotel for Red Lion in their franchise development program", as it will host a contingent of the 50,000 plus attendees in Denver for the Democrat National Convention in August, observed Jim Nelms of Nelms Hospitality Brokerage who in alliance with Mike Block of Hospitality Realty Ventures facilitated the transaction. Nelms added, "Red Lion in its earlier life cycle enjoyed a good reputation with several upper mid scale conference hotels in key western U.S. markets, including Colorado Springs, Durango, and Omaha. Their new ownership's emphasis on reentering strategic markets has been demonstrated recently with similar acquisitions of larger hotels in Anaheim and Salt Lake City.

"Full service hotels with capacity to serve 500 plus attendees under one roof are rarely being built in today's market, Nelms offered. Companies, such as Red Lion, with expertise to run full service hotels, which serve a broad range of market segments, are poised to survive the cyclical ebbs and flows of the lodging market. And, a compelling strategic fact is that there are major barriers to entry in their niche."

The newest Red Lion in Denver joins its sister property, Red Lion Central on Quebec street in the heart of Stapleton. That hotel also recently completed major refurbishment of its 298 guest rooms and 15,000 square feet of meeting space. The two hotels should complement each other in providing referrals of group and leisure travel within the Red Lion family, according to industry observers.

Mike Block, seasoned hotel broker of Hospitality Realty Services, LLC and asset manager for Malaga, LLC sellers of the hotel added, "Red Lion has acquired a prominent asset in the rapidly developing DTC/Fitzsimmons corridor. The combination of Light Rail, demand from both DTC and the Biotech Center has helped fuel a resurgence in the property's performance. Red Lion's renovation will serve to continue the property's dramatic Revpar growth".

Photo: L-R

Mike Block, Broker/Owner, Hospitality Realty Ventures

John Rogers, VP Hotel Operations, Red Lion Hotels

Jim Nelms, Broker/Owner, Nelms Hospitality Brokerage

Contact:

Jim Nelms

Tel: 720-344-3300

Cell: 303-947-0305

Email: nelmshospitality@qwest.com

www.nelmshospitality.com

Red Lion: www.redlionhotels.com