1061937--3/10/2006--HOST_MARRIOTT_L

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{investment, property, distribution}

{acquisition, growth, future}

{tax, income, asset}

{debt, indebtedness, cash}

{stock, price, share}

{operation, natural, condition}

{provision, law, control}

{cost, regulation, environmental}

{loan, real, estate}

{capital, credit, financial}

{cost, operation, labor}

{operation, international, foreign}

{financial, litigation, operation}

{loss, insurance, financial}

{personnel, key, retain}

{regulation, change, law}

{condition, economic, financial}

Financial Risks and Risks of Operation We depend on external sources of capital for future growth and we may be unable to access capital when necessary. Our revenues and the value of our properties are subject to conditions affecting the lodging industry. Future terrorist attacks or changes in terror alert levels could adversely affect us. Our expenses may not decrease if our revenue drops. Our ground lease payments may increase faster than the revenues we receive on the hotels situated on the leased properties. We do not control our hotel operations and we are dependent on the managers of our hotels. The terms of our debt place restrictions on us and our subsidiaries, reducing operational flexibility and creating default risks. Our ability to make distributions may be limited or prohibited by the terms of our indebtedness. Our ability to make distributions on our common OP units may also be limited or prohibited by the terms of our preferred OP units. We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor. Foreclosure on our mortgage debt could adversely affect our business. Our mortgage debt contains provisions that may reduce our liquidity. Rating agency downgrades may increase our cost of capital. Our management agreements could impair the sale or financing of our hotels. The acquisition contracts relating to some hotels limit our ability to sell or refinance those hotels. We may be unable to sell properties because real estate investments are illiquid. Applicable REIT laws may restrict certain business activities. We depend on our key personnel. Litigation judgments or settlements could have a significant adverse effect on our financial condition. Our acquisition of additional properties may have a significant effect on our business, liquidity, financial position and/or results of operations. We may acquire hotel properties through joint ventures with third parties that could result in conflicts. Environmental problems are possible and can be costly. Compliance with other government regulations can be costly. Some potential losses are not covered by insurance. We may not be able to recover fully under our existing terrorism insurance for losses caused by some types of terrorist acts, and federal terrorism legislation does not ensure that we will be able to obtain terrorism insurance in adequate amounts or at acceptable premium levels in the future. Risks Relating to the Acquisition of the Starwood Portfolio The occurrence of certain developments, including the failure to obtain required consents, could lead to Host s acquisition of the affected hotels being delayed past the initial closing and, ultimately, abandoned, which could cause Host not to realize all of the intended benefits of the transactions. The transactions are subject to a number of conditions that could have an adverse effect on Host could cause abandonment of the transactions. Any delay in completing the transactions may reduce or eliminate the benefits expected. The pendency of the transactions could materially adversely affect the future business and operations of Host. Host expects to incur significant costs and expenses in connection with the transactions, which could result in not realizing some or all of the anticipated benefits of the transactions. If Host is unable to finance the transactions as contemplated, including through borrowings under its anticipated bridge loan facility, the completion of the transactions will be jeopardized. Host will need to replace, at or before maturity, the bridge loan facility that will be used to finance a portion of the cash component of the transactions. Host may fail to realize the revenue enhancements and other benefits expected from the transactions, which could affect the value of Host common stock following consummation of the transactions. Host may be subject to unknown or contingent liabilities related to the business to be acquired from Starwood. Host s ability to service debt incurred to finance the transactions will depend in part on the cash flow generated by the hotels acquired. The consummation of the transactions will expand Host s business into new markets outside of the United States in which Host is not currently involved and expose Host to the general economic conditions of those markets. Exchange rate fluctuations could adversely affect our financial results. Risks of Ownership of Host s Common Stock There are limitations on the acquisition of Host common stock and changes in control. Consent rights of the limited partners. Certain charter and bylaw amendments. Shares of Host s common stock that are or become available for sale could affect the share price. Host s earnings and cash distributions will affect the market price of shares of Host s common stock. Market interest rates may affect the price of shares of Host s common stock. To qualify as a REIT, Host is required (and each of our subsidiary REITs will be required) to distribute at least 90% of its taxable income, regardless of its available cash or outstanding obligations. Adverse tax consequences would apply if Host or any of our subsidiary REITs failed to qualify as a REIT. If our leases are not respected as true leases for federal income tax purposes, Host and each of our subsidiary REITs would fail to qualify as a REIT. If our affiliated lessees fail to qualify as taxable REIT subsidiaries, Host and each of our subsidiary REITs would fail to qualify as a REIT. Despite Host s REIT status, we remain subject to various taxes. If the IRS were to challenge successfully our status as a partnership for federal income tax purposes, Host would cease to qualify as a REIT and suffer other adverse consequences. As a REIT, each of Host and our subsidiary REITs is subject to limitations on its ownership of debt and equity securities. Host or our subsidiary REITs may be required to pay a penalty tax upon the sale of a hotel. Risks Relating to Redemption of OP Units A holder who redeems OP Units may have adverse tax effects. If a holder of OP Units redeems OP Units, the original receipt of the OP Units may be subject to tax. Differences between an investment in shares of common stock and OP Units may affect redeeming holders of OP Units.

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1061937--3/10/2006--HOST_MARRIOTT_L_P