Through bcIMC, CHIP Hospitality has both the financial and operational resources to expand and upgrade our portfolio.

Our goal of providing stable, owner income with growth potential underpins our asset management approach and, as such, we have had to be very active over the past two years with the acquisition of five properties and the disposition of four since April 2005.

On September 28, 2006 we completed the acquisition of two hotels totaling $56 million, the 395-room Hilton Bonaventure Hotel in downtown Montreal, Quebec and the 196-room Harbour Towers Hotel & Suites in downtown Victoria, British Columbia. The Hilton Bonaventure Hotel is a full-service four-star hotel in the heart of Montreal's central business district. The hotel has been acquired for $37.5 million plus costs and adjustments, representing a trailing cap rate of approximately 8%. This cap rate calculation includes reserves of 3% of revenues for management fees and 4% of revenues for capital reserves. The Harbour Towers Hotel & Suites is a full-service three-star hotel located in downtown Victoria, just two blocks from the B.C. legislature and one block from Victoria's inner harbour. The hotel has been acquired for $18.5 million plus costs and adjustments, representing a trailing cap rate of approximately 10%.

On April 3, 2006 we closed the acquisition of one hotel and two free standing restaurants, the 239-room Delta Victoria Ocean Pointe Resort and Spa in Victoria, British Columbia and the Fish House and Cannery restaurants in Vancouver, British Columbia. The Delta Victoria Ocean Pointe is a destination four-star hotel situated on Victoria's inner harbour and becomes our second hotel in British Columbia and our sixth Delta property. The hotel and two Vancouver restaurants, the Cannery Seafood House and the Fish House in Stanley Park, were acquired for $34 million plus costs and adjustments. Both restaurants are well known Vancouver landmarks.

On May 18, 2005 we announced that it acquired the Hotel Tadoussac in Tadoussac, Quebec for approximately $8.6 million. Following its integration into our portfolio, this acquisition is expected to generate a capitalization rate of approximately 11%.

On April 18, 2005 we announced the acquisition of the 235-room Coast Terrace Inn in Edmonton, Alberta for $29.1 million. The capitalization rate on the purchase was 10.3% on a trailing twelve month basis after standard industry reserves for management fees and replacement capital.

On June 30, 2006 we sold the 152-room Hotel Gander in Gander, Newfoundland for cash proceeds of $4.8 million before costs and adjustments. On December 14, 2005 we sold the 272-room Radisson Winnipeg Hotel Downtown. On September 1, 2005 we sold the 158-room Howard Johnson Inn in Saskatoon, Saskatchewan for approximately $1.2 million. In the second quarter of 2005 we sold the 156-room Howard Johnson Inn in Regina, Saskatchewan for approximately $2 million.

The timing for resumed external growth and portfolio upgrades is excellent following a number of years of internal investment. CHIP is particularly interested in the Toronto, Calgary and Vancouver markets for acquisition of new hotels. If you wish to inquire about our acquisitions program, please contact Judy Kan, Senior V.P. of Real Estate, at 604.601.3881 or email JKan@chiphospitality.com.