BRIDGESTREET ACCOMMODATIONS INC, S-1/A, 1997-08-29

BRIDGESTREET ACCOMMODATIONS INC
S-1/A, 1997-08-29
HOTELS & MOTELS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 29, 1997

REGISTRATION NO. 333-26647
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 4

TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

------------------------

BRIDGESTREET ACCOMMODATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

------------------------
<TABLE>
<S> <C> <C>
DELAWARE 7021 04-3327773
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>

30670 BAINBRIDGE ROAD
SOLON, OH 44139
(216) 248-3005
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

------------------------

WILLIAM N. HULETT, III
BRIDGESTREET ACCOMMODATIONS, INC.
30670 BAINBRIDGE ROAD
SOLON, OH 44139
(216) 248-3005
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

------------------------

COPIES OF COMMUNICATIONS TO:

<TABLE>
<S> <C>
CONSTANTINE ALEXANDER, ESQUIRE MARTIN CARMICHAEL III, P.C.
NUTTER, MCCLENNEN & FISH, LLP GOODWIN, PROCTER & HOAR LLP
ONE INTERNATIONAL PLACE EXCHANGE PLACE
BOSTON, MA 02110 BOSTON, MA 02109
(617) 439-2000 (617) 570-1000
</TABLE>

------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If the Form is a post-effective amendment filed pursuant to Rule 426(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.

SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED AUGUST 29, 1997

PROSPECTUS

2,615,000 SHARES

LOGO: BRIDGESTREET ACCOMMODATIONS

COMMON STOCK
------------------------

Of the 2,615,000 shares of Common Stock offered hereby, 1,700,000 shares
are being issued and sold by BridgeStreet Accommodations, Inc. ("BridgeStreet"
or the "Company") and 915,000 shares are being sold by certain stockholders of
the Company (the "Selling Stockholders"). See "Principal and Selling
Stockholders." The Company will not receive any proceeds from the sale of Common
Stock by the Selling Stockholders. See "Use of Proceeds." Prior to this
offering, there has been no public market for the Common Stock. It is currently
estimated that the initial public offering price will be between $7.00 and $9.00
per share. See "Underwriting" for a discussion of the factors considered in
determining the initial public offering price. Officers, directors and principal
stockholders of the Company and their affiliates, some of whom are Selling
Stockholders, will receive an aggregate of approximately $6.8 million, or 39.0%,
of the net proceeds of this offering (assuming an initial public offering price
of $8.00 per share and after deducting estimated underwriting discounts and
commissions and estimated offering expenses), and upon the completion of the
offering will beneficially own an aggregate of 53.8% of the outstanding shares
of Common Stock. As a result, these stockholders, if acting together, will have
the ability to influence the outcome of corporate actions requiring stockholder
approval, including the election of directors.

The Common Stock has been approved for quotation on the Nasdaq National
Market under the symbol "BEDS."

SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN RISKS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
=======================================================================================================
Proceeds to
Price to Underwriting Proceeds to Selling
Public Discount(1) Company(2) Stockholders
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share.............................. $ $ $ $
- -------------------------------------------------------------------------------------------------------
Total(3)............................... $ $ $ $
=======================================================================================================
</TABLE>

(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."
(2) Before deducting expenses of the offering estimated at $2,000,000, payable
by the Company.
(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 392,250 additional shares of Common Stock from the Company on the same
terms and conditions as set forth above solely to cover over-allotments, if
any. If the Underwriters exercise such option in full, the total Price to
Public, Underwriting Discount, Proceeds to Company and Proceeds to Selling
Stockholders will be $ , $ , $ and $ , respectively.
See "Underwriting."
------------------------

The shares of Common Stock are offered by the Underwriters, subject to
prior sale, when, as and if delivered to and accepted by them, subject to their
right to reject any order in whole or in part and to certain other conditions.
The Underwriters reserve the right to withdraw, cancel or modify such offer and
to reject offers in whole or in part. It is expected that delivery of
certificates for the shares of the Common Stock will be made at the offices of
Legg Mason Wood Walker, Incorporated, Baltimore, Maryland on or about
, 1997.
------------------------

LEGG MASON WOOD WALKER MCDONALD & COMPANY
INCORPORATED SECURITIES, INC.
------------------------
, 1997
<PAGE> 3

[MAP DEPICTING THE COMPANY'S EXISTING AND TARGETED EXPANSION MARKETS,
AND PICTURES OF AN APARTMENT COMPLEX AND THE INTERIOR AREAS OF CERTAIN
ACCOMMODATIONS]

The accommodations and furnishings pictured in this Prospectus are leased
by the Company.

------------------------

THE UNDERWRITERS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK. SUCH
TRANSACTIONS MAY INCLUDE THE PURCHASE OF THE COMMON STOCK TO STABILIZE ITS
MARKET PRICE, THE PURCHASE OF THE COMMON STOCK TO COVER SYNDICATE SHORT
POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."

------------------------

The Company intends to furnish its stockholders with annual reports
containing audited consolidated financial statements and an opinion thereon
expressed by an independent public accounting firm, and with quarterly reports
for the first three quarters of each fiscal year containing unaudited interim
consolidated financial information.

The Company has filed an application with the United States Patent and
Trademark Office to register the service mark "BridgeStreet."
<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and pro forma and historical financial statements, including the
notes thereto, appearing elsewhere in this Prospectus. BridgeStreet
Accommodations, Inc. ("BridgeStreet" or the "Company") was incorporated in 1996,
and in January and March 1997 acquired by merger (the "Combination") five
flexible accommodation service providers (the "Founding Companies"). See
"Combination." Unless otherwise indicated, the information contained in this
Prospectus (i) gives effect to the Combination and (ii) assumes that the
Underwriters' over-allotment option will not be exercised. Investors should
carefully consider the information set forth under the heading "Risk Factors."

THE COMPANY

BridgeStreet is a leading provider of flexible accommodation services in 16
metropolitan areas located in the Midwest and Mid-Atlantic regions of the United
States. The Company offers high-quality, fully-furnished apartments, townhouses,
condominiums and to a lesser extent, houses (collectively, "accommodations"),
primarily for individuals traveling on business and company executives
relocating to new communities who require lodging for one week to several
months. Together with the specialized amenities offered by the Company, these
accommodations are intended to provide guests with a "home away from home." As
of June 30, 1997, BridgeStreet had more than 2,700 units under lease, and for
the six months ended June 30, 1997, BridgeStreet's average occupancy rate was
approximately 90%.

As a provider of flexible accommodation services, BridgeStreet leases
substantially all of its accommodations on a short-term basis from property
managers, and then rents them to its clients. This enables the Company to (i)
adjust the quantity, mix and location of its accommodations as client needs
dictate and local economic conditions warrant, (ii) expand and enter new markets
without the costs and lead times associated with investing in "bricks and
mortar" and (iii) avoid the fixed costs associated with ownership or long-term
leasing of real estate. The Company also leases the furniture for its
accommodations on a short-term basis from furniture rental companies. These
furniture leasing arrangements enable BridgeStreet to maintain well-appointed,
modern and attractive accommodations, upgrade and replace furniture as needed,
and satisfy specific furnishing requests. BridgeSteet's leasing strategy
distinguishes it from fixed-location lodging providers, such as all-suite or
extended-stay hotels, that own their lodging facilities and furnishings or lease
them on a long-term basis.

Traditionally, travelers on extended trips have stayed in hotels and
motels. According to the American Hotel and Motel Association, in 1995, business
travelers staying three or more nights represented approximately 37% of total
domestic hotel stays during that year. The Company believes that business
travelers on extended trips increasingly desire alternatives to conventional
hotel and motel rooms, which typically lack the spaciousness and amenities of
home. The Company believes that this has been an important factor in the recent
growth in the extended-stay segment of the lodging industry. Participants in
this segment include flexible accommodation service providers, all-suite hotels
and extended-stay hotels.

By providing flexible accommodation services, the Company can satisfy
client requests for accommodations in a variety of locations and neighborhoods,
as well as requests for accommodations of specific types and sizes. The
substantial majority of the Company's accommodations are located within
high-quality property complexes that typically feature, among other things,
in-unit washers and dryers, dedicated parking and access to fitness facilities
(including, in many cases, pools, saunas and tennis courts). In addition, at a
guest's request, BridgeStreet can upgrade an accommodation by providing
specialized amenities such as office furniture, fax machines and computers. The
Company's accommodations generally are priced competitively with all-suite and
upscale extended-stay hotel rooms even though, on average, the Company believes
its accommodations are substantially larger.

3
<PAGE> 5
- --------------------------------------------------------------------------------

units on December 31, 1996, representing a compound annual growth rate of 36%.
In addition, combined net revenues increased from $18.9 million in 1994 to $37.6
million in 1996, representing a compound annual growth rate of 41%.

The Company plans to achieve its goal of becoming a leading national
provider of flexible accommodation services by implementing an aggressive
acquisition program and a national operating strategy designed to increase
internal revenue growth, cost efficiencies and profitability. Key elements of
the Company's business strategy include:

Growth Through Acquisitions. The Company believes that the flexible
accommodation services industry is highly fragmented, with over 400
geographically dispersed companies in the United States, few of which have more
than a regional presence. BridgeStreet plans to take advantage of the fragmented
nature of the industry by acquiring flexible accommodation service companies in
major metropolitan areas frequented by business travelers. BridgeStreet intends
to implement its business model at each acquired company as soon as practicable
after the acquisition is completed. BridgeStreet's acquisition strategy is to:

- Enter New Geographic Markets and Establish Nationwide Coverage. In each
new market, the Company intends to target for acquisition one local or
regional flexible accommodation services provider having the size and
quality of operations suitable for serving as the Company's base for
expansion in the market. Acquisitions in new markets will enable
BridgeStreet to (i) gain local or regional market share rapidly, (ii)
increase sales to existing clients by meeting their needs for
accommodations in other regions, (iii) increase sales to the acquired
company's clients by providing them with access to BridgeStreet's growing
national network and (iv) establish the BridgeStreet brand name in new
regions and enhance its nationwide recognition. The Company also may
expand into new markets by establishing new operations.

- Expand Within Existing Markets. Once the Company has established
operations in a new region, it may seek to expand its market share by
acquiring other flexible accommodation service providers within that
region. The Company believes that it can achieve operating efficiencies
by incorporating the businesses of smaller acquired companies into the
Company's operations without any significant increase in infrastructure.
On June 30, 1997, the Company acquired the assets of a flexible
accommodation services provider in Memphis, Tennessee with 135 units
under lease.

National Operating Strategy. The Company has begun to implement a national
operating strategy with the following components:

- Maximize Sales to Existing and New Clients. The Company plans to
maximize sales to existing corporate clients and to obtain new clients
through a national sales and marketing program which highlights the
Company's expanding national network. Many of the Company's clients are
Fortune 1000 companies with significant, national employee lodging
requirements. These corporate clients generally have numerous key
decision makers (such as human resource directors, relocation managers or
training directors) who both establish and administer company travel and
accommodation policies. The Company plans to obtain a greater share of
each client's lodging requirements by establishing relationships with
additional key decision makers and emphasizing the Company's expanding
national presence.

- Achieve Cost Efficiencies. The Company believes it should be able to
reduce total operating expenses of the Founding Companies and any
additional acquired companies by consolidating certain functions
(including sales, marketing and purchasing operations) performed
separately by such companies. In addition, the Company believes that as a
large, national flexible accommodation services company, it should be
able to achieve lower costs (as a percentage of revenues) compared to
those of the individual Founding Companies and other acquired companies
in such areas as leasing accommodations and furniture, purchasing certain
hard and soft goods, and obtaining financing arrangements, employee
benefits and insurance.

- --------------------------------------------------------------------------------
4
<PAGE> 6

and cash flow management. BridgeStreet believes the implementation of
these practices will enable the Company to provide superior customer
service and maximize sales opportunities.

- Implement Management Information System. BridgeStreet intends to develop
and implement a centrally-controlled, computerized management information
system that will integrate the Company's customer contact, sales,
marketing, finance, telephone, property management, internet access,
lease management and reservation functions. BridgeStreet believes that
the proposed system will enable it to deliver superior customer service,
more efficiently manage its operations and achieve cost savings.

The Company is a Delaware corporation. Its principal executive offices are
located at 30670 Bainbridge Road, Solon, Ohio 44139 and its telephone number is
(216) 248-3005. As used herein, unless the context otherwise requires,
"BridgeStreet" or the "Company" refers to BridgeStreet Accommodations, Inc. and
its wholly-owned subsidiaries.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company.......... 1,700,000 shares
Common Stock offered by the Selling
Stockholders............................... 915,000 shares
Common Stock to be outstanding after the
offering................................... 7,175,000 shares (1)
Use of proceeds.............................. To repay certain indebtedness, including
indebtedness of the Founding Companies assumed
by the Company in connection with the
Combination, the outstanding principal amount
under the Company's revolving credit facility
and certain advances made to the Company by an
affiliated party, to implement an enhanced
management information system and for general
corporate purposes, including working capital
and future acquisitions. See "Use of
Proceeds."
Proposed Nasdaq National Market symbol....... BEDS
</TABLE>

- ---------------
(1) Excludes an aggregate of 1,100,000 shares of Common Stock reserved for
issuance under the Company's 1997 Equity Incentive Plan and Stock Plan for
Non-Employee Directors. Of this amount, 482,667 and 37,500 shares of Common
Stock will be issuable upon exercise of outstanding options under the 1997
Equity Incentive Plan and Stock Plan for Non-Employee Directors,
respectively. See "Management -- Director Compensation" and " -- Executive
Compensation; Equity Incentive Plan."

5
<PAGE> 7

SUMMARY UNAUDITED FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE AND FOOTNOTE DATA)

The following summary unaudited financial data presents certain data of the
Company, as adjusted (a) in the case of the Pro Forma Statement of Operations
Data, for (i) the effects of the Combination on a historical basis, (ii) the
effects of certain pro forma adjustments to the historical financial statements
of the Founding Companies and (iii) the consummation of this offering, and (b)
in the case of the As Adjusted Consolidated Balance Sheet Data, for the
consummation of this offering. See the Company's Unaudited Pro Forma Combined
Financial Statements and Consolidated Financial Statements and the notes thereto
included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PRO FORMA PRO FORMA ACTUAL
YEAR ENDED SIX MONTHS ENDED THREE MONTHS
DECEMBER 31, JUNE 30, ENDED
1996(1) 1997(1)(2) JUNE 30, 1997
------------ ---------------- -------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues.......................................... $ 37,566 $ 22,924 $12,655
Operating income (3).............................. 1,797 15 1,124
Income before income taxes(4)..................... 1,790 107 1,113
Net income (loss)(5).............................. $ 878 $ (486) 613
======= ======= ========
Net income (loss) per share....................... $ 0.12 $ (0.07) $ 0.11
======= ======= ========
Weighted average shares outstanding............... 7,175,000 7,175,000 5,475,000
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, 1997
---------------------------------
ACTUAL AS ADJUSTED(6)
-------------- --------------
<S> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Working capital............................................... $ 1,271 $ 8,575
Total assets.................................................. 28,930 35,209
Long-term debt, net of current maturities..................... 3,344 --
Total stockholders' equity.................................... 19,385 30,033
</TABLE>

- ---------------
(1) The Pro Forma Statement of Operations Data assumes that the Combination and
this offering took place at the beginning of the period. This data is not
necessarily indicative of the results the Company would have had if these
events actually then occurred or of the Company's future results. The Pro
Forma Statement of Operations Data for the year ended December 31, 1996
excludes (i) any adjustments for the compensation to be paid in 1997 for
services to be rendered in 1997 by the Company's Chief Executive Officer and
Chief Financial Officer pursuant to their employment agreements, and (ii)
non-recurring, non-cash compensation expense recorded in the first quarter
of 1997 in connection with the accelerated vesting of restricted stock. The
Pro Forma Statement of Operations Data for the six months ended June 30,
1997 assumes the acquisition of Home Again occurred at the beginning of the
period. See "Combination." The pro forma data is based on preliminary
estimates, available information and certain assumptions that management
deems appropriate, and should be read in conjunction with the other
financial statements and notes thereto included elsewhere in this
Prospectus.
(2) Includes non-recurring, non-cash compensation expense of $1,210,000 recorded
in connection with the accelerated vesting of restricted stock. This
represents a reduction of $0.17 per share in the Pro Forma Statement of
Operations.
(3) Reflects (i) for the year ended December 31, 1996, the reduction of $552,000
in salary and benefits to executives of the Founding Companies and the
amortization of $490,000 of goodwill to be recorded as a result of the
Combination, assuming a 35-year amortization period, and (ii) for the six
months ended June 30, 1997, an increase of $30,000 in such salary and
benefits and the amortization of $16,000 of goodwill in connection with the
acquisition of Home Again.
(4) Reflects an interest expense reduction of $158,000 for the year ended
December 31, 1996 and $97,000 for the six months ended June 30, 1997 related
to bank debt and notes payable to be repaid from the net proceeds of this
offering.
(5) Reflects an increase in the Company's historical provision for income taxes
of $373,000 for the year ended December 31, 1996 to account for the
Company's estimated consolidated effective tax rate subsequent to the
Combination, after considering nondeductible goodwill amortization, and an
increase of $75,000 in the historical provision for income taxes for the six
months ended June 30, 1997 to account for the estimated consolidated 1997
effective tax rate, after considering nondeductible goodwill.
(6) Reflects the issuance of 1,700,000 shares of Common Stock by the Company in
this offering and the application of the net proceeds as described under
"Use of Proceeds."

6
<PAGE> 8

SUMMARY INDIVIDUAL FOUNDING COMPANY FINANCIAL AND OTHER DATA
(DOLLARS IN THOUSANDS)

The following table presents summary data for each of the Founding
Companies (including their respective affiliates, if any) for the three most
recent fiscal years.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1994 1995 1996
------ ------ -------
<S> <C> <C> <C>
Temporary Corporate Housing Columbus, Inc.
Revenues........................................................ $8,309 $9,754 $12,502
Operating income................................................ 206 336 1,087
Number of units leased at end of year........................... 510 539 624
Corporate Lodgings, Inc.
Revenues........................................................ $4,069 $6,067 $ 8,820
Operating income................................................ 87 39 195
Number of units leased at end of year........................... 213 301 434
Exclusive Interim Properties, Ltd.(1)
Revenues........................................................ $4,015 $5,521 $ 8,626
Operating income................................................ 104 300 213
Number of units leased at end of year(2)........................ 125 302 441
Home Again, Inc.
Revenues........................................................ $ 532 $1,570 $ 4,035
Operating income................................................ 49 74 315
Number of units leased at end of year........................... 40 100 198
Temporary Housing Experts, Inc.
Revenues........................................................ $2,000 $3,086 $ 3,583
Operating income (loss)......................................... 115 30 (73)
Number of units leased at end of year........................... 153 214 239
</TABLE>

- ---------------

(1) Prior to the Combination, Exclusive Interim Properties, Ltd.'s fiscal year
end was March 31. The 1994 and 1995 data presents data for that company's
fiscal years ended March 31, 1995 and 1996, respectively. The 1996 data
presents 12 months of data derived from the unaudited three-month period
ended March 31, 1996 and the audited nine-month period ended December 31,
1996.

(2) Includes 19 condominium units owned by Exclusive Interim Properties, Ltd.
for all periods presented.

7
<PAGE> 9

RISK FACTORS

The following factors should be considered, together with the other
information in this Prospectus, in evaluating an investment in the Company. This
Prospectus contains, in addition to historical information, forward-looking
statements that involve risks and uncertainties. The Company's actual results
could differ significantly from the results discussed in the forward-looking
statements as a result of any number of factors, including the risk factors set
forth below and other factors discussed elsewhere in this Prospectus.

LIMITED COMBINED OPERATING HISTORY

BridgeStreet was founded in August 1996 to acquire flexible accommodation
service providers and has only conducted combined operations since the
Combination in the first quarter of 1997. Prior to the Combination, each of the
Founding Companies operated (together with any affiliates) as a separate,
independent entity. The Company intends to continue to operate the Founding
Companies under their current management, although it will integrate some sales,
marketing and purchasing operations, implement centralized financial and
management information systems and controls, and implement "best practices"
throughout its operations. The Company's senior management group has been
assembled only recently, and there can be no assurance that this group will be
successful in the Company's integration and implementation efforts, in managing
the combined operations of the Founding Companies or in implementing the
Company's business strategy. Any failure to do so could have a material adverse
effect on the Company's business, financial condition and results of operations.
See "Management."

RISKS ASSOCIATED WITH ACQUISITION STRATEGY AND PLANNED RAPID EXPANSION

As part of its strategy to establish a nationwide presence, the Company
initially has targeted the following markets within which to expand its
operations: Atlanta, Boston, Chicago, Dallas, Denver, Houston, Los Angeles, New
York, Philadelphia, Phoenix, San Francisco, Seattle, Tampa, Toronto and
Vancouver. BridgeStreet intends to grow in part through the acquisition of
additional flexible accommodation service providers in these and other major
metropolitan markets throughout the United States. However, in cases where the
Company seeks to enter a new market but is unable to acquire a suitable existing
provider on terms the Company deems acceptable, the Company may elect to
establish a new operation or strategic alliance in that market. The Company also
intends to pursue rapid internal growth through expansion of existing and
acquired operations. See "Business -- Growth Strategy" and "-- Acquisition and
Expansion Strategy."

There can be no assurance that the Company will be successful in entering
any market which it has targeted for expansion. There also can be no assurance
that the Company will be able to identify, acquire or profitably manage
additional businesses in existing or targeted expansion markets or successfully
integrate any acquired businesses into the Company without substantial costs,
delays or other operational or financial problems. Certain risks inherent in an
acquisition strategy, such as increasing leverage and debt service requirements
(to the extent that the Company elects to finance its acquisitions with debt)
and difficulties associated with combining disparate company systems and
cultures, could adversely affect the Company's ability to integrate acquired
businesses. The process of integrating acquired companies may involve unforeseen
difficulties and may require a disproportionate amount of management's attention
and financial and other resources. Moreover, increased competition for
acquisition candidates may develop, in which event fewer acquisition
opportunities may be available to the Company and acquisition costs for the
opportunities that are available may be higher. There can be no assurance that
any business acquired in the future will achieve anticipated revenues and
earnings. In addition, the size, timing and integration of such acquisitions may
cause substantial fluctuations in the Company's operating results from quarter
to quarter. To the extent that the Company chooses to enter particular markets
by establishing new operations, its results may be adversely affected by the
increased time required for such operations to achieve profitability. Future
internal growth will depend on a number of factors, including the effective and
timely initiation and development of client relationships, the availability of
additional accommodations on acceptable terms, the maintenance of the high
quality of services the Company provides to its guests, and the recruitment,
training, motivation and retention of qualified employees.

8
<PAGE> 10

Sustaining the Company's growth and expansion will require substantial
enhancements to the Company's operational and financial systems and controls as
well as additional administrative, operational and financial resources. There
can be no assurance that the Company will be able to manage its expanding
operations successfully or that it will be able to maintain or accelerate its
growth, and any failure to do so could have a material adverse effect on the
Company's business, financial condition and results of operations.

RISKS RELATED TO ACQUISITION FINANCING

The Company may choose to finance future acquisitions by issuing shares of
Common Stock for a portion or all of the consideration to be paid. In the event
that the Common Stock does not maintain a sufficient market value, or potential
acquisition candidates otherwise are unwilling to accept Common Stock as part of
the consideration for the sale of their businesses, the Company might not be
able to utilize Common Stock as consideration for acquisitions and would be
required to utilize more of its cash resources, if available, in order to
maintain its acquisition program. If the Company does not have sufficient cash
resources, its growth could be limited unless it could obtain additional capital
through debt or equity financings. While the Company currently has a $10 million
revolving credit facility to finance acquisitions, there can be no assurance
that this credit facility will be sufficient for the Company's acquisition
financing needs in the near term, or that additional financing will be available
if and when needed or on terms acceptable to the Company. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources -- BridgeStreet." The inability of
the Company to use its Common Stock as consideration for future acquisitions or
to obtain additional financing for acquisitions could have a material adverse
effect on the Company's business, financial condition and results of operations.
In addition, there can be no assurance that future issuances of Common Stock in
connection with acquisitions will not be dilutive to the Company's stockholders.

MARKET ACCEPTANCE OF BRAND NAME

BridgeStreet has yet to complete the integration of the Founding Companies
and, as a result, has limited history upon which to gauge client acceptance of
its combined operations. Further, the Company will compete against other
companies with substantially greater brand name recognition, and there can be no
assurance that the Company will be able to persuade clients of such competitors
to use the Company's services. The failure of the Company to successfully
establish and promote "BridgeStreet" as a recognized brand name capable of
attracting sufficient numbers of clients, or the receipt of adverse publicity
relating to the Company's brand name, could have a material adverse effect on
the Company's business, financial condition and results of operations. See
"Business -- Sales and Marketing" and "-- Competition."

DEPENDENCE ON THIRD PARTIES

BridgeStreet generally leases its accommodations from residential property
managers. The Company's profitability largely depends on its ability to lease
accommodations on favorable terms, and local or regional declines in either
vacancy rates or new apartment construction could lead to an increase in leasing
costs or an inability to satisfy client demand. The Company also leases the
furniture used in its accommodations from furniture rental companies, which may
increase their prices, restrict the Company's flexibility in renting greater or
lesser amounts of furniture, or otherwise impose unfavorable conditions on the
Company's ability to customize the furnishings in its accommodations. The
Company's reliance on third party vendors, assuming the occurrence of any of the
events described above, would negatively affect the Company's operating margins
and could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Business -- Properties" and
" -- Accommodations and Services."

MARKET CONDITIONS MAY AFFECT PROFITABILITY

The Company's operating results depend primarily on the difference, or
"spread," between the rental rates it charges its clients for accommodations and
the lease amounts it pays to the owners or managers of such accommodations. The
rates that the Company is able to charge its clients in a given market can be
expected to fluctuate based in part on conditions existing within the lodging
industry as a whole, including the

9
<PAGE> 11

occupancy rates of, and average daily rates being charged by, hotels and other
competitors. To the extent competitors in a given market were to exert downward
pressure on the rates that the Company is able to charge its clients, the
Company's aggregate "spread" could decrease. In addition, while the Company
seeks to manage the risks of fluctuating rates by "matching" its rental
obligations with the length of its clients' stays through flexible lease
arrangements, competitive rental market conditions could force the Company to
enter into longer-term, fixed rate leases in order to establish or protect its
unit inventory. The fixed rates in such leases also might lead to a reduction in
the Company's "spread" in the event of downward trends in lodging prices. A
reduction in the Company's "spread," as a result of either lower average daily
rates charged by competitors or longer-term leases entered into by the Company,
could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Business -- Industry Overview" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

FACTORS AFFECTING TRAVEL, SEASONALITY AND CYCLICALITY

The Company's operations are subject to events generally affecting levels
of business and leisure travel, including business cycles, political changes and
technological advances. The Company cannot predict the likelihood of occurrence
of any such events. To the extent any such event significantly reduces travel,
there could be a material adverse effect on the Company's business, financial
condition and results of operations. The Company typically experiences a decline
in earnings during its first quarter due to a decrease in business travel
following the holiday season and travel disruptions caused by winter weather. As
a general matter, due to (i) the Company's reliance on corporate clients and
(ii) the strong correlation between the lodging industry's performance and
macroeconomic conditions, the Company may be subject to cyclical changes in
revenues and profits in response to changes in the national economy or the
economies of the regions in which it operates. See "Management's Discussion of
Financial Condition and Results of Operations -- Seasonality."

COMPETITION

The lodging industry generally, and the flexible accommodation services
industry in particular, is highly competitive. Providers of flexible
accommodation services compete with each other and with traditional hotels,
motels, and all-suite and extended-stay hotels, primarily on the basis of
location, availability, price and quality of accommodations, brand name
recognition, and quality and scope of service. The Company competes with other
flexible accommodation service providers both for clients and for possible
acquisitions. The Company expects its business to become more competitive as
existing competitors expand and new competitors enter the industry. Moreover,
because the financial barriers to entry are relatively low in the flexible
accommodation services industry, entities that maintain a vendor-vendee
relationship with companies in this industry, such as real estate managers or
furniture rental businesses, have entered the industry and more such entities
may decide to enter the industry in the future. Certain of the Company's
existing competitors have, and any new competitors that enter the industry may
have, access to significantly greater financial resources than the Company. In
particular, Oakwood Corporate Housing, Inc. ("Oakwood"), a flexible
accommodation services provider which currently rents a substantially larger
number of accommodations than the Company, is affiliated with R&B Realty Group,
the nation's tenth largest apartment management company. This affiliation gives
Oakwood access to apartment communities and capital that may be unavailable to
the Company. Competitive market conditions could have a material adverse effect
on the Company's business, financial condition and results of operations. See
"Business -- Competition."

DEPENDENCE ON KEY PERSONNEL

BridgeStreet's day-to-day operations depend on the continuing efforts of
its executive officers and the senior management of the Company's operating
subsidiaries. In particular, the Company depends on: William N. Hulett, III, its
President and Chief Executive Officer; Rocco A. Di Lillo, its Vice President and
Chief Operating Officer; and Mark D. Gagne, its Chief Financial Officer and
Treasurer. While the Company has entered into employment agreements with these
individuals, there can be no assurance that the Company will be able to retain
the services of any of them. If any of these individuals does not continue in
his management role following this offering and if the Company is unable to
attract and retain qualified replacements, there

10
<PAGE> 12

could be a material adverse effect on the Company's business, financial
condition and results of operations. Each of the employment agreements with
these individuals contains non-competition covenants with the Company. See
"Management."

LICENSING AND TAX ISSUES

As a lessee of its accommodations, BridgeStreet believes that it and its
employees are either outside the purview of, exempted from or in compliance with
laws in the jurisdictions in which the Company operates requiring real estate
brokers to hold licenses. However, there can be no assurance that the Company's
position in any jurisdiction where it believes itself to be excepted or exempted
will be upheld if challenged or that any such jurisdiction will not amend its
laws to specifically require the Company and/or one or more of its employees to
be licensed brokers. Moreover, there can be no assurance that the Company will
not operate in the future in additional jurisdictions requiring such licensing.
If the Company were found to have failed to comply with brokerage licensing
laws, there could be a material adverse effect upon the Company's business,
financial condition and results of operations.

The Company provides flexible accommodation services for extended periods
in leased as opposed to fixed-location accommodations. As a result, in some of
the jurisdictions in which the Company operates, the Company believes that it is
exempt from charging certain guests the sales and "bed" taxes that many
jurisdictions require fixed-location lodging providers to charge their overnight
guests. The imposition of a sales or "bed" tax requirement on the Company in
instances where the Company currently does not charge such taxes, or the pursuit
by taxing authorities of arrearages and penalties with respect to prior periods
during which the Company did not collect and remit such taxes, could have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business -- Regulation and Tax."

CONTROL BY DIRECTORS, EXECUTIVE OFFICERS AND PRINCIPAL STOCKHOLDERS

Upon completion of this offering, the Company's directors, executive
officers and principal stockholders, together with their affiliates, will
beneficially own approximately 53.8% of the Company's outstanding shares of
Common Stock (approximately 51.0% if the Underwriters exercise their
over-allotment option in full). As a result, these stockholders, if acting
together, will have the ability to influence the outcome of corporate actions
requiring stockholder approval, including the election of directors and the
approval of significant corporate transactions, such as a merger or sale of
substantially all of the Company's assets, irrespective of how other
stockholders of the Company may vote. This concentration of ownership may have
the effect of delaying or preventing a change in control of the Company. See
"Management" and "Principal and Selling Stockholders."

POSSIBLE FUTURE SALES OF SHARES

Sales of substantial amounts of Common Stock in the public market after
this offering under Rule 144 under the Securities Act of 1933, as amended (the
"Securities Act"), or otherwise, or the perception that such sales could occur,
may adversely affect prevailing market prices of the Common Stock and could
impair the future ability of the Company to raise capital through an offering of
its equity securities or to effect acquisitions using shares of its Common
Stock. Prior to this offering, the Company had outstanding 5,475,000 shares of
Common Stock, of which 915,000 are being offered by the Selling Stockholders in
this offering. The remaining 4,560,000 shares are "restricted securities" within
the meaning of Rule 144. Subject to the contractual lockup provisions discussed
below and unless the resale of the shares is registered under the Securities
Act, these shares may not be sold in the open market until after the first
anniversary of the transaction in which they were acquired, and then only in
compliance with the applicable requirements of Rule 144. See "Shares Eligible
for Future Sale."

The Company and each of its directors, director nominees, executive
officers and existing stockholders have agreed with the Representatives of the
Underwriters not to sell or otherwise dispose of any shares of Common Stock, or
any securities convertible into or exercisable or exchangeable for shares of
Common Stock (subject, in the case of the Company, to an exception for the grant
of options under the Company's Equity Incentive Plan and Directors' Plan (both
as defined herein) or in connection with acquisitions), for a period of

11
<PAGE> 13

180 days after the date of this Prospectus without the written consent of the
Representatives. See "Shares Eligible for Future Sale" and "Underwriting."

CERTAIN ANTI-TAKEOVER PROVISIONS

The Company's Certificate of Incorporation and By-Laws require that any
action required or permitted to be taken by stockholders of the Company must be
effected at a duly called annual or special meeting of stockholders and may not
be effected by any consent in writing, and require reasonable advance notice by
a stockholder with respect to a proposal or director nomination such stockholder
desires to present at any such meeting. Special meetings of stockholders may be
called only by the President or Chairman of the Company or by the Board of
Directors. In addition, the Board of Directors has the authority, without
further action by the stockholders, to fix the rights and preferences of, and
issue up to 5,000,000 shares of, Preferred Stock. These provisions and other
provisions of the Certificate of Incorporation and By-Laws may have the effect
of deterring unsolicited acquisition proposals or hostile takeovers or delaying
or preventing changes in control or management of the Company, including
transactions in which stockholders might otherwise receive a premium for their
shares of Common Stock over the then current market prices. In addition, these
provisions may limit the ability of stockholders to approve transactions that
they may deem to be in their best interests. The Company also is subject to
Section 203 of the Delaware General Corporation Law (the "DGCL") which, subject
to certain exceptions, prohibits a Delaware corporation from engaging in any of
a broad range of business combinations with any "interested stockholder" for a
period of three years following the date that such stockholder became an
interested stockholder. See "Description of Capital Stock."

NO PRIOR MARKET FOR COMMON STOCK AND POSSIBLE VOLATILITY OF STOCK PRICE

Prior to this offering, there has been no public market for the Common
Stock, and there can be no assurance that an active public market for the Common
Stock will develop or continue after this offering. The initial public offering
price of the Common Stock was determined by negotiations between the Company and
the Representatives of the Underwriters, and may not be indicative of the market
price for the Common Stock after this offering. See "Underwriting" for a
description of the factors considered in determining the initial public offering
price. From time to time after this offering, there may be significant
volatility in the market price for the Common Stock. Quarterly operating results
of the Company, changes in general conditions in the economy or the lodging
industry, or other developments affecting the Company or the Company's
competitors could cause the market price of the Common Stock to fluctuate
substantially. The equity markets have, on occasion, experienced significant
price and volume fluctuations that have affected the market prices for many
companies' securities and have been unrelated to the operating performance of
those companies. Any such fluctuations following completion of this offering may
adversely affect the prevailing market price of the Common Stock.

IMMEDIATE AND SUBSTANTIAL DILUTION

The purchasers of the shares of Common Stock offered hereby will experience
immediate and substantial dilution in the net tangible book value of their
shares of Common Stock in the amount of $6.37 per share, and may experience
further dilution in that value from issuances of Common Stock in connection with
future acquisitions. See "Dilution."

ABSENCE OF DIVIDENDS

The Company has never paid dividends on the Common Stock and does not
anticipate paying any dividends in the foreseeable future. Declarations of
dividends on the Common Stock will depend upon, among other things, future
earnings, if any, the operating and financial condition of the Company, its
capital requirements and general business conditions. The Company's credit
facility currently prohibits dividend payments. See "Dividend Policy."

12
<PAGE> 14

COMBINATION

The Company was incorporated in August 1996 to become a leading national
provider of flexible accommodation services. In the Combination, the Company
acquired the Founding Companies through stock-for-stock mergers and issued
4,301,000 shares of Common Stock to their former stockholders. For a description
of the transactions pursuant to which these companies were merged into
BridgeStreet, see "Certain Transactions -- Organization of the Company; The
Combination." Certain of such stockholders are Selling Stockholders in the
offering. See "Principal and Selling Stockholders."

Set forth below is a brief description of each of the Founding Companies:

Temporary Corporate Housing Columbus, Inc.: Temporary Corporate Housing
Columbus, Inc. (together with three affiliates, "TCH") was founded by Lynda D.
Clutchey and Max Holzer in 1983. TCH is headquartered in Columbus, Ohio and,
prior to its acquisition by the Company, operated its flexible accommodation
services business in the following metropolitan areas: Cincinnati, Cleveland and
Columbus, Ohio; and Pittsburgh, Pennsylvania. During its fiscal year ended
December 31, 1996, TCH had combined revenues of approximately $12.5 million, and
during December 1996 TCH's average occupancy rate was approximately 79%.

Corporate Lodgings, Inc.: Corporate Lodgings, Inc. (together with four
affiliates, "CLI") was founded by Rocco A. Di Lillo in 1987. CLI is
headquartered in Hudson, Ohio and, prior to its acquisition by the Company,
operated its flexible accommodation services business in the following
metropolitan areas: Akron, Canton and Cleveland, Ohio; Lexington and Louisville,
Kentucky; Minneapolis, Minnesota; Milwaukee, Wisconsin; Pittsburgh,
Pennsylvania; and Detroit, Michigan. During its fiscal year ended December 31,
1996, CLI had combined revenues of approximately $8.8 million, and during
December 1996 CLI's average occupancy rate was approximately 80%.

Exclusive Interim Properties, Ltd.: Exclusive Interim Properties, Ltd.
(together with an affiliate, "EIP") was founded by Melanie R. Sabelhaus in 1987.
EIP is headquartered in Baltimore, Maryland and, prior to its acquisition by the
Company, operated its flexible accommodation services business in the Baltimore,
Maryland and District of Columbia metropolitan areas. During its 12 months ended
December 31, 1996, EIP had combined revenues of approximately $8.6 million, and
during December 1996 EIP's average occupancy rate was approximately 88%.

Home Again, Inc.: Home Again, Inc. (together with two affiliates, "Home
Again") was founded by Sandra A. Brown in 1993. Home Again is headquartered in
Minneapolis, Minnesota and, prior to its acquisition by the Company, operated
its flexible accommodation services business in the Minneapolis, Minnesota and
Oklahoma City, Oklahoma metropolitan areas. During its fiscal year ended
December 31, 1996, Home Again had combined revenues of approximately $4.0
million.

Temporary Housing Experts, Inc.: Temporary Housing Experts, Inc. ("THEI")
was founded in 1991 by Connie F. and Thomas W. O'Briant. THEI is headquartered
in Memphis, Tennessee and, prior to its acquisition by the Company, operated its
flexible accommodation services business in the Memphis, Tennessee and Jackson,
Mississippi metropolitan areas. During its fiscal year ended December 31, 1996,
THEI had revenues of approximately $3.6 million, and during December 1996 THEI's
average occupancy rate was approximately 75%.

13
<PAGE> 15

USE OF PROCEEDS

The total net proceeds from this offering are estimated to be approximately
$17.5 million (approximately $20.4 million if the Underwriters' over-allotment
option is exercised in full), of which $10.7 million will be received by the
Company and $6.8 million will be received by the Selling Stockholders (assuming
an initial public offering price of $8.00 per share and after (i) deducting
estimated underwriting discounts and commissions and (ii) reimbursing American
Business Partners, LLC ("ABP") for offering expenses paid by ABP (estimated at
$2.0 million), see "Certain Transactions--Organization of the Company; ABP").
ABP is an affiliate of Paul M. Verrochi, Chairman of the Company.

The Company currently intends to use approximately (i) $1.1 million of the
net proceeds to repay certain indebtedness of the Founding Companies assumed in
connection with the Combination (which indebtedness bears interest at a weighted
average interest rate of 9.3% and matures at various dates through December
2008), (ii) $2.5 million of the net proceeds to repay amounts the Company
estimates will be outstanding under its revolving credit facility with Fleet
National Bank at the closing of this offering (which amounts bear interest at a
weighted average interest rate of 7.02% as of August 15, 1997) and (iii)
$210,000 of the net proceeds to repay indebtedness incurred to repay certain
other indebtedness of the Founding Companies (which indebtedness bears interest
at a rate of 7.6%). The Company also intends to use approximately $1.5 million
of the net proceeds to enhance its management information system capabilities.
While the Company intends to repay all amounts borrowed under its revolving
credit facility upon the closing of this offering, which amounts have been used
to fund the $1.0 million purchase price in connection with the Company's
acquisition on June 30, 1997 of the assets of a flexible accommodation services
company in Memphis, Tennessee and to fund short-term working capital
requirements, it will be able to continue to borrow funds from this facility
following the offering, subject to the terms of the credit facility agreement.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources -- BridgeStreet."

In addition, the Company intends to use approximately $223,000 of the net
proceeds to repay (i) all outstanding amounts due under a loan made to the
Company by the spouse of one of the Company's directors (which loan bears
interest at a rate of 8.0% and had a principal balance of approximately $37,000
as of July 31, 1997), (ii) the outstanding balance under a personal line of
credit maintained by one of the Company's directors that was used to finance
certain working capital requirements of one of the Founding Companies (which
balance bears interest at a rate of 8.25% and aggregated approximately $11,000
as of July 31, 1997), and (iii) approximately $175,000 to ABP for expenses
advanced in connection with the Combination. See "Certain
Transactions--Organization of the Company; ABP" and "--Transactions Involving
Officers and Directors."

The balance of the net proceeds to the Company from this offering,
approximately $5.1 million, will be used for working capital and general
corporate purposes, including possible acquisitions. Although the Company
regularly reviews strategic acquisition opportunities, the Company at this time
has no binding agreements with respect to any material acquisitions. Pending the
use of the net proceeds of this offering for the purposes described above, the
Company will invest such proceeds in short-term, interest-bearing, investment
grade securities.

DIVIDEND POLICY

Following this offering, the Company intends to retain all earnings to
finance the growth and development of its business and does not anticipate
paying cash dividends on the Common Stock in the foreseeable future. Any future
determination as to the payment of dividends on the Common Stock will be at the
discretion of the Board of Directors and will depend upon, among other things,
the Company's future earnings, if any, the operating and financial condition of
the Company, its capital requirements, general business conditions and any other
factors the Board of Directors of the Company may consider. The Company's
revolving credit facility currently prohibits dividend payments.

14
<PAGE> 16

CAPITALIZATION

The following table sets forth the capitalization of the Company as of 1997
(i) on an actual basis and (ii) as adjusted to reflect the sale of the 1,700,000
shares of Common Stock offered by the Company hereby (at an assumed initial
public offering price of $8.00 per share and after deducting estimated
underwriting discounts and commissions and estimated offering expenses payable
by the Company) and the application of the net proceeds therefrom as described
under "Use of Proceeds." This table should be read in conjunction with the
Company's Unaudited Consolidated Financial Statements as of and for the three
and six months ended June 30, 1997 and the related notes thereto included
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
JUNE 30, 1997
-----------------------
ACTUAL AS ADJUSTED
------- -----------
(IN THOUSANDS)
<S> <C> <C>
DEBT:
Current maturities of long-term debt................................. $ 49 $ --
======= =======
Long-term debt, net of current maturities............................ $ 3,344 $ --

STOCKHOLDERS' EQUITY:
Preferred Stock, $.01 par value: 5,000,000 shares authorized, none
issued or outstanding, actual and as adjusted..................... -- --
Common Stock, $.01 par value: 35,000,000 shares authorized, 5,475,000
shares issued and outstanding, actual; 7,175,000 shares issued and
outstanding, as adjusted(1)....................................... 55 72
Additional paid-in capital........................................... 18,750 29,381
Retained earnings.................................................... 580 580
-------- -------
Total stockholders' equity........................................ 19,385 30,033
-------- -------
Total capitalization......................................... $22,729 $30,033
======= =======
</TABLE>

- ---------------
(1) Excludes an aggregate of 1,100,000 shares of Common Stock reserved for
issuance under the Company's 1997 Equity Incentive Plan and Stock Plan for
Non-Employee Directors. Of this amount, 482,667 and 37,500 shares of Common
Stock will be issuable upon exercise of outstanding options under the 1997
Equity Incentive Plan and Stock Plan for Non-Employee Directors,
respectively, as of the date of this Prospectus. See "Management -- Director
Compensation" and " -- Executive Compensation; Stock Option Plan."

15
<PAGE> 17

DILUTION

The net tangible book value of the Company as of June 30, 1997 was
approximately $1.0 million, or $0.19 per share. Net tangible book value per
share represents the book value of the Company's total tangible assets less
total liabilities divided by the number of shares of Common Stock outstanding.
After giving effect to the sale by the Company of 1,700,000 shares of Common
Stock in this offering at an assumed initial public offering price of $8.00 per
share and after deducting estimated underwriting discounts and commissions and
estimated offering expenses payable by the Company, the net tangible book value
at June 30, 1997 would have been approximately $11.7 million, or $1.63 per
share. This represents an immediate increase in net tangible book value per
share of $1.44 to the existing stockholders, and an immediate dilution in net
tangible book value per share of $6.37 to new investors. The following table
illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price................................ $8.00
Net tangible book value before offering............................ $0.19
Increase attributable to new investors............................. 1.44
-----
Net tangible book value after offering............................... 1.63
-----
Dilution to new investors............................................ $6.37
=====
</TABLE>

The following table sets forth, as of June 30, 1997, the number of shares
of Common Stock purchased from the Company, the total consideration paid and the
average price per share paid by the Company's existing stockholders and by
investors purchasing shares of Common Stock offered hereby (assuming an initial
public offering price of $8.00 per share and before deducting underwriting
discounts and commissions and estimated offering expenses):

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
--------------------- ----------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders......... 5,475,000 76.3% $ 1,790,000 11.6% $ 0.33
New investors................. 1,700,000 23.7 13,600,000 88.4 $ 8.00
--------- ------ ----------- ------
Total............... 7,175,000 100.0% $15,390,000 100.0%
========= ===== =========== =====
</TABLE>

16
<PAGE> 18

SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE AND FOOTNOTE DATA)

For financial reporting purposes, TCH is presented as the acquiror of all
of the other companies acquired by BridgeStreet in the Combination.
Consequently, the Company's historical combined financial statements for periods
ended on or before December 31, 1996 are the historical combined financial
statements of TCH. The historical financial statements as of June 30, 1997 and
for the period then ended are of the Company and include the accounts of each of
the Founding Companies from its date of acquisition. The following selected
historical financial data of TCH as of December 31, 1995 and 1996 and for each
year in the three-year period ended December 31, 1996 has been derived from the
audited financial statements of TCH included elsewhere herein. The remaining
selected historical financial data of TCH and the Company has been derived from
unaudited financial statements of TCH and the Company, which have been prepared
on the same basis as the audited financial statements and, in the opinion of
management, reflect all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of that data.

<TABLE>
<CAPTION>
HISTORICAL
HISTORICAL (TCH ONLY) PRO FORMA (TCH ONLY) HISTORICAL PRO FORMA
------------------------------------------- COMBINED ------------ ------------- -------------
YEAR ENDED DECEMBER 31, YEAR ENDED SIX MONTHS ENDED JUNE 30,
------------------------------------------- DECEMBER 31, --------------------------------------------
1992 1993 1994 1995 1996 1996(1) 1996 1997 1997(1)
------ ------ ------ ------ ------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS DATA:
Revenues............ $5,627 $6,803 $8,309 $9,754 $12,502 $37,566 $5,641 $21,757 $22,924
Cost of services.... 4,520 5,312 6,475 7,354 9,088 27,945 4,186 15,974 16,797
Selling, general and
administrative
expense........... 1,328 1,373 1,628 2,064 2,327 7,334(2) 1,026 4,397 4,657(2)
Officers' stock
compensation...... -- -- -- -- -- -- -- 1,210(3) 1,210(3)
Goodwill
amortization...... -- -- -- -- -- 490(4) -- 229 245(4)
------ ------ ------ ------ ------- ------- ------ ------- -------
Operating income
(loss)............ (221) 118 206 336 1,087 1,797 429 (53) 15
Interest and other
income (expense),
net............... 11 5 21 53 89 (7)(5) 38 (6) 92(5)
------ ------ ------ ------ ------- ------- ------ ------- -------
Income (loss) before
provision for
income taxes...... (210) 123 227 389 1,176 1,790 467 (59) 107
Provision (benefit)
for income
taxes............. (84) 49 114 178 512 912(6) 204 518 593(6)
------ ------ ------ ------ ------- ------- ------ ------- -------
Net income (loss)... $ (126) $ 74 $ 113 $ 211 $ 664 $ 878 $ 263 $ (577) $ (486)
====== ====== ====== ====== ======= ======= ====== ======= =======
Net income (loss)
per share......... $ 0.12 $ (0.11) $ (0.07)
======= ======= =======
Weighted average
shares
outstanding....... 7,175,000 5,238,812 7,175,000
</TABLE>

<TABLE>
<CAPTION>
HISTORICAL (TCH ONLY)
----------------------------------------
DECEMBER 31, JUNE 30, 1997
---------------------------------------- -----------------------------
1992 1993 1994 1995 1996 ACTUAL AS ADJUSTED(7)
---- ------ ------ ------ ------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital................................ $499 $ 592 $ 496 $ 563 $ 986 $ 1,271 $ 8,575
Total assets................................... 901 1,209 1,672 2,510 2,013 28,930 35,209
Long-term debt, less current maturities........ 16 10 67 -- -- 3,344 --
Total stockholders' equity..................... 471 545 658 869 1,184 19,385 30,033
</TABLE>

See accompanying notes on following page.

17
<PAGE> 19

(1) The Pro Forma Combined Statement of Operations Data assumes that the
Combination and this offering took place at the beginning of the period.
This data is not necessarily indicative of the results the Company would
have had if these events had actually then occurred or of the Company's
future results. The Pro Forma Combined Statement of Operations Data for the
year ended December 31, 1996 excludes (i) any adjustments for the
compensation to be paid in 1997 for services to be rendered in 1997 by the
Company's Chief Executive Officer and Chief Financial Officer pursuant to
their employment agreements and (ii) non-recurring, non-cash compensation
expense recorded in the first quarter of 1997 in connection with the
accelerated vesting of restricted stock. The Pro Forma Statement of
Operations Data for the six months ended June 30, 1997 assumes the
acquisition of Home Again occurred at the beginning of the period. The pro
forma data presented herein is based on preliminary estimates, available
information and certain assumptions that management deems appropriate and
should be read in conjunction with the Company's Unaudited Pro Forma
Financial Statements and the other financial statements and notes thereto
included elsewhere in this Prospectus.
(2) Reflects the reduction of $552,000 in salary and benefits to executives of
the Founding Companies for the year ended December 31, 1996 and an increase
of $30,000 in salary and benefits for the six months ended June 30, 1997.
(3) Consists of non-recurring, non-cash compensation expense recorded in
connection with the accelerated vesting of restricted stock. This represents
a reduction of $0.23 per share in the historical consolidated statement of
operations and $0.17 per share in the pro forma statement of operations.
(4) Reflects the $490,000 and $16,000 amortization of goodwill to be recorded as
a result of the Combination for the year ended December 31, 1996 and the six
months ended June 30, 1997, respectively, assuming a 35-year amortization
period.
(5) Reflects an interest expense reduction of $158,000 for the year ended
December 31, 1996 and $97,000 for the six months ended June 30, 1997 related
to bank debt and notes payable to be repaid from the net proceeds of this
offering.
(6) Reflects (i) an increase of $373,000 in the Company's historical provision
for income taxes for the year ended December 31, 1996 to account for the
Company's estimated consolidated effective tax rate subsequent to the
Combination, after considering nondeductible goodwill amortization, and (ii)
an increase of $75,000 in the historical provision for income taxes for the
six months ended June 30, 1997 to account for the estimated consolidated
1997 effective tax rate, after considering nondeductible goodwill.
(7) Reflects the issuance of 1,700,000 shares of Common Stock by the Company in
this offering and the application of the net proceeds as described under
"Use of Proceeds."

18
<PAGE> 20

SELECTED INDIVIDUAL FOUNDING COMPANY FINANCIAL AND OTHER DATA
(DOLLARS IN THOUSANDS)

The selected historical and pro forma financial data presented below for
the individual Founding Companies (including their respective affiliates, if
any) is derived from, and should be read in conjunction with, their respective
audited financial statements and related notes thereto appearing elsewhere in
this Prospectus.

- ---------------

(2) Includes 19 condominium units owned by Exclusive Interim Properties, Ltd.
for all periods presented.

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<PAGE> 21

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Company's
Unaudited Pro Forma Combined Financial Statements and Consolidated Financial
Statements and the Founding Companies' Financial Statements and the related
notes thereto appearing elsewhere in this Prospectus.

INTRODUCTION

BridgeStreet was incorporated in August 1996 with the goal of becoming a
leading national provider of flexible accommodation services. The Company plans
to achieve this goal by implementing an aggressive acquisition program and a
national operating strategy designed to increase internal revenue growth, cost
efficiencies and profitability. In the first quarter of 1997, BridgeStreet
acquired by merger the five Founding Companies in the Combination.

The Company's revenues are derived primarily from renting accommodations to
guests for extended periods. Revenues depend on the number of accommodations the
Company has available under lease, the occupancy rate and the rate charged. The
rate charged is a function of, among other factors, (i) the type, size and
location of the accommodation being rented, (ii) the rental period and (iii) any
additional amenities made available to the guest during his or her stay. Cost of
services consists primarily of lease payments for accommodations and their
furnishings, and expenses associated with cleaning, maintaining and providing
utilities to accommodations. Selling, general and administrative expense
consists primarily of compensation and related benefits for management and key
employees, administrative salaries and benefits, office rents and utilities,
professional fees and advertising.

Prior to their acquisition by BridgeStreet, the Founding Companies were
managed as independent private businesses. As such, their historical results of
operations reflect different tax structures (i.e., S corporations and C
corporations) which have influenced, among other things, their historical levels
of owners' compensation and benefits. Certain Founding Company owners agreed to
reductions in their compensation and benefits in connection with the
Combination.

BridgeStreet currently is in the process of integrating the Founding
Companies and their operations and administrative functions. This integration
process may present opportunities to (i) enhance revenues through the geographic
cross-sell capabilities that each of the Founding Companies can provide to its
existing clients and (ii) reduce costs through, among other things, the
elimination of duplicative functions and the receipt of greater volume discounts
from vendors. However, integration also will necessitate additional costs and
expenditures related to corporate management and administration, public company
operations, systems integration and facilities expansion. As a result of these
possible cost savings and various additional costs, historical operating results
may not be comparable to, or indicative of, future performance. There can be no
assurance that the Company's integration efforts will be successful. See "Risk
Factors -- Limited Combined Operating History."

For financial reporting purposes, Temporary Corporate Housing Columbus,
Inc. (together with its three affiliates) is presented as the acquiror of the
other Founding Companies. Consequently, the Company's historical financial
statements for periods ended on or before December 31, 1996 are the historical
financial statements of TCH.

RESULTS OF OPERATIONS - BRIDGESTREET INTERIM RESULTS

Three and Six Months Ended June 30, 1997 Compared to Three and Six Months
Ended June 30, 1996

BridgeStreet's Consolidated Statements of Operations for the three and six
months ended June 30, 1997 contained in this Prospectus include the unaudited
accounts of TCH, CLI, EIP and THEI, all of which were acquired on January 2,
1997. In addition, the operating results for the three months ended June 30,
1997 include the unaudited accounts of Home Again, which was acquired on March
31, 1997. The Statement of Operations of BridgeStreet for the three and six
months ended June 30, 1996 included in this Prospectus consist of the unaudited
accounts of only TCH, the designated accounting acquiror. Consequently, the 1996

20
<PAGE> 22

and 1997 three- and six-month periods are not comparable, and the comparison of
the periods below is not indicative of future results of operations. The
Company's Consolidated Balance Sheet as of June 30, 1997 reflects the accounts
of all the Founding Companies and Corporate Housing Services, Inc. ("CHS"), a
flexible accommodation services provider acquired on June 30, 1997. The
acquisition of CHS has been accounted for as a purchase. Accordingly, the
Statement of Operations for the three and six months ended June 30, 1997 do not
include the operating results of CHS.

Revenues. Revenues increased $16.2 million, or 286%, from $5.6 million for
the six months ended June 30, 1996 to $21.8 million for the six months ended
June 30, 1997. For the three months ended June 30, revenues increased $9.7
million, or 321%, from $3.0 million in 1996 to $12.7 million in 1997. The
increase in revenues primarily was the result of an increase in the number of
accommodations rented during the periods due to the acquisition in the
Combination of four flexible accommodation service providers and the growth in
existing markets. Three of the providers were acquired on January 2, 1997 and
the fourth was acquired on March 31, 1997.

Cost of Services. Cost of services increased $11.8 million, or 282%, from
$4.2 million for the six months ended June 30, 1996 to $16.0 million for the six
months ended June 30, 1997. For the three months ended June 30, cost of services
increased $6.8 million, or 308%, from $2.2 million in 1996 to $9.0 million in
1997. Cost of services as a percentage of revenues decreased from 74.2% for the
six months ended June 30, 1996 to 73.4% for the six months ended June 30, 1997.
Cost of services as a percentage of revenues for the three months ended June 30
decreased from 73.2% in 1996 to 70.8% in 1997. The dollar increase in cost of
services was primarily related to the acquisition of four flexible accommodation
service providers in the Combination. Cost of services decreased as a percentage
of revenues primarily as a result of increased rental rates and higher occupancy
rates.

Selling, General and Administrative Expense. Selling, general and
administrative expense increased $3.4 million, or 329%, from $1.0 million for
the six months ended June 30, 1996 to $4.4 million for the six months ended June
30, 1997. For the three months ended June 30, selling, general and
administrative expense increased $1.9 million, or 350%, from $543,000 in 1996 to
$2.4 million in 1997. Selling, general and administrative expense as a
percentage of revenues increased from 18.2% for the six months ended June 30,
1996 to 20.2% for the six months ended June 30, 1997. Selling, general and
administrative expense as a percentage of revenues for the three months ended
June 30 increased from 18.1% in 1996 to 19.3% in 1997. The dollar increase in
selling, general and administrative expense primarily was a result of the
Combination. The increase in such expense as a percentage of revenues resulted
from hiring corporate personnel and acquiring in the Combination certain
companies that had higher selling, general and administrative expenses as a
percentage of revenues. The Statement of Operations for the six months ended
June 30, 1997 includes $1.2 million of non-recurring, non-cash compensation
expense relating to the accelerated vesting of restricted stock held by
executive officers. The compensation charge represents the difference between
the value of stock issued to officers and the amount paid.

Income Tax Provision. For the six months ended June 30, 1997, the Company
recorded a tax provision of $518,000 on a pre-tax loss of $59,000 compared to a
tax provision of $204,000 on pre-tax income of $467,000 for the six months ended
June 30, 1996. The tax provision for the six months ended June 30, 1997 is based
on the Company's estimated consolidated effective tax rate for the 1997 fiscal
year after considering nondeductible goodwill.

LIQUIDITY AND CAPITAL RESOURCES - BRIDGESTREET

For the six months ended June 30, 1997, net cash provided by operating
activities totaled $1.1 million. Net cash used in investing activities during
the six months ended June 30, 1997 was $1.6 million, primarily for acquisitions
(as described below) and the purchase of operating stock and equipment required
in the Company's business. Net cash provided by financing activities during the
six months ended June 30, 1997 was $1.6 million, primarily from an increase in
borrowings under the line of credit partially offset by repayments of amounts
due stockholders, long-term debt and costs associated with this offering. Cash,
cash equivalents and

21
<PAGE> 23

investments in short-term marketable securities increased by $1.1 million during
the period and totaled $2.0 million at June 30, 1997.

The Company has a revolving credit facility with Fleet National Bank, the
material terms of which are summarized as follows. The facility provides the
Company with a revolving line of credit of up to $10.0 million, secured by
guarantees by certain material subsidiaries of the Company and a pledge of the
capital stock of all of the Company's wholly-owned operating subsidiaries. The
credit facility may be used for refinancing of the Company's subsidiaries'
indebtedness, post-offering acquisitions and working capital. Loans made under
the credit facility bear interest, at the Company's option, at the bank's prime
lending rate, 1.25% above the Eurodollar rate or a 30-day LIBOR rate. The credit
facility will terminate on March 31, 2002, or sooner at the discretion of the
Company, and all amounts outstanding thereunder (if any) will be due upon such
termination. The credit facility (i) prohibits the payment of dividends and
other distributions by the Company, (ii) generally will not permit the Company
to incur or assume other indebtedness and (iii) requires the Company to comply
with certain financial covenants. The Company had $2.1 million and $2.2 million
outstanding at June 30, 1997 and July 28, 1997, respectively.

On March 31, 1997 the Company acquired Home Again in a stock-for-stock
merger and issued 475,000 shares of Common Stock as merger consideration. The
acquisition has been accounted for using the purchase method of accounting. The
Company has recorded approximately $2.3 million of goodwill related to the
transaction that will be amortized over a period of 35 years. Home Again had
combined revenues of approximately $4.0 million for the year ended December 31,
1996 and approximately $1.2 million for the three months ended March 31, 1997.
Home Again's results of operations for the three months ended June 30, 1997 are
reflected in the Company's Consolidated Statements of Operations for the three-
and six-month periods ended June 30, 1997.

On June 30, 1997 the Company acquired for cash all the assets of CHS, a
provider of flexible accommodation services in the Memphis, Tennessee
metropolitan area. CHS had revenues of approximately $2.5 million for the year
ended December 31, 1996. The cost of the acquisition was $1.0 million and was
funded through borrowings from the Company's revolving line of credit. The
acquisition price was allocated to net assets of $100,000 and to goodwill of
$900,000. The results of operations for CHS are not reflected in the Company's
Consolidated Statements of Operations for the 1997 periods.

The Company's primary sources of funding to date have been cash flow from
operations, commercial credit facilities and loans from affiliates. The Company
anticipates that in addition to the net proceeds from this offering, cash flow
from operations and borrowings under its credit facility will be its principal
future sources of funding. The Company's principal future uses of cash, in
addition to cash used in operating activities, are likely to be repayment of
debt, investment in the Company's management information systems, funding of
acquisitions and expansion into new markets. See "Use of Proceeds." The Company
does not plan to make any material capital expenditures for leasehold
improvements. While there can be no assurance, management believes that cash
flow from operations, funds from the revolving credit facility and the net
proceeds to the Company from this offering will be adequate to meet the
Company's capital requirements for the next 12 months, depending on the size and
methods of financing potential acquisitions.

SEASONALITY

Quarterly earnings may be affected by the timing of certain holidays,
business and vacation patterns, weather conditions, economic factors and other
considerations affecting travel. Corporate relocation activity peaks in the
summer months and declines significantly during the first part of the first
quarter. Long-term consulting activity tends to follow a similar pattern, but
not to the same extent. The Company expects to realize lower revenues, operating
income and net income during the first quarter. For example, revenues at TCH for
the three months ended March 31, 1996, represented approximately 21.1% of its
revenues for the year ended December 31, 1996. Likewise, TCH's operating income
and net income for this three-month period represented approximately 15.3% and
16.4% of 1996 operating income and net income, respectively.

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<PAGE> 24

RESULTS OF OPERATIONS -- COMBINED

The Combined Founding Company Statements of Operations data for the years
ended December 31, 1994, 1995 and 1996 do not purport to present the combined
Founding Companies in accordance with generally accepted accounting principles,
but represent merely a summation of the data of the individual Founding
Companies on a historical basis and do not include the effects of pro forma
adjustments. This data will not be comparable to and may not be indicative of
the Company's post-Combination results of operations because (i) the Founding
Companies historically were not under common control or management and had
different tax structures during the periods presented, (ii) the Company used the
purchase method of accounting to reflect the Combination and (iii) the Founding
Companies were not all acquired at the same time.

The following table sets forth certain unaudited combined data of the
Founding Companies and that data as a percentage of revenues on a historical
basis and excludes the effects of pro forma adjustments for the periods
indicated (dollars in thousands):

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
1994 1995 1996(1)
----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Revenues..................... $18,925 100.0% $25,998 100.0% $37,566 100.0%
Cost of services............. 14,048 74.2 19,121 73.5 27,945 74.4
Selling, general and
administrative expense..... 4,413 23.3 6,099 23.5 7,883 21.0
------- ----- ------- ----- ------- -----
Operating income............. $ 464 2.5% $ 778 3.0% $ 1,738 4.6%
======= ===== ======= ===== ======= =====
</TABLE>

- ---------------
(1) Data for the period ending December 31, 1996 includes data derived from
EIP's unaudited three-month period ended March 31, 1996 and the audited
nine-month period ended December 31, 1996. Data for 1995 and 1994 includes
data for EIP's fiscal years ended March 31, 1996 and March 31, 1995,
respectively.

1996 Compared to 1995

Revenues. Revenues increased $11.6 million, or 44.5%, from $26.0 million
in 1995 to $37.6 million in 1996. Revenues for each of the Founding Companies
increased during this period. The increase primarily was a result of an increase
in the number of accommodations rented during the year, both in existing markets
and in new markets.

Cost of Services. Cost of services increased $8.8 million, or 46.1%, from
$19.1 million in 1995 to $27.9 million in 1996. Cost of services as a percentage
of revenues increased slightly from 73.5% in 1995 to 74.4% in 1996. The dollar
increase in cost of services resulted primarily from an increase in the number
of accommodations leased during the year. Cost of services as a percentage of
revenues was adversely affected by certain pricing practices at one of the
Founding Companies, which since have been discontinued, as well as higher
leasing and maintenance costs and lower occupancy rates resulting from the entry
by another Founding Company into new markets.

Selling, General and Administrative Expense. Selling, general and
administrative expense increased $1.8 million, or 29.3%, from $6.1 million in
1995 to $7.9 million in 1996, primarily as a result of an increase in staffing
required to support the increased number of accommodations, higher compensation
paid to owners of the Founding Companies and increased overhead costs associated
with entering new markets. Selling, general and administrative expense decreased
as a percentage of revenues from 23.5% in 1995 to 21.0% in 1996, generally as a
result of spreading the fixed costs of the Founding Companies' operations over a
larger revenue base.

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<PAGE> 25

1995 Compared to 1994

Revenues. Revenues increased $7.1 million, or 37.4%, from $18.9 million in
1994 to $26.0 million in 1995. Revenues for each of the Founding Companies
increased during this period. The increase primarily was a result of an increase
in the number of accommodations rented during the year, both in existing markets
and in new markets. In addition, Home Again initiated operations in mid-1993,
and as a result did not have its operations fully implemented during 1994.

Cost of Services. Cost of services increased $5.1 million, or 36.1%, from
$14.0 million in 1994 to $19.1 million in 1995 as a result of the increase in
the number of accommodations leased during the year. Cost of services as a
percentage of revenues decreased slightly from 74.2% in 1994 to 73.5% in 1995.

Selling, General and Administrative Expense. Selling, general and
administrative expense increased $1.7 million, or 38.2%, from $4.4 million in
1994 to $6.1 million in 1995, and increased slightly as a percentage of revenues
from 23.3% in 1994 to 23.5% in 1995. The increase both in dollars and as a
percentage of revenues primarily was a result of an increase in staffing
required to support the increased number of accommodations, higher compensation
paid to certain owners of the Founding Companies and increased overhead costs
associated with entering new markets.

LIQUIDITY AND CAPITAL RESOURCES -- COMBINED

On a combined basis, the Founding Companies generated $1.6 million and
$700,000 of net cash from operating activities during 1995 and 1996,
respectively. TCH and EIP generated the most cash flow from operating activities
in 1995 (approximately $620,000 and $403,000, respectively); and Home Again and
EIP generated the most cash flow from operating activities in 1996
(approximately $562,000 and $293,000, respectively). Net cash used in investing
activities by the Founding Companies was $791,000 during each of 1995 and 1996.
Cash used in investing activities primarily was for the purchase of operating
stock and property and equipment. EIP and THEI used the most cash for investing
activities in 1995 (approximately $333,000 and $138,000, respectively); and EIP
and Home Again used the most cash for investing activities in 1996
(approximately $337,000 and $335,000, respectively). Net cash used in financing
activities by the Founding Companies on a combined basis was approximately
$146,000 and $341,000 during 1995 and 1996, respectively. Net cash used in
financing activities primarily was for the repayment of notes to stockholders,
payment of long-term debt and distributions to stockholders. TCH and EIP used
the most cash for financing activities in 1995 (approximately $156,000 and
$74,000, respectively); and TCH and Home Again used the most cash for financing
activities in 1996 (approximately $270,000 and $96,000, respectively). The
combined cash and cash equivalents of the Founding Companies decreased by
$400,000, from $1.4 million in 1995 to $1.0 million in 1996. At December 31,
1996, three of the Founding Companies had a working capital deficit aggregating
approximately $700,000.

IMPACT OF INFLATION

Due to the low levels of inflation experienced in 1994, 1995 and 1996,
inflation did not have a significant effect on the combined results of the
Founding Companies in those years.

INDIVIDUAL FOUNDING COMPANIES

RESULTS OF OPERATIONS -- TEMPORARY CORPORATE HOUSING

1996 Compared to 1995 and 1995 Compared to 1994

Revenues. Revenues increased $2.7 million, or 28.2%, from $9.8 million in
1995 to $12.5 million in 1996. This increase was a result of an increase in the
number of accommodations rented during the year, an improvement in the occupancy
rate and an increase in the rates realized by TCH. Revenues increased $1.4
million, or 17.4%, from $8.3 million in 1994 to $9.8 million in 1995. This
increase was a result of an increase in the number of accommodations rented
during the year, an improvement in the occupancy rate and an increase in the
rates realized by TCH.

24
<PAGE> 26

Cost of Services. Cost of services increased $1.7 million, or 23.6%, from
$7.4 million in 1995 to $9.1 million in 1996, primarily as a result of an
increase in the number of accommodations leased and the cost of furnishing such
accommodations during the year. Cost of services as a percentage of revenues
decreased from 75.4% in 1995 to 72.7% in 1996 as a result of an improved
occupancy rate and an increase in the rates realized by TCH. Cost of services
increased $879,000, or 13.6%, from $6.5 million in 1994 to $7.4 million in 1995,
primarily as a result of an increase in the number of accommodations leased and
the cost of furnishing such accommodations during the year. Cost of services as
percentage of revenues decreased from 77.9% in 1994 to 75.4% in 1995 as a result
of an improved occupancy rate and an increase in the rates realized by TCH.

Selling, General and Administrative Expense. Selling, general and
administrative expense increased $263,000, or 12.7%, from $2.1 million in 1995
to $2.3 million in 1996, primarily as a result of increased compensation to the
stockholders, administrative payroll and sales commissions. Selling, general and
administrative expense as a percentage of revenues decreased from 21.2% in 1995
to 18.6% in 1996, primarily as a result of spreading the fixed costs of the
company's operations over a larger revenue base. Selling, general and
administrative expense increased $436,000, or 26.8%, from $1.6 million in 1994
to $2.1 million in 1995. Selling, general and administrative expense increased
as a percentage of revenues increased from 19.6% in 1994 to 21.2% in 1995. This
increase both in dollars and as a percentage of revenues primarily was a result
of increased compensation to the stockholders, administrative payroll and sales
commissions.

LIQUIDITY AND CAPITAL RESOURCES -- TEMPORARY CORPORATE HOUSING

For the three years ended December 31, 1996, TCH generated $873,000 in net
cash flow from operating activities. Increases in cash flow primarily were
generated from net income plus depreciation and amortization of $1.2 million,
while reductions in cash flow were due to increases in accounts receivable
balances of $401,000 attributable to TCH's increased sales levels. TCH also
expended $374,000 during this period, primarily for purchases of operating stock
and property and equipment. Cash used in financing activities was $432,000
during this period and primarily was attributable to loans to stockholders and a
dividend to stockholders of $349,000.

At December 31, 1996, TCH had working capital of $986,000. TCH historically
has funded its operations from cash provided by operating activities. At
December 31, 1996, TCH had cash and cash equivalents of $598,000 with no
outstanding indebtedness.

RESULTS OF OPERATIONS -- CORPORATE LODGINGS

1996 Compared to 1995 and 1995 Compared to 1994

Revenues. Revenues increased $2.7 million, or 45.4%, from $6.1 million in
1995 to $8.8 million in 1996. This increase was a result of an increase in the
number of accommodations rented during the year, an improvement in the occupancy
rate and an increase in the rates realized by CLI. Revenues increased $2.0
million, or 49.1%, from $4.1 million in 1994 to $6.1 million in 1995. This
increase was a result of an increase in the number of accommodations rented
during the year and an increase in the rates realized by CLI.

Cost of Services. Cost of services increased $2.1 million, or 50.9%, from
$4.0 million in 1995 to $6.1 million in 1996. Cost of services as percentage of
revenues also increased, from 66.7% in 1995 to 69.2% in 1996. The increase both
in dollars and as a percentage of revenues primarily was a result of an increase
in the cost to lease, furnish and clean a unit. Cost of services increased $1.3
million, or 47.4%, from $2.7 million in 1994 to $4.0 million in 1995, primarily
as a result of an increase in the number of accommodations leased and the cost
of furnishing such accommodations during the year. Cost of services as
percentage of revenues decreased from 67.5% in 1994 to 66.7% in 1995 primarily
as a result of an increase in the rates realized by CLI.

Selling, General and Administrative Expense. Selling, general and
administrative expense increased $537,000, or 27.1%, from $2.0 million in 1995
to $2.5 million in 1996, primarily as a result of increased compensation to the
majority stockholder, increased sales and administrative payroll, and general
office expenses. Selling, general and administrative expense as a percentage of
revenues decreased from 32.7% in

25
<PAGE> 27

1995 to 28.6% in 1996, primarily as a result of spreading the fixed costs of the
company's operations over a larger revenue base. Selling, general and
administrative expense increased $745,000, or 60.2%, from $1.2 million in 1994
to $2.0 million in 1995. Selling, general and administrative expense as a
percentage of revenues increased from 30.4% in 1994 to 32.7% in 1995. The
increase both in dollars and as a percentage of revenues primarily was a result
of costs associated with entering the Milwaukee, Wisconsin market and expansion
within the Lexington, Kentucky market.

RESULTS OF OPERATIONS -- EXCLUSIVE INTERIM PROPERTIES

Twelve Months Ended December 31, 1996 Compared to Fiscal Year Ended March 31,
1996 and Fiscal Year Ended March 31, 1996 Compared to Fiscal Year Ended March
31, 1995

Revenues. Revenues increased $3.1 million, or 56.2%, from $5.5 million in
the fiscal year ended March 31, 1996 to $8.6 million in the 12 months ended
December 31, 1996. This increase was a result of an increase in the number of
accommodations rented. Revenues increased $1.5 million, or 37.5%, from $4.0
million in the fiscal year ended March 31, 1995 to $5.5 million in the fiscal
year ended March 31, 1996, as a result of an increase in the number of
accommodations rented during the year.

Cost of Services. Cost of services increased $2.8 million, or 65.8%, from
$4.2 million in the fiscal year ended March 31, 1996 to $7.0 million in the 12
months ended December 31, 1996, primarily as a result of an increase in the
number of accommodations leased. Cost of services as a percentage of revenues
increased from 76.9% in the fiscal year ended March 31, 1996 to 81.6% in the 12
months ended December 31, 1996. The increase in cost of services as a percentage
of revenues primarily was attributable to the effect of certain pricing
practices, which since have been discontinued. Cost of services increased $1.2
million, or 40.8%, from $3.0 million in the fiscal year ended March 31, 1995 to
$4.2 million in the fiscal year ended March 31, 1996, as a result of an increase
in the number of accommodations leased during the year. Cost of services as a
percentage of revenues increased from 75.1% in the fiscal year ended March 31,
1995 to 76.9% in the fiscal year ended March 31, 1996.

Selling, General and Administrative Expense. Selling, general and
administrative expense increased $399,000, or 40.9%, from $975,000 in the fiscal
year ended March 31, 1996 to $1.4 million in the 12 months ended December 31,
1996. Selling, general and administrative expense as a percentage of revenues
decreased from 17.7% in the fiscal year ended March 31, 1996 to 15.9% in the 12
months ended December 31, 1996, primarily as a result of spreading the fixed
costs of the company's operations over a larger revenue base. Selling, general
and administrative expense increased $80,000, or 8.9%, from $895,000 in the
fiscal year ended March 31, 1995 to $975,000 in the fiscal year ended March 31,
1996. Selling, general and administrative expense as a percentage of revenues
decreased from 22.3% in the fiscal year ended March 31, 1995 to 17.7% in the
fiscal year ended March 31, 1996, primarily as a result of spreading the fixed
costs of the company's operations over a larger revenue base.

RESULTS OF OPERATIONS -- HOME AGAIN

1996 Compared to 1995

Revenues. Revenues increased $2.5 million, or 157.0%, from $1.6 million in
1995 to $4.0 million in 1996. This increase was a result of an increase in the
number of accommodations rented during the year.

Cost of Services. Cost of services increased $1.9 million, or 144.1%, from
$1.3 million in 1995 to $3.1 million in 1996, as a result of an increase in the
number of accommodations leased during the year. Cost of services as percentage
of revenues decreased from 81.8% in 1995 to 77.7% in 1996, primarily as a result
of spreading the fixed costs of the company's operations over a larger revenue
base.

Selling, General and Administrative Expense. Selling, general and
administrative expense increased $374,000, or 176.4%, from $212,000 in 1995 to
$586,000 in 1996. The increase both in dollars and as a percentage of revenues
primarily was a result of increased compensation to the stockholder and an
increase in administrative payroll.

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<PAGE> 28

RESULTS OF OPERATIONS -- TEMPORARY HOUSING EXPERTS

1996 Compared to 1995

Revenues. Revenues increased $500,000, or 16.1%, from $3.1 million in 1995
to $3.6 million in 1996. This increase was a result of an increase in the number
of accommodations rented during the year.

Cost of Services. Cost of services increased $388,000, or 17.7%, from $2.2
million in 1995 to $2.6 million in 1996. The increase both in dollars and as a
percentage of revenues primarily was a result of an increase in the number of
accommodations leased during the year and a lower occupancy rate due to entering
a new market in August 1995.

Selling, General and Administrative Expense. Selling, general and
administrative expense increased $212,000, or 24.5%, from $866,000 to 1995 to
$1.1 million in 1996. The increase both in dollars and as a percentage of
revenues primarily was a result of increased compensation to the stockholders
and an increase in administrative payroll.

27
<PAGE> 29

BUSINESS

OVERVIEW

BridgeStreet was founded in August 1996, and in the first quarter of 1997
combined by merger five regional providers of flexible accommodation services.
The Company has achieved significant growth in recent years. On a combined
basis, units available for rent increased from 1,041 units on December 31, 1994
to 1,936 units on December 31, 1996, representing a compound annual growth rate
of 36%. In addition, pro forma net revenues increased from $18.9 million in 1994
to $37.6 million in 1996, representing a compound annual growth rate of 41%.

GROWTH STRATEGY

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<PAGE> 30

increase internal revenue growth, cost efficiencies and profitability. Key
elements of the Company's business strategy include:

National Operating Strategy. The Company has begun to implement a national
operating strategy with the following components:

- Adopt Best Practices. The Company will continue reviewing its operations
at the local and regional operating levels in order to identify "best
practices" that can be implemented throughout its operations. Areas where
"best practices" may be utilized include accommodation pricing, occupancy
management and cash flow management. BridgeStreet believes the
implementation of these practices will enable the Company to provide
superior customer service and maximize sales opportunities.

- Implement Management Information System. BridgeStreet intends to develop
and implement a centrally-controlled, computerized management information
system that will integrate the Company's

29
<PAGE> 31

customer contact, sales, marketing, finance, telephone, property management,
internet access, lease management and reservation functions. BridgeStreet
believes that the proposed system will enable it to deliver superior customer
service, more efficiently manage its operations and achieve cost savings.

ACQUISITION AND EXPANSION STRATEGY

Given the highly fragmented nature of the flexible accommodation services
industry, the Company believes that there are numerous potential acquisition
targets both within markets currently served by the Company and in other major
metropolitan areas. The Company intends to implement an aggressive acquisition
program aimed at (i) expanding into major metropolitan markets not currently
served by the Company and (ii) acquiring other flexible accommodation service
providers in its existing markets to enhance its market position.

In new markets, the Company will target for acquisition one or more leading
local or regional flexible accommodation service providers. Generally, these
companies will be run by successful entrepreneurs, whom BridgeStreet will
endeavor to retain after the acquisitions, and will be of sufficient size to
provide the basis for the Company's future expansion within the new markets.
Each of the Company's acquisition candidates will be expected to demonstrate
potential for increased revenues and profitability. The Company also will
evaluate certain qualitative characteristics of acquisition candidates,
including their reputations in their respective geographic regions, the size and
strength of their customer bases, the quality and experience levels of their
operational management, and their operating histories. In addition, the Company
may enter a new market by establishing a new operation or forming a strategic
alliance.

In existing markets, the Company will seek to acquire flexible
accommodation service providers that meet the Company's criteria with respect to
reputation, customer base, management and operating history. Some of the
companies acquired within existing markets will be large enough to retain much
of their own operating and management infrastructures. Other, generally smaller
acquired companies will be combined with BridgeStreet's existing operations to
eliminate redundant functions and improve profitability. Acquisitions in
existing markets should improve revenues and profitability by enhancing regional
brand name recognition and leveraging the economies of scale associated with a
larger business enterprise.

The Company believes that acquisition by BridgeStreet will be attractive to
many smaller independent operators because of (i) the Company's strategy to
create a large, professionally-managed company with national brand name
recognition and a reputation for quality service and customer satisfaction, (ii)
the experience of its officers with industry consolidations, (iii) the Company's
decentralized operating strategy, (iv) the Company's increased visibility and
access to financial resources as a public company, (v) the potential for
increased profitability due to centralized administrative functions, enhanced
systems capabilities and access to increased marketing resources, (vi) the
ability of the acquired companies to participate in the Company's growth and
expansion, and (vii) the strong desire of the owners of many privately-held
companies for liquidity and a return on their investments in their companies.

Based on BridgeStreet's experience in the Combination, BridgeStreet
believes the senior executives of the Founding Companies will be instrumental in
establishing new markets for BridgeStreet and in identifying and completing
future acquisitions. Prior to the Combination, the Founding Companies' senior
executives led their companies' successful expansion into 11 new markets:
Cleveland, Cincinnati, Detroit, Jackson, Lexington, Louisville, Milwaukee,
Minneapolis, Oklahoma City, Pittsburgh and Washington, DC. Several of these
executives had leadership roles in founding and directing the National Interim
Housing Network ("NIHN"), the flexible accommodation services industry's leading
trade association. The Company believes that the visibility of these individuals
within NIHN and within the industry in general will increase the industry's
awareness of the Company and its acquisition program, thereby attracting
interest from owners of other flexible accommodation service companies.

As consideration for future acquisitions, the Company intends to use
various combinations of cash, notes and Common Stock. The consideration paid for
each future acquisition will depend on such factors as the acquired company's
historical operating results and future prospects and the ability of the
acquired company's business to complement the services offered by the Company.
The Company currently has no binding

30
<PAGE> 32

acquisition agreements. The timing, size and success of the Company's
acquisition efforts and the associated capital commitments cannot be readily
predicted.

The Company initially has targeted the following markets within which to
expand by making acquisitions, establishing new operations or arranging
strategic alliances: Atlanta, Boston, Chicago, Dallas, Denver, Houston, Los
Angeles, New York, Philadelphia, Phoenix, San Francisco, Seattle, Tampa, Toronto
and Vancouver. The Company also is considering other markets for expansion. See
"Risk Factors -- Risks Associated with Acquisition Strategy and Planned Rapid
Expansion."

ACCOMMODATIONS AND SERVICES

Accommodations

BridgeStreet offers high-quality, fully-furnished one-, two- and
three-bedroom accommodations that, together with the specialized amenities
offered by the Company, are intended to provide guests with a "home away from
home." BridgeStreet selects its accommodations based on location, general
condition and basic amenities, with the goal of providing accommodations that
meet each guest's particular needs. As a flexible accommodation services
provider, the Company can satisfy client requests for accommodations in a
variety of locations and neighborhoods, including requests for proximity to an
office, school or area attraction, as well as requests for accommodations of
specific types and sizes. The substantial majority of the Company's
accommodations are located within high-quality property complexes that typically
feature in-unit washers and dryers, dedicated parking, and access to fitness
facilities (including, in many cases, pools, saunas and tennis courts). Standard
furnishings typically include, among other things, cable televisions, answering
machines and clock radios. BridgeStreet also is able to customize its
accommodations at a guest's request with items such as office furniture, fax
machines and computers.

The Company's accommodations generally are priced competitively with
all-suite or upscale extended-stay hotel rooms even though, on average, the
Company believes its accommodations are substantially larger. The Company
believes it generally is able to price its accommodations competitively due to
(i) the high quality of its accommodations, (ii) its relatively low operating
cost structure and (iii) its ability to lease accommodations in accordance with
demand and leave unfavorable markets quickly. The length of a guest's stay can
range from a few nights to a few years, with the typical stay ranging from 30 to
45 days.

Corporate Client Services

The Company believes that it provides valuable, cost-effective services to
its corporate clients, many of which have human resource directors, relocation
managers or training directors with significant, national employee lodging
requirements. In particular, the Company aims to relieve its clients of the
administrative burden often associated with relocating employees and/or
providing them with temporary housing. In addition to providing clients with a
diverse range of accommodation types and sizes in a variety of locations, the
Company believes it satisfies its clients' needs for (i) a high degree of local
market knowledge, (ii) special accommodation requests (such as last-minute
location switches), (iii) accurate, customized billing options and (iv) other
ancillary services such as assistance in locating permanent housing and school
systems. The Company believes that existing and potential clients will
increasingly turn to outside providers such as BridgeStreet to satisfy their
employee lodging requirements as their awareness of BridgeStreet and the
flexible accommodation services industry increases.

Guest Services

The Company strives to provide the highest quality of customer service by
coordinating in advance all aspects of a guest's lodging experience. Prior to a
guest's arrival, BridgeStreet arranges to have keys and directions sent to the
guest, along with other information relating to the guest's interests (as
discerned through prior communications), such as literature on local golf
courses or other forms of entertainment. The Company makes at least one
follow-up telephone call to the guest before the guest moves in to ensure that
the guest will feel comfortable in his or her new accommodation from the moment
of arrival. Immediately prior to the

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<PAGE> 33

guest's arrival, BridgeStreet's professional housekeeping staff cleans and
inventories the accommodation to ensure that it is prepared for the guest.

During a guest's stay, BridgeStreet keeps in touch with the guest to
confirm that he or she is satisfied, and to encourage the guest to call whenever
the Company can be of assistance. In addition, the Company maintains a
representative in each city in which it operates to be responsive to guests'
needs. The Company's guest services department offers guests comprehensive
information services before and during their stays to help guests acclimate
themselves to their new surroundings. A guest can obtain information concerning,
among other things, local schools, day care providers and area playgrounds, by
placing a single telephone call. Similarly, the guest services department can
identify local entertainment and cultural events, and help coordinate automobile
rentals, grocery shopping and other miscellaneous activities.

BridgeStreet also oversees the moving-out process. The guest is asked
either to mail the keys to the Company in a self-addressed, stamped envelope or
simply to leave the keys in the accommodation. The guest also is asked to
complete a form evaluating his or her stay, and is encouraged to contact the
Company whenever the guest needs accommodations in other locations where
BridgeStreet provides services. The guest's evaluation form is thoroughly
reviewed, and (if applicable) a copy is sent to the corporate client.

CLIENT BASE

BridgeStreet has a diverse client base composed primarily of domestic
Fortune 1000 corporations, business professionals and professional firms. Among
the Company's clients are Ameritech Corporation, Andersen Consulting, members of
the Baltimore Orioles, Cargill Inc., Ernst & Young LLP, KPMG Peat Marwick LLP,
Maybelline, Inc. and United Healthcare Corporation. The Company's guests include
corporate employees, consultants, legal and accounting professionals, sales
representatives, traveling health care workers, visiting professors,
professional athletes, artistic performers, medical patients and their
relatives, and people between homes. No client accounted for more than 5% of the
Company's pro forma 1996 revenues.

SALES AND MARKETING

BridgeStreet focuses primarily on business-to-business selling. At the
local level, each of the Company's operating subsidiaries has corporate account
specialists that call on local companies (including local branches of regional
or national companies) to solicit business. The account specialist focuses his
or her efforts on the key decision makers at each company responsible for
establishing and administering travel and accommodation policies, typically
human resource directors, relocation managers or training directors. By
aggressively pursuing relationships with potential clients and expanding
services to existing clients, BridgeStreet seeks to become each client's primary
or sole provider of flexible accommodation services nationwide. As its
operations expand, BridgeStreet increasingly will market its nationwide
capabilities to its local corporate clients.

The Company tailors its marketing strategy to the needs of particular
clients. For example, BridgeStreet markets itself to a corporation with
relocating employees by focusing on its ability to situate large families in
houses and apartments with three or more bedrooms, its access to accommodations
in both metropolitan and suburban settings, and its access to accommodations
that allow pets. In contrast, when marketing to a potential corporate client
having consultants in need of short-term housing, the Company emphasizes its
flexible lease terms and its ability to customize an accommodation with
amenities such as office equipment (including computers), additional telephone
lines and other work-related items.

The Company intends to implement an advertising program designed to enhance
the "BridgeStreet" name both inside and outside the flexible accommodation
services industry and broaden its client base. In addition, the Company intends
to promote its brand name by advertising in trade publications, Chamber of
Commerce listings, local visitor magazines and telephone directories, on the
radio and the Internet, and through periodic direct mail campaigns.

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<PAGE> 34

LEASING ARRANGEMENTS

BridgeStreet leases substantially all of its accommodations through
flexible, short-term leasing arrangements in order to match its supply of
accommodations with client demand. The Company believes that its flexible
leasing strategy allows it to react quickly to changes in market demand for
particular geographic locations and types of accommodations. The Company's
strategy also provides it flexibility to address cyclicality in particular
markets. During the six months ended June 30, 1997, BridgeStreet's average
occupancy rate was approximately 90%. The Company seeks to maintain high
occupancy rates by staggering its lease expiration dates within a geographic
area, allowing it to adjust its inventory of accommodations in a given market to
reflect fluctuations in overall demand and demand for particular types of
accommodations.

The Company strives to develop strong relationships with property managers
to ensure that it has a reliable supply of high-quality, conveniently-located
accommodations. The Company believes that it can provide property managers with
numerous direct benefits, including (i) higher overall occupancy levels, (ii)
simplified lease agreements (with one lease often covering numerous individual
units), (iii) convenient, timely payment (with one check for all units under
lease in a complex) and (iv) maintenance by BridgeStreet of the accommodations
it leases.

BridgeStreet leases the furniture for its accommodations on a short-term
basis ordinarily from major furniture rental companies. Furniture leases range
from three to 18 months, but may be terminated by the Company prior to
expiration. Through its short-term furniture leasing approach, the Company is
able to maintain well-appointed, modern and attractive accommodations, upgrade
and replace furniture as needed and satisfy specific furnishing requests.

PROPERTIES

BridgeStreet leases all of its accommodations (with the exception of 19
condominium units which are owned). The Company has no plans to purchase or own
any additional properties. The Company's accommodations include one-, two- and
three-bedroom apartments, condominiums, townhouses, and, to a lesser extent,
houses. As of June 30, 1997, the Company had approximately 2,700 accommodations
under lease, with approximately 93% of such leases being for one year or less.
As of December 31, 1996, over 90% of the Founding Companies' aggregate leases of
accommodations were for periods of one year or less. The terms of the Company's
leases generally range from one to 18 months. The following table indicates as
of that date the number of units under lease in each metropolitan area in which
BridgeStreet operates:

<TABLE>
<CAPTION>
50 OR FEWER 51 TO 150 GREATER THAN 150
- --------------------- --------------------- ----------------------------
<S> <C> <C>
Canton, OH Akron, OH Baltimore, MD
Detroit, MI* Cincinnati, OH Cleveland, OH
Oklahoma City, OK* Jackson, MS Columbus, OH
Lexington, KY Memphis, TN
Louisville, KY Minneapolis/St. Paul, MN**
Milwaukee, WI Pittsburgh, PA**
Washington, DC
</TABLE>

- ---------------

* BridgeStreet has operated in this metropolitan area for less than 12 months.

** The operations of two Founding Companies have been integrated in this
metropolitan area.

INDUSTRY OVERVIEW

United States Lodging Industry Overview

According to Smith Travel Research, in 1996, the United States lodging
industry posted record profits of approximately $12.5 billion on approximately
$56.3 billion in room revenues and hotel occupancies reached 65%, representing
their highest level since 1987. In 1996, there was overall domestic supply of
approximately 3.4 million rooms per night.

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<PAGE> 35

The Company believes that the domestic lodging industry has benefited from
a gradually improving supply and demand balance, evidenced by increasing average
daily room and occupancy rates in recent years. Room supply growth in the
lodging industry slowed in the early 1990s and has rebounded in recent years,
but demand nonetheless continues to grow faster than supply. According to Smith
Travel Research, supply growth was 0.3% in 1993, 1.0% in 1994, 1.2% in 1995 and
2.1% in 1996. This slow supply growth, coupled with 1.7%, 3.0%, 1.7% and 2.3%
increases in demand (measured by occupied rooms) in 1993, 1994, 1995 and 1996,
respectively, reflects an improved supply and demand balance in the industry.

The Company believes that new hotels and lodging concepts are emerging to
compete with older hotels by offering newer and more contemporary facilities.
New concepts in the lodging industry are focusing more closely on customer needs
and are offering modern amenities such as microwave ovens, voice mail and
computers.

Lodgings for Stays of Three Nights or Longer

According to the American Hotel and Motel Association, in 1995, business
travelers staying three or more consecutive nights in a hotel accounted for more
than 37% of all hotel rooms rented. Based on 1995 room demand of 2.2 million
rooms per night, this data shows an implied demand of nearly 800,000 rooms for
such stays. According to a Smith Travel Research survey of 11 extended-stay
hotel chains (representing the majority of currently-operating extended-stay
hotels), in April 1997 these chains offered approximately 60,000 rooms per
night. From January 1, 1995 to December 31, 1996, supply growth in these chains
of 21.5% exceeded demand growth of 19.1%, but for the first four months of 1997,
compound monthly supply growth of 0.7% was exceeded by demand growth of 5.6%.

The Company believes that business travelers on extended trips desire
alternatives to conventional hotel and motel rooms, and that this desire has led
to the recent growth in the extended-stay segment of the lodging industry.
According to data compiled by Smith Travel Research, room revenues in the 11
extended-stay hotel chains referred to above increased at a 17.9% compound
annual growth rate over the last 10 years.

The extended-stay segment of the lodging industry includes the following
accommodation concepts:

All-Suite Hotels. All-suite hotels constitute a relatively new segment of
the lodging industry, having developed largely over the past 10 years. All-suite
hotels were developed partially in response to the increasing number of
corporate relocations, transfers and temporary assignments, and principally are
oriented toward business travelers willing to pay rates in the mid- to
upper-price levels. All-suite hotel rooms are larger than traditional hotel
rooms and, in some cases, contain efficiency kitchens. All-suite hotels
typically offer discounts to guests staying for extended periods.

Extended-Stay Hotels. Extended-stay hotels are an extension of the
all-suites concept, generally providing more space, rooms and "home-like"
conveniences to the traveler. Extended-stay hotel units typically are larger
than traditional hotel rooms and, in some cases, include kitchen facilities with
a stove, refrigerator and microwave, a work desk, laundry facilities, and a
separate bedroom. According to Smith Travel Research, from 1992 through 1996,
the compound annual growth rate in occupied rooms in the selected extended-stay
hotel chains described above was approximately 10.1%, compared to approximately
1.8% for the overall domestic lodging industry, while the compound annual growth
rate in room supply in such hotel chains was approximately 9.6%, compared to
approximately 0.9% for the overall domestic lodging industry.

Flexible Accommodation Service Providers. Flexible accommodation service
providers utilize a substantially different business model than fixed-location
providers (such as all-suite and extended-stay hotels) with respect to sourcing
of inventory (i.e., accommodations and furnishings), unit economics, and sales
and marketing. Companies in the flexible accommodation services industry
typically do not own real estate but instead lease apartments, condominiums,
townhouses and even houses on a short-term basis. These companies then rent the
leased accommodations, primarily for business travelers. The Company believes
that travelers on extended trips desire accommodations that better approximate
their everyday living environment. Accommodations in this segment typically are
the most "home-like" in the lodging industry, offering full-sized, fully-
equipped kitchens, bedrooms, bathrooms and living rooms. Flexible accommodation
service providers focus

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<PAGE> 36

primarily on employees in the corporate workforce, from entry-level to
executive. Due to their short-term leasing strategy, flexible accommodation
service providers are less capital- and labor-intensive, and have a more
variable cost structure, than fixed-location providers.

The industry information in this Prospectus for which Smith Travel Research
and the American Hotel and Motel Association are the indicated sources is
publicly-available. Smith Travel Research has provided authorization to be named
as the source of the information attributed to it; such authorization has not
been sought from the American Hotel and Motel Association. It should be noted
that neither Smith Travel Research nor the American Hotel and Motel Association
has provided any form of consultation, advice or counsel regarding any aspects
of, or is associated with, this offering.

COMPETITION

Flexible accommodation service providers compete primarily on the basis of
location, availability, price and quality of accommodations, quality and scope
of service and brand name recognition. The Company believes that, while it
currently competes against all lodging providers, in the future its primary
competition will come from other flexible accommodation service providers and,
to a lesser extent, all-suite hotels and upscale extended-stay hotels. The
Company intends to compete by maintaining a loyal customer base and offering a
client-oriented approach with convenient locations, large and high-quality
customized accommodations, and personalized customer service.

The Company expects its business to become more competitive as existing
competitors expand and additional companies enter the flexible accommodation
services industry. The Company believes that the largest providers of flexible
accommodation services currently are Oakwood, Gables Corporate Accommodations,
Accommodations America, Inc., ExecuStay Corporation and Globe Furniture Rentals,
Inc., some of which are larger (in terms of number of available accommodations)
than BridgeStreet. Certain of the Company's existing competitors have, and any
new competitors that enter the industry may have, access to significantly
greater resources than the Company. In particular, Oakwood is affiliated with
R&B Realty Group, the nation's tenth largest apartment management company. This
affiliation gives Oakwood access to apartment communities and capital that may
be unavailable to the Company. See "Risk Factors -- Competition."

REGULATION AND TAX

The Company is subject to employment laws, including minimum wage,
overtime, working condition and work permit requirements. The Company believes
that it is in compliance with all applicable employment laws, and intends to
continue to comply with such laws.

In addition, the Company is subject to the Americans with Disabilities Act
(the "ADA") as a private entity providing public accommodations. All public
accommodations are required to meet certain federal requirements related to
access and use by disabled persons. While the Company believes that all of the
units it leases are substantially in compliance with these requirements, a
determination that such units are not in compliance with the ADA could result in
the imposition of fines or an award of damages to private litigants.

As a lessee of its accommodations, BridgeStreet believes that it and its
employees are either outside the purview of, exempted from or in compliance with
laws in the jurisdictions in which the Company operates requiring real estate
brokers to hold licenses. However, there can be no assurance that the Company's
position in any jurisdiction where it believes itself to be excepted or exempted
would be upheld if challenged or that any such jurisdiction will not amend its
laws to require the Company and/or one or more of its employees to be licensed
brokers. Moreover, there can be no assurance that the Company will not operate
in the future in additional jurisdictions requiring such licensing. See "Risk
Factors -- Licensing and Tax Issues."

In some of the jurisdictions in which the Company operates, the Company
believes that it is not required to charge certain guests the sales and "bed"
taxes that are applicable to establishments furnishing rooms to transient
guests. There can be no assurance, however, that the tax laws in particular
jurisdictions will not change or that a tax collection agency will not
successfully challenge the Company's position regarding the

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<PAGE> 37

applicability of such taxes. The Company believes that it properly charges and
remits such taxes in all jurisdictions where it is required to do so. See "Risk
Factors -- Licensing and Tax Issues."

INSURANCE

The Company purchases general liability, comprehensive property damage,
automobile, workers' compensation and other insurance coverages that management
considers adequate for the protection of the Company's assets and operations,
although there can be no assurance that the coverage limits of such policies
will be adequate. A successful claim against the Company beyond the scope of its
insurance coverage or in excess of its limits could have a material adverse
effect on the Company's business, financial condition and results of operations.
Claims against the Company, regardless of their merit or outcome, also may have
an adverse effect on the Company's reputation and business.

INTELLECTUAL PROPERTY

The Company has filed an application with the United States Patent and
Trademark Office to register the service mark "BridgeStreet."

HEADQUARTERS AND REGIONAL OFFICES

The Company's corporate headquarters is located in Solon, Ohio and is
occupied pursuant to a lease that expires in July 2000. The Company has the
option to extend the lease for an additional three years. In addition, the
Company currently leases regional offices in Columbus, Ohio; Hudson, Ohio;
Baltimore, Maryland; Memphis, Tennessee; and Minneapolis, Minnesota.

EMPLOYEES

As of June 30, 1997 the Company had approximately 300 employees, of which
approximately 290 are full-time. BridgeStreet expects that it will increase the
number of its employees as it expands its business. The Company's employees are
not subject to any collective bargaining agreements, and management believes
that its relationship with its employees is good.

LEGAL PROCEEDINGS

The Company is from time to time a party to litigation arising in the
ordinary course of business. There can be no assurance that the Company's
insurance coverage will be adequate to cover all liabilities arising out of such
litigation. Management believes that any liability that the Company might incur
upon the resolution of any existing litigation will not have a material adverse
effect upon the Company's business, financial condition and results of
operations.

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<PAGE> 38

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information as of July 31, 1997 concerning
the Company's current directors, executive officers and director nominees. The
director nominees have agreed to become directors of the Company upon the
closing of this offering.

<TABLE>
<CAPTION>
NAME AGE CURRENT POSITIONS
-------------------------------------- --- --------------------------------------
<S> <C> <C>
William N. Hulett, III................ 53 President, Chief Executive Officer and
Director
Rocco A. Di Lillo..................... 45 Vice President, Chief Operating
Officer and Director, and President of
Corporate Lodgings, Inc.
Mark D. Gagne, CPA.................... 36 Chief Financial Officer and Treasurer
Paul M. Verrochi...................... 48 Chairman of the Board
James M. Biggar....................... 68 Director nominee
Lynda D. Clutchey..................... 39 Director, and President of Temporary
Corporate Housing, Inc.
Robert R. Mesel....................... 61 Director nominee
Connie F. O'Briant.................... 38 Director, and President of Temporary
Housing Experts, Inc.
Melanie R. Sabelhaus.................. 49 Director, and President of Exclusive
Interim Properties, Ltd.
Jerry Sue Thornton.................... 50 Director nominee
</TABLE>

William N. Hulett, III has been President, Chief Executive Officer and a
director of the Company since January 1997. He also is Chief Executive Officer
and sole director of each of the Company's wholly-owned subsidiaries. Prior to
the commencement in June 1997 of his employment with the Company under his
employment agreement, Mr. Hulett served from January 1997 through May 1997 as a
consultant to the Company. Mr. Hulett's career in the hotel industry has spanned
33 years, from 1960 to 1993. During 21 years with Westin Hotels ("Westin") (from
1960 to 1981), Mr. Hulett managed some of the best known hotels in America,
including the St. Francis in San Francisco and The Mayflower in Washington,
D.C., served as the Managing Director for all Westin Hotels in Hawaii, and also
served as Vice President for Operations and Development, during which time
Westin built the Westin in Cincinnati and the Westin O'Hare in Chicago. In 1981,
Mr. Hulett joined the Nestle Corporation as President of the Stouffer Hotel
Company ("Stouffer"). During his 12 years as President of Stouffer, Stouffer
built, acquired or joint ventured over 35 hotels. In 1993, when Stouffer was
sold, he devoted his time to fund raising and building the Rock and Roll Hall of
Fame and Museum, which opened in Cleveland, Ohio in 1995. He served as Chairman
and Chief Executive Officer of that facility until joining BridgeStreet in 1997.
Mr. Hulett is a director of the Travel Industry Association of America and of
Developers Diversified Realty Corporation, and has served the American Hotel and
Motel Association in various capacities, including Vice Chairman of its
Educational Institute.

Rocco A. Di Lillo has been Vice President, Chief Operating Officer and a
director of the Company, and President and Chief Operating Officer of one of the
Company's five operating subsidiaries, since January 1997. Mr. Di Lillo also is
President of City Visitor Publications, Inc., a leading publisher of travel and
visitor guides in the Midwest. Until the Combination in January 1997, Mr. Di
Lillo was President of CLI, which he founded in March 1987, and which expanded
into 10 Midwest cities in six states. Mr. Di Lillo was named 1997 Ohio
Entrepreneur of the Year for service companies by Ernst & Young LLP. Mr. Di
Lillo is a charter member of NIHN, the flexible accommodation services
industry's leading trade association.

Mark D. Gagne, CPA, has been Chief Financial Officer and Treasurer of the
Company since January 1997. From January 1996 until January 1997, Mr. Gagne was
a consultant to ABP. Previously, from February 1992 to December 1995, Mr. Gagne
was Chief Financial Officer and Treasurer of CMG Information Services Inc. and
subsidiaries, a publicly-traded information technology company. From April 1988
to January 1992,

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<PAGE> 39

Mr. Gagne was Vice President and Chief Financial Officer of the Trodella
Companies, three privately-held construction services companies. From 1982 to
1988, Mr. Gagne served in a number of positions as a Certified Public Accountant
for Kennedy & Lehan, P.C. and Arthur Andersen LLP.

Paul M. Verrochi has been Chairman of the Board of Directors of the Company
since August 1996. In 1992, Mr. Verrochi co-founded American Medical Response,
Inc. ("AMR"), which prior to its acquisition was a publicly-held company and the
largest national provider of ambulance services. From August 1992 to January
1996, Mr. Verrochi served as AMR's President and Chief Executive Officer, and
until January 1997 he also served as the Chairman of the Board of Directors. Mr.
Verrochi was selected as the 1995 National Entrepreneur of the Year for Emerging
Growth Companies by Inc. Magazine. Mr. Verrochi serves as an advisory board
member to numerous charitable foundations, including the New England Aquarium
and the Boston Symphony Orchestra. Mr. Verrochi also is Chairman of ABP and a
director of Coach USA, Inc., a publicly-held company.

James M. Biggar will become a director of the Company upon consummation of
this offering. Mr. Biggar has been Chairman and Chief Executive Officer of
Glencairn Corporation, a real estate development company, since July 1991. From
1960 to July 1991, Mr. Biggar served in various positions with subsidiaries of
Nestle SA and the Stouffer Corporation (which was acquired by Nestle SA in
1973), including Director of Marketing, Vice President and ultimately Chief
Executive Officer of the Stouffer Corporation, President, Chief Executive
Officer and Chairman of Nestle Enterprises, Inc. and Chairman of Nestle USA,
Inc. Mr. Biggar is a director of The Sherwin-Williams Company and ESSEF
Corporation.

Lynda D. Clutchey has been a director of the Company, and President and
Chief Operating Officer of one of the Company's five operating subsidiaries,
since January 1997. Until January 1997, Ms. Clutchey was President and a
director of TCH, which she co-founded in August 1983. Prior to co-founding TCH,
Ms. Clutchey served in the United States Peace Corps. Ms. Clutchey is a charter
member of NIHN and served on its Board of Directors from its inception in 1990
through 1994.

Robert R. Mesel will become a director of the Company upon consummation of
this offering. Mr. Mesel recently retired from BP Chemicals, Inc., where from
January 1991 he had served as President and Chief Executive. From June 1994, he
also had served as Chief Executive, Bulk Chemicals Division (London). Prior to
joining BP Chemicals, Inc., Mr. Mesel had been Vice President, Administration of
BP America, Inc. from October 1989 until January 1991, and Vice President,
Corporate Control of Standard Oil from July 1985 until October 1989. Previously,
from May 1980 to July 1985, Mr. Mesel was President of Chase Brass, a
manufacturing company. Mr. Mesel has served on many local community and
charitable boards, as well as the Board of Regents and the Board of Trustees for
Canisius College.

Connie F. O'Briant has been a director of the Company, and President and
Chief Operating Officer of one of the Company's five operating subsidiaries,
since January 1997. Until January 1997, Ms. O'Briant was President and a
director of THEI, which she co-founded in May 1991. THEI received the Memphis
Business Journal's "Memphis Business of the Year" Small Business Award in 1994.
Ms. O'Briant is a member of the President's Council of United American Bank and
an investment partner of Junior Achievement. Ms. O'Briant also is a member of
NIHN and served on its Board of Directors from 1995 to 1996.

Melanie R. Sabelhaus has been a director of the Company, and President and
Chief Operating Officer of one of the Company's five operating subsidiaries,
since January 1997. Until January 1997, Ms. Sabelhaus was President and a
director of EIP, which she founded in June 1987. Prior to founding EIP, Ms.
Sabelhaus spent 17 years in various sales and management positions at IBM. Ms.
Sabelhaus was listed in the Women's Top 100 of Maryland 1996, and also was
honored by the Baltimore Business Journal in 1995 for operating one of the top
25 women-owned businesses in that city. Ms. Sabelhaus is a charter member of
NIHN.

Jerry Sue Thornton, Ph.D. will become a director of the Company upon
consummation of this offering. Dr. Thornton has been President of Cuyahoga
Community College, the largest community college in Ohio, since 1992.
Previously, from 1985 to 1992, Dr. Thornton had been President of Lakewood
Community College in White Bear Lake, Minnesota. Dr. Thornton is a director of
Applied Industrial Technologies, Inc. and

38
<PAGE> 40

National City Bank (Cleveland), and of several non-profit organizations,
including the Greater Cleveland Growth Association, the Urban League of Greater
Cleveland and United Way Services.

Officers of the Company serve at the pleasure of the Board of Directors,
subject to the terms of any employment agreements with the Company. The term of
office of each director of the Company ends at the next annual meeting of the
Company's stockholders or when his successor is elected and qualified.

COMMITTEES OF THE BOARD OF DIRECTORS

Upon or prior to the closing of this offering, the Company will establish
an Audit Committee and Compensation Committee. The Audit Committee, a majority
of which will be independent directors, will make recommendations concerning the
engagement of independent public accountants, review with the independent public
accountants the plans for and results of the Company's annual audit, approve
professional services provided by and the independence of the independent public
accountants, consider the range of audit and non-audit fees and review the
adequacy of the Company's internal accounting controls. The Compensation
Committee, a majority of which will be independent directors, will establish a
general compensation policy for the Company, approve increases in directors'
fees and salaries paid to officers and senior employees of the Company,
administer the Company's 1997 Equity Incentive Plan and Stock Plan for
Non-Employee Directors, and determine, subject to the provisions of the
Company's employee benefit plans, the directors, officers and employees of the
Company eligible to participate in any of the plans, the extent of such
participation and terms and conditions under which benefits may be vested,
received or exercised.

DIRECTOR COMPENSATION

Members of the Board of Directors who also serve as officers of the Company
or its subsidiaries do not receive compensation for serving on the Board. Each
other member of the Board will receive a fee of $2,000 for each Board of
Directors meeting attended and an additional fee of $1,000 for each committee
meeting attended, except that $500 will be paid for each committee meeting
attended on the same date as a Board meeting. All directors will receive
reimbursement of reasonable expenses incurred in attending Board and committee
meetings and otherwise carrying out their duties.

The Company's Board of Directors has adopted the Stock Plan for
Non-Employee Directors (the "Directors' Plan"). Subject to adjustment for stock
splits and similar events, a total of 100,000 shares of Common Stock are
reserved for issuance under the Directors' Plan. Pursuant to the Directors'
Plan, on the date of this Prospectus, each director who is neither an employee
of the Company or one of its subsidiaries nor a holder of five percent or more
of the Company's Common Stock (a "non-employee director") will receive an option
to purchase 12,500 shares of Common Stock with a per-share exercise price equal
to the initial public offering price. Thereafter, each such non-employee
director will be granted, on every third anniversary of this Prospectus
(provided he or she still is a non-employee director at such time), an option to
acquire an additional 7,500 shares of Common Stock. Each non-employee director
initially elected following this offering will be granted upon such election an
option to purchase 7,500 shares of Common Stock, and thereafter will be granted,
immediately following every third anniversary of such election provided he or
she still is a non-employee director at such time (or third annual meeting at
which such non-employee director is reelected, if the director initially was
elected at an annual meeting) an option to acquire an additional 7,500 shares of
Common Stock. The exercise price of options granted following this offering will
be the fair market value of the Common Stock on the date of grant. Each option
will be non-transferable except upon death (unless otherwise approved by the
Board), will expire 10 years after the date of grant and will become exercisable
with respect to one-third of the shares of Common Stock issuable thereunder on
each of the first three anniversaries of the date of grant if the individual is
a director at such time. If the director dies or otherwise ceases to be a
director prior to the expiration of an option, the option (if exercisable) will
remain exercisable for a period of one year (following death) or three months
(following other termination of the individual's status as a director), but in
no event beyond the tenth anniversary of the date of grant. The Board of
Directors may at any time or times amend the Directors' Plan for any purpose
that at the time may be permitted by law.

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<PAGE> 41

As of the date of this Prospectus, options to purchase 37,500 shares of
Common Stock have been granted under the Directors' Plan.

EXECUTIVE COMPENSATION

The Company did not pay any compensation to its executive officers in 1996.

Equity Incentive Plan

The Company has adopted the 1997 Equity Incentive Plan (the "Equity
Incentive Plan"), which provides for the award ("Award") of up to 1,000,000
shares of Common Stock in the form of incentive stock options ("ISOs"),
non-qualified stock options, stock appreciation rights, performance shares,
restricted stock or stock units. All directors and employees of, and all
consultants and advisors to, the Company (including its subsidiaries) are
eligible to participate in the Equity Incentive Plan.

The Equity Incentive Plan will be administered by the Compensation
Committee (the "Committee"), which determines who shall receive Awards from
those individuals eligible to participate in the Equity Incentive Plan, the type
of Award to be made, the number of shares of Common Stock that may be acquired
pursuant to the Award and the specific terms and conditions of each Award,
including the purchase price, term, vesting schedule, restrictions on transfer
and any other conditions and limitations applicable to the Awards or their
exercise. Options that are ISOs may be exercisable for not more than 10 years
after the date the option is awarded. The Committee may at any time accelerate
the exercisability of all or any portion of an option.

In the event of a merger or consolidation in which the Company is not the
surviving corporation or which results in the acquisition of substantially all
the Company's outstanding shares of capital stock, or in the event of the sale
or transfer of substantially all of the Company's assets, if the Committee so
determines, all outstanding Awards will terminate, provided that on or before 20
days prior to the proposed effective date of any such transaction, the Committee
either (i) makes all outstanding Awards exercisable prior to the consummation of
the transaction or (ii) arranges for the surviving or acquiring corporation, if
any, to grant to participants replacement Awards.

The Equity Incentive Plan may be amended from time to time by the Board of
Directors or terminated in its entirety; however, no amendment may be made
without stockholder approval if such approval is necessary to comply with any
applicable tax or regulatory requirement.

Options to Purchase Shares of Common Stock

Messrs. Hulett, Di Lillo and Gagne have been awarded options under the
Equity Incentive Plan, effective as of the date of this Prospectus, to purchase
150,000, 75,000 and 75,000 shares of Common Stock, respectively. Each option (i)
has a per share exercise price equal to the initial public offering price, (ii)
becomes exercisable with respect to one-third of the shares issuable thereunder
on each of the first three anniversaries of the closing of this offering and
(iii) expires 10 years from the date of grant. With respect to Messrs. Hulett
and Gagne, upon the effectiveness of a change in control (as defined in their
employment contracts), the stock option granted to each of them will become
exercisable in full. In addition, if the Company fails to continue Mr. Hulett's
employment following the term of his employment contract for a reason other than
for cause (as defined) or disability, then all options held by Mr. Hulett at
such time will become exercisable in full. See "--Employment Contracts."

In addition to the options granted to Messrs. Hulett, Di Lillo and Gagne,
the Company has awarded options under the Equity Incentive Plan, effective as of
the date of this Prospectus, to purchase an aggregate of 182,667 shares of
Common Stock, with each such option having a per share exercise price equal to
the initial public offering price.

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<PAGE> 42

Employment Contracts

The Company has entered into employment agreements with its executive
officers, the material terms of which are summarized below.

Mr. Hulett has an employment contract ending May 31, 2000 to serve as the
Company's Chief Executive Officer and President. Under this contract, Mr. Hulett
will receive a base salary of $200,000, subject to discretionary increases and
also subject to specified increases if the Company achieves budgeted net
earnings per share. Mr. Hulett also may receive a bonus of up to 50% of his base
salary based on performance goals and other criteria. Mr. Hulett has agreed not
to compete with the Company for a period of two years following termination of
his employment. From January through May 1997, Mr. Hulett served as a consultant
to the Company pursuant to a consulting agreement.

Mr. Gagne has an employment contract ending May 31, 2000 to serve as the
Company's Chief Financial Officer. Under this contract, Mr. Gagne will receive a
base salary of $125,000, subject to discretionary increases, and a bonus of up
to 40% of his base salary based on performance goals and other criteria. Under
certain circumstances, Mr. Gagne will receive as severance three months' salary,
six months' benefits and a pro rata portion of his bonus payment, if payable. In
the event of a change in control (as defined), Mr. Gagne may terminate the
contract and receive one year's salary and a pro rata portion of his bonus, if
payable. Mr. Gagne has agreed not to compete with the Company for a period of
two years following termination of his employment.

Mr. Di Lillo has an employment contract ending January 2, 2000. Under this
contract, Mr. Di Lillo will receive a base salary of $125,000, subject to
discretionary increases, and a bonus of up to 40% of his base salary based on
performance goals and other criteria. The contract may be terminated by the
Company without cause upon the approval of two-thirds of the Company's Board of
Directors. Mr. Di Lillo is subject to the non-competition provisions described
in "Certain Transactions--Organization of the Company; The Combination."

LIMITATION OF CERTAIN LIABILITY OF OFFICERS AND DIRECTORS

As permitted by the DGCL, the Company's Certificate of Incorporation
provides for the elimination, subject to certain conditions, of the personal
liability of directors of the Company for monetary damages for breach of their
fiduciary duties. The directors, however, remain subject to equitable remedies.
The Company's Certificate of Incorporation also provides that the Company will
indemnify its directors and officers. In addition, the Company maintains an
indemnification insurance policy covering all directors and officers of the
Company. In general, the Company's Certification of Incorporation and the
indemnification insurance policy attempt to provide the maximum protection
permitted by Delaware law with respect to indemnification of directors and
officers.

Under the indemnification provisions of the Company's Certificate of
Incorporation and the indemnification insurance policy, the Company will repay
certain expenses incurred by a director or officer in connection with any civil
or criminal action or proceeding, and specifically including actions by or in
the name of the Company (derivative suits), where the individual's involvement
is by reason of the fact that he or she is or was a director or officer of the
Company. Such indemnifiable expenses include, to the maximum extent permitted by
law, attorney's fees, judgments, civil or criminal fines, settlement amounts,
and other expenses customarily incurred in connection with legal proceedings. A
director or officer will not receive indemnification if he or she is found not
to have acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the Company.

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<PAGE> 43

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock, as of July 31, 1997 and as adjusted to
reflect the sale of shares of Common Stock by the Selling Stockholders, of (i)
each director and director nominee of the Company, (ii) certain executive
officers of the Company, (iii) all directors and executive officers as a group,
(iv) each person or entity known to the Company to beneficially own more than 5%
of the outstanding Common Stock and (v) the Selling Stockholders. Except as
indicated in the footnotes below, the persons named in this table have sole
investment and voting power with respect to the shares beneficially owned by
them.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES TO BE
OWNED PRIOR SHARES TO BENEFICIALLY OWNED
TO OFFERING(1) BE SOLD AFTER OFFERING(1)
----------------------- IN ---------------------
NUMBER PERCENT OFFERING NUMBER PERCENT
--------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
William N. Hulett, III............... 175,000 3.2% -- 175,000 2.4%
Rocco A. Di Lillo(2)................. 810,851 14.8 200,000 610,851 8.5
Mark D. Gagne........................ 81,400 1.5 -- 81,400 1.1
Paul M. Verrochi(2).................. 300,500(3) 5.5 -- 300,500 4.2
James M. Biggar...................... -- -- -- -- --
Sandra A. Brown(2)(4)................ 475,000 8.7 95,000 380,000 5.3
Lynda D. Clutchey(2)................. 694,413(5) 12.7 139,200(6) 555,213 7.7
Robert R. Mesel...................... -- -- -- -- --
Connie F. O'Briant(2)................ 391,408(7) 7.1 50,000 291,408 4.1
Thomas W. O'Briant(2)................ 391,408(8) 7.1 50,000 291,408 4.1
Melanie R. Sabelhaus(2).............. 1,001,805(9) 18.3 200,000 801,805 11.2
Jerry Sue Thornton, Ph.D............. -- -- -- -- --
SLD Partnership(10).................. 1,489,395 27.2 320,000 1,169,395 16.3
All directors, director nominees and
executive officers as a group (10
persons)........................... 3,455,377(11) 63.1 639,200 2,816,177 39.2
</TABLE>

- ---------------

(1) Percentages are based upon 5,475,000 shares of Common Stock outstanding on
July 31, 1997 and 7,175,000 shares of Common Stock outstanding as of the
closing of this offering, respectively.

(2) The stockholder's address is c/o BridgeStreet Accommodations, Inc., 30670
Bainbridge Road, Solon, Ohio 44139.

(3) Includes 150,250 shares of Common Stock held in a trust for the benefit of
Mr. Verrochi's children, with respect to which Mr. Verrochi disclaims
beneficial ownership.

(4) Ms. Brown is President and Chief Operating Officer of one of the Company's
operating subsidiaries. Prior to the Combination, she was a senior
executive officer of Home Again.

(5) Consists of (i) 47,890 shares of Common Stock held jointly with Ms.
Clutchey's spouse and (ii) 646,523 shares of Common Stock held of record by
SLD Partnership, an Ohio general partnership, with respect to which Ms.
Clutchey has voting and investment power.

(6) Represents shares of Common Stock being offered by SLD Partnership in this
offering.

(7) Includes 191,790 shares of Common Stock held by Ms. O'Briant's spouse, as
to which shares Ms. O'Briant disclaims beneficial ownership.

(8) Includes 199,618 shares held by Mr. O'Briant's spouse, as to which shares
Mr. O'Briant disclaims beneficial ownership. See Note 7 above.

(9) Includes 18,250 shares of Common Stock held by Ms. Sabelhaus' spouse and
100,000 shares of Common Stock held by trusts for the benefit of Ms.
Sabelhaus' children, all as to which Ms. Sabelhaus disclaims beneficial
ownership.

(10) The address of SLD Partnership is 1515 Bethel Road, Columbus, Ohio 43220.
Ms. Clutchey and two of her siblings are general partners of SLD
Partnership.

(11) See Notes 3, 5, 7 and 9 above.

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<PAGE> 44

CERTAIN TRANSACTIONS

ORGANIZATION OF THE COMPANY

Start-Up Funding

The Company was initially capitalized in August 1996 with an aggregate of
$2,000 provided by Messrs. Verrochi, Donald W. Glazer, Joseph E. Palmer, Dominic
J. Puopolo and Michael L. Stark. As a result of a 499-for-1 stock split in
November 1996 (and following certain subsequent transfers), these individuals
currently beneficially own 818,140 shares of Common Stock in the aggregate.

ABP

Mr. Verrochi, Chairman of the Company, is a principal and Chairman of ABP,
and Mr. Glazer, Secretary of the Company, is a principal of ABP. The expenses
incurred by the Company in connection with the Combination and this offering
(estimated at approximately $2.2 million) will be paid by ABP, and the Company
will reimburse ABP out of the proceeds of this offering. See "Use of Proceeds."
As of July 31, 1997, ABP had advanced approximately $500,000 on an interest-free
basis on behalf of the Company for such expenses.

ABP has also agreed to assist the Company to complete future acquisitions
if the Company so requests. Under the agreement between the parties, which is
terminable at will by either party, ABP will receive from the Company in cash 1%
of the transaction value of acquisitions for which ABP at the Company's request
provides assistance. ABP also will be reimbursed for all direct expenses
incurred by ABP in connection with such acquisitions.

The Combination

In connection with the Combination, the Company acquired all of the issued
and outstanding capital stock of the Founding Companies. See "Combination." The
aggregate consideration paid by the Company in the Combination was 4,301,000
shares of Common Stock. Of this amount, individuals who are executive officers
and/or directors of the Company received the following: Mr. Di Lillo, 835,901
shares; Ms. Sabelhaus, 1,001,805 shares (including shares issued to her spouse);
Ms. O'Briant, 391,408 shares (including shares issued to her spouse); and Ms.
Clutchey, 1,537,285 shares (including shares issued to a general partnership in
which each of Ms. Clutchey and two of her siblings are general partners). See
"Principal and Selling Stockholders." Pursuant to the terms of the agreements by
which their Founding Companies were merged into the Company, each of Mr. Di
Lillo, Ms. Sabelhaus, Ms. O'Briant and Ms. Clutchey were designated directors of
the Company.

Each of Ms. Sabelhaus, Ms. O'Briant and Ms. Clutchey has entered into an
employment agreement with the Company, the material terms of which are
summarized as follows. Each employment agreement provides for an initial base
salary of $100,000, subject to upward adjustment in the sole discretion of the
Company's Board of Directors, and participation in the Company's bonus and
benefit plans. The employment agreements expire on January 2, 2000 but may be
terminated earlier in the event of disability, for cause (as defined) or without
cause by the approval of two-thirds of the Company's Board of Directors. Mr. Di
Lillo also entered into an employment agreement in connection with the
Combination. See "Management -- Executive Compensation; Employment Contracts."

Each of Mr. Di Lillo, Ms. Sabelhaus, Ms. O'Briant and Ms. Clutchey has
agreed not to compete with the Company until January 2, 2002 or, if later, three
years from the date of termination of employment by the Company (regardless of
the reason therefor).

TRANSACTIONS INVOLVING OFFICERS AND DIRECTORS

As a result of the Combination, the Company assumed the obligations of TCH
under a three-year contract, effective January 1, 1996, with Saturn Enterprises,
Inc. ("Saturn"), a corporation of which David Clutchey III is the sole
stockholder. Mr. Clutchey is the husband of Lynda D. Clutchey, a director of

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<PAGE> 45

BridgeStreet. Pursuant to the contract, TCH leased from Saturn on a
non-exclusive basis televisions, VCRs, and microwave ovens. In 1994, 1995 and
1996, TCH paid or accrued expenses under this contract of approximately $11,200,
$47,400 and $107,300, respectively. The Company has no obligation to lease
equipment under the contract, but may continue to do so. BridgeStreet believes
that the terms of this contract are no less favorable than could be obtained
from non-affiliated parties.

The Company also assumed TCH's obligations under an exclusive lease
agreement with Integrity Furniture, Inc., a company which is 49% owned by SLD
Partnership ("SLD"), an Ohio general partnership in which Ms. Clutchey and two
of her siblings each are general partners. The agreement was entered into on
September 12, 1995, has a five-year term and provides that the lessor has the
exclusive right to furnish all of the Company's leased accommodations in
Pittsburgh, Pennsylvania at agreed-upon prices. The initial unit lease terms are
for minimum three-month periods that then are renewable monthly. The Company
believes that the lease terms are no less favorable than could be obtained from
non-affiliated parties. The rental amounts under this contract totalled
approximately $213,000 during 1996.

On October 15, 1995, TCH loaned to SLD $45,000, at an annual interest rate
of 7% beginning November 1995. Also in 1995 SLD borrowed $109,602 from TCH. Both
of these notes were repaid in full during 1996.

Stephen and David Holzer performed consulting services for TCH from June
1992 until November 1996. For such services, each earned $48,000 per year during
1994, 1995 and 1996. The Holzers are brothers of Ms. Clutchey and general
partners of SLD Partnership. The consulting agreements were terminated in
November 1996.

As a result of the Combination, the Company assumed the obligation of EIP
to repay the outstanding balance borrowed to finance certain working capital
requirements under a personal line of credit maintained by Melanie R. Sabelhaus.
The outstanding balance bears interest at a rate of 8.25%. The Company will
repay the outstanding balance from the net proceeds of this offering, together
with accrued interest at a rate equal to the rate under the line of credit. See
"Use of Proceeds." As of July 31, 1997, the outstanding balance was
approximately $11,000.

In February 1997, Thomas W. O'Briant loaned one of the Company's operating
subsidiaries $50,000 to satisfy working capital requirements. The loan bears
interest at a rate of 8.0%, and all outstanding principal and interest under
such loan will be repaid by the Company from the net proceeds of this offering.
See "Use of Proceeds." As of July 31, 1997, this loan had an outstanding
principal balance of approximately $37,000. Mr. O'Briant is the husband of
Connie F. O'Briant, a director of the Company.

CLI performed certain general and administrative services (e.g., accounting
services) for City Visitor, an entity which publishes a travel magazine and is
100% owned by Mr. Di Lillo. For services during 1994, 1995 and 1996, City
Visitor paid CLI approximately $42,000, $51,000 and $15,000, respectively. City
Visitor sold advertising space in its magazine to CLI during these years, and
was paid, respectively, approximately $34,000, $22,000 and $31,000. Following
this offering, the Company intends to continue purchasing advertising space from
City Visitor from time to time. However, the Company has neither entered into a
contract with, nor made any commitment with respect to the amounts of
advertising purchases from, City Visitor. The Company believes that the prices
currently paid to City Visitor for advertising are no less favorable than could
be obtained from non-affiliated third parties.

COMPANY POLICY

The Company's policy is that any future transactions with directors,
officers, employees or affiliates of the Company be approved in advance by a
majority of the Company's Board of Directors, including a majority of
disinterested directors, and be on terms no less favorable to the Company than
the Company could obtain from non-affiliated parties.

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<PAGE> 46

DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital stock consists of 35,000,000 shares of
Common Stock, $.01 par value per share, and 5,000,000 shares of Preferred Stock,
$.01 par value per share. The following summary of the Common Stock and the
Preferred Stock is qualified by reference to the Company's Amended and Restated
Certificate of Incorporation and By-laws included as exhibits to the
Registration Statement of which this Prospectus is a part.

COMMON STOCK

The Company had outstanding immediately prior to this offering 5,475,000
shares of Common Stock and options to purchase an aggregate of 520,167 shares of
Common Stock. A total of 1,000,000 shares of Common Stock are reserved for
issuance under the Equity Incentive Plan and a total of 100,000 shares of Common
Stock are reserved for issuance under the Directors' Plan. Holders of Common
Stock are entitled to one vote for each share held of record on all matters
submitted to a vote of the stockholders, and do not have cumulative voting
rights. Subject to preferences that may be applicable to any outstanding shares
of Preferred Stock, holders of Common Stock are entitled to receive ratably such
dividends, if any, as may be declared from time to time by the Board of
Directors of the Company out of funds legally available therefor. See "Dividend
Policy." All outstanding shares of Common Stock are, and the shares to be sold
in this offering when issued and paid for will be, fully paid and nonassessable,
and the holders thereof will have no preferences or conversion, exchange or
pre-emptive rights. In the event of any liquidation, dissolution or winding-up
of the affairs of the Company, holders of Common Stock will be entitled to share
ratably in the assets of the Company remaining after payment or provision for
payment of all of the Company's debts and obligations and after liquidation
payments to holders of outstanding shares of Preferred Stock, if any.

PREFERRED STOCK

The Preferred Stock, if issued, would have priority over the Common Stock
with respect to dividends and other distributions, including the distribution of
assets upon liquidation. The Board of Directors has the authority, without
further stockholder authorization, to issue from time to time shares of
Preferred Stock in one or more series and to fix the terms, limitations,
relative rights and preferences and variations of each series. In addition to
having a preference with respect to dividends or liquidation proceeds, the
Preferred Stock, if issued, may be entitled to the allocation of capital gains
from the sale of the Company's assets. Although the Company has no present plans
to issue any shares of Preferred Stock following the closing of this offering,
the issuance of shares of Preferred Stock, or the issuance of rights to purchase
such shares, could decrease the amount of earnings and assets available for
distribution to the holders of Common Stock, could adversely affect the rights
and powers, including voting rights, of the Common Stock, and could have the
effect of delaying, deterring or preventing a change in control of the Company
or an unsolicited acquisition proposal.

ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER PROPOSALS AND STOCKHOLDER NOMINATIONS
OF DIRECTORS

The By-laws establish an advance notice procedure with regard to the
nomination by the stockholders of the Company of candidates for election as
directors and with regard to other matters to be brought by stockholders before
a meeting of stockholders of the Company.

These procedures require that a stockholder seeking to nominate a director
or propose business at an annual meeting give written notice of such nomination
or proposal, delivered to or mailed and received by the Secretary of the Company
at the principal executive offices of the Company not less than 60 days nor more
than 90 days prior to the meeting. Detailed requirements as to the form, timing
and substance of that notice are specified in the By-laws. No persons shall be
eligible for election as a director of the Company nor shall any business matter
be conducted unless nominated or proposed, as the case may be, in strict
accordance with the procedures set forth in the Company's By-laws, as determined
by the President of the Company.

Although the By-laws do not give the Board of Directors any power to
approve or disapprove stockholder nominations for the election of directors or
of any other business desired by stockholders to be conducted at an annual or
any other meeting, the By-laws (i) may have the effect of precluding nominations
for the election of

45
<PAGE> 47

directors or precluding the conduct of business at a particular annual meeting
if the proper procedures are not followed or (ii) may discourage or deter a
third party from conducting a solicitation of proxies to elect its own slate of
directors or otherwise attempting to obtain control of the Company, even if the
conduct of such solicitation or such attempt might be beneficial to the Company
and its stockholders.

OTHER PROVISIONS

Special Meetings of the Stockholders of the Company. The Company's By-laws
provide that a special meeting of the stockholders of the Company only may be
called by the President, the Chairman of the Board or by order of the Board of
Directors. The By-laws do not authorize the stockholders to call a special
meeting of stockholders, potentially limiting the stockholders' ability to offer
proposals between annual meetings if no special meetings are otherwise called by
the President, Chairman or the Board.

Amendment of the By-laws. The Company's Certificate of Incorporation
provides that the By-laws may be amended only by a majority vote of the Board of
Directors or by a vote of at least 75% of the outstanding shares of the
Company's stock entitled to vote in the election of directors.

No Action by Written Consent. The Company's Certificate of Incorporation
does not permit the Company's stockholders to act by written consent. As a
result, any action to be taken by the Company's stockholders must be taken at a
duly called meeting of the stockholders.

DELAWARE ANTI-TAKEOVER STATUTE

The Company is subject to Section 203 of the DGCL which, with certain
exceptions, prohibits a Delaware corporation from engaging in any of a broad
range of business combinations with any "interested stockholder" for a period of
three years following the date that such stockholder became an interested
stockholder, unless: (i) prior to such date, the Board of Directors of the
corporation approved either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder, (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced, excluding for purposes of determining the number of shares
outstanding those shares owned (a) by persons who are directors and officers and
(b) by employee stock plans in which employee participants do not have the right
to determine confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer or (iii) on or after such date, the
business combination is approved by the Board of Directors and authorized at an
annual or special meeting of stockholders by the affirmative vote of at least
66 2/3% of the outstanding voting stock which is not owned by the interested
stockholder. An "interested stockholder" is defined as any person that is (i)
the owner of 15% or more of the outstanding voting stock of the corporation or
(ii) an affiliate or associate of the corporation and was the owner of 15% or
more of the outstanding voting stock of the corporation at any time within the
three-year period immediately prior to the date on which it is sought to be
determined whether such person is an interested stockholder.

TRANSFER AGENT

The transfer agent and registrar for the Company is American Securities
Transfer & Trust, Inc.

46
<PAGE> 48

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, the Company will have 7,175,000 shares of
Common Stock issued and outstanding, and 520,167 shares of Common Stock issuable
upon the exercise of outstanding options. Of these shares, 2,615,000 shares sold
pursuant to this offering (or 3,007,250 shares, if the Underwriters'
over-allotment option is exercised in full) will be freely tradeable without
restriction under the Securities Act, except any shares purchased by an
"affiliate" (as that term is defined under the rules and regulations of the
Securities Act) of the Company, which shares will be subject to the resale
limitations of Rule 144 of the Securities Act. The remaining shares outstanding
upon completion of this offering will be subject to the resale limitations of
Rule 144.

In general, under Rule 144, if a period of at least one year has elapsed
between the later of the date on which restricted securities were acquired from
the Company and the date on which they were acquired from an affiliate, then the
holder of such restricted securities (including an affiliate) is entitled to
sell that number of shares within any three-month period that does not exceed
the greater of (i) one percent of the then outstanding shares of Common Stock or
(ii) the average weekly reported volume of trading of Common Stock during the
four calendar weeks preceding such sale. Sales under Rule 144 also are subject
to certain requirements pertaining to the manner of sales, notices of sales and
the availability of current public information concerning the Company. Any
shares not constituting restricted securities sold by affiliates must be sold in
accordance with the foregoing volume limitations and other requirements but
without regard to the one year holding period. Under Rule 144(k), if a period of
at least two years has elapsed from the later of the date on which restricted
securities were acquired from the Company and the date on which they were
acquired from the affiliate, a holder of such restricted securities who is not
an affiliate at the time of the sale and has not been an affiliate for at least
three months prior to the sale would be entitled to sell the shares immediately
without regard to the volume limitations and other conditions described above.

The Company and each of its directors, director nominees, executive
officers and existing stockholders have agreed with the Representatives of the
Underwriters not to sell or otherwise dispose of any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for shares of
Common Stock (subject, in the case of the Company, to an exception for the grant
of options under the Company's Equity Incentive Plan and Directors' Plan or in
connection with acquisitions), for a period of 180 days after the date of this
Prospectus without the written consent of the Representatives. See
"Underwriting."

An additional 100,000 shares of Common Stock are reserved for issuance
under the Directors' Plan and 1,000,000 shares are reserved for issuance under
the Equity Incentive Plan. The Company presently intends to file a registration
statement under the Securities Act to register Common Stock to be issued
pursuant to exercise of options granted or to be granted under the Directors'
Plan and Equity Incentive Plan. Common Stock issued after the effective date of
such registration statement upon exercise of such options would be available for
immediate resale in the open market, subject to compliance with Rule 144 in the
case of affiliates.

Prior to this offering, there has been no public market for the Common
Stock of the Company, and no predictions can be made of the effect, if any, that
the availability of shares for sale or the actual sale of shares will have on
market prices prevailing from time to time.

47
<PAGE> 49

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, a copy
of which has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part, the Underwriters named below have agreed, severally
and not jointly, through Legg Mason Wood Walker, Incorporated and McDonald &
Company Securities, Inc., the Representatives of the Underwriters, to purchase
from the Company and the Selling Stockholders, and the Company and the Selling
Stockholders have agreed to sell to the Underwriters, the number of shares of
Common Stock set forth opposite the name of the respective Underwriter at the
Price to Public less the Underwriting Discount set forth on the cover page of
this Prospectus.

<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
------------------------------------------------------------- ----------------
<S> <C>
Legg Mason Wood Walker, Incorporated.........................
McDonald & Company Securities, Inc...........................

---------
Total.............................................. 2,615,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will purchase all of the shares offered hereby if any of the shares
are purchased.

The Underwriters have advised the Company that they propose to offer all or
a part of the shares offered hereby directly to the public at the Price to
Public set forth on the cover page of this Prospectus, that they may offer
shares to certain dealers at a price which represents a concession of $
per share and they may allow, and such dealers may reallow, a concession of not
more than $ per share to certain other dealers. After the commencement of
this offering, the Price to Public and the concessions may be changed.

The Company has granted the Underwriters a 30-day option to purchase up to
392,250 additional shares of Common Stock at the Price to Public less the
Underwriting Discount set forth on the cover page of this Prospectus. The
Underwriters may exercise the option only to cover over-allotments, if any, in
connection with the offering of the shares made hereby. To the extent the
Underwriters exercise the option, each of the Underwriters will have a firm
commitment, subject to certain conditions, to purchase approximately the same
percentage of additional shares of Common Stock as the number of shares set
forth opposite that Underwriter's name in the preceding table bears to the total
number of shares listed in such table.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, and to contribute
to payments the Underwriter may be required to make in respect thereof.

The Company and each of its directors, director nominees, executive
officers and existing stockholders have agreed with the Representatives of the
Underwriters not to sell or otherwise dispose of any shares of Common Stock, or
any securities convertible into or exercisable or exchangeable for shares of
Common Stock (subject, in the case of the Company, to an exception for the grant
of options under the Company's Equity Incentive Plan and Directors' Plan or in
connection with acquisitions), for a period of 180 days after the date of this
Prospectus without the written consent of the Representatives. See "Shares
Eligible for Future Sale."

The Representatives of the Underwriters have advised the Company that the
Underwriters do not intend to confirm sales to any account over which they
exercise discretionary authority.

Prior to this offering, there has been no public market for the Common
Stock. The initial public offering price for the Common Stock will be determined
by negotiations between the Company and the Representatives of the Underwriters.
Among the factors to be considered in such negotiations are prevailing market

48
<PAGE> 50

conditions, the results of operations of the Company in recent periods, the
market capitalizations and stages of development of other companies which the
Company and the Representatives of the Underwriters believe to be comparable to
the Company, estimates of the business potential of the Company, the present
state of the Company's development and other factors deemed relevant. The
anticipated initial public offering price set forth on the cover of this
Prospectus is subject to change as a result of market conditions and other
factors.

Until the distribution of the Common Stock is completed, rules of the
Securities and Exchange Commission may limit the ability of the Representatives
to bid for and purchase the Common Stock. As an exception to these rules, the
Representatives are permitted to engage in certain transactions that stabilize
the price of the Common Stock. Such transactions consist of bids or purchases
for the purpose of pegging, fixing or maintaining the price of the Common Stock.

If the Representatives create a short position in the Common Stock in
connection with the offering, i.e., if it sells more shares of Common Stock than
are set forth on the cover page of this Prospectus, the Representatives may
reduce that short position by purchasing shares of Common Stock in the open
market. The Representatives may also elect to reduce any short position by
exercising all or part of the over-allotment option described above.

In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. Neither the Company nor the
Representatives make any representation or prediction as to the direction or
magnitude of any effect that the transaction described above might have on the
price of the Common Stock. In addition, neither the Company nor the
Representatives makes any representation that the Representatives will engage in
such transactions or that such transactions, once commenced, will not be
discontinued without notice.

Under the rules of the National Association of Securities Dealers, Inc.
(the "NASD"), when a NASD member participates in the distribution of equity
securities of a company with which an affiliate of such member has a conflict of
interest, the public offering price can be no higher than the price recommended
by a "qualified independent underwriter" (as defined in NASD Rule 2720) (a
"QIU"). The NASD requires that a QIU (i) be a NASD member experienced in the
securities or investment banking business, (ii) not be an affiliate of the
issuer of the securities, and (iii) agree to undertake the responsibilities and
liabilities of an underwriter under the Securities Act. Mr. Robert G. Sabelhaus,
an Executive Vice President and Director of Sales of Legg Mason Wood Walker,
Incorporated, is the husband of Melanie R. Sabelhaus, a director of the Company.
Together, the Sabelhauses currently own, and following completion of the
offering will continue to own, 10% or more of the Common Stock of the Company.
See "Principal and Selling Stockholders." In accordance with the Rules of the
NASD, McDonald & Company Securities, Inc. ("McDonald"), has agreed to serve as
QIU in this offering and to recommend an initial public offering price for the
Common Stock in compliance with Rule 2720 of the NASD. McDonald, in its role as
QIU, has performed due diligence investigations and reviewed and participated in
the preparation of the Prospectus and the Registration Statement of which the
Prospectus forms a part, although, in such capacity, it will receive no
additional compensation in connection with this offering.

LEGAL MATTERS

The validity of the shares offered will be passed upon for the Company by
Nutter, McClennen & Fish, LLP, Boston, Massachusetts. Certain legal matters will
be passed upon for the Underwriters by Goodwin, Procter & Hoar LLP, Boston,
Massachusetts.

49
<PAGE> 51

EXPERTS

The financial statements and schedule included in this Prospectus and
elsewhere in the Registration Statement, to the extent of and for the periods
indicated in the reports, have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (the "Registration
Statement") under the Securities Act and the rules and regulations promulgated
thereunder, with respect to the Common Stock offered hereby. This Prospectus
omits certain information contained in the Registration Statement, and reference
is made to the Registration Statement and the exhibits and schedules thereto for
further information with respect to the Company and the Common Stock offered
hereby. Statements contained in this Prospectus concerning the provisions or
contents of any contract, agreement or any other document referred to herein are
not necessarily complete with respect to each such contract, agreement or
document filed as an exhibit to the Registration Statement, and reference is
made to such exhibit for a more complete description of the matters involved,
and each such statement shall be deemed qualified by such reference. The
Registration Statement, including the exhibits and schedules thereto, may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1204, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the regional offices of the Commission located at 7 World
Trade Center, 13th Floor, New York, New York 10048 and at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of the Registration
Statement or any part thereof may be obtained from such office, upon payment of
the fees prescribed by the Commission. The Commission maintains a Web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants that submit electronic filings to the
Commission.

50
<PAGE> 52

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Basis of Presentation............................................................... F-3
Pro Forma Combined Balance Sheet as of December 31, 1996 (unaudited)................ F-4
Pro Forma Combined Statement of Operations for the Year Ended December 31, 1996
(unaudited)...................................................................... F-5
Pro Forma Combined Statement of Operations for the Six Months Ended June 30, 1997
(unaudited)...................................................................... F-6
Notes to Unaudited Pro Forma Combined Financial Statements.......................... F-7
HISTORICAL FINANCIAL STATEMENTS
BRIDGESTREET ACCOMMODATIONS, INC.
Consolidated Balance Sheets (unaudited).......................................... F-9
Consolidated Statements of Operations (unaudited)................................ F-10
Consolidated Statements of Stockholders' Equity (unaudited)...................... F-11
Consolidated Statements of Cash Flows (unaudited)................................ F-12
Notes to Consolidated Financial Statements (unaudited)........................... F-13
BRIDGESTREET ACCOMMODATIONS, INC.
Report of Independent Public Accountants......................................... F-18
Balance Sheet.................................................................... F-19
Statement of Operations.......................................................... F-20
Statement of Stockholders' Equity................................................ F-21
Statement of Cash Flows.......................................................... F-22
Notes to Financial Statements.................................................... F-23
TEMPORARY CORPORATE HOUSING COLUMBUS, INC.
Report of Independent Public Accountants......................................... F-26
Combined Balance Sheets.......................................................... F-27
Combined Statements of Operations................................................ F-28
Combined Statements of Stockholders' Equity...................................... F-29
Combined Statements of Cash Flows................................................ F-30
Notes to Combined Financial Statements........................................... F-31
CORPORATE LODGINGS, INC.
Report of Independent Public Accountants......................................... F-37
Combined Balance Sheets.......................................................... F-38
Combined Statements of Operations................................................ F-39
Combined Statements of Stockholders' Equity (Deficit)............................ F-40
Combined Statements of Cash Flows................................................ F-41
Notes to Combined Financial Statements........................................... F-42
</TABLE>

F-1
<PAGE> 53

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
EXCLUSIVE INTERIM PROPERTIES, LTD.
Report of Independent Public Accountants......................................... F-47
Combined Balance Sheets.......................................................... F-48
Combined Statements of Operations................................................ F-49
Combined Statements of Stockholders' Equity...................................... F-50
Combined Statements of Cash Flows................................................ F-51
Notes to Combined Financial Statements........................................... F-52
HOME AGAIN, INC.
Report of Independent Public Accountants......................................... F-57
Combined Balance Sheets.......................................................... F-58
Combined Statements of Operations................................................ F-59
Combined Statements of Stockholder's Equity...................................... F-60
Combined Statements of Cash Flows................................................ F-61
Notes to Combined Financial Statements........................................... F-62
TEMPORARY HOUSING EXPERTS, INC.
Report of Independent Public Accountants......................................... F-65
Balance Sheets................................................................... F-66
Statements of Operations......................................................... F-67
Statements of Stockholders' Equity............................................... F-68
Statements of Cash Flows......................................................... F-69
Notes to Financial Statements.................................................... F-70
</TABLE>

F-2
<PAGE> 54

BRIDGESTREET ACCOMMODATIONS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

BASIS OF PRESENTATION

The following unaudited pro forma combined financial statements give effect
to the acquisitions by BridgeStreet Accommodations, Inc. ("BridgeStreet" or the
"Company"), through stock-for-stock mergers (the "Combination"), of the
following providers of flexible accommodation services: (i) Temporary Corporate
Housing Columbus, Inc. and three affiliates ("TCH"), (ii) Exclusive Interim
Properties, Ltd. and an affiliate ("EIP"), (iii) Corporate Lodgings, Inc. and
four affiliates ("CLI"), (iv) Home Again, Inc. and two affiliates ("Home Again")
and (v) Temporary Housing Experts, Inc. ("THEI") (collectively, the "Founding
Companies"). The acquisitions have been accounted for using the purchase method
of accounting, and TCH has been identified as the acquiror for financial
presentation purposes. The unaudited pro forma combined financial statements
also give effect to this offering and the use of proceeds from this offering as
described under "Use of Proceeds." These financial statements are based on the
historical financial statements of the Founding Companies included elsewhere in
this Prospectus and the estimates and assumptions set forth herein.

The unaudited pro forma combined balance sheet gives effect to the
Combination, and the payment of the related purchase prices for the Founding
Companies, as if the Combination had occurred on December 31, 1996. The
allocation of the purchase price to the assets acquired and the liabilities
assumed initially has been assigned and recorded based on estimates of their
fair value, and may be revised as additional information concerning the
valuation of such assets and liabilities becomes available. It is management's
opinion, however, that the final allocation of the purchase price will not
differ materially from the preliminary estimated amounts. The purchase price
represents a fair market valuation of the acquired entities as determined by an
independent investment banking firm based on specific information regarding TCH
and each of the Founding Companies, which included historical financial
statements, tax returns and detailed discussions with each company's management
as to operations, financial condition and future prospects. Other valuation
factors included published industry information and certain financial analyses.
The unaudited pro forma combined statement of operations for the year ended
December 31, 1996 gives effect to the Combination as if it had occurred on
January 1, 1996. The historical results of operations for EIP represents 12
months derived from the unaudited three months ended March 31, 1996 and the
audited nine months ended December 31, 1996. The unaudited pro forma combined
statement of operations for the six months ended June 30, 1997 gives effect to
the acquisition of Home Again as if it occurred on January 1, 1997; the
acquisition of TCH, EIP, CLI and THEI all occurred on January 2, 1997. In the
opinion of management, all adjustments necessary to present fairly the pro forma
financial statements have been made.

The unaudited pro forma combined financial information presented herein
does not purport to represent what the Company's financial position and results
of operations actually would have been had such events occurred on the dates
noted above, or to project the Company's financial position or results of
operations for any future period or the future results of the Founding
Companies. The unaudited pro forma combined financial statements should be read
in conjunction with the other financial statements and notes thereto included
elsewhere in this Prospectus.

F-3
<PAGE> 55

BRIDGESTREET ACCOMMODATIONS, INC. AND FOUNDING COMPANIES

PRO FORMA COMBINED BALANCE SHEET
DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
HOME PRO FORMA
TCH CLI THEI EIP AGAIN BRIDGESTREET ADJUSTMENTS
------ ------ ---- ------ ---- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............................ $ 598 $ 180 $ 52 $ -- $146 $ 6 $ --
Investments in short-term marketable securities...... 152 -- -- -- -- -- --
Accounts receivable, net............................. 795 604 99 418 108 -- --
Security deposits held by landlords.................. -- -- 24 151 8 -- --
Deferred tax asset................................... 129 28 71 166 -- 1 --
Prepaid expense & other.............................. 34 126 26 -- 218 -- --
------ ------ ---- ------ ---- ---- -------
Total current assets............................... 1,708 938 272 735 480 7 --
Operating stock........................................ 268 -- 146 580 196 -- --
Property and equipment................................. 27 118 57 1,392 143 -- --
Other assets........................................... -- 1 -- 8 -- 412 (176)(d)
Notes receivable-stockholders related party............ 10 -- -- -- -- -- --
Goodwill............................................... -- -- -- -- -- -- 17,099(c)
------ ------ ----- ------ ---- ---- -------
Total assets................................... $2,013 $1,057 $475 $2,715 $819 $419 $16,923
====== ====== ==== ====== ==== ==== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt................. $ -- $ 10 $ 19 $ 137 $ 9 $ -- $ --
Due to stockholders and affiliates................... -- 28 -- 95 191 417 --
Accounts payable and accrued expenses................ 622 440 58 584 366 -- --
Accrued income taxes................................. 100 76 16 -- -- -- --
Deferred revenue..................................... -- 428 34 155 31 -- --
Security deposits due to customers................... -- -- 50 260 60 -- --
------ ------ ---- ------ ---- ---- -------
Total current liabilities.......................... 722 982 177 1,231 657 417 --
Long-term debt, net of current maturities.............. -- -- 12 1,049 26 -- --
Deferred income taxes.................................. 107 -- 58 233 -- -- --
Stockholders' Equity (Deficit):
Common stock......................................... 31 5 1 -- 3 12 3(d)
Additional paid in capital........................... -- 180 -- 75 -- (9) 17,292(d)
Treasury stock....................................... (4) -- -- -- -- -- 4(d)
Retained earnings (deficit).......................... 1,157 (110) 227 127 133 (1) (376)(d)
------ ------ ---- ------ ---- ---- -------
Total stockholders' equity......................... 1,184 75 228 202 136 2 16,923
------ ------ ---- ------ ---- ---- -------
Total liabilities and stockholders' equity..... $2,013 $1,057 $475 $2,715 $819 $419 $16,923
====== ====== ==== ====== ==== ==== =======

<CAPTION>
PRO FORMA
PRO FORMA ADJUSTMENTS AS ADJUSTED
--------- ----------- -----------
<S> <<C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............................ $ 982 $ 8,655(a) $ 9,637
Investments in short-term marketable securities...... 152 -- 152
Accounts receivable, net............................. 2,024 -- 2,024
Security deposits held by landlords.................. 183 -- 183
Deferred tax asset................................... 395 -- 395
Prepaid expense & other.............................. 404 -- 404
------- ------- -------
Total current assets............................... 4,140 8,655 12,795
Operating stock........................................ 1,190 -- 1,190
Property and equipment................................. 1,737 -- 1,737
Other assets........................................... 245 (235)(e) 10
Notes receivable-stockholders related party............ 10 -- 10
Goodwill............................................... 17,099 -- 17,099
------- ------- -------
Total assets................................... $24,421 $ 8,420 $32,841
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt................. $ 175 $ (175)(b) $ --
Due to stockholders and affiliates................... 731 (731)(b) --
Accounts payable and accrued expenses................ 2,070 -- 2,070
Accrued income taxes................................. 192 -- 192
Deferred revenue..................................... 648 -- 648
Security deposits due to customers................... 370 -- 370
------- ------- -------
Total current liabilities.......................... 4,186 (906) 3,280
Long-term debt, net of current maturities.............. 1,087 (1,087)(b) --
Deferred income taxes.................................. 398 -- 398
Stockholders' Equity (Deficit):
Common stock......................................... 55 17(e) 72
Additional paid in capital........................... 17,538 10,396(e) 27,934
Treasury stock....................................... -- -- --
Retained earnings (deficit).......................... 1,157 -- 1,157
------- ------- -------
Total stockholders' equity......................... 18,750 10,413 29,163
------- ------- -------
Total liabilities and stockholders' equity..... $24,421 $ 8,420 $32,841
======= ======= =======
</TABLE>

See accompanying notes to pro forma financial statements.

F-4
<PAGE> 56

BRIDGESTREET ACCOMMODATIONS, INC. AND FOUNDING COMPANIES

PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
HOME
TCH CLI THEI EIP AGAIN BRIDGESTREET ADJUSTMENTS(J) PRO FORMA
----------- ---------- ---------- ---------- ---------- ------------ -------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues......... $ 12,502 $ 8,820 $ 3,583 $ 8,626 $ 4,035 $ -- $ -- $ 37,566
Cost of
services........ 9,088 6,106 2,578 7,039 3,134 -- $ -- 27,945
Selling, general
and
administrative
expense......... 2,327 2,519 1,078 1,374 586 2 (552)(f) 7,334
Goodwill
amortization.... -- -- -- -- -- -- 490(g) 490
-------- ------- ------- ------- ------- ---- ------ -----------
Operating income
(loss).......... 1,087 195 (73) 213 315 (2) 62 1,797
Other income
(expenses)...... 89 (206) 5 (130) 77 -- 158(h) (7)
-------- ------- ------- ------- ------- ---- ------ ----------
Income (loss)
before provision
for income
taxes........... 1,176 (11) (68) 83 392 (2) 220 1,790
Provision
(benefit) for
income taxes.... 513 9 (23) 41 -- (1) 373(i) 912
--------- ------- ------- ------- ------- ---- ------ ----------
Net income
(loss).......... $ 663 $ (20) $ (45) $ 42 $ 392 $ (1) $ (153) $ 878
========= ========== ========== ======= ========== ==== ====== ==========
Pro forma net
income per
share........... $ 0.12
Shares used in ==========
computing pro
forma net income
per share....... 7,175,000
</TABLE>

See accompanying notes to pro forma financial statements.

F-5
<PAGE> 57

BRIDGESTREET ACCOMMODATIONS, INC. AND FOUNDING COMPANIES

PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
HOME
BRIDGE STREET AGAIN ADJUSTMENTS PRO FORMA
------------- ------ ----------- ----------
<S> <C> <C> <C> <C>
Revenues...................................................... $21,757 $1,167 $ -- $ 22,924
Cost of services.............................................. 15,974 823 -- 16,797
Selling, general and administrative expense................... 4,397 230 30(k) 4,657
Officers' stock compensation.................................. 1,210 -- -- 1,210
Goodwill amortization......................................... 229 -- 16(l) 245
------- ------ ----- ----------
Operating income (loss)....................................... (53) 114 (46) 15
Other income (expenses)....................................... (6) 1 97(m) 92
------- ------ ----- ----------
Income (loss) before provision for income taxes............... (59) 115 51 107
Provision for income taxes.................................... 518 -- 75(n) 593
------- ------ ----- ----------
Net income (loss)............................................. $ (577) $ 115 $ (24) $ (486)
======= ====== ===== ==========
Pro forma net loss per share.................................. $ (0.07)
==========
Shares used in computing pro forma net loss per share......... 7,175,000
</TABLE>

F-6
<PAGE> 58

BRIDGESTREET ACCOMMODATIONS, INC. AND FOUNDING COMPANIES
NOTES TO PRO FORMA FINANCIAL STATEMENTS

1. BACKGROUND

BridgeStreet was incorporated in August 1996 with the objective of becoming
a leading national provider of flexible accommodation services. The Company
acquired all of the outstanding stock of TCH, EIP, CLI and THEI on January 2,
1997 and Home Again on March 31, 1997 in exchange for 4,301,000 shares of Common
Stock of the Company. The Company conducted no operations prior to January 2,
1997 except in connection with this offering and the Combination. For financial
reporting purposes, TCH has been designated as the accounting acquiror, and its
acquisition of the remaining four Founding Companies has been accounted for
using the purchase method of accounting.

2. UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS (IN THOUSANDS EXCEPT
SHARE AND PER SHARE AMOUNTS)

(a) Records the net increase to cash from the net proceeds of this offering
of 1,700,000 shares of Common Stock at an assumed offering price of $8.00 per
share, less underwriters' discounts and other offering costs, and less the use
of proceeds to pay down approximately $1,262 of bank debt and $731 payable to
stockholders and affiliates.

(b) Records the assumed repayment of bank debt and amounts payable to
stockholders and affiliates.

(c) Records the goodwill resulting from the acquisition of four of the
Founding Companies by TCH. The goodwill is calculated as follows:

<TABLE>
<S> <C>
Appraised value of the four Founding Companies................... $ 13,093
Transaction costs................................................ 4,648
----------
Total purchase price............................................. 17,741
Less: fair market value of net assets acquired................... 642
----------
Goodwill......................................................... $ 17,099
==========
</TABLE>

The appraised value and the transaction costs in the table above are based
on the estimated fair market value of the Common Stock as of the date of the
Combination. The Company valued the Common Stock issued in the Combination and
to certain executives based on an independent appraisal of TCH, the accounting
acquirer. The appraisal was based on several estimates and assumptions about the
future. Actual results could differ and the differences could be material. Below
is a brief description of the appraisal methodology and the more important
assumptions made.

TCH was valued using a discounted cash flow approach which included an
estimate of future TCH cash flows for five years plus a terminal value. This
methodology was considered the most appropriate, and is commonly used for
private companies similar to TCH for which market comparables are not readily
available. The most important estimates and assumptions made for TCH only were
(a) sales growth ranging from 15% to 18%, (b) earnings before interest expense
and taxes (EBIT) margins ranging from 12.2% to 13.4%, and (c) a discount rate of
19.74%. These estimates were made after considering, among other things,
historical operating results, the 1997 budget and TCH's actual results through
June 1997, various risk factors, the relative size of TCH, management depth,
markets served and market position and an evaluation of sales training programs.

A company's client base cannot be separated from the general goodwill of an
ongoing business, and industry practice is not to assign separate value to
client base. The Company has not allocated purchase price to its non-compete
agreements with its executives who were former owners of the Founding Companies
because the Company believes that the value of these agreements is immaterial to
the consolidated financial statements. Although the agreements are legally
enforceable, the Company expects that the executives will continue in the employ
of the Company and will have no reason to compete with it. The executives all
are significant shareholders of the Company's Common Stock (either alone or with
their affiliates) and, as a result, have significant incentives to use their
best efforts to maximize the value of such Common Stock.

F-7
<PAGE> 59

BRIDGESTREET ACCOMMODATIONS, INC. AND FOUNDING COMPANIES
NOTES TO PRO FORMA FINANCIAL STATEMENTS -- (CONTINUED)

(d) Increase in stockholders' equity to record fair market value of shares
issued to acquire Founding Companies other than TCH, record transaction fees
paid in Company stock and eliminate in consolidation the acquired companies'
equity sections. Also allocates to paid-in capital $176 of deferred merger
costs.

(e) Records net proceeds of this offering assuming an offering price of
$8.00 per share less underwriters' commissions and other offering costs of
approximately $3,000. Also allocates to paid-in capital $235 of deferred
offering costs.

3. UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS ADJUSTMENTS FOR THE
YEAR ENDED DECEMBER 31, 1996 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(f) Compensation to certain executives of the Founding Companies has been
adjusted to reflect the compensation to be paid pursuant to employment
agreements signed in connection with the Combination.

(g) Amortization of goodwill over 35 years.

(h) Interest expense related to the bank debt and notes payable to
stockholders has been eliminated because it is assumed to have been repaid at
the beginning of the period.

(i) Pro forma provision for income taxes has been adjusted to reflect the
Company's estimated consolidated effective tax rate subsequent to the
Combination, after considering nondeductible goodwill amortization.

(j) The pro forma combined statement of operations excludes any adjustments
for the compensation to be paid in 1997 for services to be rendered in 1997 by
the Company's Chief Executive Officer and Chief Financial Officer pursuant to
their employment agreements. The statement also excludes approximately $1,210 of
non-recurring non-cash compensation expense recorded in the first quarter of
1997 in connection with the vesting of restricted stock.

4. UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS ADJUSTMENTS FOR THE SIX
MONTHS ENDED JUNE 30, 1997 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS )

(k) Compensation to an executive of Home Again has been adjusted to reflect
the compensation to be paid pursuant to an employment agreement signed in
connection with the acquisition of Home Again.

(l) Amortization of goodwill over 35 years associated with the acquisition
of Home Again.

(m) Interest expense related to the bank debt and notes payable to
stockholders has been eliminated because it is assumed to have been repaid at
the beginning of the period.

(n) Tax provision of 40% of adjustments (k) and (m) above plus a 40% tax
provision on Home Again's historical pretax income; Home Again historically was
an S Corporation that did not pay corporate income taxes, but has become subject
to income taxes subsequent to the Combination.

F-8
<PAGE> 60

BRIDGESTREET ACCOMMODATIONS, INC.
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
TCH BRIDGESTREET
DECEMBER 31, JUNE 30,
1996 1997
------------ ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents...................................... $ 597,939 $ 1,709,701
Investments in short-term marketable securities................ 152,253 277,250
Accounts receivables-
Trade, less allowance for doubtful accounts of $45,000 in
1996 and $296,515 in 1997................................... 794,445 3,415,595
Security deposits held by landlords............................ -- 218,218
Deferred income taxes.......................................... 129,200 677,861
Other current assets........................................... 33,927 592,401
----------- ------------
Total current assets...................................... 1,707,764 6,891,026
Operating stock, net of accumulated amortization.................... 268,086 1,592,889
Property and equipment, net of accumulated depreciation............. 26,961 2,100,104
Other assets........................................................ -- 460,580
Notes receivable - stockholders/affiliates.......................... 10,568 106
Goodwill, net of amortization....................................... -- 17,884,985
----------- ------------
Total assets.............................................. $ 2,013,379 $ 28,929,690
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt........................... $ -- $ 49,192
Due to stockholders and affiliates............................. -- 520,701
Accounts payable and accrued expenses.......................... 622,021 3,207,426
Accrued income taxes........................................... 100,000 287,827
Deferred revenue............................................... -- 1,047,437
Security deposits due to customers............................. -- 507,001
----------- ------------
Total current liabilities................................. 722,021 5,619,584
Long-term debt, net of current maturities........................... -- 3,343,679
Deferred income taxes............................................... 107,744 581,783
Commitments and contingencies
Stockholders' Equity:
Preferred stock................................................ -- --
Common stock................................................... 31,000 54,750
Additional paid in capital..................................... -- 18,750,159
Treasury stock................................................. (4,185) --
Retained earnings.............................................. 1,156,799 579,735
----------- ------------
Total stockholders' equity................................ 1,183,614 19,384,644
----------- ------------
Total liabilities and stockholders' equity........... $ 2,013,379 $ 28,929,690
=========== ============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-9
<PAGE> 61

BRIDGESTREET ACCOMMODATIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- --------------------------
TCH BRIDGESTREET TCH BRIDGESTREET
1996 1997 1996 1997
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Revenues...................................... $3,003,283 $ 12,654,696 $5,641,484 $ 21,757,098
Operating Expenses:
Cost of services......................... 2,197,640 8,961,314 4,186,365 15,973,576
Selling, general and administrative
expense................................ 543,206 2,447,008 1,026,283 4,397,370
Officers' stock compensation............. -- -- -- 1,210,261
Goodwill amortization.................... -- 122,405 -- 229,090
---------- ------------ ---------- ------------
Total operating expenses............ 2,740,846 11,530,727 5,212,648 21,810,297
---------- ------------ ---------- ------------
Operating income (loss)............. 262,437 1,123,969 428,836 (53,199)
Other Income (Expense):
Interest income.......................... 7,203 7,932 4,545 17,288
Interest expense......................... -- (63,869) (107) (97,473)
Other income, net........................ 4,069 44,474 33,863 74,340
---------- ------------ ---------- ------------
Other income, net................... 11,272 (11,463) 38,301 (5,845)
---------- ------------ ---------- ------------
Income (loss) before provision for income
taxes.................................. 273,709 1,112,506 467,137 (59,044)
Provision for income taxes............... 119,276 500,000 203,567 518,020
---------- ------------ ---------- ------------
Net income (loss)........................ $ 154,433 $ 612,506 $ 263,570 $ (577,064)
========== ============ ========== ============
Net income (loss) per share.............. $ 0.11 $ (0.11)
============ ============
Weighted average shares outstanding...... 5,475,000 5,238,812
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-10
<PAGE> 62

BRIDGESTREET ACCOMMODATIONS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
-------------------- PAID-IN RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
--------- ------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996....... 1,174,000 $11,740 $ (9,024) $ (1,336) $ 1,380
Issuance of stock to
founders.................. 4,301,000 43,010 17,548,922 1,158,135 18,750,067
Officers' stock
compensation.............. -- -- 1,210,261 -- 1,210,261
Net loss.................... -- -- -- (577,064) (577,064)
--------- ------ --------- -------- ---------
Balance, June 30, 1997........... 5,475,000 $54,750 $18,750,159 $ 579,735 $ 19,384,644
========= ====== ========= ======== =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-11
<PAGE> 63

BRIDGESTREET ACCOMMODATIONS, INC
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------------
TCH BRIDGESTREET
1996 1997
--------- ------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income (loss)................................................ $ 263,569 $ (577,064)
Adjustments to reconcile net income (loss) to net cash provided
by operating activities--
Officers' stock compensation.................................. -- 1,210,261
Depreciation and amortization................................. 35,470 481,854
Change in operating assets and liabilities excluding the
effect of acquisitions--
Accounts receivable......................................... (260,494) (1,378,688)
Security deposits held by landlords......................... -- (37,237)
Prepaid expenses............................................ -- (376,884)
Other assets................................................ 26,212 --
Accounts payable and accrued expenses....................... 67,981 1,329,546
Accrued taxes............................................... 114,626 95,839
Deferred income taxes....................................... (190,952) (176,274)
Security deposits due to customers.......................... -- 130,749
Deferred revenue............................................ -- 387,677
--------- ---------
Net cash provided by operating activities................ 56,412 1,089,779
Cash Flows From Investing Activities:
Purchases of investments in short term marketable securities..... (112,616) (124,997)
Sales of investments in short term marketable securities......... 29,980 --
Acquisitions, net of cash acquired............................... -- (655,581)
Purchases of operating stock..................................... (44,759) (448,343)
Purchases of property and equipment.............................. (14,862) (378,726)
--------- ---------
Net cash (used in) provided by investing activities...... (142,257) (1,607,647)
--------- ---------
Cash Flows From Financing Activities:
Borrowings from stockholders..................................... -- (296,724)
Repayment of long term debt...................................... -- (186,972)
Borrowings under line of credit.................................. -- 2,110,000
Borrowings under promissory note................................. -- 211,112
Capitalization of offering costs................................. -- (218,248)
Collections of notes receivable.................................. -- 10,462
--------- ---------
Net cash provided by financing activities................ -- 1,629,630
--------- ---------
Net (decrease) increase in cash and cash equivalents..... (85,845) 1,111,762
Cash and cash equivalents, beginning of period..................... 834,615 597,939
--------- ---------
Cash and cash equivalents, end of period........................... $ 748,770 $ 1,709,701
========= =========
Supplemental Cash Flow Information:
Cash paid for interest................................... $ 107 $ 60,805
========= =========
Cash paid for income taxes............................... $ 155,378 $ 214,054
========= =========
Non-Cash Transaction:
During the first quarter of 1997, the Company exchanged 4,301,000
shares of Common Stock in the Company for all of the outstanding
stock of the five Founding Companies.
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-12
<PAGE> 64

BRIDGESTREET ACCOMMODATIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION

BridgeStreet Accommodations, Inc. ("BridgeStreet" or the "Company") was
incorporated on August 19, 1996, to create a leading national provider of
flexible accommodation services through the acquisition and consolidation of the
operations of flexible accommodation service companies. During the first quarter
of 1997, the Company became the holder of all the outstanding stock of the
Founding Companies, five flexible accommodation service providers (the
"Combination"), in exchange for 4,301,000 shares of Common Stock of the Company
(see note 4). The Company conducted no operations prior to January 2, 1997,
except in connection with the offering and the Combination. For financial
reporting purposes, the largest founding company, Temporary Corporate Housing
Columbus, Inc. (together with its three affiliates, "TCH") has been designated
as the accounting acquiror, and its acquisition of the remaining four Founding
Companies has been accounted for using the purchase method of accounting.

The interim consolidated financial statements presented herein have been
prepared by the Company and include the unaudited accounts (on a combined basis
where applicable) of TCH, Corporate Lodgings, Inc., Exclusive Interim
Properties, Ltd. and Temporary Housing Experts, Inc. all of which were merged on
January 2, 1997, as well as the accounts of Home Again, Inc. which was acquired
on March 31, 1997. In the opinion of management, the financial statements
reflect all adjustments of a normal recurring nature necessary for a fair
statement of BridgeStreet's financial position at June 30, 1997, the results of
operations for the three- and six-month periods ended June 30, 1997, and cash
flows for the six-month period ended June 30, 1997.

The financial position at June 30, 1996, the results of operations for the
three- and six-month periods ended June 30, 1996, and cash flows for the
six-month period ended June 30, 1996 presented herein are of TCH, the designated
accounting acquiror. In the opinion of management these financial statements
reflect all normal and recurring adjustments necessary for a fair presentation
of financial position, results of operations and cash flows for the period
presented.

Interim results are not necessarily indicative of results for a full year.

The balance sheet presented as of December 31, 1996, has been derived from
the financial statements of TCH that have been audited by the Company's
independent public accountants. The consolidated financial statements and notes
included herein should be read in conjunction with the financial statements and
notes of TCH and the acquired companies included elsewhere in this prospectus.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Refer to the combined financial statement footnotes of TCH and the Company
included in this registration statement. The Company follows these policies and
the policies described in the next two paragraphs.

The Company accounts for goodwill in accordance with Statement of Financial
Accounting Standards (SFAS) No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of. The Company assesses the
future useful life of the assets whenever events or changes in circumstances
indicate that the current useful life has diminished. The Company considered the
future undiscounted cash flows of the acquired companies in assessing the
recoverability of the asset. If impairment has occurred, any excess of carrying
value over fair value is recorded as a loss.

The Company intends to account for its stock-based compensation plans under
Statement of Financial Accounting Standard No. 123 Accounting for Stock-Based
Compensation, and to elect the disclosure only provisions for stock options as
permitted by SFAS No. 123.

F-13
<PAGE> 65

BRIDGESTREET ACCOMMODATIONS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. INCOME TAXES

The Company records income taxes pursuant to Statement of Financial
Accounting Standards (SFAS) No. 109, Accounting for Income Taxes. Under SFAS No.
109, deferred income taxes are recognized for the tax consequences of temporary
differences by applying enacted statutory rates applicable to future years to
differences between the financial statement carrying amounts and the tax basis
of existing assets and liabilities. The effect on deferred taxes of a change in
tax rates is recognized as income in the period that includes the enactment
date.

Income taxes for the first quarter of 1997 have been provided based on the
Company's estimated full year 1997 effective tax rate of approximately 45%,
after excluding the nonrecurring $1,210,000 officers' restricted stock
compensation charge. The 45% effective rate is higher than the Federal statutory
rate of 34% because of state taxes and because goodwill amortization is not tax
deductible. Deferred tax assets and liabilities resulting in temporary
differences between tax and book reporting relate primarily to operating stock,
accounts receivable and other accruals. Certain of the Founding Companies
elected to be recognized as S corporations under the appropriate federal and
state tax codes when formed. Upon their acquisition by the Company, these
entities were converted to C Corporation tax filing status. The impact of the
change in tax reporting was recorded in purchase accounting and was not material
to the financial statements.

4. DEFERRED OFFERING AND MERGER COSTS

Deferred offering costs consist primarily of legal, accounting and other
professional fees incurred in connection with the offering. All of the costs
associated with the Combination will be included as a component of the purchase
price pursuant to the purchase method of accounting. All the costs associated
with the offering will be charged to stockholders' equity as a reduction to the
proceeds of the offering when the offering closes.

5. ACQUISITIONS

As discussed in Note 1, in the first quarter of 1997, the Company merged
with five flexible accommodation operating companies in stock for stock tax-free
mergers. The mergers have been accounted for using the purchase method of
accounting with TCH designated as the accounting acquiror and the other
operating companies designated as "acquired companies." The results of
operations of the "acquired companies" have been included in the accompanying
consolidated financial statements from their respective dates of acquisition.
The purchase price of the four "acquired companies," including the value of
stock issued to the founders of BridgeStreet as a transaction fee, was
approximately $17.7 million based on an independent appraisal of TCH and the
companies acquired. The aggregate cost of the acquisitions exceeded the
estimated fair value of assets and liabilities of the acquired companies by
$17,214,000. Goodwill is being amortized over 35 years. Allocation of the
purchase price for these acquisitions was based on an independent appraisal of
the fair value of the net assets acquired. Amortization expense was
approximately $122,000 for the three months ended June 30, 1997 and accumulated
goodwill amortization was approximately $229,000 as of and for the six months
ended June 30, 1997.

Based on the unaudited data, the following table presents selected
financial information for the Company, TCH and the four acquired companies on a
pro forma basis, assuming the companies had been combined since the beginning of
1996.

<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, 1996 JUNE 30, 1997
------------------ ----------------
<S> <C> <C>
Revenues................................................... $ 37,566,000 $ 22,924,000
Net income (loss).......................................... $ 452,000 $ (523,000)
Net income (loss) per share................................ $ 0.08 $ (0.10)
</TABLE>

The pro forma results are not necessarily indicative of future operations
or the actual results that would have occurred had the acquisitions been made at
the beginning of 1996.

F-14
<PAGE> 66

BRIDGESTREET ACCOMMODATIONS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

On June 30, 1997, the Company acquired the assets of a flexible
accommodation services provider in Memphis for $1.0 million in cash. The
acquisition has been accounted for using the purchase method of accounting and
the results of operations of this company have been included in the accompanying
financial statements from the date of acquisition. The cost of the acquisition
exceeded the estimated fair value of the acquired net assets by $900,000, which
has been accounted for as goodwill and will be amortized over 35 years.
Allocation of purchase price was based on estimates of the fair value of the net
assets acquired. Pro forma data is not presented since the acquisition was not
material to the Company's results of operations.

6. PROPERTY AND EQUIPMENT; OPERATING STOCK

Property and equipment, and operating stock consist of the following:

<TABLE>
<CAPTION>
JUNE 30, 1997 USEFUL LIVES
------------- ------------
<S> <C> <C>
Land............................................................. $ 266,235
Condominiums..................................................... 1,069,265 27.5 years
Computer equipment............................................... 353,295 1-5 years
Furniture, office equipment and leasehold improvements........... 435,160 5-7 years
Automobiles...................................................... 109,454 5 years
----------
Total property and equipment................................ 2,233,409
Less-accumulated depreciation.................................... 133,305
----------
Property and equipment, net................................. $2,100,104
==========
Operating stock.................................................. $1,711,790
Less-accumulated amortization.................................... 118,901
----------
Operating stock, net............................................. $1,592,889
==========
</TABLE>

7. REVOLVING CREDIT AGREEMENT AND LONG-TERM DEBT

During the first quarter of 1997 the Company entered into a credit
agreement with a bank to provide up to $10 million of revolving credit. The
revolving credit agreement, secured by the capital stock of the Company's
operating subsidiaries, extends to March 31, 2002. Interest is payable at the
prime rate, 1.25% above the Eurodollar rate or a 30-day LIBOR rate. A commitment
fee is payable on the average unused credit at a rate of 0.375%. The revolving
credit agreement contains certain restrictive covenants with which the Company
must comply. As of June 30, 1997, the Company had outstanding $2,110,000 under
this agreement. As of August 15, 1997, the weighted average interest rate was
7.02%.

Also during the first quarter, the Company borrowed under a promissory note
$211,112. The funds were used to repay a portion of the indebtedness of one of
the acquired companies. The note bears interest at 7.625% and matures on August
31, 1997 unless extended.

See Note 5 of the Exclusive Interim Properties, Ltd. financial statements
included elsewhere in this prospectus for a summary of long-term debt at
December 31, 1996 assumed by the Company on January 2, 1997.

8. RELATED PARTY TRANSACTIONS

Refer to the combined financial statements of the five founding companies
and BridgeStreet Accommodations, Inc. included elsewhere in this registration
statement.

9. CAPITAL STOCK

The Company's authorized capital stock consists of 35,000,000 (increased on
April 10, 1997, from 10,000,000 at December 31, 1996) shares of Common Stock,
$.01 par value per share. On April 10, 1997, the

F-15
<PAGE> 67

BRIDGESTREET ACCOMMODATIONS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company's Certificate of Incorporation authorized 5,000,000 shares of Preferred
Stock, $0.01 par value per share.

Common Stock. BridgeStreet effected a 499-for-one stock split in November
1996 of its Common Stock for each share of Common Stock then outstanding. The
effects of the stock split have been retroactively reflected on the balance
sheet and in the accompanying notes. At June 30, 1997, there were 5,475,000
shares of Common Stock outstanding. Holders of Common Stock are entitled to one
vote for each share held of record on all matters to be submitted to a vote of
the stockholders, and do not have cumulative voting rights. In the event of any
liquidation, dissolution or winding-up of the affairs of the Company, holders of
Common Stock will be entitled to share ratably in the assets of the Company
remaining after payment or provision for payment of all of the Company's debts
and obligations and after liquidation payments to holders of outstanding shares
of Preferred Stock, if any.

Preferred Stock. At June 30, 1997, there were no shares of Preferred Stock
outstanding. Holders of Preferred Stock would have priority over the holders of
Common Stock with respect to the dividends, and to other distributions,
including the distribution of assets upon liquidation. The Board of Directors
has the authority, without stockholder authorization, to issue shares of
Preferred Stock in one or more series and to fix terms, limitations, relative
rights and preferences and variations as among series.

10. STOCK OPTION PLANS

The Company adopted the 1997 Equity Incentive Plan (the "Equity Incentive
Plan") which provides for the award of incentive stock options ("ISOs"),
non-qualified stock options, stock appreciation rights, performance shares,
restricted stock and stock units to all directors and employees of (including
directors and employees of the founding companies) and consultants and advisors
to the Company. The number of shares authorized and reserved for issuance under
the Equity Incentive Plan is 1,000,000. In general, the terms of awards granted
under the Equity Incentive Plan (including vesting shares) will be established
by the Compensation Committee of the Company's Board of Directors. As of August
1, 1997, the Company had awarded options to purchase 482,667 shares of Common
Stock under the Equity Incentive Plan effective as of the date of the final
Prospectus used in connection with the offering. Of this amount, options to
purchase 300,000 shares were granted pursuant to employment agreements. Each
option will have a per-share exercise price equal to the offering price.

The Company has adopted the Stock Plan for Non-Employee Directors (the
"Directors' Plan"). Pursuant to the Directors' Plan, on the date of the final
Prospectus used in connection with the offering, each director who is not an
employee of the Company or one of its subsidiaries ( a "non-employee director")
and neither is a holder of five percent or more of the Company's Common Stock
nor was a stockholder of the Company prior to the offering will receive options
to purchase 12,500 shares of Common Stock with a per-share exercise price equal
to the offering price. Thereafter, each such non-employee director will be
granted, on every third anniversary of the final Prospectus (provided he or she
still is a non-employee director at such time), an option to acquire an
additional 7,500 shares of Common Stock, and each non-employee director
initially elected following the offering also will be granted an options to
purchase 7,500 shares of Common Stock having a per-share exercise price equal to
the fair marker value of the Common Stock on the date of such grant. The number
of shares authorized and reserved for issuance under the Directors' Plan is
100,000. No options have been granted under the Directors' Plan as of August 1,
1997.

11. RESTRICTED STOCK COMPENSATION

In 1996, the CEO and CFO purchased 250,000 shares of restricted Common
Stock for nominal value. The restrictions were originally scheduled to lapse
upon the earlier to occur of five years from the date of purchase or upon the
successful completion of an initial public offering of the Company's common
stock or a change in control of the Company, as long as the individuals holding
the stock were the CEO and CFO on the

F-16
<PAGE> 68

BRIDGESTREET ACCOMMODATIONS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

date the restrictions lapsed. As part of the negotiations involving these
officers' employment agreements during the first quarter of 1997, the Company's
Board of Directors removed all restrictions on the stock as of March 31, 1997,
and all of the restricted shares became fully vested. In connection with this
vesting, the Company recognized non-recurring, non-cash compensation expense of
approximately $1,210,000, which was charged to operations with an offsetting
credit to additional paid-in capital in the first quarter of 1997. The
compensation charge of approximately $1,210,000 represented the difference
between the value of the stock issued and the amount paid by the officers,
measured by an independent appraisal as of the date the individuals were
appointed to be the CEO and CFO.

12. EARNINGS PER SHARE

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128 "Earnings Per Share" which is
effective for periods ending after December 15, 1997. The standard requires the
presentation of basic earnings per share ("EPS") and diluted EPS. Basic EPS
replaces the primary EPS calculation required under APB Opinion No. 15. Basic
EPS excludes dilution and is calculated using the weighted average of common
shares outstanding for the period. Diluted EPS is computed similarly to fully
diluted EPS pursuant to APB Opinion No. 15. The pro forma effect of this
accounting change on the June 30, 1997 EPS data is immaterial.

13. COMMITMENTS AND CONTINGENCIES

Employment Contracts. During the first quarter of 1997, the Company
entered into three-year employment contracts with three officers requiring
minimum base salaries aggregating $450,000 per year. The contracts also provide
severance benefits of up to the longer of 12 months' pay or the remaining
contract term for two of the officers.

Lease Commitments. The Company leases administrative offices,
accommodations and furniture at several locations through August 31, 2003. Rent
expense for the three- and six-month periods ended June 30, 1997, was $7,243,000
and $12,598,000, respectively. Minimum future rental payments on non-cancelable
leases at June 30, 1997, are as follows:

<TABLE>
<CAPTION>
OPERATING LEASES
-----------------
<S> <C>
1997...................................................... $ 690,034
1998...................................................... 1,364,514
1999...................................................... 1,233,379
2000...................................................... 601,422
2001...................................................... 281,433
Thereafter................................................ 111,168
----------
Total........................................... $4,281,950
==========
</TABLE>

The Company is party to litigation in the ordinary course of business. The
Company does not anticipate an unfavorable result in any such litigation or
believe that an unfavorable result, if it occurred, would have a material
adverse effect on its business, financial condition or results of operations.

F-17
<PAGE> 69

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of BridgeStreet Accommodations, Inc.:

We have audited the accompanying balance sheet of BridgeStreet
Accommodations, Inc. as of December 31, 1996, and the related statement of
operations, stockholders' equity and cash flows from Inception (August 19, 1996)
through December 31, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements arc free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of BridgeStreet Accommodations,
Inc. as of December 31, 1996, and the results of its operations and its cash
flows from inception through December 31, 1996, in conformity with generally
accepted accounting principles.

ARTHUR ANDERSEN LLP

Boston, Massachusetts
April 10, 1997

F-18
<PAGE> 70

BRIDGESTREET ACCOMMODATIONS, INC.

BALANCE SHEET

<TABLE>
<CAPTION>
DECEMBER 31,
1996
------------
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents..................................................... $ 5,804
Deferred income taxes......................................................... 890
--------
Total current assets....................................................... 6,694
Deferred offering and merger costs.............................................. 411,783
Organization costs.............................................................. 449
--------
Total assets.......................................................... $418,926
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Due to affiliate.............................................................. $417,546
Stockholders' Equity:
Capital stock................................................................. 11,740
Additional paid-in capital.................................................... (9,024)
Accumulated deficit........................................................... (1,336)
--------
Total stockholders' equity................................................. 1,380
--------
Total liabilities and stockholders' equity............................ $418,926
========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-19
<PAGE> 71

BRIDGESTREET ACCOMMODATIONS, INC.

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
INCEPTION
(AUGUST 19, 1996)
THROUGH
DECEMBER 31, 1996
-----------------
<S> <C>
Revenues..................................................................... $ --
Selling, general and administrative expense.................................. 2,226
-------
Loss before benefit for income taxes......................................... (2,226)
Benefit for income taxes..................................................... (890)
-------
Net loss..................................................................... $(1,336)
=======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-20
<PAGE> 72

BRIDGESTREET ACCOMMODATIONS, INC.

STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
--------------------- PAID-IN ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT EQUITY
--------- ------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance, inception, August 19,
1996............................ -- $ -- $ -- $ -- $ --
Shares issued................... 1,174,000 11,740 (9,024) -- 2,716
Net loss........................ -- -- -- (1,336) (1,336)
--------- ------- -------- ------- -------
Balance, December 31, 1996........ 1,174,000 $11,740 $ (9,024) $(1,336) $ 1,380
========= ======= ======== ======= =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-21
<PAGE> 73

BRIDGESTREET ACCOMMODATIONS, INC.

STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
INCEPTION
(AUGUST 19, 1996)
THROUGH
DECEMBER 31, 1996
-----------------
<S> <C>
Cash Flows From Operating Activities:
Net loss................................................................... $(1,336)
Adjustments to reconcile net loss to net cash used in operating
activities --
Change in assets and liabilities --
Deferred income taxes................................................. (890)
-------
Net cash used in operating activities.............................. (2,226)
Cash Flows Used in Investing Activities:
Organization costs......................................................... (449)

Cash Flows From Financing Activities:
Advances from affiliate.................................................... 5,763
Issuance of common stock................................................... 2,716
-------
Net cash provided by financing activities.......................... 8,479
-------
Net increase in cash and cash equivalents.................................... 5,804
Cash and cash equivalents, beginning of period..................... --
-------
Cash and cash equivalents, end of period........................... $ 5,804
=======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-22
<PAGE> 74

BRIDGESTREET ACCOMMODATIONS, INC.

NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION

BridgeStreet Accommodations, Inc. ("BridgeStreet" or "the Company") was
incorporated on August 19, 1996 to create a leading national provider of
flexible accommodation services through the acquisition and consolidation of the
operations of flexible accommodation service companies. During the first quarter
of 1997 the Company acquired, through stock-for-stock transactions, five
flexible accommodation service providers (the "Combination"). BridgeStreet
intends to complete an initial public offering (the "Offering") of its common
stock and subsequent to the Offering continue to acquire, through merger or
purchase, similar companies to expand its national and regional operations.

BridgeStreet's primary assets at December 31, 1996 are cash and deferred
offering and merger costs. BridgeStreet's only operations to date have related
to the Combination and the Offering. Funding for the deferred offering and
merger costs has been provided by American Business Partners, LLC ("ABP"). See
Note 4.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed in
the preparation of these financial statements.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original
maturities of three months or less to be cash and cash equivalents.

Stock Based Compensation Plans

The Company intends to account for its stock-based compensation plans under
Statement of Financial Accounting Standards ("SFAS") No. 123, and to elect the
disclosure only provisions for stock options as permitted by SFAS No. 123.

Deferred offering and merger costs

Deferred offering and merger costs consist primarily of legal, accounting
and other professional fees incurred in connection with the Combination and the
Offering. All of the costs associated with the Combination will be included as a
component of the purchase price pursuant to the purchase method of accounting.
All of the costs associated with the Offering will be charged to Stockholders'
Equity as a reduction to the proceeds of the Offering when the Offering closes.

3. INCOME TAXES

The Company records income taxes pursuant to SFAS No. 109, Accounting for
Income Taxes. Under SFAS No. 109, deferred income taxes are recognized for the
tax consequences of temporary differences by applying enacted statutory rates
applicable to future years to differences between the financial statement
carrying amounts and the tax basis of existing assets and liabilities. The
effect on deferred income taxes of a change in tax rates is recognized as income
in the period that includes the enactment. At December 31, 1996 the Company has
recorded as an asset deferred income taxes of $890.

F-23
<PAGE> 75

BRIDGESTREET ACCOMMODATIONS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. RELATED PARTY TRANSACTIONS

Funding for the deferred Offering and merger costs has been provided by
ABP. Certain shareholders of BridgeStreet are principals of ABP including the
Company's Chairman. In addition, the Chief Financial Officer of the Company was
a consultant to ABP from January 1996 through December 1996, and the Chief
Executive Officer of the Company was a consultant to ABP from October 31, 1996
through December 31, 1996. At December 31, 1996 ABP has provided aggregate
funding of $417,546. Upon completion of the Offering the Company will pay ABP
for the funding it provided.

The Company also has a consulting agreement with ABP in which ABP will
perform services for the Company in connection with its acquisition program. In
exchange for such services, ABP will be paid a fee of 1% of the transaction
value for each acquisition by the Company after the closing of the Offering for
which ABP provides assistance. ABP also will be reimbursed for all direct
expenses incurred by ABP in connection with such acquisitions. The Company is
not obligated to utilize ABP's services in connection with its acquisition
program.

5. CAPITAL STOCK

The Company's authorized capital stock consists of 35,000,000 (increased on
April 10, 1997, from 10,000,000 at December 31, 1996) shares of Common Stock,
$0.01 par value per share, and 5,000,000 shares of Preferred Stock, $0.01 par
value per share.

Common Stock. BridgeStreet effected a 499-for-one stock split in November
1996 of its Common Stock for each share of Common Stock then outstanding. The
effects of the stock split have been retroactively reflected on the balance
sheet and in the accompanying notes. At December 31, 1996 there were 1,174,000
shares of Common Stock outstanding. Holders of Common Stock are entitled to one
vote for each share held of record on all matters to be submitted to a vote of
the stockholders, and do not have cumulative voting rights. In the event of any
liquidation, dissolution or winding-up of the affairs of the Company, holders of
Common Stock will be entitled to share ratably in the assets of the Company
remaining after payment or provision for payment of all of the Company's debts
and obligations and after liquidation payments to holders of outstanding shares
of Preferred Stock, if any.

Preferred Stock. At December 31, 1996 there were no shares of Preferred
Stock outstanding. Holders of Preferred Stock would have priority over the
holders of Common Stock with respect to dividends, and to other distributions,
including the distribution of assets upon liquidation. The Board of Directors
has the authority, without stockholder authorization, to issue shares of
Preferred Stock in one or more series and to fix the terms, limitations,
relative rights and preferences and variations as among series.

6. STOCK OPTION PLANS

The Company has adopted the 1997 Equity Incentive Plan (the "Equity
Incentive Plan") which provides for the award of incentive stock options
("ISOs"), non-qualified stock options, stock appreciation rights, performance
shares, restricted stock or stock units to all directors and employees of
(including directors and employees of the Founding Companies) and consultants
and advisors to the Company. The number of shares authorized and reserved for
issuance under the Equity Incentive Plan is 1,000,000. In general, the terms of
awards granted under the Equity Incentive Plan (including vesting schedules)
will be established by the Compensation Committee of the Company's Board of
Directors. As of April 10, 1997 the Company had awarded options to purchase
334,000 shares of Common Stock under the Equity Incentive Plan effective as of
the date of the final Prospectus used in connection with the Offering. Of this
amount, options to purchase 300,000 shares were granted pursuant to employment
agreements. Each option will have a per-share exercise price equal to the
Offering price.

F-24
<PAGE> 76

BRIDGESTREET ACCOMMODATIONS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The Company has adopted the Stock Plan for Non-Employee Directors (the
"Directors' Plan"). Pursuant to the Directors' Plan, on the date of the final
Prospectus used in connection with the Offering, each director who is not an
employee of the Company or one of its subsidiaries (a "non-employee director")
and neither is a holder of five percent or more of the Company's Common Stock
nor was a stockholder of the Company prior to the Offering will receive options
to purchase 12,500 shares of Common Stock with a per-share exercise price equal
to the Offering price. Thereafter, each such non-employee director will be
granted, on every third anniversary of the final Prospectus (provided he or she
still is a non-employee director at such time), an option to acquire an
additional 7,500 shares of Common Stock, and each non-employee director
initially elected following the Offering also will be granted an option to
purchase 7,500 shares of Common Stock having a per-share exercise price equal to
the fair market value of the Common Stock on the date of such grant. The number
of shares authorized and reserved for issuance under the Directors Plan is
100,000. No options have been granted under the plan as of April 10, 1997.

7. COMMITMENTS

Subsequent to December 31, 1996 the Company entered into three year
employment contracts with three officers requiring minimum base salaries
aggregating $450,000 per year. The contracts also provide severance benefits of
up to 12 months' pay for two of the officers.

8. RESTRICTED STOCK COMPENSATION

In 1996, the CEO and CFO purchased an aggregate of 250,000 shares of
restricted Common Stock for nominal value. The restrictions were originally
scheduled to lapse upon the earlier to occur of five years from the date of
purchase or the successful completion of an initial public offering of the
Company's common stock or a change in control of the Company, as long as the
individuals holding the stock were the CEO and CFO on the date the restrictions
lapsed. As part of the negotiations involving these officers' employment
agreements during the first quarter of 1997, the Company's Board of Directors
removed all of the restrictions as of March 31, 1997, and all of the restricted
shares became fully vested on that date. In connection with this vesting, the
Company recognized non-recurring, non-cash compensation expense of approximately
$1,210,000, which will be charged to operations with an offsetting credit to
Additional paid-in capital in the first quarter of 1997. The compensation charge
of approximately $1,210,000 represented the difference between the value of the
stock issued and the amount paid by the officers, measured by an independent
appraisal as of the date the individuals were appointed to be the CEO and CFO.

9. SUBSEQUENT EVENTS

During the first quarter of 1997, the Company acquired through
stock-for-stock mergers five flexible accommodation service providers. The
aggregate consideration paid by the Company was 4,301,000 shares of Common
Stock. The companies acquired were Temporary Corporate Housing Columbus, Inc.
(together with its three affiliates), Corporate Lodgings, Inc. (together with
its four affiliates), Exclusive Interim Properties, Ltd. (together with its
affiliate), Home Again, Inc. (together with its two affiliates) and Temporary
Housing Experts, Inc.

During the first quarter of 1997 the Company entered into a credit
agreement with a bank to provide up to $10 million of revolving credit. The
revolving credit, secured by the capital stock of the Company's operating
subsidiaries, extends to March 31, 2002. Interest is payable at the prime rate,
1.25% above the Eurodollar rate or a 30-day LIBOR rate. A commitment fee is
payable on the average unused credit at a rate of 0.375%. The revolving credit
agreement contains certain restrictive covenants with which the Company must
comply.

F-25
<PAGE> 77

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of Temporary Corporate Housing Columbus, Inc.:

We have audited the accompanying combined balance sheets of Temporary
Corporate Housing Columbus, Inc. as of December 31, 1995 and 1996, and the
related combined statements of operations, stockholders' equity and cash flows
for each of the three years in the period ended December 31, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of Temporary Corporate
Housing Columbus, Inc. as of December 31, 1995 and 1996, and the combined
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1996, in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP

Boston, Massachusetts
February 28, 1997

F-26
<PAGE> 78

TEMPORARY CORPORATE HOUSING COLUMBUS, INC.

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1995 1996
---------- ----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents......................................... $ 834,615 $ 597,939
Investment in short-term marketable securities.................... 219,300 152,253
Accounts receivable, less allowance for doubtful accounts
of $45,000 in 1996............................................. 755,649 794,445
Deferred income taxes............................................. 255,217 129,200
Refundable taxes.................................................. -- 33,927
Other current assets.............................................. 36,883 --
---------- ----------
Total current assets........................................... 2,101,664 1,707,764
Operating stock, net of accumulated amortization.................... 220,251 268,086
Property and equipment, net of accumulated depreciation............. 33,482 26,961
Notes receivable -- stockholder/related party....................... 154,602 10,568
---------- ----------
Total assets.............................................. $2,509,999 $2,013,379
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable.................................................. $ 208,712 $ 218,407
Accrued expenses --
Payroll and employee benefits.................................. 391,420 61,201
Other.......................................................... 371,880 342,413
Accrued income taxes.............................................. 501,520 100,000
Due to stockholder................................................ 64,844 --
---------- ----------
Total current liabilities...................................... 1,538,376 722,021
Deferred income taxes............................................... 102,500 107,744
Commitments and contingencies
Stockholders' Equity:
Common stock...................................................... 31,000 31,000
Treasury stock.................................................... (4,185) (4,185)
Retained earnings................................................. 842,308 1,156,799
---------- ----------
Total stockholders' equity..................................... 869,123 1,183,614
---------- ----------
Total liabilities and stockholders' equity................ $2,509,999 $2,013,379
========== ==========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-27
<PAGE> 79

TEMPORARY CORPORATE HOUSING COLUMBUS, INC.

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------
1994 1995 1996
---------- ---------- -----------
<S> <C> <C> <C>
Revenues.............................................. $8,308,840 $9,754,222 $12,501,885
Operating Expenses:
Cost of services.................................... 6,474,548 7,353,552 9,087,689
Selling, general and administrative expense......... 1,628,406 2,064,463 2,326,772
---------- ---------- -----------
Total operating expenses......................... 8,102,954 9,418,015 11,414,461
---------- ---------- -----------
Operating income................................. 205,886 336,207 1,087,424
Other Income (Expense):
Interest income..................................... 9,586 25,592 47,093
Interest expense.................................... (2,957) (6,914) (107)
Other income........................................ 14,024 34,537 41,941
---------- ---------- -----------
Other income, net................................ 20,653 53,215 88,927
---------- ---------- -----------
Income before provision for income taxes.............. 226,539 389,422 1,176,351
Provision for income taxes............................ 113,116 178,269 512,627
---------- ---------- -----------
Net income............................................ $ 113,423 $ 211,153 $ 663,724
========== ========== ===========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-28
<PAGE> 80

TEMPORARY CORPORATE HOUSING COLUMBUS, INC.

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
------------------ TREASURY RETAINED STOCKHOLDERS'
SHARES AMOUNT STOCK EARNINGS EQUITY
------ ------- -------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1993............ 2,056 $31,000 $(4,185) $ 517,732 $ 544,547
Net income.......................... -- -- -- 113,423 113,423
----- ------- ------- ---------- ----------
Balance, December 31, 1994............ 2,056 31,000 (4,185) 631,155 657,970
Net income.......................... -- -- -- 211,153 211,153
----- ------- ------- ---------- ----------
Balance, December 31, 1995............ 2,056 31,000 (4,185) 842,308 869,123
Net income.......................... -- -- -- 663,724 663,724
Cash dividend....................... -- -- -- (349,233) (349,233)
----- ------- ------- ---------- ----------
Balance, December 31, 1996............ 2,056 $31,000 $(4,185) $1,156,799 $1,183,614
===== ======= ======= ========== ==========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-29
<PAGE> 81

TEMPORARY CORPORATE HOUSING COLUMBUS, INC.

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
1994 1995 1996
--------- --------- ---------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income............................................ $ 113,423 $ 211,153 $ 663,724
Adjustments to reconcile net income to net cash
provided by operating activities --
Depreciation and amortization...................... 66,652 78,684 60,333
Gain on sale of assets............................. -- -- (500)
Change in operating assets and liabilities --
Accounts receivable.............................. (207,780) (154,680) (38,796)
Other assets..................................... 572 (30,978) 36,883
Accounts payable................................. (25,488) 53,404 9,695
Accrued expenses................................. 280,353 560,967 (761,206)
Deferred income taxes............................ (42,338) (98,307) 97,334
--------- --------- ---------
Net cash provided by operating activities..... 185,394 620,243 67,467
--------- --------- ---------
Cash Flows From Investing Activities:
Purchases of investments in short-term marketable
securities......................................... (134,501) (194,925) (330,887)
Sales of investments in short-term marketable
securities......................................... 27,888 151,076 397,934
Proceeds from sale of assets.......................... -- -- 4,507
Purchases of operating stock.......................... (76,610) (24,591) (77,642)
Purchases of property and equipment................... (30,341) (57,798) (28,012)
--------- --------- ---------
Net cash used in investing activities......... (213,564) (126,238) (34,100)
--------- --------- ---------
Cash Flows From Financing Activities:
Due to stockholders................................... 5,154 (1,920) (64,844)
Cash dividend......................................... -- -- (349,233)
Payments of notes payable............................. (10,318) -- --
Collections on notes receivable....................... -- -- 144,034
Additions to notes receivable......................... -- (154,602) --
--------- --------- ---------
Net cash used in financing activities......... (5,164) (156,522) (270,043)
--------- --------- ---------
Net (decrease) increase in cash and cash
equivalents................................. (33,334) 337,483 (236,676)
Cash and cash equivalents, beginning of year............ 530,466 497,132 834,615
--------- --------- ---------
Cash and cash equivalents, end of year.................. $ 497,132 $ 834,615 $ 597,939
========= ========= =========
Supplemental cash flow information:
Cash paid for interest........................ $ 2,957 $ 6,914 $ 107
========= ========= =========
Cash paid for income taxes.................... $ 25,264 $ 33,348 $ 828,618
========= ========= =========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-30
<PAGE> 82

TEMPORARY CORPORATE HOUSING COLUMBUS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION

The accompanying combined financial statements include the accounts of
Temporary Corporate Housing Columbus, Inc. and three affiliated entities in the
same business (collectively, "TCH" or the "Company"), substantially all of which
are commonly owned through a general partnership, the general partners of which
are all family members. The affiliated entities are Temporary Corporate Housing
Cincinnati, Inc., Temporary Corporate Housing Cleveland, Inc. and Temporary
Corporate Housing Pittsburgh, Inc. The Company was founded in 1983, and provides
fully-furnished apartments, townhouses, condominiums and, to a lesser extent,
homes (collectively, "accommodations") to individuals in need of flexible
accommodations. The Company has offices in four cities: Columbus, Cleveland and
Cincinnati, Ohio; and Pittsburgh, Pennsylvania.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed in
the preparation of these combined financial statements.

Use of Estimates

Principles of Combination

The accompanying combined financial statements include the accounts of
Temporary Corporate Housing Columbus, Inc. and three affiliated entities. All
significant intercompany accounts and transactions have been eliminated.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original
maturities of three months or less to be cash and cash equivalents. The fair
market value of the Company's financial instruments approximates their financial
statement carrying value.

Investments in Available-for-Sale Marketable Securities

Investments in available-for-sale short-term marketable securities are
stated at cost, which approximates market value.

Property and Equipment

F-31
<PAGE> 83

TEMPORARY CORPORATE HOUSING COLUMBUS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

reporting and income tax reporting purposes over the estimated useful lives of
the respective assets. Estimated useful lives are as follows:

<TABLE>
<CAPTION>
ESTIMATED
USEFUL
ASSET CLASSIFICATION LIFE
-------------------- ----------
<S> <C>
Computer equipment..................................... 1-5 Years
Office furniture and equipment......................... 5 Years
Automobiles............................................ 5 Years
</TABLE>

Repairs and maintenance are charged to expense as incurred. General and
administrative costs associated with the opening of new Company offices are
expenses as incurred.

Revenue Recognition

The Company recognizes revenues on the rentals of accommodations to its
clients on a pro rata basis over the length of the client's stay.

Concentration of Credit Risk

Concentration of credit risk is limited to accounts receivable. The Company
does not require collateral or other security to support their receivables. The
Company conducts periodic reviews of its clients' financial condition and
payment practices to minimize collection risks on accounts receivable.

Operating Stock

Operating stock to furnish new units, including linen, glassware,
silverware, utensils and minor appliances, is capitalized as it is purchased and
amortized over a three year period to a residual value of 50% of the original
cost. Additional purchases of operating stock for units already established is
expensed as incurred.

Accommodation and Furniture Leases

The Company leases substantially all of its accommodations on a short-term
basis with lease terms ranging from three months to one year. Furniture for the
accommodations is leased on a monthly basis from various furniture rental
companies, including a related party. (See Note 6)

3. INCOME TAXES

F-32
<PAGE> 84

TEMPORARY CORPORATE HOUSING COLUMBUS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The provision (benefit) for income taxes consists of the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1994 1995 1996
-------- -------- ---------
<S> <C> <C> <C>
Current --
City and state.......................... $ 12,360 $ 13,964 $ 112,447
Federal................................. 58,418 65,998 531,441
-------- -------- ---------
70,778 79,962 643,888
-------- -------- ---------
Deferred --
City and state.......................... 7,394 17,168 (22,923)
Federal................................. 34,944 81,139 (108,338)
-------- -------- ---------
42,338 98,307 (131,261)
-------- -------- ---------
Total provision for income
taxes......................... $113,116 $178,269 $ 512,627
======== ======== =========
</TABLE>

A reconciliation between the provision for income taxes computed at the
statutory rates and the amount reflected in the accompanying combined statements
of operations is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
1994 1995 1996
-------- -------- --------
<S> <C> <C> <C>
Computed expected federal tax provision for
the three years ended December 31, 1994,
1995 and 1996............................ $ 77,023 $132,403 $399,959
Increase in taxes resulting from --
City and state income taxes.............. 16,297 28,015 84,627
Other.................................... 19,796 17,851 28,041
-------- -------- --------
Provision for income taxes....... $113,116 $178,269 $512,627
======== ======== ========
</TABLE>

Deferred tax assets (liabilities) consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1996
-------- --------
<S> <C> <C>
Tax assets --
Accruals not yet deductible for tax purposes...... $255,217 $129,200
Net operating loss carryforward................... 17,391 --
Less -- valuation allowance............................ (17,391) --
-------- --------
255,217 129,200
-------- --------
Tax liabilities
Operating stock and prepaid supplies expensed for
tax purposes.................................... 102,500 107,744
-------- --------
Net deferred tax assets...................... $152,717 $ 21,456
======== ========
</TABLE>

The Company had no net operating loss ("NOL") carryforwards as of December
31, 1996. At December 31, 1995, the valuation allowance related to uncertainty
concerning the Company's ability to realize the NOL.

F-33
<PAGE> 85

TEMPORARY CORPORATE HOUSING COLUMBUS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

4. PROPERTY AND EQUIPMENT; OPERATING STOCK

Property and equipment, and operating stock, consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1995 1996
-------- ---------
<S> <C> <C>
Computer equipment............................................. $183,201 $169,577
Furniture and office equipment................................. 89,252 80,738
Automobiles.................................................... 62,084 57,584
-------- --------
Total property and equipment......................... 334,537 307,899
Less -- accumulated depreciation............................... 301,055 280,938
-------- --------
Property and equipment, net.......................... $ 33,482 $ 26,961
======== ========

Operating stock................................................ $398,570 $476,212
Less -- accumulated amortization............................... 178,319 208,126
-------- --------
Operating stock, net................................. $220,251 $268,086
======== ========
</TABLE>

5. LEASE COMMITMENTS

The Company leases administrative offices, accommodations and furniture at
several locations through August 31, 1999. Rent expense for the fiscal years
ended December 31, 1994, 1995 and 1996 was $4,965,215, $5,642,868 and
$6,998,444, respectively. Minimum future rental payments on noncancelable leases
at December 31, 1996 are as follows:

<TABLE>
<CAPTION>
OPERATING
LEASES
----------
<S> <C>
1997..................................................................... $ 969,826
1998..................................................................... 796,825
1999..................................................................... 806,518
2000..................................................................... 301,523
----------
Total.......................................................... $2,874,692
==========
</TABLE>

6. RELATED PARTY TRANSACTIONS

For the period from November 1, 1992 until October 31, 1995, the Company
leased office space for its corporate headquarters located in Columbus, Ohio,
from a former owner of the Company and spouse of one the general partners of SLD
Partnership ("SLD"), an Ohio general partnership that owns substantially all of
the outstanding capital stock of the Company. The lease term and annual rental
amounts were comparable to the current lease agreement for the same premises
that the Company entered into, effective November 1, 1995, with an unaffiliated
entity. Rent expense related to this office space for the years ended December
31, 1994, 1995 and 1996 was $9,720, $10,200 and $11,378, respectively.

The Company has entered into an exclusive furniture lease agreement with
Integrity Furniture, Inc., which is 49% owned by SLD. The agreement was entered
into on September 12, 1995, has a five year period and provides that the lessor
will have the exclusive right to furnish all of the Company's leased
accommodations in Pittsburgh, Pennsylvania at agreed-upon prices. The initial
unit lease terms are for minimum three-month periods that then are renewable
monthly. In management's opinion, the lease terms and rental amounts are
comparable to other agreements that the Company has entered into with
unaffiliated entities.

F-34
<PAGE> 86

TEMPORARY CORPORATE HOUSING COLUMBUS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

On October 15, 1995, the Company loaned to SLD $45,000 (included in related
party notes receivable as of December 31, 1995), at an annual interest rate of
7% beginning November 1995. Also in 1995 SLD borrowed $109,602 from the Company.
Both of these notes were repaid in full during 1996.

The Company leases televisions, VCRs and microwave ovens from Saturn
Enterprises, Inc. ("Saturn"), which is owned by the spouse of one of the general
partners of SLD. The original agreement commenced on January 1, 1989, and was
renewed on December 28, 1995 for a three-year period beginning on January 1,
1996. These items are rented at rates that are comparable to those charged by
unaffiliated companies. Included in accounts payable at December 31, 1995 and
1996 are amounts owed to Saturn of approximately $47,000 and $17,500,
respectively.

For the period from June 1992 until November 1996, the Company received
consulting services from two of the general partners of SLD. The cost incurred
for these services was $96,000 in each of 1994, 1995 and 1996. The consulting
contracts with the two general partners of SLD were terminated in November 1996.

7. PROFIT SHARING PLAN

Eligible employees of the Company participated in a profit sharing plan
(the "Plan") sponsored by the Company. This defined contribution plan provides
that the Company will make contributions to the Plan in its sole discretion. The
Company's contributions to the Plan amounted to approximately $43,523 in 1995.
The Plan was terminated by the Company on December 31, 1995. In accordance with
the provisions of the Plan agreement, all plan assets were distributed to the
participants during 1996.

8. CONTINGENCIES

The Company is a party to litigation in the ordinary course of business.
The Company does not anticipate an unfavorable result in any such litigation or
believe that an unfavorable result, if it occurred, would have a material
adverse effect on its business, financial condition and results of operations.

9. STOCKHOLDERS' EQUITY

Combined stockholders' equity includes the following common stock accounts
as of December 31, 1995 and 1996 (no par value for all classes of stock):

<TABLE>
<CAPTION>
OUTSTANDING
SHARES AMOUNT
----------- -------
<S> <C> <C>
Temporary Corporate Housing Columbus, Inc. --
Class A common stock --
Voting common stock authorized -- 500 shares.............. 500 $25,000
Class B common stock --
Nonvoting common stock authorized -- 500 shares........... 56 --
Temporary Corporate Housing Cleveland, Inc. --
Voting common stock authorized -- 500 shares.............. 500 500
Temporary Corporate Housing Cincinnati, Inc. --
Voting common stock authorized -- 500 shares.............. 500 5,000
Temporary Corporate Housing Pittsburgh, Inc. --
Voting common stock authorized -- 500 shares.............. 500 500
----- -------
2,056 $31,000
===== =======
</TABLE>

The treasury stock in the combined financial statements represents 40
shares of TCH Class B common stock purchased for $4,185.

F-35
<PAGE> 87

TEMPORARY CORPORATE HOUSING COLUMBUS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

10. ACCRUED EXPENSES -- OTHER

Accrued expenses -- other includes an accrual for sales and use taxes of
$125,000 and $200,000 as of December 31, 1995 and 1996, respectively.

11. SALE OF COMPANY

Effective on January 2, 1997, the Company was acquired, through a stock for
stock merger, by Bridgestreet Accommodations, Inc. The stockholders of the
Company received 1,596,350 shares of Bridgestreet Accommodations, Inc.'s common
stock in exchange for all of the outstanding common stock of the Company.

F-36
<PAGE> 88

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of Corporate Lodgings, Inc.:

We have audited the accompanying combined balance sheets of Corporate
Lodgings, Inc., as of December 31, 1995 and 1996, and the related combined
statements of operations, stockholders' equity (deficit) and cash flows for each
of the three years in the period ended December 31, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of Corporate Lodgings,
Inc. as of December 31, 1995 and 1996, and the combined results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Boston, Massachusetts
February 28, 1997

F-37
<PAGE> 89

CORPORATE LODGINGS, INC.

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1995 1996
---------- ----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents......................................... $ 343,231 $ 179,795
Accounts receivable -- trade, less allowance for doubtful accounts
of $29,689 and $43,172 in 1995, and 1996, respectively......... 376,317 604,098
Deferred income taxes............................................. 78,734 28,215
Prepaid expenses and other current assets......................... 217,793 126,116
---------- ----------
Total current assets...................................... 1,016,075 938,224
Property and equipment, net of accumulated depreciation........... 117,777 117,906
Notes receivable -- stockholder................................... 30,034 --
Other assets...................................................... 1,752 1,249
---------- ----------
Total assets.............................................. $1,165,638 $1,057,379
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable.................................................. $ 186,859 $ 282,436
Accrued expenses --
Payroll, bonuses and related items............................. 275,007 65,238
Other.......................................................... 59,566 92,631
Accrued income taxes.............................................. 125,104 76,093
Current portion of notes payable.................................. 28,893 9,720
Notes payable -- stockholder...................................... 194,015 28,493
Deferred revenue.................................................. 371,283 427,987
---------- ----------
Total current liabilities................................. 1,240,727 982,598
Notes payable....................................................... 9,720 --
Commitments and contingencies
Stockholders' Equity (Deficit):
Common stock...................................................... 5,000 5,000
Additional paid-in capital........................................ 800 179,797
Accumulated deficit............................................... (90,609) (110,016)
---------- ----------
Total stockholders' equity (deficit)........................... (84,809) 74,781
---------- ----------
Total liabilities and stockholders' equity (deficit)...... $1,165,638 $1,057,379
========== ==========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-38
<PAGE> 90

CORPORATE LODGINGS, INC.

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1994 1995 1996
---------- ---------- ----------
<S> <C> <C> <C>
Revenues............................................... $4,069,094 $6,067,389 $8,820,039
---------- ---------- ----------
Operating Expenses:
Cost of services..................................... 2,744,916 4,046,624 6,105,473
Selling, general and administrative expense.......... 1,237,403 1,981,852 2,519,435
---------- ---------- ----------
Total operating expenses.......................... 3,982,319 6,028,476 8,624,908
---------- ---------- ----------
Operating income.................................. 86,775 38,913 195,131
Other Income (Expense):
Interest income...................................... 1,992 1,646 1,284
Interest expense..................................... (6,851) (14,615) (26,625)
Other income (expense), net.......................... (2,491) 504 (180,449)
---------- ---------- ----------
Other expense, net................................ (7,350) (12,465) (205,790)
---------- ---------- ----------
Income (loss) before provision for income taxes... 79,425 26,448 (10,659)
Provision for income taxes............................. 50,454 47,463 8,748
---------- ---------- ----------
Net income (loss)...................................... $ 28,971 $ (21,015) $ (19,407)
========== ========== ==========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-39
<PAGE> 91

CORPORATE LODGINGS, INC.

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
TOTAL
COMMON STOCK ADDITIONAL STOCKHOLDERS'
--------------------- PAID-IN ACCUMULATED EQUITY
SHARES AMOUNT CAPITAL DEFICIT (DEFICIT)
--------- --------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1993............ 1,450 $3,000 $ 800 $ (98,565) $(94,765)
Net income.......................... -- -- -- 28,971 28,971
Issuance of stock................... 100 1,000 -- -- 1,000
----- ------ -------- --------- --------
Balance, December 31, 1994............ 1,550 4,000 800 (69,594) (64,794)
Net loss............................ -- -- -- (21,015) (21,015)
Issuance of stock................... 100 1,000 -- -- 1,000
----- ------ -------- --------- --------
Balance, December 31, 1995............ 1,650 5,000 800 (90,609) (84,809)
Net loss............................ -- -- -- (19,407) (19,407)
Capital contribution................ -- -- 178,997 -- 178,997
----- ------ -------- --------- --------
Balance, December 31, 1996............ 1,650 $5,000 $179,797 $(110,016) $ 74,781
===== ====== ======== ========= ========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-40
<PAGE> 92

CORPORATE LODGINGS, INC.

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1994 1995 1996
-------- --------- ---------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net (loss) income...................................... $ 28,971 $ (21,015) $ (19,407)
Adjustments to reconcile net (loss) income to net cash
(used in) provided by operating activities --
Depreciation and amortization....................... 16,376 36,496 52,970
Change in operating assets and liabilities --
Accounts receivable............................... (43,184) (145,204) (227,781)
Deferred income taxes............................. (1,346) (36,580) 50,519
Prepaid expenses and other current assets......... (10,206) (141,831) 91,677
Accounts payable.................................. (67,939) 98,767 95,577
Accounts payable -- stockholder................... 72,468 (11,544) --
Accrued expenses.................................. 47,090 209,822 (176,704)
Accrued income taxes.............................. 20,217 76,525 (49,011)
Deferred income................................... 16,665 151,041 56,704
Other............................................. (379) (434) --
-------- --------- ---------
Net cash provided by (used in) operating
activities................................... 78,733 216,043 (125,456)
-------- --------- ---------
Cash Flows From Investing Activities:
Purchases of property and equipment.................... (26,159) (94,032) (53,953)
Other.................................................. -- -- 1,357
-------- --------- ---------
Net cash used in investing activities.......... (26,159) (94,032) (52,596)
-------- --------- ---------
Cash Flows From Financing Activities:
Cash received from notes receivable -- stockholder..... 1,648 5,576 30,034
Issuance (payments) of notes payable, net.............. 13,642 11,303 (15,418)
Issuance (payments) of notes payable -- stockholder.... -- 112,000 --
Issuance of common stock............................... 1,000 1,000 --
-------- --------- ---------
Net cash provided by financing activities...... 16,290 129,879 14,616
-------- --------- ---------
Net (decrease) increase in cash and cash equivalents..... 68,864 251,890 (163,436)
Cash and cash equivalents, beginning of year............. 22,477 91,341 343,231
-------- --------- ---------
Cash and cash equivalents, end of year................... $ 91,341 $ 343,231 $ 179,795
======== ========= =========
Supplemental Cash Flow Information:
Cash paid for interest......................... $ 6,851 $ 14,615 $ 25,675
======== ========= =========
Cash paid for income taxes..................... $ 31,583 $ 7,518 $ 14,726
======== ========= =========
</TABLE>

Non-Cash Transaction:

In 1996 the stockholder contributed to capital a note payable to the
stockholder for $178,977.

The accompanying notes are an integral part of these combined financial
statements.

F-41
<PAGE> 93

CORPORATE LODGINGS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION

The accompanying combined financial statements include the accounts of
Corporate Lodgings, Inc., a C corporation, and four S corporations which all are
owned substantially by the same individual and operate similar businesses
(collectively, the "Company"). The four S corporations are Corporate Lodgings,
Pennsylvania Inc.; Corporate Lodgings, Minnesota Inc.; Corporate Lodgings,
Kentucky Inc.; and Corporate Lodgings, Wisconsin Inc. The Company was founded in
1987 and provides fully-furnished apartments, townhouses, condominiums and, to a
lesser extent, homes (collectively, "accommodations") to individuals in need of
flexible accommodations. The Company has offices in: Ohio, Pennsylvania,
Minnesota, Kentucky and Wisconsin.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed in
the preparation of these combined financial statements.

Use of Estimates

Principles of Combination

The accompanying combined financial statements include the accounts of
Corporate Lodgings, Inc. and four affiliated entities which are under common
control of and management by a single shareholder. All significant intercompany
accounts and transactions have been eliminated.

Cash and Cash Equivalents

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation.
Upon sale or retirement, the related cost and accumulated depreciation are
removed from the accounts, and any gain or loss is recorded in the combined
statements of operations. Depreciation is determined using the straight-line
method for financial reporting purposes and accelerated methods for income tax
reporting purposes over the estimated useful lives of the respective assets.
Estimated useful lives are as follows:

Repairs and maintenance are charged to expense as incurred. General and
administrative costs associated with the opening of new company offices are
expensed as incurred.

F-42
<PAGE> 94

CORPORATE LODGINGS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Revenue Recognition

The Company records cash payments from clients in advance of their stays as
deferred revenue and recognizes these amounts as revenue on a pro rata basis
over the length of the guests' stays.

Concentration of Credit Risk

Operating Stock

The Company leases operating stock such as linens, small appliances,
glassware, silverware, dishes, etc.

Accommodation and Furniture Leases

The Company leases substantially all of its accommodations on a short-term
basis with lease terms that range from three months to one year. Furniture for
the accommodations is leased on a monthly basis from various furniture rental
companies.

3. INCOME TAXES

The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
1994 1995 1996
------- -------- --------
<S> <C> <C> <C>
Current provision (benefit) --
State............................................. $10,403 $ 16,142 $ (3,189)
Federal........................................... 38,897 61,501 (12,311)
------- -------- --------
49,300 77,643 (15,500)
------- -------- --------
Deferred provision (benefit) --
State............................................. 171 (4,463) 3,586
Federal........................................... 983 (25,717) 20,662
------- -------- --------
1,154 (30,180) 24,248
------- -------- --------
Total provision for income taxes.......... $50,454 $ 47,463 $ 8,748
======= ======== ========
</TABLE>

F-43
<PAGE> 95

CORPORATE LODGINGS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

A reconciliation between the provision for income taxes computed at the
statutory rates and the amount reflected in the accompanying combined statements
of operations is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
------- ------- -------
<S> <C> <C> <C>
Computed expected federal tax provision (benefit)..... $27,005 $ 8,992 $(3,624)
Increase (decrease) in taxes resulting from --
Impact of S corporation not taxable................. 13,908 29,699 4,470
State income taxes, net of federal benefit.......... 5,141 2,547 (4,355)
Other............................................... 4,400 6,225 12,257
------- ------- -------
Provision for income taxes.................. $50,454 $47,463 $ 8,748
======= ======= =======
</TABLE>

Deferred tax assets (liabilities) consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1995 1996
--------- ---------
<S> <C> <C>
Tax Assets:
Accruals................................................... $ 117,550 $ 152,152
Other...................................................... 63,750 178,641
--------- ---------
181,300 330,793
--------- ---------
Tax Liabilities:
Receivables................................................ (73,016) (251,205)
Other...................................................... (29,550) (51,373)
--------- ---------
(102,566) (302,578)
--------- ---------
Net deferred tax asset............................. $ 78,734 $ 28,215
========= =========
</TABLE>

4. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1996
-------- --------
<S> <C> <C>
Computer equipment............................................. $127,281 $159,835
Furniture and office equipment................................. 48,734 65,555
-------- --------
Total property and equipment......................... 176,015 225,390
Less -- accumulated depreciation............................... 58,238 107,484
-------- --------
Property and equipment, net.......................... $117,777 $117,906
======== ========
</TABLE>

5. NOTES PAYABLE

As of December 31, 1995 and 1996, the Company had $38,613 and $9,720,
respectively, of notes payable outstanding, related in part to the purchase of
computer equipment. The notes bear interest at rates ranging from 6.75% to 9.75%
and are secured by all business assets. All such outstanding notes mature in
1997.

F-44
<PAGE> 96

CORPORATE LODGINGS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

6. RELATED PARTY TRANSACTIONS

Notes Receivable -- Stockholder

As of December 31, 1995, the Company held notes receivable from the
majority stockholder of $30,034. All of such notes are non-interest-bearing with
the exception of one, which bears interest at 5.69%. Included in the
accompanying statements of operations is $1,114, $1,023 and $854 of interest
income related to these notes for the years ended December 31, 1994, 1995 and
1996, respectively. These notes were repaid in 1996.

Notes Payable -- Stockholder

As of December 31, 1995 and 1996, the Company had $194,015 and $28,493
respectively, of notes payable due to the majority stockholder. The notes bear
interest at rates ranging from 6.75% and 9.75% and are payable on demand.
Interest expense for the fiscal years ended December 31, 1994, 1995 and 1996 of
$3,873, $10,943 and $24,168, respectively, related to these notes is included in
the accompanying statements of operations.

Contingent Liabilities

During 1995, the Company entered into an agreement to guarantee a
promissory note of the majority stockholder. As of December 31, 1995 and 1996,
there was $25,000 outstanding on the note. In addition, during December 1995,
the Company pledged the inventory, accounts receivable, contract rights,
equipment and general intangibles of one of the affiliated companies to secure a
$200,000 promissory note between the majority stockholder and a bank. As of
December 31, 1995 and 1996, there was $137,000 and $109,000, respectively,
outstanding on the promissory note.

City Visitor

The Company purchases advertising space from City Visitor Publications,
Inc. ("City Visitor"), an entity which publishes a travel magazine and is 100%
owned by the majority stockholder of the Company. Included in the accompanying
statements of operations is $34,048, $21,780 and $31,356 of advertising expense
paid to City Visitor in 1994, 1995, and 1996, respectively. In addition, the
Company will from time to time pay expenses on behalf of City Visitor which are
subsequently repaid to the Company by City Visitor. Included in accounts payable
in the accompanying balance sheet is approximately $866 and $1,790 as of
December 31, 1995 and 1996, respectively.

In addition, the Company performed certain general and administrative
functions, such as accounting and finance, on behalf of City Visitor. In
connection with these services, the Company billed City Visitor approximately
$42,200, $51,000 and $14,500 for the years ended December 31, 1994, 1995 and
1996, respectively.

7. LEASE COMMITMENTS

The Company leases administrative offices, accommodations and furniture at
several locations through January 1998. The terms of the leases of
accommodations are typically less than one year. Rent expense for the fiscal
years ended December 31, 1994, 1995 and 1996 was $1,575,031, $2,317,274 and
$3,518,705, respectively. Minimum future rental payments at December 31, 1996
are as follows:

<TABLE>
<CAPTION>
OPERATING
LEASES
---------
<S> <C>
1997...................................................... $ 78,583
1998...................................................... 61,558
1999...................................................... 3,834
-------
Total..................................................... $ 143,975
=======
</TABLE>

F-45
<PAGE> 97

CORPORATE LODGINGS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

8. PENSION PLAN

Eligible employees of the Company participate in a defined contribution
profit sharing plan sponsored by the Company. The plan provides that the Company
may make discretionary contributions to the plan. For the years ended December
31, 1994, 1995 and 1996, the Company did not make any discretionary
contributions to the plan.

9. STOCKHOLDERS' EQUITY

Combined stockholders' equity includes the following common stock accounts
as of December 31, 1995 and 1996.

<TABLE>
<CAPTION>
OUTSTANDING
SHARES AMOUNT
----------- ------
<S> <C> <C>
Corporate Lodgings, Inc.:
No par value, voting common stock, 1,750 shares authorized.... 1,250 $1,000
Corporate Lodgings, Pennsylvania:
No par value, voting common stock, 750 shares authorized... 100 1,000
Corporate Lodgings, Minnesota:
No par value, voting common stock, 750 shares authorized... 100 1,000
Corporate Lodgings, Kentucky:
No par value, voting common stock, 750 shares authorized... 100 1,000
Corporate Lodgings, Wisconsin:
No par value, voting common stock, 750 shares authorized... 100 1,000
----- ------
1,650 $5,000
===== ======
</TABLE>

10. CONTINGENCIES

Various lawsuits have arisen in the ordinary course of the Company's
business. The Company does not anticipate an unfavorable result in any such
litigation or believe that an unfavorable result, if it occurred, would have a
material adverse effect on its business, financial condition and results of
operations.

11. OTHER INCOME (EXPENSE), NET

Included in other income (expense) for the year ended December 31, 1996 is
approximately $160,000 for services rendered by an outside consultant related to
the sale of the Company.

12. SALE OF COMPANY

Effective on January 2, 1997, the Company was acquired, through a stock for
stock merger, by BridgeStreet Accommodations, Inc. The stockholders of the
Company received 836,437 shares of BridgeStreet Accommodations, Inc.'s common
stock in exchange for all of the outstanding common stock of the Company.

F-46
<PAGE> 98

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of Exclusive Interim Properties, Ltd.:

We have audited the accompanying combined balance sheets of Exclusive
Interim Properties, Ltd. as of March 31, 1996 and as of December 31, 1996, and
the related combined statements of operations, stockholders' equity and cash
flows for each of the two years in the period ended March 31, 1996 and for the
nine month period ended December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of Exclusive Interim
Properties, Ltd. as of March 31, 1996 and December 31, 1996, and the combined
results of their operations and their cash flows for each of the two years in
the period ended March 31, 1996 and for the nine month period ended December 31,
1996, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Boston, Massachusetts
March 11, 1997

F-47
<PAGE> 99

EXCLUSIVE INTERIM PROPERTIES, LTD.

COMBINED BALANCE SHEETS

MARCH 31, DECEMBER 31,
1996 1996
---------- ------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents......................................... $ 32,284 $ --
Accounts receivable -- trade
less allowance for doubtful accounts of $25,191 and
$107,191 at March 31, 1996 and December 31, 1996, 158,664 405,244
respectively...................................................
Other receivables................................................. 23,913 12,384
Security deposits held by landlord................................ 85,473 150,614
Deferred income taxes............................................. 143,058 166,650
---------- ----------
Total current assets........................................... 443,392 734,892
Operating stock, net of accumulated amortization.................... 381,852 580,394
Land, property and equipment, net of accumulated depreciation....... 1,367,371 1,391,834
Other assets........................................................ 10,504 7,950
---------- ----------
Total assets................................................... $2,203,119 $2,715,070
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable.................................................. $ 296,444 $ 366,004
Accrued expenses
Payroll, bonuses and related items............................. 18,852 15,308
Other.......................................................... 98,750 202,575
Deferred revenue.................................................. 123,138 155,313
Security deposits due to customers................................ 117,475 260,443
Current portion of long-term debt................................. 70,080 136,579
Notes payable-stockholder......................................... 110,549 94,655
---------- ----------
Total current liabilities...................................... 835,288 1,230,877
Deferred income taxes............................................... 152,741 232,168
Long-term debt, net of current maturities........................... 1,113,921 1,049,038
Commitments and contingencies
Stockholders' Equity:
Common stock...................................................... 20 20
Additional paid in capital........................................ 50,200 75,801
Retained earnings................................................. 50,949 127,166
---------- ----------
Total stockholders' equity..................................... 101,169 202,987
---------- ----------
Total liabilities and stockholders' equity................ $2,203,119 $2,715,070
========== ==========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-48
<PAGE> 100

EXCLUSIVE INTERIM PROPERTIES, LTD.

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED MARCH 31, ENDED
------------------------- DECEMBER 31,
1995 1996 1996
---------- ---------- ------------
<S> <C> <C> <C>
Revenues.............................................. $4,014,541 $5,521,373 $7,136,843
Operating Expenses:
Cost of services.................................... 3,015,261 4,246,342 5,789,975
Selling, general and administrative expense......... 895,109 975,186 1,110,249
---------- ---------- ----------
Total operating expenses......................... 3,910,370 5,221,528 6,900,224
---------- ---------- ----------
Operating income................................. 104,171 299,845 236,619
Other Income (Expense):
Interest income..................................... 3,195 -- 29
Interest expense.................................... (110,726) (133,025) (95,974)
---------- ---------- ----------
Other expense, net............................... (107,531) (133,025) (95,945)
---------- ---------- ----------
Income (loss) before provision (benefit) for income
taxes............................................... (3,360) 166,820 140,674
Provision (benefit) for income taxes.................. (18,466) 57,723 64,457
---------- ---------- ----------
Net income............................................ $ 15,106 $ 109,097 $ 76,217
========== ========== ==========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-49
<PAGE> 101

EXCLUSIVE INTERIM PROPERTIES, LTD.

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
TOTAL
COMMON STOCK ADDITIONAL RETAINED STOCKHOLDERS'
----------------- PAID-IN EARNINGS EQUITY
SHARES AMOUNT CAPITAL (DEFICIT) (DEFICIT)
------ ------ ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balance, March 31, 1994................ 2,000 $ 20 $ 40,500 $(73,254) $(32,734)
Contributions........................ -- -- 2,600 -- 2,600
Net income........................... -- -- -- 15,106 15,106
----- --- -------- -------- --------
Balance, March 31, 1995................ 2,000 20 43,100 (58,148) (15,028)
Contributions........................ -- -- 50,000 -- 50,000
Withdrawals.......................... -- -- (42,900) -- (42,900)
Net income........................... -- -- -- 109,097 109,097
----- --- -------- -------- --------
Balance, March 31, 1996................ 2,000 20 50,200 50,949 101,169
Contributions........................ -- -- 56,100 -- 56,100
Withdrawals.......................... -- -- (30,499) -- (30,499)
Net income........................... -- -- -- 76,217 76,217
----- --- -------- -------- --------
Balance, December 31, 1996............. 2,000 $ 20 $ 75,801 $127,166 $202,987
===== === ======== ======== ========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-50
<PAGE> 102

EXCLUSIVE INTERIM PROPERTIES, LTD.

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED MARCH 31, ENDED
------------------------- DECEMBER 31,
1995 1996 1996
----------- --------- ------------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income.......................................... $ 15,106 $ 109,097 $ 76,217
Adjustments to reconcile net income to net cash
provided by operating activities --
Depreciation and amortization.................... 70,149 118,131 116,218
Provision for bad debts.......................... -- 25,191 82,000
Change in operating assets and liabilities
Accounts receivable............................ (19,981) (145,513) (317,051)
Security deposits held by landlord............. (32,230) (32,753) (65,141)
Accounts payable............................... (22,061) 196,063 69,560
Deferred revenue............................... 71,172 23,988 32,175
Security deposits due to customers............. 10,100 29,150 142,968
Accrued expenses............................... 59,803 21,194 100,281
Other.......................................... 20,769 58,306 55,836
----------- --------- ---------
Net cash provided by operating activities... 172,827 402,854 293,063
----------- --------- ---------
Cash Flows From Investing Activities:
Purchases of operating stock........................ (37,782) (323,287) (278,487)
Purchases of property and equipment................. (1,377,093) (10,164) (58,183)
----------- --------- ---------
Net cash used in investing activities....... (1,414,875) (333,451) (336,670)
----------- --------- ---------
Cash Flows From Financing Activities:
Due to stockholder.................................. 82,265 (11,716) (15,894)
Proceeds from long-term debt........................ 1,191,600 -- 71,266
Principal payments of long-term debt................ -- (69,266) (69,650)
Capital contributions............................... 2,600 50,000 56,100
Distributions to stockholder........................ -- (42,900) (30,499)
----------- --------- ---------
Net cash provided by (used in) financing
activities................................ 1,276,465 (73,882) 11,323
----------- --------- ---------
Net (decrease) increase in cash and cash
equivalents......................................... 34,417 (4,479) (32,284)
Cash and cash equivalents, beginning of period........ 2,346 36,763 32,284
----------- --------- ---------
Cash and cash equivalents, end of period.............. $ 36,763 $ 32,284 $ --
=========== ========= =========
Supplemental Cash Flow Information:
Cash paid for interest...................... $ 99,726 $ 133,025 $ 92,391
=========== ========= =========
Cash paid for income taxes.................. $ -- $ 1,273 $ --
=========== ========= =========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-51
<PAGE> 103

EXCLUSIVE INTERIM PROPERTIES, LTD.

NOTES TO COMBINED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION

The accompanying combined financial statements include the accounts of
Exclusive Interim Properties, Ltd., which is owned by a sole stockholder, and
Haus Account, LLC (the "LLC") and an individual condominium unit, each of which
are owned by the sole stockholder of EIP and her spouse (collectively, the
"Company"). These entities and the condominium unit are involved in the same
business. The Company was founded in 1987 and provides fully-furnished
apartments, townhouses, condominiums and, to a lesser extent, homes
(collectively, "accommodations") to individuals in need of flexible
accommodations. The Company has offices in Baltimore, Maryland; and Washington,
D.C.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed in
the preparation of these combined financial statements.

Use of Estimates

Principles of Combination

The accompanying combined financial statements include the accounts of
Exclusive Interim Properties, Ltd. and one affiliated entity. All significant
intercompany accounts and transactions have been eliminated.

Cash and Cash Equivalents

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation.
Upon sale or retirement, the related cost and accumulated depreciation are
removed from the accounts, and any gain or loss is recorded in the combined
statements of operations. Depreciation is computed on the straight-line method
over estimated useful lives for financial reporting purposes. For income tax
reporting purposes, depreciation on equipment is determined using the
double-declining balance method. Condominiums are depreciated using the
straight-line method for financial reporting and income tax reporting purposes
over the estimated useful life of the units. Estimated useful lives are as
follows:

<TABLE>
<CAPTION>
ASSET CLASSIFICATION ESTIMATED USEFUL LIFE
-------------------- ---------------------
<S> <C>
Computer equipment........................................ 3 years
Office furniture and equipment............................ 7 years
Condominiums.............................................. 39 years
Vehicles.................................................. 5 years
Leasehold improvements.................................... Lease life
</TABLE>

Repairs and maintenance are charged to expense as incurred. General and
administrative costs associated with the opening of new company offices are
expensed as incurred.

F-52
<PAGE> 104

EXCLUSIVE INTERIM PROPERTIES, LTD.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Revenue Recognition

The Company records cash payments from clients in advance of their stay as
Deferred Revenue and recognizes these amounts as revenue on a pro rata basis
over the length of the guests' stays.

Concentration of Credit Risk

Concentration of credit risk is limited to accounts receivable. The Company
does not require collateral or security to support their receivables. The
Company conducts periodic reviews of its clients' financial condition and
payment practices to minimize collection risk on accounts receivable.

Operating Stock

Operating stock to furnish new apartment units, including linens,
glassware, silverware, utensils, and small appliances, is capitalized as it is
purchased and amortized over a three-year period to a residual value of 50% of
its original cost. Additional purchases of operating stock for apartment units
already established is expensed as incurred.

Accommodation and Furniture Leases

3. INCOME TAXES

The provision (benefit) for income taxes consists of the following:

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-------------------- DECEMBER 31,
1995 1996 1996
-------- -------- ------------
<S> <C> <C> <C>
Total provision (benefit) for income taxes:
State............................................ $ (7,673) $ 13,294 $ 14,390
Federal.......................................... (56,467) 97,833 105,902
-------- -------- --------
(64,140) 111,127 120,292
-------- -------- --------
Deferred
State............................................ 5,464 (6,389) (6,679)
Federal.......................................... 40,210 (47,015) (49,156)
-------- -------- --------
45,674 (53,404) (55,835)
-------- -------- --------
Total provision (benefit) for income
taxes.................................. $(18,446) $ 57,723 $ 64,457
======== ======== ========
</TABLE>

Income taxes are not provided on the portion of income related to the LLC
because those taxes are paid by the partners.

F-53
<PAGE> 105

EXCLUSIVE INTERIM PROPERTIES, LTD.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

A reconciliation between the provision for income taxes computed at the
statutory rates and the amount reflected in the accompanying combined statements
of operations for the two years ended March 31, 1996 and the nine months ended
December 31, 1996 is as follows:

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED MARCH 31, ENDED
-------------------- DECEMBER 31,
1995 1996 1996
-------- -------- ------------
<S> <C> <C> <C>
Computed expected federal tax provision............ $ (1,142) $ 56,719 $ 47,829
Increase (decrease) in taxes resulting from:
State income taxes............................... (222) 11,010 9,284
Deductions taken for books not allowed for tax
purposes...................................... 3,941 4,053 3,400
LLC income not taxable........................... (14,996) (11,531) (4,373)
Other............................................ (6,047) (2,528) 8,317
-------- -------- --------
Provision (benefit) for income taxes..... $(18,466) $ 57,723 $ 64,457
======== ======== ========
</TABLE>

The Company uses the cash basis method for its tax returns. Deferred tax
(assets) liabilities consist of the following:

<TABLE>
<CAPTION>
MARCH 31, 1996 DECEMBER 31, 1996
-------------- -----------------
<S> <C> <C>
Tax assets:
Payables and accruals not yet deducted for tax
purposes......................................... 214,874 295,680
Net operating loss carry forwards................... -- 39,638
-------- --------
214,874 335,318
-------- --------
Tax liabilities:
Accounts receivable not yet reported for tax
purposes......................................... (63,466) (162,098)
Operating stock expensed for tax purposes........... (152,741) (232,158)
Other............................................... (8,350) (6,580)
-------- --------
(224,557) (400,836)
-------- --------
Net deferred tax liabilities................ (9,683) (65,518)
======== ========
</TABLE>

The Company has net operating loss carryforwards of $99,000 as of December
31, 1996.

4. LAND, PROPERTY AND EQUIPMENT; OPERATING STOCK

Land, property and equipment, and operating stock consist of the following:

<TABLE>
<CAPTION>
MARCH 31, 1996 DECEMBER 31, 1996
-------------- -----------------
<S> <C> <C>
Land.................................................. $ 266,235 $ 266,235
Condominiums.......................................... 1,166,700 1,166,700
Leasehold improvements & vehicles..................... -- 30,992
Computer equipment.................................... 37,392 64,582
Furniture and office equipment........................ 66,266 66,266
---------- ----------
Total land, property and equipment.......... 1,536,593 1,594,775
Less -- accumulated depreciation...................... 169,222 202,941
---------- ----------
Land, property and equipment, net........... $1,367,371 $1,391,834
========== ==========
Operating stock....................................... $ 535,583 $ 814,070
Less -- accumulated amortization...................... 153,731 233,676
---------- ----------
Operating stock, net........................ $ 381,852 $ 580,394
========== ==========
</TABLE>

F-54
<PAGE> 106

EXCLUSIVE INTERIM PROPERTIES, LTD.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

5. LONG-TERM DEBT

A summary of long-term debt is as follows:

<TABLE>
<CAPTION>
MARCH 31, 1996 DECEMBER 31, 1996
-------------- -----------------
<S> <C> <C>
Mortgage note -- LLC.................................. $ 975,520 $ 962,935
Installment note -- LLC............................... 150,000 100,000
Mortgage notes -- stockholder......................... 58,481 56,182
Revolving lines of credit............................. -- 49,817
Automobile loan....................................... -- 16,683
---------- ----------
Total....................................... 1,184,001 1,185,617
Less-current maturities............................... 70,080 136,579
---------- ----------
Total long-term debt........................ $1,113,921 $1,049,038
========== ==========
</TABLE>

Mortgage Note -- LLC

On May 12, 1994, the LLC entered into a Mortgage note agreement with a
bank, under which the bank provided cash of $1,005,000 in exchange for a
$1,005,000 Mortgage note (the "Mortgage"). The Mortgage is secured by
substantially all assets of the LLC, including 18 condominiums owned by the LLC.
The Mortgage calls for monthly principal payments of $1,340 through June 1, 1999
at which time all outstanding borrowings are due. The Mortgage bears interest at
bank's prime rate plus 1.5%. The interest rates at both March 31, 1996 and
December 31, 1996 were 9.75%. Interest is payable monthly, in arrears.

Installment Note -- LLC

On May 12, 1994, the LLC entered into an agreement with a bank, pursuant to
which the bank provided the LLC with cash of $200,000 in exchange for a $200,000
installment note (the "Installment Note"). The Installment Note calls for annual
principal payments of $50,000, from May 1, 1995 through May 1, 1998. The
Installment Note bears interest at the highest prime rate published in the Wall
Street Journal on the last day of the immediately prior calendar month plus
1.5%. The interest rate at both March 31, 1996 and December 31, 1996 was 9.75%.
Interest is payable monthly, in arrears.

Mortgage -- Stockholder

On October 22, 1993, the principal stockholder of the Company entered into
a mortgage note agreement for $65,000. The mortgage is secured by a condominium
owned by the stockholder located in Baltimore, Maryland. The mortgage calls for
monthly payments of principal and interest in the amount of $590. The mortgage
bears interest at a fixed rate of 7.0%. The mortgage and the condominium were
contributed by the stockholder to the Company.

Revolving Lines of Credit

At December 31, 1996, the Company had a line of credit agreement expiring
February 15, 1997 which provided for borrowings of up to $50,000 and bore
interest at 8.25% on such date. At December 31, 1996, the Company's advances on
this line of credit were $49,817.

Automobile Loan

In April 1996, the Company entered into a note payable agreement for
$21,000 with Chrysler Financial Group. The note calls for monthly payments of
principal and interest of $570 through April 1999. The note bears interest at a
fixed rate of 8.55%.

F-55
<PAGE> 107

EXCLUSIVE INTERIM PROPERTIES, LTD.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The following is a schedule of required debt payments as of December 31,
1996:

<TABLE>
<CAPTION>
YEAR AMOUNT
---- ----------
<S> <C>
1997..................................................... $ 136,579
1998..................................................... 70,080
1999..................................................... 935,300
2000..................................................... 4,000
2001..................................................... 4,000
Thereafter............................................... 35,658
----------
Total.......................................... $1,185,617
==========
</TABLE>

6. LEASE COMMITMENTS

The Company leases administrative offices, accommodations and furniture at
several locations through August 31, 1999. Rent expense for the fiscal years
ended March 31, 1995 and 1996 and for the nine months ended December 31, 1996
was $2,183,491, $3,240,935 and $4,102,087, respectively. Minimum future rental
payments at December 31, 1996 are as follows:

<TABLE>
<CAPTION>
OPERATING
LEASES
---------
<S> <C>
1997...................................................... $ 57,212
1998...................................................... 56,522
1999...................................................... 48,526
2000...................................................... 50,088
2001...................................................... 41,741
--------
Total........................................... $254,089
========
</TABLE>

7. CONTINGENCIES

8. SALE OF COMPANY

Effective on January 2, 1997, the Company was acquired, through a stock for
stock merger, by BridgeStreet Accommodations, Inc. The stockholders of the
Company received 1,001,805 shares of BridgeStreet Accommodations, Inc.'s common
stock in exchange for all of the outstanding common stock of and equity
interests in the Company.

F-56
<PAGE> 108

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholder of Home Again, Inc.:

We have audited the accompanying combined balance sheets of Home Again,
Inc. as of December 31, 1995 and 1996, and the related combined statements of
operations, stockholder's equity and cash flows for each of the two years in the
period ended December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the combined financial statements. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of Home Again, Inc. as
of December 31, 1995 and 1996, and the results of their operations and their
cash flows for each of the two years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Boston, Massachusetts
March 21, 1997

F-57
<PAGE> 109

HOME AGAIN, INC.

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1996
-------- --------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............................................ $ 14,210 $145,140
Accounts receivable.................................................. 68,905 109,167
Security deposits held by landlords.................................. 6,801 7,553
Prepaid expenses..................................................... 131,325 217,172
Other current assets................................................. 1,774 1,293
-------- --------
Total current assets.............................................. 223,015 480,325
Operating stock, net of accumulated amortization....................... 35,966 196,015
Property and equipment, net of accumulated depreciation................ 68,759 142,508
-------- --------
Total assets................................................. $327,740 $818,848
======== ========

LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable..................................................... $191,119 $300,755
Accrued expenses --
Payroll and employee benefits..................................... 6,977 290
Other............................................................. 42,500 64,750
Deferred revenue..................................................... 20,850 30,880
Security deposits due to customers................................... -- 60,460
Due to stockholder................................................... 2,812 191,404
Current portion of long-term debt.................................... -- 8,595
-------- --------
Total current liabilities......................................... 264,258 657,134
Long-term debt, net of current maturities.............................. -- 25,608
Commitments and Contingencies

Stockholder's Equity:
Common stock......................................................... 30 30
Additional paid-in capital........................................... 2,970 2,970
Retained earnings.................................................... 60,482 133,106
-------- --------
Total stockholder's equity........................................ 63,482 136,106
-------- --------
Total liabilities and stockholder's equity................... $327,740 $818,848
======== ========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-58
<PAGE> 110

HOME AGAIN, INC.

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1995 1996
---------- ----------
<S> <C> <C>
Revenues............................................................ $1,569,502 $4,034,905
Operating Expenses:
Cost of services.................................................. 1,283,752 3,133,900
Selling, general and administrative expense....................... 212,242 586,339
---------- ----------
Total operating expenses....................................... 1,495,994 3,720,239
---------- ----------
Operating income............................................... 73,508 314,666
Other Income:
Interest income................................................... 362 1,202
Other income...................................................... 33,042 75,702
---------- ----------
Other income, net.............................................. 33,404 76,904
---------- ----------
Net income.......................................................... $ 106,912 $ 391,570
========== ==========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-59
<PAGE> 111

HOME AGAIN, INC.

COMBINED STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
TOTAL
COMMON STOCK ADDITIONAL RETAINED STOCKHOLDER'S
--------------- PAID-IN EARNINGS EQUITY
SHARES AMOUNT CAPITAL (DEFICIT) (DEFICIT)
------ ------ ---------- --------- ------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1994..................... 1,000 $10 $ 990 $ (46,430) $ (45,430)
Issuance of stock............................ 2,000 20 1,980 -- 2,000
Net income................................... -- -- -- 106,912 106,912
----- --- ------ --------- ---------
Balance, December 31, 1995..................... 3,000 30 2,970 60,482 63,482
Distributions to stockholder................. -- -- -- (318,946) (318,946)
Net income................................... -- -- -- 391,570 391,570
----- --- ------ --------- ---------
Balance, December 31, 1996..................... 3,000 $30 $2,970 $ 133,106 $ 136,106
===== === ====== ========= =========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-60
<PAGE> 112

HOME AGAIN, INC.

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31,
----------------------
1995 1996
-------- ---------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income.......................................................... $106,912 $ 391,570
Adjustments to reconcile net income to net cash provided by
operating activities --
Depreciation and amortization.................................... 23,518 101,045
Change in operating assets and liabilities --
Accounts receivable............................................ (54,407) (40,262)
Security deposits held by landlords............................ (783) (752)
Prepaid expenses............................................... (96,119) (85,847)
Other current assets........................................... (999) 481
Accounts payable............................................... 171,759 109,636
Advanced rent.................................................. 5,132 10,030
Security deposits due customers................................ -- 60,460
Accrued expenses............................................... 19,789 15,563
-------- ---------
Net cash provided by operating activities................... 174,802 561,924
-------- ---------
Cash Flows From Investing Activities:
Purchases of operating stock........................................ (43,159) (200,689)
Purchases of property and equipment................................. (55,918) (134,154)
-------- ---------
Net cash used in investing activities....................... (99,077) (334,843)
-------- ---------
Cash Flows From Financing Activities:
Due to stockholder.................................................. (64,179) 188,592
Proceeds from issuance of stock..................................... 2,000 --
Payments of long-term debt.......................................... -- (4,411)
Proceeds from long-term debt........................................ -- 38,614
Distribution to stockholder......................................... -- (318,946)
-------- ---------
Net cash used in financing activities....................... (62,179) (96,151)
-------- ---------
Net increase in cash and cash equivalents............................. 13,546 130,930
Cash and cash equivalents, beginning of year.......................... 664 14,210
-------- ---------
Cash and cash equivalents, end of year................................ $ 14,210 $ 145,140
======== =========
Supplemental Cash Flow Information:
Cash paid for interest...................................... $ 362 $ 1,202
======== =========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-61
<PAGE> 113

HOME AGAIN, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION

The accompanying combined financial statements include the accounts of Home
Again, Inc. and two affiliated entities in the same business (collectively,
"Home Again" or the "Company"), all of which are S corporations owned by the
same stockholder. The Company was founded in 1994 and provides fully-furnished
apartments, townhouses, condominiums and, to a lesser extent, homes
(collectively, "accommodations") to individuals in need of flexible
accommodations. The Company has offices in Minneapolis, Minnesota; and Oklahoma
City, Oklahoma.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed in
the preparation of these financial statements.

Use of Estimates

Cash and Cash Equivalents

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation.
Leasehold improvements are capitalized and charged to expense through
depreciation. Upon sale or retirements, the related cost and accumulated
depreciation are removed from the accounts, and any gain or loss is recorded in
the statement of operations. Depreciation is determined using the straight-line
method for financial reporting purposes and accelerated methods for income tax
reporting purposes over the estimated useful lives of the respective assets.
Estimated useful lives are as follows:

<TABLE>
<CAPTION>
ESTIMATED
ASSET CLASSIFICATION USEFUL LIFE
-------------------- -----------
<S> <C>
Computer equipment............................................... 3-5 years
Office furniture and equipment................................... 5 years
Leasehold improvements........................................... 7 years
Vehicles......................................................... 5 years
</TABLE>

Repairs and maintenance are charged to expense as incurred. General and
administrative costs associated with the opening of new company offices are
expenses as incurred.

Revenue Recognition

The Company recognizes revenues on the sublease of accommodations for its
clients as services are provided.

F-62
<PAGE> 114

HOME AGAIN, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Concentration of Credit Risk

Concentration of credit risk is limited to accounts receivable. The Company
does not require collateral or other security to support their receivables. The
Company conducts periodic reviews of its clients' financial conditions and
payment practices to minimize collection risks on accounts receivable.

Operating Stock

Operating stock to furnish new apartment units, including linen, glass and
silver, and minor appliances is capitalized as it is purchased and amortized
over a three-year period to a residual value of 50% of the original cost.
Additional purchases of operating stock for apartment units established is
expensed as incurred.

Apartment and Furniture Leases

The Company leases substantially all of its accommodations under lease
terms ranging from one to two years. Furniture for the accommodations is leased
on a monthly basis from various furniture rental companies.

3. INCOME TAXES

The Company, with the consent of its stockholder, elected to be recognized
as an S corporation under the appropriate federal and state tax codes beginning
June 8, 1993. In lieu of corporate income taxes, the stockholders of an S
corporation are taxed on their proportionate shares of the Company's taxable
income. As a result, the recognition of current and deferred income taxes is not
needed in the accompanying combined financial statements.

4. PROPERTY AND EQUIPMENT; OPERATING STOCK

Property and equipment and operating stock consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996
------- --------
<S> <C> <C>
Computer equipment.............................................. $18,542 $ 35,171
Furniture and office equipment.................................. 71,405 146,787
Vehicles........................................................ -- 42,143
------- --------
Total property and equipment............................... 89,947 224,101
Less -- accumulated depreciation................................ 21,188 81,593
------- --------
Property and equipment, net........................... $68,759 $142,508
======= ========
Operating stock................................................. $43,159 $243,848
Less -- accumulated amortization................................ 7,193 47,833
------- --------
Operating stock, net.................................. $35,966 $196,015
======= ========
</TABLE>

5. DEBT

Long-term debt consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1996
------------
<S> <C>
Note payable to a bank, interest rate of 8.75%, due in 48 equal
installments through October 2000, secured by an automobile
purchased with the proceeds from the note........................... $ 18,031
Note payable to a bank, interest rate of 9.5%, due in 48 equal
installments through March 2000; secured by an automobile purchased
with the proceeds from the note..................................... 16,172
--------
34,203
Less -- current maturities............................................ 8,595
--------
Total long-term debt.................................................. $ 25,608
========
</TABLE>

F-63
<PAGE> 115

HOME AGAIN, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The following is a schedule of required debt payments as of December 31,
1996:

<TABLE>
<S> <C>
1997....................................................................... $ 8,595
1998....................................................................... 9,641
1999....................................................................... 10,561
2000....................................................................... 5,406
-------
Total............................................................ $34,203
=======
</TABLE>

6. LEASE COMMITMENTS

The Company leases administrative offices, apartment units and furniture at
several locations through 1998. Rent expense for the fiscal years ended December
31, 1995 and 1996 was $989,203 and $2,592,965 respectively. Minimum future
rental payments on long-term leases at December 31, 1996 are as follows:

<TABLE>
<CAPTION>
OPERATING LEASES
----------------
<S> <C>
1997.......................................... $ 59,793
1998.......................................... 57,078
1999.......................................... 53,340
2000.......................................... 51,070
2001.......................................... 50,247
Thereafter.................................... 111,168
--------
Total............................... $382,696
========
</TABLE>

7. DISTRIBUTION TO STOCKHOLDER

The Company declared a distribution to the stockholder during December 1996
in the amount of $191,404, related to 1996 earnings, to be paid in 1997.

8. CONTINGENCIES

9. STOCKHOLDERS' EQUITY

Combined stockholder's equity includes the following common stock accounts
as of December 31, 1995 and 1996 (.01 par value and voting for all classes of
common stock).

<TABLE>
<CAPTION>
OUTSTANDING
SHARES AMOUNT
----------- ------
<S> <C> <C>
Home Again, Inc.
Authorized--1,000,000................................................ 1,000 $ 10
Home Again, Corporate Housing, Inc.
Authorized--100,000.................................................. 1,000 $ 10
Home Again, Amenities, Inc.
Authorized--100,000.................................................. 1,000 $ 10
</TABLE>

10. SALE OF COMPANY

Effective on March 31, 1997, the Company was acquired, through a stock for
stock merger, by Bridgestreet Accomodations, Inc. The stockholder of the Company
received 475,000 shares of Bridgestreet Accomodations, Inc.'s common stock in
exchange for all of the outstanding common stock of the Company.

F-64
<PAGE> 116

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of Temporary Housing Experts, Inc.:

We have audited the accompanying balance sheets of Temporary Housing
Experts, Inc. as of December 31, 1995 and 1996, and the related statements of
operations, stockholders' equity and cash flows for each of the two years in the
period ended December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Temporary Housing Experts,
Inc. as of December 31, 1995 and 1996, and the results of its operations and its
cash flows for each of the two years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Memphis, Tennessee
March 21, 1997
(except for Note 10, for which
the date is June 30, 1997)

F-65
<PAGE> 117

TEMPORARY HOUSING EXPERTS, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1996
-------- --------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............................................ $213,845 $ 51,536
Accounts receivable, less allowance for doubtful accounts of $1,311
in 1995 and 1996.................................................. 77,481 99,487
Deferred income taxes................................................ 46,300 70,794
Prepaid expenses..................................................... -- 25,504
Security deposits held by landlord complexes......................... 18,566 24,244
-------- --------
Total current assets.............................................. 356,192 271,565
Operating stock, net of accumulated amortization....................... 141,680 145,086
Property and equipment, net of accumulated depreciation................ 82,265 58,450
-------- --------
Total assets................................................. $580,137 $475,101
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt................................. $ 15,669 $ 18,745
Accounts payable..................................................... 1,257 6,046
Security deposits due to customers................................... 51,087 50,548
Deferred revenue..................................................... 3,363 34,347
Accrued expenses..................................................... 115,750 51,875
Accrued income taxes................................................. 48,287 15,895
-------- --------
Total current liabilities......................................... 235,413 177,456
Long-term debt, net of current maturities.............................. 15,669 11,873
Deferred income taxes.................................................. 56,671 58,033
Stockholders' Equity:
Common stock......................................................... 1,000 1,000
Retained earnings.................................................... 271,384 226,739
-------- --------
Total stockholders' equity........................................ 272,384 227,739
-------- --------
Total liabilities and stockholders' equity................... $580,137 $475,101
======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-66
<PAGE> 118

TEMPORARY HOUSING EXPERTS, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1995 1996
---------- ----------
<S> <C> <C>
Revenues............................................................ $3,085,736 $3,582,924
Operating Expenses:
Cost of services.................................................. 2,190,252 2,578,247
Selling, general and administrative expense....................... 865,689 1,077,568
---------- ----------
Total operating expenses....................................... 3,055,941 3,655,815
---------- ----------
Operating income (loss)........................................ 29,795 (72,891)
Other Income (Expense):
Interest expense.................................................. (1,018) (977)
Other income (expense)............................................ (3,649) 6,197
---------- ----------
Other income (expense), net.................................... (4,667) 5,220
---------- ----------
Income (loss) before provision for income taxes..................... 25,128 (67,671)
Benefit for income taxes............................................ (1,923) (23,026)
---------- ----------
Net income (loss)................................................... $ 27,051 $ (44,645)
========== ==========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-67
<PAGE> 119

TEMPORARY HOUSING EXPERTS, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
----------------- RETAINED STOCKHOLDERS'
SHARES AMOUNT EARNINGS EQUITY
------ ------ -------- -------------
<S> <C> <C> <C> <C>
Balance, December 31, 1994......................... 1,000 $1,000 $244,333 $ 245,333
Net income....................................... -- -- 27,051 27,051
----- ------ -------- --------
Balance, December 31, 1995......................... 1,000 1,000 271,384 272,384
Net loss......................................... -- -- (44,645) (44,645)
----- ------ -------- --------
Balance, December 31, 1996......................... 1,000 $1,000 $226,739 $ 227,739
===== ====== ======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-68
<PAGE> 120

TEMPORARY HOUSING EXPERTS, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1995 1996
--------- ---------
<S> <C> <C>
Cash Flows From Operating Activities:
Net (loss) income................................................ $ 27,051 $ (44,645)
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities --
Depreciation and amortization................................. 41,044 59,507
Provision for bad debts....................................... (1,359) --
Gain on sale of property and equipment........................ -- (6,197)
Change in operating assets and liabilities --
Accounts receivable......................................... 740 (26,547)
Prepaid expenses and deposits............................... 1,247 (31,182)
Accounts payable............................................ (12,131) 4,789
Accrued expenses............................................ 102,745 (96,267)
Deferred revenue............................................ (4,615) 30,984
Refundable customer deposits................................ 17,584 (539)
Loans made to employees..................................... (1,676) --
Loan payments from employees................................ -- 4,541
Deferred income taxes....................................... (23,512) (23,132)
--------- ---------
Net cash provided by (used in) operating activities...... 147,118 (128,688)
--------- ---------
Cash Flows from Investing Activities:
Purchases of operating stock..................................... (54,534) (23,250)
Purchases of property and equipment.............................. (83,521) (33,553)
Proceeds from sale of property and equipment..................... -- 23,901
--------- ---------
Net cash used in investing activities.................... (138,055) (32,902)
--------- ---------
Cash Flows from Financing Activities:
Proceeds from notes payable...................................... 31,338 17,100
Payments of notes payable........................................ (14,251) (17,819)
Advances from stockholder........................................ -- 50,000
Repayments to stockholder........................................ -- (50,000)
--------- ---------
Net cash provided by (used in) financing activities...... 17,087 (719)
--------- ---------
Net (decrease) increase in cash and cash equivalents............... 26,150 (162,309)
Cash and cash equivalents, beginning of year....................... 187,695 213,845
--------- ---------
Cash and cash equivalents, end of year............................. $ 213,845 $ 51,536
========= =========
Supplemental Cash Flow Information:
Cash paid for interest................................... $ 979 $ 969
========= =========
Cash paid for income taxes............................... $ 17,800 $ 27,564
========= =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-69
<PAGE> 121

TEMPORARY HOUSING EXPERTS, INC.

NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION

Temporary Housing Experts, Inc. (the "Company") was founded in 1991, and
provides fully-furnished apartments, townhouses, condominiums and, to a lesser
extent, homes (collectively "accommodations") to individuals in need of flexible
accommodations. The Company has offices in: Memphis, Tennessee; and Jackson,
Mississippi.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed in
the preparation of these financial statements.

Use of Estimates

Cash and Cash Equivalents

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation.
Leasehold improvements are capitalized and charged to expense through
depreciation. Upon sale or retirement, the related cost and accumulated
depreciation are removed from the accounts, and any gain or loss is recorded in
the statement of operations. Depreciation is determined using the straight-line
method for financial reporting purposes and accelerated methods for income tax
reporting purposes over the estimated useful lives of the respective assets.
Estimated useful lives are as follows:

<TABLE>
<CAPTION>
ESTIMATED
ASSET CLASSIFICATION USEFUL LIFE
---------------------------------------------------------------- -----------
<S> <C>
Computer equipment.............................................. 3 Years
Office furniture and equipment.................................. 5 Years
Leasehold improvements.......................................... 7 Years
Vehicles........................................................ 5 Years
</TABLE>

Revenue Recognition

The Company recognizes revenues on the rentals of accommodations to its
clients on a pro rata basis over the length of the client's stay.

Concentration of Credit Risk

F-70
<PAGE> 122

TEMPORARY HOUSING EXPERTS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Operating Stock

Operating stock to furnish new units, including linen, glassware,
silverware and minor appliances is capitalized as it is purchased and amortized
over a three-year period to a residual value of 50% of the original cost.
Additional purchases of operating stock for apartment units already established
is expensed as incurred.

Accommodation and Furniture Leases

3. INCOME TAXES

The provision (benefit) for income taxes consists of the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1995 1996
-------- --------
<S> <C> <C>
Current --
State........................................................ $ 5,009 $ 106
Federal...................................................... 16,580 --
--------- ---------
21,589 106
--------- ---------
Deferred --
State........................................................ $ (1,881) $ (2,891)
Federal...................................................... (21,631) (20,241)
--------- ---------
(23,512) (23,132)
--------- ---------
Total benefit for income taxes....................... $ (1,923) $(23,026)
========= =========
</TABLE>

A reconciliation between the benefit for income taxes computed at the
statutory rates and the amount reflected in the accompanying statements of
operations for the two years ended is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1995 1996
-------- --------
<S> <C> <C>
Computed expected federal tax provision (benefit).............. $ 3,769 $(23,008)
Increase (decrease) in taxes resulting from:
State income taxes, net of federal benefit................... 829 (4,060)
Other........................................................ (6,521) 4,042
--------- ---------
Benefit for income taxes............................. $ (1,923) $(23,026)
========= =========
</TABLE>

F-71

<PAGE> 123

TEMPORARY HOUSING EXPERTS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1995 1996
-------- --------
<S> <C> <C>
Deferred tax assets (liabilities) consist of the following:
Tax assets --
Accruals not yet deductible for tax purposes................. $ 46,300 $ 20,750
Net operating loss carryforward.............................. -- 50,044
-------- --------
46,300 70,794
Tax liabilities --
Operating stock expensed for tax purposes.................... (56,671) (58,033)
-------- --------
Net deferred tax asset (liability)................... $(10,371) $ 12,761
-------- --------
</TABLE>

4. PROPERTY AND EQUIPMENT; OPERATING STOCK

Property and equipment and operating stock consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996
--------- --------
<S> <C> <C>
Leasehold improvements.......................................... $ 1,987 $ 1,987
Computer equipment.............................................. 26,298 42,602
Furniture and office equipment.................................. 28,429 23,204
Vehicles........................................................ 80,258 65,296
--------- --------
Total property and equipment.......................... 136,972 133,089
Less -- accumulated depreciation................................ 54,707 74,639
--------- --------
Property and equipment, net........................... $ 82,265 $ 58,450
========= ========
Operating stock................................................. $ 203,244 $226,494
Less -- accumulated amortization................................ 61,564 81,408
--------- --------
Operating stock, net.................................. $ 141,680 $145,086
========= ========
</TABLE>

5. DEBT

Long-term obligations consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1996
-------- --------
<S> <C> <C>
Notes payable to financial institutions, interest ranging from 0%
to 7.99% maturing at various dates through March 2001: secured
by certain automobiles purchased with the proceeds from the
notes.......................................................... $ 31,338 $ 30,618
Less -- current maturities....................................... (15,669) (18,745)
-------- --------
$ 15,669 $ 11,873
======== ========
</TABLE>

6. LEASE COMMITMENTS

The Company leases administrative offices, accommodations and furniture at
several locations through 1998. Rent expense for the fiscal years ended December
31, 1995 and 1996 was $1,890,967 and $2,164,855, respectively. Minimum future
rental payments on long-term leases at December 31, 1996 are as follows:

<TABLE>
<CAPTION>
OPERATING LEASES
----------------
<S> <C>
1997................................................ $709,278
1998................................................ 65,825
--------
Total..................................... $775,103
========
</TABLE>

F-72
<PAGE> 124

TEMPORARY HOUSING EXPERTS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

7. PENSION PLAN

Eligible employees of the Company participate in a profit sharing plan
sponsored by the Company. This defined contribution plan was effective on
January 1, 1995 and provides that the Company will match participant
contributions within specific limitations. The Company's contributions to the
plan amounted to approximately $28,000 in 1995. There was no contribution to the
plan in 1996.

8. CONTINGENCIES

9. SALE OF COMPANY

Effective on January 2, 1997, the Company was acquired, through a stock for
stock merger, by BridgeStreet Accommodations, Inc. The stockholders of the
Company received 391,408 shares of BridgeStreet Accommodations, Inc.'s common
stock in exchange for all of the outstanding common stock of the Company.

10. SUBSEQUENT EVENTS

On June 30, 1997, the Company acquired all the assets of a flexible
accommodation services provider in Memphis for $1 million, which was financed
with intercompany debt from BridgeStreet. The cost of the acquisition exceeded
the estimated fair value of the acquired net assets by $900,000, which will be
accounted for as goodwill and will be amortized over 35 years. Allocation of
purchase price was based on estimates of the fair value of the net assets
acquired.

F-73
<PAGE> 125

============================================================
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY ANY SECURITY
OTHER THAN THE SHARES OF COMMON STOCK OFFERED BY THIS PROSPECTUS, NOR DOES IT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY THE SHARES OF
COMMON STOCK BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.

UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK OFFERED HEREBY, WHETHER OR
NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S> <C>
Prospectus Summary......................... 3
Risk Factors............................... 8
Combination................................ 13
Use of Proceeds............................ 14
Dividend Policy............................ 14
Capitalization............................. 15
Dilution................................... 16
Selected Financial Data.................... 17
Selected Individual Founding Company
Financial and Other Data................. 19
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 20
Business................................... 28
Management................................. 37
Principal and Selling Stockholders......... 42
Certain Transactions....................... 43
Description of Capital Stock............... 45
Shares Eligible for Future Sale............ 47
Underwriting............................... 48
Legal Matters.............................. 49
Experts.................................... 50
Additional Information..................... 50
Index to Financial Statements.............. F-1
</TABLE>
============================================================
2,615,000 SHARES

LOGO

COMMON STOCK
------------------------

PROSPECTUS

------------------------
LEGG MASON WOOD WALKER
INCORPORATED

MCDONALD & COMPANY
SECURITIES, INC.
, 1997
============================================================
<PAGE> 126

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are estimated
except the Securities and Exchange Commission registration fee, the NASD filing
fee and the Nasdaq listing fee.

<TABLE>
<S> <C>
SEC registration fee..................................................... $ 9,113
NASD filing fee.......................................................... 3,536
Blue Sky fees and expenses............................................... 5,000
Nasdaq listing fee....................................................... 39,168
Printing and engraving expenses.......................................... 150,000
Legal fees and expenses.................................................. 750,000
Accounting fees and expenses............................................. 750,000
Transfer agent and registrar fees........................................ 4,000
Premium for directors' and officers' insurance........................... 80,000
Miscellaneous............................................................ 209,183
----------
Total.......................................................... $2,000,000
==========
</TABLE>

ABP will bear all of the foregoing fees and expenses, and the Company will
reimburse ABP for such fees and expenses out of the proceeds of this offering.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company is a Delaware corporation. Reference is made to Section 145 of
the DGCL, as amended, which provides that a corporation may indemnify any person
who was or is a party to or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation) by reason of the fact that he or she is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or her in connection with such action,
suit or proceeding if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceedings, had no
reasonable cause to believe his or her conduct was unlawful. Section 145 further
provides that a corporation similarly may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he or she is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees) actually and reasonably incurred by him or
her in connection with the defense or settlement of such action or suit if he or
she acted in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Delaware Court of Chancery or the court
in which such action or suit was brought shall determine upon application that,
despite an adjudication of liability, but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper. The
Company's Certificate of Incorporation further provides that the Company shall
indemnify its directors and officers to the full extent permitted by the law of
the State of Delaware.

The Company's Certificate of Incorporation provides that the Company's
directors shall not be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except to the

II-1
<PAGE> 127

extent that exculpation from liability is not permitted under the DGCL as in
effect at the time such liability is determined.

The Certificate of Incorporation also provides that each person who was or
is made a party to, or is involved in, any action, suit, proceeding or claim by
reason of the fact that he or she is or was a director, officer or employee of
the Registrant (or is or was serving at the request of the Registrant as a
director, officer, trustee employee or agent of any other enterprise including
service with respect to employee benefit plans) shall be indemnified and held
harmless by the Registrant, to the full extent permitted by Delaware law, as in
effect from time to time, against all expenses (including attorneys' fees and
expenses), judgments, fines, penalties and amounts to be paid in settlement
incurred by such person in connection with the investigation, preparation to
defend or defense of such action, suit, proceeding or claim.

The rights to indemnification and the payment of expenses provided by the
Certificate of Incorporation do not apply to any action, suit, proceeding or
claim initiated by or on behalf of a person otherwise entitled to the benefit of
such provisions. Any person seeking indemnification under the Certificate of
Incorporation shall be deemed to have met the standard of conduct required for
such indemnification unless the contrary shall be established. Any repeal or
modification of such indemnification provisions shall not adversely affect any
right or protection of a director or officer with respect to any conduct of such
director or officer occurring prior to such repeal or modification.

The Company maintains an indemnification insurance policy covering all
directors and officers of the Company and its subsidiaries.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

In connection with the Combination, in January and March 1997, the Company
issued to the stockholders of the Founding Companies an aggregate of 4,301,000
shares of Common Stock in exchange for all of the issued and outstanding stock
of such companies.

Prior to the Combination, in August 1996, the Company issued to the
promoters of the Company an aggregate of 2,000 shares of Common Stock at a
purchase price of $1.00 per share. In August and November 1996, the Company
issued 150 and 350 shares of restricted Common Stock, respectively, at a
purchase price of $1.00 per share, to two individuals upon their agreement to
become executive officers of the Company in January 1997. The restrictions since
have lapsed. In November 1996, the Company issued 66 shares of Common Stock to a
consultant at a purchase price of $1.00 per share. A 499-for-1 stock dividend
(the "Stock Dividend") was declared by the Company with respect to all shares of
Common Stock that were outstanding as of November 28, 1996.

All such issuances of Common Stock (other than the Stock Dividend) have
been made in reliance upon the exemption from registration afforded by Section
4(2) under the Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS

(a) EXHIBITS.

<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT DESCRIPTION PAGE NO.
- ------ ------------------------------------------------------------------------- ----------
<C> <S> <C>
+1 Form of Underwriting Agreement...........................................
*3.1 Certificate of Incorporation of the Company..............................
*3.2 By-laws of the Company...................................................
*4.1 Form of Specimen Stock Certificate.......................................
*5 Opinion of Nutter, McClennen & Fish, LLP.................................
*10.1 Agreement and Plan of Merger dated as of December 30, 1996 by and among
BridgeStreet International Inc., EIP Acquisition Corp., Exclusive Interim
Properties, Ltd. and Melanie R. Sabelhaus................................
</TABLE>

II-2
<PAGE> 128

<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT DESCRIPTION PAGE NO.
- ------ ------------------------------------------------------------------------- ----------
<C> <S> <C>
*10.2 Agreement and Plan of Merger dated as of December 30, 1996 by and among
BridgeStreet International Inc., THEI Acquisition Corp., Temporary
Housing Experts, Inc., Connie F. O'Briant and Thomas W. O'Briant.........
*10.3 Agreement and Plan of Merger dated as of December 30, 1996 by and among
BridgeStreet International Inc., TCHI Acquisition Corp., Temporary
Corporate Housing Columbus, Inc., Temporary Corporate Housing Cleveland,
Inc., Temporary Corporate Housing Cincinnati, Inc., Temporary Corporate
Housing Pittsburgh, Inc., SLD Partnership, Lynda Clutchey, David Clutchey
III, Beth Holzer and David Holzer........................................
*10.4 Agreement and Plan of Merger dated as of December 30, 1996 by and among
BridgeStreet International Inc., CL Acquisition Corp., Corporate
Lodgings, Inc., Corporate Lodgings of Kentucky, Inc., Corporate Lodgings
of Minnesota, Inc., Corporate Lodgings of Pennsylvania, Inc., Corporate
Lodgings of Wisconsin, Inc. and Rocco A. Di Lillo........................
*10.5 Agreement and Plan of Merger dated as of March 31, 1997 by and among
BridgeStreet International Inc., HAI Acquisition Corp., Home Again, Inc.,
Home Again Amenities, Inc., Home Again Corporate Housing, Inc. and Sandra
A. Brown.................................................................
*10.6 1997 Equity Incentive Plan...............................................
*10.7 Stock Plan for Non-Employee Directors....................................
*10.8 Employment Agreement dated December 30, 1996, between CL Acquisition
Corp. and Rocco A. Di Lillo..............................................
*10.9 Employment Agreement dated December 30, 1996, between EIP Acquisition
Corp. and Melanie R. Sabelhaus...........................................
*10.10 Employment Agreement dated December 30, 1996 between THEI Acquisition
Corp. and Connie F. O'Briant.............................................
*10.11 Employment Agreement dated December 30, 1996, between TCHI Acquisition
Corp. and Lynda Clutchey.................................................
*10.12 Employment Agreement dated as of January 2, 1997, between BridgeStreet
International Inc. and Mark D. Gagne.....................................
*10.13 Employment Agreement dated as of March 31, 1997, between BridgeStreet
International Inc. and William N. Hulett, III............................
*10.14 Revolving Credit Agreement. Dated as of March 31, 1997 between
BridgeStreet International Inc., as Borrower, and Fleet National Bank and
the Other Lending Institutions listed on Schedule 1 thereto and Fleet
National Bank as Agent...................................................
*10.15 Revolving Credit Note for the principal balance of $10,000,000, dated
March 31, 1997...........................................................
*10.16 Rental Agreement between Saturn Enterprises Inc. and Temporary Corporate
Housing Inc. dated December 28, 1995.....................................
*10.17 Exclusive Lease Agreement between Integrity Furniture, Inc. and Temporary
Corporate Housing Pittsburgh, Inc. dated September 12, 1995..............
*21 Subsidiaries of the Registrant...........................................
+23.1 Consent of Arthur Andersen, LLP..........................................
+23.2 Consent of Arthur Andersen, LLP..........................................
*23.3 Consent of Nutter, McClennen & Fish, LLP (contained in Exhibit 5)........
*24 Power of Attorney (contained in the signature page to this Registration
Statement)...............................................................
*27 Financial Data Schedule..................................................
*99.1 Consent of James M. Biggar...............................................
*99.2 Consent of Robert R. Mesel...............................................
</TABLE>

II-3
<PAGE> 129

- ---------------

* Previously filed.
+ Filed herewith.

(b) FINANCIAL STATEMENT SCHEDULES

The following Financial Statement Schedule is filed herewith as part of
this Registration Statement:

Schedule II -- Valuation and Qualifying Accounts

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A under the
Securities Act and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this Registration Statement as of the
time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

(3) It will provide in its annual reports on Form 10-K filed under the
Securities Exchange Act of 1934, as amended, commencing with its annual
report on Form 10-K for its fiscal year ending December 31, 1997,
consolidated historical information (and, commencing with its annual report
on Form 10-K for its fiscal year ending December 31, 1998, comparative data
for prior periods during the two previous years, to the extent such data is
available) regarding: (i) the number of accommodation units owned and
leased; (ii) the percentage of its leases of one year or less in duration;
(iii) its average occupancy rates; and (iv) its average daily lease and
rental rates.

II-4
<PAGE> 130

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boston, the
Commonwealth of Massachusetts, on the 28th day of August 1997.

BRIDGESTREET ACCOMMODATIONS, INC.

By: /s/ MARK D. GAGNE
------------------------------------
Mark D. Gagne
Chief Financial Officer and
Principal Accounting Officer

POWER OF ATTORNEY

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------- ----------------
<C> <S> <C>
/s/ WILLIAM N. HULETT, III* President, Chief Executive August 28, 1997
- --------------------------------------------- Officer and Director
William N. Hulett, III

/s/ MARK D. GAGNE Chief Financial Officer and August 28, 1997
- --------------------------------------------- Principal Accounting Officer
Mark D. Gagne

/s/ PAUL M. VERROCHI* Chairman of the Board August 28, 1997
- ---------------------------------------------
Paul M. Verrochi

/s/ ROCCO A. DI LILLO* Vice President, Chief Operating August 28, 1997
- --------------------------------------------- Officer and Director
Rocco A. Di Lillo

/s/ LYNDA D. CLUTCHEY* Director August 28, 1997
- ---------------------------------------------
Lynda D. Clutchey

/s/ CONNIE F. O'BRIANT* Director August 28, 1997
- ---------------------------------------------
Connie F. O'Briant

/s/ MELANIE R. SABELHAUS* Director August 28, 1997
- ---------------------------------------------
Melanie R. Sabelhaus
</TABLE>

*By: /s/ MARK D. GAGNE
-------------------------------
Mark D. Gagne
Attorney-in-Fact

Powers of Attorney have been filed with this Registration Statement

II-5
<PAGE> 131

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders and Board of Directors of BridgeStreet Accommodations, Inc.

We have audited, in accordance with generally accepted auditing standards,
the combined financial statements of Temporary Corporate Housing Columbus, Inc.
included in BridgeStreet Accommodations, Inc.'s Form S-1 and have issued our
report thereon dated February 28, 1997. Our audit was made for the purpose of
forming an opinion on those statements taken as a whole. Temporary Corporate
Housing Columbus, Inc.'s Schedule of Valuation and Qualifying Accounts, included
in Schedule II on page S-2, is the responsibility of the Company's management
and is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic combined financial statements.
This schedule has been subjected to the auditing procedures applied in the
audits of the basic combined financial statements and, in our opinion, fairly
states in all material respects the combined financial data required to be set
forth therein in relation to the basic combined financial statements taken as a
whole.

Arthur Andersen LLP

Boston, Massachusetts
February 28, 1997

S-1
<PAGE> 132

SCHEDULE II

TEMPORARY CORPORATE HOUSING COLUMBUS, INC.

VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
PROVISION
BALANCE AT CHARGED ACCOUNTS BALANCE
BEGINNING TO ACCOUNTS WRITTEN AT END
OF YEAR EXPENSE RECOVERED OFF OF YEAR
---------- --------- --------- -------- -------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1996
Allowance for Doubtful Accounts....... $ -- $ 45,000 $ -- $ -- $45,000

Year Ended December 31, 1995
Allowance for Doubtful Accounts....... $ -- $ -- $ -- $ -- $ --
Year Ended December 31, 1994
Allowance for Doubtful Accounts....... $ -- $ -- $ -- $ -- $ --
</TABLE>

S-2
<PAGE> 133

EXHIBIT INDEX

<PAGE> 134

<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT DESCRIPTION PAGE NO.
- ------ ------------------------------------------------------------------------- ----------
<C> <S> <C>
*21 Subsidiaries of the Registrant...........................................
+23.1 Consent of Arthur Andersen, LLP..........................................
+23.2 Consent of Arthur Andersen, LLP..........................................
*23.3 Consent of Nutter, McClennen & Fish, LLP (contained in Exhibit 5)........
*24 Power of Attorney (contained in the signature page to this Registration
Statement)...............................................................
*27 Financial Data Schedule..................................................
*99.1 Consent of James M. Biggar...............................................
*99.2 Consent of Robert R. Mesel...............................................
*99.3 Consent of Jerry Sue Thornton............................................
</TABLE>

- ---------------
* Previously filed.

+ Filed herewith.

<PAGE> 1
2,615,000 Shares

BRIDGESTREET ACCOMMODATIONS, INC.

Common Stock

UNDERWRITING AGREEMENT

September __, 1997

LEGG MASON WOOD WALKER, INCORPORATED
MCDONALD & COMPANY SECURITIES, INC.
As Representatives of the
several Underwriters
c/o Legg Mason Wood Walker, Incorporated
111 South Calvert Street, 20th Floor
Baltimore, MD 21202

Ladies and Gentlemen:

BridgeStreet Accommodations, Inc. a Delaware corporation (the
"Company"), and the persons named in Schedule I (the "Selling Shareholders")
propose to sell an aggregate of 2,615,000 shares (the "Firm Shares") of the
Company's Common Stock, $.01 par value per share (the "Common Stock"), of which
1,700,000 shares are to be issued and sold by the Company and an aggregate of
915,000 shares are to be sold by the Selling Shareholders in the respective
amounts set forth opposite their respective names in Schedule I, in each case to
you and to the other underwriters named in Schedule II, acting severally and not
jointly (collectively, the "Underwriters"), for whom you are acting as
representatives (the "Representatives"). The Company and the Selling
Shareholders have also agreed to grant to you and the other Underwriters an
option (the "Option") to purchase up to an additional 392,250 shares of Common
Stock (the "Option Shares") on the terms and for the purposes set forth in
Section 1(b). The Firm Shares and the Option Shares are hereinafter collectively
referred to as the "Shares."

The initial public offering price per share for the Shares and the
purchase price per share for the Shares to be paid by the several Underwriters
shall be agreed upon by the Company, the Selling Shareholders and the
Representatives, acting on behalf of the several Underwriters, and such
agreement shall be set forth in a separate written instrument substantially in
the form of Exhibit A hereto (the "Price Determination Agreement"). The Price
Determination Agreement may take the form of an exchange of any standard form of
written telecommunication among the Company, the Selling Shareholders and the
Representatives and shall specify such applicable information as is indicated in
Exhibit A hereto. The offering of the Shares will be governed by
<PAGE> 2
this Agreement, as supplemented by the Price Determination Agreement. From and
after the date of the execution and delivery of the Price Determination
Agreement, this Agreement shall be deemed to incorporate, and, unless the
context otherwise indicates, all references contained herein to "this Agreement"
and to the phrase "herein" shall be deemed to include the Price Determination
Agreement.

Each Selling Shareholder has executed and delivered a Custody Agreement
and a Power of Attorney in the form attached hereto as Exhibit B (collectively,
the "Agreement and Power of Attorney") pursuant to which each Selling
Shareholder has placed his or her Firm Shares in custody and appointed the
persons designated therein as a committee (the "Committee") with authority to
execute and deliver this Agreement on behalf of such Selling Shareholder and to
take certain other actions with respect thereto and hereto.

The Company and the Selling Shareholders severally confirm as follows
their respective agreements with the Representatives and the several other
Underwriters.

1. Agreement to Sell and Purchase.

(a) On the basis of the respective representations,
warranties and agreements of the Company and the Selling Shareholders herein
contained and subject to all the terms and conditions of this Agreement, (i) the
Company and each of the Selling Shareholders, severally and not jointly, agree
to sell to the several Underwriters and (ii) each of the Underwriters, severally
and not jointly, agrees to purchase from the Company and the Selling
Shareholders, at the purchase price per share for the Firm Shares to be agreed
upon by the Representatives, the Company and the Selling Shareholders in
accordance with Section 1(c) hereof, which purchase price shall not be higher
than the maximum price recommended by McDonald & Company Securities, Inc., who
the Company has engaged to act as "qualified independent underwriter" within the
meaning of Rule 2720 (formerly Schedule E) to the By-Laws of the National
Association of Securities Dealers, Inc., and set forth in the Price
Determination Agreement, the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule II, plus such additional number of Firm Shares
which such Underwriter may become obligated to purchase pursuant to Section 9
hereof. Schedule II may be attached to the Price Determination Agreement. The
Company and the Underwriters agree that McDonald & Company Securities, Inc. will
not receive any additional benefits hereunder for serving as the QIU in
connection with the offering.

(b) Subject to all the terms and conditions of this
Agreement, the Company and the Selling Shareholders grant the Option to the
several Underwriters to purchase, severally and not jointly, up to 255,000
Option Shares from the Company and an aggregate of 137,250 Option Shares
(determined on a pro rata basis) unless the Company and the Selling Shareholders
otherwise agree from the Selling Shareholders at the same price per share as the
Underwriters shall pay for the Firm Shares. The Option may be exercised only to
cover over-allotments in the sale of the Firm Shares by the Underwriters and may
be exercised in whole or in part at any time (but not more than once) on or
before the 30th day after the date of the Price Determination Agreement,

2
<PAGE> 3
upon written or telegraphic notice (the "Option Shares Notice") by the
Representatives to the Company and the Committee no later than 12:00 noon, New
York City time, at least two and no more than five business days before the date
specified for closing in the Option Shares Notice (the "Option Closing Date")
setting forth the aggregate number of Option Shares to be purchased and the time
and date for such purchase. On the Option Closing Date, the Company and the
Selling Shareholders will issue and sell to the Underwriters the number of
Option Shares set forth in the Option Shares Notice, and each Underwriter will
purchase such percentage of the Option Shares as is equal to the percentage of
Firm Shares that such Underwriter is purchasing, as adjusted by the
Representatives in such manner as they deem advisable to avoid fractional
shares.

(c) The initial public offering price per share for the
Firm Shares and the purchase price per share for the Firm Shares to be paid by
the several Underwriters shall be agreed upon and set forth in the Price
Determination Agreement. The Company has elected to rely on Rule 430A. In the
event such price has not been agreed upon and the Price Determination Agreement
has not been executed by the close of business on the fourteenth business day
following the date on which the Registration Statement (as hereinafter defined)
becomes effective, this Agreement shall terminate forthwith, without liability
of any party to any other party except that Section 7 shall remain in effect.

2. Delivery and Payment. Delivery of the Firm Shares shall be
made to the Representatives for the accounts of the Underwriters at the office
of Legg Mason Wood Walker, Incorporated, 111 South Calvert Street, 20th Floor,
Baltimore, Maryland 21202, against payment of the purchase price therefor by
wire transfer of Federal Funds or similar same day funds to an account
designated in writing by the Company and an account designated in writing by the
Selling Shareholders as a group to Legg Mason Wood Walker, Incorporated at least
one business day prior to the Closing Date (as hereinafter defined). Such
payment shall be made at 10:00 a.m., New York City time, on the third business
day (or fourth business day, if the Price Determination Agreement is executed
after 4:30 p.m. New York City time) after the date on which the first bona fide
offering of the Shares to the public is made by the Underwriters or at such time
on such other date, not later than ten business days after such date, as may be
agreed upon by the Company and the Representatives (such date is hereinafter
referred to as the "Closing Date").

To the extent the Option is exercised, delivery of the Option
Shares against payment by the Underwriters (in the manner specified above) will
take place at the offices specified above for the Closing Date at the time and
date (which may be the Closing Date) specified in the Option Shares Notice.

Certificates evidencing the Shares shall be in definitive form
and shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection at least 24 hours prior to the Closing Date or the
Option Closing Date, as the case may be.

3
<PAGE> 4
The cost of original issue tax stamps, if any, in connection
with the issuance and delivery of the Firm Shares and Option Shares by the
Company to the respective Underwriters shall be borne by the Company. The cost
of tax stamps, if any, in connection with the sale of the Firm Shares by the
Selling Shareholders shall be borne by the Selling Shareholders. The Company and
the Selling Shareholders will, severally and not jointly, pay and save each
Underwriter and any subsequent holder of the Shares harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
Federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
such Underwriter of the Firm Shares and Option Shares.

3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to each Underwriter that:

(a) A registration statement (Registration No. 333-26647)
on Form S-1 relating to the Shares, including a preliminary prospectus and such
amendments to such registration statement as may have been required to the date
of this Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the published rules and
regulations (collectively referred to as the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, and has been
filed with the Commission. The term "preliminary prospectus" as used herein
means a preliminary prospectus as contemplated by Rule 430 or Rule 430A ("Rule
430A") of the Rules and Regulations included at any time as part of the
registration statement. Copies of such registration statement and amendments and
of each related preliminary prospectus have been delivered to the
Representatives. The term "Registration Statement" means the registration
statement as amended at the time it becomes or became effective (the "Effective
Date"), including financial statements and all exhibits and any information
deemed to be included by Rule 430A or Rule 434 of the Rules and Regulations. If
the Company files a registration statement to register a portion of the Shares
and relies on Rule 462(b) of the Rules and Regulations for such registration
statement to become effective upon filing with the Commission (the "Rule 462
Registration Statement"), then any reference to the "Registration Statement"
shall be deemed to include the Rule 462 Registration Statement, as amended from
time to time. The term "Prospectus" means the prospectus as first filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations or, if no such
filing is required, the form of final prospectus included in the Registration
Statement at the Effective Date.

(b) On the Effective Date, the date the Prospectus is
first filed with the Commission pursuant to Rule 424(b) (if required), at all
times subsequent to and including the Closing Date and, if later, the Option
Closing Date and when any post-effective amendment to the Registration Statement
becomes effective or any amendment or supplement to the Prospectus is filed with
the Commission, the Registration Statement and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
or supplement thereto), including the financial statements included in the
Prospectus, did or will comply with all

4
<PAGE> 5
applicable provisions of the Act and the Rules and Regulations. On the Effective
Date and when any post-effective amendment to the Registration Statement becomes
effective, no part of the Registration Statement or any such amendment did or
will contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading. At the Effective Date, the date the Prospectus or any
amendment or supplement to the Prospectus is filed with the Commission and at
the Closing Date and, if later, the Option Closing Date, the Prospectus did not
or will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
representations and warranties in this Section 3(b) do not apply to any
statements or omissions made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto or relating to any Selling
Shareholder forwarded in writing to the Company by or on behalf of such Selling
Shareholder. For all purposes of this Agreement, the amounts of the selling
concession and reallowance set forth in the Prospectus constitute the only
information relating to any Underwriter furnished in writing to the Company by
the Representatives specifically for inclusion in the preliminary prospectus,
the Registration Statement or the Prospectus. The Company has not distributed
any offering material in connection with the offering or sale of the Shares
other than the Registration Statement, the preliminary prospectus, the
Prospectus or any other materials, if any, permitted by the Act.

(c) The only subsidiaries (as defined in the Rules and
Regulations) of the Company are the subsidiaries listed on Exhibit 21 to the
Registration Statement (the "Subsidiaries"). The Company and each of its
Subsidiaries is, and at the Closing Date will be, a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. The Company and each of its Subsidiaries has, and at the Closing
Date will have, full power and authority to conduct all the activities conducted
by it, to own or lease all the assets owned or leased by it and to conduct its
business as described in the Registration Statement and the Prospectus. Each of
the Company and its Subsidiaries is, and at the Closing Date will be, duly
licensed or qualified to do business and in good standing as a foreign
corporation (i) in the jurisdiction in which it has its principal place of
business and (ii) in all other jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned or leased by it
makes such licensing or qualification necessary except where the failure to so
license or qualify in any such other jurisdiction will not have a material
adverse effect on the business, properties, condition (financial or otherwise),
or results of operations of the Company and the Subsidiaries taken as a whole (a
"Material Adverse Effect"). All of the outstanding shares of capital stock of
the Subsidiaries have been duly authorized and validly issued, and are fully
paid and non-assessable and are owned by the Company free and clear of all
liens, encumbrances and claims whatsoever, except as disclosed in the
Prospectus. Except for the stock of the Subsidiaries and as disclosed in the
Registration Statement, the Company does not own, and at the Closing Date will
not own, directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any equity interest in any
firm,

5
<PAGE> 6
partnership, joint venture, limited liability company, association or other
entity. Complete and correct copies of the certificate of incorporation and of
the by-laws of the Company and each of its Subsidiaries and all amendments
thereto have been delivered to the Representatives, and no changes therein will
be made subsequent to the date hereof and prior to the Closing Date or, if
later, the Option Closing Date.

(d) The outstanding shares of Common Stock have been, and
the Shares to be issued and sold by the Company upon such issuance will be, duly
authorized, validly issued, fully paid and nonassessable and will not be subject
to any preemptive or similar right. The description of the Common Stock in the
Registration Statement and the Prospectus is, and at the Closing Date will be,
complete and accurate in all respects. Except as set forth in the Prospectus,
the Company does not have outstanding, and at the Closing Date will not have
outstanding, any options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of Common Stock, any shares of capital
stock of any Subsidiary or any such warrants, convertible securities or
obligations.

(e) The financial statements and schedules included in
the Registration Statement or the Prospectus present fairly the consolidated
financial condition of the Company as of the respective dates thereof and the
consolidated results of operations and cash flows of the Company for the
respective periods covered thereby, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the entire period
involved, except as otherwise disclosed in the Prospectus. The pro forma
financial statements and other pro forma financial information included in the
Registration Statement or the Prospectus (i) present fairly in all material
respects the information shown therein, (ii) have been prepared in accordance
with the Commission's published rules and guidelines with respect to pro forma
financial statements and (iii) have been properly computed on the bases
described therein. The assumptions used in the preparation of the pro forma
financial statements and other pro forma financial information included in the
Registration Statement or the Prospectus are reasonable and the adjustments used
therein are appropriate to give effect to the transactions or circumstances
referred to therein. No other financial statements or schedules of the Company
are required by the Act or the Rules and Regulations to be included in the
Registration Statement or the Prospectus. Arthur Andersen LLP (the
"Accountants") who have reported on such financial statements and schedules, are
independent accountants with respect to the Company as required by the Act and
the Rules and Regulations. The statements included in the Registration Statement
with respect to the Accountants pursuant to Rule 509 of Regulation S-K of the
Rules and Regulations are true and correct in all material respects.

(f) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with

6
<PAGE> 7
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

(g) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and prior
to the Closing Date, except as set forth in or contemplated by the Registration
Statement and the Prospectus, (i) there has not been and will not have been any
change in the capitalization of the Company or any material adverse change in
the business, properties, business prospects, condition (financial or otherwise)
or results of operations of the Company and its Subsidiaries, taken as a whole,
arising for any reason whatsoever, (ii) neither the Company nor any of its
Subsidiaries has incurred nor will it incur any liabilities or obligations,
direct or contingent, other than in the ordinary course of business and as will
not have a Material Adverse Effect nor has it entered into nor will it enter
into any transactions other than in the ordinary course of business and as will
not have a Material Adverse Effect and other than pursuant to this Agreement and
the transactions referred to herein and (iii) the Company has not and will not
have paid or declared any dividends or other distributions of any kind on any
class of its capital stock.

(h) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.

(i) Except as set forth in the Registration Statement and
the Prospectus, there are no actions, suits or proceedings pending or threatened
against or affecting the Company or any of its Subsidiaries or any of their
respective officers in their capacity as such, before or by any Federal or state
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, wherein an unfavorable ruling, decision or finding
could have a Material Adverse Effect.

(j) Except to the extent that breach of any of the
following will not, individually or in the aggregate, have a Material Adverse
Effect, the Company and each of its Subsidiaries has, and at the Closing Date
will have, (i) all governmental licenses, permits, consents, orders, approvals
and other authorizations necessary to carry on its business as contemplated in
the Prospectus, (ii) complied in all respects with all laws, regulations and
orders applicable to it or its business, including without limitation all zoning
and licensing requirements and (iii) performed all its obligations required to
be performed by it, and is not, and at the Closing Date will not be, in default
under any indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement, lease, contract or other agreement
or instrument (collectively, a "contract or other agreement") to which it is a
party or by which its property is bound or affected. To the best knowledge of
the Company and each of its Subsidiaries, no other party under any contract or
other agreement to which it is a party is in default in any respect thereunder,
which default could have a Material Adverse Effect. Neither the Company nor any
of its Subsidiaries is, nor at the Closing Date will any of them be, in
violation of any provision of its certificate of incorporation or by-laws.

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<PAGE> 8
(k) No consent, approval, authorization or order of, or
any filing or declaration with, any court or governmental agency or body is
required in connection with the authorization, issuance, transfer, sale or
delivery of the Shares by the Company, in connection with the execution,
delivery and performance of this Agreement by the Company or in connection with
the taking by the Company of any action contemplated hereby, except such as have
been obtained under the Act or the Rules and Regulations and such as may be
required under state or other securities or Blue Sky laws or the by-laws and
rules of the National Association of Securities Dealers, Inc. (the "NASD") in
connection with the purchase and distribution by the Underwriters of the Shares
to be sold by the Company.

(l) The Company has full corporate power and authority to
enter into this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company and is enforceable against the Company in accordance with the terms
hereof. The performance of this Agreement and the consummation of the
transactions contemplated hereby and the application of the net proceeds from
the offering and sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds" will not result in the creation
or imposition of any lien, charge or encumbrance upon any of the assets of the
Company or any of its Subsidiaries pursuant to the terms or provisions of, or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or give any other party a right to terminate any of
its obligations under, or result in the acceleration of any obligation under,
the certificate of incorporation or by-laws of the Company or any of its
Subsidiaries, any contract or other agreement to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries or
any of its properties is bound or affected, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of any court or
other governmental agency or body applicable to the business or properties of
the Company or any of its Subsidiaries.

(m) The Company and each of its Subsidiaries has good and
marketable title to all properties and assets described in the Prospectus as
owned by it, free and clear of all liens, charges, encumbrances or restrictions,
except for liens for taxes not yet due and payable for which adequate reserves
have been made, and except such as are described in the Prospectus or are not
material to the business of the Company and its Subsidiaries taken as a whole.
The Company and each of its Subsidiaries has valid, subsisting and enforceable
leases for the properties described in the Prospectus as leased by it, with such
exceptions as are not, individually or in the aggregate, material to the Company
and its Subsidiaries taken as a whole and do not materially interfere with the
use made and proposed to be made of such properties by the Company and such
Subsidiaries, and no other parties to such leases have asserted any violations
thereunder which, individually or in the aggregate, could result in a Material
Adverse Effect on the condition (financial or otherwise) or on the earnings,
business, properties, business prospects or operations of the Company and its
Subsidiaries, taken as a whole.

(n) There is no document or contract of a character
required to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration

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<PAGE> 9
Statement which is not described or filed as required. All such contracts to
which the Company or any Subsidiary is a party have been duly authorized,
executed and delivered by the Company or such Subsidiary, constitute valid and
binding agreements of the Company or such Subsidiary and are enforceable against
the Company or such Subsidiary in accordance with the terms thereof.

(o) Neither the Company nor any of its directors,
officers or controlling persons has taken, directly or indirectly, any action
intended, or which might reasonably be expected, to cause or result, under the
Act or otherwise, in, or which has constituted, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Shares.

(p) No holder of securities of the Company has rights to
the registration of any securities of the Company because of the filing of the
Registration Statement.

(q) Prior to the Closing Date, the Shares will be duly
authorized for quotation on The Nasdaq Stock Market's National Market (the
"Nasdaq National Market").

(r) The Company and its Subsidiaries are in compliance
with all material federal, state and local employment and labor laws, including,
but not limited to, laws relating to non-discrimination in hiring, promotion and
pay of employees; no labor dispute with the employees of the Company or any
Subsidiary exists or, to the knowledge of the Company, is imminent or
threatened; and the Company is not aware of any existing, imminent or threatened
labor disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could result in a Material Adverse Effect.

(s) The Company and its Subsidiaries own, or are licensed
or otherwise have the full exclusive right to use the material patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names (collectively,
"patent and proprietary rights") presently employed by them or which are
necessary in connection with the conduct of the business now operated by them,
and neither the Company nor any of its Subsidiaries has received any written
notice or otherwise has actual knowledge of any infringement of or conflict with
asserted rights of others or any other claims with respect to any patent or
proprietary rights, or of any basis for rendering any patent and proprietary
rights invalid or inadequate to protect the interest of the Company or any of
its Subsidiaries.

(t) Neither the Company nor any of its Subsidiaries nor,
to the Company's knowledge, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary or
received or retained any funds in violation of any law, rule or regulation or in
a transaction of a character required to be disclosed in the Prospectus.

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<PAGE> 10
(u) The Company has complied, and until the completion of
the distribution of the Shares, will comply with all of the provisions of
(including, without limitation, filing all forms required by) Section 517.075 of
the Florida Securities and Investor Protection Act and Regulation 3E-900.001
issued thereunder with respect to the offering and sale of the Shares.

(v) The Company and its Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or imposing liability or standards of conduct concerning any
Hazardous Material (as hereinafter defined) ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
individually or in the aggregate, result in a Material Adverse Effect. The term
"Hazardous Material" means (A) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, (B) any "hazardous waste" as defined by the Resource Conservation and
Recovery Act, as amended, (C) any petroleum or petroleum product, (D) any
polychlorinated biphenyl and (E) any pollutant or contaminant or hazardous,
dangerous, or toxic chemical, material, waste or substance regulated under or
within the meaning of any other Environmental Law.

(w) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its Subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties). Except as set forth in the Registration
Statement and the Prospectus there are no costs and liabilities associated with
or arising in connection with Environmental Laws as currently in effect
(including, without limitation, costs of compliance herewith) which could,
singly or in the aggregate, have a Material Adverse Effect.

(x) The Company maintains insurance with respect to its
properties and business of the types and in amounts believed by the Company to
be generally adequate for its business and consistent with insurance coverage
maintained in similar companies and businesses, all of which insurance is in
full force and effect.

(y) The Company has filed all material federal, state and
foreign income and franchise tax returns and has paid all taxes shown as due
thereon, other than taxes which are being contested in good faith and for which
adequate reserves have been established in accordance with generally accepted
accounting principles ("GAAP"); and the Company has no knowledge of any tax
deficiency which has been or might be asserted or threatened against the
Company. There are

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<PAGE> 11
no tax returns of the Company or any of its Subsidiaries that are currently
being audited by state, local or federal taxing authorities or agencies (and
with respect to which the Company or any Subsidiary has received notice), where
the findings of such audit, if adversely determined, could result in a Material
Adverse Effect.

(z) With respect to each employee benefit plan, program
and arrangement (including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) maintained or contributed to by the Company, or with
respect to which the Company could incur any liability under ERISA
(collectively, the "Benefit Plans"), no event has occurred and, to the best
knowledge of the Company, there exists no condition or set of circumstances, in
connection with which the Company could be subject to any liability under the
terms of such Benefit Plan, applicable law (including, without limitation, ERISA
and the Internal Revenue Code of 1986, as amended) or any applicable agreement
that could have a Material Adverse Effect.

4. Representations and Warranties of the Selling Shareholders.
Each Selling Shareholder, severally and not jointly, represents, warrants and
covenants to each Underwriter that:

(a) Such Selling Shareholder has full power and authority
to enter into this Agreement and the Agreement and Power of Attorney. All
authorizations and consents necessary for the execution and delivery by such
Selling Shareholder of the Agreement and Power of Attorney, and for the
execution of this Agreement on behalf of such Selling Shareholder, have been
given. Each of the Agreement and Power of Attorney and this Agreement has been
duly authorized, executed and delivered by or on behalf of such Selling
Shareholder and constitutes a valid and binding agreement of such Selling
Shareholder and is enforceable against such Selling Shareholder in accordance
with the terms thereof and hereof.

(b) Such Selling Shareholder now has, and at the time of
delivery thereof hereunder will have, (i) good and marketable title to the
Shares to be sold by such Selling Shareholder hereunder, free and clear of all
liens, encumbrances and claims whatsoever (other than pursuant to the Agreement
and Power of Attorney), and (ii) full legal right and power, and all
authorizations and approvals required by law, to sell, transfer and deliver such
Shares to the Underwriters hereunder and to make the representations, warranties
and agreements made by such Selling Shareholder herein. Upon the delivery of and
payment for such Shares hereunder, such Selling Shareholder will deliver good
and marketable title thereto, free and clear of all liens, encumbrances and
claims whatsoever.

(c) On the Closing Date or the Option Closing Date, as
the case may be, all stock transfer or other taxes (other than income taxes)
which are required to be paid in connection with the sale and transfer of the
Shares to be sold by such Selling Shareholder to the several Underwriters
hereunder will have been fully paid or provided for by such Selling Shareholder
and all laws imposing such taxes will have been fully complied with.

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<PAGE> 12
(d) The performance of this Agreement and the
consummation of the transactions contemplated hereby will not result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of such Selling Shareholder pursuant to the terms or provisions of, or result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the acceleration of any obligation under, any
contract or other agreement to which such Selling Shareholder is a party or by
which such Selling Shareholder or any of its property is bound or affected, or
under any ruling, decree, judgment, order, statute, rule or regulation of any
court or other governmental agency or body having jurisdiction over such Selling
Shareholder or the property of such Selling Shareholder.

(e) No consent, approval, authorization or order of, or
any filing or declaration with, any court or governmental agency or body is
required for the consummation by such Selling Shareholder of the transactions on
its part contemplated herein and in the Agreement and Power of Attorney, except
such as have been obtained under the Act or the Rules and Regulations and such
as may be required under state securities or Blue Sky laws or the by-laws and
rules of the NASD in connection with the purchase and distribution by the
Underwriters of the Shares to be sold by such Selling Shareholder.

(f) Such Selling Shareholder has examined the
Registration Statement and Prospectus and has no knowledge of any material fact
or condition not set forth in the Registration Statement or the Prospectus which
has adversely affected, or may adversely affect, the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company and, to the best of such Selling Shareholder's knowledge and
belief, neither the Registration Statement nor the Prospectus contains any
untrue statement of a material fact or omits to state a material fact required
to be stated therein in order to make the statements therein not misleading, and
the sale of the Shares proposed to be sold by such Selling Shareholder is not
prompted by any such knowledge.

(g) All information with respect to such Selling
Shareholder contained in the Registration Statement and the Prospectus (as
amended or supplemented, if the Company shall have filed with the Commission any
amendment or supplement thereto) complied and will comply with all applicable
provisions of the Act and the Rules and Regulations, contains and will contain
all statements required to be stated therein in accordance with the Act and the
Rules and Regulations, and does not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading.

(h) To the best knowledge of such Selling Shareholder,
the representations and warranties of the Company contained in Section 3 hereof
are true and correct.

(i) Other than as permitted by the Act and the Rules and
Regulations, such Selling Shareholder has not distributed and will not
distribute any preliminary prospectus, the Prospectus or any other offering
material in connection with the offering and sale of the Shares.

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<PAGE> 13
Such Selling Shareholder has not taken, directly or indirectly, any action
intended, or which might reasonably be expected, to cause or result in, under
the Act or otherwise, or which has caused or resulted in, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.

(j) Certificates in negotiable form for the Firm Shares
to be sold hereunder by such Selling Shareholder have been placed in custody,
for the purpose of making delivery of such Firm Shares under this Agreement,
under the Agreement and Power of Attorney which appoints ______________ as
custodian (the "Custodian") for each Selling Shareholder. Such Selling
Shareholder agrees that the Shares represented by the certificates held in
custody for him or her under the Agreement and Power of Attorney are for the
benefit of and coupled with and subject to the interest hereunder of the
Custodian, the Committee, the Underwriters, each other Selling Shareholder and
the Company, that the arrangements made by such Selling Shareholder for such
custody and the appointment of the Custodian and the Committee by such Selling
Shareholder are irrevocable, and that the obligations of such Selling
Shareholder hereunder shall not be terminated by operation of law, whether by
the death, disability, incapacity or liquidation of any Selling Shareholder or
the occurrence of any other event. If any Selling Shareholder should die, become
disabled or incapacitated or be liquidated or if any other such event should
occur before the delivery of the Shares hereunder, certificates for the Shares
shall be delivered by the Custodian in accordance with the terms and conditions
of this Agreement and actions taken by the Committee and the Custodian pursuant
to the Agreement and Power of Attorney shall be as valid as if such death,
liquidation, incapacity or other event had not occurred, regardless of whether
or not the Custodian or the Committee, or either of them, shall have received
notice thereof.

(k) Such Selling Shareholder has not taken any action
which would cause the Company to incur or become liable for any broker's
commission or finder's fee in connection with any transaction contemplated by
this Agreement.

5. Agreements of the Company and the Selling Shareholders. The
Company and the Selling Shareholders (as to Sections 5(i), (j), (o), (p), (q),
(r) and (s)) agree, severally and not jointly, with the several Underwriters as
follows:

(a) The Company will not, either prior to the Effective
Date or thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.

(b) The Company will use its best efforts to cause the
Registration Statement to become effective, and will notify the Representatives
promptly, and will confirm such advice in writing, (1) when the Registration
Statement has become effective and when any post-effective amendment thereto
becomes effective, (2) of any request by the Commission for amendments or

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<PAGE> 14
supplements to the Registration Statement or the Prospectus or for additional
information, (3) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose or the threat thereof, (4) of the happening of any
event during the period mentioned in the second sentence of Section 5(e) that in
the judgment of the Company makes any statement made in the Registration
Statement or the Prospectus untrue or that requires the making of any changes in
the Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances in which they are made, not misleading
and (5) of receipt by the Company or any representative of the Company of any
other communication from the Commission relating to the Company, the
Registration Statement, any preliminary prospectus or the Prospectus. If at any
time the Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. The Company will
use its best efforts to comply with the provisions of and make all requisite
filings with the Commission pursuant to Rule 430A and to notify the
Representatives promptly of all such filings.

(c) The Company will furnish to the Representatives,
without charge, two signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto and will furnish to the Representatives, without
charge, for transmittal to each of the other Underwriters, a copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules but without exhibits.

(d) The Company will comply with all the provisions of
any undertakings contained in the Registration Statement.

(e) On the Effective Date, and thereafter from time to
time, the Company will deliver to each of the Underwriters, without charge, as
many copies of the Prospectus or any amendment or supplement thereto as the
Representatives may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the several Underwriters
and by all dealers to whom the Shares may be sold, both in connection with the
offering or sale of the Shares and for any period of time thereafter during
which the Prospectus is required by law to be delivered in connection therewith.
If during such period of time any event shall occur which in the judgment of the
Company or counsel to the Underwriters should be set forth in the Prospectus in
order to make any statement therein, in the light of the circumstances under
which it was made, not misleading, or if it is necessary to supplement or amend
the Prospectus to comply with law, the Company will forthwith prepare and duly
file with the Commission an appropriate supplement or amendment thereto, and
will deliver to each of the Underwriters, without charge, such number of copies
thereof as the Representatives may reasonably request.

(f) Prior to any public offering of the Shares by the
Underwriters, the Company will cooperate with the Representatives and counsel to
the Underwriters in connection with the

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<PAGE> 15
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives may
request; provided, that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any jurisdiction
where it is not now so subject or subject itself to taxation in any jurisdiction
where it is not now so subject.

(g) During the period of five years commencing on the
Effective Date, the Company will furnish to the Representatives and each other
Underwriter who may so request copies of such financial statements and other
periodic and special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock, and will furnish to
the Representatives and each other Underwriter who may so request a copy of each
annual or other report it shall be required to file with the Commission.

(h) The Company will make generally available to holders
of its securities as soon as may be practicable but in no event later than the
last day of the fifteenth full calendar month following the calendar quarter in
which the Effective Date falls, an earnings statement (which need not be audited
but shall be in reasonable detail) for a period of 12 months ended commencing
after the Effective Date, and satisfying the provisions of Section 11(a) of the
Act (including Rule 158 of the Rules and Regulations).

(i) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay,
or reimburse if paid by the Representatives, all costs and expenses incident to
the performance of the obligations of the Company and the Selling Shareholders
under this Agreement, including but not limited to costs and expenses of or
relating to (1) the preparation, printing and filing of the Registration
Statement and exhibits to it, each preliminary prospectus, the Prospectus and
any amendment or supplement to the Registration Statement or the Prospectus, (2)
the preparation and delivery of certificates representing the Shares, (3) the
word processing, printing and reproduction of this Agreement, the Agreement
Among Underwriters, any Dealer Agreements, any Underwriters' Questionnaire and
the Agreement and Power of Attorney, (4) furnishing (including costs of
shipping, mailing and courier) such copies of the Registration Statement, the
Prospectus and any preliminary prospectus, and all amendments and supplements
thereto, as may be requested for use in connection with the offering and sale of
the Shares by the Underwriters or by dealers to whom Shares may be sold, (5) the
listing of the Shares on the Nasdaq National Market, (6) any filings required to
be made by the Underwriters with the NASD, and the fees, disbursements and other
charges of counsel for the Underwriters in connection therewith, (7) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions designated pursuant to Section
5(f), including the fees, disbursements and other charges of counsel to the
Underwriters in connection therewith, and the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda, (8) counsel to the
Company and counsel to the Selling Shareholders, (9) the transfer agent for the
Shares and (10) the Accountants.

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<PAGE> 16
(j) If this Agreement shall be terminated by the Company
or the Selling Shareholders pursuant to any of the provisions hereof (otherwise
than pursuant to Section 9) or if for any reason the Company or any Selling
Shareholder shall be unable to perform its obligations hereunder, the Company
and the Selling Shareholders, jointly and severally, will reimburse the several
Underwriters for all out-of-pocket expenses (including the fees, disbursements
and other charges of counsel to the Underwriters) reasonably incurred by them in
connection herewith.

(k) The Company will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the Shares.

(l) The Company will apply the net proceeds from the
offering and sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds" and shall file such reports with
the Commission with respect to the sale of the Shares and the application of the
proceeds therefrom as may be required in accordance with Rule 463 under the Act.

(m) During the period of 180 days commencing at the
Closing Date, the Company will not, without the prior written consent of Legg
Mason Wood Walker, Incorporated, directly or indirectly, sell, offer to sell,
contract to sell, grant any option for the purchase of, or otherwise dispose of,
any shares of Common Stock or securities convertible into or exchangeable for
Common Stock or warrants or other rights to acquire shares of Common Stock,
other than to the Underwriters pursuant to this Agreement and other than
pursuant to employee benefit plans or in connection with the acquisition of the
business, stock or assets of third parties provided that the shares issued in
any such acquisition may not be resold or otherwise disposed of during the
period of 180 days commencing at the Closing Date.

(n) The Company will cause each of its executive
officers, directors and each beneficial owner of more than 5% of the outstanding
shares of Common Stock to enter into agreements with the Representatives in the
form set forth in Exhibit C to the effect that they will not, for a period of
180 days after the commencement of the public offering of the Shares, without
the prior written consent of Legg Mason Wood Walker, Incorporated, directly or
indirectly, sell, offer to sell, contract to sell, grant any option for the
purchase of, or otherwise dispose of (except bona fide gifts to donees who agree
to comply with the restrictions imposed upon the donors), or require the Company
to file with the Commission a registration statement under the Securities Act to
register any shares of, Common Stock or securities convertible into or
exchangeable for Common Stock, or warrants or other rights to acquire shares of
Common Stock of which any of such executive officers, directors, and more than
5% beneficial owners is now, or in the future may become, the beneficial owner
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), other than to the Underwriters pursuant to this
Agreement and other than pursuant to employee benefit plans.

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<PAGE> 17
(o) The Selling Shareholders will not, for a period of
180 days after the commencement of the public offering of the Shares, without
the prior written consent of Legg Mason Wood Walker, Incorporated, directly or
indirectly, offer to sell, sell, contract to sell, grant any option to sell, or
otherwise dispose of or require the Company to file with the Commission on a
registration statement under the Securities Act to register, any shares of
Common Stock or securities convertible into or exchangeable for Common Stock, or
warrants or other rights to acquire shares of Common Stock of which such Selling
Shareholders are now or may in the future become the beneficial owner (within
the meaning of Rule 13d-3 under the Exchange Act).

(p) The Selling Shareholders will not, without the prior
written consent of Legg Mason Wood Walker, Incorporated, make any bid for or
purchase any shares of Common Stock during the 120-day period following the date
hereof.

(q) As soon as any Selling Shareholder is advised
thereof, such Selling Shareholder will advise Legg Mason Wood Walker,
Incorporated and confirm such advice in writing, (1) of receipt by such Selling
Shareholder, or by any representative of such Selling Shareholder, of any
communication from the Commission relating to the Registration Statement, the
Prospectus or any preliminary prospectus, or any notice or order of the
Commission relating to the Company or any of the Selling Shareholders in
connection with the transactions contemplated by this Agreement and (2) of the
happening of any event during the period from and after the Effective Date that
in the judgment of such Selling Shareholder makes any statement made in the
Registration Statement or the Prospectus untrue or that requires the making of
any changes in the Registration Statement or the Prospectus in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading.

(r) The Selling Shareholders will deliver to Legg Mason
Wood Walker, Incorporated prior to or on the Effective Date a properly completed
and executed United States Treasury Department Form W-9 (or other applicable
form or statement specified by Treasury Department regulations in lieu thereof).

6. Conditions of the Obligations of the Underwriters. In addition
to the execution and delivery of the Price Determination Agreement, the
obligations of each Underwriter hereunder are subject to the following
conditions:

(a) Notification that the Registration Statement has
become effective shall be received by Legg Mason Wood Walker, Incorporated not
later than 5:00 p.m., New York City time, on the date of this Agreement or at
such later date and time as shall be consented to in writing by Legg Mason Wood
Walker, Incorporated and all filings required by Rule 424 and Rule 430A of the
Rules and Regulations shall have been made.

(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the

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<PAGE> 18
qualification or registration of the Shares under the securities or Blue Sky
laws of any jurisdiction shall be in effect and no proceeding for such purpose
shall be pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to Legg Mason Wood Walker, Incorporated and Legg
Mason Wood Walker, Incorporated did not object thereto in good faith, and Legg
Mason Wood Walker, Incorporated shall have received certificates, dated the
Closing Date and the Option Closing Date and signed on behalf of the Company by
the Chief Executive Officer or the Chairman of the Board of Directors of the
Company and the Chief Financial Officer of the Company (who may, as to
proceedings threatened, rely upon the best of their information and belief), to
the effect of clauses (i), (ii) and (iii).

(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been, and no development shall have occurred which could reasonably be expected
to have a Material Adverse Effect whether or not arising from transactions in
the ordinary course of business, in each case other than as set forth in or
contemplated by the Registration Statement and the Prospectus and (ii) neither
the Company nor any of its Subsidiaries shall have sustained any material loss
or interference with its business or properties from fire, explosion, flood or
other casualty, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree, which
is not set forth in the Registration Statement and the Prospectus, if in the
judgment of Legg Mason Wood Walker, Incorporated any such development makes it
impracticable or inadvisable to consummate the sale and delivery of the Shares
by the Underwriters at the initial public offering price.

(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
Subsidiaries or any of their respective officers or directors in their
capacities as such, before or by any Federal, state or local court, commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, in which litigation or proceeding an unfavorable ruling, decision or
finding could have a Material Adverse Effect.

(e) Each of the representations and warranties of the
Company and the Selling Shareholders contained herein shall be true and correct
in all material respects at the Closing Date and, with respect to the Option
Shares, at the Option Closing Date, as if made at the Closing Date and, with
respect to the Option Shares, at the Option Closing Date, and all covenants and
agreements herein contained to be performed on the part of the Company and the
Selling Shareholders and all conditions herein contained to be fulfilled or
complied with by the Company and the Selling Shareholders at or prior to the
Closing Date and, with respect to the Option Shares, at or prior to the Option
Closing Date, shall have been duly performed, fulfilled or complied with.

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<PAGE> 19
(f) The Representatives shall have received opinions,
each dated the Closing Date and, with respect to the Option Shares, the Option
Closing Date, and satisfactory in form and substance to counsel for the
Underwriters, from Nutter, McClennen & Fish LLP, counsel to the Company, and
from _______________________, counsel to the Selling Shareholders, to the effect
set forth in Exhibit D.

(g) The Representatives shall have received opinions,
each dated the Closing Date and with respect to the Option Shares, the Option
Closing Date, from Goodwin, Procter & Hoar LLP, counsel to the Underwriters,
with respect to the Registration Statement, the Prospectus and this Agreement,
which opinion shall be satisfactory in all respects to Legg Mason Wood Walker,
Incorporated.

(h) On the date of the Prospectus, the Accountants shall
have furnished to the Representatives a letter, dated the date of its delivery,
addressed to the Representatives and in form and substance satisfactory to Legg
Mason Wood Walker, Incorporated, confirming that they are independent
accountants with respect to the Company as required by the Act and the Rules and
Regulations and with respect to the financial and other statistical and
numerical information contained in the Registration Statement. At the Closing
Date and, as to the Option Shares, the Option Closing Date, the Accountants
shall have furnished to the Representatives a letter, dated the date of its
delivery, which shall confirm, on the basis of a review in accordance with the
procedures set forth in the letter from the Accountants, that nothing has come
to their attention during the period from the date of the letter referred to in
the prior sentence to a date (specified in the letter) not more than five days
prior to the Closing Date and the Option Closing Date which would require any
change in their letter dated the date of the Prospectus, if it were required to
be dated and delivered at the Closing Date and the Option Closing Date.

(i) At the Closing Date and, as to the Option Shares, the
Option Closing Date, there shall be furnished to the Representatives an accurate
certificate, dated the date of its delivery, signed by each of the Chief
Executive Officer and the Chief Financial Officer of the Company on behalf of
the Company, in form and substance satisfactory to Legg Mason Wood Walker,
Incorporated, to the effect that:

(i) Each signer of such certificate has carefully
examined the Registration Statement and the Prospectus and (A) as of
the date of such certificate, such documents do not omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein not untrue or misleading and (B) since the
Effective Date, no event has occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein not untrue or misleading in any material respect.

(ii) Each of the representations and warranties of the
Company contained in this Agreement was, when originally made, and is,
at the time such certificate is delivered, true and correct in all
material respects;

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<PAGE> 20
(iii) Each of the covenants required herein to be performed
by the Company on or prior to the date of such certificate has been
duly, timely and fully performed and each condition herein required to
be complied with by the Company on or prior to the delivery of such
certificate has been duly, timely and fully complied with; and

(iv) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (A) there has
not been, and no development has occurred which could reasonably be
expected to result in, a material adverse change in the general
affairs, business, properties, management, condition (financial or
otherwise) or results of operations of the Company and its
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and
the Prospectus and (B) neither the Company nor any of its Subsidiaries
has sustained any material loss or interference with its business or
properties from fire, explosion, flood or other casualty, whether or
not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree, which is not
set forth in the Registration Statement and the Prospectus.

(v) There are no actions, suits, proceedings or
investigations pending or threatened in writing against the Company or
any of its Subsidiaries or any of their respective officers or
directors in their capacities as such, before any court, governmental
agency or arbitrator which seek to challenge the legality or
enforceability of any of the documents filed, or required to be filed,
as exhibits to the Registration Statement, seek damages or other
remedies with respect to any of the documents filed, or required to be
filed, as exhibits to the Registration Statement, except as set forth
in or contemplated by the Registration Statement and the Prospectus,
seek money damages in excess of $100,000 or seek to impose criminal
penalties upon the Company, any of its Subsidiaries or any of their
respective officers or directors in their capacities as such or seek to
enjoin any of the business activities of the Company or any of its
Subsidiaries or the transactions described in the Prospectus.

(vi) At the Closing Date and, as to the Option Shares, the
Option Closing Date, there shall have been furnished to the
Representatives an accurate certificate, dated the date of its
delivery, signed by the Committee on behalf of each of the Selling
Shareholders, in form and substance satisfactory to Legg Mason Wood
Walker, Incorporated, to the effect that the representations and
warranties of each of the Selling Shareholders contained herein are
true and correct in all material respects on and as of the date of such
certificate as if made on and as of the date of such certificate, and
each of the covenants and conditions required herein to be performed or
complied with by the Selling Shareholders on or prior to the date of
such certificate has been duly, timely and fully performed or complied
with.

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<PAGE> 21
(j) On or prior to the Closing Date, Legg Mason Wood
Walker, Incorporated shall have received the executed agreements referred to in
Section 5(n).

(k) The Shares shall be qualified for sale in such states
as Legg Mason Wood Walker, Incorporated may reasonably request, each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Date and the Option Closing Date.

(l) Prior to the Closing Date, the Shares shall have been
duly authorized for quotation on the Nasdaq National Market.

(m) The NASD shall have approved the underwriting terms
and arrangements and such approval shall not have been withdrawn or limited.

7. Indemnification.

(a) Each of the Company and the Selling Shareholders,
severally and not jointly, will indemnify and hold harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter and each
person, if any, who controls each Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, liabilities, expenses and damages (including, without
limitation, any and all investigative, legal and other expenses reasonably
incurred in connection with, and any and all amounts paid in settlement of, any
action, suit or proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third party, or
otherwise, or any claim asserted, which settlement has been approved by the
indemnifying party), as and when incurred, to which any Underwriter, or any such
person, may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, liabilities, expenses or damages arise out of or are based on
(i) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement or the
Prospectus, or in any application or other document executed by or on behalf of
the Company or based on written information furnished by or on behalf of the
Company filed in any jurisdiction in order to qualify the shares under the
securities laws thereof or filed with the Commission, (ii) the omission or
alleged omission to state in such document a material fact required to be stated
in it or necessary to make the statements in it not misleading, or (iii) any act
or failure to act by any Underwriter in connection with, or relating in any
manner to, the Shares or the offering contemplated hereby, and which is included
as part of or referred to in any loss, claim, liability, expense or damage
arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the Company shall not be liable under this clause (iii) to the
extent it is finally judicially determined by a court of competent jurisdiction
that such loss, claim, liability, expense or damage resulted directly from any
such acts or failures to act undertaken or omitted to be taken by such
underwriter through its negligence or willful misconduct), provided that the
Company and the Selling Shareholders will not be liable to the extent that such
loss, claim, liability, expense or damage arises from the sale of the Shares in
the

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<PAGE> 22
public offering to any person by an Underwriter and is based on an untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to any Underwriter furnished in
writing to the Company by the Representatives on behalf of any Underwriter
expressly for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus; and provided further that the Company shall not be
liable to any Underwriter and each person, if any, who controls any Underwriter
as aforesaid with respect to the preliminary Prospectus to the extent such loss,
claim, damage or liability results from the fact that such Underwriter sold
Shares to a person who was not sent or given, prior to or concurrently with
written confirmation of such sale, a copy of the Prospectus in each case where
such delivery is required by the Securities Act, if the Company has previously
furnished copies thereof to such Underwriter and the loss, claim, damage or
liability of such Underwriter is caused by such untrue statement or omission
that was corrected in such Prospectus. This indemnity agreement will be in
addition to any liability that the Company or any Selling Shareholder might
otherwise have to any person who is an indemnified party hereunder.

The Company will also indemnify and hold harmless McDonald &
Company Securities, Inc. acting as "qualified independent underwriter" within
the meaning of Rules 2720(b)(15)(A) through (b)(15)(G) of the Conduct Rules of
the NASD (the "QIU"), the directors, officers, employees, and agents and each
person, if any, who controls the QIU within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, against any losses, claims, liabilities,
expenses and damages (including, without limitation, any and all investigative,
legal and other expenses reasonably incurred in connection with, and any and all
amounts paid in settlement of, any action, suit or proceeding between any of the
indemnified parties and any indemnifying parties, or between any indemnified
parties and any third party, or otherwise, or any claim asserted, which
settlement has been approved by the indemnifying party), as and when incurred,
as a result of the QIU's participation as a "qualified independent underwriter"
in connection with the offering of the Common Stock, except for any losses,
claims, liabilities, expenses, damages and judgments resulting from the QIU's or
such controlling person's willful misconduct or gross negligence.

(b) Each Underwriter will indemnify and hold harmless the
Company, the Selling Shareholders, each person, if any, who controls the Company
or the Selling Shareholders within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, each director of the Company and each officer of
the Company who signs the Registration Statement to the same extent as the
foregoing indemnity from the Company and the Selling Shareholders to each
Underwriter, but only insofar as losses, claims, liabilities, expenses or
damages arise out of or are based on any untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives on behalf of such Underwriter expressly for use in the
Registration Statement, any preliminary prospectus or the Prospectus. This
indemnity will be in addition to any liability that each Underwriter might
otherwise have; provided, however, that in no case shall any Underwriter be
liable or responsible for any amount in excess of the underwriting discounts and
commissions received by such Underwriter.

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<PAGE> 23
(c) Any party that proposes to assert the right to be
indemnified under this Section 7 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 7, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 7 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party promptly after
receiving notice of the commencement of the action from the indemnified party,
jointly with any other indemnifying party similarly notified, to assume the
defense of the action, with counsel reasonably satisfactory to the indemnified
party, and after notice from the indemnifying party to the indemnified party of
its election to assume the defense, the indemnifying party will not be liable to
the indemnified party for any legal or other expenses except as provided below
and except for the reasonable costs of investigation subsequently incurred by
the indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (3) a conflict
or potential conflict exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (4) the indemnifying party has not
in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably
withheld). No indemnifying party shall, without the prior written consent of
each indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding relating to
the matters contemplated by this Section 7 (whether or not any indemnified party
is a party thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding. Notwithstanding any
other provision of this Section 7(c), if at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel, such

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<PAGE> 24
indemnifying party agrees that it shall be liable for any settlement effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.

(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 7 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company, the Selling
Shareholders or the Underwriters, the Company, the Selling Shareholders and the
Underwriters will contribute to the total losses, claims, liabilities, expenses
and damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid consistent with the Agreement
in settlement of, any action, suit or proceeding or any claim asserted, but
after deducting any contribution received by the Company or the Selling
Shareholders from persons other than the Underwriters, such as persons who
control the Company or the Selling Shareholders within the meaning of the Act,
officers of the Company who signed the Registration Statement and directors of
the Company, who also may be liable for contribution) to which the Company or
the Selling Shareholders and any one or more of the Underwriters may be subject
in such proportion as shall be appropriate to reflect the relative benefits
received by the Company and Selling Shareholders on the one hand and the
Underwriters on the other. The relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Selling Shareholders
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. If, but only if, the allocation provided by the foregoing sentence
is not permitted by applicable law, the allocation of contribution shall be made
in such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the Company
and the Selling Shareholders, on the one hand, and the Underwriters, on the
other, with respect to the statements or omissions which resulted in such loss,
claim, liability, expense or damage, or action in respect thereof, as well as
any other relevant equitable considerations with respect to such offering. Such
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Representatives on behalf of the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Selling Shareholders and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 7(d) were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 7(d) shall be deemed to
include, for purpose of

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<PAGE> 25
this Section 7(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7(d), no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts and commissions received by it, and no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 7(d) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 7(d), any
person who controls a party to this Agreement within the meaning of the Act will
have the same rights to contribution as that party, and each officer of the
Company who signed the Registration Statement will have the same rights to
contribution as the Company, subject in each case to the provisions hereof. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim for contribution
may be made under this Section 7(d), will notify any such party or parties from
whom contribution may be sought, but the omission so to notify will not relieve
the party or parties from whom contribution may be sought from any other
obligation it or they may have under this Section 7(d). Except for a settlement
entered into pursuant to the last sentence of Section 7(c) hereof, no party will
be liable for contribution with respect to any action or claim settled without
its written consent (which consent will not be unreasonably withheld).

(e) The indemnity and contribution agreements contained
in this Section 7 and the representations and warranties of the Company and the
Selling Shareholders contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any investigation made by or on behalf
of the Underwriters, (ii) acceptance of any of the Shares and payment therefor
or (iii) any termination of this Agreement.

8. Termination. The obligations of the several Underwriters under
this Agreement may be terminated at any time prior to the Closing Date (or, with
respect to the Option Shares, on or prior to the Option Closing Date), by notice
to the Company from Legg Mason Wood Walker, Incorporated, without liability on
the part of any Underwriter to the Company or any Selling Shareholder, if, prior
to delivery and payment for the Shares (or the Option Shares, as the case may
be), in the sole judgment of the Representatives, (i) there has been, since the
respective dates as of which information is given in the Registration Statement,
any material adverse change in the Company's business, properties, condition
(financial or otherwise) or results of operations, (ii) trading in any of the
equity securities of the Company shall have been suspended by the Commission,
the NASD or by the Nasdaq Stock Market, (iii) trading in securities generally on
the Nasdaq National Market shall have been suspended or limited or minimum or
maximum prices shall have been generally established on such exchange or on the
Nasdaq National Market, or additional material governmental restrictions, not in
force on the date of this Agreement, shall have been imposed upon trading in
securities generally by such exchange or by order of the Commission or the NASD
or any court or other governmental authority, (iv) a general banking moratorium
shall have been declared by either Federal or New York State authorities or (v)
any material adverse change in the financial or securities markets in the United
States or in political,

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<PAGE> 26
financial or economic conditions in the United States or any outbreak or
material escalation of hostilities or declaration by the United States of a
national emergency or war or other calamity or crisis shall have occurred, the
effect of any of which is such as to make it, in the sole judgment of the
Representatives, impracticable or inadvisable to market the Shares on the terms
and in the manner contemplated by the Prospectus.

9. Substitution of Underwriters. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Shares which it or
they have agreed to purchase hereunder, and the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of Firm Shares,
the other Underwriters shall be obligated, severally, to purchase the Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase, in the proportions which the number of Firm Shares which
they have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of Firm Shares which all such non-defaulting Underwriters have
so agreed to purchase, or in such other proportions as the Representatives may
specify; provided that in no event shall the maximum number of Firm Shares which
any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 9 by more than one-ninth of the number of
Firm Shares agreed to be purchased by such Underwriter without the prior written
consent of such Underwriter. If any Underwriter or Underwriters shall fail or
refuse to purchase any Firm Shares and the aggregate number of Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase exceeds one-tenth of the aggregate number of the Firm Shares and
arrangements satisfactory to the Representatives, the Company and the Committee
for the purchase of such Firm Shares are not made within 48 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, or the Company or any Selling Shareholder for the
purchase or sale of any Shares under this Agreement. In any such case either the
Representatives or the Company and the Committee shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken pursuant to this Section 9 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.

10. Miscellaneous. Notice given pursuant to any of the provisions
of this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company, at the office of the Company, 1896
Georgetown Road, Hudson, Ohio 44236, Attention: William N. Hulett, III, with a
copy to Constantine Alexander, Esq., Nutter, McClennen & Fish, LLP, One
International Place, Boston, Massachusetts 02110-2699, (b) if to any Selling
Shareholder, _______________________, or (c) if to the Underwriters, to Legg
Mason Wood Walker, Incorporated at the offices of Legg Mason Wood Walker,
Incorporated, 111 South Calvert Street, 20th Floor, Baltimore, MD 21202,
Attention: Corporate Finance Department. Any such notice shall be effective only
upon receipt. Any notice under Section 8 or 9 may be made by telex or telephone,
but if so made shall be subsequently confirmed in writing.

26
<PAGE> 27
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company and the Selling Shareholders and of the
controlling persons, directors and officers referred to in Section 7, and their
respective successors and assigns, and no other person shall acquire or have any
right under or by virtue of this Agreement. The term "successors and assigns" as
used in this Agreement shall not include a purchaser, as such purchaser, of
Shares from any of the several Underwriters.

With respect to any obligation of the Company and the Selling
Shareholders hereunder to make any payment, to indemnify for any liability or to
reimburse for any expense, the Underwriters (or any other person to whom such
payment, indemnification or reimbursement is owed) may pursue the Company with
respect thereto prior to pursuing any Selling Shareholder.

All representations, warranties and agreements of the Company and the
Selling Shareholders contained herein or in certificates or other instruments
delivered pursuant hereto, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter or any
of their controlling persons and shall survive delivery of and payment for the
Shares hereunder.

Any action required or permitted to be taken by the Representatives
under this Agreement may be taken by them jointly or by Legg Mason Wood Walker,
Incorporated.

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.

This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.

In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

The Company, the Selling Shareholders and the Underwriters each hereby
irrevocably waive any right they may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.

This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by (i) Legg
Mason Wood Walker, Incorporated and the Company and, (ii) with respect to any
amendment, modification or waiver which would materially and adversely affect
the rights or materially increase the obligation of the Selling Shareholders, by
the holders of at least two-thirds of the Firm Shares held by the Selling
Shareholders.

27
<PAGE> 28
UNDERWRITING AGREEMENT SIGNATURE PAGE

Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.

Very truly yours,

BRIDGESTREET ACCOMMODATIONS, INC.

By:_______________________________
Title:

THE SELLING SHAREHOLDERS NAMED
IN SCHEDULE I ATTACHED HERETO

By: The Committee

By:_______________________________

Confirmed as of the date first above mentioned:

LEGG MASON WOOD WALKER, INCORPORATED
MCDONALD & COMPANY SECURITIES, INC.
Acting on behalf of themselves and as the
Representatives of the
several Underwriters
named in Schedule II hereof.

By: LEGG MASON WOOD WALKER, INCORPORATED

By:_______________________________
Title:

By: MCDONALD & COMPANY SECURITIES, INC.

By:_______________________________
Title:

28
<PAGE> 29
SCHEDULE I

29
<PAGE> 30
SCHEDULE II

UNDERWRITERS

<TABLE>
<CAPTION>
Name of Number of
Underwriters Firm Shares
------------ to be Purchased
---------------
<S> <C>
Legg Mason Wood Walker, Incorporated

McDonald & Company Securities, Inc.

Total.........................................
---------------

---------------
</TABLE>
<PAGE> 31
EXHIBIT A

BRIDGESTREET ACCOMMODATIONS, INC.

---------------------

PRICE DETERMINATION AGREEMENT

September __, 1997

LEGG MASON WOOD WALKER, INCORPORATED
MCDONALD & COMPANY SECURITIES, INC.
As Representatives of the several Underwriters
c/o Legg Mason Wood Walker, Incorporated
111 South Calvert Street, 20th Floor
Baltimore, MD 21202

Dear Sirs:

Reference is made to the Underwriting Agreement, dated September __,
1997 (the "Underwriting Agreement"), among BridgeStreet Accommodations, Inc., a
Delaware corporation (the "Company"), the Selling Shareholders named in Schedule
I thereto or hereto (the "Selling Shareholders"), and the several Underwriters
named in Schedule II thereto or hereto (the "Underwriters"), for whom Legg Mason
Wood Walker, Incorporated and McDonald & Company Securities, Inc. are acting as
representatives (the "Representatives"). The Underwriting Agreement provides for
the purchase by the Underwriters from the Company and the Selling Shareholders,
subject to the terms and conditions set forth therein, of an aggregate of
2,615,000 shares (the "Firm Shares") of the Company's common stock, par value
$.01 per share. This Agreement is the Price Determination Agreement referred to
in the Underwriting Agreement.

Pursuant to Section 1 of the Underwriting Agreement, the undersigned
agree with the Representatives as follows:

The initial public offering price per share for the 2,615,000 Shares
shall be $_______.
<PAGE> 32
The purchase price per share for the Firm Shares to be paid by the
several Underwriters shall be $_______ representing an amount equal to the
initial public offering price set forth above, less $______ per share.

The Company represents and warrants to each of the Underwriters that
the representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.

The Selling Shareholders, severally and not jointly, represent and
warrant to each of the Underwriters that the representations and warranties of
the Selling Shareholders set forth in Section 4 of the Underwriting Agreement
are accurate as though expressly made at and as of the date hereof.

As contemplated by the Underwriting Agreement, attached as Schedule II
is a completed list of the several Underwriters, which shall be a part of this
Agreement and the Underwriting Agreement.

THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.

If the foregoing is in accordance with your understanding of the
agreement among the Underwriters, the Company and the Selling Shareholders,
please sign and return to the Company a counterpart hereof, whereupon this
instrument along with all counterparts and together with the Underwriting
Agreement shall be a binding agreement among the Underwriters, the Company and
the Selling Shareholders in accordance with its terms and the terms of the
Underwriting Agreement.

2
<PAGE> 33
PRICE DETERMINATION AGREEMENT SIGNATURE PAGE

Very truly yours,

BRIDGESTREET ACCOMMODATIONS, INC.

By:_______________________________
Title:

THE SELLING SHAREHOLDERS NAMED IN
SCHEDULE I TO THE UNDERWRITING
AGREEMENT

By: The Committee

By:_______________________________

Confirmed as of the date first above mentioned:

LEGG MASON WOOD WALKER, INCORPORATED
MCDONALD & COMPANY SECURITIES, INC.
Acting on behalf of themselves and as the
Representatives of the several Underwriters
named in Schedule II hereof.

By: LEGG MASON WOOD WALKER, INCORPORATED

By:_______________________________
Title:

By: MCDONALD & COMPANY SECURITIES, INC.

By:_______________________________
Title:

3
<PAGE> 34
EXHIBIT B

POWER OF ATTORNEY

BRIDGESTREET ACCOMMODATIONS, INC.

Common Stock

[Names and Addresses of Committee]

Dear Sirs:

The undersigned understands that BridgeStreet Accommodations, Inc., a
Delaware corporation (the "Company"), intends to file a registration statement
(the "Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), in connection with the proposed public offering and sale by the Company,
the undersigned (the "Selling Shareholder") and certain other Selling
Shareholders of the Company's Common Stock, par value $.01 per share (the
"Common Stock").

The Selling Shareholder desires to sell certain shares of Common Stock
and to include such shares among the shares covered by the Registration
Statement. The number of shares of Common Stock which the undersigned desires to
sell (the "Shares") are set forth beneath the signature of the Selling
Shareholder below.

Concurrently with the execution and delivery of this Power of Attorney,
the undersigned is delivering to you, or requesting the Company to deliver to
you, certificates for the Shares, which you are authorized to deposit with
____________, as custodian (the "Custodian"), pursuant to a custody agreement in
the form attached as Attachment A hereto (the "Custody Agreement").

1. In connection with the foregoing, the Selling Shareholder hereby
makes, constitutes and appoints you collectively, and each of you individually
(a "Member") and each of your respective substitutes under Section 3, the true
and lawful attorneys-in-fact of the undersigned (the Members or any of them or
their respective substitutes, being herein referred to collectively as the
"Committee"), with full power and authority, in the name and on behalf of the
Selling Shareholder:
<PAGE> 35
(a) To enter into the Custody Agreement and deposit with
the Custodian pursuant thereto the certificates for the Shares
delivered to the Committee concurrently herewith;

(b) For the purpose of effecting the sale of the Shares,
to execute and deliver (i) an Underwriting Agreement (the "Underwriting
Agreement"), by and among the Company, the other Selling Shareholders
and the representatives (the "Representatives"), selected by the
Company, of the several Underwriters (the "Underwriters") and (ii) a
Price Determination Agreement (as defined in the Underwriting
Agreement), by and among the Company, the other Selling Shareholders
and the Representatives;

(c) To endorse, transfer and deliver certificates for the
Shares to or on the order of the Representatives or to their nominee or
nominees, and to give such orders and instructions to the Custodian as
the Committee may in its sole discretion determine with respect to (i)
the transfer on the books of the Company of the Shares in order to
effect such sale (including the names in which new certificates for
such Shares are to be issued and the denominations thereof); (ii) the
delivery to or for the account of the Representatives of the
certificates for the Shares against receipt by the Custodian of the
full purchase price to be paid therefor; (iii) the remittance to the
Selling Shareholder of the Selling Shareholder's share of the proceeds,
after payment of expenses described in the Underwriting Agreement, from
any sale of Shares; and (iv) the return to the Selling Shareholder of
certificates representing the number of Shares (if any) deposited with
the Custodian but not sold by the Selling Shareholder under the
Registration Statement for any reason;

(d) To retain ________________________ (who are also
counsel to the Company) as legal counsel for the Selling Shareholders
in connection with any and all matters referred to herein;

(e) To take for the Selling Shareholder all steps deemed
necessary or advisable by the Committee in connection with the
registration of the Shares under the Act, including, without
limitation, filing amendments to the Registration Statement, requesting
acceleration of effectiveness of the Registration Statement, advising
the Securities and Exchange Commission that the reason the Selling
Shareholder is offering the Shares for sale is to diversify the Selling
Shareholder's investments and to assist the Company in creating the
public market for the Common Stock, informing said Commission that the
Selling Shareholder has no knowledge of any material adverse
information with regard to the current and prospective operations of
the Company which is not stated in the Registration Statement, and such
other steps as the Committee may in its absolute discretion deem
necessary or advisable;

2
<PAGE> 36
(f) To make, acknowledge, verify and file on behalf of
the Selling Shareholder applications, consents to service of process
and such other undertakings or reports as may be required by law with
state commissioners or officers administering state securities or Blue
Sky laws and to take any other action required to facilitate the
qualification of the Shares under the securities or Blue Sky laws of
the jurisdictions in which the Shares are to be offered;

(g) If necessary, to endorse (in blank or otherwise) on
behalf of the Selling Shareholder the certificate or certificates
representing the Shares, or a stock power or powers attached to such
certificate or certificates; and

(h) To make, execute, acknowledge and deliver all such
other contracts, orders, receipts, notices, requests, instructions,
certificates, letters and other writings and, in general, to do all
things and to take all action which the Committee in its sole
discretion may consider necessary or proper in connection with or to
carry out the aforesaid sale of Shares, as fully as could the Selling
Shareholder if personally present and acting.

2. This Power of Attorney and all authority conferred hereby is
granted and conferred subject to and in consideration of the interests of the
Company, the Representatives, the Underwriters and the other Selling
Shareholders and, for the purpose of completing the transactions contemplated by
this Power of Attorney, this Power of Attorney and all authority conferred
hereby shall be irrevocable and shall not be terminated by any act of the
Selling Shareholder or by operation of law, whether by the death, disability,
incapacity or liquidation of the Selling Shareholder or by the occurrence of any
other event or events (including without limitation the termination of any trust
or estate for which the Selling Shareholder is acting as a fiduciary or
fiduciaries), and if, after the execution hereof, the Selling Shareholder shall
die or become disabled or incapacitated or is liquidated, or if any other such
event or events shall occur before the completion of the transactions
contemplated by this Power of Attorney, the Committee shall nevertheless be
authorized and directed to complete all such transactions as if such death,
disability, incapacity, liquidation or other event or events had not occurred
and regardless of notice thereof.

3. Each Member shall have full power to make and substitute any
person in the place and stead of such Member, and the Selling Shareholder hereby
ratifies and confirms all that each Member or substitute or substitutes shall do
by virtue of these presents. All actions hereunder may be taken by any one
Member or his substitute. In the event of the death, disability or incapacity of
any Member, the remaining Member or Members shall appoint a substitute therefor.

4. The Selling Shareholder hereby represents, warrants and
covenants that:

3
<PAGE> 37
(a) All information furnished to the Company by or on
behalf of the Selling Shareholder for use in connection with the
preparation of the Registration Statement is and will be true and
correct in all material respects and does not and will not omit any
material fact necessary to make such information not misleading;

(b) The Selling Shareholder, having full right, power and
authority to do so, has duly executed and delivered this Power of
Attorney;

(c) The Selling Shareholder has carefully reviewed the
Registration Statement and will carefully review each amendment thereto
immediately upon receipt thereof from the Company and will promptly
advise the Company in writing if:

(i) The name and address of the Selling
Shareholder is not properly set forth in each preliminary
prospectus (collectively, the "Preliminary Prospectus")
contained in the Registration Statement and the prospectuses
(collectively, the "Prospectus") contained in the Registration
Statement at the time it becomes effective;

(ii) The Selling Shareholder has reason to
believe that (A) any information furnished to the Company by
or on behalf of the Selling Shareholder for use in connection
with the Registration Statement or the Prospectus or any
Preliminary Prospectus is not true and complete; and (B) any
Preliminary Prospectus, the Prospectus and any supplements
thereto contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;

(iii) The Selling Shareholder knows of any
material adverse information with regard to the current or
prospective operations of the Company or any of its
subsidiaries which is not disclosed in any Preliminary
Prospectus, the Prospectus or the Registration Statement; or

(iv) Except as indicated in the Prospectus, the
Selling Shareholder knows of any arrangements made or to be
made by any person, or of any transaction already effected,
(A) to limit or restrict the sale of shares of the Common
Stock during the period of the public distribution, (B) to
stabilize the market for the Common Stock or (C) for
withholding commissions, or otherwise to hold any other person
responsible for the distribution of the Selling Shareholder's
participation;

(d) In connection with the offering of the Shares, the
Selling Shareholder has not taken and will not take, directly or
indirectly, any action intended to, or which

4
<PAGE> 38
might reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Shares to facilitate the sale or
resale of the Shares;

(e) The Selling Shareholder has not distributed and will
not distribute any prospectus or other offering material in connection
with the offering and sale of the Shares other than a Preliminary
Prospectus, a Prospectus or other material permitted by the Act;

(f) The Selling Shareholder will notify the Company in
writing immediately of any changes in the foregoing information which
should be made as a result of developments occurring after the date
hereof and prior to the Closing Date under the Underwriting Agreement,
and the Committee may consider that there has not been any such
development unless advised to the contrary;

(g) The Selling Shareholder has, and at the time of
delivery of the Shares to the Representatives, will have, full power
and authority to enter into this Power of Attorney, to carry out the
terms and provisions hereof and to make all the representations,
warranties and covenants contained herein; and

(h) This Power of Attorney is the valid and binding
agreement of the Selling Shareholder and is enforceable against the
Selling Shareholder in accordance with its terms.

5. The representations, warranties and covenants of the Selling
Shareholder in this Power of Attorney are made for the benefit of, and may be
relied upon by, the other Selling Shareholders, the Committee, the Company and
its counsel, and their representatives, agents and counsel, the Custodian, the
Underwriters and the Representatives and their counsel.

6. The Committee shall be entitled to act and rely upon any
statement, request, notice or instructions respecting this Power of Attorney
given to it by the Selling Shareholder, not only as to the authorization,
validity and effectiveness thereof, but also as to the truth and acceptability
of any information therein contained.

7. It is understood that the Committee assumes no responsibility
or liability to any person other than to deal with the Shares deposited with it
and the proceeds from the sale of the Shares in accordance with the provisions
hereof. The Committee makes no representations with respect to and shall have no
responsibility for the Registration Statement, the Prospectus or any Preliminary
Prospectus nor, except as herein expressly provided, for any aspect of the
offering of Common Stock, and it shall not be liable for any error of judgment
or for any act done or omitted or for any mistake of fact or law except for its
own negligence or bad faith. The Selling Shareholder agrees to indemnify the
Committee for and to hold the Committee harmless against any loss, claim, damage
or liability incurred on its part arising out of or in connection with it acting
as the Committee under this Power of Attorney, as well as the cost

5
<PAGE> 39
and expense of investigating and defending against any such loss, claim, damage
or liability, except to the extent such loss, claim, damage or liability is due
to the negligence or bad faith of the Member seeking indemnification. The
Selling Shareholder agrees that the Committee may consult with counsel of its
own choice (who may be counsel for the Company) and it shall have full and
complete authorization and protection for any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such counsel.

8. It is understood that the Committee may, without breaching any
express or implied obligation to the Selling Shareholder hereunder, release,
amend or modify any other Power of Attorney granted by any other Selling
Shareholder.

9. It is understood that the Committee shall serve entirely
without compensation.

10. This Power of Attorney shall be governed by the laws of the
State of New York without regard to the conflict of laws principles of such
State.

11. This Power of Attorney may be signed in two or more
counterparts with the same effect as if the signature thereto and hereto were
upon the same instrument.

12. In case any provision in this Power of Attorney shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

This Power of Attorney shall be binding upon the Committee and the
Selling Shareholder and the heirs, legal representatives, distributees,
successors and assigns of the Selling Shareholder.

Dated: __________, 1997

Very truly yours,

_____________________________

6
<PAGE> 40
Signature(s) of Selling Shareholder(s)

_____________________________

(Address)

SHARES TO BE SOLD:
_____ shares of Common Stock

ACKNOWLEDGED AND ACCEPTED:
THE COMMITTEE:

_____________________________

7
<PAGE> 41
ATTACHMENT A

CUSTODY AGREEMENT

CUSTODY AGREEMENT, dated September ___, 1997, among _________________,
as Custodian (the "Custodian"), and the persons listed on Annex I hereto (each a
"Selling Shareholder" and collectively the "Selling Shareholders").

BridgeStreet Accommodations, Inc., a Delaware corporation (the
"Company"), intends to file a Registration Statement (the "Registration
Statement") with the Securities and Exchange Commission to register for sale to
the public under the Securities Act of 1933, as amended (the "Act"), shares of
the Company's common stock, $.01 par value per share (the "Common Stock").

Each of the Selling Shareholders has executed and delivered a Power of
Attorney (the "Power of Attorney") naming _____________, ____________ and
_______________, and each of them, as his or her attorney-in-fact (the
"Committee"), for certain purposes, including the execution, delivery and
performance of this Agreement in his or her name, place and stead, in connection
with the proposed sale by each Selling Shareholder of the number of Shares set
forth opposite such Selling Shareholder's name in Annex I.

1. A custody arrangement is hereby established by the Selling
Shareholders with the Custodian with respect to the Shares, and the Custodian is
hereby instructed to act in accordance with this Agreement and any amendments or
supplements hereto authorized by the Committee.

2. There are herewith delivered to the Custodian, and the
Custodian hereby acknowledges receipt of, certificates representing the Shares,
which certificates have been endorsed in blank or are accompanied by duly
executed stock powers, in each case with all signatures guaranteed by a
commercial bank or trust company or by a member firm of the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. or a member of the National
Association of Securities Dealers, Inc. Such certificates are to be held by the
Custodian for the account of the Selling Shareholders and are to be disposed of
by the Custodian in accordance with this Agreement.

<PAGE> 42
3. The Custodian is authorized and directed by the Selling
Shareholders:

(a) To hold the certificates representing the Shares
delivered by the Selling Shareholders in its custody;

(b) On or immediately prior to the settlement date for
any Shares sold pursuant to the Registration Statement (the "Closing
Date"), to cause such Shares to be transferred on the books of the
Company into such names as the Custodian shall have been instructed by
the representatives (the "Representatives") of the several Underwriters
(the "Underwriters"); to cause to be issued, against surrender of the
certificates for the Shares, a new certificate or certificates for such
Shares, free of any restrictive legend, registered in such name or
names; to deliver such new certificates representing such Shares to the
Representatives, as instructed by the Representatives on the Closing
Date for their account or accounts against full payment therefor; and
to give receipt for such payment;

(c) To disburse such payments in the following manner:
(i) to itself, as agent for the Selling Shareholders, a reserve amount
to be designated in writing by the Committee from which amount the
Custodian shall pay, as soon as reasonably practicable, (A) the Selling
Shareholders' proportionate share of all expenses of the offering and
sale of the Shares as provided in the Underwriting Agreement by and
among the Company, the Selling Shareholders and the Representatives,
(B) its reasonable disbursements for acting hereunder with respect to
the sale of the Shares and (C) any applicable stock transfer taxes; and
(ii) to each Selling Shareholder, pursuant to the written instructions
of the Committee, (A) on the Closing Date, a sum equal to the share of
the proceeds to which such Selling Shareholder is entitled, as
determined by the Committee, less the reserve amount designated by any
Committee, and (B) promptly after all proper charges, disbursements,
costs and expenses shall have been paid, any remaining balance of the
amount reserved under clause (i) above. Before making any payment from
the amount reserved under clause (i) above, except payments made
pursuant to subclause (B) of clause (ii) above, the Custodian shall
request and receive the written approval of the Committee. To the
extent the expenses referred to in subclause (A) of clause (i) above
exceed the amount reserved, the Selling Shareholders shall remain
liable for their proportionate share of such expenses.

4. Subject in each case to the indemnification obligations set
forth in Section 7, in the event Shares of any Selling Shareholder are not sold,
the Custodian shall deliver to such Selling Shareholder as soon as practicable
after termination of the offering of the Shares, certificates representing such
Shares deposited by such Selling Shareholder. Certificates returned to any
Selling Shareholder shall be returned with any related stock powers, and any new
certificates issued to the Selling Shareholders with respect to such Shares
shall bear any appropriate legend reflecting the unregistered status thereof
under the Act.

2
<PAGE> 43
5. This Agreement is for the express benefit of the Company and
the Selling Shareholders, the Underwriters and the Representatives. The
obligations and authorizations of the Selling Shareholders hereunder are
irrevocable and shall not be terminated by any act of any Selling Shareholder or
by operation of law, whether by the death, disability, incapacity or liquidation
of any Selling Shareholder or by the occurrence of any other event or events
(including without limitation the termination of any trust or estate for which
any Selling Shareholder is acting as a fiduciary or fiduciaries), and if after
the execution hereof any Selling Shareholder shall die or become disabled or
incapacitated or is liquidated, or if any other event or events shall occur
before the delivery of such Selling Shareholder's Shares hereunder to the
Representatives, such Shares shall be delivered to the Representatives in
accordance with the terms and conditions of this Agreement, as if such event had
not occurred, regardless of whether or not the Custodian shall have received
notice of such event.

6. Until payment of the purchase price for the Shares has been
made to the Selling Shareholders or to the Custodian, the Selling Shareholders
shall remain the owner of (and shall retain the right to receive dividends and
distributions on, and to vote) the number of Shares delivered by each of them to
the Custodian hereunder. Until such payment in full has been made or until the
offering of Shares has been terminated, each Selling Shareholder agrees that it
will not give, sell, pledge, hypothecate, grant any lien on, transfer, deal with
or contract with respect to the Shares and any interests therein.

7. The Custodian shall assume no responsibility to any person
other than to deal with the certificates for the Shares and the proceeds from
the sale of the Shares represented thereby in accordance with the provisions
hereof, and the Selling Shareholders, severally and not jointly, hereby agree to
indemnify the Custodian for and to hold the Custodian harmless against any and
all losses, claims, damages or liabilities incurred on its part arising out of
or in connection with it acting as the Custodian pursuant hereto, as well as the
cost and expenses of investigating and defending any such losses, claims,
damages or liabilities, except to the extent such losses, claims, damages or
liabilities are due to the negligence or bad faith of the Custodian. The Selling
Shareholders agree that the Custodian may consult with counsel of its own choice
(who may be counsel for the Company), and the Custodian shall have full and
complete authorization and protection for any action taken or suffered by the
Custodian hereunder in good faith and in accordance with the opinion of such
counsel.

8. Each of the Selling Shareholders, jointly and not severally,
hereby represents and warrants that: (a) it has, and at the time of delivery of
its Shares to the Representatives it will have, full power and authority to
enter into this Agreement and the Power of Attorney, to carry out the terms and
provisions hereof and thereof and to make all of the representations, warranties
and agreements contained herein and therein; and (b) this Agreement and the
Power of Attorney are the valid and binding agreements of such Selling
Shareholder and are enforceable against such Selling Shareholder in accordance
with their respective terms.

3
<PAGE> 44
9. The Custodian's acceptance of this Agreement by the execution
hereof shall constitute an acknowledgment by the Custodian of the authorization
herein conferred and shall evidence the Custodian's agreement to carry out and
perform this Agreement in accordance with its terms.

10. The Custodian shall be entitled to act and rely upon any
statement, request, notice or instruction with respect to this Agreement given
to it on behalf of each of the Selling Shareholders if the same shall be made or
given to the Custodian by the Committee, not only as to the authorization,
validity and effectiveness thereof, but also as to the truth and acceptability
of any information therein contained.

11. This Agreement may be executed in two or more counterparts
with the same effect as if the signatures thereto and hereto were upon the same
instrument. Execution by the Custodian of one counterpart hereof and its
delivery thereof to the Committee shall constitute the valid execution of this
Agreement by the Custodian.

12. This Agreement shall be binding upon the Custodian, each of
the Selling Shareholders and the respective heirs, legal representatives,
distributees, successors and assigns of the Selling Shareholders.

13. This Agreement shall be governed by the laws of the State of
New York without regard to the conflict of laws principles of such State.

14. Any notice given pursuant to this Agreement shall be deemed
given if in writing and delivered in person, or if given by telephone or
telegraph if subsequently confirmed by letter: (i) if to a Selling Shareholder,
to his address set forth in Annex I; and (ii) if to the Custodian, to it at
___________________.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

_________________________________

_________________________________,
as Custodian

THE SELLING SHAREHOLDERS
LISTED IN ANNEX I HERETO:

By: The Committee

By:_______________________________

4
<PAGE> 45
Annex I

<TABLE>
<CAPTION>
Names and Addresses
of Selling Shareholders Share to be Sold
<S> <C>

Total......................................................
----------------

----------------
</TABLE>
<PAGE> 46
EXHIBIT C

September __, 1997

Dear Sirs:

In consideration of the agreement of the several Underwriters, for
which Legg Mason Wood Walker, Incorporated and McDonald & Company Securities,
Inc. (the "Representatives") intend to act as Representatives, to underwrite a
proposed public offering (the "Offering") of 3,007,250 shares of Common Stock,
par value $.01 per share (the "Common Stock") of BridgeStreet Accommodations,
Inc., a Delaware corporation, as contemplated by a registration statement with
respect to such shares filed with the Securities and Exchange Commission on Form
S-1 (Registration No. 333-26647), the undersigned hereby agrees that the
undersigned will not, for a period of 180 days after the date of the Prospectus
(as defined in the Underwriting Agreement between the Company and the
Underwriters), without the prior written consent of the Representatives,
directly or indirectly, offer, sell, contract to sell, grant any option to
purchase, or otherwise dispose (or announce the offer, sale, contract of sale,
grant of any option to purchase or other disposition) of any shares of Common
Stock, or any securities convertible into or exchangeable or exercisable for
shares of Common Stock of the Company (such securities being referred to herein
as "Rights"), other than pursuant to bona fide gifts to persons who agree in
writing with the Representative to be bound by the balance of such 180-day
restriction. The foregoing restriction is expressly agreed to preclude the
holder of any such shares of Common Stock or Rights from engaging in any hedging
or other transaction which is designed to or reasonably expected to lead to or
result in such disposition during such 180-day period, even if such shares of
Common Stock or Rights would be disposed of by someone other than such holder.
Such prohibited hedging or other transactions would include, without limitation,
any short sale (whether or not against the box) or any purchase, sale or grant
of any right (including, without limitation, any put or call option) with
respect to any such shares of Common Stock or Rights or with respect to any
security (other than a broad-based market basket or index) that includes,
relates to or derives any significant part of its value from such shares of
Common Stock or Rights. The
<PAGE> 47
undersigned agrees and consents to the entry of stop transfer instructions with
the Company's transfer agent against the transfer of the Common Stock or Rights
held by such person except in compliance with this restriction.

Notwithstanding the foregoing, the undersigned may purchase Common
Stock pursuant to the Company's 1997 Equity Incentive Plan and may exercise
stock options granted pursuant to the Company's 1997 Equity Incentive Plan
without complying with the restrictions described in the preceding paragraph
provided that any shares of Common Stock purchased pursuant to such plans during
the 180-day period described in the preceding paragraph shall be subject to the
balance of such 180-day restriction.

Very truly yours,

By:____________________________________

Print Name:_____________________________

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<PAGE> 48
EXHIBIT D

Form of Opinion of
Counsel to the Company

The Company and each of its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has full corporate power and authority to
conduct all the activities conducted by it, to own or lease all the assets owned
or leased by it and to conduct its business, all as described in the
Registration Statement and the Prospectus. The Company is the sole record owner
and, to our knowledge, the sole beneficial owner of all of the capital stock of
each of its Subsidiaries.

All of the outstanding shares of Common Stock have been, and the
Shares, when paid for by the Underwriters in accordance with the terms of the
Agreement, will be, duly authorized, validly issued, fully paid and
nonassessable and will not be subject to any preemptive or similar right under
(i) the statutes, judicial and administrative decisions and the rules and
regulations of the governmental agencies of the State of Delaware, (ii) the
Company's certificate of incorporation or by-laws or (iii) any instrument,
document, contract or other agreement referred to in the Registration Statement
or any instrument, document, contract or agreement filed as an exhibit to the
Registration Statement. Except as described in the Registration Statement or the
Prospectus, to our knowledge, there is no commitment or arrangement to issue,
and there are no outstanding options, warrants or other rights calling for the
issuance of, any share of capital stock of the Company or any Subsidiary to any
person or any security or other instrument that by its terms is convertible
into, exercisable for or exchangeable for capital stock of the Company.

The Registration Statement and the Prospectus comply in all material
respects as to form with the requirements of the Act (except that we express no
opinion as to financial statements, schedules and other financial data contained
in the Registration Statement or the Prospectus).

To our knowledge, any instrument, document, lease, license, contract or
other agreement (collectively, "Documents") required to be described or referred
to in the Registration Statement or the Prospectus has been properly described
or referred to therein and any Document required to be filed as an exhibit to
the Registration Statement has been filed as an exhibit thereto.

To our knowledge, except as disclosed in the Registration Statement or
the Prospectus, no person or entity has the right to require the registration
under the Act of shares of Common Stock or other securities of the Company by
reason of the filing or effectiveness of the Registration Statement.

To our knowledge, neither the Company nor any of the Subsidiaries is in
violation of, or in default with respect to, any law, rule, regulation, order,
judgment or decree, except as may be described in the Prospectus or such as in
the aggregate do not now have and will not in the future have a material adverse
effect upon the operations, business or assets of the Company and the
Subsidiaries, taken as a whole.

All descriptions in the Prospectus of statutes, regulations or legal or
governmental proceedings are accurate and fairly present the information
required to be shown.

The Company has full corporate power and authority to enter into the
Agreement, and the Agreement has been duly authorized, executed and delivered by
the Company.

The execution and delivery by the Company of, and the performance by
the Company of its agreements in, the Agreement do not and will not (i) violate
the certificate of incorporation or by-laws of the Company, (ii) breach or
result in a default under, cause the

2
<PAGE> 50
time for performance of any obligation to be accelerated under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of the Company or any of its Subsidiaries pursuant to the terms of, (A) any
indenture, mortgage, deed of trust, loan agreement, bond, debenture, note
agreement, capital lease or other evidence of indebtedness of which we have
knowledge, (B) any voting trust arrangement or any contract or other agreement
to which the Company is a party that restricts the ability of the Company to
issue securities and of which we have knowledge or (C) any Document filed as an
exhibit to the Registration Statement, (iii) breach or otherwise violate any
existing obligation of the Company under any court or administrative order,
judgment or decree of which we have knowledge, or (iv) to our knowledge, violate
applicable provisions of any statute or regulation.

Delivery of certificates for the Shares will transfer valid and
marketable title thereto to each Underwriter that has purchased such Shares in
good faith and without any notice of any adverse claim with respect thereto.

The Company is not an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.

The Shares have been authorized for quotation on The Nasdaq Stock
Market's National Market.

We hereby confirm to you that we have been advised by the Commission
that the Registration Statement has become effective under the Act and that no
order suspending the effectiveness of the Registration Statement has been issued
and no proceeding for that purpose has been instituted or is threatened, pending
or contemplated.

We hereby further confirm to you that, to our knowledge, there are no
actions, suits, proceedings or investigations pending or overtly threatened in
writing against the Company, any of the Subsidiaries or any of their respective
officers or directors in their capacities as such, before or by any court,
governmental agency or arbitrator which (i) seek to challenge the legality or
enforceability of the Agreement or (ii) are of a character required to be
disclosed in the Registration Statement which is not adequately disclosed in the
Prospectus.

In addition to the opinion set forth above, we also confirm that we
have participated in the preparation of the Registration Statement and the
Prospectus and, without assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in the

3
<PAGE> 51
Registration Statement or the Prospectus or in any amendment or supplement
thereto nothing has come to our attention that causes us to believe that, both
as of the Effective Date and as of the Closing Date and the Option Closing Date,
the Registration Statement, or any amendment thereto, contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that any Prospectus or any amendment or supplement thereto at the
time such Prospectus was issued, at the time any such amended or supplemented
Prospectus was issued, at the Closing Date and the Option Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances in which they were made, not
misleading (except that we express no opinion as to financial statements,
schedules and other financial data contained in the Registration Statement or
the Prospectus).

The foregoing opinion is subject to the qualification that the
enforceability of the Agreement may be: (i) subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally; and (ii) subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity),
including principles of commercial reasonableness or conscionability and an
implied covenant of good faith and fair dealing. In rendering such opinion, we
may rely (A) as to matters involving the application of laws of any jurisdiction
other than the Commonwealth of Massachusetts, the United States or the Delaware
General Corporation Law, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they believe to
be reliable and who are satisfactory to counsel for the Underwriters, and (B) as
to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and of public officials.

This letter is furnished by us solely for your benefit in connection
with the transactions referred to in the Agreement and may not be circulated to,
or relied upon by, any other person, except that this letter may be relied upon
by your counsel in connection with the opinion letter to be delivered to you
pursuant to Section 6(g) of the Agreement.

4
<PAGE> 52
EXHIBIT E

Form of Opinion
of Counsel to the
Selling Shareholders

Each of the Selling Shareholders has full power and authority to enter
into the Agreement and the Agreement and Power of Attorney and to sell, transfer
and deliver such Shares pursuant to the Agreement and the Agreement and Power of
Attorney. All authorizations and consents necessary for the execution and
delivery of the Agreement and the Agreement and Power of Attorney on behalf of
each of the Selling Shareholders has been given. The delivery of the Shares on
behalf of the Selling Shareholders pursuant to the terms of the Agreement and
payment therefor by the Underwriters will transfer good and marketable title to
the Shares to the several Underwriters purchasing the Shares, free and clear of
all liens, encumbrance and claims whatsoever.

Each of the Agreement and the Agreement and Power of Attorney has been
duly authorized, executed and delivered by or on behalf of each of the Selling
Shareholders, is a valid and binding agreement of each Selling Shareholder and,
except for the indemnification and contribution provisions of the Agreement, the
Agreement and the Agreement and Power of Attorney are enforceable against the
Selling Shareholders in accordance with the terms thereof.

No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by or on behalf of the Selling Shareholders, in connection with the
execution, delivery and performance of the Agreement and the Agreement and Power
of Attorney by or on behalf of the Selling Shareholders or in connection with
the taking by or on behalf of the Selling Shareholders of any action
contemplated thereby, except such as have been obtained under the Act or the
Rules and Regulations and such as may be required under state securities or
"Blue Sky" laws or by the by-laws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the Shares to be sold by the
Selling Shareholders.
<PAGE> 53
The execution and delivery by the Selling Shareholders of, and the
performance by the Selling Shareholders of their agreements in, the Agreement
and the Agreement and Power of Attorney, do not and will not (i) breach or
result in a default under, cause the time for performance of any obligation to
be accelerated under, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of any Selling Shareholder pursuant
to the terms of, (A) any indenture, mortgage, deed of trust, loan agreement,
bond, debenture, note agreement, capital lease or other evidence of indebtedness
of which we have knowledge, (B) any voting trust arrangement or any contract or
other agreement to which any Selling Shareholder is a party that restricts the
ability of any such Selling Shareholder to issue securities and of which we have
knowledge or (C) any other contract or other agreement of which we have
knowledge, (ii) breach or otherwise violate any existing obligation of any
Selling Shareholder under any court or administrative order, judgment or decree
of which we have knowledge or (iii) violate applicable provisions of any statute
or regulation in the States of Delaware, Maryland, Virginia, Tennessee,
Mississippi, Ohio, Minnesota, Michigan, Oklahoma, or Illinois, the District of
Columbia or of the United States.

There are no transfer or similar taxes payable in connection with the
sale and delivery of the Shares by the Selling Shareholders to the several
Underwriters, except as specified in such opinion.

The foregoing opinion is subject to the qualification that the
enforceability of the Agreement and the Agreement and Power of Attorney may be:
(i) subject to bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally; and (ii) subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding at law or in equity), including principles of commercial
reasonableness or conscionability and an implied covenant of good faith and fair
dealing.

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

To BridgeStreet Accommodations, Inc.

As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) for BridgeStreet Accommodations,
Inc. dated April 10, 1997, for Temporary Corporate Housing Columbus, Inc. dated
February 28, 1997, for Corporate Lodgings, Inc. dated February 28, 1997, for
Exclusive Interim Properties, Ltd. dated March 11, 1997, and for Home Again,
Inc. dated March 21, 1997, included in or made part of this registration
statement.

/S/ ARTHUR ANDERSEN LLP

Boston, Massachusetts

August 27, 1997

<PAGE> 1

EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

To BridgeStreet Accommodations, Inc.

As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) for Temporary Housing Experts, Inc.,
dated March 21, 1997, included in or made part of this registration statement.

/S/ ARTHUR ANDERSEN LLP

Memphis, Tennessee

August 27, 1997