The Friendly Arm

The Friendly Arm is the inn situated in the keep at the appropriately-named area, Friendly Arm Inn. One of the biggest and most popular inns in the game, it's here you meet Khalid and Jaheira. In Baldur's Gate: Enhanced Edition, you can find Dorn II-Khan here too, and Neera will come and stay here if she is dismissed from the party.

If you successfully loot every container in this building you will find:
 * 121 GP
 * Potion of Healing (x2)
 * Zircon Gem
 * Bastard Sword
 * Gold Ring
 * Chain Mail
 * Dagger (x2)
 * Throwing Dagger (x5)
 * War Hammer
 * Studded Leather Armor
 * Studded Necklace with Zios Gems
 * Rainbow Obsidian Necklace
 * Andar Gem
 * Leather Armor
 * Quarterstaff
 * Onyx Ring
 * Club
 * Battle Axe
 * Arrows (x4)
 * Bloodstone Gem

Side-quests

 * Landrin's Spiders
 * Golden Pantaloon Decision
 * Unshey's Belt

Buy and Sell
Bentley Mirrorshade, proprietor of The Friendly Arm, sells items for 150% of their "item value," with the usual adjustments for Reputation and Charisma.