HEI Hospitality/Greenfield Partners/GIC to Acquire Five Marriott Hotels from Host Marriott; Partnership to Invest $21.6 Million in Renovations Over Next Three Years

NORWALK, Conn.--(BUSINESS WIRE)--Jan. 29, 2004--HEI Hospitality, a privately held hotel ownership and management group, today announced that it had agreed to acquire in a joint venture with an investment fund managed by Greenfield Partners, LLC, a privately owned real estate investment management firm, and GIC Real Estate, a global real estate investment management company, five Marriott hotels from Host Marriott Corp. (NYSE:HMT) for $70 million. Sale of three of the properties will be consummated today, with the remaining two scheduled to close on March 12. The partnership announced that all five hotels will undergo significant renovations, aggregating more than $21 million, over the next three years. Merritt Hospitality, a wholly owned subsidiary of HEI, will manage the properties. "These hotels match up well with our investment model favoring first-class, full-service hotels with 200 to 500 rooms," said Gary Mendell, chairman and CEO of HEI Hospitality. "With the completion of the planned renovations, these properties, which will remain under the Marriott flag, will be well positioned to take maximum advantage of the current rebound in the economy and return of the transient business traveler. "This is our first joint venture with Greenfield Partners and GIC, and we look forward to building on this new relationship," said Roger Clark, HEI senior vice president. "HEI continues to have an aggressive appetite for acquisitions, and we actively are seeking to acquire up to an additional $750 million of hotels." "We believe that the timing is appropriate to acquire hotels in this phase of the economic recovery," said Eugene Gorab, president and CEO of Greenfield Partners. "In addition to acquiring quality assets, ownership needs quality management. Merritt Hospitality has the management expertise and depth to complete the renovations in a timely and cost-effective manner and maximize the value of these assets." The five properties comprise 1,324 rooms and are located in Atlanta (2), Detroit (2), and Fullerton, Calif. Including this transaction, HEI's portfolio now includes 18 properties with 5,424 rooms. The five hotels acquired from Host Marriott are: Property Location # of Rooms -------- -------- ---------- Atlanta Marriott Northwest Atlanta, Ga. 401 Detroit Marriott Southfield Detroit, Mich. 226 Detroit Airport Marriott Romulus, Mich. 251 Atlanta Marriott Norcross Norcross, Ga. 222 Fullerton Marriott at Calif. State U. Fullerton, Calif. 224 ---------- Total rooms: 1,324 Norwalk, Conn.-based Greenfield Partners, LLC is a privately held management firm specializing in real estate-related investments on behalf of principals and partners. Since its inception in 1997, Greenfield Partners has acquired in excess of $2 billion of assets on behalf of its principals and partners. GIC Real Estate is the real estate investment company of the Government of Singapore Investment Corporation. The company has one of the largest international real estate portfolios among institutional investors with approximately 120 separate investments in more than 25 countries. HEI Hospitality, headquartered in Norwalk, Conn., is an ownership/investment and hotel management group that owns and operates first-class and full-service hotels throughout the United States under such well-known brand names as Westin, Marriott, Sheraton, and Hilton. Merritt, previously known as Smilezzzz Hospitality, is an independent hotel management company and a wholly owned subsidiary of HEI Hospitality.