"With a slowing economy, there are opportunities to acquire hotels, add needed capital where appropriate, and reposition them," said Craig A. Spencer, principal and founder of The Arden Group. "We will focus on upscale and luxury hotels and resorts where we believe a combination of capital, strategic asset management and sound hotel operations can generate both short- and long-term returns."

"Highly focused oversight of hotel and resort operations is especially critical in today's difficult economic climate," said Jeff McIntyre, principal of Gemstone. "Our goal, as with all of our relationships with ownership groups and individuals, is to maximize returns on hospitality investment."

Gemstone has seen a significant increase in sophisticated owners like The Arden Group turning to more  experienced and specialized management companies to maximize the returns on their hotel investments, according to Mark van Hartesvelt, principal of Gemstone. "This trend has accelerated since the tragic events of September 11, and we expect it to continue," he said.
"Gemstone has particular strength as a turn-around specialist, which is in growing demand in today's current market conditions."

The joint venture is actively seeking to acquire properties, with a goal of acquiring approximately $250 million over the next 18 months. "We have a highly flexible approach and can be extremely creative in structuring transactions," Spencer said. "While there has not been a glut of hotel real estate on the market, we are beginning to see the first signs of an increase in properties that are more attractively priced coming up for sale. We want to be at the leading edge of the acquisitions front and have the funds available
to move quickly."

The initial two properties in the joint venture are:
    
Omni Colonnade
    
The historical, 157-room, Mobil Four-Star, AAA Four-Diamond Omni Colonnade hotel is located on Miracle Mile, Coral Gables' premier shopping and dining area. Just 4.5 miles from Miami International Airport and 20 minutes from South Beach, the property caters primarily to business travelers and corporate meetings during the week and has a strong leisure component on weekends.

With more than 15,000 square feet of meeting space, anchored by the unique, historical, 6,000-square-foot Rotunda, the hotel serves groups ranging from 10 to 500 guests. In addition, the Omni Colonnade offers a fully equipped exercise facility overlooking the pool area, a 24-hour business center and a multilingual concierge staff. The property also offers the popular Omni Kids Program for traveling families.

"Gemstone's role as asset manager for this property is to help provide the Omni team with the tools and support it needs to help refine and expand targeted marketing efforts, reduce costs and continue to build on the hotel's already excellent reputation for service," said McIntyre.

The Savoy

The Savoy hotel is located directly on the beach in the heart of the South Beach entertainment district. The first-class, 74-room property has just completed the first phase of a major renovation to its classic Art Deco exterior and offers a variety of completely refurbished one- and two-bedroom and oversized executive suites.

Gemstone will oversee the property and immediately initiate the addition of two meeting rooms that will overlook the ocean and are designed for groups of five to 40 guests who seek personalized service in an unmatched setting. The hotel also features a beautiful secluded garden courtyard between two highly landscaped swimming pools. The Savoy provides ample guest parking, a
rare commodity in the popular South Beach district.

"Our goal will be to create a world-class luxury hotel by adding the high-touch personal service standards that complement its unmatched setting," said McIntyre. "We have a highly successful track record in beach resorts, boutique-style hotels and the South Beach district and look forward to creating a truly unique hotel experience for our guests."

The Arden Group, Inc., and related affiliates specialize in the acquisition, development, leasing and management of real estate assets. Real estate property types include hotels and resorts, office and specialized land development. Properties include over 3.5 million square feet of office space, six hotels and more than 3,000 acres of land, including a 1,500-acre luxury resort development in Jackson, Wyoming. Most recently, The Arden Group completed the $100 million conversion of the former Girard Bank buildings into
The Ritz-Carlton Philadelphia, which received the exclusive Mobile Five-Diamond Award within the first 90 days of opening. The Arden Group also recently participated in the partnership, which is developing The Ritz-Carlton at Bachelor Gulch (Vail), Colorado, scheduled to open in July 2002.

Headquartered in Park City, Utah, Gemstone is a full-service operating and asset management company that specializes in unique hotels and complex resorts that include a variety of components such as hotels, restaurants, retail, resort amenities such as beach, golf or skiing, time-share and other hospitality-related activities. The company is engaged in resort marketing and
management, asset management and consulting for such well-regarded hotel real estate investors as The Arden Group and Olympus Real Estate Partners. Gemstone currently manages or asset manages 14 projects in Arizona, California, Colorado, Florida, New Mexico, Utah, Vermont and Washington.