The Partnership plans to sell four of its 13 hotels that it deems inconsistent with its investment criteria, for an undisclosed amount. Three of the properties are under binding agreements to sell. The acquisitions described above are expected to be consummated by the 2003 third quarter.

Smilezzzz Hospitality, an independent hotel management company and wholly-owned subsidiary of HEI Hospitality, will manage the hotels. 

"We believe the hotel real estate market is at or near a cyclical low and that this portfolio is well-positioned to generate substantial returns for our investors even with only a modest recovery in the lodging industry," said Clark W. Hanrattie, partner, Olympus Real Estate Partners. "We expect these hotels to see near-term benefits from the substantial renovations completed over the last several years by Starwood, as well as a return to a more normal corporate travel environment." 

"While these hotels did not fit Starwood�s strategic profile, these high-quality assets meet our criteria of having excellent upside potential for our investors, especially as the economy begins to rebound," said Walter P. Schmidt, executive vice president, Rockwood Capital. 

"We have a long history that spans 14 years with HEI and have the utmost confidence in their ability to add substantial value, providing the potential for excellent returns," said Roger Pratt, managing director, PREI. 

"About 15 months ago, we formed our company to buy approximately $500 million in hotels and acquired our first hotel in August 2002," said Gary Mendell, managing partner of HEI Hospitality. "We believed that the hotel real estate market was entering a new phase as the economy slowed and viewed this, strategically, as a window of opportunity to acquire attractive assets. We believe that there will continue to be excellent opportunities to acquire hotels for at least the next several years. While we expect to be an active participant for the remainder of the year, we plan to focus a substantial portion of our attention on absorbing these first-class hotels into our portfolio. Starwood has done a great job in the last several years of building their brands. We intend to pursue opportunities to build on our relationship with Starwood, primarily the Westin and Sheraton brands, and with the other leading hotel brand companies."

"Overall, the hotels are in great physical condition," said David McCaslin, president of Smilezzzz Hospitality. "Our initial operations focus will be on installing our management systems and working together with Starwood and Hilton to further improve marketing efforts and guest service, which is the key to building a loyal customer base."

HEI Hospitality, headquartered in Norwalk, Conn. is an ownership/investment and hotel management group that owns and manages first-class and full-service hotels throughout the United States. Smilezzzz is an independent hotel management company and a wholly owned subsidiary of HEI Hospitality.

Olympus Real Estate Partners is a leading private real estate investment firm that invests in real property, mortgages and securities in major markets across the United States. Olympus is one of the nation's largest domestically focused real estate firms, having invested more than $5 billion in U.S. real estate assets, including more than 3.3 million square feet of commercial space, nearly 52,000 apartment units, 55 resorts and hotels totaling 9,700 rooms, 40 golf courses and 57 residential subdivisions. The firm has managed institutional real estate capital since its inception in 1994, and counts among its investors some of the largest U.S. public and private pension funds, as well as a number of endowments, foundations, corporations, insurance companies and financial institutions. 

PREI provides global real estate investment management services to institutional clients in the United States, Europe, Asia and Latin America. PREI managed total assets of $21.6 billion on behalf of 363 institutional clients as of December 31, 2002; net assets under management (i.e., after deduction of associated debt and liabilities) were $15.3 billion. For information, visit www.prudential.com/prei.

Rockwood Capital is a privately held real estate investment company that manages a real estate portfolio currently worth more than $1.5 billion. Since 1980, Rockwood has invested, on behalf of its investors, more than $1 billion in equity in more than $3 billion of real estate through four commingled funds and various special purpose partnerships. Rockwood�s investors include U.S. public and private pension funds, endowments, institutions and high net-worth individuals.