SEATTLE, June 11, 2007 - AvStar Seattle LLC, a joint-venture partnership between Portland-based Avalon Holdings and international real estate development firm Starwood Capital Group Global LLC, has broken ground on 1 Hotel & Residences, its 23-story, mixed-use development at Second Avenue and Pine Street in downtown Seattle. Upon its completion, expected by the second quarter of 2009, the building is expected to become the inaugural property under the 1 brand, which will set a new standard in environmentally conscious luxury living globally by combining extraordinary five-star service and features with the best of environmentally sustainable architecture and interior design.

The majority of the Seattle hotel's 110 City Suites and 98 condominiums are already under reservation for priority presales -- the public sales debut is scheduled for September 2007. Hotel guests and residents will be treated to an unmatched combination of green construction and operational components consistent with Seattle's environmentally sensitive lifestyle, all amid an extravagant hospitality experience.

"The opportunity to bring this project on line at a time when Seattle is transforming itself into a top-tier American city is extremely gratifying," says developer Paul Brenneke, president and CEO of Avalon Holdings. "And to offer thoughtful design while simultaneously supporting Seattle's leadership in global sustainability -- all in the context of community -- has been worth all the time and effort."

The $200 million project will redefine mixed use for Seattle. At 560,000 square feet and 23 stories, 1 Hotel & Residences will house 10 floors of spectacular condominium residences that range in size from 800 square feet to more than 6,800 square feet; an eco-friendly, luxury 1 Hotel; a 40,000 square foot full-service athletic club and an 8,000 square foot day spa; a restaurant and specialty grocer that promotes organic, local and sustainable ingredients in tune with the building's environmental conscience.

The project was designed by Sienna Architecture, with the public spaces, restaurant and hotel room interiors designed by Yabu Pushelberg. PCL Construction Services, Inc. is the contractor, with structural engineering services provided by KPFF Consulting Engineers and landscape design by Berger Partners. Design-build services are provided by PSF Mechanical, Auburn Mechanical and Nelson Electric. Avalon Holdings provides construction management.

The 1 Hotel brand is the latest innovation from Starwood Capital Chairman and CEO Barry Sternlicht. Mr. Sternlicht's previous trend-setting hospitality creations included the W Hotel chain, the first hotel brand to combine a unique, hip and useful urban style with superior service and facilities for business travelers, and the Westin Heavenly Bed, bath and suite of products, which he introduced during his nearly 10 years as founder, Chairman and CEO of Starwood Hotels.

Consistent with Mr. Sternlicht's desire to create the world's first five- star, eco-friendly global hotel brand, the National Resources and Defense Council (NRDC) will serve as an environmental advisor on each 1 Hotel project, including Seattle, with the goal of helping set a new standard for environmental excellence in the hospitality industry. Green Building Services of Portland and Sienna Architecture's in-house green design expert are also serving as consultants for the project.

As with all 1 Brand projects, the 1 Hotel & Residences Seattle will be a LEED-certified project. The LEED rating system was created by the U.S. Green Building Council and is the nationally accepted benchmark for the design, construction and operation of high performance green buildings. The property will also donate one percent of its revenue to local environmental organizations chosen by a steering committee with NRDC representation.

Avalon Holdings
Avalon Holdings is a commercial and residential real estate development firm based in Portland, OR. The firm was established in 2000, and was created specifically to focus on luxury, urban mixed-use and resort developments. President Paul Brenneke draws on his collective experiences in all real estate faculties, which include hotel, condominium, spa and retail to envision a complete lifestyle within a single mixed-use community and has been a pioneer in this arena with one of the first urban hotel/spa/condominiums on the West Coast. As the vision behind such developments as the Avalon Hotel & Spa in Portland, OR, designated as the only Oregon member of Small Luxury Hotels of the World, the firm has earned national recognition for its upscale, urban environments using the latest in luxury design for its condominium projects and world's top management for its hotels and facilities.

Starwood Capital Group Global LLC
Starwood Capital Group has been a leader in real estate investments since 1991. Its international investor base includes some of the United States' largest state and corporate pension funds, endowments and foundations and high-net worth families from around the world. During the past fifteen years, Starwood Capital and its affiliates have invested approximately $6 billion of equity capital in transactions representing over $30 billion of asset value. Starwood has closed and/or advised on more than 250 transactions and has acquired equity interests in residential and multifamily, hotels, office, retail and industrial space, golf and leisure-related properties. Starwood's past and current investments include the acquisition or formation and growth of several market leading companies including Groupe Taittinger and Societe du Louvre, Europe's second largest hotel network; iStar Financial, the leading publicly traded finance company specializing in commercial real estate mortgage, mezzanine and net lease financing; Starwood Hotels & Resorts Worldwide, a leading global owner/operator of hotels; Mammoth Mountain Ski Area, the leading four season resort in California; and National Golf Properties/American Golf Corporation, the largest owner/operator of golf courses and related facilities in the U.S. Starwood Capital Group no longer owns an equity stake in either iStar Financial or Starwood Hotels.

WARNING: This release is not an "Offering" nor a solicitation for the purchase of any product or real estate interest.