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 American General Buys 14-Hotel Portfolio
Multi-Hotel Transaction Signals Shift to Mega-Sales in 1998
ATLANTA, Ga.--March 9, 1998--American General Hospitality (NYSE: AGT), a hotel real estate investment trust (REIT), has acquired a 14-hotel portfolio from Financial Security Assurance, Inc. (FSA), for $270 million in cash, according to officials at Hodges Ward Elliott (HWE), the investment banking/brokerage group that handled the transaction. The package, which includes seven oceanfront resorts and seven commercial hotels, contains 3,229 rooms.

"We believe this transaction, the first major portfolio to trade in 1998, is part of a growing trend towards larger hotel transactions," said Al Calhoun, HWE senior vice president and co-banker/broker of the transaction. "We expect to see record numbers of portfolios coming to the market throughout the year, some of which may exceed $1 billion in value. We currently are actively marketing 14 portfolios containing more than 57 hotels valued at more than $668 million.

Four of the properties are Florida beachfront locations; another is a Disney Village hotel in Orlando; two hotels target business travelers in Tampa and New York; two are located in West Los Angeles; and the remaining five hotels are scattered along the East Coast.

"FSA's hotel real estate strategy in this decade has been quite different from most other financial companies," said Mark Elliott, HWE partner and co-banker/broker of the transaction. "The company took over these properties as troubled loans during the early 1990's. Rather than selling them at deeply discounted rates, however, FSA patiently operated and invested in the properties to achieve excellent return on their initial strategy."

The hotels include:
     Courtyard by Marriott, Century City, California, 134 rooms
     Courtyard by Marriott, Marina del Rey, California, 276 rooms
     The Lodge at Seaport, Mystic, Connecticut, 77 rooms
     Doubletree Resort Surfside, Clearwater Beach, Florida, 426 rooms
     Ramada Inn Gulfview, Clearwater Beach, Florida, 289 rooms
     Holiday Inn Ft. Lauderdale Beach Galleria, Florida, 240 rooms
     Howard Johnson Resort, Key Largo, Florida, 100 rooms
     Courtyard by Marriott, Lake Buena Vista, Florida, 323 rooms
     Holiday Inn, Madeira Beach, Florida, 149 rooms
     Doubletree Hotel Tampa Airport Westshore, Florida, 496 rooms
     Select Inn, Bloomington, Minnesota, 148 rooms
     Holiday Inn, St. Louis, Missouri, 120 rooms
     Radisson Inn Airport, Rochester, New York, 171 rooms
     Holiday Inn, Richmond, Virginia, 280 rooms

American General Hospitality Corporation is a publicly traded real estate investment trust (REIT) with a portfolio
of 66 hotels, owned and pending acquisition, in 22 states containing 15,159 guestrooms. Operating in major
markets, the company is focused on creating shareholder value through acquisitions, and product, operational
and brand repositioning.

Headquartered in Atlanta, Hodges Ward Elliott is ranked as one of the nation's top three largest investment banking/brokerage firm specializing in hotels. In 1997, the company completed 67 hotel transactions valued at more than $1.2 billion, including $100 million in financings. Typical properties range from luxury through mid-market and limited service hotels. The company has completed approximately $700 million in transactions in the first quarter 1998, and expects to be involved in approximately $2.5 billion for the full year.

Jerry Daly or Chris Daly
 (609) 383-1414

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