NEW YORK, April 30, 1998 - Ian Schrager, in partnership with NorthStar Capital Investment Corp. ("NCIC"), today announced that Ian Schrager Hotels LLC ("ISH") has acquired the historic St. Moritz Hotel in Manhattan. The property has an unparalleled location on the southeast corner of Central Park South and Sixth Avenue in New York City with phenomenal views of the park. The company plans to redevelop and re-introduce the property with a spectacular modern design, creating an upscale urban hotel targeted toward a discerning clientele. The hotel was acquired from FAI Insurance, an Australian Insurance Company. Angelo Gordon and Co.was involved in the transaction, and Credit Suisse First Boston provided acquisition financing. Terms of the
transaction were not disclosed.

Mr. Schrager will once again call upon Philippe Starck, one of the world's most acclaimed designers, to design and redevelop the St. Moritz as a world-class property. Mr. Starck is also responsible for the internationally hailed design of four of Mr. Schrager's other properties: Royalton and Paramount in New York, Delano in Miami Beach and Mondrian in West Hollywood.

"We are extremely excited about this major acquisition. The St. Moritz is one of the most renowned hotel sites in the world. We plan to create something new which will maintain the property's historic tradition while adding something spectacular," said Mr. Schrager, chairman and chief executive of ISH. "This transaction is exactly the kind we anticipated when we announced that in February that we were rolling up all of our hotels with NorthStar into a new company. The St. Moritz will make a fantastic addition to our portfolio of premier hotel properties. We look forward to creating a design and concept for this hotel that matches its great history and fulfills its even greater potential."

W. Edward Scheetz, a board member of ISH and co-chairman and chief executive of NorthStar, said: "The potential of this property coupled with Ian Schrager's unique vision makes this acquisition a very attractive investment for the company. The transaction dramatically underscores the great power of the NorthStar-Schrager partnership and is indicative of the impact that we expect to make in the lodging industry." NCIC is a newly organized Maryland corporation that intends to qualify as a real estate investment trust. NCIC was established to continue the opportunistic real estate-related investment activities of David T. Hamamoto, formerly co-head of the Whitehall Funds and a partner at Goldman Sachs Co., and W. Edward Scheetz, formerly a partner at Apollo Real Estate Advisors. NorthStar recently raised $322 million to pursue its plan of acquiring real estate-related assets.

ISH is a newly formed company of which Mr. Schrager serves as chairman and chief executive officer. ISH now operates Paramount, Morgans and Royalton in New York, Delano in Miami Beach, Mondrian in Los Angeles and Clift in San Francisco. The company is developing other new hotels: the Henry Hudson and McAlpin in New York; the Miramar in Santa Barbara; and the St. Martin's Lane and Sanderson in London. In addition, ISH is working on a number of other property transactions that are in various stages of development. With ISH, Mr. Schrager will vigorously pursue his strategy of developing multiple properties at various price points in international gateway cities in North America and abroad. Mr. Schrager is one of the most successful and prominent figures in the lodging industry today. Since he and Steve Rubell first introduced the concept of the "boutique hotel" to the world with Morgans in 1984, Mr. Schrager has been acclaimed for creating uniquely theatrical and cutting-edge properties, each of which is characterized by a profoundly original vision and design aesthetic that captures the spirit of the times and reflects popular culture.