Hotel Online  Special Report

Strategic Hotel Capital, Inc. Agrees to Acquire an 85% Controlling Interest in the InterContinental Chicago
and InterContinental Miami for Aggregate
Value of $303.5 million


CHICAGO, Feb. 28, 2005 - Strategic Hotel Capital, Inc.  (NYSE: SLH) today announced it has signed an agreement to acquire an 85% controlling interest in the InterContinental hotels in Chicago and Miami with a combined room count of 1,448 and an agreed upon aggregate value of $303.5 million, or a price of $210,000 per room.  The acquisition, which is expected to close in April, remains subject to customary closing conditions.
The completely renovated 807-room InterContinental Chicago, located in the heart of the Magnificent Mile shopping district, is an historic luxury property in the third most populated metropolitan area in the nation.  The hotel consists of two towers, the 42-story historic tower and the 26-story main tower, and features 42,000 square feet of function space, including six historic ballrooms and 30 state-of-the-art meeting rooms.

The 641-room InterContinental Miami rises 34 stories above Biscayne Bay in the Central Business District of Miami.  The luxury property is located on 3.6 acres of the Miami Centre, a prominent office and 

InterContinental Chicago
505 North Michigan Avenue
Chicago Illinois
hotel complex in the core of Miami's downtown, and features 65,000 square feet of meeting space, a state-of-the-art fitness center and other high-end amenities, including three restaurants.

Each hotel will be held in a partnership in which Strategic Hotel Capital will own a controlling 85% interest with InterContinental Hotels ("IHG") holding the remaining 15%.  Through its partnership agreements with IHG, Strategic Hotel Capital will be entitled to receive a non-cumulative preferred return of 8% on its total investment of $263.5 million, less Strategic's 85% share of the partnership's debt service obligations.  The investment of $263.5 million includes the company's proportionate share of the cost of the properties, closing costs, and initial capital expenditures. 

After SLH receives its preferred return, IHG is entitled to receive a non-cumulative preferred return of 8% on its investment.  Thereafter SLH and IHG will share proportionate to their respective ownership interests in the partnership returns.  Strategic Hotel Capital's investment is expected to be financed through a combination of debt and equity financing as market conditions permit.  The company anticipates that the acquisition will be accretive to earnings beginning with the second quarter of 2005, and forecasts a combined 12-month property EBITDA of $25 million to $27 million.  The expected 9-month 2005 property EBITDA is forecasted to be in the range of $19 million to $21 million.

Laurence Geller, CEO of Strategic Hotel Capital, commented, "These acquisitions are well-aligned with our core investment strategy, and we are very enthusiastic about the quality of assets and their potential opportunities.  Both properties provide our asset management team with avenues to add substantial value to well-located urban hotels in growing markets with multiple demand generators.  We are also fortunate to be able to strengthen a key strategic relationship with InterContinental Hotels, which also manages our InterContinental Hotel Praha - Prague, Czech Republic."

About the Company
Strategic Hotel Capital, Inc., is a real estate investment trust (REIT) which owns and asset manages high-end hotels and resorts.  The company has ownership interests in 15 properties with an aggregate of 6,192 rooms. 



Strategic Hotel Capital, Inc.
Also See: Panama Hotel Developer Herman Bern Building 300 room InterContinental Playa Bonita Resort on Panama's Pacific Coast / October 2004
Chicago's McCormick Place Loses Nationwide Hardware Show to Las Vegas; 30 Year Run Peaked in 1999 with 67,634 People / October 2004

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