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Leading Hotel Groups Sign Agreements With
Grill Concepts to Launch Daily Grill Restaurants

LOS ANGELES, June 12, 1998 - Three hotel groups, Capstar Hotel Company, Strategic Hotel Capital and
Sunstone Hotel Investors, have initiated agreements with Grill Concepts, Inc. (Nasdaq: GRIL) to open Daily Grill
restaurants in their hotel properties. Each of the three companies has selected a location to launch the program.
All three are expected to open by the end of this year.

The new agreements reflect a strategic alliance between Grill Concepts and Hotel Restaurant Properties
Corporation (HRP), a Los Angeles-based affiliate, recently formed for the purpose of acquiring leases and
management agreements for placement of Daily Grill restaurants in selected hotels nationwide.

"Opening hotel restaurants will be another key element to our company's growth strategy," said Robert Spivak,
president and chief executive officer of Grill Concepts. "We are excited about our new relationships with leading
hotel investment and management companies and are exploring additional venues for our proven Daily Grill
concept in select hotels throughout the U.S. Partnering with major hotels provides the resources and ability to
rollout the Daily Grill concept more rapidly in key markets, which, in turn, will help further establish brand name
recognition for the opening of our free standing Daily Grill restaurants."

Capstar Hotel Company (NYSE: CHO), headquartered in Washington, D.C., has agreed with Grill Concepts to
open a Daily Grill in the Georgetown Inn on Wisconsin Avenue, in Georgetown. Capstar is a leading hotel and
management company that acquires, owns, renovates, repositions and manages over 200 upscale, full-service
hotel properties throughout the U.S., including hotels such as Hilton, Sheraton, Marriott, Embassy Suites,
Doubletree, Crowne Plaza, Radisson and Westin.

Strategic Hotel Capital, a Chicago-based, privately-owned hotel management company which owns 24 hotels,
has agreed to convert the restaurant at its Burbank Hilton in Burbank, California, into a Daily Grill. Strategic owns full service, upscale hotels operating under the Ritz Carlson, Hyatt, Hilton, Sheraton and Embassy Suites brands.
Sunstone Hotel Investors, Inc. (NYSE: SSI), based in San Clemente, California, plans to rebuild its 7,000 square
foot restaurant in the Salt Lake City Hilton, a 400-room property, and to convert it into a Daily Grill. Sunstone
Hotel Investors is a hotel real estate investment trust (REIT) that buys and renovates full-service hotels in the
U.S. Sunstone owns more than 60 hotels and is among the fastest growing hotel reits in the U.S. Grill Concepts
already is working with Sunstone on a second property to open and manage a Daily Grill in its Rochester,
Minnesota Kahler Hotel, a 700-room hotel property, adjacent to the Mayo Clinic.

Grill Concepts said it already has been successfully testing this restaurant hotel concept in San Jose, California
at the San Jose Hilton, where the pilot program has been installed, with Grill Concepts assuming management of
the hotel's City Bar Grill restaurant, including room service. The menu has been converted; the staff has been
trained; and construction to renovate the property is underway.

The first Daily Grill opened in 1988, as an offspring of The Grill on the Alley, the company's nationally acclaimed
fine dining establishment in Beverly Hills, and last month opened its second The Grill on the Alley in the San Jose Fairmont Hotel. Daily Grills bring "dinner house" quality food and service to the casual dining segment. Using home-cooking techniques, Daily Grills serve straight forward food made from fresh ingredients purchased daily, soups and sauces slow simmered from fresh stock, with meats and fish prepared and served any way customers want, in a clean, uncluttered, honest, warm environment.

Grill Concepts currently operates Daily Grill restaurants in Southern California and Washington, D.C., in addition
to The Grill on the Alley restaurants in Beverly Hills and San Jose. The company also operates restaurant
properties in New Jersey and Pennsylvania.

Certain statements in this news release, including rollout plans for Daily Grill restaurants and other matters, are
forward looking within the meaning of the Private Securities Litigation Reform Act of 1995. They involve a
number of risks and uncertainties, and, therefore, there can be no assurance that such statements will materialize
in the future.

Robert Spivak or Michael Weinstock 
Grill Concepts, Inc.
Roger S. Pondel
Pondel Parsons Wilkinson
Also see: The Grill On The Alley Opens At San Jose Fairmont Hotel; Debut Is Prelude To Potential Rollout In Other Locations

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