"The Sheraton Long Island fits well with the acquisition goals of our partnership fund with Northridge Capital," said John Emery, Interstate's president and chief operating officer. "NIHF's investment model is focused on stable, income-producing properties rather than major repositioning/turnaround investments. This high-quality, full-service property is located in a strong metropolitan New York submarket with high barriers to entry, surrounded by a number of business and leisure demand generators. The previous owner completed a major, $8 million renovation to the hotel in 2000 and 2001, which included all guestrooms, public areas, meeting rooms, FF&E and the building exterior, effectively repositioning the hotel in the market. In addition to its positive investment characteristics, the acquisition expands our relationship with a strong, joint-venture partner for whom we already manage two other hotels and demonstrates our ability to actively participate in acquisitions in the current market."

"Based on our previous experience with Interstate, we know that they bring to the table proven management expertise, as well as a number of other advantages and benefits related to their size, including proprietary operating systems and purchasing and marketing economies of scale," said David Jackson, president, Northridge Capital. "We believe that we are at or near a bottom of the hotel real estate cycle, and we are actively seeking other appropriate acquisition candidates. Currently, we have a number of other properties in the pipeline."

The 209-room, six-story Sheraton Long Island is located in Smithtown, N.Y., at Exit 53 of the Long Island Expressway, with excellent visibility and accessibility both eastbound and westbound. The hotel is situated directly in front of the Hauppauge Industrial Park, a 14-acre, 2.0 million-square-foot office and industrial park, and is the only full-service hotel near the industrial park. Hotel amenities include an indoor pool, large outdoor deck and barbeque area, fitness center, gift shop, full-service restaurant, small cafe and lobby bar and 18,500 square feet of meeting space, including a 6,500-square-foot ballroom, eight meeting rooms and a fixed-seat, tiered theater.

Established in 1997, Northridge Capital is a Washington D.C.-based asset management firm responsible for managing the investment assets of private investors. These assets include hotel and office properties, as well as multi-family, retail and other types of real estate. Northridge's current investment focus is on hotels in key urban and suburban markets with strong economic fundamentals and favorable competitive conditions.

Interstate Hotels & Resorts operates more than 340 hospitality properties with nearly 76,000 rooms in 44 states, the District of Columbia, Canada and Russia, including 55 properties managed by Flagstone Hospitality Management, a subsidiary of Interstate Hotels & Resorts. BridgeStreet Corporate Housing Worldwide, an Interstate Hotels & Resorts subsidiary, is one of the world's largest corporate housing providers, offering upscale, fully furnished corporate housing throughout the United States, Canada, the United Kingdom, France and 39 additional countries through its network partners. For more information about Interstate Hotels & Resorts, visit the company's Web site: www.ihrco.com.

This press release contains "forward-looking statements," within the meaning of the Private Securities Litigation Reform Act of 1995, about Interstate Hotels & Resorts, including those statements regarding future operating results and the timing and composition of revenues, among others, and statements containing words such as "expects," "believes" or "will," which indicate that those statements are forward-looking.