Highland Completes Acquisition of Wyndham Hotels

Highland Hospitality
Corporation , a lodging real estate investment trust, or REIT, announced
today the acquisition of four hotels consisting of 1,687 rooms from
Wyndham International, Inc. for $227 million, or $134,500 per room, plus
customary closing adjustments. The Company financed a portion of the
acquisition with a $160 million fixed-rate mortgage provided by JP Morgan
Chase Bank. The seven-year loan carries an interest rate of 6.65 percent.
The four-hotel portfolio consists of the 510-room Hilton Parsippany in
Parsippany, New Jersey, the 495-room Crowne Plaza Hotel Atlanta-Ravinia in
Atlanta, Georgia, the 360-room Wyndham Wind Watch Hotel in Hauppauge, New
York and the 322-room Tremont Boston—A Wyndham Historic Hotel in
Boston, Massachusetts. Crestline Hotels & Resorts, Inc. will manage the
Parsippany Hilton, Crowne Plaza Atlanta-Ravinia and Boston Tremont hotels.
The Wyndham Wind Watch Hotel will be converted to the Hyatt Regency Wind
Watch Long Island and managed under a contract with Hyatt Hotels.

James L. Francis, Highland’s President and CEO, stated, “We are excited
about our purchase of these four assets. This acquisition fits well with
our stated strategy of investing in upscale full-service hotels in major
urban markets with high barriers to entry. This portfolio will be a great
addition to our balance sheet and we believe its long-term performance
will benefit from our renovation and repositioning efforts, as well as
from improving lodging trends within these markets.”

The Company plans to invest an additional $25 million to renovate, re-
brand or reposition these assets, including approximately $10 million, or
$28,000 per room, to upgrade the Wind Watch hotel to the Hyatt Regency
brand, approximately $6 million, or $18,600 per room, to reposition the
Tremont Boston hotel, approximately $7 million, or $14,100 per room to
renovate and reposition the Crowne Plaza Atlanta-Ravinia hotel and the
remaining $2 million, or $3,900 per room, to enhance the Hilton Parsippany
hotel.

  Hilton Parsippany


The 510-room Hilton Parsippany hotel is situated within a business campus
setting that includes offices for such companies as General Motors, Philip
Morris/Kraft, Deloitte & Touche, ADP and Tiffany Corporation, and is
located approximately 25 miles from Newark International Airport. Recently
renovated in 2001, the property contains 30,000 square feet of flexible
meeting space and two on-site restaurants, including a Ruth’s Chris Steak
House. Other facilities and amenities include a modern fitness center, two
pools, two tennis courts, a basketball court, an on-site business center,
guest room high-speed internet access and a free shuttle to the local
companies within the business complex.

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Crowne Plaza Hotel Atlanta-Ravinia

The 495-room Crowne Plaza Hotel Atlanta-Ravinia is situated in the heart
of Atlanta’s Perimeter Center business district, conveniently located in
proximity to several Fortune 500 companies and minutes from downtown,
Buckhead and Atlanta’s professional sports complexes. In addition, the
hotel is easily accessible from Atlanta’s Hartsfield International Airport
via the city’s MARTA mass transportation system. The property features
33,000 square feet of flexible meeting space and two on-site restaurants,
including Atlanta’s only four diamond Italian restaurant, LaGrotta. Other
hotel amenities include an indoor pool, high-speed internet access, a
fitness center, limousine service and complimentary parking. Highland
Hospitality plans to invest an additional $7 million to renovate and
upgrade the guestrooms, meeting facilities, lobby, lounge and other common
areas.

Hyatt Regency Wind Watch Long Island

The 360-room Hyatt Regency Wind Watch Long Island is located in Hauppauge,
in the heart of New York’s Long Island, and approximately 50 miles from
Manhattan. The property caters to both business and leisure demand with
approximately 18,000 square feet of flexible meeting space and a
resort-like setting, including access to the adjacent Hamlet Wind Watch
Golf & Country Club. Other amenities provided by the hotel include indoor
and outdoor pool facilities, a health club and state-of-the-art meeting
facilities providing wireless internet connections. Highland Hospitality
plans to invest $10 million to renovate and upgrade the guestrooms,
meeting facilities, restaurant and other common areas according to the
Hyatt Regency brand standards. The newly flagged Hyatt hotel will be the
only Hyatt-branded hotel on Long Island.

Tremont Boston Hotel

The 322-room Tremont Boston Hotel is situated in downtown Boston in the
heart of the city’s Theatre District. The hotel is centrally located near
Boston’s financial district and government center, and only blocks away
from Boston Common, Newbury Street, Faneuil Hall Marketplace and the Back
Bay. The city’s underground transportation system is located directly
across the street and provides convenient access to such attractions as
Fenway Park and the Fleet Center. Highland Hospitality plans to invest an
additional $6 million to reposition the hotel and upgrade the guestrooms,
lobby and other common areas.
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