Highland Announce Cancun Acquisition

Highland Hospitality Corporation, announced today that it
has acquired the 332-room Tucancun Beach Resort & Villas located in
Cancun, Mexico, for approximately $31.0 million, plus customary closing
adjustments, or approximately $93,400 per room. The Company purchased the
hotel from a private seller based in Mexico. Barcelo Hotels & Resorts, a
global lodging company based in Spain, will manage the beachfront property
as an all-inclusive resort under the Barcelo brand name. James L. Francis, Highland’s President and CEO, stated, “We are extremely
excited about our acquisition of the Tucancun Beach Resort & Villas and
the opportunity to strengthen our relationship with our global partner,
Barcelo Hotels & Resorts. This acquisition is our first in Mexico and is
representative of our strategy to invest a portion of our capital in all-
inclusive beachfront resorts outside of the United States. We believe that
attractive pricing of this asset, along with Barcelo’s ability to
efficiently market and operate the resort, will help to generate
significant current returns and create value over time for our
shareholders.”

The Tucancun Beach Resort & Villas is centrally located within the Hotel
Zone on Cancun Island, approximately twenty minutes from Cancun
International Airport and downtown Cancun. The resort is also closely
situated near two of Cancun’s premier shopping malls, which offer several
luxury retail boutiques and upscale restaurants and bars. The resort
complex consists of four multiple-story towers and villas situated on over
4.5 acres of fee-owned land, including approximately 600 feet of direct
beachfront. Approximately two- thirds of the 332 rooms have private
terraces and ocean views and all guestrooms are finished with stone floors
and bathrooms. On-site amenities include three pools (including a lounge
pool), four restaurants, three lounges, on-site car rental and travel
agencies, concierge services, aqua sports & dive services, fitness room,
tennis court, business center and a 3,000 square-foot ballroom.
——-