BETHESDA, MD; June 18, 2002—Host Marriott Corporation (NYSE: HMT) today announced
that it acquired the 1,139-room Boston Marriott Copley Place, located in the famous Back Bay
district of Boston, Massachusetts. The hotel was purchased for $214 million, or $188,000 per
room. The purchase price includes the assumption of $97 million of debt, with an interest rate of
8.39% and a maturity date in 2006. In 2001, the Earnings Before Interest Expense, Taxes,
Depreciation, Amortization and other non-cash items (EBITDA) was $23.5 million.
Christopher J. Nassetta, president and chief executive officer, stated, “We are extremely
pleased to add this impressive hotel to our portfolio. This investment is another example of our
strategy of acquiring high quality, large urban hotels in difficult to replace locations at a significant discount to replacement cost. The Boston market has been particularly soft during the
last year, with the hotel’s cash flow down approximately 35% from 2000 levels. As a result, we
believe there is meaningful upside potential over the next several years as the Boston market
recovers and as we implement our asset management strategies.”
The Boston Marriott Copley Place, which opened in 1984, has had an impressive
operating history with average occupancy of 85% over the past five years. The hotel also boasts
the largest hotel ballroom in New England and offers meeting planners the flexibility of more
than a total of 60,000 square feet of meeting, exhibit and banquet space. The Back Bay district of
Boston is the hub of the city’s business, convention, cultural and educational communities. The
hotel’s lobby opens to the upscale Copley Place Shopping Galleries and the Prudential Center,
with over 200 upscale shops and restaurants with over 17,000 visitors each day. With this
acquisition, Host Marriott now owns nine hotels with at least 1,000 rooms.
“The acquisition of the Copley Place Marriott confirms our disciplined strategy of
purchasing the best assets in the best markets with the best brands. Given our purchase price
represents a 35% discount to replacement cost, we are confident this asset will create long term
value for our shareholders,” stated James Risoleo, executive vice president of acquisitions and
Host Marriott is a Fortune 500 lodging real estate company that currently owns or holds
controlling interests in 123 upscale and luxury hotel properties primarily operated under
premium brands such as Marriott, The Ritz-Carlton, Hyatt, Four Seasons, Swiss™tel and Hilton.
For further information, please visit the Company’s website at www.hostmarriott.com.