CNL and KSL Announce Acquisition

CNL Hospitality Properties, Inc. (“CNL”) and an affiliate of KSL
Recreation Corporation (“KSL”) announced today their joint venture
partnership completed the acquisition of the legendary Hotel del Coronado.
The classic historical 688-room resort, built in 1888, is situated along
31 beachfront acres on the quaint island of Coronado in San Diego,
CNL, one of the lodging industry`s top acquirers of hotels, owns a
majority interest in the partnership. KSL, one of the nation`s leading
owners and operators of luxury destination resorts, now operates the hotel
under a long-term management agreement and holds a minority interest in
the partnership.
“The Hotel del Coronado is truly a defining asset in CNL`s portfolio, and
further demonstrates our commitment to build a world-class portfolio of
hotels and resorts. The Del`s superb location in the resurging San Diego
marketplace, consistent performance and stable cash flow directly aligns
with our strategy to create long-term value,” said Thomas J. Hutchison
III, Chief Executive Officer of CNL Hospitality Properties, Inc. “We are
also pleased to be working with an exceptional operator in KSL, and look
forward to executing the redevelopment plans to enhance this historic
In 2001, the legendary hotel underwent $55 million in renovations
featuring the addition of the Sheerwater and Prince of Whales restaurants,
eight North Beach Cottages, as well as refurbishment to the hotel`s
Victorian Building including its guestrooms, lobby and Crown Room, and
expansion to the gardens and seaside walkways of the Windsor Lawn. Under
the new ownership, additional renovations are planned, including a
significant spa expansion and guestrooms additions.

According to Scott Dalecio, president of KSL`s Resort Division, the
acquisition of the Hotel del Coronado presents another unique growth
opportunity for KSL.

“We are very pleased to partner for the first time with CNL and proud that
it involves the addition of the Hotel del Coronado to our collection of
unique resorts and hotels,” Dalecio said. “The Del is a remarkable
property with a storied history. We look forward to being responsible
stewards of such a landmark hotel and further building upon its success.”

Based in La Quinta, California, KSL includes Hotel del Coronado in a
portfolio of luxurious destination resorts with a reputation for offering
some of the most memorable lifestyle and recreation experiences in the
CNL Hospitality Properties, Inc. is an affiliate of CNL Financial Group,
Inc., and specializes in the investment of quality hotels and resorts. CNL
Hospitality Properties, Inc. owns interests in a portfolio of 130 hotels
with more than 29,000 rooms featuring 19 nationally-recognized hotel
brands in 37 states and Canada. Headquartered in Orlando, Florida, CNL
Financial Group, Inc. is one of the nation`s largest, privately held real
estate investment and finance companies. CNL Financial Group, Inc. and the
entities it has formed or acquired have over $9 billion in assets,
representing more than 3,000 properties in 49 states and Canada. For additional information,
please visit .

KSL Recreation Corporation is a La Quinta, California-based owner and
operator of La Quinta Resort & Club and PGA West in La Quinta, California;
The Claremont Resort & Spa in Berkeley, California; La Costa Resort & Spa
in Carlsbad, California; The Arizona Biltmore Resort & Spa in Phoenix,
Arizona; Doral Golf Resort and Spa in Miami, Florida; Grand Wailea Resort
Hotel & Spa on Maui; and Lake Lanier Islands Resort near Atlanta, Georgia.
For additional information, please visit . For
more information on Hotel del Coronado, please visit: