Highland Acquisition of Plaza San Antonio

Highland Hospitality Corporation announced today that it has acquired the
252-room Plaza San Antonio Marriott for a purchase price of $32.5 million,
plus customary closing adjustments. Highland`s net investment will equate
to approximately $129,300 per room. Highland purchased the asset from Host
Marriott Corporation. Crestline Hotels & Resorts, a leading hotel
management company, will manage the hotel.

James L. Francis, President and CEO stated, “We are very pleased to add
this hotel to our portfolio. The Plaza San Antonio Marriott is an ideal
fit for our strategy to invest in upscale full-service and premium limited
service hotels in primary and secondary urban markets.”

The 252-room Plaza San Antonio Marriott is situated on over 6.2 acres of
landscaped grounds near San Antonio`s famed River Walk and is directly
across the street from the city`s convention center. The hotel`s downtown
location also provides convenient access to major demand generators such
as the downtown financial district and the Alamo Dome. The hotel offers
over 16,000 square feet of meeting space, and offers such amenities a
sauna and whirlpool, a heated outdoor swimming pool and complimentary
transportation to the downtown financial district. In conjunction with the
acquisition, Highland Hospitality plans to complete a comprehensive
renovation of the guestrooms, lobby, restaurant and bar in 2004.

Highland Hospitality Corporation is a newly formed, self-advised lodging
real estate investment trust, or REIT, focused on hotel investments
primarily in the United States. With the acquisition of the Plaza San
Antonio Marriott property, the Company now owns four hotel properties with
an aggregate of 978 rooms. Additional information can be found on the
company`s website at http://www.highlandhospitality.com/.