CapStar Hotel Company Plans to Enter Conference Center Business With Acquisition of The Forrestal at Princeton Hotel & Conference Center.

WASHINGTON--(BUSINESS WIRE)--May 4, 1998--CapStar Hotel Company (NYSE: CHO), a leading hotel investment and management company, today announced that it has signed a contract to acquire the 290-room Forrestal at Princeton Hotel & Conference Center in New Jersey from a partnership between Circa Capital Corporation and Amstar Group, Ltd. Following completion of the transaction, the company will invest approximately $1.5 million to refurbish the center.

"This acquisition is consistent with our stated objective to broaden our growth horizons by entering the conference center business," said Paul Whetsell, CapStar chairman and CEO. "The superior quality of this asset and its desirable location make it a natural fit with our portfolio. This is our first certified executive conference center. We will continue to seek other acquisition or management opportunities of this caliber in the conference center segment."

Consisting of a single four-story building with five wings, the Forrestal overlooks a 25-acre wooded setting in Princeton University's master-planned Forrestal Center Business Park. The highly regarded conference center offers approximately 35,000 square feet of dedicated conference space wholly contained in one of the property's wings. The center is composed of 33 meeting rooms, including 2 board rooms, 22 breakout rooms, 7 conference rooms and 2 auditoriums. All 33 meeting rooms feature ergonomic chairs, solid-wall construction, tackable surfaces and multiple lighting alternatives. Within the conference center wing there also is a full-service business center, four electronic information kiosks, each with three television screens, and four restaurants.

Hotel amenities include an outdoor Challenge Course, an indoor swimming pool, a whirlpool, a fitness center, four lighted tennis courts, an outdoor jogging trail with exercise stations and two volleyball courts. Additionally, the property has access agreements with one private and two public golf courses.

The center completed a $10 million renovation in 1997 which incorporated new interior design in public areas, meeting rooms, guest rooms corridors and restaurant space. Upon completion of the acquisition, CapStar will invest an additional $1.5 million to complete the guest room renovations, add complementary amenities and upgrade existing restaurant facilities.

"Certified by the International Association of Conference Centers as meeting the highest standards of such centers worldwide, the Forrestal has served every Fortune 100 company located in the New York metropolitan area," noted David McCaslin, CapStar chief operating officer. "We are particularly pleased to be acquiring a first-class conference facility located in a quiet wooded setting, yet only an hour from New York and Philadelphia."

Washington, D.C.-based CapStar Hotel Company owns and manages upscale, full-service hotels and resorts throughout the U.S. and Canada under such internationally known brands as Hilton, Sheraton, Marriott, Embassy Suites, Westin and Doubletree. Including nine hotels under contract, CapStar's hotel portfolio currently comprises 64 owned hotels with 16,792 rooms and 88 leased or managed with 13,876 rooms for a total of 152 properties with 30,668 rooms. The company continues to actively seek acquisitions and management contracts in major markets and resort locations throughout North America. CapStar has announced an agreement to merge with American General Hospitality Corporation and spin off its hotel management operations, creating two new companies--MeriStar Hotel and Resorts, Inc. and MeriStar Hospitality Corporation.

Certain statements in this press release look forward in time and involve risks and uncertainties, including the ability to consummate pending acquisitions and the merger between CapStar and American General Hospitality Corporation, the ability to achieve the proposed benefits from the merger, the ability to successfully implement acquisition and operating strategies, the ability to manage rapid expansion, changes in economic cycles, competition from other hospitality companies, changes in the applicable laws and government regulations and other risk factors related to the merger.

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