CapStar Hotel Company closes acquisition of Doubletree Hotel-LA/Worldport.

WASHINGTON, D.C.--(BUSINESS WIRE)--Jan. 30, 1997--CapStar Hotel Company (NYSE: CHO), a leading hotel management and investment corporation, today announced that it completed the acquisition of the long-term leasehold rights to the 226-room Doubletree Hotel- LA/Worldport in San Pedro, California, from U.S. Bancorp for $7 million. The company also said that it has re-flagged the property under the Hilton brand and plans to spend $1.5 million to renovate the hotel's public space, including the lobby, bar and restaurant space.

Built in 1989, the property consists of three buildings on three acres of waterfront real estate. Hotel amenities include a swimming pool, spa, bar, grill and two tennis courts. The hotel also contains approximately 14,000 square feet of banquet and meeting space, plus an additional 11,300 square feet of retail space, currently used for storage and meeting rooms.

"The Doubletree LA/Worldport allows us to capitalize on the strongly rebounding California market and is a property we believe has significant upside potential," said Paul Whetsell, president and CEO of CapStar. "We were able to obtain this hotel at approximately 50 percent of replacement cost. With the completion of the refurbishment and re-flagging, this property will perfectly complement our portfolio of upscale, full-service hotels. This is our eighth hotel in California and our fourth owned property in the state. We continue to seek other acquisitions and hotel management contracts throughout the region."

The property is located in Los Angeles County, between Long Beach and Palos Verdes, approximately 12 miles south of Los Angeles International Airport. Nearby tourist attractions include the South Bay Beaches, Disneyland and Knott s Berry Farm.

"With the completion of the renovation, this re-branded property will be well positioned in this rapidly expanding market," said David McCaslin, chief operating officer. "Several events should have a positive impact on the Long Beach lodging market, including the convention center's re-opening this year, the opening of an aquarium in 1998 and the ongoing Queensway Development project, the latter two being especially important in generating leisure demand growth."

CapStar owns and manages upscale, full-service hotels throughout the U.S. under such nationally known brands as Hilton, Sheraton, Marriott and Westin. The company currently owns 20 upscale, full service hotels, with 5,392 rooms. CapStar is one of the nation's largest hotel management companies and currently manages 49 hotels with 10,088 rooms.

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