CapStar Hotel Company to Acquire Hotels in Arizona and Connecticut.

WASHINGTON--(BUSINESS WIRE)--Nov. 18, 1997--CapStar Hotel Company (NYSE: CHO), a leading hotel management and investment corporation, today announced that it has signed contracts to purchase two hotels in separate transactions. The company will purchase the 273-room Sheraton Mesa Hotel in downtown Mesa, Arizona, a suburb of Phoenix, and a 200-room property at Bradley International Airport in Windsor Locks, Connecticut, which currently is a Holiday Inn, but will be converted to a Doubletree upon CapStar's acquisition. Both transactions are expected to close within 30 days, subject to customary documentation and conditions.

Sheraton Mesa Hotel

The 273-room, 12-story Sheraton Mesa Hotel is located in downtown Mesa, adjacent to the Mesa Convention Center and near a number of business/industrial facilities, including Boeing, Intel, General Motors and Motorola. In addition to the property's approximately 14,000 square feet of meeting/banquet space, the hotel contains a restaurant, lounge, exterior pool and whirlpool, and a fitness center.

CapStar plans to invest approximately $1.4 million in a full cosmetic upgrade of the property following completion of the purchase from Town King Enterprise Company, Ltd. Planned capital improvements include the addition of a concierge floor, the renovation and re-theming of the Quail Run restaurant, and a refurbishment of the guest rooms and baths.

"The Mesa property is a classic CapStar opportunity -- a well-located, well-built property in a growing market with solid upside potential, priced well below replacement cost," said Paul Whetsell, CapStar president and CEO. "The addition of a new highway link, scheduled to open in 1998, will substantially improve access to the property from Sky Harbor Airport and the Phoenix and Scottsdale markets."

The hotel offers substantial revenue enhancement and cost savings opportunities, according to David McCaslin, CapStar's chief operating officer. "The Sheraton Mesa is one of only two full-service hotels in the area. Our planned capital enhancements and our aggressive, focused, direct sales techniques will significantly improve the property's competitive positioning."

Doubletree Hotel at Bradley International Airport

Upon completion of the purchase of the Connecticut property, CapStar will invest approximately $2.3 million to upgrade the hotel to the Doubletree brand.

"The Doubletree Bradley International Airport affords CapStar an excellent opportunity to take advantage of the rebounding Hartford market," Whetsell said. "We feel the property will benefit from further refurbishing and re-branding to a full-service Doubletree property and also from the implementation of our proprietary management and marketing systems."

Located adjacent to Bradley International Airport with frontage on Connecticut Route 75, the five-story hotel features approximately 4,000 square feet of meeting space, including the 2,300 square-foot Pine Meadow Ballroom, an indoor swimming pool, whirlpool, 24-hour complimentary airport transportation, valet service and guest laundry.

The $2.3 million in planned renovations to upgrade the hotel to the Doubletree brand will include new lobby furnishings, artwork and accessories that are intended to create a more upscale atmosphere. The ballroom will be completely refurbished. Guest rooms will receive new case goods, and guest baths will be upgraded with new floors, vanities and wall coverings. The current sauna facility will be converted to a health club. Guest phones will be equipped with two-line systems with voice mail.

"We believe that the Doubletree brand will give us long-term upside potential," McCaslin said. "With its proximity to the airport and numerous corporate headquarters and demand generators, we believe the refurbished hotel will be well-positioned to become a market leader."

Washington, D.C.-based CapStar Hotel Company owns and manages upscale, full-service hotels throughout the U.S. and Canada under such internationally known brands as Hilton, Sheraton, Marriott, Embassy Suites, Westin and Doubletree. Including the 10 hotels currently under contract, CapStar's hotel portfolio comprises 52 owned hotels with 13,509 rooms and 29 managed hotels with 5,039 rooms, for a total of 81 properties with 18,548 rooms. CapStar also has entered into a contract to purchase the long-term leases for 38 hotels with 5,032 rooms. The company continues to actively seek acquisitions and management contracts in major markets and resort locations throughout North America.

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