Colony Capital to Buy Water Terrace in Marina del Rey, California A Rare Ultra-Luxury Waterfront Residential Building.

LOS ANGELES -- Investment Follows Announcement of Gaming Acquisition of Harrah's and Caesars Properties for $1.2 Billion in 2004

Colony Capital, LLC (Colony) announced today that it will purchase the Water Terrace apartment tower in Marina del Rey, California, from Equity Residential (EQR) for $305 million. The Los Angeles-based real estate private investment firm plans to invest approximately $340 million to acquire, renovate and sell Water Terrace condominiums, with a plan to create the premier luxury waterfront residence in Los Angeles.

Colony is one of the world's foremost owners and operators of global five-star properties, renowned for its five-star amenities and services program and tradition of excellence. With the purchase of Water Terrace, Colony is acquiring a prime waterfront asset, one of the few full-service, luxury high-rise apartment towers located on the water in Southern California. Combining Colony's expertise in operating exclusive, high-end hospitality and residential properties will produce a world-class signature residence at Water Terrace.

"Water Terrace will be a unique living experience, offering the best waterfront living in California with the kind of services and amenities offered by the best luxury doorman buildings in New York City," said John Brady, Principal, Colony.

The acquisition underscores the firm's recent investment momentum, following the purchase of the Las Vegas Hilton, and also recently, four casino hotels from Harrah's Entertainment and Caesars Entertainment for $1.2 billion, pending licensing. In 2004, Colony, along with the Blackstone Group, sold the Savoy Group of London, including Claridge's, the Savoy, the Connaught and the Berkeley, for $1.4 billion.

Water Terrace is an 18-story, 450-unit high-rise apartment tower completed in 2003 and located immediately adjacent to the marina. The unique location is one of the most sought after residential areas with its proximity to the ocean and LAX airport, accessibility to employment centers, the incomparable views and the impressive array of services and amenities that the neighborhood offers. The luxury condominiums will offer turnkey living with privacy and security that appeals to an affluent global client base who choose to make the Los Angeles waterfront one of their residences.

Shortly after closing on Water Terrace later this month, Colony plans to rebrand and rename the property as a part of the overall repositioning process. Condominium units will be available for reservation in early 2005 with many of the units available for move-in by mid-year, commensurate with the completion of the common area improvements and the implementation of the five-star services and amenities program.

Colony Capital has extensive experience in creating value in unique high-end residential and hospitality properties. The firm owns the exquisite Costa Smeralda in Sardinia, Italy and recently converted New York's Mayfair Hotel to condominiums (now known as 610 Park Avenue). Since 1997, Colony's Sunrise Colony Company has developed some of the most sought after golf-oriented, master planned communities in the U.S. The firm's other investments in exclusive leisure lifestyle and resort properties have included the Amanresorts hotel chain, London's Savoy Group, the Orchid at Mauna Lani on Hawaii's Big Island, The Gaunahani on St. Bart's, the "W" in Honolulu, the Chateau Lascombes in France, Resorts International in Atlantic City, the Las Vegas Hilton, and Accor Casinos in Europe. Colony also owns the Fukuoka Dome complex in Japan, and owns and operates luxury full service apartments in Asia under the Oakwood brand.

Colony has secured a financing facility of approximately $290 million for the Water Terrace acquisition from AIG Global Investment Group and will finance the remainder with $50 million of equity from its Colony Investors VI Fund.

About Colony Capital

Colony Capital, a private, international investment firm, has an extensive global investment portfolio encompassing numerous luxury hotels and upscale residential projects. Over the past 13 years, Colony Capital has invested approximately $12 billion in over 7,500 assets through various corporate, portfolio and complex property transactions. Colony has a staff of more than 100 and is headquartered in Los Angeles, with offices in New York, Paris, London, Madrid, Rome, Hawaii, Hong Kong, Tokyo, Taipei, Shanghai and Seoul. For additional information visit www.colonyinc.com.