PITTSBURGH / Host Marriott Corporation HMT and Interstate Hotels Company IHC today announced the completion of the first step of the acquisition of three upscale hotels: the Albany Marriott in New York, the San Diego Marriott Mission Valley in California, and the Minneappolis Marriott Southwest in Minnesota for a combined price of $100 million. Interstate Hotels has acquired these hotels and has signed a letter of understanding to enter into a partnership with Host Marriott who will acquire 49% of Interstate Hotels' interest and become managing general partner. The closing of the partnership with Host Marriott is expected to occur within the next few weeks. Interstate Hotels will remain as manager of the properties. The three hotels are expected to generate a combined $13.3 million of Earnings Before Net Interest Expense, Taxes, Depreciation, Amortization and other non-cash items (EBITDA) for full year 1997. The partnership intends to invest approximately $2.9 million to renovate the three properties.

The Albany Marriott is a 359-room full-service, upscale hotel located on nine acres in the town of Colonie. The eight-story hotel has been managed by Interstate since 1985 and features 13,000 square feet of meeting space, two restaurants, lobby bar, indoor and outdoor pools, health club and gift shop.

The Albany Marriott is located just minutes from Albany County Airport and the State University of New York campus and twenty minutes from Saratoga Flat Track, an attraction which draws nearly a million visitors each summer. Located at the juncture of two major highways, Albany is the gateway to tourist destinations in both the Catskill and Adirondack Mountain regions. The property is also well suited to benefit from the constant influx of lobbyists, trade associations and government vendors who frequent New York's capital throughout the year.

The 350-room San Diego Marriott Mission Valley is a full- service, upscale hotel located on 7.5 acres in San Diego's Mission Valley area. The 16-story hotel has been managed by Interstate since its opening in 1988 and features 22,000 square feet of meeting space, a full-service restaurant, lobby bar, an outdoor pool, health club facilities, lighted tennis courts and gift shop.

The hotel is close to Jack Murphy Stadium, home of the San Diego Padres and San Diego Chargers as well as numerous concerts and other events, and the new Rio Vista West Shopping Plaza and Mission Valley Center, San Diego's largest outdoor shopping center. The San Diego market continues to improve rapidly, showing consistent growth in key economic indicators for the past eighteen months.

The Minneapolis Marriott Southwest is a 320-room full- service, upscale hotel located on 10.3 acres in the Opus II Office Park in Minnetonka, a southwestern suburb of Minneapolis. The 17-story hotel has been managed by Interstate since its opening in 1988 and features 13,000 square feet of meeting space with an additional 2,700 square feet currently being converted from a lounge. The property also offers a full-service restaurant, lobby bar, indoor pool, health club facilities and gift shop.

Mr. Terence C. Golden, President and Chief Executive Officer of Host Marriott, stated, "We are pleased to be adding these upscale, full service hotels to our portfolio. They are being purchased at a very attractive price. Once this transaction has been completed, we will have acquired property so far this year with an aggregate value of approximately $1.1 billion. We remain very confident we will achieve our recently announced two year acquisition target of $2.3 billion for 1997 and 1998."

Mr. Golden added, "We are continuing our relationship with Interstate Hotels. We will have eight properties managed by Interstate and we look forward to working with them in the future."

W. Thomas Parrington, Jr., Chief Executive Officer of Interstate Hotels, said, "The completion of these three acquisitions demonstrates Interstate's continued ability to capitalize on the strong industry fundamentals in the upscale, full-service segment. These properties are all high quality upscale hotels well situated in their respective marketplace. Each market is characterized by favorable demand and supply characteristics and their local economies are experiencing solid growth. Further, we understand the market dynamics in each location as we have extensive experience with each property. Finding quality properties such as these allows us to further our geographic diversification strategy."

Interstate Hotels is the largest independent hotel management company in the U.S. As of September 1, 1997, Interstate owned, managed, leased or performed related services for a portfolio of 229 hotels, totaling 45,905 rooms. With the addition of these three hotels, the Company owns or has controlling interest in 38 hotels.

Host Marriott is a lodging real estate company which upon completion of this transaction will own or hold controlling interest in 91 upscale and luxury full-service hotel properties operated primarily under the Marriott and Ritz- Carlton brand names. The company also serves as general partner and holds minority interests in various unconsolidated partnerships that own 250 lodging properties, 30 of which are full-service hotels. Additionally, the company recently acquired 29 senior living communities. These communities are managed under the Marriott name.

Note: Certain matters discussed within this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Host Marriott and Interstate Hotels to be different from any future results, performance or achievements expressed or implied by such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be attained. These risks are detailed from time to time in both companies' filings with the Securities and Exchange Commission.

Tom Loftus
412-937-0600