CHICAGO, Strategic Hotel Capital, Inc. (NYSE: SLH) today announced it has signed an agreement to acquire an 85% controlling interest in the InterContinental hotels in Chicago and Miami with a combined room count of 1,448 and an agreed upon aggregate value of $303.5 million, or a price of $210,000 per room. The acquisition, which is expected to close in April, remains subject to customary closing conditions.

The completely renovated 807-room InterContinental Chicago, located in the heart of the Magnificent Mile shopping district, is an historic luxury property in the third most populated metropolitan area in the nation. The hotel consists of two towers, the 42-story historic tower and the 26-story main tower, and features 42,000 square feet of function space, including six historic ballrooms and 30 state-of-the-art meeting rooms.

The 641-room InterContinental Miami rises 34 stories above Biscayne Bay in the Central Business District of Miami. The luxury property is located on 3.6 acres of the Miami Centre, a prominent office and hotel complex in the core of Miami's downtown, and features 65,000 square feet of meeting space, a state-of-the-art fitness center and other high-end amenities, including three restaurants.

Each hotel will be held in a partnership in which Strategic Hotel Capital will own a controlling 85% interest with InterContinental Hotels ("IHG") holding the remaining 15%. Through its partnership agreements with IHG, Strategic Hotel Capital will be entitled to receive a non-cumulative preferred return of 8% on its total investment of $263.5 million, less Strategic's 85% share of the partnership's debt service obligations. The investment of $263.5 million includes the company's proportionate share of the cost of the properties, closing costs, and initial capital expenditures. After SLH receives its preferred return, IHG is entitled to receive a non-cumulative preferred return of 8% on its investment. Thereafter SLH and IHG will share proportionate to their respective ownership interests in the partnership returns. Strategic Hotel Capital's investment is expected to be financed through a combination of debt and equity financing as market conditions permit. The company anticipates that the acquisition will be accretive to earnings beginning with the second quarter of 2005, and forecasts a combined 12-month property EBITDA of $25 million to $27 million. The expected 9-month 2005 property EBITDA is forecasted to be in the range of $19 million to $21 million.

Laurence Geller, CEO of Strategic Hotel Capital, commented, "These acquisitions are well-aligned with our core investment strategy, and we are very enthusiastic about the quality of assets and their potential opportunities. Both properties provide our asset management team with avenues to add substantial value to well-located urban hotels in growing markets with multiple demand generators. We are also fortunate to be able to strengthen a key strategic relationship with InterContinental Hotels, which also manages our InterContinental Hotel Praha - Prague, Czech Republic."

Earnings Conference Call

The company will hold a conference call to discuss fourth quarter 2004 and full-year 2004 results, in addition to its 2005 guidance, on March 3, 2005 at 11:00 a.m. ET. Interested individuals are invited to listen to the call by telephone at 800-289-0569. To participate on the webcast, log on to http://www.shci.com or 15 minutes before the call to download the necessary software.

Strategic Hotel Capital, Inc., is a real estate investment trust (REIT) which owns and asset manages high-end hotels and resorts. The company has ownership interests in 15 properties with an aggregate of 6,192 rooms. For further information, please visit the company's website at .

This press release contains forward-looking statements about Strategic Hotel Capital, Inc. (the "Company"). Except for historical information, the matters discussed in this press release are forward-looking statements subject to certain risks and uncertainties that could cause the actual results to differ materially, including but not limited to the following: availability of capital; ability to obtain or refinance debt; rising interest rates; rising insurance premiums; cash available for capital expenditures; competition; demand for hotel rooms in our current and proposed market areas; economic conditions generally and in the real estate market specifically; the effect of threats of terrorism and increased security precautions on travel patterns and hotel bookings; the outbreak of hostilities and international political instability; legislative or regulatory changes, including changes to laws governing the taxation of REITs; and changes in generally accepted accounting principles, policies and guidelines applicable to REITs.

Additional risks are discussed in the Company's filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. The forward-looking statements are made as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Strategic Hotel Capital Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.

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