Strategic Hotels & Resorts, Inc. Announces The Sale Of The Marriott London Grosvenor Square Hotel And Acquisition Of The

  Strategic Hotels & Resorts, Inc. Announces The Sale Of The Marriott London
 Grosvenor Square Hotel And Acquisition Of The Remaining 50 Percent Ownership
                 Interest In The Fairmont Scottsdale Princess

The transactions effectively complete the Company's exit from Europe and
enhance its industry leading United States hotel portfolio

PR Newswire

CHICAGO, April 1, 2014

CHICAGO, April 1, 2014 /PRNewswire/ -- Strategic Hotels & Resorts, Inc. (NYSE:
BEE), today announced two significant transactions: The closing of the sale
of the Marriott London Grosvenor Square hotel and the acquisition of the
remaining 50 percent ownership interest in the Fairmont Scottsdale Princess.
Combined with the previously completed sale of the Four Seasons Punta Mita
resort, the Company successfully executed over $715 million in transactions in
the first quarter of 2014.

The Company closed on the sale of the 237-room Marriott London Grosvenor
Square hotel for £125.15 million ($207.7 million), or approximately £528,000
per key ($877,000). Net proceeds from the transaction total approximately
£58.1 million ($96.5 million), after the repayment of property-level net debt
of £67.0 million ($111.3 million). The hotel was sold to an affiliate of Hong
Kong based private equity firm Joint Treasure and remains subject to a ground
lease with 43 years remaining on the term. The Company was advised by JLL on
the sale of the hotel.

"By closing on the sale of the the Marriott London Grosvenor Square, we are
finalizing our exit of the European market, as previously committed," said
Raymond L. "Rip" Gellein, Chairman and Chief Executive Officer of Strategic
Hotels & Resorts, Inc. "In addition, this sale will eliminate approximately
$1.0 million of annual frictional costs associated with the asset and allow us
to redeploy capital into one of the highest growth assets in our portfolio,"
Gellein continued.

The Company also closed on the acquisition of the remaining 50 percent
ownership interest in the 649-room Fairmont Scottsdale Princess resort for
approximately $90.6 million. Prior to the transaction, the Company owned a 50
percent ownership position in the asset through a joint venture with an
affiliate of Walton Street Capital, L.L.C. ("Walton Street"). The transaction
values the asset at a gross value of $307.5 million and includes the
assumption of the existing $117.0 million mortgage financing. As part of the
transaction, the Company earned a promoted interest that was negotiated during
the 2011 restructuring of the asset totaling $19.3 million, resulting in a net
purchase price of approximately $288 million.

"The Fairmont Scottsdale Princess is one of our highest growth assets as the
resort continues to benefit from the addition of 60,000 square feet of new
meeting space as well as improving market trends in the greater
Phoenix/Scottsdale market. In fact, since the introduction of new meeting
spaces and other amenities, group RevPAR penetration at the resort has
increased nearly 17 points," said Gellein. "We are pleased to essentially
match-fund this acquisition with the proceeds from the sale of the Marriott
London Grosvenor Square, allowing us to execute this acquisition without
requiring us to raise external capital. On a full-year basis, the two
transactions are essentially neutral to our earnings per share and marginally
deleverage the balance sheet. Our nearly three year partnership with Walton
Street, who assisted us in recapitalizing the resort in 2011, has been both a
rewarding and profitable experience, and we appreciate their support and
partnership," Gellein concluded.

The net purchase represents a $444,000 per key valuation, a 12.7 times
multiple on forecasted 2014 EBITDA and a 6.5 percent capitalization rate on
forecasted 2014 NOI. In 2013, RevPAR grew 15 percent at the property
resulting in 48 percent EBITDA growth.

Guidance

As a result of the two transactions, the Company is adjusting its full-year
2014 Comparable EBITDA and Comparable FFO per diluted share guidance ranges as
detailed below:

Guidance Metrics                 Previous Range  Revised Range
Comparable EBITDA                $220M - $240M   $210M - $230M
Comparable FFO per diluted share $0.53 - $0.63   $0.50 - $0.60

The lowering of the FFO per diluted share guidance range is primarily driven
by the timing of the closing of the transactions and the seasonality of the
two hotels. On a pro forma, full-year basis, the two transactions would be
neutral to FFO per diluted share and marginally lower the Company's leverage
metrics. The Company is reaffirming its other previously provided guidance
metrics for 2014 including RevPAR growth in the range of 5.0 percent to 7.0
percent and Total RevPAR in the range of 4.5 percent to 6.5 percent for its
Same Store and Total United States hotel portfolios.

About the Fairmont Scottsdale Princess

The Fairmont Scottsdale Princess is a 649-room, 65-acre resort property
located in the northern region of Scottsdale. The hotel's design is
authentically western with Spanish-style architecture throughout the
property. Few, if any, resort destinations in Scottsdale offer the level of
service, multitude of amenities, and expansive grounds of the Fairmont
Scottsdale Princess.

The resort includes 649 rooms and suites consisting of 72 villas / Fairmont
Gold rooms and 119 casitas, 106,000 square feet of indoor meeting space
including the newly completed 20,000 square foot Palomino Ballroom, 50,000
square feet of outdoor meeting space, a 44,000 square foot Well & Being
wellness spa, five restaurants including Bourbon Steak and La Hacienda, and
the exclusive long-term booking rights to two 18-hole Championship Golf
Courses (one of which is a TPC course and home to the annual PGA Tour Waste
Management Open, formerly the Phoenix Open). Of the resort's 65 acres of
controlled land, 27 are fee simple and 38 are under a favorable long-term
lease agreement through 2110 with the City of Scottsdale.

About the Company

Strategic Hotels & Resorts, Inc. is a real estate investment trust (REIT)
which owns and provides value-enhancing asset management of high-end hotels
and resorts in the United States and Europe. The Company currently has
ownership interests in 16 properties with an aggregate of 7,862 rooms and
835,000 square feet of multi-purpose meeting and banqueting space. For a list
of current properties and for further information, please visit the Company's
website at www.strategichotels.com.

About Walton Street

Walton Street Capital, L.L.C. is a premier private equity real estate firm
based in Chicago, Illinois that focuses on value-added and opportunistic real
estate related investments. Since its founding in 1994, affiliates of Walton
Street Capital have received total equity commitments of over $8.0 billion
from public and corporate pension plans, foreign institutions, insurance
companies and banks, endowments and foundations, trusts, and high net worth
individuals. The firm employs over 100 professionals through its offices in
Chicago, IL (USA), Mexico City, Mexico and Mumbai, India.

This press release contains forward-looking statements about Strategic Hotels
& Resorts, Inc. (the "Company"). Except for historical information, the
matters discussed in this press release are forward-looking statements subject
to certain risks and uncertainties. These forward-looking statements include
statements regarding the Company's future financial results, stabilization in
the lodging space, positive trends in the lodging industry and the Company's
continued focus on improving profitability. Actual results could differ
materially from the Company's projections. Factors that may contribute to
these differences include, but are not limited to the following: the effects
of the recent global economic recession upon business and leisure travel and
the hotel markets in which the Company invests; the Company's liquidity and
refinancing demands; the Company's ability to obtain, refinance or extend
maturing debt; the Company's ability to maintain compliance with covenants
contained in its debt facilities; stagnation or further deterioration in
economic and market conditions, particularly impacting business and leisure
travel spending in the markets where the Company's hotels operate and in which
the Company invests, including luxury and upper upscale product; general
volatility of the capital markets and the market price of the Company's shares
of common stock; availability of capital; the Company's ability to dispose of
properties in a manner consistent with its investment strategy and liquidity
needs; hostilities and security concerns, including future terrorist attacks,
or the apprehension of hostilities, in each case that affect travel within or
to the United States, Mexico, Germany or other countries where the Company
invests; difficulties in identifying properties to acquire and completing
acquisitions; the Company's failure to maintain effective internal control
over financial reporting and disclosure controls and procedures; risks related
to natural disasters; increases in interest rates and operating costs,
including insurance premiums and real property taxes; contagious disease
outbreaks, such as the H1N1 virus outbreak; delays and cost-overruns in
construction and development; marketing challenges associated with entering
new lines of business or pursuing new business strategies; the Company's
failure to maintain its status as a REIT; changes in the competitive
environment in the Company's industry and the markets where the Company
invests; changes in real estate and zoning laws or regulations; legislative or
regulatory changes, including changes to laws governing the taxation of REITs;
changes in generally accepted accounting principles, policies and guidelines;
and litigation, judgments or settlements.

Additional risks are discussed in the Company's filings with the Securities
and Exchange Commission, including those appearing under the heading "Item 1A.
Risk Factors" in the Company's most recent Form 10-K and subsequent Form
10-Qs. 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 the Company
undertakes no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise,
except as required by law.

                                                     Low Range  High Range
Net Income Attributable to Common Shareholders       $147.6     $167.6
Depreciation and Amortization                        115.5      115.5
Interest Expense                                     82.3       82.3
Income Taxes                                         1.9        1.9
Non-controlling Interests                            0.8        0.8
Adjustments from Consolidated Affiliates             (15.5)     (15.5)
Adjustments from Unconsolidated Affiliates           17.7       17.7
Preferred Shareholder Dividends                      17.6       17.6
Realized Portion of Deferred Gain on Sale Leasebacks (0.2)      (0.2)
Gain on Sale of Asset                                (157.9)    (157.9)
Other Adjustments                                    0.2        0.2
Comparable EBITDA                                    $210.0     $230.0
                                                     Low Range  High Range
Net Income Attributable to Common Shareholders       $147.6     $167.6
Depreciation and Amortization                        114.7      114.7
Realized Portion of Deferred Gain on Sale Leasebacks (0.2)      (0.2)
Gain on Sale of Asset                                (157.9)    (157.9)
Non-controlling Interests                            0.7        0.7
Adjustments from Consolidated Affiliates             (8.0)      (8.0)
Adjustments from Unconsolidated Affiliates           9.4        9.4
Other Adjustments                                    0.2        0.2
Comparable FFO                                       106.5      126.5
Comparable FFO per Diluted Share                     $0.50      $0.60

SOURCE Strategic Hotels & Resorts, Inc.

Website: http://www.strategichotels.com
Contact: Diane Morefield, EVP, Chief Financial Officer, Strategic Hotels &
Resorts, Inc., (312) 658-5740 or Jonathan Stanner, VP, Capital Markets &
Treasurer, Strategic Hotels & Resorts, Inc., (312) 658-5746
 
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