Strategic Hotel Capital, Inc. to Acquire The Ritz-Carlton Half Moon Bay for $124.4 Million

Strategic Hotel Capital, Inc. to Acquire The Ritz-Carlton Half
Moon Bay for $124.4 Million 


CHICAGO, July 26  /PRNewswire-FirstCall/ -- Strategic Hotel Capital, Inc.
(NYSE:SLH) today announced that it has signed an agreement to acquire The
Ritz-Carlton Half Moon Bay, a luxury destination resort overlooking the Pacific
Ocean south of San Francisco, California, from a client advised by Morgan
Stanley Real Estate.  The resort features 261 guestrooms -- the majority of
which have ocean or coastal views -- a 16,000 square foot spa and 17,000 square
feet of indoor meeting space with additional outdoor meeting areas.  Other
highlighted features include: Navio, a fine dining restaurant; The
Conservatory, offering light fare and beverages; two fitness centers; an indoor
pool; six lighted tennis courts and access to two adjacent 18-hole championship
golf courses.

This is the first resort to have been built on the Northern California coast in
over a decade, having taken over 20 years to bring to completion. The hotel
opened in 2001, with the first full year of operations in 2002.  The resort was
developed by The Athens Group, a leading developer of luxury resort properties.

The purchase price of $124.4 million is expected to be funded by the
combination of a mortgage loan, the company's line of credit and cash.  The
resort's Earnings Before Interest Expense, Taxes, Depreciation and Amortization
(EBITDA) is forecasted to be approximately $8.1 million in 2004 and $10.4
million in 2005.  The purchase is subject to customary closing conditions and
is expected to close in the third quarter.

  Key features of this acquisition include the following:

   -- This hotel opened immediately prior to September 11, 2001, in the
      midst of the Bay Area's technology-industry recession, and should be a
      beneficiary of the overall recoveries in both the national and Bay
      Area economies.
   -- The purchase price is attractive relative to estimated replacement
      cost in a market with substantial barriers to entry.



Commenting on the acquisition, Laurence Geller, president and chief executive
officer of Strategic Hotel Capital, Inc., said, "We are pleased to announce
this acquisition following our recent public offering.  The Ritz- Carlton Half
Moon Bay quintessentially fits our growth strategy.  This is a genuinely
unique, high-end hotel with significant growth prospects located in a market
with high barriers to entry.  In addition, the property possesses those
characteristics which will allow us to make full use of our value-added asset
management skills: complexity; sophisticated and demanding customers; varied
demand generators, and is still in the growth stage of its life cycle." Geller
also added, "Our ability to underwrite this acquisition, and to manage this
investment going forward, is enhanced by the knowledge gained from our
successful ownership and asset management of California beachfront resorts and
Bay Area hotels."  On a final note, Geller concluded, "We look forward to once
again expanding our relationship with the Ritz-Carlton Hotel Company and its
parent company, Marriott International, and working together to make an
excellent asset even better."

Arne Sorenson, executive vice president and chief financial officer of Marriott
International, said,  "We are delighted that Strategic Hotel Capital, Inc. will
be adding a world class Ritz-Carlton property to its portfolio.  We look
forward to continuing to grow our relationship with Strategic Hotel Capital."

About the Company

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 14 properties with an aggregate of 5,931 rooms.  For further
information, please visit the company's website at http://www.shci.com/ .

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 that are subject
to certain risks and uncertainties that could cause the actual results to
differ materially, including but not limited to the following: the uncertainty
of the national economy; economic conditions generally and 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; cash available for
capital expenditures; availability of capital; ability to obtain or refinance
debt; rising interest rates; rising insurance premiums; competition; demand for
hotel rooms in our current and proposed market areas; 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. 

DATASOURCE: Strategic Hotel Capital, Inc.



CONTACT:  Jim Lyman, EVP & CFO of Strategic Hotel Capital, Inc.,

[phone], or General Information, Georganne Palffy of Financial

Relations Board, [phone]



Web site:  http://www.shci.com/ 

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