IHR Interstate Hotels & Resorts,

ARLINGTON, Va., Jan. 4 /PRNewswire-FirstCall/ -- Interstate Hotels & Resorts (NYSE:IHR), one of the nation's largest independent hotel management companies, today announced that it has signed a long-term agreement with new ownership to manage the Hilton Arlington in Virginia. The property, which has been managed by Interstate since 1996, recently was purchased by Cornerstone Hotel Income & Equity Fund (CHIEF). The hotel will undergo a multi-million dollar renovation over the next several years to further upgrade the guest's experience, including the addition of a first-class fitness center with state- of-the-art aerobic and strength equipment. "This is our third contract with Cornerstone and reflects their confidence in our track record of producing superior operating results," said Thomas F. Hewitt, chief executive officer. "The hotel is located within blocks of our corporate headquarters, and we know this market extremely well. "In fact, the Arlington Hilton is one of a cluster of seven hotels we manage in the Washington, D.C./Northern Virginia market, which offers us a number of unique operating advantages, including economies of scale in purchasing and proprietary, state-of-the-art support. Washington has been one of the strongest hotel markets in the country over the past several years, and the results we have achieved reflect that strength." Located at 950 N. Stafford St. in Arlington, the 209-room hotel occupies the first seven floors of a 26-story, mixed-use development adjacent to the Metro Ballston commuter station. The property, which completed a major renovation in 2005, is located in the heart of the dynamic Ballston-Rosslyn corridor, proximate to Washington, D.C., National Airport, as well as the surrounding government offices and a high concentration of corporate office space. A skywalk links the hotel to the Ballston Mall, the National Science Foundation office complex, movie theaters and surrounding office buildings. Hotel amenities include 6,000 square feet of flexible meeting space, an on-site parking garage offering valet and self-parking, guestrooms featuring the Hilton Serenity package, a full-service restaurant, Dan & Brad's Steakhouse, and separate lounge, two HHonors' level floors, and an association with the proximate Ballston Commons Sports & Health Club. Cornerstone Hotel Income & Equity Fund (CHIEF), managed by Cornerstone Real Estate Advisers LLC, comprises four institutional investors, including one private and three public pension funds. CHIEF's investment focus is on operating business-class hotels with established, upper upscale brand affiliations in top U.S. markets. The fund will have a total capitalization in excess of $750 million. Cornerstone Real Estate Advisors LLC, a registered investment adviser, is headquartered in Hartford, Conn. The firm was founded in 1994 to provide a full range of real estate equity investment advisory services. Cornerstone manages a number of real estate portfolios and public securities (listed REITs) portfolios aggregating to $8.1 billion in assets, as of September 30, 2006. As of November 30, Interstate Hotels & Resorts operated 232 hospitality properties with more than 52,000 rooms in 40 states, the District of Columbia, Canada, and Russia. BridgeStreet Worldwide, an Interstate Hotels & Resorts subsidiary, is one of the world's largest corporate housing providers. BridgeStreet and its network of Global Partners offer approximately 10,000 corporate apartments located in more than 100 MSAs throughout the United States and internationally. For more information about Interstate Hotels & Resorts, visit the company's Web site: http://www.ihrco.com/. This press release contains "forward-looking statements," within the meaning of the Private Securities Litigation Reform Act of 1995, about Interstate Hotels & Resorts, including those statements regarding future operating results and the timing and composition of revenues, among others, and statements containing words such as "expects," "believes" or "will," which indicate that those statements are forward-looking. 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 the volatility of the national economy, economic conditions generally and the hotel and real estate markets specifically, the aftermath of the war with Iraq, international and geopolitical difficulties or health concerns, governmental actions, legislative and regulatory changes, availability of debt and equity capital, interest rates, competition, weather conditions or natural disasters, supply and demand for lodging facilities in our current and proposed market areas, and the company's ability to manage integration and growth. Additional risks are discussed in Interstate Hotels & Resorts' filings with the Securities and Exchange Commission, including Interstate Hotels & Resorts' annual report on Form 10-K as amended for the year ended December 31, 2005. Contact: Jerry Daly, Carol McCune Carrie McIntyre Daly Gray Public Relations SVP, Treasurer (703) 435-6293 (703) 387-3320 DATASOURCE: Interstate Hotels & Resorts CONTACT: Jerry Daly or Carol McCune of Daly Gray Public Relations, +1-703-435-6293, for Interstate Hotels & Resorts; or Carrie McIntyre, SVP, Treasurer of Interstate Hotels & Resorts, +1-703-387-3320 Web site: http://www.ihrco.com/

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