Sorrento Acquires BridgeStreet Worldwide for $40.5mil

Corporate Housing No Longer Part of Interstate Hotels & Resorts Growth Strategy

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. October 14, 2008

DUBLIN, Ireland /ARLINGTON, VA, January 29, 2007. Sorrento Asset Management, a Dublin-based, privately held, investment group, today announced that it has acquired BridgeStreet Worldwide, a leading international provider of corporate housing (referred to as serviced apartments throughout Europe), from Interstate Hotels & Resorts (NYSE: IHR) for approximately $40.5 million.

"Over the last several years, BridgeStreet has operated a number of our properties in Europe and the United States. As we became familiar with their strengths, we saw the strategic opportunity to combine our global real estate activity with BridgeStreet's proven management team," said Bryan Turley, Sorrento's chief executive officer. "The combination into a single organization will translate into significant synergies, and creates additional opportunities for BridgeStreet. We see BridgeStreet, which will be our management division, as a catalyst for strategic growth. In addition to operating our current properties, we will continue to pursue strategic acquisitions in key U.S. and European markets."

"Our partnership with Sorrento will open doors to multiple capital sources, which will allow us to fund our ongoing and future growth plans," said Lee Curtis, president and newly named CEO of BridgeStreet. "We remain commited to our clients and associates and are very enthusiastic about the opportunities this merger brings to both. We will remain a U.S.-based company, with our full management team remaining in northern Virginia." .

"BridgeStreet has gone through a remarkable turnaround over the past two years," said Thomas F. Hewitt, chief executive officer, Interstate Hotels & Resorts. "Lee Curtis, president of Bridgestreet Worldwide, and his team have done an excellent job of managing their existing corporate apartment inventory and driving rates, resulting in significantly increased profits. At the same time, they expanded and entered key U.S. and international markets.

"However, corporate housing, while related, is no longer part of our core growth strategy," he said. "Now that we have completed the turnaround, we believe the timing is right for us to exit this business and monetize the value we have created. We plan to reinvest those proceeds into our core businesses.

"Sorrento already is well acquainted with BridgeStreet, which already manages corporate apartments for them. We believe this is an excellent fit and the sale represents a win-win situation for everyone," Hewitt added.

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Turley noted that BridgeStreet had successfully implemented a major turn-around program over the past few years. "Curtis and his team have re-energized the company by concentrating on high potential, tier-one markets, by increasing revenues and profitability and through significantly expanding their global accounts. We foresee significant upside growth potential."

In 2006, BridgeStreet introduced a number of client-friendly programs, including enhanced guest service packages in major markets, a state-of-the-art, integrated supplier management tool, a new luxury bedding program and the industry's first mapping and point of interest Web-based tools. As a result, guest satisfaction scores rose more than 17 percent.

The acquisition was financed by Credit Suisse, and Cantor Fitzgerald and DLA Piper acted as financial and legal advisor to Sorrento, respectively.