"Given our purchase price represents a 35% discount toreplacement cost, we are confident this asset will create long-termvalue for our shareholders," says James Risoleo, executive vicepresident of acquisitions and development for Host Marriott.

Christopher J. Nassetta, president and CEO of Host Marriott,acknowledges that the local hotel market has been very soft thisyear but he points out that that is a perfect scenario for thecompany's acquisition strategy. "This investment is another exampleof our strategy of acquiring high quality, large urban hotels indifficult to replace locations at a significant discount toreplacement cost," he says. "The hotel's cash flow [is] downapproximately 35% from 2000 levels. As a result, we believe thereis meaningful upside potential over the next several years as theBoston market recovers and as we implement our asset managementstrategies."

The purchase price includes the assumption of $97 million ofdebt, with an interest rate of 8.39% and a maturity date in 2006.According to a released statement, the hotel, which opened in 1984,has had an average occupancy of 85% over the past five years. Italso has the largest hotel ballroom in New England and includesover 60,000 sf of meeting, exhibit and banquet space. The hotel'slobby opens to the Copley Place Shopping Galleries and thePrudential Center, with over 200 shops and restaurants. The releaseemphasizes that the hotel is located in a "strong market with highbarriers to entry."

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