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HEI Hospitality Acquires New York's Historic Algonquin Hotel

Issued: September 22, 2005

HEI Hospitality Acquires New York's Historic Algonquin Hotel

NORWALK, Conn., September 22, 2005 - HEI Hospitality, a rapidly growing hotel ownership and operating company, today announced that it has acquired the 174-room historic Algonquin Hotel in New York City for an undisclosed amount from Miller Global Properties LLC, a partnership between Miller Properties Group and Global Holdings, Inc. Merritt Hospitality, a wholly owned subsidiary of HEI, will operate the hotel.

Located off of Times Square at 59 West 44th Street, between Fifth and Sixth Avenues, the property arguably is the most "literary" hotel in the world. Home of The Algonquin Roundtable in the 1920s, the property has played host to many of the world's most illustrious writers and personalities, including Dorothy Parker, H.L. Mencken, Gertrude Stein, Eudora Welty, Tallulah Bankhead, Douglas Fairbanks, Sr., John Barrymore, Anthony Hopkins, Tom Stoppard and Helen Hays. William Faulkner drafted his Nobel Prize acceptance speech at the hotel, and Alan Jay Lerner and Frederick Lowe wrote "My Fair Lady" in Lerner's suite.

"The Algonquin is our first Manhattan property, and marks our fourth acquisition in 2005, with several more pending," said Gary Mendell, chief executive officer. "The hotel, built in 1902, has always been on the cutting edge of guest comfort and social awareness. It was the first leading hotel in New York to receive ladies traveling alone, and the first to have electronic door locks, smoke detectors and air conditioning in all of its rooms. The Algonquin is an extraordinary hotel, and our goal is to live up to its past and further enhance its legend."

"The hotel has received more than $11 million in upgrades since 1998 and is in excellent physical condition. We plan to continue to enhance upon its current high quality with approximately $3.5 million of additional improvements over the next several years," Mendell added.

The Algonquin is home to the Oak Room, one of the city's most acclaimed cabarets, having launched the careers of Harry Connick Jr., Diana Krall, Andrea Marcovicci, Michael Feinstein, Jane Monheit, Peter Cincotti and Jamie Cullum to name a few. The Oak Room will celebrate its 25th anniversary in 2006. The recently renovated, neighboring Roundtable Room serves retro dishes from the legendary room's past. The Blue Bar serves its famous $10,000 martini.

The property offers 4,000 square feet of recently renovated meeting space capable of holding groups of up to 200 people. The hotel also provides a state-of-the-art fitness center and a business center.

Cushman & Wakefield acted as the broker in the transaction.

HEI Hospitality, headquartered in Norwalk, Conn., is an ownership/investment firm that owns and/or operates 26 first-class and full-service hotels throughout the United States under such well-known brand names as Marriott, Sheraton, Westin and Hilton. Merritt Hospitality is an independent hotel management company and a wholly-owned subsidiary of HEI Hospital