Costa Smeralda, or the Emerald Coast, is a world-class, luxury resort destination enjoying an excellent reputation among the world�s most privileged travelers. Located on the northern coast of the Italian island of Sardinia, Costa Smeralda is in the heart of the Mediterranean Sea and at the crossroads of international yachting routes.

Under the agreement, Colony Capital is buying from Starwood�s CIGA portfolio of hotels and resorts: Hotel Cala di Volpe, Hotel Pitrizza, Hotel Romazzino, and Cervo Hotel & Conference Center; the Porto Cervo Marina and Shipyard; the Pevero Golf Club; a 51% stake in nearly 6,000 acres of undeveloped oceanfront land; and some additional office, retail and storage facilities. The hotels total 382 rooms and the Porto Cervo Marina is host to the Yacht Club Costa Smeralda. Pevero Golf Club was designed by Robert Trent Jones, Sr., and is recognized as one of the top 100 golf courses in the world. Starwood�s Sardinian hotels are considered among the finest leisure destinations in all of Europe and the world over and have been featured in the pages of Vogue, Bazaar and Town and Country.

Starwood will continue to manage the hotels under a long-term contract and will retain a 49% stake in the undeveloped land.

Tom Barrack, Chairman and CEO of Colony Capital, elaborated on the deal, �Costa Smeralda is one of the most prestigious and pristine resorts in the World. We are honored to continue the vision and stewardship of the Costa Smeralda founder, Prince Karim Aga Khan, who first unwrapped the emerald coast�s beauty. Our hope is to be the vehicle through which the ultimate dreams and desires of the Sardinian people are finally realized. No one can truly own the Costa Smeralda. Rather, it owns you.�

Barry S. Sternlicht, Chairman & CEO of Starwood Hotels & Resorts added, �We believe that with this transaction we have not only harvested some of the value of a portion of our extraordinary European asset base but we have also maintained significant upside with our continued material interest in the undeveloped land assets. This combined with our continued management of all four hotels means we are not leaving Costa - rather we will together with Colony enhance the value of these extraordinary hotels and land. We believe Colony�s real estate expertise can maximize the potential of the land assets materially increasing our proceeds over time.�

The acquisition is the latest in Colony Capital�s impressive history of investing in luxury hotel properties. Colony�s holdings have included the Savoy Hotel Group in London, the Amanresorts, the Guanahani Hotel in St. Barth�s and The Orchid at Mauna Lani in Hawaii.

The sale of its Costa Smeralda assets comes just a few weeks after Starwood announced that the company had signed an agreement to sell the Hotel Principe di Savoia to the London-based Dorchester Group LTD for 275 million Euros or approximately $300 million. Together, these transactions will exceed the $500 million of hotel assets Starwood had announced it would sell by the end of 2003. The Company continues to pursue other asset sale opportunities.

The sale, subject to standard closing conditions, is expected to close in the second quarter of this year.

Colony Capital, LLC (www.colonyinc.com), founded in 1991, is a private, international investment firm focusing primarily on real estate-related assets. To date, the firm has invested approximately $8 billion in commercial and residential real estate transactions worldwide. Colony is led by Thomas J. Barrack, Jr., has a staff of more than 100, and is headquartered in Los Angeles, with offices in New York, Paris, Rome, Singapore, Seoul, Tokyo, Taipei, Shanghai and Hawaii.

Starwood Hotels & Resorts is one of the leading hotel and leisure companies in the world with more than 750 properties in 80 countries and 105,000 employees at its owned and managed properties.