Laurence Geller, President & Chief Executive Officer, commented, "Despitethe opportunities this property presents, the financial markets and economicoperating environment have changed significantly since we first entered intothe agreement to purchase the space in 2006. We remain committed to ourthoughtful and disciplined business approach which, given the higher cost ofcapital, escalating total project costs and our dedication to maintainingsufficient liquidity for all market conditions, makes it imprudent for theCompany to proceed at this time."

In conjunction with the decision not to proceed with the purchase, theCompany estimates it will take a one time charge of approximately $36 millionin its third quarter 2008 financial results, which includes the loss of $28million deposited in the form of a letter of credit to secure the contract andapproximately $8 million in planning and development costs. As a result ofthis decision, capital expenditure needs will be reduced by approximately $100million, enhancing the Company's liquidity and capital position.

About the Company

Strategic Hotels & Resorts, Inc. is a real estate investment trust (REIT)which owns and provides value-enhancing asset management of high-end hotelsand resorts in the United States, Mexico and Europe. The company currently hasownership interests in 19 properties with an aggregate of 8,347 rooms. For alist of current properties and for further information, please visit thecompany's website at http://www.strategichotels.com.

This press release contains forward-looking statements about StrategicHotels & Resorts (the "Company"). Except for historical information, thematters discussed in this press release are forward-looking statements subjectto certain risks and uncertainties. Actual results could differ materiallyfrom the Company's projections. Factors that may contribute to thesedifferences include, but are not limited to the following: demand for hotelrooms in our current and proposed market areas; availability of capital;ability to obtain or refinance debt; rising interest rates; rising insurancepremiums; cash available for capital expenditures; competition; economicconditions generally and in the real estate market specifically; delays andcost overruns in construction and development; demand for hotel condominiums;marketing challenges associated with entering new lines of business; risksrelated to natural disasters; costs of litigation; the effect of threats ofterrorism and increased security precautions on travel patterns and hotelbookings; the outbreak of hostilities and international political instability;legislative or regulatory changes, including changes to laws governing thetaxation of REITs; and changes in generally accepted accounting principles,policies and guidelines applicable to REITs.

Additional risks are discussed in the Company's current filings with theSecurities and Exchange Commission. Although the Company believes theexpectations reflected in such forward-looking statements are based onreasonable assumptions, it can give no assurance that its expectations will beattained. The forward-looking statements are made as of the date of thispress release, and we undertake no obligation to publicly update or revise anyforward-looking statement, whether as a result of new information, futureevents or otherwise.

SOURCE Strategic Hotels & Resorts, Inc.