Sandalwood Lodging Investment Corporation and Barcelo Crestline Corporation Enter Into Strategic Relationship

This relationship will provide Sandalwood with a number of important strategic benefits, including:

• A long-term relationship with an established and reputable hotel management company;
• The benefits of Barcelo Crestline's extensive experience, contacts and market knowledge in the lodging industry;
• Acquisition advisory services on potential hotel acquisitions, including but not limited to, market and feasibility analysis, due diligence and property sourcing referrals, through Barcelo Crestline's development and acquisition department;
• Referral of acquisition opportunities which may be assigned to Sandalwood by Barcelo Crestline;
• A pre-negotiated form of hotel management agreement to reduce the time and expense of securing a manager upon acquisition of a hotel;
• Potential other organizational resource sharing between Sandalwood and Barcelo Crestline; and
• A $3 million commitment to purchase shares of common stock in Sandalwood by Barcelo Crestline.

In consideration of Barcelo Crestline's purchase of $3 million in common stock and the provision of acquisition services, Sandalwood will provide Barcelo Crestline with the right of first refusal to manage certain hotels that Sandalwood acquires, and pay Barcelo Crestline an annual acquisition services fee.

"We believe that this relationship will bring long-term strategic benefits to Sandalwood," said Douglas Greene, Sandalwood's Vice Chairman and Chief Investment Officer. "As one of the nation's larger independent hotel management companies, Barcelo Crestline's capabilities and track-record dovetail nicely into the Company's long-term objectives and strategies in the full-service hotel segment. We believe that this relationship will be a significant asset to Sandalwood's property acquisition and management capabilities, and thus benefit its shareholders."

About Barcelo Crestline

Barcelo Crestline is a Maryland corporation headquartered in McLean, Virginia and a subsidiary of Barcelo Corporacion Empresarial, S.A., a Spanish corporation ("Barcelo Empresarial"). Barcelo Crestline was formed in 1998 as Crestline Capital Corporation, a New York Stock Exchange-listed company which was spun-off by Host Marriott Corporation to its shareholders. In June 2002, Barcelo Crestline was acquired by Barcelo Empresarial through a merger with one of Barcelo Empresarial's subsidiaries. Barcelo Crestline was the surviving corporation in the merger, and as a result of the merger, is now a private company. Barcelo Crestline's senior executives average over 20 years of hospitality industry experience and served in senior management capacities with Host Marriott, Marriott Corporation and Marriott International prior to Crestline Capital's 1998 spin-off from Host Marriott.

About Sandalwood Lodging Investment Corporation

Sandalwood Lodging Investment Corporation, headquartered in Potomac, Maryland, ( ) is a real estate investment company that focuses its investment strategy on properties and financial assets within the full-service segment of the lodging industry. Sandalwood has commenced an initial public offering of 10 million shares of common stock at an initial public offering price of $20 per share, and intends to qualify as a Real Estate Investment Trust for federal income tax purposes. Sandalwood has received a conditional commitment from the American Stock Exchange to list its common stock under the ticker symbol "SND" following the initial closing of the offering.

A registration statement relating to these securities was filed with and declared effective by the Securities and Exchange Commission. This press release shall not constitute an offer to sell nor the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Investor information and copies of the prospectus related to the Sandalwood offering may be obtained by contacting the managing dealer, Emerald Bay Capital Management, LLC at: 4210 Shawnee Mission Parkway, Suite 310A, Fairway, Kansas 66205, (800) 969-3226, .

Portions of this press release contain forward-looking statements regarding future events and are subject to risks and uncertainties. Actual results could differ materially from the results indicated by such statements.