EXHIBIT 99.13

INDEPENDENT AUDITORS' REPORT

The Partners
EquiStar Hotel Investors, L.P.:

We have audited the accompanying statements of operations and cash flows of
the Georgetown Latham Hotel (the "Hotel") for the period from January 1, 1996 to
March 8, 1996 (date of acquisition by EquiStar Hotel Investors, L.P.) and the
years ended December 31, 1995, 1994 and 1993. These financial statements are the
responsibility of the Hotel's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of the Georgetown Latham Hotel's
operations and its cash flows for the period from January 1, 1996 to March 8,
1996 and the years ended December 31, 1995, 1994 and 1993 in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

Washington, D.C.
April 12, 1996

GEORGETOWN LATHAM HOTEL
STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM JANUARY 1, 1996 TO MARCH 8, 1996
(DATE OF ACQUISITION BY EQUISTAR HOTEL INVESTORS, L.P.) AND
THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

1996 1995 1994 1993
------------ ------------ ------------ ------------

Revenue:
Rooms.................................................. $ 612,857 3,790,580 3,764,567 3,784,884
Food and beverage...................................... 628,269 3,699,257 3,448,669 3,192,731
Other operating departments............................ 81,116 360,958 419,968 374,672
------------ ------------ ------------ ------------
1,322,242 7,850,795 7,633,204 7,352,287
------------ ------------ ------------ ------------
Operating costs and expenses:
Rooms.................................................. 187,244 1,081,472 1,069,864 1,177,839
Food and beverage...................................... 553,396 3,268,979 3,095,593 3,032,272
Other operating departments............................ 50,228 313,870 272,476 185,028
Undistributed operating expenses:
Administrative and general............................. 110,613 996,666 795,642 663,466
Sales and marketing.................................... 94,903 511,975 478,520 606,068
Management fees........................................ 39,581 235,523 248,270 288,779
Property operating costs............................... 105,258 649,576 672,065 585,158
Property taxes, insurance and other.................... 65,278 328,299 244,123 328,451
Depreciation and amortization.......................... 81,782 674,537 637,614 574,751
Interest expense....................................... 87,771 476,901 5,265 --
------------ ------------ ------------ ------------
1,376,054 8,537,798 7,519,432 7,441,812
------------ ------------ ------------ ------------
Net income (loss)........................................ $ (53,812) (687,003) 113,772 (89,525)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------

See accompanying notes to financial statements.

GEORGETOWN LATHAM HOTEL
STATEMENTS OF CASH FLOWS
FOR THE PERIOD FROM JANUARY 1, 1996 TO MARCH 8, 1996
(DATE OF ACQUISITION BY EQUISTAR HOTEL INVESTORS, L.P.) AND
THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

1996 1995 1994 1993
---------- ----------- ----------- ----------

Cash flows from operating activities:
Net income (loss)........................................... $ (53,812) (687,003) 113,772 (89,525)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization........................... 81,782 674,537 637,614 574,751
Decrease (increase) in accounts receivable.............. (26,055) 43,384 83,943 (305,105)
Decrease (increase) in other assets..................... (29,166) 121,568 (311,111) (184,175)
Increase (decrease) in accounts payable and accrued
expenses.............................................. 165,028 42,727 (384,682) 450,341
Increase in interest payable............................ -- 33,880 5,265 --
---------- ----------- ----------- ----------
Net cash provided by operating activities..................... 137,777 229,093 144,801 446,287
---------- ----------- ----------- ----------
Cash flows from investing activities:
Purchase of furniture, fixtures and equipment............... (18,907) (262,176) -- (276,520)
Proceeds from sale of furniture, fixtures and equipment..... -- -- 91,933 --
---------- ----------- ----------- ----------
Net cash provided (used) by investing activities.............. (18,907) (262,176) 91,933 (276,520)
---------- ----------- ----------- ----------
Cash flows from financing activities:
Principal repayments on capital leases...................... (3,770) (21,857) -- --
Proceeds from note payable.................................. -- -- 4,500,000 --
Principal payments on note payable.......................... (6,849) (35,573) -- --
Advances to affiliate....................................... -- -- (3,825,000) --
Repayments of advances to affiliate......................... -- 3,825,000 -- --
Capital distributions....................................... -- (4,206,759) (593,312) (134,115)
---------- ----------- ----------- ----------
Net cash provided (used) by financing activities.............. (10,619) (439,189) 81,688 (134,115)
---------- ----------- ----------- ----------
Net increase (decrease) in cash............................... 108,251 (472,272) 318,422 35,652
Cash at beginning of year..................................... 32,193 504,465 186,043 150,391
---------- ----------- ----------- ----------
Cash at end of year........................................... $ 140,444 32,193 504,465 186,043
---------- ----------- ----------- ----------
---------- ----------- ----------- ----------
Supplemental disclosure of cash flow information:
Cash paid for interest...................................... $ 118,085 443,021 -- --
Additions to capital lease obligations...................... $ -- -- 71,004 --
---------- ----------- ----------- ----------
---------- ----------- ----------- ----------

See accompanying notes to financial statements.

GEORGETOWN LATHAM HOTEL
Notes to Financial Statements
For the period from January 1, 1996 to March 8, 1996
(date of acquisition by EquiStar Hotel Investors, L.P.) and
the years ended December 31, 1995, 1994 and 1993

(1) ORGANIZATION

The Georgetown Latham Hotel (the "Hotel") is located on 3000 M Street in
Washington, D.C. It is close to the Smithsonian, embassies, monuments, the
Kennedy Center and the downtown business district, and caters mainly to tourists
and business travelers. The Hotel has 143 rooms; fine dining in the CITRONELLE
restaurant; meeting and banquet facilities; an outdoor pool; business center;
limousine rental service; and valet parking.

Until 1993, the Hotel was owned by Muben/LCP Hotel Partners, L.P.
("Muben/LCP"), a limited partnership which owned 9 hotels. On October 1, 1993,
LCP Hotel Ventures, L.P., a partner in Muben/LCP ("LCP Ventures"), conveyed its
10% interest in Muben/LCP for 100% ownership of the Hotel.

The Hotel was sold on March 8, 1996 to EquiStar for a purchase price of
$12,000,000.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accounts of the Hotel were included in the financial records of
Muben/LCP and then LCP Ventures, as described above, until the Hotel was sold to
EquiStar. The accompanying statements of operations and cash flows include the
accounts of the Hotel only, as if it were a separate legal entity, and have been
prepared using the accrual basis of accounting.

DEPRECIATION

Depreciation is computed on the cost of the Hotel property and equipment
using the straight-line method over 31.5 years for the building and building
improvements and over five years for furniture, fixtures and equipment.

BAD DEBT EXPENSE

Bad debt expense is accounted for using the allowance method. Management
reviews the aging of accounts receivable and other current information on
debtors to establish an allowance for doubtful accounts. Write-offs occur when
management deems a receivable uncollectible.

REVENUE

Revenue is earned primarily through the operations of the Hotel and
recognized when earned.

INCOME TAXES

The financial statements contain no provision for federal income taxes since
the Hotel was owned by a partnership and, therefore, all federal income tax
liabilities are passed through to the individual partners in accordance with the
partnership agreement and the Internal Revenue Code.

GEORGETOWN LATHAM HOTEL
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
USE OF ESTIMATES

Management has made a number of estimates and assumptions to prepare these
financial statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.

(3) INTEREST EXPENSE

On December 23, 1994, the Hotel obtained financing from CPC Advisors No. 3,
L.L.C. The original note balance was $4,500,000 and had a fixed interest rate of
10.53%. Principal and interest payments were due monthly. The note was scheduled
to mature on December 27, 1999.

(4) RELATED-PARTY TRANSACTIONS

The Hotel was managed by an affiliate of LCP Ventures. For the period from
January 1, 1993 through September 30, 1993 the Hotel incurred management fees of
4% of gross revenue, as defined in the management agreement. For the remainder
of 1993 through March 8, 1996 the Hotel incurred base management fees of 3% and
an incentive management fee equal to 5% of the amount by which the net operating
income exceeds the amount of preferred return, as defined in the management
agreement. Management fees incurred during 1996, 1995, 1994 and 1993 were
$39,581, $235,523, $248,270 and $288,779, respectively. No incentive management
fees were earned.