Winston Hotels Announces the Sale of Comfort Inns

    Business Editors/Real Estate Writers

    RALEIGH, N.C.--(BUSINESS WIRE)--Jan. 25, 2005--Winston Hotels, Inc. (NYSE: WXH), a real estate investment trust (REIT) and owner of premium limited-service, upscale extended-stay and full-service hotels, today announced that it has sold the 122-room Comfort Inn in Chester, Virginia and the 190-room Comfort Inn in Greenville, South Carolina in separate transactions. The Chester Comfort Inn was sold for $5.2 million in cash, net of closing costs and the Greenville Comfort Inn for $1.8 million in cash, net of closing costs, resulting in losses of approximately $300,000 and $100,000, respectively.
    "The sale of these two comfort inns is consistent with our strategy of pruning our hotel portfolio where appropriate and re-investing the proceeds in selected investments," said Joe Green, president & chief financial officer. "We plan to use the net proceeds to pay down our debt, as we continue to consider investment opportunities in hotel loans and hotel assets that meet our investment objectives."

    About the Company

    Raleigh, North Carolina-based Winston Hotels, Inc. is a real estate investment trust specializing in the development, acquisition, and repositioning of, and provision of subordinated financing to, premium limited-service, upscale extended-stay and full-service hotels, with a portfolio increasingly weighted toward the leading brands in the lodging industry's upscale segment. The company currently owns or is invested in 50 hotels with an aggregate of 7,008 rooms in 15 states, which includes: 43 wholly owned properties with an aggregate of 6,085 rooms; a 49 percent ownership interest in one joint-venture hotel with 118 rooms; a 48.8 percent ownership interest in one joint venture hotel with 147 rooms; and a 13.05 percent ownership interest in five joint-venture hotels with 658 rooms. For more information about Winston Hotels, visit the Winston Hotels Web site at www.winstonhotels.com.

    In addition to historical information, this press release contains forward-looking statements. The reader can identify these statements by use of words like "may," "will," "expect," "project," "anticipate," "estimate," "target," "believe," or "continue" or similar expressions. These statements represent the company's judgment and are subject to risks and uncertainties that could cause actual operating results to differ materially from those expressed or implied in the forward looking statements including, but not limited to, changes in general economic conditions, lower occupancy rates, lower average daily rates, acquisition risks, development and redevelopment risks including risk of construction delay, cost overruns, occupancy and other governmental permits, zoning, the increase of development costs in connection with projects that are not pursued to completion, lender consent rights in making mezzanine loans, the risk of non-payment of mezzanine loans, or the failure to make additional mezzanine debt investments and investments in hotels. Other risks are discussed in the company's filings with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K for the year ended December 31, 2003, Quarterly Reports on Form 10-Q and its other periodic reports.

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CONTACT: Winston Hotels, Inc. Patti L. Bell, 919-510-8003 pbell@winstonhotels.com or DalyGray Jerry Daly, 703-435-6293 jerry@dalygray.com Carol McCune, 703-435-6293 carol@dalygray.com

KEYWORD: NORTH CAROLINA INDUSTRY KEYWORD: BANKING TRAVEL REAL ESTATE BUILDING/CONSTRUCTION PRODUCT SOURCE: Winston Hotels, Inc.

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