Winston Hotels Announces Joint Venture with DeHoff Development to Build Hilton Garden Inn at Akron-Canton Airport

Business Wire, July 11, 2005

GREEN, Ohio & RALEIGH, N.C. -- Winston Hotels, Inc. (NYSE: WXH), a real estate investment trust and owner of premium limited-service, upscale extended-stay and full-service hotels, and DeHoff Development Company, a diversified real estate owner and developer, today announced the formation of a joint venture to build a 121-room Hilton Garden Inn at Gateway Corporate Park, adjacent to the Akron-Canton Airport in Green, Ohio for approximately $12.0 million. The total equity investment in the joint venture is expected to be $4.6 million. Winston Hotels plans to contribute $1.0 million in common equity, and another $2.2 million in preferred equity, while DeHoff plans to contribute $1.4 million in common equity to the project. The joint venture anticipates funding approximately $7.4 million of the project's all-in cost with a first mortgage. Alliance Hospitality will operate the hotel, which will break ground in late 2005 and is expected to open in late fall 2006.

"DeHoff is a highly regarded Midwest real estate developer," said Bob Winston, chief executive officer of Winston Hotels. "This is a quality project in a great location with multiple demand generators in a growing market. We have a solid track record in developing projects with strong partners like DeHoff and look forward to expanding our relationship with them."

"Winston Hotels has in-depth expertise in hotel development and operations and provides an added dimension to this project," said Dan DeHoff, vice president, DeHoff Development Company. "We believe the airport market and surrounding areas are well positioned for growth."

The Hilton Garden Inn at Gateway Park will be the anchor hotel for the 33-acre Gateway Corporate Park, a strip of land bordered by Lauby Road and I-77 at the Akron-Canton Airport interchange. Plans call for the site to include class "A" office buildings, restaurants and service retail, which also will be developed by DeHoff.

The upper mid-market Hilton Garden Inn will feature 121 guestrooms and executive suites offering complimentary high-speed Internet access and secure remote printing; 3,000 square-feet of flexible meeting space with high-tech capabilities; a 24-hour complimentary business center; a workout facility; an indoor swimming pool and whirlpool; a full-service restaurant; and an onsite guest laundry facility.

DeHoff Development is a division of Prudential DeHoff Realtors, a fully integrated real estate company that owns interests in a diversified portfolio of industrial, office and retail properties across northeastern Ohio. The company provides leasing, property and asset management, acquisition, development, construction, build-to-suit, landscaping and other related services.

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 49 hotels with an aggregate of 6,886 rooms in 15 states, which includes: 42 wholly owned properties with an aggregate of 5,963 rooms; a 49 percent ownership interest in one joint-venture hotel with 118 rooms; a 48.78 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, 2004, Quarterly Reports on Form 10-Q and its other periodic reports.