Winston Hotels to Build Homewood Suites in Princeton, N.J

Business Wire, July 21, 2005

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, today announced that it recently closed on the purchase of 4.5 acres of land for $2.94 million and plans to build a 142-room Homewood Suites hotel within the Forrestal Center of Princeton University for an all-in cost of approximately $19.6 million. The company anticipates funding about $12.0 million of the project's cost through a first mortgage loan with the remainder to be funded with available cash. Alliance Hospitality will operate the hotel, which is scheduled to break ground this summer and is expected to open in the first quarter of 2007.

"Princeton has multiple demand generators, including the university and many major corporate office operations," said Joseph V. Green, president and chief financial officer. "We have a proven track record in developing successful projects adjacent to major universities. We believe that the market is strong and the Homewood product will be well received there."

Located in the Forrestal Center on Highway 1, the hotel is one mile from Princeton University. The Princeton market has approximately 12 million square feet of office space, including six million square feet of office space in the Forrestal Center complex.

The upper mid-market Homewood Suites hotel brand is designed for business and leisure travelers who typically stay multiple nights. The hotel will feature 142 residential-style, studio, one and two-bedroom suites with fully equipped kitchens and separate sleeping and living areas and 750 square feet of meeting space.

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.