Equity Inns Sells Two Older Midscale Hotels

Business Wire, August 28, 2006

GERMANTOWN, Tenn. -- Equity Inns, Inc. (NYSE: ENN), the third largest hotel real estate investment trust (REIT), today announced the sale of two older hotels. In two separate transactions, the Company sold a 19-year old, 130-room Hampton located in the Dallas suburb of Richardson, Texas and a 37-year old, 159-room exterior corridor Holiday Inn located in Winston Salem, North Carolina.

The Hampton Inn and Holiday Inn were sold for approximately $5.0 million and $2.6 million, respectively, representing a capitalization rate of approximately 6.3% and 2.0%, respectively, based upon the property's trailing twelve months net operating income.

The sale of these hotels represents Equity Inns' continued focus on divesting of older properties with limited remaining franchise life and recycling the capital received into newer, higher growth potential assets, which results in a younger portfolio with an increased franchise life. Since the beginning of 2004, the Company has sold 13 hotels with an average life of nineteen years at an average capitalization rate of approximately 6.0%. The Company expects to sell only a few additional older hotels that remain in the portfolio. The sale of these two hotels combined with the sale of the two hotels previously announced on August 17th is not expected to have a material impact on the Company's earnings.

Forward Looking Statements

Certain matters discussed in this press release which are not historical facts are "forward-looking statements" within the meaning of the federal securities laws and involve risks and uncertainties. The words "may," "plan," "project," "anticipate," "believe," "estimate," "forecast, "expect," "intend," "will," and similar terms are intended to identify forward-looking statements, which include, without limitation, statements concerning our outlook for the hotel industry, acquisition and disposition plans for our hotels and assumptions and forecasts of future results for fiscal year 2006. Forward-looking statements are not guarantees of future performance and involve numerous risks and uncertainties which may cause our actual financial condition, results of operations and performance to be materially different from the results of expectations expressed or implied by such statements. General economic conditions, future acts of terrorism or war, risks associated with the hotel and hospitality business, the availability of capital, risks associated with our debt financing, hotel operating risks and numerous other factors, may affect our future results and performance and achievements. These risks and uncertainties are described in greater detail in our 2005 Annual Report on Form 10-K filed on March 15, 2006, and our other periodic filings with the United States Securities and Exchange Commission (SEC). We undertake no obligation and do not intend to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Although we believe our current expectations to be based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that actual results will not differ materially.

Capitalization Rate

The Company uses a measure common in the hotel industry to discuss its underwriting of acquired or disposed hotel assets. Capitalization rate, for this discussion, is defined as the percentage derived by dividing the net operating income of the hotel asset(s), less a management fee and an allowance for recurring capital expenditures, by the purchase price paid or received for the hotel asset(s).

About Equity Inns

Equity Inns, Inc. is a self-advised REIT that focuses on the upscale extended stay, all-suite and midscale limited-service segments of the hotel industry. The Company, which ranks as the third largest hotel REIT based on number of hotels, currently owns 125 hotels with 14,924 rooms located in 35 states. For more information about Equity Inns, visit the Company's Web site at www.equityinns.com.