Equity Inns Completes Purchase of Four Hotels

Business Wire, Feb 12, 2007

GERMANTOWN, Tenn. -- Equity Inns, Inc. (NYSE: ENN), the third largest hotel real estate investment trust (REIT), today announced that the Company has completed the purchase of four upscale hotels for a total of $53.7 million. Three of the hotels, which were purchased from Musselman Hotels, LLC, are located in the Lexington and Louisville metropolitan areas of Kentucky and have a total of 338 rooms. The fourth hotel, a seven year old 129-room Hilton Garden Inn, which was purchased from LinGate Hospitality, is located in the Albuquerque suburb of Rio Rancho, New Mexico. The average purchase of these hotels represents a capitalization rate of approximately 10% based upon trailing twelve-month net operating income.

The hotels purchased from Musselman Hotels, LLC include a six year old 90-room Courtyard by Marriott located in suburban Lexington, a two-year old, 108-suite SpringHill Suites located in downtown Lexington and a six-year old, 140-room Courtyard by Marriott in downtown Louisville. The Louisville purchase also includes a 250-space parking garage adjacent to the property that serves the hotel and the many surrounding businesses and attractions in the downtown area. The Company anticipates that its purchase of the 91-room Residence Inn located in Lexington, as announced in October 2006, should close by the end of the first quarter 2007.

Forward Looking Statements

Certain matters discussed in this press release which are not historical fact 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 results 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.

Non-GAAP Financial Measures

Included in this press release is the term Capitalization Rate, a "non-GAAP financial measure", common in the hotel industry, used by the Company to help 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 129 hotels with 15,366 rooms located in 35 states. For more information about Equity Inns, visit the Company's Web site at www.equityinns.com.