WXH Winston Hotels

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 has acquired the 121-room Courtyard by Marriott in St. Charles, Ill. for $9.2 million from a private investment group. "Built in 2000, this well-located property is surrounded by a diversified mix of demand generators that attract both corporate and leisure travelers," said Joe Green, president and chief financial officer. "The hotel adds to our growing list of properties located in or near major urban markets, and we were able to acquire it at an attractive valuation." Located about 35 miles west of downtown Chicago, the hotel features about 1,000 square feet of meeting space, an indoor pool, a fitness center, and complimentary high-speed wireless internet access. Hotel Sale Winston also announced the sale of its Homewood Suites in Alpharetta, Ga. that closed on August 28, 2006 for net sales proceeds of $9.7 million, resulting in a gain of approximately $3.4 million. "We will continue to selectively sell those assets where we believe we can better enhance shareholders in the long term by reinvesting net sale proceeds", Green noted. Dividend Winston's board of directors declared the company's regular quarterly cash dividend for the 2006 third quarter on its common and preferred shares. The cash dividend of $0.15 per common share is payable on October 16, 2006 to common shareholders of record on September 30, 2006. Based on yesterday's closing price of $11.91 per common share, the annualized dividend yield is 5.0 percent. The board also declared a cash dividend of $0.50 per Series B Cumulative Preferred share for the third quarter of 2006. The cash dividend is payable on October 16, 2006, to preferred shareholders of record on September 30, 2006. About the Company The company currently owns or is invested in 52 hotel properties in 17 states having an aggregate of 7,064 rooms. This includes 44 wholly owned properties with an aggregate of 5,993 rooms and eight hotels in joint ventures totaling 1,071 rooms. The company's joint venture hotels include a 60% ownership interest in a joint venture that owns one hotel with 138 rooms, a 49% ownership interest in a joint venture that owns one hotel with 118 rooms, a 48.78% ownership interest in a joint venture that owns one hotel with 147 rooms, a 13.05% ownership interest in a joint venture that owns four hotels with an aggregate of 545 rooms and a 0.21% ownership interest in a joint venture that owns one hotel with 123 rooms, for which substantially all of the profit or loss generated by the joint venture is allocated to the company. As of June 30, 2006, the company also had approximately $59.7 million of outstanding loans in its loan portfolio that it originated or purchased. The company does not hold an ownership interest in any of the hotels for which it has provided financing. 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," "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, governmental permits, zoning, the increase of development costs in connection with projects that are not pursued to completion, lender consent rights in making loans, the risk of non-payment of loans, or the failure to make additional 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, 2005, Quarterly Reports on Form 10-Q and its other periodic reports.