Winston Hotels Completes $155 Million Financing with GECC; Receives Fu

    Business Editors/Financial Editors

    RALEIGH, N.C.--(BUSINESS WIRE)--March 17, 2005--Winston Hotels, Inc. (NYSE: WXH), a real estate investment trust (REIT) and owner of premium limited-service, upscale extended-stay and full-service hotels, today announced that one of its wholly owned subsidiaries has entered into a five-year line of credit with General Electric Capital Corporation. The GE line of credit provides for revolving loan commitments of up to $155 million.
    Borrowings bear interest at rates from 30-, 60-, 90- or 120-day LIBOR (at the company's option) plus 1.75% to 2.50%, based on the ratio of the underwritten net operating income of the hotels that collateralize the facility to the outstanding principal balance of the line. The current interest rate is 30-day LIBOR plus 2.00%. Borrowings under the GE line are collateralized by 23 hotel properties owned by one of the company's wholly owned subsidiaries.
    At closing, the company borrowed $77.5 million under the GE line and paid off all outstanding debt under its then-existing $125 million credit facility led by Wachovia Bank and terminated that facility.
    "GECC is a major player in hotel finance. They have the ability to think outside the box to create unique credit facilities like ours, and we look forward to exploring other ways to work with them. Through this credit facility and our Marathon Funding $50 million credit facility, we now have approximately $127 million available to finance our external growth strategies of 1) acquiring both profitable and deep turn-around hotels that require repositioning, 2) our debt investment financing program, and 3) hotel development," said Joe Green, president and chief financial officer.
    "We have significant pipeline activity in all of our external growth strategies," he added. "We believe that Winston has the flexibility it needs to respond opportunistically to the options before us, and we will continue to be deliberate in our approach to seek those transactions that we believe offer the highest and best returns on a risk-adjusted basis."
    "The GE facility is unique in its structure because it gives our client better flexibility to run their business than a typical bank line would permit, while giving us the comfort that our loan is collateralized by strong assets," said Mike Rowan, Senior Vice President of GE Commercial Finance Real Estate. Rowan added that he was "quite pleased to be able to close this facility and expand our relationship with Winston Hotels."
    The Company also announced today that it has received a full prepayment of its $6 million piece of the total $16.85 million loan provided in June 2004 to finance the acquisition and major refurbishment/conversion of the Cornhusker Square Hotel in Lincoln, Neb. The original term of the loan was for two years, plus a one-year extension at the option of the borrower. The Company and Canyon Capital Realty Advisors, a national lending and real estate investment firm, issued the original $16.85 million loan. In addition to the total $6 million principal amount, the Company also received accrued interest plus exit and prepayment fees totaling approximately $370,000. The Company used the proceeds from the early payoff to pay down its outstanding principal balance under the GE Line. Approximately $77.0 million is currently available under the line.

    About the Company

    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 50 hotels with an aggregate of 7,011 rooms in 15 states, which includes: 43 wholly owned properties with an aggregate of 6,088 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 company's Web site at www.winstonhotels.com.
    GE Commercial Finance Real Estate (www.gerealestate.com) is one of the world's leading resources for commercial real estate capital. Headquartered in Stamford, Connecticut, the business has assets over $30 billion and more than 30 offices throughout North America, Europe and Asia/Pacific. GE Commercial Finance (www.gecommercialfinance.com) offers businesses of all sizes an array of financial services and products worldwide. With $232 billion in assets and an expertise in the mid-market segment, GE Commercial Finance provides loans, operating leases, financing programs and innovative structured capital to help customers grow. A wholly owned subsidiary of the General Electric Company, GE Commercial Finance is headquartered in Stamford, Connecticut, USA. GE (NYSE: GE) is a diversified technology, media and financial services company dedicated to creating products that make life better.

    Notes About Forward-Looking Statements

    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, including without limitation its acquisition and disposition plans for hotel properties, and its hotel lending plans. 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 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, the risk of non-payment of mezzanine loans, or the failure to make additional hotel 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.

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CONTACT: Winston Hotels, Inc. Patti L. Bell, 919-510-8003 pbell@winstonhotels.com or DalyGray Jerry Daly, 703-435-6293 jerry@dalygray.com Carol McCune, 703-435-6293 carol@dalygray.com

KEYWORD: CONNECTICUT NEBRASKA NORTH CAROLINA INTERNATIONAL ASIA PACIFIC EUROPE INDUSTRY KEYWORD: REAL ESTATE BUILDING/CONSTRUCTION BANKING TRAVEL PRODUCT SOURCE: Winston Hotels, Inc.

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