Winston Hotels Prices Follow-on Offering of 2,400,000 Shares of Common Stock

Winston Hotels, Inc. (NYSE: WXH), a real estateinvestment trust (REIT) that owns, acquires and develops hotelsdirectly and through joint ventures, originates and acquires hotelloans and provides hotel development and asset management services tojoint ventures in which it invests, today announced the pricing of afollow-on public offering of 2,400,000 shares of common stock at$11.75 per share. The net proceeds of the offering to the company areexpected to be approximately $26.4 million. The company intends to usethe net proceeds from this offering to reduce borrowings under itsline of credit and for general corporate purposes.

Friedman, Billings, Ramsey & Co., Inc. acted as sole book-runnerof the offering and Raymond James & Associates, Inc. acted as co-leadmanager, with Robert W. Baird & Co. Incorporated and BB&T CapitalMarkets, a division of Scott & Stringfellow, Inc., acting asco-managers for the offering. The company has granted the underwritersan option, exercisable within 30 days after the pricing date, topurchase up to 360,000 additional shares of common stock to coverover-allotments, if any.

This press release shall not constitute an offer to sell or thesolicitation of an offer to buy any of these securities, nor willthere be any sale of these securities in any state in which suchoffer, solicitation or sale would be unlawful prior to registration orqualification under the securities laws of any such state. Theoffering of these securities will be made only by means of aprospectus, copies of which may be obtained from Friedman, Billings,Ramsey & Co., Inc., 1001 19th Street North, Arlington, Virginia 22209.

About the Company

The company currently owns or is invested in 52 hotel propertiesin 17 states having an aggregate of 7,055 rooms. This includes 44wholly owned properties with an aggregate of 5,984 rooms and eighthotels in joint ventures totaling 1,071 rooms. The company's jointventure hotels include a 60% ownership interest in a joint venturethat owns one hotel with 138 rooms, a 49% ownership interest in ajoint venture that owns one hotel with 118 rooms, a 48.78% ownershipinterest in a joint venture that owns one hotel with 147 rooms, a13.05% ownership interest in a joint venture that owns four hotelswith an aggregate of 545 rooms and a 0.21% ownership interest in ajoint venture that owns one hotel with 123 rooms, for whichsubstantially all of the profit or loss generated by the joint ventureis allocated to the company. As of June 30, 2006, the company also hadapproximately $59.7 million of outstanding loans in its loan portfoliothat it originated or purchased. The company does not hold anownership interest in any of the hotels for which it has providedfinancing.

Notes About Forward-Looking Statements

In addition to historical information, this press release containsforward-looking statements. The reader can identify these statementsby use of words like "may," "will," "expect," "project," "anticipate,""estimate," "target," "believe," or "continue" or similar expressions,including without limitation its acquisition, disposition anddevelopment plans for hotel properties, its hotel lending plans, itsdividend policy, and its estimated net income available to commonshareholders, net income available to common shareholders per share,FFO available to common shareholders, FFO available to commonshareholders per share and RevPAR. These statements represent thecompany's judgment and are subject to risks and uncertainties thatcould cause actual operating results to differ materially from thoseexpressed or implied in the forward looking statements including, butnot limited to, the failure of customary closing conditions, changesin general economic conditions, lower occupancy rates, lower averagedaily rates, acquisition risks, development risks including risk ofconstruction delay, cost overruns, occupancy and governmental permits,zoning, the increase of development costs in connection with projectsthat are not pursued to completion, the risk of non-payment ofsubordinated loans, or the failure to make additional hotel debtinvestments and investments in hotels. Other risks are discussed inthe company's filings with the Securities and Exchange Commission,including but not limited to its Annual Report on Form 10-K for theyear ended December 31, 2005.

For more information, call Patti Bell, Assistant Vice President ofAdministration & Investor Relations of Winston Hotels, Inc., at (919)510-8003. For more information on Winston Hotels visit the WinstonHotels page at www.winstonhotels.com.