ENN Equity Inns

Equity Inns, Inc. (NYSE: ENN), the third largest hotel real estate investment trust (REIT), today announced that the Company has signed a contract to purchase four Kentucky hotels with a total of 429 rooms from Musselman Hotels, LLC for $53.8 million. The purchase price represents a capitalization rate of approximately 10% based upon trailing twelve-month net operating income and includes the assumption of $27 million of existing debt. Musselman Hotels will retain management under a three year, performance based management contract. The four properties include three hotels in the Lexington metropolitan area: a six-year old, 90-room Courtyard by Marriott in suburban Hamburg, a two-year old, 91-room Residence Inn also located in Hamburg and a two-year old, 108-suite SpringHill Suites-Downtown, which was named �SpringHill of the Year� at the 2006 Marriott franchise owner�s conference. The fourth property is a six-year old, 140-room Courtyard by Marriott in downtown Louisville, one block from the recently expanded Kentucky Convention Center. 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. Mr. Howard Silver, President and CEO, commented, �This transaction creates significant value for our shareholders in a number of ways. First, the purchase price for these well-located assets is attractive and immediately accretive. With an average age of four years and with strong upscale brands, this purchase continues our strategy of acquiring younger, premium branded hotels for our portfolio. We also believe that establishing a relationship with the Musselman Group, a top-tier hotel developer and operator, will provide us access to additional quality acquisition opportunities over time.� The Company expects to close the transaction by the end of the fourth quarter of this year. 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. 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 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. Equity Inns, Inc. (NYSE: ENN), the third largest hotel real estate investment trust (REIT), today announced that the Company has signed a contract to purchase four Kentucky hotels with a total of 429 rooms from Musselman Hotels, LLC for $53.8 million. The purchase price represents a capitalization rate of approximately 10% based upon trailing twelve-month net operating income and includes the assumption of $27 million of existing debt. Musselman Hotels will retain management under a three year, performance based management contract. The four properties include three hotels in the Lexington metropolitan area: a six-year old, 90-room Courtyard by Marriott in suburban Hamburg, a two-year old, 91-room Residence Inn also located in Hamburg and a two-year old, 108-suite SpringHill Suites-Downtown, which was named "SpringHill of the Year" at the 2006 Marriott franchise owner's conference. The fourth property is a six-year old, 140-room Courtyard by Marriott in downtown Louisville, one block from the recently expanded Kentucky Convention Center. 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. Mr. Howard Silver, President and CEO, commented, "This transaction creates significant value for our shareholders in a number of ways. First, the purchase price for these well-located assets is attractive and immediately accretive. With an average age of four years and with strong upscale brands, this purchase continues our strategy of acquiring younger, premium branded hotels for our portfolio. We also believe that establishing a relationship with the Musselman Group, a top-tier hotel developer and operator, will provide us access to additional quality acquisition opportunities over time." The Company expects to close the transaction by the end of the fourth quarter of this year. 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. 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 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.