Equity Inns to Acquire Three Marriott Hotels

    Business Editors

    GERMANTOWN, Tenn.--(BUSINESS WIRE)--May 12, 2005--Equity Inns, Inc. (NYSE: ENN), a hotel real estate investment trust (REIT), today announced that it has entered into an agreement to purchase three hotels from the McKibbon Hotel Group, a hotel developer and management company, for $30.3 million, including the assumption of $12.8 million of debt. Acquisition of the hotels will follow the satisfactory completion of due diligence, and the transaction is expected to close by the start of the third quarter 2005.
    Equity Inns will acquire two hotels in Sarasota, one a Residence Inn and the other a Marriott Courtyard along with a Residence Inn located in Fort Myers. Collectively, the three hotels have an average age of 7.5 years and will add 238 rooms and suites to the Company's hotel portfolio. The average cap rate of the acquisition is 10% on a trailing 12 month net operating income basis. The Company expects that the acquisition of these hotels will be accretive to its 2005 funds from operations (FFO).
    Also, and consistent with other agreements, McKibbon Hotel Management, Inc., will manage the properties for three years with a base fee plus incentive structured management agreement.
    Howard Silver, President and Chief Executive Officer commented, "We are pleased to again purchase well-managed and well-situated hotels from the McKibbon Hotel Group. As with prior acquisitions, these new properties fit well with our purchase criteria and growth objectives. The hotels are located in fast-growing areas and have established brand names with both business and leisure travelers. Additionally, these hotels will improve the average age of our hotel portfolio."
    The Residence Inn and Courtyard in Sarasota are located directly across from the main entrance to the Sarasota Bradenton International Airport. In April 2005, that airport facility reported that its quarterly growth in passengers through March 2005 had increased by 19.2% year over year. The airport also noted that its international charter and scheduled activity was up 134%. The Sarasota area is a popular destination for both vacation travelers and increasingly a popular choice for year round living. Sarasota County was among the top 100 fastest growing counties in the country last year.
    The other hotel, a Residence Inn in Fort Myers, is the Company's second acquisition in this fast-growing market. The hotel fronts Colonial Boulevard, a major thoroughfare in Fort Myers, and is only 10 miles from the Fort Myers airport. In addition, directly across the street from the Residence Inn is the 2 million square foot Metro Office complex, which contains the world headquarters of clothing retailer Chico's FAS, Inc., as well as a General Electric Medical Records facility.
    When these transactions are finalized, the Company will own 116 hotels with 14,001 rooms in 34 states.

    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 owns 113 hotels with 13,763 rooms located in 34 states. For more information about Equity Inns, visit the Company's Web site at www.equityinns.com.

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CONTACT: Equity Inns, Inc. Howard Silver or Mitch Collins, 901-754-7774 or Integrated Corporate Relations, Inc. Brad Cohen, 203-682-8211

KEYWORD: TENNESSEE FLORIDA INDUSTRY KEYWORD: REAL ESTATE BUILDING/CONSTRUCTION MERGERS/ACQ SOURCE: Equity Inns, Inc.

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