"We are excited to begin the partnership with Boston Capital, as we continue to look for new ways to underwrite our development program in today's financial markets," said Jack P. DeBoer, Candlewood chairman and chief executive officer. "This financing vehicle is just one of a number of alternatives that we are evaluating. We are dealing with a number of local and regional banks for the construction debt financing of this joint-venture, and are pleased with their responses to date."

Candlewood currently has 57 Company-operated hotels open and 8 properties under construction. Including 11 franchise properties, the Candlewood system consists of 76 hotels open or under construction in 29 states.

BCIA is a commercial real estate investment firm, which finances a wide array of real estate assets as well as related operating companies. BCIA provides commitments for direct equity, preferred equity, secured and unsecured mezzanine loans, and short duration senior and junior mortgage loans.

Candlewood Suites are targeted to value-oriented, business travelers and include large studio and one-bedroom suites with fully equipped kitchens. Room rates range from $50 to $85 per night for studio suites and $75 to $115 per night for one-bedroom suites, depending on market location and length of stay.

The matters in this press release include "forward looking statements" within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are qualified by cautionary statements contained herein and in Candlewood Hotel Corporation filings with the Securities and Exchange Commission. Candlewood has signed a letter of intent with BCIA. Funding is contingent upon numerous events including: negotiation and execution of definitive documentation, securing construction financing on acceptable terms, and satisfactory due-diligence for potential hotels. The Company can give no assurances that the transaction will be completed or that any hotels will be built with this financing. Actual results may differ materially from management's expectations.