This is the Company�s first development project under an arms length joint venture agreement with Marsh Landing Investment, L.L.C., headed by Winston Hotels� Chairman, Charles M. Winston, and Winston Board Member, James H. Winston.  Winston Hotels and Marsh Landing Investment, L.L.C., as the managing member, have formed a joint venture, Marsh Landing Hotel Associates, L.L.C. 
 

Located in the Jacksonville area, Ponte Vedra is highly appealing to both business and leisure travelers. �The community is home to golf courses, world-class tennis facilities, marshlands, and miles of unspoiled beaches. The PGA Tour�s World Golf Village, home of the PGA Hall of Fame, The Players Championship and the world headquarters of the Association of Tennis Professionals are nearby,� said Winston Hotels� President and COO, James D. Rosenberg. �Because of this property�s appealing location and demographics, we are particularly

James D. Rosenberg

This property will be leased to MeriStar Hotels and Resorts (NYSE: MMH), which also leases 48 of Winston�s operating hotels. Under the terms of the joint venture, Winston Hotels will develop the hotel and receive fees for its services which include development, purchasing, and an ongoing monthly asset management fee when the hotel is operational. Within the joint venture, Winston Hotels owns 49 percent of Marsh Landing Hotel Associates, L.L.C., while Marsh Landing Investment, L.L.C. owns 51 percent.

�New hotels, which tend to outperform older properties in terms of average daily rate and occupancy, complement the young asset age of Winston�s portfolio,� Rosenberg noted. �Joint venture projects also broaden our hotel acquisition and development pipeline despite the external capital constraints still prevalent in the real estate sector. Moreover, they leverage our management team�s new hotel development expertise to generate fee income, thus enhancing the Company�s bottom line.�

Raleigh, North Carolina-based Winston Hotels, Inc., is a lodging real estate investment trust specializing in the development, acquisition, and rehabilitation of premium limited-service, high-end extended-stay and full-service hotel properties.  With an increasingly strong emphasis on affiliations with the industry�s leading upscale brands, the Company currently owns 50 operating hotels with 6,842 rooms in 12 states.

The press release contains �forward-looking� statements within the meaning
of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to, statements referring to the anticipated benefits and development plans of the new joint venture.