The all cash proceeds were used to repay borrowings under the Company�s bank line of credit. The sale of the Florida property is consistent with the Company�s plan to dispose of assets that do not meet the Company�s criteria for long-term retention to repay debt and fund additional development opportunities.
 

During the first six months of 2000, the Company sold five hotels resulting in proceeds of $31.8 million, which has been utilized principally for debt repayment. Long term debt at June 30, 2000 was $263 million compared to $294 million at December 31, 1999. The five hotels sold in the first six months of 2000 reported last twelve months revenue of $11.8 million and EBITDA of $2.4 million.

Clarion Hotel Hollywood Beach 4000 S. Ocean Beach Hollywood Beach, FL 33019

Don Landry, Sunburst�s CEO, commented, �We are pleased with the progress we have made in selling certain properties which allows us to focus on the reduction of debt and development opportunities. Our extended-stay hotels provide outstanding guest satisfaction and have generated impressive financial returns. We are particularly pleased with the strong results in the newly opened Secaucus hotel which operated at 91% occupancy in both May and June of this year.�

Sunburst Hospitality Corporation operates 10,747 rooms in 79 hotels in 27 states. The Company�s hotels are operated under various brand names including MainStay Suites®, Comfort Inns®, Quality Inns and Suites®, Clarion® and Sleep Inns®.

The references to assets sales, future development and debt reduction are forward-looking statements.