Press Release: Equity Inns, Inc.
January 9, 2001
GERMANTOWN, TN -- Equity Inns, Inc. (NYSE: ENN), a hotel real estate investment trust (REIT), yesterday announced
that it has signed an agreement with Hilton Hotels Corporation to manage 16 of the REIT's hotels for a term of
two years. All 16 hotels are Hilton-branded properties, including 15 Hampton Inns and one Homewood Suites by Hilton.
The properties previously were leased and managed by Interstate Hotels Corporation.
The reassignment was precipitated by the late 1999 enactment of the REIT Modernization Act (RMA), which allows
REITs greater control of their properties by establishing taxable REIT subsidiaries which function as lessees,
with hotel management provided by independent companies. In July, Equity Inns signed an agreement with Interstate,
its primary lessee, under which Equity Inns would regain all 75 leases from Interstate with no remuneration being
paid by either party. In exchange, Interstate obtained management contracts for 55 properties that expire on a
staggered, annual basis over a five-year period, beginning in 2001. With the completion of the Hilton agreement,
Equity Inns has two remaining management contracts currently under negotiation, which it expects to announce tomorrow.
``Under the new arrangement, the REIT's and the management company's interests are more perfectly aligned and focused
on improving our properties' bottom lines,'' said Howard Silver, Equity Inns president. ``Hilton previously managed
eight of these properties very effectively before they were purchased by Equity Inns in 1997. Based on our experience
with Hilton, we feel very confident about their ability to optimize hotel profitability. In addition to being experienced
operators, they have the added incentive of protecting and enhancing their own brands.''
Commenting on the new management agreement, Rick Schultz, senior vice president of operations, limited service
hotels for Hilton, said, ``Since its inception in 1994, Equity Inns has been a major owner of our hotels. Currently,
they are our largest Hampton Inn owner and one of our largest Homewood Suites owners. We are looking forward to
expanding our operational relationship with Equity Inns and view this agreement as an opportunity to grow an already
mutually beneficial relationship.''
The majority of the 16 properties are located in Texas, Tennessee and Alabama. Hilton also will continue to manage
four other Equity Inns-owned hotels from a previous arrangement. Effective January 1, 2001, Equity Inns hotel portfolio
will be managed as follows: Interstate, 55 hotels; Hilton, 20 hotels; Prime, 19 hotels (leased and managed); and
two hotels with management contracts to be announced tomorrow.
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 96 hotels with approximately 12,300 rooms located in 34 states.
For more information about Equity Inns, visit the company's web site: www.equityinns.com .
Certain matters within this press release are discussed using forward- looking language as specified in the 1995
Private Securities Litigation Reform Law, and, as such, may involve known and unknown risks, uncertainties and
other factors that may cause the actual results or performance to differ from those projected in the forward-looking
statement. From time to time, these risks are discussed in the company's filings with the Securities and Exchange
Commission.
SOURCE: Equity Inns, Inc.