Homestead Studio Suites Agrees to Purchase 17 Hotels

02 June 2003

Expands brand’s presence in eight new markets

(Atlanta, Ga. – June 2, 2003) Homestead Studio Suites Hotels, one of the largest owner/operators of moderate-priced extended stay hotels in the United States, has signed a $92 million binding agreement with an affiliate of Sunburst Hospitality Corp. to purchase 17 hotels currently under the MainStay Suites brand. In addition, two underlying land leases are being assumed and Sunburst has an earn-out potential of up to $2.5 million based on the hotels’ future performance.

Immediately upon close, the hotels will be reflagged to the Homestead brand. The sale, subject to standard closing conditions, is expected to close by mid-June.

“This acquisition is a continuation of our efforts to grow the brand with properties that provide seamless integration to the Homestead customer,” stated Homestead President/CEO Gary A. DeLapp. “This is the largest single expansion Homestead has undertaken since our inception. We will continue to search out similar transactions in this environment while new construction is uneconomic. We are particularly excited about our expansion in the Miami, suburban Boston and New York markets.”

The purchase includes 1,654 rooms and will increase the Homestead Studio Suites total brand portfolio to 132 hotels and 16,841 rooms.

Homestead’s parent company, New York-based Blackstone Real Estate Advisors, was instrumental in negotiating the acquisition agreement. “Despite today’s difficult operating conditions, we are excited about the growth of Homestead,” said Jonathan D. Gray, Senior Managing Director of Blackstone. “We have confidence in the company’s ability to bring these assets into its highly-profitable business model, while at the same time maintaining the brand’s excellent price/value proposition to its customers.”

About Homestead Studio Suites Hotels

BRE/Homestead Village L.L.C., based in Atlanta, is an owner and operator of 115 extended-stay hotels in 28 states under the Homestead Studio Suites brand. Designed with an extended stay in mind, each studio suite features a fully equipped kitchen, work area with computer dataport, free local calls and voicemail that can be personalized. Homestead provides a quality lodging experience at flexible, reasonable rates based on guests’ length of stay. For more information, please visit http://www.homesteadhotels.com/

MAINSTAY PORTFOLIO OF 17 HOTELS

* Asterisk Indicates New Market for Homestead Studio Suites