HPT Buys Seven Hotels for $65 Million

July 21, 2003

Newton, MA (July 21, 2003): Hospitality Properties Trust today purchased seven Candlewood Suites Hotels for $65 million. These seven hotels have 888 suites and are located in six states: California (2); Connecticut; Massachusetts; Michigan; New Jersey; and New York. The average age of these hotels is less than three years.

The seven hotels were purchased from Candlewood Hotel Company Fund I, LLC and its subsidiaries, a joint venture between Candlewood Hotel Company, Inc. (OTC: CNDL) and MMBC Equity Member I, LLC in connection with a plan to wind up that joint venture. Simultaneous with this purchase, HPT added these seven hotels to its existing lease for 57 Candlewood Suites hotels with CNDL. When these hotels were added to this existing lease, the rent payable by CNDL to HPT was increased by $6.5 million/year, plus a percentage of operating revenues at these hotels in excess of negotiated amounts. The combined lease for all 64 hotels remains secured by a cash security deposit and a guaranty from CNDL.

HPT funded today's purchase by using cash on hand and borrowings under its revolving bank credit facility.

Hospitality Properties Trust is a real estate investment trust headquartered in Newton, MA which owned 274 hotels located in 38 states.

WARNING REGARDING FORWARD LOOKING STATEMENTS

THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND THE FEDERAL SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON HPT'S CURRENT BELIEFS AND EXPECTATIONS, BUT THEY MAY NOT OCCUR. FOR EXAMPLE, THIS PRESS RELEASE IMPLIES THAT THE SEVEN HOTELS PURCHASED TODAY WILL EARN SUFFICIENT AMOUNTS TO PAY THE RENT INCREASE DUE TO HPT, THAT CNDL WILL PAY THE RENT DUE FOR ALL 64 HOTELS INCLUDED IN THE EXPANDED LEASE AND THAT THE SECURITY DEPOSIT AND GUARANTY HELD BY HPT WILL ENSURE THESE PAYMENTS. HOWEVER, THE EARNINGS OF THE SEVEN HOTELS AND OF ALL 64 LEASED HOTELS MAY DECLINE AND CNDL MAY BE UNABLE OR UNWILLING TO PAY ITS LEASE OBLIGATIONS TO HPT. THIS COULD OCCUR FOR SEVERAL DIFFERENT REASONS, SOME OF WHICH ARE BEYOND HPT'S OR CNDL'S CONTROL. IN FACT, THE 57 HOTELS INCLUDED IN THE HISTORICAL LEASE BETWEEN HPT AND CNDL RECENTLY HAVE NOT EARNED SUFFICIENT AMOUNTS TO PAY HPT'S RENTS, AND ALTHOUGH THE SEVEN HOTELS PURCHASED TODAY RECENTLY HAVE EARNED MORE THAN THE RENT INCREASE, THE 64 HOTEL COMBINATION RECENTLY DID NOT EARN ENOUGH TO PAY THE PRO FORMA COMBINED RENT. IF THESE OPERATING RESULTS CONTINUE, CNDL MAY BE UNABLE TO PAY ITS RENTS DUE HPT DESPITE THE SECURITY DEPOSIT AND DESPITE THE GUARANTY. MOREOVER, IF THE ECONOMY GENERALLY DOES NOT IMPROVE, IF CNDL'S OPERATING RESULTS DO NOT IMPROVE, IF ANOTHER TERRORIST ATTACK CAUSES PEOPLE TO REDUCE TRAVEL OR IF, FOR ANY OTHER REASON, OPERATING PERFORMANCE AT CNDL AND AT THE 64 LEASED HOTELS REFERENCED IN THIS PRESS RELEASE DO NOT IMPROVE, CNDL MAY DEFAULT ITS LEASE OBLIGATIONS TO HPT. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.

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