The sale of the 27 properties is expected to generate aggregate sales proceeds of $115 million to $122 million, based upon sales contracts, letters of intent, broker opinions of value or management estimates. The sales would result in net positive cash flow of $60 million to $70 million after selling expenses and the successful refinancing of the company's current floating rate credit facility in the first quarter 2007. The company will announce which hotels will be sold by year's end.

"Selling these properties will put us in a strong positive for positive organic growth," says Lodgian President and CEO Ed Rohling during the call. "We believe that selling them now when the market is strong will yield maximum proceeds."

For nine months ending Sept. 30, the 43 hotels that the company plans to keep in its portfolio had a net operating income of $19 million and adjusted EBITDA of $42.4 million. The company has spent approximately $120 million in capital expenditures on these properties since 2004.

To implement the initiative to sell the hotels, the company has divided into management teams. One team will focus on creating long-term results and value in the core hotels. The other team will focus on maximizing performance in the hotels that will be sold prior to their disposition. "Each division has a clear objective," Rohling says.

During the third quarter, Lodgian reported a the net income attributable to common stock decreased from $9.7 million to $162,000 or from $0.39 to $0.01 per common diluted share. Adjusted EBITDA from 56 continuing operations declined to $12.5 million from $13.1 million and adjusted EBITDA margins decreased 130 basis points to 17%. RevPAR growth for the company's 60 continuing operations hotels improved 5.6% in the third quarter and 12% for the first nine months of the year, the company reports.