The seven hotels, which are located in California, Connecticut,Massachusetts, Michigan, New Jersey and New York, were purchasedfrom Candlewood Hotel Company Fund I, LLC and its subsidiaries, ajoint venture between Candlewood Hotel Company, Inc. and MMBCEquity Member I, LLC in connection with a plan to wind up thatjoint venture.

Simultaneous with this purchase, Hospitality Properties Trustadded these seven hotels to its existing lease for 57 CandlewoodSuites hotels with Candlewood. When these hotels were added to thisexisting lease, the rent payable by Candlewood to HospitalityProperties Trust was increased by $6.5 million a year, plus apercentage of operating revenues at these hotels in excess ofnegotiated amounts. The combined lease for all 64 hotels remainssecured by a cash security deposit and a guaranty fromCandlewood.

Hospitality Properties Trust funded the purchase by using cashon hand and borrowings under its revolving bank credit facility.The locally based REIT owns 274 hotels located in 38 states.