Prime Group, an affiliate of The Lightstone Group, has a 12%preferred dividend rate per annum that is payable monthly, isentitled to receive a 15.1% residual profits interest and had aliquidation preference of $120 million, according to a pressrelease from Prime Group. Representatives from Prime Group did notreturn phone calls seeking comment. Prime Group received a $120million non-recourse loan from Citicorp USA Inc. The loan is untilJune 10, 2008 and has an interest rate of 4% above LIBOR or 1.5%above Citicorp's base interest rate.

Equity investors involved in the acquisition in June of ExtendedStay Hotels included Arbor Realty Trust, based in Uniondale, NY,and affiliates of seller Blackstone. Arbor Realty Trust is reducingthe amount of equity that it will have in the hotels. Approximately$7.4 billion of mortgage and mezzanine financing was secured fromWachovia Bank, National Association and Bear Stearns CommercialMortgage. There was $210 million of senior preferred equity andapproximately $420 million of subordinated equity in two offerings,according to a press release from Arbor Realty Trust. Arbor hadoriginally provided the $210 million of senior preferred equity butis selling off $105 million of it. Arbor will receive 15% interestfrom the $105 million interest that it is retaining. Arbor hadpreviously received 12% preferred dividend rate per annum on the$210 million equity. Arbor may decide to sell off another $30million in equity at a later date, according to the releasedstatement. Arbor did not return phone calls seeking comment.