CHIP REIT Completes Debt Refinancing

Canadian Hotel Income Properties Real Estate Investment Trust ("CHIP REIT") today announced that it has refinanced $60 million of 7.95% mortgage debt due in December 2006, further strengthening the Trust's balance sheet.  In addition to eliminating annual principal payments and reducing the security required, this refinancing will result in annual interest savings of approximately $950,000 versus the previous loan, commencing in 2006.  Under the terms of the new arrangement, the amount of debt has been increased to $65 million with interest at 6.37%. Security under the arrangement has been reduced from seven hotel properties to four and no principal is repayable for the first five years of the loan. The new maturity date for the financing is August 2011. Following this refinancing, CHIP REIT has no debt maturities until 2007 and continues to have access to a $50 million line of credit facility to finance growth opportunities.   CHIP REIT is an integrated hotel real estate investment trust focused on mid-market and upscale full-service hotels. Through its large, diversified portfolio, CHIP REIT provides investors with stable, tax-advantaged income as well as growth potential through acquisitions, repositioning and franchising. CHIP REIT currently owns or manages 31 hotels with approximately 7,300 rooms. CHIP REIT units and convertible debentures trade on the Toronto Stock Exchange under the symbols HOT.un, HOT.db and HOT.db.a.   %SEDAR: 00005031E 
  For further information: Kevin Grayston, Executive Vice President &  Chief Financial Officer, Phone (604) 646-2447, Fax (604) 646-2404,  www.chipreit.com

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