CHIP REIT Sells Hotel

Canadian Hotel Income Properties Real Estate Investment Trust ("CHIP REIT") today announced that it has sold the 272-room Radisson Winnipeg Hotel Downtown. As part of the sale agreement, CHIP REIT has provided the purchaser with 40% loan-to-value, five-year second mortgage financing valued at approximately $4.6 million with interest at 8.0%. Over the past twelve months, the hotel did not generate significant operating cash flow after standard industry reserves for management fees and capital expenditures. CHIP REIT believes it will be able to productively redeploy this capital in 2006, either by way of acquisitions or through the reduction of debt. No material gain or loss is expected to result from the sale.   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: please contact: Kevin Grayston, Executive Vice  President & Chief Financial Officer, Phone (604) 646-2447, Fax (604) 646-2404,  www.chipreit.com

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