Vancouver, B.C. | Canadian Hotel Income Properties Real Estate Investment Trust ("CHIP REIT") today announced that it has acquired the 235-room Coast Terrace Inn in Edmonton, Alberta for $29.1 million. The capitalization rate on the purchase was 10.3% on a trailing twelve month basis after standard industry reserves for management fees and replacement capital. Trailing twelve month revenues at the property were $13.3 million.

The hotel is located in South Edmonton next to CHIP REIT's Delta Edmonton South hotel. The property features over 30,000 feet of meeting and banquet space, supporting extensive food and beverage operations. Amenities include a 25,000 square foot spa and fitness centre featuring a salt water pool, running track and racquet courts, a restaurant, lounge and pub. The Coast Terrace Inn is CHIP REIT's tenth property in Alberta and its fourth in Edmonton.

"We are very pleased with this accretive addition to our portfolio" said Ed Pitoniak, President and CEO of CHIP REIT. "We know the Edmonton market well and are increasing our exposure to take advantage of the strong growth prospects in the region."

Financing for the acquisition included the assumption of a $15.2 million mortgage on the property, maturing in July 2008 and with an interest rate marked to market at 5.40%. The balance of the acquisition was financed with existing cash and credit resources.

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 33 hotels with approximately 7,700 rooms. CHIP REIT units and convertible debentures trade on the Toronto Stock Exchange under the symbols HOT.un, HOT.db, and HOT.db.a.

Charlene Krepiakevich
(604) 646-8787
CHIP Hospitality