MHI Hospitality Corporation Announces Partial Redemption of Preferred Stock; Amends Raleigh Mortgage Loan

  MHI Hospitality Corporation Announces Partial Redemption of Preferred Stock;
  Amends Raleigh Mortgage Loan

Business Wire

WILLIAMSBURG, Va. -- March 28, 2013

MHI Hospitality Corporation (NASDAQ: MDH) (the “Company”) announced today that
the Company has entered into an agreement with the holders of the Company’s
Series A Cumulative Redeemable Preferred Stock (the “Preferred Stock”) to
redeem 1,901.547 shares of Preferred Stock for an aggregate redemption price
of approximately $2.1 million plus the payment of accrued and unpaid cash and
stock dividends.

The Company also announced that it amended the original $8.0 million mortgage
secured by its Doubletree by Hilton Brownstone-University hotel with its
existing lender, Premier Bank, Inc. With the amendment, the loan’s principal
amount is increased to $10.0 million. The mortgage’s interest rate will remain
at 5.25% and the loan was amended to remove any prepayment penalty. Per the
above, proceeds from the loan amendment were used to redeem a portion of the
Preferred Stock. This combined transaction results in a normalized annual
interest expense savings of approximately $115,000 to the Company.

About MHI Hospitality Corporation

MHI Hospitality Corporation is a self-managed and self-administered lodging
REIT focused on the acquisition, renovation, upbranding and repositioning of
upscale to upper upscale full-service hotels in the Mid-Atlantic and Southern
United States. Currently, the Company’s portfolio consists of investments in
ten hotel properties, nine of which are wholly-owned and comprise 2,113 rooms.
All of the Company’s wholly-owned properties operate under the Hilton
Worldwide, InterContinental Hotels Group and Starwood Hotels and Resorts
brands. The Company has a 25.0 percent interest in the Crowne Plaza Hollywood
Beach Resort. MHI Hospitality Corporation was organized in 2004 and is
headquartered in Williamsburg, Virginia. For more information please visit
www.mhihospitality.com.

Contact:

MHI Hospitality Corporation
Scott Kucinski
Director - Investor Relations
757-229-5648
scottkucinski@mhihospitality.com