Red Roof Inns, Inc.
Ticker: RRI 4355 Davidson Road
Exchange: New York Stock Exchange Hilliard, Ohio 43026
Industry: Service (614) 876-3200

Type of Shares:Common Shares Filing Date:10/10/95
U.S. Shares:8,000,000 Offer Date:1/31/96
Non-U.S. Shares:2,000,000 Filing Range:$14.00 - $16.00
Primary Shares:10,000,000 Offer Price:$16.00
Secondary Shares:0 Gross Spread:$0.96
Offering Amount: $150,000,000 Selling:$0.58
Expenses:$900,000 Reallowance:$0.10
Shares Out After:28,400,000
Spin out parent firm: Morgan Stanley Real Estate Fund, Inc.

ManagerTierPhone
Morgan Stanley & Co. IncorporatedLead Manager (212) 703-4797
Alex. Brown & Sons IncorporatedCo-manager (410) 727-1700
Donaldson, Lufkin & Jenrette Securities Corp.Co-manager (212) 504-4525
Schroder Wertheim & Company, IncorporatedCo-manager (212) 492-6900

Auditor: Deloitte & Touche
Audited
Income
Latest
Unaudited
Income
Prior
Unaudited
Income
Balance
Sheet
12/31/94 9/30/95 10/1/94 9/30/95
Revenue:$269.31$223.05$206.05Assets:$729.59
Net Income:$16.86$15.12$13.84Liabilities:$580.08
EPS:$0.59$0.53Equity:$149.51

Note: Dollar amounts are in U.S. millions; Audited figures expressed as full year,
unaudited figures are partial year

Business Description
The Company is the third largest owner/operator of economy hotels in the United States, with 231 inns containing over 26,100 rooms in 33 states, primarily located throughout the Midwest, East, South and Gulf Coast regions. The Company's hotels are designed to attract the business and leisure traveler seeking room quality and inn locations that are generally comparable to those of mid-priced hotels, but at a lower average room rates. By not providing full service management intensive facilities and services, such as in-house restaurants or cocktail lounges, banquet centers, conference rooms, room service, recreational facilities or other services and facilities that the Company's targeted customers do not typically value, the Company is able to deliver a product that addresses its customers' needs and price expectations. In general, the Company's guests are evenly divided between business and leisure.

Use of Proceeds
Proceeds from the proposed offering will be used to reduce the company's outstanding debt, and to fund its acquisition and development program and for general corporate purposes.

Last updated: 10/28/96

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