James H.M. Sprayregen, P.C. Paul M. Basta Stephen E. Hessler Brian S.

Lennon KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, NY 10022-4611 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 and Anup Sathy, P.C. Marc J. Carmel (admitted pro hac vice) KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, IL 60654-3406 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Counsel to the Debtors and Debtors in Possession

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK

Inre: INNKEEPERS USA TRUST, et al./ Debtors.

________________ )

) ) ) ) ) )

Chapter 11 Case No. 10-13800 (SCC) Jointly Administered

PERIODIC REPORT REGARDING VALUE, OPERATIONS, AND PROFITABILITY OF ENTITIES IN WHICH THE DEBTORS' ESTATES HOLD A SUBSTANTIAL OR CONTROLLING INTEREST

This is the report (the "Periodic Report") as of March 7, 2011 (based on the unaudited income statement and balance sheet information dated as of December 31, 201 0 and contained on
The list of Debtors in these Chapter 11 Cases along with the last four digits of each Debtor's federal tax identification number can be found by visiting the Debtors' restructuring website at www.omnimgt.com/innkeepers or by contacting Omni Management Group, LLC at Innkeepers USA Trust c/o Omni Management Group, LLC, 16161 Ventura Boulevard, Suite C, PMB 606, Encino, California 91436. The location of the Debtors' corporate headquarters and the service address for their affiliates is: c/o Innkeepers USA, 340 Royal Poinciana Way, Suite 306, Palm Beach, Florida 33480.

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Exhibit A hereto), on the value, operations, and profitability of those entities in which the estates of Innkeepers USA Limited Partnership ("Innkeepers USA LP") and KPA Leaseco Holding Inc. ("KP A Leaseco and, together with Innkeepers USA LP and the other above captioned debtors, the "Debtors") hold a substantial or controlling interest, as required by Rule 2015.3 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"). Specifically, the estate of Innkeepers USA LP, through its non-Debtor subsidiary, KPA Raleigh, LLC, owns a 49% ownership interest in Genwood Raleigh, LLC, a fee owner of the Sheraton in Raleigh, North Carolina. Further, the estate of KP A Leaseco, through its non-Debtor subsidiary, KP A Raleigh Leaseco, LLC, owns a 49% ownership interest in Genwood Raleigh Lessee, LLC, the property lessee of the Sheraton in Raleigh, North Carolina. None of KP A Raleigh, LLC, Genwood Raleigh, LLC, KP A Raleigh Leaseco, LLC, or Genwood Raleigh Lessee, LLC is a Debtor in the above-captioned chapter 11 cases.

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This Periodic Report contains reports ("Entity Reports") on the value, operations, and profitability of each entity in which the Debtors own a substantial or controlling interest. The Entity Reports consist of two exhibits. Exhibit A contains a net book value estimate for each such entity as of a date not more than two years prior to the date of this report. Exhibit B contains balance sheets (Exhibit B-1) and statements of income (loss) (Exhibit B-2) for each such entity included in this Periodic Report as of and for the year ended December 31, 2010, along with notes supplementing all of the exhibits (Exhibit B-3). Pursuant to the Debtors' agreement with the United States Trustee for the Southern District of New York, the Debtors are submitting the information contained on Exhibit A and Exhibit B in lieu of the three exhibits listed on Official Form 26. The undersigned, having reviewed the above listing of entities in which the Debtors' estates hold a substantial or controlling interest, and being familiar with the Debtors' financial affairs, verifies under the penalty of perjury that the listing is complete, accurate, and truthful to the best of his knowledge. Date: March 7, 2011

By:zJ/?t;L
Signature of Authorized Individual Nathan Cook Name of Authorized Individual Chief Financial Officer of Innkeepers USA Trust Title of Authorized Individual

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Exhibit A

Name of Entity

% Ownership Interest Held by the Debtors

100% 100% 49% (indirect ownership) 49% (indirect ownership)

KPA Raleigh, LLC KPA Raleigh Leaseco, LLC Genwood Raleigh Lessee, LLC Genwood Raleigh, LLC

Net Book Value $01

$0 ($3,255,666) ($4,345,840)

In the ordinary course ofbusiness, the Debtors do not record the earnings or losses ofKPA Raleigh, LLC and KPA Raleigh Leasco, LLC on their individual general ledgers because those amounts are reflected through the consolidation process in the preparation of the Debtors' consolidated entity financial statements. The net book values ofKPA Raleigh, LLC's 49% ownership interest in Genwood Raleigh, LLC and of KPA Raleigh Leasco, LLC's 49% ownership interest in Genwood Raleigh Lessee, LLC are each reflected on the consolidated entity financial statements of Innkeepers USA LP. As of December 31, 2010, these net book values were reduced to $0.

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Exhibit B-1

Balance Sheets as of December 31, 2010 Unaudited

KPA Raleigh, LLC

KPA Raleigh Leaseco, LLC

Genwood Raleigh Lessee, LLC

Genwood Raleigh, LLC

$ 1,337,633

320,741

440,598 4,054,911

Assets Current Assets Cash and cash equivalents Restricted Cash Accounts Receivable Due from Genwood Raleigh Lessee, LLC Inventories Prepaid expenses and other current assets Total Current Assets 75,019 141,717 1,875,110

4,495,509

Property and equipment, net Total non-current assets $ $ $ -

1,875,110 $

23,597,584 23,597,584 28,093,093

Total Assets

Liabilities and Members' Capital Current Liabilities Accounts payable and accrued expenses Due to Genwood Raleigh, LLC Advance deposits Total Current Liabilities $ -

983,843 4,054,911 92,022 5,130,776

413,226

413,226

Long Term Debt Total Liabilities -

5,130,776

32,025,707 32,438,933

Members' capital Members' capital Total Members' Capital $ $

(3,255,666) (3,255,666) 1,875,110 $

(4,345,840) (4,345,840) 28,093,093

Total Liabilities and members' capital

Exhibit B-2

Statement of Operations for the year ended December 31, 2010 Unaudited

KPA Raleigh, LLC $ $ $ 8,243,912 3,246,598 490,109 11,980,619 $

KPA Raleigh Leaseco, LLC

Genwood Raleigh Lessee, LLC

Genwood Raleigh, LLC -

Revenues

Rooms Food and beverage Other Hotel Rent Revenue Total Revenues -

3,317,906 3,317,906

4,843,064 2,510,368 3,317,906 975,618 582,953 479,224 12,709,133

384,104

Costs and Expenses Hotel Operations General and Administrative Expenses Rent Expense Sales and Marketing Costs Property repair and maintenance Property taxes Management fes Depreciation and amortization Total Costs and Expenses

285,600 1,571,350 2,241,054

Other Expenses Other expenses Interest expense, net Total Other Expenses $ $ -

19,791 19,791 $ (748,305) $ 1,536,258 1,536,258 (459,406)

Net income/(loss)

Exhibit B-3 Notes to Periodic Report Required by Bankruptcy Rule 2015.3 The fmancial statements contained in the Periodic Report are unaudited. While management of the Debtors and their affiliates has made reasonable efforts to ensure that these financial statements are accurate and complete based upon information available at the time of preparation, the subsequent receipt of information may result in material changes in the data contained in these fmancial statements, and inadvertent errors or omissions may exist.
1. Reservation of Rights. Nothing contained in this Periodic Report shall constitute a waiver of any of the Debtors' rights or an admission with respect to their chapter 11 cases under the provisions of chapter 11 of the United States Code (the "Bankruptcy Code") including, but not limited to, matters involving objections to claims, substantive consolidation, equitable subordination, defenses, characterization or re-characterization of agreements, assumption or rejection of executory contracts or unexpired leases, and/or causes of action under the provisions of chapter 5 of the Bankruptcy Code or any other relevant applicable laws to recover assets or avoid transfers. 2. Basis of Presentation. The accompanying unaudited financial information presented on Exhibits B-1 and B-2 represents the financial position and statements of operations (collectively, the "Financial Information") ofthe nonDebtor entities in which the Debtors hold a substantial or controlling interest (the "Reporting Entities").

The Financial Information has been assembled from the general ledgers of the Reporting Entities. The Financial Information has generally been maintained in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). The Financial Information is presented on an unconsolidated, separate legal entity basis (but with the balance sheets for all Reporting Entities on one page and the income statements for all Reporting Entities on another for ease of review). In the ordinary course of business, the Debtors do not record the earnings or losses of the Reporting Entities on their individual general ledgers because the related amounts are reflected through the consolidation process in the preparation of the Debtors' consolidated entity financial statements. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual amounts and results could differ from those estimates. Given, among other things, the uncertainty surrounding the collection and ownership of certain assets and the valuation and nature of certain liabilities, to the extent that a non-Debtor entity shows more assets than liabilities, this is not an admission that the non-Debtor entity was solvent on July 19,2010 (the "Petition Date") or at any time prior to the Petition Date, including the date as of or for the period of any financial statements or other financial information included in this Periodic Report. Likewise, to the extent that a non-Debtor entity shows more liabilities than assets, this is not an admission that the non-Debtor entity was insolvent at the Petition Date or at any time prior to the Petition Date, including the date as of or for the period of any financial statements or other fmancial information included in this Periodic Report. The accompanying Financial Information does not include all footnotes and certain financial presentations normally required by U.S. GAAP. 3. Current values. Unless otherwise indicated, the basis for all current values included in this Periodic Report was the net book value from relevant corporate books and records as of the close of business on December 31, 2010. The net book value as of December 31, 2010, may not reflect the current value of the respective assets. For the reasons discussed above, the Debtors caution readers not to place undue reliance upon the information contained in this Periodic Report.

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