|                                          |
|------------------------------------------|
|                                          |  |
| Delaware                                 | 52-1500621 |
| (State of Incorporation)                 | (I.R.S. Employer Identification No.) |
| 11200 Rockville Pike                     |   |
| Rockville, MD                            | 20852 |
| (Address of Principal Executive Offices) | (ZIP Code) |

----

|                                                                                                                                                                                  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                  |  |
|                                                                                                                                                                             | Page |
| Part I      FINANCIAL INFORMATION                                                                                                                                                |   |
|                                                                                                                                                                             |   |
| Item 1.     Financial Statements                                                                                                                                                 |   |
|                                                                                                                                                                             |   |
|                 Condensed Consolidated Balance Sheets - September 30, 2013 and December 31, 2012 | 1 |
| Condensed Consolidated Statements of Operations for the three and nine months ended                                                                                              |   |
| September 30, 2013 and 2012                                                                                                                                                      | 2 |
| Condensed Consolidated Statement of Changes in Partners' Capital (Deficit) for the nine months ended                                                                             |   |
| September 30, 2013                                                                                                                                                               | 3 |
| Condensed Consolidated Statements of Cash Flows for the nine months ended                                                                                                        |   |
| September 30, 2013 and 2012                                                                                                                                                      | 4 |
| Notes to Condensed Consolidated Financial Statements                                                                                                                             | 5 |
|                                                                                                                                                                             |   |
| Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations                                                                                 | 18 |
|                                                                                                                                                                             |   |
| Item 3.     Quantitative and Qualitative Disclosures about Market Risk                                                                                                      | 24 |
|                                                                                                                                                                             |   |
| Item 4.     Controls and Procedures                                                                                                                                              | 25 |
|                                                                                                                                                                             |   |
| Part II      OTHER INFORMATION                                                                                                                                                   |   |
|                                                                                                                                                                             |   |
| Item 5.       Other Information                                                                                                                                                  | 26 |
|                                                                                                                                                                             |   |
| Item 6.        Exhibits                                                                                                                                                          | 27 |
|                                                                                                                                                                             |   |
| Signatures                                                                                                                                                                       | 28 |

----

|                                           |
|-------------------------------------------|
|                                           |  |  |  |  |  |  |  |
|                                      | September 30, |   | December 31, |
|                                      | 2013 |   | 2012 |
|                                      |   |   | (Note 1) |
| Assets related to discontinued operations | $ | 4,241,743 |  |   | $ | 5,494,389 |  |
| Working capital reserves                  | 877,181 |  |   | 1,353,505 |  |
| Accounts receivable                       | 18,750 |  |   | 18,750 |  |
|                                      |  |  |   |  |  |
| Total assets                              | $ | 5,137,674 |  |   | $ | 6,866,644 |  |

|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |
| Accounts payable and accrued expenses                     | $ | 60,238 |  |   | $ | 242,303 |  |
| Liabilities related to discontinued operations            | 3,609,244 |  |   | 7,143,914 |  |
| Total liabilities                                         | 3,669,482 |  |   | 7,386,217 |  |
|                                                      |   |   |   |
| General Partner                                           | (359,421 | ) |   | (399,176 | ) |
| Beneficial Assignee Certificates (BACs) Series A; 868,662 |   |   |   |
| issued and outstanding                                    | 1,827,613 |  |   | (120,397 | ) |
| Total partners' capital (deficit)                         | 1,468,192 |  |   | (519,573 | ) |
| Total liabilities and partners' capital (deficit)         | $ | 5,137,674 |  |   | $ | 6,866,644 |  |

----

|                                                                                 |
|---------------------------------------------------------------------------------|
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                            | For the three months ended |   | For the nine months ended |
|                                                                            | September 30, |   | September 30, |
|                                                                            | 2013 |   | 2012 |   | 2013 |   | 2012 |
|                                                                            |   |   | (Note 1) |   |   |   | (Note 1) |
| Operating income (expenses):                                                    |   |   |   |   |   |  |   |   |  |
| Interest and other income                                                       | $ | 156 |  |   | $ | 349 |  |   | $ | 518 |  |   | $ | 1,295 |  |
| General and administrative                                                      | (46,713 | ) |   | (68,205 | ) |   | (286,371 | ) |   | (236,718 | ) |
| Base asset management fee                                                       | (16,250 | ) |   | (23,438 | ) |   | (48,750 | ) |   | (70,313 | ) |
| Professional fees                                                               | (69,676 | ) |   | (111,013 | ) |   | (141,806 | ) |   | (338,883 | ) |
| Total operating costs and expenses                                              | (132,483 | ) |   | (202,307 | ) |   | (476,409 | ) |   | (644,619 | ) |
|                                                                            |   |   |   |   |   |   |  |  |
| Loss from continuing operations                                                 | (132,483 | ) |   | (202,307 | ) |   | (476,409 | ) |   | (644,619 | ) |
|                                                                            |   |   |   |   |   |   |   |
| Gain on sale of hotel property                                                  | 2,096,216 |  |   | — |  |   | 2,096,216 |  |   | 417,303 |  |
| Asset impairment                                                                | — |  |   | (87,104 | ) |   | — |  |   | (87,104 | ) |
| Income from operations related to discontinued operations                       | 328,312 |  |   | 131,931 |  |   | 367,958 |  |   | 460,033 |  |
| Income from discontinued operations                                             | 2,424,528 |  |   | 44,827 |  |   | 2,464,174 |  |   | 790,232 |  |
| Net income (loss)                                                               | $ | 2,292,045 |  |   | $ | (157,480 | ) |   | $ | 1,987,765 |  |   | $ | 145,613 |  |
| Net income (loss) allocated to GP (2%)                                          | $ | 45,841 |  |   | $ | (3,150 | ) |   | $ | 39,755 |  |   | $ | 2,912 |  |
| Net income (loss) allocated to LPs (98%)                                        | $ | 2,246,204 |  |   | $ | (154,330 | ) |   | $ | 1,948,010 |  |   | $ | 142,701 |  |
| Loss from continuing operations per BAC, based on 868,662 BACs outstanding      | $ | (0.15 | ) |   | $ | (0.23 | ) |   | $ | (0.55 | ) |  | $ | (0.74 | ) |
| Income from discontinued operations per BAC, based on 868,662 BAC's outstanding | $ | 2.79 |  |   | $ | 0.05 |  |   | $ | 2.84 |  |  | $ | 0.91 |  |
| Net income (loss) per BAC, based on 868,662 BACs outstanding                    | $ | 2.64 |  |   | $ | (0.18 | ) |   | $ | 2.29 |  |  | $ | 0.17 |  |

----

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |
|                                            | GeneralPartner |   | BeneficialAssigneeCertificateHolders |   | Total |
|                                            |   |   |   |   |   |
| Partners' deficit, January 1, 2013              | $ | (399,176 | ) |  | $ | (120,397 | ) |  | $ | (519,573 | ) |
|                                            |   |   |   |   |   |
| Net income                                      | 39,755 |  |   | 1,948,010 |  |   | 1,987,765 |  |
|                                            |   |   |   |   |   |
| Partners' (deficit) capital, September 30, 2013 | $ | (359,421 | ) |   | $ | 1,827,613 |  |   | $ | 1,468,192 |  |

----

|                                                                                 |
|---------------------------------------------------------------------------------|
|                                                                                 |  |  |  |  |  |  |  |
|                                                                            | For the nine months ended September 30, |
|                                                                            | 2013 |   | 2012 |
|                                                                            |   |   | (Note 1) |
| Cash flows from operating activities:                                           |   |   |   |
| Net income                                                                      | $ | 1,987,765 |  |   | $ | 145,613 |  |
| Adjustments to reconcile net income to net cash (used in) provided by           |   |  |   |   |  |
| operating activities:                                                           |   |  |   |   |  |
| Depreciation and amortization                                                   | 407,790 |  |   | 497,019 |  |
| Gain on sale of hotel property                                                  | (2,096,216 | ) |   | (417,303 | ) |
| Asset impairment                                                                | — |  |   | 87,104 |  |
| Changes in assets and liabilities:                                              |   |  |   |   |  |
| Decrease in accounts payable and accrued expenses                               | (182,065 | ) |   | (28,426 | ) |
| Increase in operating assets related to discontinued operations                 | (121,061 | ) |   | (384,471 | ) |
| (Decrease) increase in operating liabilities related to discontinued operations | (86,177 | ) |   | 108,495 |  |
|                                                                            |   |   |   |
| Net cash (used in) provided by operating activities                             | (89,964 | ) |   | 8,031 |  |
|                                                                            |   |   |   |
| Cash flows from investing activities:                                           |   |  |   |   |  |
| Proceeds from sale of hotel property                                            | 3,380,867 |  |   | 1,844,775 |  |
| Additions to property and equipment                                             | (188,783 | ) |   | (121,573 | ) |
| Change in working capital reserve                                               | 476,324 |  |   | (628,363 | ) |
| Change in restricted cash                                                       | (129,951 | ) |   | 91,950 |  |
| Net cash provided by investing activities                                       | 3,538,457 |  |   | 1,186,789 |  |
|                                                                            |   |   |   |
| Cash flows from financing activities:                                           |   |  |   |   |  |
| Repayment of principal on mortgage loan                                         | (3,448,493 | ) |   | (1,194,820 | ) |
| Net cash used in financing activities                                           | (3,448,493 | ) |   | (1,194,820 | ) |
|                                                                            |   |   |   |
| Net change in hotel operating cash and cash equivalents                         | — |  |   | — |  |
|                                                                            |   |  |   |   |  |
| Hotel operating cash and cash equivalents, beginning of period                  | — |  |   | — |  |
|                                                                            |   |   |   |  |
| Hotel operating cash and cash equivalents, end of period                        | $ | — |  |   | $ | — |  |
| Supplemental disclosure of cash flow information:                               |   |  |   |   |  |
| Cash paid during the period for interest                                        | $ | 319,341 |  |   | $ | 361,675 |  |
| Supplemental disclosure of noncash investing activities:                        |   |   |   |
| Fixed asset reduction, net                                                      | $ | 1,254,280 |  |   | $ | 1,354,368 |  |
| Write-off of financing costs, net                                               | $ | 33,604 |  |   | $ | 73,104 |  |

----

----

|                                           |
|-------------------------------------------|
|                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| ASSETS RELATED TO DISCONTINUED OPERATIONS |
|  SEPTEMBER 30, 2013                  |
|                                      |   |   |   |   |   |   |   |   |   |
|                                      | University |   | Plymouth |   | Roseville |   | Scottsdale |   | Total |
|                                      |   |   |   |   |   |   |   |   |   |
| Cash and restricted cash                  | $ | 1,231,982 |  |   | $ | 105,138 |  |   | $ | 124,781 |  |   | $ | 66 |  |   | $ | 1,461,967 |  |
| Accounts receivable and other assets      | 237,465 |  |   | 71,968 |  |   | 40,593 |  |   | 5,821 |  |   | 355,847 |  |
| Land                                      | 444,480 |  |   | 272,727 |  |   | — |  |   | — |  |   | 717,207 |  |
| Building                                  | 4,120,883 |  |   | 3,454,768 |  |   | — |  |   | — |  |   | 7,575,651 |  |
| Furniture, fixtures and equipment         | 2,482,620 |  |   | 776,914 |  |   | — |  |   | — |  |   | 3,259,534 |  |
| Deferred assets                           | 46,680 |  |   | 38,560 |  |   | — |  |   | — |  |   | 85,240 |  |
| Accumulated depreciation and amortization | (5,638,385 | ) |   | (3,575,318 | ) |   | — |  |   | — |  |   | (9,213,703 | ) |
|                                      |   |   |   |   |   |   |   |   |   |
| Total                                     | $ | 2,925,725 |  |   | $ | 1,144,757 |  |   | $ | 165,374 |  |   | $ | 5,887 |  |   | $ | 4,241,743 |  |

|                                           |
|-------------------------------------------|
|                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| ASSETS RELATED TO DISCONTINUED OPERATIONS |
| DECEMBER 31, 2012                         |
|                                      |   |   |   |   |   |   |   |   |   |
|                                      | University |   | Plymouth |   | Roseville |   | Scottsdale |   | Total |
|                                      |   |   |   |   |   |   |   |   |   |
| Cash and restricted cash                  | $ | 1,032,204 |  |   | $ | 18,341 |  |   | $ | 43,049 |  |   | $ | 24,541 |  |   | $ | 1,118,135 |  |
| Accounts receivable and other assets      | 208,322 |  |   | 61,839 |  |   | 94,745 |  |   | 46,732 |  |   | 411,638 |  |
| Land                                      | 444,480 |  |   | 272,727 |  |   | 474,783 |  |   | — |  |   | 1,191,990 |  |
| Building                                  | 4,145,969 |  |   | 3,423,204 |  |   | 3,482,197 |  |   | — |  |   | 11,051,370 |  |
| Furniture, fixtures and equipment         | 2,381,856 |  |   | 758,317 |  |   | 810,861 |  |   | — |  |   | 3,951,034 |  |
| Deferred assets                           | 74,692 |  |   | 51,729 |  |   | 80,793 |  |   | — |  |   | 207,214 |  |
| Accumulated depreciation and amortization | (5,454,800 | ) |   | (3,485,061 | ) |   | (3,497,131 | ) |   | — |  |   | (12,436,992 | ) |
|                                      |   |   |   |   |   |   |   |   |   |
| Total                                     | $ | 2,832,723 |  |   | $ | 1,101,096 |  |   | $ | 1,489,297 |  |   | $ | 71,273 |  |   | $ | 5,494,389 |  |

----

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| LIABILITIES RELATED TO DISCONTINUED OPERATIONS |
| AS OF SEPTEMBER 30, 2013                       |
|                                           |   |   |   |   |   |   |   |   |   |
|                                           | University |   | Plymouth |   | Roseville |   | Scottsdale |   | Total |
|                                           |   |   |   |   |   |   |   |   |   |
| Mortgage                                       | $ | 3,270,124 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 3,270,124 |  |
|                                           |   |   |   |   |   |   |   |   |   |
| Hotel trade payable and accrued expenses       | 226,190 |  |   | 76,765 |  |   | 26,437 |  |   | 9,728 |  |   | 339,120 |  |
|                                           |   |   |   |   |   |   |   |   |   |
| Total                                          | $ | 3,496,314 |  |   | $ | 76,765 |  |   | $ | 26,437 |  |   | $ | 9,728 |  |   | $ | 3,609,244 |  |

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| LIABILITIES RELATED TO DISCOUNTINUED OPERATIONS |
| AS OF DECEMBER 31, 2012                         |
|                                            |   |   |   |   |   |   |   |   |   |
|                                            | University |   | Plymouth |   | Roseville |   | Scottsdale |   | Total |
|                                            |   |   |   |   |   |   |   |   |   |
| Mortgage                                        | $ | 3,340,595 |  |   | $ | 1,009,025 |  |   | $ | 2,368,997 |  |   | $ | — |  |   | $ | 6,718,617 |  |
|                                            |   |   |   |   |   |   |   |   |   |
| Hotel trade payable and accrued expenses        | 161,458 |  |   | 70,156 |  |   | 88,171 |  |   | 105,512 |  |   | 425,297 |  |
|                                            |   |   |   |   |   |   |   |   |   |
| Total                                           | $ | 3,502,053 |  |   | $ | 1,079,181 |  |   | $ | 2,457,168 |  |   | $ | 105,512 |  |   | $ | 7,143,914 |  |

----

|                                               |
|-----------------------------------------------|
|                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| DISCONTINUED OPERATIONS                       |
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013 |
|                                          |   |   |   |   |   |   |   |
|                                          |   |   |   |   |   |   |   |
|                                          |  Roseville |   |  Plymouth |   |  University |   |  Total |
|                                          |   |   |   |   |   |   |   |
| Revenue:                                      |   |   |   |   |   |   |   |
| Rooms                                         | $ | 165,663 |  |   | $ | 418,488 |  |   | $ | 891,452 |  |   | $ | 1,475,603 |  |
| Rental and other                              | 20,811 |  |   | 9,077 |  |   | 74,454 |  |   | 104,342 |  |
| Telephone                                     | — |  |   | — |  |   | 15 |  |   | 15 |  |
|                                          | 186,474 |  |   | 427,565 |  |   | 965,921 |  |   | 1,579,960 |  |
|                                          |   |   |   |   |   |   |   |
| Departmental expenses:                        |   |   |   |   |   |   |   |
| Rooms                                         | (75,990 | ) |   | (152,360 | ) |   | (235,837 | ) |   | (464,187 | ) |
| Rental and other                              | (3,669 | ) |   | (2,075 | ) |   | (1,740 | ) |   | (7,484 | ) |
| Telephone                                     | (826 | ) |   | (2,585 | ) |   | (2,123 | ) |   | (5,534 | ) |
|                                          | (80,485 | ) |   | (157,020 | ) |   | (239,700 | ) |   | (477,205 | ) |
| Gross operating income                        | 105,989 |  |   | 270,545 |  |   | 726,221 |  |   | 1,102,755 |  |
|                                          |   |   |   |   |   |   |   |
| Unallocated operating income (expenses):      |   |   |   |   |   |   |   |
|                                          |   |   |   |   |   |   |   |
| General and administrative                    | (37,778 | ) |   | (46,988 | ) |   | (72,621 | ) |   | (157,387 | ) |
| Depreciation and amortization                 | (15,503 | ) |   | (15,628 | ) |   | (64,358 | ) |   | (95,489 | ) |
| Marketing                                     | (25,755 | ) |   | (28,955 | ) |   | (55,158 | ) |   | (109,868 | ) |
| Energy                                        | (12,673 | ) |   | (27,659 | ) |   | (36,803 | ) |   | (77,135 | ) |
| Building lease                                | 320 |  |   | (166 | ) |   | (707 | ) |   | (553 | ) |
| Property operations and maintenance           | (20,094 | ) |   | (35,221 | ) |   | (43,569 | ) |   | (98,884 | ) |
| Property taxes                                | (9,458 | ) |   | (21,046 | ) |   | (62,456 | ) |   | (92,960 | ) |
| Management fees                               | (6,596 | ) |   | (14,729 | ) |   | (33,811 | ) |   | (55,136 | ) |
|                                          | (127,537 | ) |   | (190,392 | ) |   | (369,483 | ) |   | (687,412 | ) |
|                                          |   |   |   |   |   |   |   |
|                                          |   |   |   |   |   |   |   |
| Gain on sale                                  | 2,096,216 |  |   | — |  |   | — |  |   | 2,096,216 |  |
| Interest                                      | (23,860 | ) |   | (5,013 | ) |   | (58,158 | ) |   | (87,031 | ) |
| Operating income from                         |   |   |   |   |   |   |   |
| discontinued operations                       | $ | 2,050,808 |  |   | $ | 75,140 |  |   | $ | 298,580 |  |   | $ | 2,424,528 |  |

----

|                                              |
|----------------------------------------------|
|                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| DISCONTINUED OPERATIONS                      |
| FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 |
|                                         |   |   |   |   |   |   |   |   |   |
|                                         |   |   |   |   |   |   |   |   |   |
|                                         |  Roseville |   |  Plymouth |   |  University |   |  Scottsdale |   |  Total |
|                                         |   |   |   |   |   |   |   |   |   |
| Revenue:                                     |   |   |   |   |   |   |   |   |   |
| Rooms                                        | $ | 832,447 |  |   | $ | 913,137 |  |   | $ | 2,284,469 |  |   | $ | 760 |  |   | $ | 4,030,813 |  |
| Rental and other                             | 43,463 |  |   | 21,796 |  |   | 190,631 |  |   | — |  |   | 255,890 |  |
| Food and beverage                            | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Telephone                                    | — |  |   | 24 |  |   | 1,200 |  |   | — |  |   | 1,224 |  |
|                                         | 875,910 |  |   | 934,957 |  |   | 2,476,300 |  |   | 760 |  |   | 4,287,927 |  |
|                                         |   |   |   |   |   |   |   |   |   |
| Departmental expenses:                       |   |   |   |   |   |   |   |   |   |
| Rooms                                        | (302,349 | ) |   | (371,853 | ) |   | (630,019 | ) |   | (1,206 | ) |   | (1,305,427 | ) |
| Rental and other                             | (7,165 | ) |   | (5,346 | ) |   | (5,792 | ) |   | — |  |   | (18,303 | ) |
| Telephone                                    | (4,999 | ) |   | (6,539 | ) |   | (7,878 | ) |   | — |  |   | (19,416 | ) |
|                                         | (314,513 | ) |   | (383,738 | ) |   | (643,689 | ) |   | (1,206 | ) |   | (1,343,146 | ) |
| Gross operating income (loss)                | 561,397 |  |   | 551,219 |  |   | 1,832,611 |  |   | (446 | ) |   | 2,944,781 |  |
|                                         |   |   |   |   |   |   |   |   |   |
| Unallocated operating expenses:              |   |   |   |   |   |   |   |   |   |
|                                         |   |   |   |   |   |   |   |   |   |
| General and administrative                   | (137,193 | ) |   | (121,471 | ) |   | (194,022 | ) |   | (31,139 | ) |   | (483,825 | ) |
| Depreciation and amortization                | (119,166 | ) |   | (97,168 | ) |   | (191,456 | ) |   | — |  |   | (407,790 | ) |
| Marketing                                    | (88,354 | ) |   | (76,086 | ) |   | (140,296 | ) |   | (1,203 | ) |   | (305,939 | ) |
| Energy                                       | (75,201 | ) |   | (82,976 | ) |   | (118,797 | ) |   | — |  |   | (276,974 | ) |
| Building lease                               | (1,377 | ) |   | (1,836 | ) |   | (8,100 | ) |   | — |  |   | (11,313 | ) |
| Property operations and maintenance          | (85,849 | ) |   | (104,913 | ) |   | (124,805 | ) |   | (1,109 | ) |   | (316,676 | ) |
| Property taxes                               | (54,566 | ) |   | (63,133 | ) |   | (187,372 | ) |   | — |  |   | (305,071 | ) |
| Management fees                              | (30,728 | ) |   | (32,489 | ) |   | (86,665 | ) |   | (12 | ) |   | (149,894 | ) |
|                                         | (592,434 | ) |   | (580,072 | ) |   | (1,051,513 | ) |   | (33,463 | ) |   | (2,257,482 | ) |
|                                         |   |   |   |   |   |   |   |   |   |
|                                         |   |   |   |   |   |   |   |   |   |
| Gain on sale                                 | 2,096,216 |  |   | — |  |   | — |  |   | — |  |   | 2,096,216 |  |
| Interest                                     | (100,653 | ) |   | (43,009 | ) |   | (175,679 | ) |   | — |  |   | (319,341 | ) |
| Operating (loss) income from                 |   |   |   |   |   |   |   |   |   |
| discontinued operations                      | $ | 1,964,526 |  |   | $ | (71,862 | ) |   | $ | 605,419 |  |   | $ | (33,909 | ) |   | $ | 2,464,174 |  |

----

|                                               |
|-----------------------------------------------|
|                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| DISCONTINUED OPERATIONS                       |
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 |
|                                          |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |
|                                          |  Roseville |   |  Plymouth |   |  University |   |  Scottsdale |   | Clearwater |   |  Total |
|                                          |   |   |   |   |   |   |   |   |   |   |   |
| Revenue:                                      |   |   |   |   |   |   |   |   |   |   |   |
| Rooms                                         | $ | 424,966 |  |   | $ | 371,368 |  |   | $ | 838,518 |  |   | $ | 321,578 |  |   | $ | — |  |   | $ | 1,956,430 |  |
| Rental and other                              | 14,225 |  |   | 9,333 |  |   | 64,569 |  |   | 10,939 |  |   | — |  |   | 99,066 |  |
| Food and beverage                             | — |  |   | — |  |   | — |  |   | (6,645 | ) |   | — |  |   | (6,645 | ) |
| Telephone                                     | — |  |   | 153 |  |   | 718 |  |   | 1,655 |  |   | — |  |   | 2,526 |  |
|                                          | 439,191 |  |   | 380,854 |  |   | 903,805 |  |   | 327,527 |  |   | — |  |   | 2,051,377 |  |
|                                          |   |   |   |   |   |   |   |   |   |   |   |
| Departmental expenses:                        |   |   |   |   |   |   |   |   |   |   |   |
| Rooms                                         | (131,098 | ) |   | (139,140 | ) |   | (222,691 | ) |   | (115,783 | ) |   | — |  |   | (608,712 | ) |
| Rental and other                              | (3,087 | ) |   | (1,713 | ) |   | (2,202 | ) |   | (15 | ) |   | — |  |   | (7,017 | ) |
| Food and beverage                             | — |  |   | — |  |   | — |  |   | 2,724 |  |   | — |  |   | 2,724 |  |
| Telephone                                     | (1,998 | ) |   | (1,828 | ) |   | (3,026 | ) |   | (4,350 | ) |   | — |  |   | (11,202 | ) |
|                                          | (136,183 | ) |   | (142,681 | ) |   | (227,919 | ) |   | (117,424 | ) |   | — |  |   | (624,207 | ) |
| Gross operating income                        | 303,008 |  |   | 238,173 |  |   | 675,886 |  |   | 210,103 |  |   | — |  |   | 1,427,170 |  |
|                                          |   |   |   |   |   |   |   |   |   |   |   |
| Unallocated operating expenses:               |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative                    | (54,563 | ) |   | (48,701 | ) |   | (63,999 | ) |   | (67,078 | ) |   | (3,790 | ) |   | (238,131 | ) |
| Depreciation and amortization                 | (59,073 | ) |   | (42,543 | ) |   | (52,880 | ) |   | (12,242 | ) |   | — |  |   | (166,738 | ) |
| Marketing                                     | (33,190 | ) |   | (23,613 | ) |   | (52,306 | ) |   | (48,884 | ) |   | — |  |   | (157,993 | ) |
| Energy                                        | (27,618 | ) |   | (26,544 | ) |   | (32,666 | ) |   | (58,958 | ) |   | — |  |   | (145,786 | ) |
| Building lease                                | (850 | ) |   | (1,063 | ) |   | (3,902 | ) |   | (89,383 | ) |   | — |  |   | (95,198 | ) |
| Property operations and maintenance           | (36,946 | ) |   | (31,018 | ) |   | (47,548 | ) |   | (49,304 | ) |   | — |  |   | (164,816 | ) |
| Property taxes                                | (21,153 | ) |   | (19,593 | ) |   | (59,065 | ) |   | (28,413 | ) |   | — |  |   | (128,224 | ) |
| Management fees                               | (15,371 | ) |   | (13,330 | ) |   | (31,977 | ) |   | (15,009 | ) |   | — |  |   | (75,687 | ) |
|                                          | (248,764 | ) |   | (206,405 | ) |   | (344,343 | ) |   | (369,271 | ) |   | (3,790 | ) |   | (1,172,573 | ) |
|                                          |   |   |   |   |   |   |   |   |   |   |   |
| Impairment                                    | — |  |   | — |  |   | — |  |   | (87,104 | ) |   | — |  |   | (87,104 | ) |
| Gain on sale                                  | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Interest                                      | (44,112 | ) |   | (18,788 | ) |   | (59,766 | ) |   | — |  |   | — |  |   | (122,666 | ) |
| Operating income (loss) from                  |   |   |   |   |   |   |   |   |   |   |   |
| discontinued operations                       | $ | 10,132 |  |   | $ | 12,980 |  |   | $ | 271,777 |  |   | $ | (246,272 | ) |   | $ | (3,790 | ) |   | $ | 44,827 |  |

----

|                                              |
|----------------------------------------------|
|                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| DISCONTINUED OPERATIONS                      |
| FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 |
|                                         |   |   |   |   |   |   |   |   |   |   |   |
|                                         |   |   |   |   |   |   |   |   |   |   |   |
|                                         |  Roseville |   |  Plymouth |   |  University |   |  Scottsdale |   | Clearwater |   |  Total |
|                                         |   |   |   |   |   |   |   |   |   |   |   |
| Revenue:                                     |   |   |   |   |   |   |   |   |   |   |   |
| Rooms                                        | $ | 1,085,229 |  |   | $ | 897,107 |  |   | $ | 2,159,323 |  |   | $ | 1,613,980 |  |   | $ | 9,592 |  |   | $ | 5,765,231 |  |
| Rental and other                             | 37,958 |  |   | 21,734 |  |   | 182,012 |  |   | 30,930 |  |   | 676 |  |   | 273,310 |  |
| Food and beverage                            | — |  |   | — |  |   | — |  |   | 5,993 |  |   | — |  |   | 5,993 |  |
| Telephone                                    | — |  |   | 378 |  |   | 1,803 |  |   | 7,644 |  |   | (187 | ) |   | 9,638 |  |
|                                         | 1,123,187 |  |   | 919,219 |  |   | 2,343,138 |  |   | 1,658,547 |  |   | 10,081 |  |   | 6,054,172 |  |
|                                         |   |   |   |   |   |   |   |   |   |   |   |
| Departmental expenses:                       |   |   |   |   |   |   |   |   |   |   |   |
| Rooms                                        | (354,460 | ) |   | (364,670 | ) |   | (608,664 | ) |   | (415,887 | ) |   | (16,372 | ) |   | (1,760,053 | ) |
| Rental and other                             | (9,160 | ) |   | (6,235 | ) |   | (7,611 | ) |   | (241 | ) |   | (101 | ) |   | (23,348 | ) |
| Food and beverage                            | — |  |   | — |  |   | — |  |   | (5,353 | ) |   | — |  |   | (5,353 | ) |
| Telephone                                    | (5,890 | ) |   | (6,057 | ) |   | (9,227 | ) |   | (10,141 | ) |   | 1,062 |  |   | (30,253 | ) |
|                                         | (369,510 | ) |   | (376,962 | ) |   | (625,502 | ) |   | (431,622 | ) |   | (15,411 | ) |   | (1,819,007 | ) |
| Gross operating income (loss)                | 753,677 |  |   | 542,257 |  |   | 1,717,636 |  |   | 1,226,925 |  |   | (5,330 | ) |   | 4,235,165 |  |
|                                         |   |   |   |   |   |   |   |   |   |   |   |
| Unallocated operating expenses:              |   |   |   |   |   |   |   |   |   |   |   |
|                                         |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative                   | (149,314 | ) |   | (141,852 | ) |   | (184,435 | ) |   | (165,167 | ) |   | (15,341 | ) |   | (656,109 | ) |
| Depreciation and amortization                | (150,699 | ) |   | (130,042 | ) |   | (186,881 | ) |   | (29,397 | ) |   | — |  |   | (497,019 | ) |
| Marketing                                    | (91,609 | ) |   | (66,021 | ) |   | (132,546 | ) |   | (186,321 | ) |   | (5,698 | ) |   | (482,195 | ) |
| Energy                                       | (80,406 | ) |   | (70,097 | ) |   | (102,085 | ) |   | (139,350 | ) |   | 2,132 |  |   | (389,806 | ) |
| Building lease                               | (2,547 | ) |   | (3,195 | ) |   | (11,701 | ) |   | (268,146 | ) |   | (18,453 | ) |   | (304,042 | ) |
| Property operations and maintenance          | (100,353 | ) |   | (95,381 | ) |   | (122,751 | ) |   | (148,702 | ) |   | (5,063 | ) |   | (472,250 | ) |
| Property taxes                               | (63,459 | ) |   | (58,778 | ) |   | (175,193 | ) |   | (85,239 | ) |   | (667 | ) |   | (383,336 | ) |
| Management fees                              | (39,310 | ) |   | (32,173 | ) |   | (81,995 | ) |   | (74,875 | ) |   | (347 | ) |   | (228,700 | ) |
|                                         | (677,697 | ) |   | (597,539 | ) |   | (997,587 | ) |   | (1,097,197 | ) |   | (43,437 | ) |   | (3,413,457 | ) |
|                                         |   |   |   |   |   |   |   |   |   |   |   |
| Impairment                                   | — |  |   | — |  |   | — |  |   | (87,104 | ) |   | — |  |   | (87,104 | ) |
| Gain on sale                                 | — |  |   | — |  |   | — |  |   | — |  |   | 417,303 |  |   | 417,303 |  |
| Interest                                     | (126,639 | ) |   | (53,939 | ) |   | (181,097 | ) |   | — |  |   | — |  |   | (361,675 | ) |
| Operating (loss) income from                 |   |   |   |   |   |   |   |   |   |   |   |
| discontinued operations                      | $ | (50,659 | ) |   | $ | (109,221 | ) |   | $ | 538,952 |  |   | $ | 42,624 |  |   | $ | 368,536 |  |   | $ | 790,232 |  |

----

----

|                   |
|-------------------|
|                   |  |  |  |  |
| December 31, 2013 |   | $ | 3,270,124 |  |
| 2014              |   | — |  |
| 2015              |   | — |  |
| 2016              |   | — |  |
| Total             |   | $ | 3,270,124 |  |

----

----

----

|                                                                                                        |
|--------------------------------------------------------------------------------------------------------|
|                                                                                                        |  |  |
| Type of asset                                                                                          |   | Estimated life |
|                                                                                                   |   |   |
|             Building and site improvements |   | 10-30 years |
| Furniture, fixtures and equipment                                                                      |   | 7 years |
| Leasehold improvements                                                                                 |   | Shorter of estimated life (usually7 years) or remaining lease term |

----

|                       |
|-----------------------|
|                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                  | Number of |   | Bank Balance |   | Insured |   | Uninsured |
| Bank                  | Accounts |   | 9/30/2013 |   | 9/30/2013 |   | 9/30/2013 |
| Bank of America, N.A. | 4 |  |   | $ | 209,560 |  |   | $ | 209,560 |  |   | $ | — |  |
| Wells Fargo           | 1 |  |   | $ | 5,451 |  |   | $ | 5,451 |  |   | $ | — |  |
| Franklin Bank         | 6 |  |   | $ | 1,219,293 |  |   | $ | 346,122 |  |   | $ | 873,171 |  |
| Eagle Bank            | 3 |  |   | $ | 877,904 |  |   | $ | 550,446 |  |   | $ | 327,458 |  |

----

----

----

|        |
|--------|
|        |  |  |
|   | Hotel Location | Peak Months |
|   |   |   |
|   | Minneapolis, MN | March through November |
|   | Plymouth, MN | April through October |
|   | Roseville, MN | April through October |
|   | Scottsdale, AZ | January through April; and October and November |

----

|                                                                                      |
|--------------------------------------------------------------------------------------|
|                                                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                 | Gross Operating Income |   | Gross Operating Income |
|                                                                                 | for the three months ended |   | for the nine months ended |
|                                                                                 | September 30, |   | September 30, |
|                                                                                 | 2013 |   | 2012 |   | 2013 |   | 2012 |
| Hotel Location                                                                       |   |   |   |   |   |   |   |
| Minneapolis, MN                                                                      | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |
| Plymouth, MN                                                                         | — |  |   | — |  |   | — |  |   | — |  |
| Roseville, MN                                                                        | — |  |   | — |  |   | — |  |   | — |  |
|                                                                                 |   |   |   |   |   |   |   |
|      Total continuing operations                            | — |  |   | — |  |   | — |  |   | — |  |
|                                                                                 |   |   |   |   |   |   |   |
| Discontinued operations:                                                             |   |   |   |   |   |   |   |
| Minneapolis, MN                                                                      | 726,221 |  |   | 675,886 |  |   | 1,832,611 |  |   | 1,717,636 |  |
| Plymouth, MN                                                                         | 270,545 |  |   | 238,173 |  |   | 551,219 |  |   | 542,257 |  |
| Roseville, MN                                                                        | 105,989 |  |   | 303,008 |  |   | 561,397 |  |   | 753,677 |  |
|      Clearwater, FL                                         | — |  |   | — |  |   | — |  |   | (5,330 | ) |
|      Scottsdale, AZ                                         | — |  |   | 210,103 |  |   | (446 | ) |   | 1,226,925 |  |
|                                                                                 |   |   |   |   |   |   |   |
|              Totals | $ | 1,102,755 |  |   | $ | 1,427,170 |  |   | $ | 2,944,781 |  |   | $ | 4,235,165 |  |

----

|                                                                                |
|--------------------------------------------------------------------------------|
|                                                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                           |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |
|                                                                           | Operating Income (Loss) |   | Operating Income |
|                                                                           | for the three months ended |   | for the nine months ended |
|                                                                           | September 30, |   | September 30, |
|                                                                           | 2013 |   | 2012 |   | 2013 |   | 2012 |
| Hotel Location                                                                 |   |   |   |   |   |   |   |
| Minneapolis, MN                                                                | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |
| Plymouth, MN                                                                   | — |  |   | — |  |   | — |  |   | — |  |
| Roseville, MN                                                                  | — |  |   | — |  |   | — |  |   | — |  |
| Partnership operating expenses                                                 | (132,483 | ) |   | (202,307 | ) |   | (476,409 | ) |   | (644,619 | ) |
|      Total continuing operations                      | (132,483 | ) |   | (202,307 | ) |   | (476,409 | ) |   | (644,619 | ) |
|                                                                           |   |   |   |   |   |   |   |
| Operations related to discontinued operations:                                 |   |   |   |   |   |   |   |
| Minneapolis, MN                                                                | 298,580 |  |   | 271,777 |  |   | 605,419 |  |   | 538,952 |  |
| Plymouth, MN                                                                   | 75,140 |  |   | 12,980 |  |   | (71,862 | ) |   | (109,221 | ) |
| Roseville, MN                                                                  | 2,050,808 |  |   | 10,132 |  |   | 1,964,526 |  |   | (50,659 | ) |
|      Clearwater, FL                                   | — |  |   | (3,750 | ) |   | — |  |   | 368,536 |  |
|      Scottsdale, AZ                                   | — |  |   | (246,272 | ) |   | (33,909 | ) |   | 42,624 |  |
| Total operations related to            discontinued operations                 | 2,424,528 |  |   | 44,867 |  |   | 2,464,174 |  |   | 790,232 |  |
|                                                                           |   |   |   |   |   |   |   |
|             Totals | $ | 2,292,045 |  |   | $ | (157,440 | ) |   | $ | 1,987,765 |  |   | $ | 145,613 |  |

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |  |  |
|                               | Average Occupancy |   |   | Average Occupancy |
|                               | for the three months ended |   |   | for the nine months ended |
|                               | September 30, |   |   | September 30, |
|                               | 2013 |   | 2012 |   |   |   | 2013 | 2012 |
|                               |   |   |   |   |   |   |   |   |
| Operations of asset held for sale: |   |   |   |   |   |   |   |   |
| Minneapolis, MN                    | 86% |   | 87% |   |   |   | 79% | 80% |
| Plymouth, MN                       | 79% |   | 75% |   |   |   | 61% | 64% |
| Roseville, MN                      | 83% |   | 81% |   |   |   | 71% | 70% |
| Scottsdale, AZ                     | —% |   | 50% |   |   |   | —% | 55% |

----

----

----

----

|    |                                                                                                                                                                                                                               |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| a. | There has not been any information required to be disclosed in a report on Form 8-K during the quarter ended September 30, 2013, but not reported, whether or not otherwise required by this Form 10-Q at September 30, 2013. |

|    |                                                                                                                                                                                                                                   |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| b. | There is no established market for the purchase and sale of BACs, although various informal secondary market services may exist.  Due to the limited markets, investors may be unable to sell or otherwise dispose of their BACs. |

|    |                                                                                                                                                                                                                                                      |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| c. | In addition, certain transfers of BACs in the Partnership may not exceed two percent of the total interests in the Partnership's capital or profits during any one taxable year to avoid the Partnership being deemed a publicly traded partnership. |

----

|      |
|------|
|      |  |
| 31.1 | Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2 | Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32   | Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |

----

|                   |
|-------------------|
|                   |  |  |  |  |  |  |
|              |   |   | CRI HOTEL INCOME PARTNERS, L.P. |
|              |   |   | (Registrant) |
|              |   |   |   |   |   |   |
|              |   |   | by: | CRICO Hotel Associates I, L.P |
|              |   |   |   |   |   |   |
|              |   |   | by: | C.R.I., Inc. |
|              |   |   |   |   |   |   |
|              |   |   |   |   |   |   |
| November 27, 2013 |   |   | by: |     /s/ William B. Dockser |
| DATE              |   |   | William B. Dockser |
|              |   |   | Director, Chairman of the Board, |
|              |   |   | and Treasurer |
|              |   |   | Principal Executive Officer |
|              |   |   |   |   |   |   |

|                   |
|-------------------|
|                   |  |  |  |  |
| November 27, 2013 |   |   | by: | /s/ H. William Willoughby  |
| DATE              |   |   |   | H. William Willoughby |
|              |   |   |   | Director, President, Secretary, |
|              |   |   |   | Principal Financial Officer and |
|              |   |   |   | Principal Accounting Officer |
|              |   |   |   |   |