8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): October 29, 2007

MHI HOSPITALITY CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Maryland	333-118873	20-1531029
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4801 Courthouse Street, Suite 201

Williamsburg, Virginia 23188

(757) 229-5648

(Address, including Zip Code and Telephone Number, including

Area Code, of Principal Executive Offices)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.01    Completion of Acquisition or Disposition of Assets

On October 29, 2007, MHI Hospitality Corporation (the “Company”)’s assignee and indirect subsidiary completed the acquisition of the 250-room former Clarion Hotel (the “Hotel”) in Tampa, Florida for the aggregate purchase price of $13.5 million from Van Tampa Plaza Hotel, Inc., a Florida corporation (“Seller”). Another indirect subsidiary of the Company, which will lease the Hotel, has entered into a 10-year franchise agreement with InterContinental Hotels Group through its franchising entity, Holiday Hospitality Franchising, Inc., to brand the Hotel as the Crowne Plaza^® Tampa Westshore.

The Company acquired in this acquisition approximately 3.82 acres of land located in Tampa, Florida, the improvements located on that land consisting principally of the Hotel, all personal property and equipment owned by the Seller and located in or at the Hotel, and all permits and licenses transferable by the Seller as described in the purchase agreement by and between Seller and the Company disclosed as Exhibit 10.28 to the Company’s Current Report on Form 8-K dated July 16, 2007.

The Hotel is presently closed, and it will remain closed pending the completion of renovations which the Company anticipates will be part of a $20.0 million capital improvement program for the Hotel. The Company expects this capital improvement program may last approximately eighteen months, and the Company anticipates opening the Hotel some time during the first quarter of 2009. The Company expects to brand the Hotel as a Crowne Plaza^® if the renovated Hotel satisfies Crowne Plaza^® franchise requirements. Following completion of the renovation, the Company expects that the Hotel will be managed by MHI Hotels Services, LLC, the manager of the Company’s other properties.

The summary of the transactions described above is qualified in its entirety by the complete text of the purchase agreement by and between Seller and the Company disclosed as Exhibit 10.28 to the Company’s Current Report on Form 8-K dated July 16, 2007.

Item 2.03    Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

To pay the aggregate purchase price for the Hotel, the Company borrowed approximately $13.5 million under its line of credit dated as of May 8, 2006. The information set forth in Item 2.03 of the Company’s Current Report on Form 8-K dated May 9, 2006 is incorporated herein by reference.

Item 7.01.    Regulation FD Disclosure.

On October 31, 2007, the Company issued a press release announcing the closing of the acquisition of the Hotel and a press release announcing the Crowne Plaza^® franchise agreement. Copies of the press releases are furnished as Exhibits 99.1 and 99.2, respectively, hereto.

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Item 9.01    Financial Statements and Exhibits

(d) Exhibits

99.1    Press release of MHI Hospitality Corporation dated October 31, 2007 announcing the closing of the acquisition of the former Tampa Clarion Hotel

99.2    Press release of MHI Hospitality Corporation dated October 31, 2007 announcing the Crowne Plaza^® Flag for Tampa Hotel

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 31, 2007

MHI HOSPITALITY CORPORATION
By:	/s/ David R. Folsom
Name:	David R. Folsom
Title:	Executive Vice President and Chief Operating Officer

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Exhibit Index

99.1    Press release of MHI Hospitality Corporation dated October 31, 2007 announcing the closing of the acquisition of the former Tampa Clarion Hotel

99.2    Press release of MHI Hospitality Corporation dated October 31, 2007 announcing the Crowne Plaza^® Flag for Tampa Hotel

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EX-99.1

Exhibit 99.1

RE: MHI Hospitality Corporation

4801 Courthouse Street, Suite 201

Williamsburg, VA 23188

(757) 229-5648

TRADED: AMEX: MDH

FOR YOUR INFORMATION:

AT THE COMPANY:	AT FINANCIAL RELATIONS BOARD:
Bill Zaiser Chief Financial Officer (301) 220-5400	Vicki Baker General Information (703) 796-1798

FOR IMMEDIATE RELEASE

WEDNESDAY, OCTOBER 31, 2007

MHI HOSPITALITY CORPORATION CLOSES

ACQUISITION OF FORMER TAMPA CLARION HOTEL

Williamsburg, VA – October 31, 2007 – MHI Hospitality Corporation (AMEX: MDH) announced today that the Company has completed the acquisition of the 250-room former Clarion Hotel in Tampa, Florida for $13.5 million, or $54,000 per room. The hotel is situated on 3.82 acres in Tampa’s Westshore Corridor, the city’s corporate, entertainment, restaurant and shopping district, and is within two miles of Tampa International Airport. The asset features 10,000 square feet of meeting space, a full service restaurant, outdoor pool and approximately 250 surface parking spaces.

To facilitate acquisition closing, the Company accessed the purchase price of approximately $13.5 million from its line of credit. Consistent with the Company’s portfolio repositioning strategy, MHI Hospitality will rebrand the hotel and commence a $20.0 million capital improvement program with major physical renovations to be completed by the first quarter of 2009. The hotel will remain closed until major renovations are complete.

Andrew M. Sims, President and CEO of MHI Hospitality Corporation, stated, “We are very pleased to finalize the acquisition of this well-located Gulf coast asset. With its scale and amenities the property is an excellent portfolio fit. The acquisition also extends our footprint in the dynamic Florida market.”

About MHI Hospitality Corporation

MHI Hospitality Corporation is a self-advised lodging REIT focused on the acquisition, redevelopment and management of mid-scale, upscale and upper upscale full service hotels in the

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MHI Hospitality Corporation

Add 1

Mid-Atlantic, Midwest and Southeastern United States. Currently, the company’s portfolio consists of eight properties comprising 1,973 rooms, all of which operate under the Hilton, InterContinental Hotels Group and Starwood Hotels and Resorts brands. In addition, the Company has a 25 percent interest in the Crowne Plaza Resort Hollywood Beach and a leasehold interest in the common area of Shell Island Resort, a resort condominium property. MHI Hospitality Corporation was organized in 2004 and is listed on the Russell Microcap™ Index. The company is headquartered in Williamsburg, Virginia. For more information please visit www.mhihospitality.com.

Forward-Looking Statements

This news release includes “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonable, these statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond the Company’s control. Therefore, actual outcomes and results may differ materially from what is expressed, forecasted or implied in such forward-looking statements. Economic conditions generally and the real estate market specifically, management and performance of the Company’s hotels, plans for hotel renovations, financing plans, supply and demand for hotel rooms in the Company’s current and proposed market areas, the Company’s ability to acquire additional properties and the risk that potential acquisitions may not perform in accordance with expectations, legislative/regulatory changes, including changes to laws governing taxation of real estate investment trusts and competition, and other factors, may affect the Company’s future results, performance and achievements. These risks and uncertainties are described in greater detail under “Risk Factors” in the Company’s Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. The Company undertakes no obligation and does not intend to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Although we believe our current expectations to be based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that actual results will not differ materially.

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EX-99.2

Exhibit 99.2

RE: MHI Hospitality Corporation

4801 Courthouse Street, Suite 201

Williamsburg, VA 23188

(757) 229-5648

TRADED: AMEX: MDH

FOR YOUR INFORMATION:

AT THE COMPANY:	AT FINANCIAL RELATIONS BOARD:
Bill Zaiser Chief Financial Officer (301) 220-5400	Vicki Baker General Information (703) 796-1798

FOR IMMEDIATE RELEASE

WEDNESDAY, OCTOBER 31, 2007

MHI HOSPITALITY CORPORATION ANNOUNCES

CROWNE PLAZA^® FLAG FOR TAMPA HOTEL

Williamsburg, VA – October 31, 2007 – MHI Hospitality Corporation (AMEX: MDH) announced today that the Company has entered into a 10-year franchise agreement with InterContinental Hotels Group (IHG) [LON: IHG, NYSE:IHG (ADRs)] through its franchising entity, Holiday Hospitality Franchising, Inc., to brand the hotel as the Crowne Plaza^® Tampa Westshore.

The hotel is situated on 3.82 acres in Tampa’s Westshore Corridor, the city’s corporate, entertainment, restaurant and shopping district, and is within two miles of Tampa International Airport. In conjunction with the branding the Company will extensively renovate the hotel. Major physical renovations are expected to be completed within 18 months, with the Crowne Plaza^® Tampa Westshore expected to open in the first quarter of 2009.

Andrew M. Sims, President and CEO of MHI Hospitality Corporation, stated, “We are very pleased to partner once again with InterContinental Hotels Group to flag our Tampa hotel acquisition as a Crowne Plaza^®. Our planned repositioning and upbranding of the Crowne Plaza^® Tampa Westshore makes this asset an integral and promising addition to our real estate platform.”

About MHI Hospitality Corporation

MHI Hospitality Corporation is a self-advised lodging REIT focused on the acquisition, redevelopment and management of mid-scale, upscale and upper upscale full service hotels in the Mid-Atlantic, Midwest and Southeastern United States. Currently, the company’s portfolio

- more -

MHI Hospitality Corporation

Add 1

consists of eight properties comprising 1,973 rooms, all of which operate under the Hilton, InterContinental Hotels Group and Starwood Hotels and Resorts brands. In addition, the Company has a 25 percent interest in the Crowne Plaza Resort Hollywood Beach and a leasehold interest in the common area of Shell Island Resort, a resort condominium property. MHI Hospitality Corporation was organized in 2004 and is listed on the Russell Microcap™ Index. The company is headquartered in Williamsburg, Virginia. For more information please visit www.mhihospitality.com.

Forward-Looking Statements

This news release includes “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonable, these statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond the Company’s control. Therefore, actual outcomes and results may differ materially from what is expressed, forecasted or implied in such forward-looking statements. Economic conditions generally and the real estate market specifically, management and performance of the Company’s hotels, plans for hotel renovations, financing plans, supply and demand for hotel rooms in the Company’s current and proposed market areas, the Company’s ability to acquire additional properties and the risk that potential acquisitions may not perform in accordance with expectations, legislative/regulatory changes, including changes to laws governing taxation of real estate investment trusts and competition, and other factors, may affect the Company’s future results, performance and achievements. These risks and uncertainties are described in greater detail under “Risk Factors” in the Company’s Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. The Company undertakes no obligation and does not intend to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Although we believe our current expectations to be based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that actual results will not differ materially.

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