Molinaro Koger Structures Sale of Summerfield Portfolio to Hersha

On behalf of LodgeWorks

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. October 14, 2008

JANUARY 16, 2007. Molinaro Koger (MK), announced today that the firm successfully marketed and structured the sale of seven extended-stay Hyatt Summerfield Suites hotels to Hersha Hospitality Trust on behalf of LodgeWorks, L.P.

The sale price for the upscale extended-stay portfolio of 1,005 suites was approximately $169 million. The properties involved are well-located in top-tier, high barrier to entry markets in the Northeast, Mid-Atlantic and West coast.

Following the sale, LodgeWorks will continue to manage the hotels and ensure brand compliance and quality for this portfolio. Hersha Hospitality Trust (AMEX: HT), a real estate investment trust (REIT), which owns interests in 68 nationally franchised, upper-upscale, upscale and midscale limited service and extended-stay hotels, anticipates the investment of an additional $2.5 million for capital improvements following the sale.

"I believe this purchase will be viewed as a bold and smart move by Hersha," commented Mark Morris, Senior Vice President of MK, who structured the transaction in conjunction with Rob Koger, President of MK.

"Hyatt has devoted significant marketing resources to create brand recognition for the Summerfield Suites product and is very committed to this segment of the lodging industry. The extended stay segment is recognized as a worthy and stable niche within hospitality, with some of the highest profit margins in the industry. History is going to look back at this portfolio transaction as both a savvy execution of LodgeWorks' development plans and as a prime strategic acquisition by Hersha essential to their corporate development," concluded Mr. Morris.

B. Anthony (Tony) Isaac, President of LodgeWorks is pleased with the outcome of MK's handling of this significant assignment. "The sale of the Hyatt Summerfield portfolio to Hersha was beneficial to all parties involved," commented Mr. Isaac. "Our private real estate investors were pleased with the pricing that resulted. In turn, we believe Hersha will benefit from assets that are well located and in outstanding physical condition. The continuity of LodgeWorks as manager of the properties ensures the hotels will continue to perform at the top of their markets without any distractions or disruptions."

The following Summerfield Suites hotels comprised the transaction:

• 159-suite property in White Plains, New York,

• 128-suite property in Bridgewater, New Jersey,

• 140-suite property in Gaithersburg, Maryland and

• 144-suite property in Charlotte, North Carolina

• 164-suite property in Scottsdale, Arizona

Two hotels in northern California, near San Francisco:

• 142-suite property in Pleasant Hill/Walnut Creek and

• 128-suite property in Pleasanton, California.

Mr. Jay H. Shah, Chief Executive Officer, of Hersha commented, "We could not pass up this transaction for many reasons, but foremost it is projected to be accretive to our earnings in 2007, as we were able to acquire these assets at favorable cap rates and at prices below replacement cost in these key markets. Extended-stay hotels, which we believe better weather market cycles and offer high absolute RevPAR, will become more than 35% of our portfolio, post closing of the transaction. We are also pleased to be able to begin a relationship with LodgeWorks, our fifth independent management company, the pioneer of the extended-stay segment, and a leading developer and manager in northern California and other key markets. This transaction is very complementary to our existing upscale extended-stay portfolio."

Mr. Shah added, "Although the hotels had initially been underwritten without the benefits of a top-tier brand, the new relationship with Hyatt is expected to provide substantial rate and occupancy upside to these assets. These properties represent the embodiment of Hyatt's new brand for the upscale extended-stay segment - the extended-stay model combined with urban design and lifestyle elements. Additionally, these assets already attain a premium rate versus Residence Inn and Homewood Suites in their markets. Combined with Hyatt's brand launch, frequent stay program, and enhanced food and beverage offerings, these assets may grow at an even faster rate than their high growth sub-markets."

During the last 12 months MK has structured more than $3 billion in hotel real estate transactions worldwide, including such significant transactions as the Summerfield Suites portfolio. For further information about this transaction and current hotel property offerings, please contact MK at 703.760.9600 or via www.mkhotels.com.