Hersha Sells Non-core Asset and Refinances Four Hotels
JULY 31, 2009 - Hersha Hospitality Trust (NYSE: HT) announced the sale and closing of the Hilton Garden Inn Gettysburg, PA as well as the closing of the previously announced sale of the Four Points by Sheraton in Revere, MA.
Hersha is selling a non-core 88-room Hilton Garden Inn in Gettysburg, Pennsylvania for $7.75 million and expects to receive net proceeds of approximately $1.75 million after debt extinguishment and closing costs. On a trailing twelve month property-level earnings before interest, taxes, depreciation, and amortization ('Hotel EBITDA') basis, this equates to a multiple of approximately 13.8 times.
The Company also closed on the sale of the 180-room Four Points hotel in Revere, Massachusetts in which the Company is selling its 55% interest for net proceeds of $2.5 million.
The Company refinanced two land parcels currently owned by the Company and leased to developers. One parcel is located on 8th Avenue in Manhattan, New York, and another parcel is located on Nevins Street in Brooklyn, New York. Additionally, the Company refinanced two hotels, a Holiday Inn Express in Hershey, Pennsylvania and a Fairfield Inn in Laurel, Maryland, each of which was previously pledged as collateral for the Company's revolving line of credit facility.
Debt on the 8th Avenue parcel was reduced from $13.25 million to $12.0 million and debt on the Nevins Street parcel was reduced from $6.5 million to $6.0 million. The Company in turn extended the maturity of both of its loans until July 2011 and decreased the interest rate floor on those loans to 6.875%.
The Company placed a new $6 million mortgage loan on the Holiday Inn Express in Hershey, PA and a new $7.35 million mortgage loan on the Fairfield Inn in Laurel, MD. The loan terms on both new loans expire in August 2014. Both of these assets were previously pledged as collateral for the Company's revolving line of credit facility, and net loan proceeds of approximately $13.0 million were utilized to pay down the credit facility to provide additional revolving line capacity.
As a result of these transactions, the Company has eliminated all of its remaining 2009 consolidated debt maturities as the Company continues to execute on its strategy of disposing of non-core properties and paying down debt to create greater financial flexibility through this turbulent cycle.
Marriott International, Inc. (NASDAQ: MAR) is a global leading lodging company based in Bethesda,Maryland, USA, with more than 4,200 properties in 80 countries and territories. Marriott International reported revenues of nearly $14 billion in fiscal year 2014. The company operates and franchises hotels and licenses vacation ownership resorts under 19 brands, including: The Ritz-Carlton®, BVlgari®, EDITION®, JW Marriott®, Autograph Collection® Hotels, Renaissance® Hotels, Marriott Hotels®, Delta Hotels and Resorts®, Marriott Executive Apartments®, Marriott Vacation Club®, Gaylord Hotels®, AC Hotels by Marriott®, Courtyard®, Residence Inn®, SpringHill Suites®, Fairfield Inn & Suites®, TownePlace Suites®, Protea Hotels® and MoxyHotels®. Marriott has been consistently recognized as a top employer and for its superior business ethics. The company also manages the award-winning guest loyalty program, Marriott Rewards® and The Ritz-Carlton Rewards® program, which together surpass 50 million members. For more information or reservations, please visit our website at 
