Hersha Hospitality Trust to Sell Non-Core Urban Select Service Properties for $505 Million

USA, Philadelphia, Pennsylvania. May 13, 2022

Hersha Hospitality Trust (NYSE: HT) ("Hersha" or the "Company"), owner of high-quality hotels in urban gateway markets and regional resort destinations, announced that it has entered into a definitive agreement to sell seven of its non-core Urban Select Service properties outside of New York (the "USS Portfolio") for gross proceeds of $505 million, or approximately $360,000 per key.

Mr. Jay H. Shah, Hersha's Chief Executive Officer, stated, "We're pleased to have reached an agreement that supports our long-term strategic objectives and delivers immediate shareholder value. With the sale of these non-core properties, we are able to continue our transformation by deepening our focus on our luxury & lifestyle and New York portfolios - both demonstrating resiliency coming out of the pandemic. Our resort markets and lifestyle properties continue to outperform - as reflected in our first quarter financial results announced yesterday - and our purpose-built New York City cluster, coupled with our unique operating model, positions us for strong performances across the recovery."

The following Select Service Properties will be included in the transaction:

- Courtyard Brookline

- Hampton inn - Philadelphia

- Hilton Garden Inn M Street

- Hampton Inn - Washington D.C.

- Courtyard Sunnyvale

- Courtyard Los Angeles Westside

- TownePlace Suites Sunnyvale

Hersha intends to use the proceeds from the sale of the USS Portfolio to provide immediate liquidity for a significant net debt reduction of approximately $460 - $480 million. In addition to approximately $390 - $410 million of corporate debt, the Company expects to reduce mortgage debt associated with the USS Portfolio by approximately $75 million, resulting in a pro forma consolidated leverage ratio of 4.9x-5.1x.1 The Company also expects to recast its existing credit facility, which would eliminate all corporate-level debt maturities through 2024.

Following completion of the transaction, Hersha will own 26 hotels in six key destination markets across the U.S. On a pro forma basis, the remaining portfolio's Total RevPAR based on 2019 actual performance would have increased from $206 to $219, total ADR would have increased from $247 to $262, and EBITDA per Key would have increased from approximately $32,000 to $33,000.

The transaction is expected to close in the third quarter of 2022, subject to customary closing conditions. The transaction is not subject to any financing conditions. Further details on the transaction can be found on the Company's website at www.hersha.com.

Business Contact:

Subscribe to our newsletter
for more Hotel Newswire articles

Related News

Choose a Social Network!

The social network you are looking for is not available.

Coming up in July 2023...

Hotel Spa: Reconnecting With Nature

Hotel spas have never been so popular. The global wellness market is estimated to be in excess of $1.5 trillion with an annual growth rate of 5 to 10 percent. Consequently, spas are continually developing new programs, products, tools, and environments to meet the needs of guests who are seeking total body health and wellness. One trend that spas are embracing is a multiplicity of ways to reconnect with nature. Spas are moving beyond the “garden” model and going deeper into the countryside and forest, providing immersion in a wilder natural setting. Wild swimming, forest bathing, foraging, outdoor massage, and hiking trails are concepts that are being designed into the spa journey. Some hotels have built individual cabins deep in the forest for sauna, bathing and massage treatments, and others are offering bedroom suites which are located in cabins or tree houses away from the main hotel. The July issue of the Hotel Business Review will report on these and other developments, and how some hotel spas are integrating them into their operations.