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.

Media 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.

Close
Coming up in June 2022...

Sales & Marketing: Promoting Peace of Mind


As the hotel industry transitions to a more familiar position, it is still necessary for hotels to emphasize in their marketing the health protocols they have implemented to ensure guest safety and wellness. Above all, guests need to be reassured that every precaution is being taken to safeguard their well-being. Additionally, there are other marketing strategies that hotels can implement as a way to boost their business. For example, neighborhood marketing is a tactic that relies heavily on appealing to local audiences. Incentives targeting locals can fulfill the craving that some people have for time away from home, but aren't ready to hop on a plane. Another viable strategy is to promote experiences in nature. After being stuck inside for so long, many people are looking for hotels to help them re-connect with the great outdoors. The June Hotel Business Review will focus on the marketing strategies that some hotels are adopting and how they are benefiting from them.