Hersha Purchases Remaining Interest in Hampton Philadelphia

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. October 14, 2008

OCTOBER 4, 2007. Hersha Hospitality Trust (AMEX: HT), owner of nationally franchised premium full service and limited service hotels, today announced that it has completed the purchase of the remaining 20% interest in its joint-venture with Affordable Hospitality Associates, LP. The joint-venture owns the 250-room Hampton Inn Philadelphia.

This transaction values the hotel at approximately $41.9 million (which includes approximately $21.4 million of outstanding debt on the property), which was based upon operating results and sales data of comparable hotels in Philadelphia. As a result of this transaction, Hersha's cost basis for the asset will be approximately $30.0 million, which equates to approximately $120,000 per key. The Company will issue approximately 406,877 Hersha Hospitality Limited Partnership Units to 3344 Associates, LP, a related party entity comprised of certain members of the Company's management team and trustees.

Jay H. Shah, Chief Executive Officer commented, "This is a very attractive transaction for all of our shareholders, from a financial perspective, as our cost basis equates to 8.8 times trailing twelve months earnings before interest, taxes, depreciation and amortization (EBITDA). The Hampton Inn Philadelphia, which is located across the street from the Philadelphia convention center, has been a strong performing asset since our initial transaction with steady growth in revenue per available room (RevPAR), led by rate gains and increased occupancy. The strength of the Philadelphia market in conjunction with the improved performance of the hotel strongly supports the growth in the value of the asset and provides us with a very attractive cost basis in the asset."