News for the Hospitality Executive
Philadelphia, PA, May 9, 2011 - Hersha Hospitality Trust (NYSE: HT), owner of select service and upscale hotels in major metropolitan markets, announced that during the second quarter of 2011 it expects to complete the acquisition of the 260 room Marriott Courtyard Westside in Los Angeles (Culver City), CA for $47.5 million, or $182,500 per key, including closing costs and fees. The hotel was completely renovated and reopened as the Courtyard Westside in 2008 and includes approximately 11,000 square feet of meeting space. This hotel is Hersha’s first property in Los Angeles and is located in western Los Angeles County near the intersection of two major freeways, I-405 and I-10.
Jay H. Shah, Chief Executive Officer stated, “I am very excited about our entry into the Los Angeles market with an acquisition in a well located, high barrier-to-entry in-fill market. The Culver City submarket is an area that is home to a vibrant entertainment industry, a growing cultural district and a burgeoning employment center along with convenient transportation options. The competitive environment consists primarily of older product, and we believe the Courtyard Westside is one of the best hotels in its market due to its high quality and desirable location within five miles of the Los Angeles airport and Marina del Ray. The Los Angeles hotel market posted a strong year in 2010, and we expect it to be among the highest growth markets in the nation for the next several years. The expansion of Hersha’s footprint is another step in executing on our strategy of building a presence in a high growth, high density market.”
The Los Angeles hotel market has displayed favorable dynamics, with 15% year over year growth in Revenue per Available Room (or RevPAR) year to date through April. Since 1995, Los Angeles has offered the second highest RevPAR growth in the country, behind only New York. Additionally, the market average RevPAR is still approximately 17% below its 2008 peak.
The Courtyard Westside is surrounded by abundant commercial and leisure demand generators including large concentrations of Class A office space, high end retailers, entertainment venues and production studios. It is also proximate to the Los Angeles International Airport, Venice Beach, the Santa Monica Pier and the Los Angeles Convention Center. The anticipated acquisition is subject to customary closing conditions, including receipt of franchisor approval, which the Company anticipates obtaining; however, no assurance can be given that franchisor approval will be obtained, the closing conditions will be satisfied and the acquisition will be completed on the schedule and on the terms described in this press release.
The hotel will be purchased with cash and borrowings drawn on the Company’s line of credit. The total purchase price represents a first year economic capitalization rate of approximately 8.3% and an expected stabilized capitalization rate of approximately 11%.
About Hersha Hospitality Trust
Hersha Hospitality Trust is a self-advised real estate investment trust, which owns interests in 78 hotels, totaling 10,442 rooms, primarily along the Northeast Corridor from Boston, MA to Washington DC. Hersha also owns hotels in Northern California and Scottsdale, Arizona. Hersha focuses on upscale, mid-scale and extended stay hotels in major metropolitan markets.
Forward Looking Statement
Certain matters within this press release are discussed using “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. For a description of these factors, please review the information under the heading “Risk Factors” in Hersha Hospitality Trust’s filings with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2010.
Hersha Hospitality Trust
Hospitality Trust Acquires 112-room Holiday Inn Express Wall Street and
the 81-room Hampton Inn Financial District in New York City / April
Hospitality Trust Acquires Three Newly Opened Hotels in New York City
for $165 million / $284,000 per Key / February 2010
|Hersha Hospitality Management Adds 1,000-plus Rooms to Portfolio, Outlines Aggressive Growth Plans Via Third-Party Management/Joint Ventures / October 2009|
|Hersha Hospitality Trust Acquires the 45-room Duane Street Hotel in the Tribeca Area of New York City for $24.75 million / January 2008|