Marriott Branded Hotel for Approximately $76 million
|PHILADELPHIA - Jan. 19, 2006--Hersha Hospitality Trust (AMEX: HT ),
a real estate investment trust (REIT) and owner of 50 nationally franchised,
upscale and midscale hotels, today announced the signing of separate agreements
to purchase hotels in Philadelphia, metro-New York City and metro-Washington,
D.C. for approximately $76 million.
The Company entered into an agreement with Metro JFK Associates, LLC, a related party hotel developer, to purchase the Hilton Garden Inn at JFK Airport. The hotel has 188 rooms, was built in 2005, and is situated at the JFK Airport, the hotel is also easily accessible to both LaGuardia Airport and New York City.
Hersha Hospitality Trust has also finalized the agreement on the purchase of the 96-room Tyson's Corner Residence Inn located in Vienna, Virginia. The property is located in one of Northern Virginia's fastest growing corporate markets within easy access to Reagan National Airport, Dulles International Airport and the Washington D.C. area. These transportation hubs help facilitate approach for travelers to the many attractions and government offices of the nation's Capital District.
In addition, the Company entered into a joint-venture agreement with Affordable Hospitality Associates, L.P., a related party hotel developer, giving the Company an 80% equity interest carrying a 9% participating preferred return, on the Hampton Inn Philadelphia. The hotel has 250 rooms, was built in 2001, and is located adjacent to the Philadelphia Convention Center.
Mr. Jay H. Shah commented, "These acquisitions compliment our strategy of building a portfolio of newer hotel properties in high-barrier to entry Northeast corridor markets that we believe can benefit from growth in RevPAR over the next few years. The purchase the Hilton Garden Inn is a prime example of the benefits derived from our development loan financing program, which affords Hersha Hospitality Trust a first right of refusal to purchase a financed asset. As with our other hotel joint-ventures, the Hampton Inn transaction has the potential to create solid value through a preferred return, while also participating in the performance of the hotel."
The agreements are subject to customary closing conditions. The Company expects to close these acquisitions by the end of the first quarter of 2006. The purchase of these hotels will be completed with a combination of cash, mortgage debt and operating partnership units, to be determined at the closing of the transactions. The purchase price for the Tyson's Corner Residence and the Hilton Garden Inn, JFK include assumable mortgages with principal balances of $9.6 and $13.0 million, respectively.
About Hersha Hospitality
Hersha Hospitality Trust
|Also See:||Hasu P. Shah to Retire as Hersha Hospitality Trust's Chief Executive Officer; Jay H. Shah Promoted to Chief Executive Officer / December 2005|