Hotel Online  Special Report


 Hersha Hospitality Trust to Purchase Seven Hyatt Summerfield Suites
from LodgeWorks, L.P. for Approximately $169 million
- Hotels Converted to the Global Hyatt System - 

PHILADELPHIA - December 22, 2006 - Hersha Hospitality Trust (AMEX: HT), a real estate investment trust (REIT), which owns interests in 59 nationally franchised, upper-upscale, upscale and midscale limited service and extended-stay hotels, today announced that the Company has signed a definitive agreement to purchase seven extended-stay Hyatt Summerfield Suites hotels with a total of 1,005 suites from LodgeWorks, L.P. for approximately $169 million. The Company anticipates spending an additional approximately $2.5 million for capital improvements. LodgeWorks will continue to manage the hotels and bear any additional costs for brand compliance.

Mr. Jay H. Shah, Chief Executive Officer, commented, "We could not pass up this transaction for many reasons, but foremost it is projected to be accretive to our earnings in 2007, as we were able to acquire these assets at favorable cap rates and at prices below replacement cost in these key markets. Extended-stay hotels, which we believe better weather market cycles and offer high absolute RevPAR, will become more than 35% of our portfolio, post closing of the transaction. We are also pleased to be able to begin a relationship with LodgeWorks, our fifth independent management company, the pioneer of the extended-stay segment, and a leading developer and manager in northern California and other key markets. This transaction is very complementary to our existing upscale extended-stay portfolio."

The Hyatt Summerfield Suites transaction includes four hotels in the Company's core Northeast and Mid-Atlantic markets comprising of 

  • a 159-suite property in White Plains, New York, 
  • a 128-suite property in Bridgewater, New Jersey, 
  • a 140-suite property in Gaithersburg, Maryland and
  • a 144-suite property in Charlotte, North Carolina. 
Additionally, the Company will enter into two new markets with the purchase of 
  • a 164-suite property in Scottsdale, Arizona 
and two northern California hotels, near San Francisco, including 
  • a 142-suite property in Pleasant Hill/Walnut Creek and 
  • a 128-suite property in Pleasanton, California.
The purchase of the Northern California and Scottsdale, Arizona hotels marks the Company's diversification into new markets that demonstrate high barriers to entry and rate premiums similar to the Company's core Northeast and Mid-Atlantic portfolio.

Mr. Shah added, "Although the hotels had initially been underwritten without the benefits of a top-tier brand, the new relationship with Hyatt is expected to provide substantial rate and occupancy upside to these assets. These properties represent the embodiment of Hyatt's new brand for the upscale extended-stay segment - the extended-stay model combined with urban design and lifestyle elements. Additionally, these assets already attain a premium rate versus Residence Inn and Homewood Suites in their markets. Combined with Hyatt's brand launch, frequent stay program, and enhanced food and beverage offerings, these assets may grow at an even faster rate than their high growth sub-markets."

Westchester Summerfield Suites
101 Corporate Park Drive
White Plains, NY

Summerfield Suites
2611 Contra Costa Blvd.
Pleasant Hill, CA
The purchase of the seven hotels will be financed with an interest only 10-year first mortgage for $120 million, bearing interest at approximately 5.5% per annum and available cash on hand, including the Company's proceeds from the recently completed sale of its four Atlanta hotels.

The transaction is expected to be closed by the end of the first quarter 2007.

Closing of this acquisition is subject to customary closing conditions, including completion of due diligence, obtaining financing and consent from the franchisor (or other third parties). There can be no assurances that Hersha will be able to close this transaction in the timeframe contemplated, on the proposed terms, or at all.

About LodgeWorks
The LodgeWorks L.P. partner team pioneered extended-stay lodging with the development of the Residence Inn® concept (which was later sold to Marriott) and the upscale Summerfield Suites® hotel chain (which was sold to Wyndham International and then Global Hyatt). Currently the company owns and operates Sierra Suites Hotels, an upscale suite brand with locations in Branchburg and Parsippany, New Jersey; San Ramon and Santa Clara, California, and Fishkill, New York. Development plans call for 2007 openings in Dulles Airport-Sterling, Virginia and Seattle-Bellevue, Washington. The company has also launched an upper-upscale boutique collection with 2008 openings in Napa and Long Beach, California, and Savannah-Historic District, Georgia.

About Hersha Hospitality
Hersha Hospitality Trust is a self-advised real estate investment trust, which owns interests in 59 high quality, upper-upscale, upscale and midscale limited service and extended-stay hotel properties with 7,635 rooms located in high barrier to entry markets primarily from Metro Boston, Massachusetts to Metro Washington, DC with strong, national franchise affiliations. The Company focuses on acquisition and joint venture opportunities in primary and secondary markets near major metropolitan markets.

Forward Looking Statement
Certain matters within this press release are discussed using forward-looking language as specified in 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" included in our Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC.


Hersha Hospitality Trust
Ashish Parikh, 215-238-1046
Chief Financial Officer

Also See: LodgeWorks, L.P., Parent Company of the Sierra Suites Hotel Chain, Opens Sixth Property in Fishkill, New York / March 2006
Partnership Led by Rolf E. Ruhfus and B. Anthony Isaac Acquire Sierra Suites Hotel Brand and Properties from Wyndham / Mar 2000


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