PHILADELPHIA--(May 2, 2012)-- Hersha Hospitality Trust (NYSE: HT), owner of upscale hotels in urban gateway markets, announced today that the Company has entered into a definitive purchase agreement to acquire the 80-room Bulfinch Hotel in downtown Boston’s West End neighborhood for $18.2 million, or $228,000 per key.

“We are pleased to capitalize on the opportunity to enhance our foothold in one of the highest barrier to entry lodging markets in the country at a price well below replacement cost,” stated Jay H. Shah, Chief Executive Officer. “The acquisition of the Bulfinch Hotel is our first in the Boston Central Business District. This is a core market for Hersha that is expected to be one of the best performing markets in the country for the next few years with continued strength expected in the city’s technology, healthcare and education industry’s in addition to a very strong convention calendar. It is an attractive asset in a fantastic location, which can be further enhanced by the implementation of sales and revenue management initiatives. In addition to growing the revenue base, we expect that capital initiatives and overseeing an aggressive asset management program will allow us to improve the asset’s operating margins as we take advantage of opportunities to reposition this hotel.”

The asset’s unique position as a brand and management unencumbered hotel along with its high growth location, allows the Company an attractive opportunity to reposition the asset to appeal to the highly desirable urban transient and lifestyle oriented traveler. This property complements the Company’s other independent properties in New York and Washington, similar to the Duane Street Hotel and NU Hotel. The Company plans to invest approximately $2.5 million in the hotel to upgrade guest rooms, improve the food and beverage platform, fitness and business amenities, while adding an additional room.

With record level convention center demand expected in 2012 and no additional lodging supply expected in the downtown area, Boston is expected to realize approximately 10% revenue per available room, (RevPAR) growth in 2012, among the highest RevPAR growth in the country in 2012 according to Pinnacle Advisory.

The purchase price represents a forward capitalization rate of approximately 8.6% on the hotel’s projected 2013 net operating income, stabilizing at approximately 10.5%. The acquisition and capital improvements are anticipated to be funded with cash on hand and the Company’s revolving line of credit.

The Company anticipates the closing of this acquisition will occur by the end of the second quarter of 2012. The proposed acquisition is subject to a variety of closing conditions and as a result, there can be no assurance that the Company will be able to consummate the acquisition on the schedule or on the terms described.

The Bulfinch Hotel is located in downtown Boston’s rapidly growing West End and within walking distance of Beacon Hill and the North End. It is adjacent to the O’Neill Federal Building and in close proximity to TD Banknorth Garden, North Station Commuter Rail, and the Massachusetts General Hospital campus, the largest non-governmental employer in Boston.

About Hersha Hospitality Trust
Hersha Hospitality Trust is a self-advised real estate investment trust, which owns 67 hotels in major urban gateway markets including New York, Washington, Boston, Philadelphia, Los Angeles and Miami totaling 9,598 rooms. HT follows a highly selective investment approach and leverages operational advantage through rigorous and sustainable asset management practices. For further information on the Company visit our website at www.hersha.com.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding the completion of the proposed acquisition, growth potential related to the Boston hotel market in general and the Bulfinch Hotel specifically, anticipated new lodging supply in the Boston market and the forward capitalization rate and stabilized capitalization rate for the Bulfinch Hotel. As such, these statements may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those reflected in the forward-looking statement. For a description of these factors, please review the information under the heading “Risk Factors” included in Hersha Hospitality Trust’s Annual Report on Form 10-K for the year ended December 31, 2011, filed with the U.S. Securities Exchange Commission.