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PHILADELPHIA - September 24, 2013 - Hersha Hospitality Trust (NYSE:HT) (the “Company”), owner of upscale hotels in urban gateway markets, today announced the Company has entered into a definitive agreement to sell 16 hotels to an affiliate of Blackstone Real Estate Advisors (“Blackstone”) for gross proceeds of $217 million, or approximately $125,000 per key. This transaction marks the Company’s exit from Long Island and suburban Philadelphia, as well as the sale of the Company’s remaining consolidated properties in Connecticut and Rhode Island.

“The anticipated sale of these non-core portfolio hotels completes our transformation into a pure play, urban transient portfolio with exposure to some of the highest demand gateway markets in the United States,” explains Mr. Jay H. Shah, the Company’s Chief Executive Officer. “The sale of these assets will result in material improvement to our RevPAR quality and EBITDA growth potential, and demonstrates our ability to achieve diverse strategic objectives across the Company. We are pleased to have timed our two portfolio sale processes to capitalize on private equity interest in stabilized, select service assets in suburban markets. Including the anticipated sale of these 16 non-core hotels, we have sold 46 non-strategic hotels generating approximately $460 million in gross proceeds since 2008. In addition to further reducing leverage, we expect to redeploy the cash proceeds from this sale into higher growth opportunities in Miami and the West Coast.” 

The Company values the anticipated sale of these hotels at a trailing twelve months capitalization rate of approximately 8% and a hotel EBITDA multiple of 11x. In conjunction with the anticipated sale, the Company expects to repay approximately $79 million of outstanding debt, which will result in the Company receiving cash proceeds of $138 million before customary closing costs and transaction expenses. The Company anticipates recording a book gain of approximately $30 million on the sale of these assets. 

As previously stated, the transaction with Blackstone substantially improves the operating and growth profile of the Company’s core portfolio. Assuming the sale of these 16 assets was completed January 1, 2013, pro forma 2013 revenue per available room (“RevPAR”) for the Company’s core portfolio is forecasted to be $146, 70% higher than the RevPAR of the non-core assets being sold. Based on the same time period, pro forma EBITDA margins for the Company’s core portfolio are forecasted to be 38.8%, 350 bps higher than the non-core portfolio being sold. 

The transaction is expected to close by the end of first quarter 2014, and is subject to customary closing conditions. The Company has posted a presentation of supplemental information regarding the sale of the 16 non-core hotels described in this press release on its website at in the Investor Relations section under “Presentations”. 

Forward Looking Statement

Certain matters within this press release, including, among others, the anticipated closing of the sale of the 16 non-core hotels and potential for EBITDA growth 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, 2012. No assurance can be given that the anticipated sale will occur by the end of the first quarter of 2014 on the terms described above and in the Company’s filings with the SEC or at all. 

About Hersha Hospitality

Hersha Hospitality Trust (HT) is a self-advised real estate investment trust in the hospitality space, which owns and operates high quality upscale hotels in urban gateway markets. The Company’s 48 hotels totaling 7,755 rooms are located in New York, Boston, Philadelphia, Washington, DC, Miami and select markets on the West Coast. The Company’s shares are traded on The New York Stock Exchange-Euronext under the ticker “HT”. For more information on the Company, and the Company’s hotel portfolio, please visit the Company's Web site at

Contact: Ashish Parikh, CFO


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