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Hersha Hospitality Trust (NYSE: HT), owner of upscale hotels in urban gateway markets, announced today that the Company acquired an interest in a mixed-use building, which includes a condominium interest in the 111-room Rittenhouse Hotel and 44,000 square feet of retail and office space and a fee interest in an adjacent parking garage. The total purchase price for the tangible and intangible assets of the hotel, office, retail and parking garage is $42.0 million. Including the anticipated renovations, the hotel portion is valued at $23.9 million or $215,000 per key. The Rittenhouse Hotel has historically produced the highest revenue per available room (RevPAR) in the Philadelphia market.
“We are pleased to enhance our presence in the emerging Philadelphia market with the acquisition of the highly rated Rittenhouse Hotel,” commented Jay H. Shah, Chief Executive Officer. “This AAA Five Diamond hotel boasts the largest guestrooms and the best location in the city. The property is ideally situated on Philadelphia’s famed Rittenhouse Square, within walking distance to Center City’s primary corporate demand generators and its premier retail corridor. Additionally, the hotel affords easy access to the Convention Center and the City’s numerous arts, cultural, dining and leisure venues. The property has consistently been the top performer in the market, and we have identified further opportunities for enhanced asset management, upgrades and expansion which should improve operating margins and maximize Hersha’s investment in the property. The revenue from the adjacent parking garage and the income from the retail and office leases will also provide consistent cash flow at the property.”
The hotel features the highly rated Lacroix Restaurant, an indoor pool, fitness center, 8,500 square feet of business and social function space and 100 underground parking spaces. Hersha Hospitality Management has assumed management of the hotel.
Included in the acquisition is 44,000 square feet of retail and office space. The primary leaseholders include Smith & Wollensky, Citizens Bank, Prudential, Adolf Biecker Spa & Salon, and Saxbys Coffee. Hersha is also purchasing the adjacent fee simple stand-alone parking garage with 300 parking spaces.