Hersha Hospitality Trust (NYSE: HT), owner of upscale and select service hotels in major metropolitan markets, announced that it has purchased the remaining 50% interest it did not previously own in a 130-room Courtyard by Marriott located in Ewing, a densely populated sub-market of Princeton, New Jersey, for assumption of debt and nominal cash consideration. Since Hersha’s initial acquisition in 2004, the Courtyard Ewing has been accounted for as an unconsolidated joint venture investment but will become a consolidated asset as of the third quarter of 2012.
“Gaining full control of this high quality hotel will enable us to maximize our investment as the sub-market recovery continues and as the lodging cycle gains strength,” commented Jay H. Shah, Chief Executive Officer. “Additionally, the advantageous location of the hotel provides it with consistent and accelerating demand from key corporate clients such as Bank of America-Merrill Lynch and BlackRock Financial Services. With the completion of this transaction, we now anticipate that less than eight percent of our 2013 Adjusted EBITDA will be generated from our portfolio of unconsolidated joint ventures as our ongoing efforts to simplify our capital structure and to limit our exposure to joint venture investments have proven to be effective.”
Prior to the closing of the transaction, the Company repaid the first mortgage loan secured by the Courtyard Ewing Hotel and entered into a new $9.15 million revolving line of credit secured by a mortgage on the hotel. The revolver bears interest at a rate of LIBOR plus 3.50% with a floor of 4.25% and matures in August 2014.
About Hersha Hospitality TrustHersha Hospitality Trust is a self-advised real estate investment trust, which owns 64 hotels in major urban gateway markets including New York, Washington, Boston, Philadelphia, Los Angeles and Miami totaling 9,221 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 statements related to the expected timing of the transaction described above, 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 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.
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