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Hersha Hospitality Trust (NYSE:HT)(“Hersha” or the “Company”), owner of upscale hotels in urban gateway markets, today announced results for the third quarter ended September 30, 2013.
Third Quarter 2013 Financial Results
Adjusted Funds from Operations (“AFFO”) in the third quarter increased by $3.3 million to $26.5 million, compared to $23.2 million for the third quarter of 2012. AFFO per diluted common share and unit of limited partnership interest in Hersha Hospitality Limited Partnership (“OP Unit”) was $0.13, an increase from AFFO of $0.11 per diluted common share and OP Unit reported in the same quarter in 2012. The Company’s weighted average diluted common shares and OP Units outstanding were approximately 208.6 million in the third quarter 2013.
Net loss applicable to common shareholders was $1.1 million for the third quarter ended September 30, 2013, compared to net income applicable to common shareholders of $2.7 million for the comparable quarter in 2012. The loss reported in the third quarter was due to a non-cash impairment charge on assets held for sale, which were reclassified to discontinued operations. It should be noted that upon the culmination of the non-core asset sale, the Company forecasts a book gain of approximately $30.0 million.
Mr. Jay H. Shah, Hersha Hospitality Trust’s Chief Executive Officer stated, “During the third quarter, Hersha’s portfolio occupancy exceeded the Company’s prior peak reached in 2007, while same store RevPAR also registered a record high. Market conditions in Washington D.C. and Philadelphia were challenging and muted our portfolio performance this quarter. Our same store consolidated portfolio performance was driven by the West Coast and New York markets, with RevPAR increases of 9.6% and 5.9%, respectively.”
Mr. Shah continued, “The third quarter’s defining event, however, was the Company’s agreement to sell 16 hotels for gross proceeds of $217 million, completing our transformation into a pure play, urban transient portfolio with significant presence in the highest demand gateway markets in the United States. Since 2008, we have sold 46 non-strategic hotels generating approximately $460 million in gross proceeds, demonstrating an ability to strategically recycle capital into high quality assets. Hersha will continue to work to reduce leverage and redeploy capital into higher growth opportunities in Miami and on the West Coast. With this execution, we have fortified Hersha’s position as the leading urban-focused hospitality REIT in the sector. Furthermore, the Company’s refined portfolio, combined with significant development projects coming on-line in Miami and New York, as well as the continued ramp-up at the Hyatt Union Square, position us well for ongoing outperformance.”