Hersha, which owns upscale urban hotels, announced that it would sell Hotel 373 in midtown Manhattan to an offshore investment group for $37 million, which equates to approximately $529,000 per room for the 70-room hotel. The deal values the hotel at $1,680 per square foot.
Hersha expects the deal to close in the second quarter of the fiscal year 2014.
"The pricing on the sale of Hotel 373 is indicative of Manhattan's highly sought after real estate market, and underscores the quality and value of Hersha's New York City hotel portfolio. We believe the sale of Hotel 373 will narrow the gap between the private and public market value of the Company's real estate", stated CEO Jay H. Shah in the company's statement. "The transaction is a strong indication of continuing domestic and international interest from public and private groups seeking to acquire cash flowing real estate in top U.S. gateway markets. We remain optimistic regarding the long-term prospects of the New York City hotel market, but we will continue to search for opportunities to divest high-yielding, stabilized assets and to redeploy the proceeds into higher growth opportunities or to pursue stock buyback opportunities at periods when the stock price does not appropriately reflect value."