Hersha Exits Market With $18M Sale of Four Hotels

ATLANTA-Philadelphia-based REIT Hersha Hospitality Trust is exiting the market by signing an agreement to sell four hotels for a total price of $18.1 million.

The four hotels are the Holiday Inn Express-Duluth, the Comfort Suites-Duluth, the Hampton Inn-Peachtree City and the Hampton Inn-Newnan. The buyers have completed due diligence on the transaction, which is expected to close by the end of the fourth quarter 2006. The hotels have a total of 305 rooms and an average age of 11 years. “By selling these older hotels, which have a median age that is almost double that of our portfolio as a whole, we will reduce the age of our already young portfolio,” Hersha CEO Jay Shah says.

The sale is not expected to have an impact on the company’s earnings. The hotels are being sold for a forward 2006 cap rate of 8.3%, a figure that includes renovation costs and costs associated with the debt of the property. The net proceeds of the transaction, approximately $6 million, will be used to pay down a portion of the company’s floating debt rate.