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Hersha Slows Pace of Acquisitions

PHILADELPHIA-After adding 17 properties this year, the hospitality REIT turns inward. It will focus on buying out its JV partnerships and increasing average daily rates.

By Marita Thomas | Updated on November 07, 2006

PHILADELPHIA-Hersha Hospitality Trust took delivery of one property during the third quarter, closed on three more in September and also purchased the outstanding two-thirds of a fifth asset. Noting that the locally based hospitality REIT’s pace of acquisitions slowed in comparison with previous quarters, Jay Shah, CEO, said during a conference call that he expects the acquisition pace to continue to slow.

“We are more focused on internal growth,” he said, “particularly on average daily rate increases.” Going forward, the company plans to exercise options to buy outstanding portions of properties it now owns in joint venture.

Since the end of 2005, it has acquired 17 properties and has an agreement to dispose of its non-core Atlanta portfolio. Since 2003, Shah said Hersha has followed “a deliberate assembly program,” which shifted it from a Pennsylvania focus on mid-level properties to a portfolio of 63 nationally franchised, primarily upper-scale assets from Boston to Washington, DC. Earnings are now split 21% from New York assets, 20% from Boston, 19% from Philadelphia, 15% from Washington, DC, and the remaining 25% from Connecticut and Pennsylvania.

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