In the coming weeks, Hersha will take 100% ownership of the 65-room Hampton Inn Manhattan-Financial District Seaport for approximately $27.6 million. According to Hersha officials, the transaction includes the assumption of a $19.3-million three-year only first mortgage. The loan bears interest at 6.36%.

Hersha will also take a 50% interest in the joint venture that controls the 228-room Holiday Inn Express Manhattan Madison Square. Hersha officials put the property value at $85.5 million. Once the deal closes, the Philadelphia-based REIT plans to invest about $7.75 million--a combination of cash and Limited Partnership Units--for its 50% equity interest. As part of the deal, Brisam Management, the hotel's developer, will retain the other 50% interest. Hersha previously provided a $15-million mezzanine development loan to Brisam at an annual interest rate of 10%, which will remain in place once the transaction is completed. The JV will also retain the current $55-million first mortgage, a 10-year fixed-rate loan ay 6.5%, five years interest only, company officials add.

"After completion of this deal, which is expected to close by the end of the first quarter, Hersha will own four hotels in Manhattan and earn approximately 40% of the company's [EBITDA] from the New York City metropolitan market including Manhattan, Queens, Brooklyn, Long Island, and Northern New Jersey," explains CEO Jay H. Shah. "New York offers strong current yield, high growth and is a market with a remarkable lack of high quality, mid-priced accommodations. On a trialing basis, the Hampton and Holiday Inn Express delivered over $200 in Average Daily Rate (ADR) and were nearly 90% occupied."