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Hersha Takes Remaining 20% of Hampton Inn

PHILADELPHIA-The hospitality REIT takes full ownership of the 250-room asset at 1301 Race St., which it bought in a joint venture in January 2006.

By Marita Thomas | Updated on October 04, 2007

PHILADELPHIA-Hersha Hospitality Trust has purchased the remaining 20% of Hampton Inn Philadelphia. The locally based REIT acquired an 80% stake in the property in joint venture with Affordable Hospitality Associates LP, also based here, in January 2006.

The latest transaction values the hotel at approximately $41.9 million, which includes about $21.4 million in debt. Ashish Parikh, CFO, tells GlobeSt.com the company paid $27 million for its initial share and $4.2 million for the final share, “which means we made a good buy,” he says. The cap rate on the entire property, Parikh says, is 10%, and “the cap rate on the final 20% share is closer to 8%.” Affordable was a Hersha development partner, and this was its only asset, according to Parikh.

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