PHILADELPHIA-Hersha Hospitality Trust has closed on the sale of 12 of 16 hotels in a non-core hotel portfolio the company is shedding in order to concentrate on upscale urban properties.
A Blackstone Group affiliate agreed to buy all 16 hotels for $217 million last September. The properties are all in the Northeast, including hotels in Long Island, suburban Philadelphia, Connecticut and Rhode Island.
The sale of the other four hotels in the non-core portfolio is expected early next year, according to Hersha, after completion of the CMBS loan assumption process. The company did not specify which hotels are involved.
At the time of the agreement to sell, Hersha CEO Jay H. Shah said the move was timed to “capitalize on private-equity interest in stabilized, select-service assets in suburban markets.”
The sale of the 12 hotels generated $158.6 million - $33 million of which was used to pay off mortgage debt.
Hersha pland to reinvest most of the proceeds from the non-core portfolio sale into higher-growth assets on the West Coast and in Miami. It announced earlier this week that it will acquire the Hotel Oceana in Santa Barbara and the Autograph Portfolio in Miami's South Beach.
Also, the Hersha REIT is funneling proceeds into its stock re-purchase program.
When the remaining four hotels are sold, Hersha's upscale hotel portfolio will be concentrated in high-demand gateway markets.
Hersha is a self-advised publicly-traded REIT that operates 50 hotels totaling 7,900 rooms in New York, Boston, Philadelphia, Washington, DC, Miami and select markets on the West Coast.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
