Hersha Hospitality Trust (NYSE: HT, “Hersha” or the “Company”),
owner of upscale hotels in urban gateway markets, announced the
Company acquired the 153-room Pan Pacific Hotel in Seattle, WA for
$79.0 million.
The Pan Pacific Hotel is part of the 2200 Westlake mixed-use
project, which was developed by Seattle-based Vulcan Inc. in 2006.
The property is located at the gateway to South Lake Union,
Seattle’s fastest growing neighborhood, where Vulcan has developed
6.3 million square feet of office, biotech, residential, and retail
and hospitality projects since 2004.
“The Pan Pacific Hotel was one of our most pioneering projects,”
said Ada M. Healey, Vice President of Real Estate at Vulcan Inc.
“It helped put South Lake Union on the map and was a key asset that
helped attract numerous tenants and investment to the
neighborhood.”
“We are pleased to enter the dynamic Seattle market with the Pan
Pacific Hotel. Greater Seattle is home to iconic Fortune 500
companies, such as Amazon, Costco, Microsoft and Starbucks, and
boasts one of the country’s fastest growing economies, reporting
the second highest annual GDP growth rate among major MSAs at 4.1%
from 2010 - 2015. The Pan Pacific’s prominent location as the
closest independent lifestyle hotel to Amazon positions the hotel
to be the property of choice for the new-economy businesses in the
burgeoning South Lake Union submarket. South Lake Union has become
the most desirable neighborhood in Seattle, with transformational
office, retail and residential development all adjacent to the
hotel. Today, the city has approximately 46 million square feet of
office space with an additional 6 million square feet under
construction, and more than 14 million square feet in various
stages of entitlement. The Pan Pacific’s superior location, luxury
amenities, and well-appointed meeting space, combined with the
submarket’s embedded corporate and leisure demand provide
meaningful upside. We expect to leverage the expertise garnered at
our other independent lifestyle hotels to add to the success of The
Pan Pacific. Working with Vulcan, Seattle’s most respected and
innovative real estate developer, gave us comfort as we enter one
of the best real estate markets in the United States. We are
appreciative of Vulcan’s professionalism and support and look
forward to becoming part of the vibrant Seattle community,” stated
Mr. Jay H. Shah, Hersha’s Chief Executive Officer.
The Pan Pacific Hotel is exceptionally located at the corner of
Denny Way and Westlake Avenue, across the street from Amazon’s
global headquarters, at the North end of Seattle’s CBD, the
epicenter of the city’s growth over the past several years. Amazon
occupies 8.5 million square feet of commercial space proximate to
the hotel, with plans to build an additional 3.5 million square
feet by 2020. Additional companies and institutions contributing to
South Lake Union’s unprecedented growth include Facebook, Google,
Expedia, Microsoft, The Bill & Melinda Gates Foundation, The
Fred Hutchinson Cancer Research Center, The University of
Washington School of Medicine, and The Allen Institute. The hotel
is also within walking distance to Seattle’s leisure attractions,
including The Space Needle, The Museum of Pop Culture and Chihuly
Garden and Glass.
The luxury lifestyle Forbes Four Star, AAA Four-Diamond Pan
Pacific Hotel opened in 2006 as part of 2200 Westlake, a mixed-use
development with 260 luxury condominiums anchored by a very
successful, new generation Whole Foods. The hotel’s 153 rooms, of
which 20% are premium suites, feature four fixture baths including
separate glass showers and oversized bathtubs. The hotel’s
amenities also include a 3-meal restaurant, 9,100 square feet of
meeting space, an outdoor veranda, a fitness center with an indoor
whirlpool spa, locker rooms and sauna and 60 designated parking
spaces. HHM, which manages 2 hotels in Seattle, will operate the
hotel as an independent property, and is expected to reprogram and
elevate the hotel’s food and beverage offering and service
delivery.
Hersha intends to engage in a tax-deferred reverse like-kind
exchange with respect to the Company’s acquisition of The Pan
Pacific, and the expected disposition of the suburban West Coast
portfolio of 3 Hyatt Houses anticipated to close in July 2017. The
disposition of the suburban West Coast portfolio is forecast to
generate approximately $65 million in taxable gains, which will
deferred by the acquisition of The Pan Pacific. The suburban West
Coast portfolio sale is subject to customary closing conditions,
with no assurance that this transaction will close within the
expected time frame, or at all.
Hersha Hospitality Trust (HT) is a self-advised real
estate investment trust in the hospitality sector, which owns and
operates high quality upscale hotels in urban gateway markets. The
Company's 53 hotels totaling 7,943 rooms are located in New York,
Washington, DC, Boston, Philadelphia, Miami and select markets on
the West Coast. The Company's common shares are traded on The New
York Stock Exchange under the ticker “HT”.
About Vulcan Real Estate: Seattle-based Vulcan Real
Estate directs all real-estate investment activities for
Vulcan Inc., a Paul G. Allen company. Through strategic
acquisitions and innovative development, Vulcan Real Estate has
created a diversified portfolio of high-performing quality assets
including office, life sciences, residential and mixed-use
projects. The company’s integrated team of real estate
professionals offers a full range of development and portfolio
management services from site selection and urban planning to
build-to-suit construction, leasing, financing and asset
repositioning. Its real estate model is based on quality,
sustainable development that builds new value across the entire
community. Since 2000, Vulcan Real Estate has delivered $3 billion
in assets in 32 projects comprising 8 million square feet and 1,555
residential units. Eighty percent of the development projects have
occurred in South Lake Union, renowned as one of the largest urban
redevelopment projects in the country. The company also has a
near-term development pipeline of 13 projects, including 2.6
million square feet and 1,870 residential units.
Forward Looking Statement
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, and, as such, may involve known and unknown risks,
uncertainties and other factors that may cause the actual results
or performance to differ from those reflected in the
forward-looking statement, including, without limitation, the
Company’s ability to implement its business strategies for The Pan
Pacific Hotel on the terms and timing it expects, the Company’s
forecasts of performance and future yields for The Pan Pacific
Hotel, the Company’s expectations for the long-term performance of
the Seattle market and the risks associated with a lack of market
knowledge or understanding of the local economy, ability to forge
new business relationships and lack of experience with local
government and permitting procedures when entering a new market.
For a description of these factors, please review the information
under the heading “Risk Factors” included in Hersha Hospitality
Trust’s filings with the U.S. Securities and Exchange Commission
Annual Report on Form 10-K for the year ended December 31, 2016 and
subsequent reports filed by the Company with the Securities and
Exchange Commission from time to time.
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version on businesswire.com: http://www.businesswire.com/news/home/20170222006549/en/
Hersha Hospitality TrustAshish Parikh, Chief Financial
OfficerPete Majeski, Manager of Investor Relations &
FinancePhone: 215-238-1046
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