Hersha Hospitality Announces Sale of Non-Core Properties
July 15 2009 - 7:30AM
Business Wire
Hersha Hospitality Trust (NYSE: HT), owner of select service and
upscale hotels in major metropolitan markets, today announced the
sale of three properties. The properties include a Mainstay Suites
and a Comfort Inn in Frederick, MD and a Four Points in Revere,
MA.
On a trailing twelve month property-level earnings before
interest, taxes, depreciation, and amortization (�Hotel EBITDA�)
basis, the Company sold the Frederick properties for 12.3 times and
the Revere property for 12.4 times.
�As part of our strategy to opportunistically recycle capital,
we have implemented a plan to explore the sale of certain non-core
brands and assets in locations that we believe have less
opportunity for growth in the future,� stated Mr. Jay H. Shah,
Hersha Hospitality�s Chief Executive Officer. �We are pleased that
even in this challenging environment we were able to negotiate
deals at favorable multiples, which along with additional sales
that we are pursuing, indicates that there is a market for limited
service hotels. We intend to continue our asset disposition program
for non-core properties and to pay down debt to create greater
financial flexibility as we navigate through this turbulent
cycle.�
Hersha is selling the Frederick properties, with a total of 145
rooms, for $10.3 million. The 180-room Four Points Reserve is a
joint-venture in which the Company is selling its 55% interest for
$2.5 million. Net proceeds from the sales are expected to total
$7.1 million, and the Company will record a net gain of
approximately $1.2 million in the third quarter of 2009.
The sales of the Frederick facilities closed on July 14, 2009
and the Revere asset sale is expected to close in the third quarter
of 2009. The pending disposition is subject to conditions beyond
the Company�s control, and there�can be no assurance that this
disposition will occur at the time or on the terms currently
expected.
About Hersha Hospitality Trust
Hersha Hospitality Trust is a self-advised real estate
investment trust that owns interests in 75 hotels totaling 9,562
rooms, primarily along the northeast corridor from Boston to
Washington D.C. The company also owns hotels in northern California
and Scottsdale, Arizona. Hersha focuses on high-quality, upscale
hotels in major metropolitan markets with a high barrier to
entry.
Forward-Looking Statements
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. For a description of these factors,
please review the information under the heading �Risk Factors�
included in our Annual Report on Form 10-K for the year ended
December 31, 2008, filed with the U.S. Securities Exchange
Commission and the prospectus supplement relating to the
offering.
Hotel EBITDA and GAAP Reconciliation
Hotel earnings before interest, taxes, depreciation, and
amortization (�Hotel EBITDA�) is a commonly used measure of
performance in the hotel industry for a specific hotel or group of
hotels. The Company believes Hotel EBITDA provides a more complete
understanding of the operating results of the individual hotel or
group of hotels. It calculates Hotel EBITDA by utilizing the total
revenues generated from hotel operations less all operating
expenses, property taxes, insurance and management fees, which
calculation excludes Company expenses not specific to a hotel.
Because Hotel EBITDA is specific to individual hotels or groups of
hotels and not to the Company as a whole, it is not reconcilable to
any comparable GAAP measure for the Company.
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