- Sale of Miami & NYC Hotels at Attractive EBITDA Multiple -
- Sale of South Boston Joint Venture Interest -
- Proceeds to be Utilized to Reduce Leverage -
PHILADELPHIA, Feb. 24, 2020 (GLOBE NEWSWIRE) -- Hersha Hospitality Trust (NYSE: HT) (“Hersha” or the “Company”), owner of high-quality upscale, luxury and lifestyle hotels in urban gateway markets and resort destinations, today announced it has entered into binding sales contracts for two consolidated hotels and two unconsolidated joint venture assets for a total asset value of $144.0 million which will result in $97.0 million of debt reduction. These agreements include the Blue Moon Hotel on Miami Beach for $30.0 million, the Duane Street Hotel in New York City for $20.0 million, and the exit of the 50% ownership in two South Boston hotels: Courtyard South Boston and Holiday Inn Express South Boston for $94.0 million.
“The anticipated sales of the Blue Moon Hotel & Duane Street Hotel at very attractive pricing highlights the inherent value of Hersha’s Miami Beach and New York City portfolios, and demonstrates the strong domestic and international interest from public and private groups seeking premier real estate in top U.S. gateway markets. We are also pleased to announce the sale of our 50% joint-venture with Jiten Hotel Management for our two mature hotels in South Boston. This transaction led to a significant gain on our investment, simplifies our structure, and leads to a more keen focus from our Asset Management team on running our wholly-owned assets. Each of these transactions occurred as a result of our strategy to reduce our leverage profile by selling lower EBITDA-producing hotels for valuations exceeding those ascribed to our current stock valuation,” stated Mr. Jay H. Shah, Hersha’s Chief Executive Officer.
Mr. Shah continued, “The sale price of the Blue Moon Hotel represents a trailing twelve-month economic capitalization rate of 1.7% and a hotel EBITDA multiple of 43.3x. The sale price of the Duane Street Hotel represents a trailing twelve-month economic capitalization rate of 3.8% and a hotel EBITDA multiple of 21.7x. Additionally, the sale price of the South Boston portfolio represents a blended trailing twelve-month economic capitalization rate of 4.9% and a hotel EBITDA multiple of 17.7x. The sale of these 4 hotels will result in taxable gains of approximately $31.0 million.”
The transactions are anticipated to close by the end of the second quarter 2020. The transactions remain subject to customary closing conditions and no assurance can be given that these transactions 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, luxury and lifestyle hotels in urban gateway markets and resort destinations. The Company's 48 hotels totaling 7,644 rooms are located in New York, Washington, DC, Boston, Philadelphia, South Florida and select markets on the West Coast. The Company's common shares are traded on The New York Stock Exchange under the ticker “HT”. For more information on the Company, and the Company’s hotel portfolio, please visit the Company's website at www.hersha.com
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. 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, 2019 and subsequent reports filed by the Company with the Securities and Exchange Commission from time to time.