September 14, 2016
Hersha Hospitality Trust has placed a five-hotel suburban portfolio, totaling 757 rooms, under contract for $185 million, or $244,000 per key. The assets under contract are Hyatt Houses, a Residence Inn and Courtyard in Arizona, California, Maryland and Virginia; the potential buyer is undisclosed. The transaction is scheduled to close by the end of the year.
The Philadelphia-based REIT is shedding suburban-based hotels in an effort to “opportunistically upgrade the portfolio with newly built, higher-growth hotels,” said Jay Shah, Hersha’s CEO. He added that the assets performed well during the REIT’s 10-year hold period, delivering levered IRR in the teens at 50% leverage, and a 2.0x equity return multiple.
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