– Net Proceeds are expected to be used for general corporate purposes including, but not limited to, additional debt repayment and dividend payments –
– Price implies a blended 2.9% cap rate and 27.0x EBITDA multiple on 2019 results and a $455K per key valuation –
PHILADELPHIA, Sept. 12, 2022 (GLOBE NEWSWIRE) — Hersha Hospitality Trust (NYSE: HT) (“Hersha” or the “Company”), owner of luxury and lifestyle hotels in coastal gateway and resort markets, today announced that it has entered into definitive agreements to sell two of its West Coast properties for gross proceeds of $125 million, or approximately $455,000 per key.
Mr. Jay H. Shah, Hersha’s Chief Executive Officer, stated, “We’re pleased to have reached two separate agreements that are expected to increase our operational flexibility while furthering our long-term strategic objectives and delivering immediate shareholder value. The valuation of these two assets is yet another confirmation of the public-to-private market valuation gap for our portfolio, and we believe pricing on these two assets is more representative of the remaining portfolio than prior dispositions.”
Hersha intends to use the proceeds from the sale to pay down approximately $45 million of debt and expects to utilize the remainder for general corporate purposes including, but not limited to, additional debt repayment and dividend payments.
These transactions are subject to customary closing conditions and are expected to close in the fourth quarter of 2022, subject to customary closing conditions.
In conjunction with this release, the Company has posted an updated investor relations presentation and a presentation of supplemental information detailing the impact of transactions completed this year on its website in the Investor Relations section under “Presentations”.
Hersha Hospitality Trust (HT) is a self-advised real estate investment trust in the hospitality sector, which owns and operates luxury and lifestyle hotels in coastal gateway and resort markets. The Company’s 30 hotels totaling 4,544 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, including, without limitation, the Company’s ability to close on the pending transactions on the terms and timing it expects, if at all, and the Company’s evaluation of market valuations for its assets. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “believe,” “could,” “outlook,” “consider,” “expect,” “anticipate,” “forecast,” “project,” “likely,” “estimate,” “plan,” “continue,” “intend,” “should,” “may” and words of similar import. Because these forward-looking statements relate to future events, the Company’s plans, strategies, prospects and future financial performance, and involve known and unknown risks that are difficult to predict and may be outside the Company’s control, they are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement. Therefore, you should not rely on any of these forward-looking statements. For a description of factors that may cause the Company’s actual results or performance to differ from its forward-looking statements, please review the information under the heading “Risk Factors” included in the Company’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q filed by the Company with the Securities and Exchange Commission (“SEC”) and other documents filed by the Company with the SEC from time to time. All information provided in this press release, unless otherwise stated, is as of September 12, 2022, and the Company undertakes no duty to update this information unless required by law.
Contact: Ashish Parikh, Chief Financial Officer
Andrew Tamaccio, Director of Investor Relations & Finance
Phone: (215) 238-1046