Hersha (HT) to Sell 18 Property Portfolio in $155M Deal
Tweet
Share
E-mailGet Alerts HT Hot Sheet
Join SI Premium – FREE
Hersha Hospitality Trust (NYSE: HT) announced that as part of the Company’s portfolio repositioning and capital recycling program it has entered into definitive agreements to sell 18 properties to an affiliate of Starwood Capital Group for approximately $155 million, including the assumption of outstanding mortgage debt.
From the release: "ny estimates that it is selling these hotels at a trailing 12 month net operating income capitalization rate of approximately 8.4% and a trailing 12 month Hotel EBITDA multiple of approximately 10.3 times. The sale of these non-core assets significantly improves the Company’s hotel operating metrics and further reduces the average age of the portfolio following the completion of the anticipated sale of the 18 non-core hotels to less than seven years old, while the average age of the non-core hotels to be sold approximates 11.5 years.
For the second quarter ended June 30, 2011, Average Daily Rate (“ADR”) for the consolidated non-core hotels being sold (14 hotels) was $107.01, 32.2% less than the ADR for the remainder of the consolidated portfolio (53 hotels), which was $157.91. Hotel EBITDA margins of 34.4% for the consolidated non-core hotels being sold were approximately 810 basis points less than the Hotel EBITDA margins for the remainder of the consolidated portfolio, which were 42.5%. On a pro forma basis, adjusted to reflect the sale of the 14 consolidated non-core hotels, the Company’s second quarter consolidated RevPAR of $125.10 would have been approximately 18.2% higher than 2010 second quarter RevPAR, while Hotel EBITDA margin of 42.5% would represent approximately 240 basis points of margin expansion from the comparable period in 2010.
Upon the sale of the 18 non-core hotels, the Company expects to generate net proceeds of approximately $54 million, reduce its consolidated mortgage debt by approximately $61.5 million and reduce its proportionate share of unconsolidated mortgage debt by approximately $18.3 million. The Company anticipates utilizing the net proceeds from these sales for further debt reduction and for general corporate purposes. The transaction is expected to close by the end of the fourth quarter of 2011 and is subject to the satisfaction of customary closing conditions, including the receipt of lender and franchisor consents."
From the release: "ny estimates that it is selling these hotels at a trailing 12 month net operating income capitalization rate of approximately 8.4% and a trailing 12 month Hotel EBITDA multiple of approximately 10.3 times. The sale of these non-core assets significantly improves the Company’s hotel operating metrics and further reduces the average age of the portfolio following the completion of the anticipated sale of the 18 non-core hotels to less than seven years old, while the average age of the non-core hotels to be sold approximates 11.5 years.
For the second quarter ended June 30, 2011, Average Daily Rate (“ADR”) for the consolidated non-core hotels being sold (14 hotels) was $107.01, 32.2% less than the ADR for the remainder of the consolidated portfolio (53 hotels), which was $157.91. Hotel EBITDA margins of 34.4% for the consolidated non-core hotels being sold were approximately 810 basis points less than the Hotel EBITDA margins for the remainder of the consolidated portfolio, which were 42.5%. On a pro forma basis, adjusted to reflect the sale of the 14 consolidated non-core hotels, the Company’s second quarter consolidated RevPAR of $125.10 would have been approximately 18.2% higher than 2010 second quarter RevPAR, while Hotel EBITDA margin of 42.5% would represent approximately 240 basis points of margin expansion from the comparable period in 2010.
Upon the sale of the 18 non-core hotels, the Company expects to generate net proceeds of approximately $54 million, reduce its consolidated mortgage debt by approximately $61.5 million and reduce its proportionate share of unconsolidated mortgage debt by approximately $18.3 million. The Company anticipates utilizing the net proceeds from these sales for further debt reduction and for general corporate purposes. The transaction is expected to close by the end of the fourth quarter of 2011 and is subject to the satisfaction of customary closing conditions, including the receipt of lender and franchisor consents."
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Real and RE/MAX Holdings receive court approval for merger
- Kimbell Royalty closes $221.2M mineral rights acquisition
- Wolfspeed (WOLF) Misses Q4 EPS by 174c; Offers Guidance
Create E-mail Alert Related Categories
Corporate News, Guidance, Mergers and AcquisitionsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
