Hersha Hospitality Announces Agreement to Acquire Hilton Garden Inn in Midtown Manhattan For $74.0M

Hersha Hospitality Trust (NYSE: HT), owner of upscale andselect service hotels in major metropolitan markets, announced that theCompany has entered into a purchase and sale agreement to acquire the 205 roomHilton Garden Inn in New York City located at 52^nd Street near Third Avenuefor total consideration of $74.0 million, or approximately $361,000 per key.The transaction is expected to close shortly after the developer completes thehotel's construction, anticipated in the fourth quarter of 2013.“We have been able to source another extremely attractive off-market asset toadd to our Manhattan portfolio. Not only will it be a high quality,well-located hotel, but we will be acquiring it at a basis that isapproximately 25% below the average price per room for recent comparabletransactions,” commented Jay H. Shah, Chief Executive Officer. “Appealing toboth corporate and leisure travelers, the HGI Midtown East is ideally situatedwithin a 19.8 million square foot office market and is proximate to a numberof notable landmarks including the United Nations, Grand Central Station andRockefeller Center. This asset will be only the second hotel to open in thissubmarket in the last 15 years speaking volumes of its high barriers toentry.”The Company has provided $17.0 million to the seller as a non-refundabledeposit earning a current cash coupon of 10% per annum. At the completion ofconstruction, the Company will assume or extinguish $42 million of firstmortgage debt and make an additional cash payment of $15.0 million. While thispurchase and sale agreement secures the Company's right to acquire thecompleted hotel, the Company is not assuming any construction risk, includingthe risk of schedule and cost overruns. Upon acquisition, the hotel will bemanaged by HHM.