PHILADELPHIA— Hersha Hospitality Trust announced that it has purchased the remaining 50 percent interest it did not previously own in a 130-room Courtyard by Marriott located in Ewing, a densely populated sub-market of Princeton, New Jersey, for assumption of debt and nominal cash consideration. Since Hersha’s initial acquisition in 2004, the Courtyard Ewing has been accounted for as an unconsolidated joint venture investment but will become a consolidated asset as of the third quarter of 2012.
“Gaining full control of this high quality hotel will enable us to maximize our investment as the sub-market recovery continues and as the lodging cycle gains strength,” commented Jay H. Shah, chief executive officer, in an announcement. “Additionally, the advantageous location of the hotel provides it with consistent and accelerating demand from key corporate clients such as Bank of America-Merrill Lynch and BlackRock Financial Services. With the completion of this transaction, we now anticipate that less than eight percent of our 2013 Adjusted EBITDA will be generated from our portfolio of unconsolidated joint ventures as our ongoing efforts to simplify our capital structure and to limit our exposure to joint venture investments have proven to be effective.”
Prior to the closing of the transaction, the Company repaid the first mortgage loan secured by the Courtyard Ewing Hotel and entered into a new $9.15 million revolving line of credit secured by a mortgage on the hotel. The revolver bears interest at a rate of LIBOR plus 3.50 percent with a floor of 4.25 percent and matures in August 2014.