PHILADELPHIA—Hersha Hospitality Trust announced that the company has closed on the previously-announced sale of Hotel 373 in midtown Manhattan for $37 million, or approximately $529,000 per key.
“The successful closing of the sale of Hotel 373 at attractive pricing highlights the inherent value of Hersha’s New York City hotel portfolio, and demonstrates the strong domestic and international interest from public and private groups seeking well-located cash flowing real estate in top U.S. gateway markets. The company utilized a portion of the proceeds generated from the sale to repurchase 2.6 million common shares. Moving forward, we will continue to examine opportunities to divest stabilized assets and redeploy the proceeds into higher growth opportunities, or to repurchase common shares when our stock price does not properly reflect value,” stated Mr. Jay H. Shah, Hersha’s chief executive officer.
The sale price valued the hotel at $1,680 per square foot, and represented an economic capitalization rate of 5.2 percent based on the hotel’s net operating income for the year ended Dec. 31, 2013, and a multiple of 17.3x based on hotel EBITDA for the year ended Dec. 31, 2013.
Hersha was represented by New York City-based broker Solid Rock Advisors East LLC.