Hersha Hospitality Trust, a real estate investment trust, which owns interests in 59 nationally franchised, upper-upscale, upscale and midscale limited service and extended-stay hotels, announced lately that the Company has signed a definitive agreement to purchase 7 extended-stay Hyatt Summerfield Suites hotels with a total of 1,005 suites from LodgeWorks, L.P. for approximately $169 million. The Company anticipates spending an additional approximately $2.5 million for capital improvements. LodgeWorks will continue to manage the hotels and bear any additional costs for brand compliance.
Mr. Jay H. Shah, Chief Executive Officer, commented, ‘We could not pass up this transaction for many reasons, but foremost it is projected to be accretive to our earnings in 2007, as we were able to acquire these assets at favorable cap rates and at prices below replacement cost in these key markets. Extended-stay hotels, which we believe better weather market cycles and offer high absolute RevPAR, will become more than 35% of our portfolio, post closing of the transaction. We are also pleased to be able to begin a relationship with LodgeWorks, our fifth independent management company, the pioneer of the extended-stay segment, and a leading developer and manager in northern California and other key markets. This transaction is very complementary to our existing upscale extended-stay portfolio.’ More.
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