Philadelphia, Pa.-based Hersha Hospitality Trust is selling 16 hotels to an affiliate of Blackstone Real Estate Advisors for $217 million, the company said in a press release Sept. 24.
The deal means Hersha is leaving the New York?s Long Island and suburban Philadelphia markets, selling off Holiday Inn Express, Hampton Inn, Courtyard by Marriott and other properties. It also sold one Hampton Inn property in Connecticut and one in Rhode Island, AP reported.
Selling the properties should improve the company?s revenue per available room, a key metric in the hotel industry.
The price is about $125,000 per room key. The deal is expected to close by the end of the first quarter of 2014.
?The anticipated sale of these non-core portfolio hotels completes our transformation into a pure play, urban transient portfolio with exposure to some of the highest demand gateway markets in the United States,? said Hersha CEO Jay H. Shah.
?Including the anticipated sale of these 16 non-core hotels, we have sold 46 non-strategic hotels generating approximately $460 million in gross proceeds since 2008. In addition to further reducing leverage, we expect to redeploy the cash proceeds from this sale into higher growth opportunities in Miami and the West Coast,? the Indian American CEO said.
After it pays off $79 million in debt, the deal will leave it with proceeds of $138 million before closing costs and transaction expenses, the company said.
Hersha Hospitality closed at $5.51 Sept. 23. The shares have fallen almost 13 percent since peaking for the past 52 weeks at $6.30 in mid-March, AP reported.