NEW YORK CITY — Philadelphia-based Hersha Hospitality Trust has acquired three recently opened hotels in the Times Square area of New York City. The properties include the 184-room Hampton Inn, the 188-room Candlewood Suites and the 210-room Holiday Inn Express Times Square. The company acquired the hotels for $165 million, which includes approximately 1.45 million units of limited partnership interest in the company’s operating partnership that were issued to the undisclosed sellers.
“Expanding our presence in New York City, which has historically been one of the strongest markets in the country, is one of our long-term strategic objectives,” says Jay Shah, CEO of Hersha Hospitality Trust.
Hersha was able to acquire the Holiday Inn Express property for an incremental $55 million, which lowered the company’s basis for the three hotels to approximately $284,000 per key, notes Shah. The total purchase price is approximately 12 times the assets’ estimated 2010 pro-forma cash flow.
This latest acquisition reduces the average age of Hersha’s hotel portfolio and reduces the average age of the New York City hotel portfolio to 2 years. Currently, the New York metro region accounts for 27 percent of the company’s hotel rooms. Hersha Hospitality Management manages the three properties.
— Amy Bigley