Hersha Hospitality Trust Provides Capital Allocation Update - Seite 2

“We are pleased to announce our unsecured notes placement with the GS Purchasers, the culmination of a robust and competitive process with a high-quality field of private institutional investors. We sought to address the Company’s financing and liquidity needs without diluting our shareholders -- this bespoke solution crafted with the GS Purchasers accomplished that. Additionally, we preserve the optionality to prepay this financing as early as the first quarter of 2022. This capital allows us to eliminate all term loan maturities until August 2022, and simultaneously amend the revolving credit facility agreement extending the financial covenant holiday. The completion of these capital transactions gives us the flexibility to clear our preferred dividend accrual and keep it current as we turn our immediate focus to operational performance as demand returns, and to accretive opportunities that emerge in the recovery,” stated Mr. Jay H. Shah, Hersha’s Chief Executive Officer.

Asset Sales Strategy Completed
Year-to-date 2021, the Company has entered into binding sales contracts on four consolidated hotels for a total sale price of $178.5 million, before customary closing costs:

• The 245-room Courtyard Downtown San Diego, CA
• The 140-room Residence Inn in Coconut Grove, FL
• The 153-room Capitol Hill Hotel in Washington, DC
• The 112-room Holiday Inn Express in Cambridge, MA

These binding contracts, in addition to the previously announced sales of the Duane Street Hotel and Sheraton Wilmington, will generate net proceeds totaling $191.0 million, before customary closing costs.   In conjunction with the proceeds from the committed GS Purchasers notes placement the Company will utilize portions of the Asset Sales proceeds to satisfy its 2021 Term Loan.

The sale of the Sheraton Wilmington closed on December 1, 2020. The sales of the Courtyard Downtown San Diego, Residence Inn Coconut Grove, Capitol Hill Hotel, and Holiday Inn Express Cambridge are forecasted to close by the end of the first quarter 2021 while the sale of the Duane Street Hotel is expected to close in the second quarter 2021.

Mr. Shah continued, “Our disposition strategy focused on generating efficiently priced liquidity by selling certain older, more mature assets from our various clusters that will require more capital investment in the coming two to three years relative to the rest of the portfolio.   We owned these hotels for an average of 10.5 years and they proved to be successful investments for the Company, generating a net book gain of roughly $53 million over their hold period. The hotel sales represent a weighted average 11.7x multiple and a 7.5% capitalization rate on the six hotels’ total 2019 Hotel EBITDA and Net Operating Income, respectively. The transactions further hone the real estate value of our high-quality, purpose-built hotel portfolio and demonstrate the substantial investment appeal of hotels in urban gateway markets to sophisticated, institutional investors. We are pleased with the value retention and liquidity of our hotels during this extraordinary time.”