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A Pennsylvania-based hospitality REIT is selling $144M in hotel assets and partnerships following a disappointing Q4.
Hersha Hospitality Trust is selling its 50% stake in a joint venture with Jiten Hotel Management at both the Courtyard South Boston and Holiday Inn Express South Boston hotels in Massachusetts for $94M. The REIT is also selling the Blue Moon Hotel in Miami for $30M and the Duane Street Hotel in New York City for $20M in an effort to reduce its debt.
The binding sales contracts for both hotels and the joint venture are expected to close by the end of Q2.
“This transaction led to a significant gain on our investment, simplifies our structure, and leads to a more keen focus from our Asset Management team on running our wholly-owned assets,” Hersha Hospitality CEO Jay Shah said in a prepared statement.
Jiten Hotel Management is buying out Hersha Hospitality's stake in the Boston hotels, but details about the buyers in New York and Miami were not made publicly available.
The sales commitment comes after the hospitality REIT missed Q4 cash flow estimates by 2 cents. Hersha Hospitality reported Monday a Q4 loss of $9.3M. Shares of the REIT fell more than 11% Wednesday.
The growth of RevPAR, or revenue per available room, was strongest for Q4 in Hersha Hospitality’s South Florida portfolio, at 17.7%. It was the weakest in Manhattan (down 6.9%) and Boston (down 6.6%).
Hersha’s earnings report blamed Boston’s weak performance on a flood of new supply hitting the market while Manhattan’s poor numbers were blamed on a shortened holiday season.
The four-asset sale is expected to reduce debt by $97M.
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