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Blog Coverage Hersha Hospitality Sells Washington DC Hotels for $62 Million

Upcoming AWS Coverage on Host Hotels & Resorts

LONDON, UK / ACCESSWIRE / January 12, 2017 / Active Wall St. blog coverage looks at the headline from Hersha Hospitality Trust (NYSE: HT) as the Company announced on January 11th, 2017, the completion of sale of two suburban Washington, DC hotels. Additionally, the Company disclosed that it has redeemed its interest in its Mystic Partners joint-venture. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

One of Hersha Hospitality Trust's competitors within the REIT - Hotel/Motel space, Host Hotels & Resorts, Inc. (NYSE: HST), is estimated to report earnings on February15, 2017. AWS will be initiating a research report on Host Hotels & Resorts following the releases of its earnings results.

Today, AWS is promoting its blog coverage on HT; touching on HST. Get all of our free blog coverage and more by clicking on the links below:

http://www.activewallst.com/registration-3/?symbol=HT

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Sale of Suburban Washington, DC Hotels

Hersha Hospitality closed the sale of the 203-room Courtyard by Marriott in Alexandria, Virginia, and the 120-room Residence Inn in Greenbelt, MD for $62.0 million. The Company also announced that it has agreed to a 6-month extension to close on the sale of three suburban West Coast hotels for $130.5 million, a $7.5 million increase from the original purchase price.

"The successful disposition of two stabilized suburban hotels with an average age of thirteen years reflects the Company's ongoing ability to execute accretive capital recycling, further concentrates our footprint to higher barrier-to-entry urban gateway and destination markets, and focuses our resources on higher quality, higher growth hotels. We expect to redeploy sales proceeds in strategic growth markets to offset taxable gains given our low basis in the hotels that we sold. We are also pleased to have structured a deal that delays the closing of the three suburban West Coast hotels for six months at improved pricing, as it allows us to continue to capture strong operational performance of these hotels while we seek replacement assets that meet the Company's strategic goals," stated Mr. Jay H. Shah, Hersha's Chief Executive Officer.

Hersha Hospitality's agreement to delay the closing of the three suburban West Coast hotels includes a $7.5 million increase in the purchase price, thus valuing the entire 757-room, 5-hotel suburban portfolio at $192.5 million, or $254,000 per key. Furthermore, Hersha Hospitality announced that it has secured a $10.0 million non-refundable deposit from the purchaser. The suburban West Coast portfolio sale is anticipated to close in July 2017, and is subject to customary closing conditions.

The sale of Hersha Hospitality's suburban Washington, DC hotels represented a blended trailing economic capitalization rate of 7.4% based on the hotels' net operating income for the twelve-month period ended December 31, 2016, and a hotel EBITDA multiple of 12.1x. The sale resulted in net proceeds of $60.1 million, with taxable gains on the sale approximating $20.0 million.

Exiting of Mystic Partners Joint-Venture

Additionally, Hersha transferred to its former joint-venture partner all of its partnership interests in the Hartford Marriott and the Hartford Hilton for $8.5 million, which represented a 100% recovery of the Company's equity investment in these assets. The Company simultaneously assumed full ownership of the Mystic Marriott Hotel & Spa without any additional cash payment to the joint-venture partner.

Mr. Shah said of the transaction:

"The liquidation of the Mystic Partners joint-venture adds the high-quality Mystic Marriott to our consolidated hotel portfolio, further simplifying our balance sheet and eliminating our exposure to full service assets in Hartford, CT. HHM assumed operational management of the Mystic Marriott at the end of 2015, and combined with our proactive asset management, has driven over a $1.0 million increase in EBITDA in the past 12 months. Moving forward, we expect to implement additional revenue and asset management strategies to drive profitability and further enhance the hotel's value."

Stock Performance

At the closing bell, on Wednesday, January 11, 2017, Hersha Hospitality Trust's stock closed the trading session at $20.64, marginally falling 0.29% from its previous closing price of $20.70. A total volume of 358.13 thousand shares have exchanged hands. The Company's stock price advanced 15.74% in the last three months, 15.26% in the past six months, and 14.36% in the previous twelve months. The Company's shares are trading at a PE ratio of 8.85 and have a dividend yield of 5.43%. The stock currently has a market cap of $878.23 million.

Earnings Alert: Hersha Hospitality will release its financial results for Q4 2016 after the market close on February 22, 2017. The Company will host a conference call to discuss these results at 9:00 a.m. ET on February 23, 2017.

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