Hersha Sells Hilton Garden Inn Gettysburg, PA for $7.75M as it Continues to Shed Non-Core Assets
(PHILADELPHIA, PA) -- Hersha Hospitality Trust (NYSE: HT) continues to strengthen its balance sheet and reduce its debt load with the continuing sales of non-core assets.
(Please see Real Estate Channel posting July 15, 2009, "Hersha Unloads Its Interest in Three Small Hotels totaling 325 Rooms for $12.8M")
The Philadelphia, PA-based REIT today announced the $7.75 million sale of the 88-room Hilton Garden Inn Gettysburg, PA as well as the closing of the previously announced sale of the Four Points by Sheraton in Revere, MA.
On a trailing t12-month property-level earnings before interest, taxes, depreciation, and amortization ("Hotel EBITDA") basis, this equates to a multiple of approximately 13.8 times.
The company also closed on the sale of the 180-room Four Points hotel in Revere, MA in which the Company is selling its 55% interest for net proceeds of $2.5 million.
Hersha refinanced two land parcels currently owned by the company and leased to developers. One parcel is located on 8th Avenue in Manhattan, New York, and another parcel is located on Nevins Street in Brooklyn, New York.
Additionally, the company refinanced two hotels, a Holiday Inn Express in Hershey, Pennsylvania and a Fairfield Inn in Laurel, Maryland, each of which was previously pledged as collateral for the Company's revolving line of credit facility.
Debt on the 8th Avenue parcel was reduced from $13.25 million to $12.0 million and debt on the Nevins Street parcel was reduced from $6.5 million to $6.0 million. The Company in turn extended the maturity of both of its loans until July 2011 and decreased the interest rate floor on those loans to 6.875%.
The company placed a new $6 million mortgage loan on the Holiday Inn Express in Hershey, PA and a new $7.35 million mortgage loan on the Fairfield Inn in Laurel, MD.
The loan terms on both new loans expire in August 2014. Both of these assets were previously pledged as collateral for the company's revolving line of credit facility, and net loan proceeds of approximately $13.0 million were utilized to pay down the credit facility to provide additional revolving line capacity.
As a result of these transactions, the company states it has eliminated all of its remaining 2009 consolidated debt maturities as it "continues to execute on its strategy of disposing of non-core properties and paying down debt to create greater financial flexibility through this turbulent cycle."