Hersha Hospitality Trust has closed on sale of the 121-room Hotel Milo Santa Barbara and the 153-room Pan Pacific Seattle.
The company initially announced its intent to offload the two properties in September of this year, which executives at the time said would provide gross proceeds of $125 million, or approximately $455,000 per key.
A news release on the closing said the sale of these two hotels, along with the sale of its urban, select-service portfolio and other pending dispositions, total approximately $650 million in gross proceeds. The combined totals will reduce Hersha's debt load by approximately $500 million while generating unrestricted cash of nearly $120 million.
Hersha CEO Jay Shah said in the release the firm has maintained significant financial and operational flexibility with a projected year-end cash balance exceeding $200 million and a $100-million undrawn line of credit.
https://sha.cornell.edu/people/jay-shah
“The timing of all of our dispositions has been very strategic," Shah said. "Holding assets into 2022 allowed us to benefit from increased hotel cash flows in the first half of the year, bringing pricing close to our internal NAV, while allowing us to take full advantage of a more active transaction and financing market than we are witnessing in today’s environment."
Hotel News Now’s Robert McCune earlier this month wrote that stock values for the largest publicly traded hotel brands and real estate investment trusts took their largest hit since June, down 9.1% from August to September.
Hersha did not register the largest fall in value among the firms HNN analyzed, but during the period its shares fell 17.7%.
The firm owns 28 hotels and 4,270 rooms.