HERSHA Hospitality Trust has entered into an agreement to sell 18 hotels to Starwood Capital for $155m, the largest sale in the real-estate investment trust’s history.
The 18 hotels transacted with Starwood Capital are all in secondary and tertiary cities in the eastern US states, reports said.
The REIT’s future plans are to concentrate its portfolio to only urban, high-barrier-to entry markets, Hersha CFO Ashish R Parikh said.
Parikh said the decision to sell to an affiliate of Starwood Capital was built on a close relationship and was strategic in nature.
Most of Hersha Hospitality Trust’s portfolio is operated by Hersha Hospitality Management, which is a separate, private entity, although it is 34% owned by trustees and officers of Hersha Hospitality Trust. Fourteen of the 18 hotels sold to Starwood Capital were managed by Hersha Hospitality Management and the remaining four were operated by Waterford Hospitality Group.
Starwood last year purchased a 49.9% stake in Hersha Hospitality Management for an undisclosed amount.