US hotels investment firm Hersha Hospitality Trust is selling $144m (€133m) worth of assets to help reduce its debt.
The New York-listed real estate investment trust said it has agreed to sell the Blue Moon Hotel on Miami Beach for $30m, the Duane Street Hotel in New York City for $20m, and will sell its 50% stake in the Courtyard South Boston and Holiday Inn Express South Boston hotels for $94m.
Hersha holds the stake in a joint-venture with Jiten Hotel Management.
The transaction, which is expected to close by the end of the second quarter 2020, will result in $97m of debt reduction and a taxable gains of $31m.
Jay H Shah, Hersha CEO, said: “The anticipated sales of the Blue Moon Hotel & Duane Street Hotel at very attractive pricing highlights the inherent value of Hersha’s Miami Beach and New York City portfolios, and demonstrates the strong domestic and international interest from public and private groups seeking premier real estate in top US gateway markets.
“We are also pleased to announce the sale of our 50% joint-venture with Jiten Hotel Management for our two mature hotels in South Boston. 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.
“Each of these transactions occurred as a result of our strategy to reduce our leverage profile by selling lower Ebitda-producing hotels for valuations exceeding those ascribed to our current stock valuation.”
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