Hersha Sells Hotel Portfolio to Blackstone; Tower Place Seeks New Owner
- Sep 26, 2013
By Veronica Grecu, Associate Editor
Hersha Hospitality Trust, a Harrisburg,PA-based real estate investment trust that owns and operates 48 luxury hotels located in urban gateway markets, will sell a large part of its portfolio to BRE NE Hospitality Holdings LLC, an affiliate of Blackstone Real Estate Advisors, for $217 million. The deal is subject to customary conditions for real estate transactions and is expected to close by the end of Q1 2014.
The deal includes 16 non-core hotels in Long Island, suburban Philadelphia, Connecticut and Rhode Island and marks Hersha’s exit from these markets in an effort to set up “a pure play, urban transient portfolio with exposure to some of the highest demand gateway markets in the United States,” according to Jay H. Shah, the company’s chief executive officer. “Including the anticipated sale of these 16 non-core hotels, we have sold 46 non-strategic hotels generating approximately $460 million in gross proceeds since 2008. In addition to further reducing leverage, we expect to redeploy the cash proceeds from this sale into higher growth opportunities in Miami and the West Coast,” he added.
In further commercial real estate news, the Philadelphia Business Journal reports that developer Bart Blatstein is selling Tower Place, a recently renovated apartment building located at 1400 Spring Garden Street. According to the source, the structure was built in 1958 by the General State Authority to serve as the Philadelphia State Office Building. In 2011 Blatstein’s Tower Investments Inc. invested around $70 million in reconverting the 300,000-square-foot high-rise into 204 luxury residential units with rents between $1,500 and $3,000 a month. The building, which is marketed by Jones Lang LaSalle, is currently 75 percent occupied.
Photo via Tower Place Facebook Page