Hersha Hospitality Trust said Thursday it has closed on the sale of 14 of 18 secondary-market hotels with SOF-VIII U.S. Hotel Co-Invest Holdings LP, or SOF VIII, an affiliate of Connecticut-based Starwood Capital Group.
The real estate investment trust announced the sale in August as part of a portfolio restructuring. Hersha, which has offices in Harrisburg and Philadelphia, owns upscale and mid-priced hotels in major markets including Boston, Los Angeles, Miami, New York, Philadelphia and Washington.
Starwood, a privately held global investment firm, last year bought a 49.9 percent stake in Hersha to chase hotel-turnaround deals.
Last month, the deed for the Yorktowne Hotel in downtown York transferred to Starwood following a sheriff’s sale. Hersha is managing the historic property.
Six of the 18 properties in the deal with SOF VIII are in Pennsylvania, including the 97-room Hampton Inn in Middlesex Township, Cumberland County. The others are spread among Connecticut, Maryland, Massachusetts, New Jersey, North Carolina and Virginia.
Hersha said it expects to complete the sale of the remaining four properties by the end of the first quarter. The sale of the 14 assets generated net proceeds of about $40.5 million, reduced the company’s consolidated mortgage debt by $42.5 million and reduced its proportionate share of unconsolidated mortgage debt by $13.8 million, according to a company news release.
On Thursday, Hersha also reported fourth-quarter and annual earnings for 2011.
Hersha reported a quarterly net loss applicable to common shareholders of $2.8 million, or 2 cents per diluted share, compared with a net loss of $8.8 million, or 5 cents per share, in the fourth quarter of 2010.
But quarterly adjusted funds from operations were $16.5 million, or 9 cents per diluted share, matching analyst estimates, according to Yahoo Finance. That was up from $11.9 million, or 7 cents per share, in the prior year period.
For the year, net loss applicable to common shareholders was $35.7 million, or 21 cents per diluted share, compared with a net loss of $21.2 million, or 16 cents per share, in 2010, Hersha said. The increase in loss was primarily due to impairment charges on assets in the company’s noncore portfolio.
Adjusted funds from operations were $68.7 million, or 38 cents per diluted share, compared with $49.3 million, or 34 cents per share, in 2010.
Shares of the Hersha stock are traded on the New York Stock Exchange under the ticker symbol HT.