Hersha Hospitality Trust closed on the sale of Hotel 373 in midtown Manhattan to an offshore investment group for $37 million, or approximately $529,000 per room.
The Fifth Avenue hotel has 70 rooms, Hersha said in a news release.
“The successful closing of the sale of Hotel 373 at attractive pricing highlights the inherent value of Hersha’s New York City hotel portfolio, and demonstrates the strong domestic and international interest from public and private groups seeking well-located cash flowing real estate in top U.S. gateway markets,” said Jay H. Shah, Hersha CEO.
The company utilized a portion of the proceeds generated from the sale to repurchase 2.6 million common shares of Hersha stock, Shah said.
“Moving forward, we will continue to examine opportunities to divest stabilized assets and redeploy the proceeds into higher growth opportunities, or to repurchase common shares when our stock price does not properly reflect value,” he explained.
The sale price values Hotel 373 at $1,680 per square foot, and on 2013 operating results, represents an economic capitalization rate of 5.2 percent and a hotel EBITDA multiple of 17.3.
Hersha was represented by New York City-based broker Solid Rock Advisors East, LLC.
With corporate offices in Harrisburg and Philadelphia, Hersha is a self-advised real estate investment trust that owns and operates upscale hotels in urban gateway markets. The company announced plans last year to shed noncore hotels from its portfolio.