{"id":1004049721,"date":"2012-11-09T08:12:25","date_gmt":"2012-11-09T16:12:25","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004049721"},"modified":"2022-12-04T10:12:43","modified_gmt":"2022-12-04T18:12:43","slug":"hersha-hospitality-closes-400m-senior-unsecured-credit-facility","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/hersha-hospitality-closes-400m-senior-unsecured-credit-facility\/","title":{"rendered":"Hersha Hospitality Closes $400M Senior Unsecured Credit Facility"},"content":{"rendered":"

By Gail Kalinoski, Contributing Editor<\/em><\/p>\n

Just weeks after announcing its acquisition of a new midtown Manhattan hotel for $74 million, Hersha Hospitality Trust has closed on a $400 million senior unsecured credit facility that can expand to $550 million.<\/p>\n

The credit facility is comprised of a $250 million senior revolving line of credit and a $150 million senior unsecured-term loan that replaces the company\u2019s $250 million senior secured revolving credit facility. The Philadelphia-based hotel REIT also said it had funded a $100 million tranche of a four-year term loan at a fixed interest-rate of 3.195 percent. The term loans are being used to pay off the balance on mortgages for six hotels and for general corporate purposes.<\/p>\n

The closing comes about a week after Hersha had announced it had received commitments for the financing. At that time, CFO Ashish R. Parikh said the new funding \u201cwill meaningfully strengthen our balance sheet and provide us with greater financial flexibility.\u201d<\/p>\n

He added then that the transaction \u201cwill significantly reduce our weighted average cost of debt and enhance our liquidity position by over a half a billion dollars.\u201d<\/p>\n

This week, Parikh thanked the 16 members of the banking group that supported the financing deal for their confidence in Hersha.<\/p>\n

\u201cThe overwhelming support of the banking community resulted in a significant oversubscription that allows us to eliminate our floor pricing and reduce our weighted average cost of debt, extends the term of the facility and provides us access to the unsecured debt markets,\u201d he said.<\/p>\n

Parikh added that, \u201cthe size and pricing of the new facility further validates the embedded growth potential of our portfolio and the conservative balance sheet strategy we have undertaken.\u201d<\/p>\n

The financing was arranged by Citigroup Global Markets Inc. and Wells Fargo Securities, L.L.C. as joint lead arrangers and book running managers. Bank of America, N.A., Raymond Jones Bank, N.A., Manufacturers and Traders Trust Company and TD Bank, N.A. are acting as co-documentation agents. BBVA Compass, Fifth Third Bank, Regions Bank and US Bank National Association are acting as senior managing agents. Other lenders include Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., UBS Loan Finance L.LC., PNC Bank, The Provident Bank and Beneficial Bank.<\/p>\n

Hersha, which focuses on upscale and select-service hotels in major metropolitan markets, has made several acquisitions this year, including two in Manhattan. The most recent was the Hilton Garden Inn, a 205-room hotel at 52nd<\/sup> and Third Avenue that it bought for $74 million, or about $361,000 per key. The hotel is under construction and expected to be completed in the fourth quarter of 2013. Hersha provided the unidentified seller $17 million as a non-refundable deposit. Once completed, Hersha will assume or pay off $42 million of first mortgage debt and make additional cash payment of $15 million.<\/p>\n

Hersha CEO Jay H. Shah called the property an \u201cextremely attractive off-market asset,\u201d adding that it was well-located and only the second hotel to open in the submarket in 15 years.<\/p>\n

In July, the REIT acquired the remaining 50 percent it did not previously own in the 228-room Holiday Inn Express 29th<\/sup> Street at 29th<\/sup> Street between 8th<\/sup> and 7th<\/sup> avenues in the Midtown south submarket. Including its initial investment in February 2007, Hersha\u2019s total acquisition price was $87.5 million, or $383,772 per key.<\/p>\n

The self-advised REIT owns 64 hotels in major urban markets including New York, Washington, D.C., Boston, Philadelphia, Los Angeles and Miami, totaling 9,221 rooms.<\/p>\n","protected":false},"excerpt":{"rendered":"

Just weeks after announcing its acquisition of a new midtown Manhattan hotel for $74 million, Hersha Hospitality Trust has closed on a $400 million senior unsecured credit facility that can expand to $550 million.<\/p>\n","protected":false},"author":1068,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37774,37775,21751,21783,21742,37776,37777,37778],"tags":[],"class_list":["post-1004049721","post","type-post","status-publish","format-standard","hentry","category-rc-dividend-yield","category-rc-forward-affo-payout-ratios","category-hotel","category-investment","category-latest","category-rc-premium-discount-to-nav","category-rc-price-ltm-ffo","category-rc-total-return"],"acf":[],"yoast_head":"\nHersha Hospitality Closes $400M Senior Unsecured Credit Facility - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/hersha-hospitality-closes-400m-senior-unsecured-credit-facility\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hersha Hospitality Closes $400M Senior Unsecured Credit Facility\" \/>\n<meta property=\"og:description\" content=\"Just weeks after announcing its acquisition of a new midtown Manhattan hotel for $74 million, Hersha Hospitality Trust has closed on a $400 million senior unsecured credit facility that can expand to $550 million.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/hersha-hospitality-closes-400m-senior-unsecured-credit-facility\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2012-11-09T16:12:25+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-04T18:12:43+00:00\" \/>\n<meta name=\"author\" content=\"Gail Kalinoski\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/hersha-hospitality-closes-400m-senior-unsecured-credit-facility\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/hersha-hospitality-closes-400m-senior-unsecured-credit-facility\\\/\"},\"author\":{\"name\":\"Gail Kalinoski\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/fc5b5df1393e5023d2417bd48c2fda57\"},\"headline\":\"Hersha Hospitality Closes $400M Senior Unsecured Credit Facility\",\"datePublished\":\"2012-11-09T16:12:25+00:00\",\"dateModified\":\"2022-12-04T18:12:43+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/hersha-hospitality-closes-400m-senior-unsecured-credit-facility\\\/\"},\"wordCount\":567,\"commentCount\":0,\"articleSection\":[\"Dividend Yield\",\"Forward AFFO Payout Ratios\",\"Hotel\",\"Investment\",\"News\",\"Premium\\\/Discount to NAV\",\"Price\\\/LTM FFO\",\"Total Return\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/hersha-hospitality-closes-400m-senior-unsecured-credit-facility\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/hersha-hospitality-closes-400m-senior-unsecured-credit-facility\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/hersha-hospitality-closes-400m-senior-unsecured-credit-facility\\\/\",\"name\":\"Hersha Hospitality Closes $400M Senior Unsecured Credit Facility - 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