Hersha Hospitality Trust (NYSE: HT), owner of upscale, mid-scale and extended stay hotels in major metropolitan markets, announced that it has refinanced the outstanding debt on its Hilton Garden Inn located in Tribeca, New York City.
The Hilton Garden Inn, Tribeca is a newly built hotel that opened in January of 2009. Hersha completed its acquisition of this hotel in June 2009 and assumed approximately $29.8 million of debt in conjunction with the acquisition. Despite this asset's limited operating history, based on its performance under Hersha's ownership, the Company was able to secure new financing on the property with a larger principal balance and lower interest rate while simultaneously extending the term of the loan.
The new non-recourse debt financing increases the mortgage to $32.0 million with a fixed interest rate of 8.25%. This new financing extends the maturity from 2012 until 2015.
Since the beginning of the credit crisis in 2008, the Company has taken significant steps to refinance its debt outstanding and to extend its maturity profile. Including the existing credit line, the Company has refinanced approximately $264 million of debt at a weighted average interest rate of 4.94% and has increased its debt capacity by $56 million. Approximately 87 percent of the Company's debt is fixed or capped with a weighted average maturity of 7.4 years.
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