Hersha Hospitality Trust (NYSE: HT) announced that the Company has closed on the purchase of the Hotel Oceana in Santa Barbara, California for $41.7 million.
“We are pleased to have successfully closed on the acquisition of the Hotel Oceana. This high quality independent oceanfront hotel is an attractive addition to our West Coast portfolio and is situated in one of the best RevPAR markets in the country,” stated Mr. Jay H. Shah, Hersha’s Chief Executive Officer. “In 2012 and 2013, we sold approximately $400 million of assets, while acquiring approximately $525 million of assets during the same period. We recently completed the sale of 16 non-core assets, and the completion of the Hotel Oceana acquisition is further indication of our commitment to prudently recycle capital. These initiatives have resulted in a refined pure play transient focused portfolio with exposure to the highest demand gateway markets in the United States. Together with our properties in San Diego, Los Angeles and the San Francisco Bay Area, the Company’s West Coast assets are positioned to leverage solid growth fundamentals and limited supply growth in some of the leading markets on the West Coast.”
For full-year 2013, the hotel reported 92.0% occupancy, with an ADR of $214.34 for a RevPAR of $196.61, outperforming the competitive set on an occupancy and RevPAR basis. The purchase price reflects an 8.6% capitalization rate on trailing-twelve month net operating income as of December 31, 2013. The Hotel Oceana acquisition was funded with a portion of the net proceeds from the non-core portfolio sale, and included the assumption of $24.9 million in mortgage debt, incurring interest at a fixed rate of 4.4% per year and maturing in 2023.
The Hotel Oceana is located on two oceanfront acres and within walking distance to downtown Santa Barbara. The high quality independently managed hotel is driven by significant transient demand in a high barrier to entry market for new hotel development, and reports operating metrics similar to the Company’s Manhattan portfolio.
Hersha Hospitality Trust (HT) is a self-advised real estate investment trust in the hospitality sector, which owns and operates high quality, upscale hotels in urban gateway markets. The Company’s 51 hotels totaling 8,120 rooms are located in New York, Boston, Philadelphia, Washington, DC, Miami and select markets on the West Coast. The Company’s shares are traded on The New York Stock Exchange-Euronext under the ticker “HT”.
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