NEW YORK—Hersha Hospitality Trust, based in Philadelphia, Pa., has purchased the remaining 50 percent interest it did not previously own in the 228-room Holiday Inn Express 29th Street in New York City. Including its initialat the commencement of operations in February 2007, the total acquisition price is $87.5 million, or $383,772 per key.
Since the Company’s initial acquisition, the asset had been accounted for as an unconsolidated joint venturebut will now become a consolidated asset.
The company’s purchase of the remaining ownership in the joint venture for $10.0 million follows its February 2007 purchase of a 50 percent ownership stake for $7.5 million. The property has an outstanding first mortgage loan balance of $54.6 million, which bears interest at a rate of 6.50 percent and matures in 2016. In addition, the property holds a $15.0 million mezzanine loan.
The total purchase price represents an initial capitalization rate of 8.4 percent based upon net operating income for the 12 months ended December 2012 and an expected stabilized capitalization rate of 10.5 percent.
The Holiday Inn Express 29th Street is located in Midtown South on 29th Street between 8th Avenue and 7th Avenue. Located two blocks from Madison Square Garden and Penn Station, the 12-story, fee-simple property contains 228 rooms, an 80-seat breakfast area, business center and fitness center.