Philadelphia-based Hersha Hospitality Trust has closed on a $571.4 million, seven-hotel sale.

Hersha Hospitality Trust (NYSE: HT) in February announced the sale of seven of its Manhattan hotels to a joint venture with Chinese company Cindat Capital Management.

Hersha Hospitality Trust closed the sale of seven of its Manhattan hotels to a joint venture with Chinese company Cindat Capital Management.

Hersha on Monday announced the deal has closed.

The deal totaled 1,087 rooms for the price of about $571.4 million, or about $526,000 per key. The cost includes closing and capital improvement costs, according to Hersha.

The transaction also included senior acquisition and mezzanine financing from Natixis Real Estate Capital and Oaktree Capital Management totaling about $335 million

For Hersha, the move to sell was made in order to grow.

“For us, it was a way to monetize some value we had created in that portfolio ... across many years,” Hersha CEO Jay H. Shah told the Business Journal in February. “It satisfied two objectives: The ability to recycle capital from stabilized assets to more growth-oriented assets, and [it created] a strong strategic relationship with an offshore Chinese partner.”

Under the arrangement, Hersha will control a 30 percent equity interest while Cindat will hold 70 percent ownership stake.

"Cindat’s investment expertise in global gateway market real estate, combined with Hersha’s fifteen-year track record of owning and operating hotels in the most valuable and liquid real estate market in the world, form a strong foundation for a long-term partnership,” Neil H. Shah, Hersha’s president and COO, said in a statement on Monday.

The sale, Shah said earlier, won’t decrease Hersha’s presence in New York — it will still own 10 hotels in the city’s submarkets, including the Hyatt Union Square, three Hilton Garden Inns and a Holiday Inn Express.

Hunton & Williams served as legal counsel to Hersha on the transaction. Sidley Austin served as legal counsel to Cindat. Solid Rock Advisors advised Cindat on the transaction.

Source: Philadelphia Business Journal

Source: Philadelphia Business Journal