A group of banks has already committed $135 million, and the agreement's structure allows for an additional $40 million to be arranged through new participants. The agreement expires on Dec. 31, 2011.
Hersha has consolidated debt maturities in fiscal 2009 totaling $32.5 million. Management expects to refinance that maturity, but if it is not able, intends to pay it down with the new agreement.
Locally based Hersha owns interests in 77 hotels, with over 9,700 rooms on the East Coast, Northern California and Arizona. This summer it opened Nu Hotel, in Brooklyn, NY; which totals 93 rooms and is located in the Cobble Hill section of the borough.
Also this summer, Hersha agreed to purchase the 150-room Sheraton JFK Airport Hotel in Queens, NY; for just under $34 million. "We believe that possessing a young portfolio, located in high barrier-to-entry markets, is a winning strategy, regardless of the market conditions, given the growth potential these assets can provide in the coming years," said Jay Shah, the firm's chief executive officer in its Q2 report.
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