WASHINGTON, DC-Hersha Hospitality Trust has acquired two hotels in the Mid-Atlantic region recently. One is the Capitol Hill Suites, a 152-room hotel on Capitol Hill that traded for $47.5 million. The other is a 191-room hotel at Delaware Park in New Castle, DE, which sold for $15 million, or $78, 000 per key. Hersha Hospitality did not return a call to GlobeSt.com in time for publication.
An all-suite boutique hotel, Capitol Hill Suites went through an $8-million renovation in 2008. The purchase price represents a forward cap rate of 7.3% on the hotel’s projected 2011 net operating income. Hersha is funding the deal with cash and by assuming $32.5 million of existing debt at 5.81%.
At $312,000 per key, the Capitol Hill Suites trade was a decent buy for the District, Marc Magazine, principal of Humboldt Hospitality Advisors, tells GlobeSt.com. In general, the REIT is expanding its presence in the DC market, as illustrated by its other recent transaction in Delaware, which Magazine brokered. “That, too, was a good buy; it is a great physical property.” The Delaware hotel is still under development and is expected to open in Q3 2011. Hersha did not indicate under what flag it would operate. The all-in cost is targeted to be less than $20 million.
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