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ATLANTA-Philadelphia-based REIT Hersha Hospitality Trust is exiting the market by signing an agreement to sell four hotels for a total price of $18.1 million.

The four hotels are the Holiday Inn Express-Duluth, the Comfort Suites-Duluth, the Hampton Inn-Peachtree City and the Hampton Inn-Newnan. The buyers have completed due diligence on the transaction, which is expected to close by the end of the fourth quarter 2006. The hotels have a total of 305 rooms and an average age of 11 years. “By selling these older hotels, which have a median age that is almost double that of our portfolio as a whole, we will reduce the age of our already young portfolio,” Hersha CEO Jay Shah says.

The sale is not expected to have an impact on the company’s earnings. The hotels are being sold for a forward 2006 cap rate of 8.3%, a figure that includes renovation costs and costs associated with the debt of the property. The net proceeds of the transaction, approximately $6 million, will be used to pay down a portion of the company’s floating debt rate.

“By disposing of these mature limited service hotels in non-strategic markets, which are expected to have a slower growth trajectory than the rest of our portfolio, we are able to focus our asset management attention on our core upscale and extended stay assets in the high barrier to entry and strong growth markets in the northeast corridor,” Shah says.

Hersha CFO Ashish Parikh tells GlobeSt.com that most of the company’s 63 hotel and extended-stay hotel properties are located in the Northeast and Mid-Atlantic regions from Boston to Washington, DC. “These properties did not fit in with our portfolio,” Parikh says. “We don’t plan to do anything else in the Southeast at this time.”

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