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September 13, 2022

Hersha to divest two West Coast properties for $125m

The company will leverage proceeds from the sale to repay debt and other general corporate purposes.

Luxury and lifestyle hotels owner Hersha Hospitality Trust has entered into agreement to divest two of its West Coast properties.

The properties Hotel Milo Santa Barbara and Pan Pacific Seattle have been sold for gross proceeds of $125m, or approximately $455,000 per key.

Hotel Milo has 122 guest rooms in various sizes and other guest amenities including complimentary Wi-Fi throughout the property, outdoor pools on-demand mini-bar and Milo Market in the hotel lobby offering hand-selected goods, gifts, and snacks.

The Pan Pacific Seattle, which is located in the heart of the West Coast’s Emerald City, features 153 guestrooms and suites, as well as South Lake Kitchen + Bar catering local Washington wine and fresh, seasonal cuisine.

The property is located minutes away from major destinations like Pike Place Market, the Space Needle, and the postcard-worthy waterfront.

Hersha will leverage proceeds from the sale to repay approximately $45m of debt and the remainder for general corporate purposes.

The deals are subject to customary closing conditions and are expected to close in the fourth quarter of this year.

Hersha chief executive officer Jay Shah said: “We’re pleased to have reached two separate agreements that are expected to increase our operational flexibility while furthering our long-term strategic objectives and delivering immediate shareholder value.

“The valuation of these two assets is yet another confirmation of the public-to-private market valuation gap for our portfolio, and we believe pricing on these two assets is more representative of the remaining portfolio than prior dispositions.”

In 2017, Hersha purchased Pan Pacific Hotel in Seattle, Washington, for $79m.

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