Hersha Jumps After Forming Joint Venture for 7 Manhattan Hotelsby
Hersha Hospitality Trust surged the most in more than four years after the company said it sold stakes in seven Manhattan hotels, three of them in the tourist-heavy Times Square neighborhood, to a Chinese investment firm.
The hotels -- which operate under the Holiday Inn, Hampton Inn and Candlewood Suites brands -- have a total of 1,087 rooms. Cindat Capital Management Ltd. will pay $571.4 million for a 70 percent stake in the joint venture, Hersha said in a statement Thursday. The transaction is scheduled to close next month.
Hersha shares jumped 13 percent to $19.18 at 9:51 a.m. in New York, the biggest intraday gain since October 2011.
The real estate investment trust said it expects $300 million in proceeds with taxable gains of $170 million to $180 million that it will use to acquire other assets, including the 86-room Ritz-Carlton Georgetown for $50 million, and the 238-room Hilton Garden Inn M Street for $106.5 million, both in Washington.
The transactions highlight “our unique ability to recycle capital from stabilized assets into higher-growth hotels in our strategic gateway markets,” Hersha Chief Executive Officer Neil H. Shah said in the statement.