SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): June 5, 2000
HERSHA HOSPITALITY TRUST
(Exact name of registrant as specified in its charter)
Maryland 005-55249 251811499
(State or other jurisdiction (Commission File No.) I.R.S. Employer
of incorporation) (Identification No.)
148 Sheraton Drive, Box A
New Cumberland, Pennsylvania 17070
(Address of principal executive offices)
(717) 770-2405
(Registrant's telephone number, including area code)
N/A
(former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets
On May 19, 2000, Hersha Hospitality Trust (the "Company"), through its
interest in Hersha Hospitality L.P. (the "Partnership"), completed its
acquisition of four hotel properties in metropolitan Atlanta, Georgia from
various entities owned by Noble Investments Group, Ltd. ("Noble").
Collectively, the four properties are referred to as the ("Noble Investments
Hotels"). The four properties acquired and their respective purchase prices are
as follows:
Hotel Property Rooms Location Purchase Price
- -------------- ----- -------- --------------
Comfort Suites 85 Duluth, GA. $5,207,857
Holiday Inn Express 68 Duluth, GA. $3,735,413
Hampton Inn 91 Newnan, GA. $7,117,092
Hampton Inn 61 Peachtree City, GA. $3,939,640
The Partnership acquired the Hampton Inn, Newnan and Hampton Inn,
Peachtree City through the assumption of existing debt, held by General Electric
Capital Corporation, of $3.6 million and $2.4 million, respectively. In
addition, approximately $5.0 million was utilized from the Company's outstanding
line of credit. The Comfort Suites, Duluth and the Holiday Inn Express, Duluth
were purchased through mortgages from Lehman Brothers Bank totaling $6.0 million
in addition to $3.0 million from the Company's outstanding line of credit.
The Partnership leased the properties to entities owned by Noble pursuant
to percentage leases (the "Percentage Leases") that provide for rent based, in
part, on the room revenues from the hotels. The leases for the Hampton Inn
hotels located in Newnan and Peachtree City are effective as of April 20, 2000.
The leases for the Comfort Suites, Duluth, and the Holiday Inn Express, Duluth,
are effective as of May 19, 2000.
The purchase prices for the hotels were determined via arm's length
negotiations between the Company and Noble relative to the rent to be paid by
Noble under the Percentage Leases. Independent appraisals were obtained for
each of the hotel properties in order to further substantiate the purchase
prices.
The following table sets forth (i) the Initial Fixed Rent for the first
lease term and (ii) the annual percentage rent formula for the four hotel
properties:
Acquired Initial
Hotel Fixed Rent Percentage Rent Formula
- ----- ---------- -----------------------
Comfort Suites, $745,000 47.54% of room revenue up to $1,567,000,
Duluth, GA plus 40% of room revenues in excess of $1,567,000
Holiday Inn Express, $533,000 43.47% of room revenue up to $1,226,000,
Duluth, GA plus 40% of room revenues in excess of $1,226,000
Hampton Inn, $965,000 53.76% of room revenue up to $1,795,000,
Newnan, GA plus 40% of room revenues in excess of $1,795,000
Hampton Inn, $557,000 46.85% of room revenue up to $1,189,000,
Peachtree City, GA plus 40% of room revenues in excess of $1,189,000
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements. As of the date of this report, historical
audited financial information for the four properties is not
available. Audited financial information will be provided for the
periods specified under Rule 3-05(b) of Regulation S-X within sixty
days of this report. Pro forma financial information for the Company
will also be provided at that time.
(b) Exhibits. The following exhibits are required by Item 601 of
Regulation S-K and are listed below:
10.1 Form of Purchase Leaseback Agreement
10.2 Form of Lease Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Hersha Hospitality Trust
By: /s/ Hasu P. Shah
___________________
Hasu P. Shah
Chief Executive Officer
Date: June 5, 2000
EXHIBIT INDEX
10.1 Form Purchase Leaseback Agreement
10.2 Form Lease Agreement