SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
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 $2.7 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 Comfort Suites,
Duluth, and the Holiday Inn Express, Duluth, are effective as of May 19, 2000.
The leases for the Hampton Inn hotels located in Newnan and Peachtree City is
effective as of April 20, 2000.
The purchase prices for the hotels were determined via arm's length
negotiations between the Company and Noble regarding 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, $745,623 47.56% of room revenue up to $1,567,000,
Duluth, GA plus 40% of room revenues in excess of $1,567,000
Holiday Inn Express, $533,290 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
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements.
The combined audited balance sheets and statements of operations, partners'
equity and cash flows of the Noble Investments Hotels as of December 31,
1998, June 30, 1999 and December 31, 1999 are included as Exhibit 99.1 to
this Form 8-K/A.
The combined unaudited balance sheets and statements of operations,
partners' equity and cash flows of the Noble Investments Hotels as of March
31, 2000 is included as Exhibit 99.2 to this Form 8-K/A.
(b) Pro Forma Financial Information.
The pro forma financial (unaudited) as of December 31, 1999 and for the
three months ended March 31, 2000 reflecting all of the acquisitions made
by the Company since its inception, including the acquisitions of the Noble
Investments Hotels, is included as Exhibit 99.3 to this Form 8-K/A.
(c) Exhibits.
*10.1 Form of Purchase Leaseback Agreement.
*10.2 Form of Lease Agreement.
99.1 The combined audited balance sheets and statements of operations,
partners' equity and cash flows of the Noble Investments Hotels as
of December 31, 1998, June 30, 1999 and December 31, 1999.
99.2 The combined unaudited balance sheets and statements of operations,
partners; equity and cash flows of the Noble Investments Hotels as
of March 31, 2000.
99.3 The pro forma financial (unaudited) as of December 31, 1999 and for
the three months ended March 31, 2000.
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*Previously filed.
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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: July 18, 2000
EXHIBIT INDEX
*10.1 Form of Purchase Leaseback Agreement.
*10.2 Form of Lease Agreement.
99.1 The combined audited balance sheets and statements of operations,
partners' equity and cash flows of the Noble Investments Hotels as of
December 31, 1998, June 30, 1999 and December 31, 1999.
99.2 The combined unaudited balance sheets and statements of operations,
partners; equity and cash flows of the Noble Investments Hotels as of
March 31, 2000.
99.3 The pro forma financial (unaudited) as of December 31, 1999 and for the
three months ended March 31, 2000.
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*Previously filed.
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