EXHIBIT 8.1
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
December 28, 2001
Hersha Hospitality Trust
148 Sheraton Drive, Box A
New Cumberland, Pennsylvania 17070
Hersha Hospitality Trust
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Qualification as
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Real Estate Investment Trust
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Ladies and Gentlemen:
We have acted as counsel to Hersha Hospitality Trust, a Maryland
real estate investment trust (the "Company"), in connection with the preparation
of a Form S-11 registration statement (the "Registration Statement") filed with
the Securities and Exchange Commission ("SEC") on December 18, 2001 with respect
to the offer and sale of up to 2,000,000 Priority Class A common shares of
beneficial interest, par value $0.01 per share, of the Company (the "Priority
Common Shares"). You have requested our opinion regarding certain U.S. federal
income tax matters.
The Company owns, through Hersha Hospitality Limited Partnership,
a Virginia limited partnership (the "Operating Partnership"), and its subsidiary
partnerships (the "Subsidiary Partnerships"), interests in 18 hotels and
associated personal property (the "Hotels"). Hersha Hospitality, LLC, a
wholly-owned subsidiary of the Operating Partnership ("Hersha LLC"), is the
general partner, and the Operating Partnership is the limited partner, of each
Subsidiary Partnership. The Operating Partnership and the Subsidiary
Partnerships lease (i) 14 of the Hotels to Hersha Hospitality Management, L.P.,
a Pennsylvania limited partnership ("HHMLP"), pursuant to substantially similar
operating lease agreements (the "HHMLP Leases"), and (ii) four of the Hotels to
subsidiaries of Noble Investment Group, Ltd. ("Noble") pursuant to substantially
similar operating lease agreements (the "Noble Leases" and, together with the
HHMLP Leases, the "Leases").
In giving this opinion letter, we have examined the following:
Hersha Hospitality Trust
December 28, 2001
Page 2
1. the Company's Amended and Restated Declaration of Trust, filed on
January 15, 1999 with the Department of Assessments and Taxation of the State of
Maryland;
2. the Company's Bylaws;
3. the Registration Statement, including the prospectus contained as
part thereof (the "Prospectus");
4. the Amended and Restated Agreement of Limited Partnership of the
Operating Partnership, dated January 26, 1999 (the "Operating Partnership
Agreement"), among the Company, as general partner, and several limited
partners;
5. the partnership agreements governing the subsidiary partnerships;
6. the Leases; and
7. such other documents as we have deemed necessary or appropriate for
purposes of this opinion.
In connection with the opinions rendered below, we have assumed,
with your consent, that:
1. each of the documents referred to above has been duly authorized,
executed, and delivered; is authentic, if an original, or is accurate, if a
copy; and has not been amended;
2. during its taxable year ending December 31, 2001 and future taxable
years, the Company will operate in a manner that will make the representations
contained in a certificate, dated December 28, 2001 and executed by a duly
appointed officer of the Company (the "Officer's Certificate"), true for such
years;
3. the Company will not make any amendments to its organizational
documents, the Operating Partnership Agreement, or the partnership agreements of
the Subsidiary Partnerships (the "Subsidiary Partnership Agreements") after the
date of this opinion that would affect its qualification as a real estate
investment trust (a "REIT") for any taxable year;
4. each partner of the Operating Partnership (a "Partner") that is a
corporation or other entity has a valid legal existence;
Hersha Hospitality Trust
December 28, 2001
Page 3
5. each Partner has full power, authority, and legal right to enter
into and to perform the terms of the Operating Partnership Agreement and the
transactions contemplated thereby; and
6. no action will be taken by the Company, the Operating Partnership,
the Subsidiary Partnerships, or the Partners after the date hereof that would
have the effect of altering the facts upon which the opinions set forth below
are based.
In connection with the opinions rendered below, we also have
relied upon the correctness of the factual representations contained in the
Officer's Certificate. Where such factual representations involve matters of
law, we have explained to the Company's representatives the relevant and
material sections of the Internal Revenue Code of 1986, as amended (the "Code"),
the Treasury regulations thereunder (the "Regulations"), published rulings of
the Internal Revenue Service (the "Service"), and other relevant authority to
which such representations relate and are satisfied that the Company's
representatives understand such provisions and are capable of making such
representations.
Based on the documents and assumptions set forth above, the
representations set forth in the Officer's Certificate, and the discussion in
the Prospectus under the caption "Federal Income Tax Consequences of Our Status
as a REIT" (which is incorporated herein by reference), we are of the opinion
that:
(a) the Company qualified to be taxed as a REIT pursuant to
sections 856 through 860 of the Code for its taxable years ended December
31, 1999 and December 31, 2000, and the Company's organization and current
and proposed method of operation will enable it to continue to meet the
requirements for qualification and taxation as a REIT under the Code for
its taxable year ending December 31, 2001 and future taxable years; and
(b) the descriptions of the law and the legal conclusions
contained in the Prospectus under the caption "Federal Income Tax
Consequences of Our Status as a REIT" are correct in all material respects,
and the discussion thereunder fairly summarizes the federal income tax
considerations that are likely to be material to a holder of the Priority
Common Shares.
We will not review on a continuing basis the Company's compliance
with the documents or assumptions set forth above, or the representations set
forth in the Officer's Certificate. Accordingly, no assurance can be given that
the actual results of the Company's operations for any given taxable year will
satisfy the requirements for qualification and taxation as a REIT.
Hersha Hospitality Trust
December 28, 2001
Page 4
The foregoing opinions are based on current provisions of the Code and
the Regulations, published administrative interpretations thereof, and published
court decisions. The Service has not issued Regulations or administrative
interpretations with respect to various provisions of the Code relating to REIT
qualification. No assurance can be given that the law will not change in a way
that will prevent the Company from qualifying as a REIT.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the references to Hunton & Williams
under the captions "Federal Income Tax Consequences of Our Status as a REIT" and
"Legal Matters" in the Registration Statement. In giving this consent, we do
not admit that we are in the category of persons whose consent is required by
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations promulgated thereunder by the SEC.
The foregoing opinions are limited to the U.S. federal income tax
matters addressed herein, and no other opinions are rendered with respect to
other federal tax matters or to any issues arising under the tax laws of any
other country, or any state or locality. We undertake no obligation to update
the opinions expressed herein after the date of this letter. This opinion
letter is solely for the information and use of the addressee and the purchasers
of Priority Common Shares pursuant to the Registration Statement, and it speaks
only as of the date hereof. This opinion letter may not be distributed, relied
upon for any purpose by any other person, quoted in whole or in part or
otherwise reproduced in any document, or filed with any governmental agency
without our express written consent.
Very truly yours,
/s/ Hunton & Williams