Exhibit 8.1
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[Hunton & Williams Letterhead]
February 12, 2002
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-3 registration statement (the "Registration Statement") filed with the
Securities and Exchange Commission ("SEC") on February 12, 2002 with respect to
the issuance from time to time of up to 500,000 Priority Class A common shares
of beneficial interest, par value $0.01 per share, of the Company (the "Priority
Common Shares") in connection with the Company's Dividend Reinvestment Plan (the
"Plan"). 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:
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February 12, 2002
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 opinion 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 February 12, 2002 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;
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February 12, 2002
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 opinion set forth below is
based.
In connection with the opinion 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 and the
representations set forth in the Officer's Certificate, we are of the opinion
that 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, 2001, 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, 2002 and future taxable years.
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.
The foregoing opinion is 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. In giving this consent, we do not admit that we are in
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February 12, 2002
Page 4
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 opinion is 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 opinion expressed herein after the date of this letter. This opinion letter
is solely for the information and use of the addressee and the persons who
acquire Priority Common Shares pursuant to the Plan, 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