Item Ids
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of
1934
Date
of Report (Date of earliest event reported): February 15,
2006
HERSHA
HOSPITALITY TRUST
(Exact
name of registrant as specified in its charter)
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Maryland
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001-14765
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251811499
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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510
Walnut Street, 9th
Floor
Philadelphia,
Pennsylvania 19106
(Address
and zip code of
principal
executive offices)
Registrant’s
telephone number, including area code: (215)
238-1046
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instructions A.2. below):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
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Item
2.01.
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Completion
of Acquisition or Disposition of
Assets.
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Hampton
Inn (Center City)
On
February 15, 2006, Hersha Hospitality Limited Partnership (“HHLP”), the
operating partnership subsidiary of Hersha Hospitality Trust (“HT”), and Race
Street LLC, a wholly owned subsidiary of HHLP (“Race Street” and with HHLP, the
“Purchasers”) closed on the acquisition of 80% of the outstanding limited
partnership interests in Affordable Hospitality Associates, LP (the “AHA
Partnership”), the owner of the land, improvements and certain personal property
of the Hampton Inn (Center City) situated at 1301 Race Street, Philadelphia,
Pennsylvania (the “Hampton Inn”). The limited partners of the AHA Partnership
that sold their limited partnership interests are Affordable Hospitality, Inc.
(“Affordable”), 3344 Associates (“3344”) and Hersha Capital, Inc. (“HCI” and
collectively with Affordable and 3344, the “AHA Sellers”). Race Street will be
the sole general partner of the AHA Partnership.
The
purchase price for the limited partnership interests in the AHA Partnership
was
approximately $6.9 million, which was paid from cash on hand and borrowings
under Hersha’s revolving credit facility with Commerce Bank. The Purchasers did
not assume any existing debt of the AHA Partnership, but the Partnership entered
a revolving credit facility of approximately $21.0 million. Hersha’s 80.0%
equity interest in the AHA Partnership carries a 9.0% participating preferred
return. Hersha Hospitality Management L.P. (“HHMLP”), Hersha’s affiliated
hotel management company, will manage the Hampton Inn.
Hasu
P.
Shah, our Chairman of the Board of Trustees and former Chief Executive Officer,
owns direct and indirect interests in the AHA Sellers. K.D. Patel, a Trustee
of
HT and a Director of HHMLP, owns direct and indirect interests in the
AHA Sellers. Jay H. Shah, our Chief Executive Officer, owns direct and indirect
interests in the AHA Sellers. Neil H. Shah, our President and Chief
Operating Officer, owns direct and indirect interests in the AHA Sellers. Ashish
R. Parikh, our Chief Financial Officer, owns a direct interest in 3344. David
L.
Desfor, our Treasurer, owns a direct interest in 3344. Kiran P. Patel, our
corporate secretary, owns direct and indirect interests in the AHA Sellers.
Bharat C. Mehta, a Director of HHMLP, owns direct and indirect interests in
the
AHA Sellers. Each of these trustees and executive officers will receive a
portion of the proceeds of the transaction. As a related party transaction,
the
transaction was approved by all of our independent trustees.
A
copy of
the Purchase Agreement was filed as Exhibit 10.2 to the Current Report on Form
8-K filed by Hersha Hospitality Trust on January 25, 2006.
Hilton
Garden Inn
On
February 16, 2006, HHLP closed on the acquisition of 100% of the outstanding
membership interests in Metro JFK Associates LLC (“Metro LLC”), the owner of a
leasehold interest in the land, improvements and certain personal property
of
the Hilton Garden Inn JFK situated at 148-18 134 Street, Jamaica, New York
(the
“Garden Inn”). The members of Metro LLC that sold their interests are Shanti III
Associates (“Shanti”), Kunj Associates (“Kunj”), Devi Associates (“Devi”), Shree
Associates (“Shree”), David L. Desfor (“Desfor”), Ashish R. Parikh (“Parikh”),
Sal Shahriar (“Shahriar”), The Hasu and Hersha Shah 2004 Trust FBO Neil H. Shah
(“FBO Neil”) and The Hasu and Hersha Shah 2004 Trust FBO Jay H. Shah (“FBO Jay”
and collectively with Shanti, Kunj, Devi, Shree, Desfor, Parikh, Shahriar and
FBO Neil, the “Sellers”).
The
purchase price for the membership interests in Metro LLC was approximately
$29.0
million, which was paid from cash on hand and borrowings under Hersha’s
revolving credit facility with Commerce Bank. The purchase price includes the
assumption of existing debt of approximately $13.0 million. Six million of
the purchase price was paid in the form of common partnership units in
HHLP, as is more specifically described in Item 3.02 herein. HHMLP will manage
the Garden Inn.
Hasu
P.
Shah, our Chairman of the Board of Trustees and former Chief Executive Officer,
is the general partner of one of the Sellers. K.D. Patel, a Trustee of
HT and a Director of HHMLP, is the general partner of one of the
Sellers. Jay H. Shah, our Chief Executive Officer, is the beneficiary of
and a trustee of one of the sellers and is a limited partner
in one of the Sellers. Neil H. Shah, our President and Chief Operating
Officer, is the beneficiary of and a trustee of one of the Sellers and
is a limited partner in one of the Sellers. Ashish R. Parikh, our Chief
Financial Officer, and David L. Desfor, our Treasurer, are each Sellers.
Kiran P. Patel, our corporate secretary, is the general partner of one of the
Sellers. Sal Shahriar is the Executive Vice President of Operations of HHMLP.
Bharat C. Mehta, a Director of HHMLP, is the general partner of one of the
Sellers. Each of these trustees and executive officers received a portion of
the
proceeds of the transaction. As a related party transaction, the transaction
was
approved by all of our independent trustees.
A
copy of
the Contribution Agreement was filed as Exhibit 10.1 to the Current Report
on
Form 8-K filed by Hersha Hospitality Trust on January 25, 2006.
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Item
3.02.
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Unregistered
Sales of Equity
Securities.
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On
February 16, 2006, HHLP issued 657,895 common partnership units (the "Units")
in
connection with the closing of HHLP's acquisition of the membership interests
in
Metro LLC. As consideration for the sale of the Units, HHLP received membership
interests in Metro LLC valued at approximately $6.0 million. In the Contribution
Agreement, each Seller represented that it qualified as an "accredited investor"
as that term is defined in Rule 501 of Regulation D under the Securities Act,
and the Units were issued pursuant to the registration exemption for the sale
of
unregistered securities to an accredited investor. The Units are immediately
eligible for conversion into shares of HT on a one-for-one basis.
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Item
9.01
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Financial
Statements and Exhibits.
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(a)
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Financial
Statements of Business Acquired.
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To
the
extent required by this item, additional financial statements will be filed
as
part of an amendment to this Current Report on Form 8-K.
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(b)
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Pro
Forma Financial Information.
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To
the
extent required by this item, additional financial statements will be filed
as
part of an amendment to this Current Report on Form 8-K.
SIGNATURE
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 thereunto
duly authorized.
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HERSHA
HOSPITALITY TRUST
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Date:
February 21, 2006
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By:
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/s/Ashish
R. Parikh
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Ashish
R. Parikh
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Chief
Financial Officer
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