form8k.htm
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): January 11, 2010 (November 11,
2009)
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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44
Hersha Drive
Harrisburg,
Pennsylvania 17102
(Address
and zip code of
principal
executive offices)
Registrant’s
telephone number, including area code: (717) 236-4400
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
7.01
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Regulation
FD Disclosure
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On
January 11, 2010, Hersha Hospitality Trust (the “Company”) issued a press
release announcing the commencement of a public offering of 35,000,000 common
shares of beneficial interest, par value $0.01 per share. A copy of
that press release is furnished as Exhibit 99.1.
The
information furnished with this report shall not be deemed to be “filed” for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or otherwise subject to the liability of that section, and
shall not be deemed incorporated by reference in any filing under the Securities
Act of 1933, as amended (the “Securities Act”), or the Exchange Act,
regardless of any general incorporation by reference language contained therein,
except as shall be expressly set forth by specific reference in such
filing.
On
November 11, 2009, HHLP Duo One Associates, LLC (“HHLP Duo One”), a wholly-owned
subsidiary of Hersha Hospitality Limited Partnership (“HHLP”), the operating
partnership of Hersha Hospitality Trust (the “Company”), entered into a
definitive purchase agreement (the “Hampton Inn Purchase Agreement”), with Metro
Eleven Hotel, LLC, an unaffiliated seller (“Seller”), to acquire a
newly-constructed 184-room Hampton Inn located at 337 West 39th Street, New
York, New York (“Hampton Inn, Times Square”). The purchase price for
the Hampton Inn, Times Square is approximately $54.3 million, which will be
comprised of cash and may include units of limited partnership interest in HHLP
(“OP Units”) with a value no greater than $1.5 million (valued at the average
closing price of the Company’s Class A common shares of beneficial interest,
$0.01 par value per share (the “Common Shares”), on the New York Stock Exchange
(the “NYSE”) for the 20 trading days ending two trading days prior to closing on
the acquisition).
On the
same date, HHLP Duo Two Associates, LLC, another wholly-owned subsidiary of HHLP
(“HHLP Duo Two” and together with HHLP Duo One, “Buyers”), entered into a
definitive purchase agreement (the “Candlewood Suites Purchase Agreement” and
together with the Hampton Inn Purchase Agreement, the “Purchase Agreements”)
also with Seller to acquire a newly constructed 188-room Candlewood Suites
located adjacent to the Hampton Inn, Times Square at 339 West 39th Street, New
York, New York (the “Candlewood Suites, Times Square”). The purchase
price for the Candlewood Suites, Times Square is approximately $55.5 million,
which will be comprised of cash and may include OP Units with a value no greater
than $1.5 million (valued at the average closing price of the Common Shares on
the NYSE for the 20 trading days ending two days prior to closing on the
acquisition).
On
December 15, 2009, Buyers and Seller amended each Purchase Agreement (the
“Purchase Agreement Amendments”) to extend the closing date of the transactions
from December 31, 2009 to February 1, 2010.
The
Company anticipates the closing of these acquisitions will occur during the
first quarter of 2010. However, the proposed acquisitions are subject
to the completion of the offering described in the press release furnished as
Exhibit 99.1 and a variety of conditions set forth in the Purchase Agreements,
which are described below. There can be no assurance that the Company
will close the proposed public offering of common shares. In
addition, there can be no assurance that the Company will be able to consummate
the acquisitions on the schedule or on the terms described in this Current
Report on Form 8-K or at all. See “Forward-Looking Statements”
below.
Description
of Hotels
Both the
Hampton Inn, Times Square and the Candlewood Suites, Times Square are newly
constructed and opened on July 14, 2009 and July 17, 2009,
respectively. Both hotels are constructed of concrete and reinforced
steel with brick façade exteriors and soundproof windows surrounded by metal
windowpanes. The Hampton Inn, Times Square offers a business center,
a breakfast area serving complimentary breakfast, a fitness room and laundry and
valet services. The Candlewood Suites, Times Square offers a business
center, high-speed internet access in guest rooms, courier service, a fitness
room, a same-day dry cleaning service and a guest self-serve laundry
service. Since their original openings in 2009, both hotels have
been, and will continue to be following the completion of the acquisitions,
managed by Hersha Hospitality Management, L.P., a private hotel management
company owned by certain of the Company’s affiliated trustees and executive
officers and other unaffiliated third party investors.
Summary
of Purchase Agreements
Except as
otherwise noted herein, the materials terms and conditions of the two Purchase
Agreements are identical.
The
Purchase Agreements contain customary representations and warranties that
generally survive for one year, and the parties have agreed to customary
indemnification obligations related to losses arising from, among other things,
breaches of representations, warranties, covenants and
agreements. Seller and Buyers have also agreed to various covenants,
including covenants prohibiting the parties from soliciting or entering into
discussions concerning any alternative transactions during the term of the
Purchase Agreements and requiring the Seller to conducts its business in the
ordinary course and not to engage in certain transactions between the execution
of the Purchase Agreements and closing of the transactions contemplated by the
Purchase Agreements.
As
described above, pursuant to the Purchase Agreement Amendments, the closing of
the transactions contemplated by the Purchase Agreements is to occur no later
than February 1, 2010, subject to certain rights of Buyers to postpone the
closing, and is subject to certain conditions, including, among
others: (i) Buyer’s completion of the due diligence process; (ii) the
simultaneous closing of the transactions contemplated by both Purchase
Agreements; (iii) the absence of the occurrence of a substantial condemnation
proceeding or casualty loss during the term of the Purchase Agreements; (iv)
Buyers’ receipt of written approval from the franchisor of each of the hotels
for the issuance of a new franchise license to Buyers for each hotel; (v) the
accuracy of representations and warranties made by Seller and Buyers; (vi)
compliance by Seller and Buyers with their respective obligations under the
Purchase Agreements; and (vii) Seller’s delivery of customary real estate
deliverables, including certificates of occupancy or temporary certificates of
occupancy, a title policy that complies with the terms of the Purchase
Agreements and a general assignment of the assets comprising the
properties. Buyers’ liability for terminating the Purchase Agreements
for any reason prior to closing will not exceed the total earnest money deposit
of $10,100 under each Purchase Agreement.
Additionally,
the Purchase Agreements contemplate that Seller will deliver to Buyers
a right of first offer agreement memorializing the right of Buyers to make a
first offer to purchase the Holiday Inn Express Times Square South located at
343 West 39th Street, New York, New York, which is adjacent to, and was
constructed together with, the Hampton Inn, Times Square and the Candlewood
Suites, Times Square.
The
foregoing description of the Purchase Agreements and the transactions
contemplated thereby does not purport to be complete and is subject to, and
qualified in its entirety by, reference to the Purchase Agreements, copies of
which are attached to this Current Report on Form 8-K as Exhibits 99.2 and 99.3,
respectively, and incorporated by reference herein. The Purchase
Agreements have been included to provide potential investors and current holders
of the Company’s securities with information regarding their terms. The Purchase
Agreements are not intended to provide any other factual information about the
Company, HHLP or Buyers. The representations, warranties and covenants contained
in the Purchase Agreements were made only for purposes of those agreements and
as of specific dates; were solely for the benefit of the parties to those
agreements; may be subject to limitations agreed upon by the contracting
parties; and may be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to investors. Investors
should not rely on the representations, warranties and covenants or any
descriptions thereof as characterizations of the actual state of facts or
condition of the Company, HHLP or Buyers or any of the foregoing entities’
subsidiaries or affiliates. Moreover, information concerning the subject matter
of the representations, warranties and covenants may change after the date of
the Purchase Agreements, which subsequent information may or may not be fully
reflected in the Company’s public disclosures.
Forward-Looking
Statements
This
current report on Form 8-K contains forward-looking statements within the
meaning of the federal securities laws. These statements include
statements about the Company’s plans,
strategies and prospects and involve known and unknown risks that are difficult
to predict. The statement regarding the anticipated closing of the
transactions contemplated by the Purchase Agreements are forward-looking
statements. The Company’s actual
results, performance or achievements may differ materially from those expressed
in or implied by these forward-looking statements. In some cases, you
can identify forward-looking statements by the use of words such as “may,”
“could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,”
“estimate,” “predict,” “forecast,” “potential,” “continue,” “likely,” “will,”
“would” and variations of these terms and similar expressions, or the negative
of these terms or similar expressions. You should not place undue
reliance on forward-looking statements. Factors that may cause our
actual results to differ materially from the Company’s current
expectations include, but are not limited to the risk factors set forth in the
Company’s
Annual Report on Form 10-K for the year ended December 31, 2008.
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Item
9.01
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Financial
Statements and Exhibits
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99.1
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Press
release issued on January 11,
2009.*
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99.2
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Hampton
Inn Purchase Contract by and between HHLP Duo One Associates, LLC, as
Buyer, and Metro Eleven Hotel LLC, as Seller, dated as of November 11,
2009.
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99.3
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Candlewood
Suites Purchase Contract by and between HHLP Duo Two Associates, LLC, as
Buyer, and Metro Eleven Hotel LLC, as Seller, dated as of November 11,
2009.
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*
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Furnished
with this report and shall not be deemed to be “filed” for purposes of
Section 18 of the Exchange Act or otherwise subject to the liability
of that section, and shall not be deemed incorporated by reference in any
filing under the Securities Act or the Exchange Act, regardless of
any general incorporation by reference language contained therein, except
as shall be expressly set forth by specific reference in such
filing.
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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: January
11, 2010
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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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Exhibit
Index
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Exhibit
No.
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Description
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Press
release issued on January 11, 2009.*
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Hampton
Inn Purchase Contract by and between HHLP Duo One Associates, LLC, as
Buyer, and Metro Eleven Hotel LLC, as Seller, dated as of November 11,
2009.
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Candlewood
Suites Purchase Contract by and between HHLP Duo Two Associates, LLC, as
Buyer, and Metro Eleven Hotel LLC, as Seller, dated as of November 11,
2009.
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* Furnished
with this report and shall not be deemed to be “filed” for purposes of Section
18 of the Exchange Act or otherwise subject to the liability of that section,
and shall not be deemed incorporated by reference in any filing under the
Securities Act or the Exchange Act, regardless of any general incorporation by
reference language contained therein, except as shall be expressly set forth by
specific reference in such filing.