Private equity firm KSL Capital Partners has acquired Hersha Hospitality Trust. The transaction, valued at approximately $1.4 billion, is expected to close in the fourth quarter of 2023. According to the terms of the deal, KSL will acquire all outstanding common shares of Hersha at a price of $10 per share. The purchase price represents a premium of about 60% over Hersha’s closing stock price on August 25th. As of Hersha’s second-quarter earnings report, the REIT (Real Estate Investment Trust) had a portfolio of 25 hotels with 3,811 keys. In the second quarter of 2023, the REIT achieved a net income of $1.7 million, down from $2.4 million in the second quarter of 2022, an Average Daily Rate (ADR) of $303, and a Revenue Per Available Room (RevPAR) of $234.

In an investor note, C. Patrick Scholes, Managing Director of Lodging and Leisure Equity Research at Truist Securities, mentioned that it had been several years since a private equity firm showed interest in acquiring a publicly traded full-service hotel REIT. The last instance was in 2017 when Blackstone offered RLJ Lodging Trust $24 per share, an offer that was rejected by RLJ’s Board of Directors.

KSL Capital has acquired several companies in the hotel sector in recent years. In July, they acquired a majority stake in Sereno Hotels. In February, they acquired the Martin Resorts Collection, which includes five independent boutique hotels in California, The Pig Hotels in the UK, and increased their investment in Under Canvas. One of their significant past acquisitions dates back to 2016 when they acquired Outrigger Hotels & Resorts. In 2021, the company also launched Mission Hill, an investment platform focused on the extended-stay and select service segments.