The Holiday Inn Norwich is one of six Connecticut hotels being sold by Hersha Hospitality Trust to an affiliate of Starwood Capital Group for $155 million.
The transaction encompasses 18 hotels including the 134-room Norwich property, located at 10 Laura Blvd., as well as the 133-room Residence Inn in Mystic and 80-room Springhill Suites in Waterford. Hotels in Danbury, Glastonbury and Southington also are being sold, Philadelphia-based Hersha said in a filing with the U.S. Securities and Exchange Commission.
The deal is slated to close by the end of the year. The prices of the individual properties weren’t listed.
Portfolio transformation
“The sale of these 18 properties represents a major step in the transformation of our portfolio as we continue to execute on our non-core disposition program,” Hersha Hospitality CEO Jay H. Shah said in a press release.
Hersha’s holdings include the Courtyard by Marriott in Norwich and the Mystic Marriott Hotel Spa in Groton, according to its website. The Marriott Downtown and Hilton Hotel, both in Hartford, are part of its 11 Connecticut hotel portfolio. Overall, it owns stakes in 79 hotels, mainly along the Northeast Corridor, including Massachusetts and Rhode Island and stretching as far south as Washington, D.C.
Hersha aims to lower its consolidated mortgage debt by $61.5 million and cut proportionate share of unconsolidated mortgage debt by $18.3 million through the sale. Starwood will assume $6.9 million in debt associated with the Mystic property and $6 million from the Waterford hotel, according to the SEC filing. Hersha owns 66.7 percent stakes in both those hotels and owns 100 percent of the Holiday Inn Norwich. The Holiday Inn has no debt associated with it relative to the sale.
Transactions
Starwood, whose world headquarters is in Greenwich, is a private global investment firm. It has made 400 transactions covering $28 billion in assets since its creation 20 years ago, according to its website. Its lodging holdings include The Carlyle and St. Regis hotels in New York City.
Starwood Capital executives weren’t available to comment on whether Holiday Inn Norwich and the other two Eastern Connecticut hotels will be keeping their nameplates and maintaining their staffs at current levels.
Starwood did not issue a press release on the agreement but may do so after the transaction closes, spokesman Tom Johnson said.