PHILADELPHIA--August 18, 2011-- Hersha Hospitality Trust (NYSE: HT), owner of upscale and select service hotels in major metropolitan markets, announced that as part of the Company’s portfolio repositioning and capital recycling program it has entered into definitive agreements to sell 18 properties to an affiliate of Starwood Capital Group for approximately $155 million, including the assumption of outstanding mortgage debt.

“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,” commented Mr. Jay H. Shah, the Company’s Chief Executive Officer. “The ongoing realignment of our portfolio toward urban gateway markets with higher growth opportunities is anticipated to result in higher RevPAR, improved Hotel EBITDA margins, lower debt and a higher net asset value for the entire portfolio. We are greatly encouraged by the progress we have made and will continue to seek opportunities to further execute on our capital recycling strategy and to increase our concentration in core urban gateway cities.”

The Company estimates that it is selling these hotels at a trailing 12 month net operating income capitalization rate of approximately 8.4% and a trailing 12 month Hotel EBITDA multiple of approximately 10.3 times. The sale of these non-core assets significantly improves the Company’s hotel operating metrics and further reduces the average age of the portfolio following the completion of the anticipated sale of the 18 non-core hotels to less than seven years old, while the average age of the non-core hotels to be sold approximates 11.5 years.

For the second quarter ended June 30, 2011, Average Daily Rate (“ADR”) for the consolidated non-core hotels being sold (14 hotels) was $107.01, 32.2% less than the ADR for the remainder of the consolidated portfolio (53 hotels), which was $157.91. Hotel EBITDA margins of 34.4% for the consolidated non-core hotels being sold were approximately 810 basis points less than the Hotel EBITDA margins for the remainder of the consolidated portfolio, which were 42.5%. On a pro forma basis, adjusted to reflect the sale of the 14 consolidated non-core hotels, the Company’s second quarter consolidated RevPAR of $125.10 would have been approximately 18.2% higher than 2010 second quarter RevPAR, while Hotel EBITDA margin of 42.5% would represent approximately 240 basis points of margin expansion from the comparable period in 2010.

Upon the sale of the 18 non-core hotels, the Company expects to generate net proceeds of approximately $54 million, reduce its consolidated mortgage debt by approximately $61.5 million and reduce its proportionate share of unconsolidated mortgage debt by approximately $18.3 million. The Company anticipates utilizing the net proceeds from these sales for further debt reduction and for general corporate purposes. The transaction is expected to close by the end of the fourth quarter of 2011 and is subject to the satisfaction of customary closing conditions, including the receipt of lender and franchisor consents.

About Hersha Hospitality Trust

Hersha Hospitality Trust is a self-advised real estate investment trust, which owns interests in 79 hotels, totaling 10,702 rooms, primarily along the Northeast Corridor from Boston, Massachusetts to Washington DC. Hersha also owns hotels in Los Angeles, Northern California and Arizona. Hersha focuses on upscale, mid-priced and extended stay hotels in major metropolitan markets.

Forward Looking Statement

Certain matters within this press release, including the anticipated closing of the sale of the 18 non-core hotels, are discussed using “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. For a description of these factors, please review the information under the heading “Risk Factors” in Hersha Hospitality Trust’s filings with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2010. No assurance can be given that the anticipated sale will occur by the end of the fourth quarter of 2011, on the terms described above and in the Company’s filings with the SEC or at all.