Hersha Hospitality Trust (HT, Financial) filed Quarterly Report for the period ended 2009-03-31.
Hersha Hospitality Trust is an entrepreneurial high-growth real estatedevelopment and management company focussed on the hospitalityindustry. Hersha currently owns operates and develops a portfolio ofhotels and assisted living facilities in the mid-Atlantic region of the United States. (PRESS RELEASE) Hersha Hospitality Trust has a market cap of $145.4 million; its shares were traded at around $3.01 with a P/E ratio of 2.7 and P/S ratio of 0.5. The dividend yield of Hersha Hospitality Trust stocks is 23.8%.
We own parcels of land which are being leased to hotel developers, some of which are owned in part by certain executives and affiliated trustees of the Company. Our net investment in these parcels is approximately $23,366. Each land parcel is leased at a minimum rental rate of 10% of our net investment in the land. Additional rents are paid by the lessee for the principal and interest on the mortgage, real estate taxes and insurance. During the three months ended March 31, 2009, we recorded $1,321 in land lease revenue from these parcels. We incurred $724 in expense related to these land leases resulting in a contribution of $597 to our operating income during the three months ended March 31, 2009. These leases contributed $585 to our operating income during the three months ended March 31, 2008.
Total hotel operating expenses decreased 5.8% to approximately $30,538 for the three months ended March 31, 2009 from $32,432 for the three months ended March 31, 2008. As a result of declining hotel operating revenues, our hotel operators implemented cost reduction and cost containment initiatives to reduce hotel operating expenses. Decreases in our hotel operating expenses resulting from lower occupancies and our operators cost reduction initiatives were partially offset by increases in hotel operating expenses due to the acquisitions consummated since March 31, 2008, as mentioned above. The acquisitions also resulted in an increase in depreciation and amortization from $9,466 for the three months ended March 31, 2008 to $10,938 for the three months ended March 31, 2009. Similarly, real estate and personal property tax and property insurance increased $186, or 5.88%, in the three months ended March 31, 2009 when compared to the same period in 2008. General and administrative expense for the three months ended March 31, 2009 remained consistent when compared to the same period in 2008.
Interest expense, decreased $88 from $10,707 for the three months ended March 31, 2008 to $10,619 for the three months ended March 31, 2009. The decrease in interest expense is due primarily to declines in rates on our variable rate borrowings and our interest rate hedge strategy that has taken advantage of declines in LIBOR by locking in favorable fixed rates by entering into interest rate swaps.
Net cash used in investing activities for the year ended December 31, 2008 decreased $45,434, from $50,185 in the three months ended March 31, 2008 compared to $4,751 for the three months ended March 31, 2009. During the three months ended March 31, 2008, we acquired two properties for a total purchase price of $41,218 including the issuance of units in our operating partnership valued at $6,862 resulting in net cash paid for acquisitions of $34,356 plus $104 paid for the operating assets of the hotel. We did not acquire any hotel properties during the same period in 2008. We decreased our capital expenditures from $3,828 during the three months ended March 31, 2008 to $1,998 during the same period in 2009. This decrease was the result of our initiatives to defer all non-essential capital expenditures. In addition, cash used to invest in development loans receivable was $12,700 for the three months ended March 31, 2008 compared to $2,000 for the same period in 2009.
Net cash provided by financing activities for the three months ended March 31, 2009 was $4,222 compared to $46,794 during the same period in 2008. Proceeds from our credit facility and mortgages and notes payable, net of repayments, were $15,689 during the three months ended March 31, 2009 compared to net proceeds of $56,772 during the same period in 2008. The decrease in these borrowings is a result of a decrease in our acquisition activity. The decrease in cash provided by financing activities was partially offset by an increase in dividends paid on common shares and our Common Units. Dividends paid on common shares and distributions on our Common Units increased $1,551 during the three months ended March 31, 2009 compared to the same period in 2008.
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Hersha Hospitality Trust is an entrepreneurial high-growth real estatedevelopment and management company focussed on the hospitalityindustry. Hersha currently owns operates and develops a portfolio ofhotels and assisted living facilities in the mid-Atlantic region of the United States. (PRESS RELEASE) Hersha Hospitality Trust has a market cap of $145.4 million; its shares were traded at around $3.01 with a P/E ratio of 2.7 and P/S ratio of 0.5. The dividend yield of Hersha Hospitality Trust stocks is 23.8%.
Highlight of Business Operations:
Our total revenues for three months ended March 31, 2009 consisted of hotel operating revenues, interest income from our development loan program, land lease revenue, and other revenue. Hotel operating revenues are recorded for wholly owned hotels that are leased to our wholly owned TRS and hotels owned through joint venture interests that are consolidated in our financial statements. Hotel operating revenues decreased $6,850, or 13.2%, from $51,919 for the three months ended March 31, 2008 to $45,069 for the same period in 2009. This decrease was primarily the result of a decrease in our occupancy rate from 65.7% during the three months ended March 31, 2008 to 57.5% for the same period in 2009. In addition, ADR decreased 8.5% from $130.12 per room for the three months ended March 31, 2008 to $119.00 per room during the same period in 2009. The decrease was only partially offset by increases in revenue attributed to the acquisitions consummated in 2008.We own parcels of land which are being leased to hotel developers, some of which are owned in part by certain executives and affiliated trustees of the Company. Our net investment in these parcels is approximately $23,366. Each land parcel is leased at a minimum rental rate of 10% of our net investment in the land. Additional rents are paid by the lessee for the principal and interest on the mortgage, real estate taxes and insurance. During the three months ended March 31, 2009, we recorded $1,321 in land lease revenue from these parcels. We incurred $724 in expense related to these land leases resulting in a contribution of $597 to our operating income during the three months ended March 31, 2009. These leases contributed $585 to our operating income during the three months ended March 31, 2008.
Total hotel operating expenses decreased 5.8% to approximately $30,538 for the three months ended March 31, 2009 from $32,432 for the three months ended March 31, 2008. As a result of declining hotel operating revenues, our hotel operators implemented cost reduction and cost containment initiatives to reduce hotel operating expenses. Decreases in our hotel operating expenses resulting from lower occupancies and our operators cost reduction initiatives were partially offset by increases in hotel operating expenses due to the acquisitions consummated since March 31, 2008, as mentioned above. The acquisitions also resulted in an increase in depreciation and amortization from $9,466 for the three months ended March 31, 2008 to $10,938 for the three months ended March 31, 2009. Similarly, real estate and personal property tax and property insurance increased $186, or 5.88%, in the three months ended March 31, 2009 when compared to the same period in 2008. General and administrative expense for the three months ended March 31, 2009 remained consistent when compared to the same period in 2008.
Interest expense, decreased $88 from $10,707 for the three months ended March 31, 2008 to $10,619 for the three months ended March 31, 2009. The decrease in interest expense is due primarily to declines in rates on our variable rate borrowings and our interest rate hedge strategy that has taken advantage of declines in LIBOR by locking in favorable fixed rates by entering into interest rate swaps.
Net cash used in investing activities for the year ended December 31, 2008 decreased $45,434, from $50,185 in the three months ended March 31, 2008 compared to $4,751 for the three months ended March 31, 2009. During the three months ended March 31, 2008, we acquired two properties for a total purchase price of $41,218 including the issuance of units in our operating partnership valued at $6,862 resulting in net cash paid for acquisitions of $34,356 plus $104 paid for the operating assets of the hotel. We did not acquire any hotel properties during the same period in 2008. We decreased our capital expenditures from $3,828 during the three months ended March 31, 2008 to $1,998 during the same period in 2009. This decrease was the result of our initiatives to defer all non-essential capital expenditures. In addition, cash used to invest in development loans receivable was $12,700 for the three months ended March 31, 2008 compared to $2,000 for the same period in 2009.
Net cash provided by financing activities for the three months ended March 31, 2009 was $4,222 compared to $46,794 during the same period in 2008. Proceeds from our credit facility and mortgages and notes payable, net of repayments, were $15,689 during the three months ended March 31, 2009 compared to net proceeds of $56,772 during the same period in 2008. The decrease in these borrowings is a result of a decrease in our acquisition activity. The decrease in cash provided by financing activities was partially offset by an increase in dividends paid on common shares and our Common Units. Dividends paid on common shares and distributions on our Common Units increased $1,551 during the three months ended March 31, 2009 compared to the same period in 2008.
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