Hersha Hospitality Trust (NYSE: HT) ("Hersha" or the "Company"), owner of upscale hotels in urban gateway markets, today announced the Company has entered into a purchase agreement for the 155-room St. Gregory Hotel & Suites ("St. Gregory") in Washington, DC for $57.0 million.

"The high quality, well-located St. Gregory characterizes the type of strategic investment that we seek in our core markets. The hotel will be immediately accretive to our portfolio's RevPAR and EBITDA growth and will further benefit from our pricing and positioning strategies. The independent upscale hotel affords operational flexibility to drive strong margin performance. Through Hersha's active and aggressive asset management program, we will shift the hotel's operational and sales strategies and reposition the asset to leverage growing demand in the vibrant DuPont Circle submarket. The acquisition of the St. Gregory also demonstrates our conviction in Washington, DC as the market recovers from a period of muted growth. The evolution of private and public sector demand drivers in Washington, DC over the past year provide excellent prospects for meaningful RevPAR growth over the long-term," stated Mr. Jay H. Shah, Hersha's Chief Executive Officer.

The St. Gregory, which will join HT's growingportfolio of independent hotels, is situated in Washington, DC's DuPont Circle neighborhood at 21st and M Street NW and just steps away from Downtown and the West End. The hotel operated at an average daily rate ("ADR") of $169.36 and occupancy of 89.5% in the trailing twelve months ending April 30, 2015. The nine-story building contains 155 rooms, 101 of which are suites with kitchens. The property features a restaurant and bar, 3,500 square feet of meeting space, exercise facilities and a 50-space underground parking facility. The hotel's rooms were renovated in Fall 2014.

Based on the Company's underwriting assumptions, the Company anticipates the purchase price for the St. Gregory reflects a forward economic capitalization rate and EBITDA multiple of 7.0% and 12.9x, respectively.

The acquisition of the St. Gregory will be funded with cash on hand and proceeds from the Company's $250 million senior unsecured credit facility. The acquisition includes the assumption of $25.8 million in mortgage debt that matures in September 2021. The Company anticipates closing by the end of June 2015. However, the closing is subject to the satisfactory completion of the Company's due diligence and other customary closing conditions, including the receipt of lender consents. Therefore, no assurance can be given that the St. Gregory will be acquired on the terms described above or at all.

The Company has posted a presentation of supplemental information regarding the purchase of the St. Gregory on its website at www.hersha.com in the Investor Relations section under "Presentations".

Hersha Hospitality Trust (HT) is a self-advised real estate investment trust in the hospitality sector, which owns and operates high quality upscale hotels in urban gateway markets. The Company's 56 hotels totaling 8,892 rooms are located in New York, Boston, Philadelphia, Washington, DC, Miami and select markets on the West Coast. The Company's shares are traded on The New York Stock Exchange under the ticker "HT".

Forward Looking Statement

This press release contains 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 reflected in the forward-looking statement. For a description of these factors, please review the information under the heading "Risk Factors" included in Hersha Hospitality Trust's Annual Report on Form 10-K for the year ended December 31, 2015, filed with the U.S. Securities Exchange Commission.