Starwood Capital and Hersha Hospitality Management Announce Partnership to Build Premier Hotel Management Company

PHILADELPHIA, PA and GREENWICH, CT,  June 7, 2010 – Starwood Capital Group and Hersha Hospitality Management (“HHM”) announced today that they have entered into an agreement that will provide Hersha the resources to expand its highly successful platform across the United States.

 The transaction brings together two of the best known names in the real estate and hotel sectors.

 Starwood Capital is one of the world’s leading investment firms focused on real estate, having invested more than $24 billion in assets since its inception, while the privately held HHM is a leading third-party hotel management company operating more than 70 hotels in major metropolitan markets.

Under the terms of the agreement, Starwood Capital has purchased a 49.9% stake in HHM, for an undisclosed amount.

The new partnership will seek to capitalize on the ongoing industry recovery by aggressively pursuing select-service and full-service hotel management opportunities on a national scale.

 In addition, the venture will also target strategic investments in turnaround and opportunistic select-service hotels throughout the country and full-service hotels in select suburban markets.

“We are very pleased to be partnering with HHM,” said Barry Sternlicht, (top right photo) Chairman and CEO of Starwood Capital.

“Over the years, we have built a close relationship with Hersha’s leadership team and admire its best-in-class operating capabilities and ability to create value for the properties it manages. Starwood Capital will contribute capital, deal flow and enterprise-building resources to help leverage HHM’s operating expertise across the country and across a broader spectrum of investments.”

“Partnering HHM with Starwood Capital allows us to leverage the considerable strengths of both organizations,” Naveen Kakarla, (middle left photo) President and Chief Executive Officer of HHM said.

“Barry Sternlicht and Starwood Capital Group have demonstrated keen judgment, innovative vision, and an unparalleled access to capital across several real estate cycles. HHM, I believe, has struck the fine balance between building a high quality multi-brand platform that is both scalable and process-oriented, while preserving a hands-on, entrepreneurial approach to managing hotels and projects.”

HHM currently operates more than 70 hotels in metropolitan regions in Boston, Connecticut, New York, New Jersey, Philadelphia and Washington, D.C.

Media Contacts:
Tom Johnson, Abernathy MacGregor Group, (212) 371-5999
Jerry Daly or Chris Daly, Daly Gray Public Relations, jerry@dalygray.com, chris@dalygray.com