Hersha Hospitality Trust : HT 2022 Disposition Impact Supplemental Investor Presentation - September 2022

S E P T E M B E R 2 0 2 2

2 0 2 2 T R A N S A C T I O N S U M M A R Y

HERSHA HOSPITALITY TRUST ("HERSHA") HAS ENTERED INTO A SERIES OF TRANSACTIONS IN 2022 TO STREAMLINE THE PORTFOLIO, FORTIFY THE BALANCE SHEET AND PROVIDE ADDITIONAL FINANCIAL FLEXIBILITY

SALE OF THE PAN PACIFIC SEATTLE AND HOTEL MILO SANTA BARBARA FOR COMBINED GROSS PROCEEDS OF $125 MILLION - ANNOUNCED SEPTEMBER 2022

• Transaction price implies a blended 2.9% cap rate and 27.0x EBITDA multiple on 2019 Actual NOI and EBITDA, respectively, and ~ $455K per key
• Net proceeds after $45 million of property level debt repayment to be used for general corporate purposes including but not limited to additional debt repayment and dividend payments

SALE OF 6 OF THE 7 NON-CORE URBAN SELECT SERVICE ("USS") PORTFOLIO - COMPLETED AUGUST 2022

• The remaining asset is set to close in the fourth quarter once the CMBS loan is assumed by the buyer

REFINANCING OF REVOLVING CORPORATE CREDIT FACILITY - COMPLETED AUGUST 2022

• Reduced the Company's Weighted Average Cost of Debt and Extended our Weighted Average Life to Maturity
• As a result of the USS sale and Credit Facility refinancing, Hersha was able to reduce consolidated debt by approximately $450M

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2 0 2 2 T R A N S A C T I O N S U M M A R Y

INHERENT EQUITY VALUE OF OUR PORTFOLIO OF HIGH-QUALITY ASSETS UNDERSCORED BY THE SIGNIFICANT PROCEEDS GENERATED FROM DISPOSITIONS IN 2022

RECENT DISPOSITIONS HIGHLIGHT THE DISPARITY BETWEEN PRIVATE MARKET VALUE OF OUR ASSETS AND

HERSHA'S PUBLIC MARKET VALUATION

• The USS - 7 consisted of some of our lower quality assets with longer recovery times and more Capex requirements
• USS - 7 transaction price represented a blended cap rate of 7.3% on 2019 results and a valuation of $360K per key
• The recent sales of Hotel Milo and Pan Pacific Seattle at a blended cap rate of 2.9% on 2019 results and value of $455K per key - more indicative of the valuation of the remaining portfolio
• Portfolio is currently trading at $340-$350K per key with sell-side analyst NAV ranging from $450-$500K per key*

* Refers to the Raymond James report published 8/24/22 and the Stifel report published 8/17/22

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P R O F O R M A C A P I TA L I Z AT I O N TA B L E

HERSHA WILL BE ABLE TO REDUCE CONSOLIDATED DEBT BY APPROXIMATELY $500M AS A RESULT OF THE 2022 SALES

• Weighted average interest expense reduced to 4.25% from 4.68%
• Including the extension, the new facility will span 3 years

Capitalization

		Capitalization as		Asset Sales
$ Millions		and Credit
of 6/30/2022
			Refinancing
Share Price as of 6/30/2022	$9.81
Common Shares + Units	46.4
Equity Market Capitalization		$455.0
Line of Credit	118.7		(118.7)
Existing Term Loan	497.5		(497.5)
New Term Loan				377.6
Term Loan & Line of Credit	616.2		(238.5)
Secured Debt	309.4		(100.8)
Trust Preferreds	51.5
Unsecured Notes	158.1		(158.1)
Total Consolidated Debt	$1,135.2		($497.4)
Total Preferred Equity	367.6
Total Consolidated Debt + Preferred Equity	$1,502.8
Consolidated Equity & Debt Capitalization		$1,957.8
HT Pro Rata Share of UJV Debt	33
Total Capitalization		$1,990.8
Cash & Cash Equivalents	100.7		121.5
Total Enterprise Value (TEV)		$1,890.1
Net Consolidated Debt		$1,034.5		($618.9)

Pro Forma

Capitalization

$9.81 46.4

$455.0

0.0

0.0

377.6

377.6

208.6

51.5

-

$637.8

367.6

$1,005.4

$1,460.4

33

$1,493.4

222.2

$1,271.2

$415.6

Note: Asset Sales include 7 Urban Select Service hotels including Courtyard Brookline, Hampton Inn Philadelphia, Hampton Inn Washington DC, Hilton Garden Inn M Street, Townplace Suites Sunnyvale and Courtyard LA Westside which closed	4
8/4/22, and Courtyard Sunnyvale scheduled to close in Q4 22, as well as the Pan Pacific and Hotel Milo as contracted sales were announced on 9/12/22

I N T E R E S T S AV I N G S

HERSHA WILL BE ABLE TO REDUCE ANNUAL CASH INTEREST EXPENSE BY APPROXIMATELY $20 MILLION AS A RESULT OF THE 2022 SALES AND ITS NEW CREDIT FACILITY

• The Company utilized an existing swap to hedge $300M of the new $400M term loan at a fixed rate of 3.93%. The remaining $100M will float at SOFR + 250bps
• Weighted average interest expense reduced to 4.25% from 4.68%
• The annualized cash interest savings is approximately $20M, $15M of which stems from the paydown of the 9.5% Unsecured Notes

Annual Cash Interest Pro Forma

$20
$17.0
$15
			$9.1		Total Pro Forma
$10					Interest:
							$28.1M
$5
						$2.1
$0
New Facility	Consolidated Mortgage Debt	Trust Preferred

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