10-Q 1 ht-20220630.htm 10-Q ht-20220630
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

COMMISSION FILE NUMBER: 001-14765
HERSHA HOSPITALITY TRUST
(Exact Name of Registrant as Specified in Its Charter)
Maryland 25-1811499
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
44 Hersha DriveHarrisburgPA 17102
(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (717) 236-4400

Former name, former address and former fiscal year, if changed since last report: Not applicable

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Shares of Beneficial Interest, par value $.01 per shareHTNew York Stock Exchange
6.875% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest, par $.01 per shareHT-PCNew York Stock Exchange
6.500% Series D Cumulative Redeemable Preferred Shares of Beneficial Interest, par $.01 per shareHT-PDNew York Stock Exchange
6.500% Series E Cumulative Redeemable Preferred Shares of Beneficial Interest, par $.01 per shareHT-PENew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
 



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No 

As of August 9, 2022, the number of Class A common shares of beneficial interest outstanding was 39,594,963 and there were no Class B common shares of beneficial interest outstanding.



 Hersha Hospitality Trust
Table of Contents

3

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2022 (UNAUDITED) AND DECEMBER 31, 2021
(IN THOUSANDS, EXCEPT SHARE/UNIT AND PER SHARE AMOUNTS)





June 30, 2022December 31, 2021
Assets:  
Investment in Hotel Properties, Net of Accumulated Depreciation$1,335,479 $1,665,097 
Investment in Unconsolidated Joint Ventures5,486 5,580 
Cash and Cash Equivalents87,918 72,238 
Escrow Deposits12,764 12,707 
Hotel Accounts Receivable8,242 8,491 
Due from Related Parties534 2,495 
Intangible Assets, Net of Accumulated Amortization of $7,075 and $6,944
1,204 1,335 
Right of Use Assets30,152 43,442 
Other Assets36,152 21,759 
Hotel Assets Held for Sale318,716  
Total Assets$1,836,647 $1,833,144 
  
Liabilities and Equity:  
Line of Credit$118,684 $118,684 
Term Loans, Net of Unamortized Deferred Financing Costs (Note 5)496,527 496,085 
Unsecured Notes Payable, Net of Unamortized Discount and Unamortized Deferred Financing Costs (Note 5)201,386 198,490 
Mortgages Payable, Net of Unamortized Premium and Unamortized Deferred Financing Costs229,605 304,614 
Lease Liabilities47,744 53,691 
Accounts Payable, Accrued Expenses and Other Liabilities38,990 43,207 
Dividends and Distributions Payable6,044 6,044 
Liabilities Related to Hotel Assets Held for Sale79,787  
Due to Related Parties482 1,723 
Total Liabilities$1,219,249 $1,222,538 
Redeemable Noncontrolling Interests - Consolidated Joint Venture (Note 1)$5,274 $2,310 
  
Equity:  
Shareholders' Equity:  
Preferred Shares:  $.01 Par Value, 29,000,000 Shares Authorized, 3,000,000 Series C, 7,701,700 Series D and 4,001,514 Series E Shares Issued and Outstanding at June 30, 2022 and December 31, 2021, with Liquidation Preferences of $25.00 Per Share (Note 1)
$147 $147 
Common Shares:  Class A, $.01 Par Value, 104,000,000 Shares Authorized at June 30, 2022 and December 31, 2021; 39,514,661 and 39,325,025 Shares Issued and Outstanding at June 30, 2022 and December 31, 2021, respectively
396 394 
Common Shares:  Class B, $.01 Par Value, 1,000,000 Shares Authorized, None Issued and Outstanding at June 30, 2022 and December 31, 2021
  
Accumulated Other Comprehensive Income (Loss)15,629 (2,747)
Additional Paid-in Capital1,154,367 1,155,034 
Distributions in Excess of Net Income(612,951)(595,454)
Total Shareholders' Equity557,588 557,374 
  
Noncontrolling Interests (Note 1)54,536 50,922 
  
Total Equity612,124 608,296 
  
Total Liabilities and Equity$1,836,647 $1,833,144 
The Accompanying Notes Are an Integral Part of These Consolidated Financial Statements.
4


HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE/UNIT AND PER SHARE AMOUNTS)
Three Months Ended June 30,Six months ended June 30,
2022202120222021
Revenue:  
Hotel Operating Revenues:
Room$98,242 $56,539 $163,374 $95,889 
Food & Beverage15,710 7,230 24,766 10,304 
Other Operating Revenues9,247 6,314 16,886 11,043 
Other Revenues91 13 132 25 
Total Revenues123,290 70,096 205,158 117,261 
Operating Expenses:  
Hotel Operating Expenses:
Room19,447 12,350 34,037 21,548 
Food & Beverage11,607 5,409 20,011 8,282 
Other Operating Expenses36,039 23,551 62,395 43,660 
Insurance Recoveries in Excess of Property Losses(987)(711)(962)(711)
Hotel Ground Rent1,531 1,064 2,621 2,164 
Real Estate and Personal Property Taxes and Property Insurance8,335 9,466 16,818 19,537 
General and Administrative (including Share Based Payments of $3,299 and $2,589 and $5,840 and $4,758 for the three and six months ended June 30, 2022 and 2021, respectively)
6,491 5,287 11,809 10,231 
Terminated Transaction Costs 36  390 
Loss on Impairment of Assets 222  222 
Depreciation and Amortization17,003 21,014 36,279 42,816 
Total Operating Expenses99,466 77,688 183,008 148,139 
  
Operating Income (Loss)23,824 (7,592)22,150 (30,878)
  
Interest Income1 4 2 5 
Interest Expense(14,769)(14,982)(29,006)(28,411)
Other (Expense) Income (108)(84)(207)377 
Gain on Disposition of Hotel Properties   48,352 
Loss on Debt Extinguishment (129) (3,069)
Income (Loss) Before Results from Unconsolidated Joint Venture Investments and Income Taxes8,948 (22,783)(7,061)(13,624)
  
Income (Loss) from Unconsolidated Joint Ventures357 (589)(579)(1,247)
  
Income (Loss) Before Income Taxes9,305 (23,372)(7,640)(14,871)
  
Income Tax (Expense) Benefit(93)(151)(114)438 
  
Net Income (Loss)9,212 (23,523)(7,754)(14,433)
  
(Income) Loss Allocated to Noncontrolling Interests - Common Units(379)2,945 2,345 2,623 
Income Allocated to Noncontrolling Interests - Consolidated Joint Venture(691)(1,968)(2,964)(1,810)
Preferred Distributions(6,043)(6,044)(12,087)(12,087)
  
Net Income (Loss) Applicable to Common Shareholders$2,099 $(28,590)$(20,460)$(25,707)
The Accompanying Notes Are an Integral Part of These Consolidated Financial Statements.
5


HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE/UNIT AND PER SHARE AMOUNTS)

Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Earnings (Loss) Per Share:    
BASIC    
 Income (Loss) from Continuing Operations Applicable to Common Shareholders$0.05 $(0.73)$(0.52)$(0.66)
    
DILUTED    
Income (Loss) from Continuing Operations Applicable to Common Shareholders$0.05 $(0.73)$(0.52)$(0.66)
    
Weighted Average Common Shares Outstanding:    
Basic39,277,269 39,097,820 39,254,536 39,034,707 
Diluted*40,453,785 39,097,820 39,254,536 39,034,707 
*Income (Loss) allocated to noncontrolling interest in Hersha Hospitality Limited Partnership (the “Operating Partnership” or “HHLP”) has been excluded from the numerator and the Class A common shares issuable upon any redemption of the Operating Partnership’s common units of limited partnership interest (“Common Units”) and the Operating Partnership’s vested LTIP units (“Vested LTIP Units”) have been omitted from the denominator for the purpose of computing diluted earnings per share because the effect of including these shares and units in the numerator and denominator would have no impact. In addition, potentially dilutive common shares, if any, have been excluded from the denominator if they are anti-dilutive to income (loss) applicable to common shareholders.
The following table summarizes potentially dilutive securities that have been excluded from the denominator for the purpose of computing diluted earnings per share:
 Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Common Units and Vested LTIP Units5,262,313 4,279,355 5,264,772 4,314,347 
Unvested Stock Awards and LTIP Units Outstanding 939,591 791,544 581,989 
Contingently Issuable Share Awards 408,202 318,893 594,125 
Total Potentially Dilutive Securities Excluded from the Denominator5,262,313 5,627,148 6,375,209 5,490,461 
The Accompanying Notes Are an Integral Part of These Consolidated Financial Statements.
6


HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021 (UNAUDITED)
(IN THOUSANDS)
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Net Income (Loss)$9,212 $(23,523)$(7,754)$(14,433)
Other Comprehensive Income    
Change in Fair Value of Derivative Instruments5,353 2,539 20,842 9,004 
Reclassification Adjustment for Change in Fair Value of Derivative Instruments Included in Net Income (Loss) (141) 159 
Total Other Comprehensive Income $5,353 $2,398 $20,842 $9,163 
    
Comprehensive Income (Loss)14,565 (21,125)13,088 (5,270)
Less:  Comprehensive (Income) Loss Attributable to Noncontrolling Interests - Common Units(1,011)2,712 (121)1,711 
Less:  Comprehensive Income Attributable to Noncontrolling Interests - Consolidated Joint Venture(691)(1,968)(2,964)(1,810)
Less:  Preferred Distributions(6,043)(6,044)(12,087)(12,087)
Comprehensive Income (Loss) Attributable to Common Shareholders$6,820 $(26,425)$(2,084)$(17,456)
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
7


HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARES)




Redeemable Noncontrolling InterestsShareholders' EquityNoncontrolling Interests
Consolidated Joint Venture ($)Common SharesClass A Common Shares ($)Class B Common Shares ($)Preferred SharesPreferred Shares ($)Additional Paid-In Capital ($)Accumulated Other Comprehensive Income ($)Distributions in Excess of Net Income ($)Total Shareholders' Equity ($)Common Units and LTIP UnitsCommon Units and LTIP Units ($)Total Equity ($)
Balance at March 31, 20224,583 39,354,893 394  14,703,214 147 1,153,486 10,908 (615,740)549,195 6,926,253 51,809 601,004 
Issuance Costs/Other— — — — — — (10)— — (10)— — (10)
Unit Conversion— 50,000 1 — — — 425 — — 426 (50,000)(426)— 
Dividends and Distributions declared:
Preferred Shares— — — — — — — — (6,044)(6,044)— — (6,044)
Share Based Compensation:
Grants— 109,768 1 — — — — — — 1 194,427 — 1 
Amortization— — — — — — 1,157 — — 1,157 2,142 3,299 
Change in Fair Value of Derivative Instruments— — — — — — — 4,721 — 4,721 — 632 5,353 
Adjustment to Record Noncontrolling Interest at Redemption Value691 — — — — — (691)— — (691)— — (691)
Net Income— — — — — — — — 8,833 8,833 — 379 9,212 
Balance at June 30, 20225,274 39,514,661 396  14,703,214 147 1,154,367 15,629 (612,951)557,588 7,070,680 54,536 612,124 

8


HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARES)



Redeemable Noncontrolling InterestsShareholders' EquityNoncontrolling Interests
Consolidated Joint Venture ($)Common SharesClass A Common Shares ($)Class B Common Shares ($)Preferred SharesPreferred Shares ($)Additional Paid-In Capital ($)Accumulated Other Comprehensive Loss ($)Distributions in Excess of Net Income ($)Total Shareholders' Equity ($)Common Units and LTIP UnitsCommon Units and LTIP Units ($)Total Equity ($)
Balance at March 31, 2021 39,132,307 391  14,703,214 147 1,154,579 (12,509)(530,535)612,073 5,943,014 49,172 661,245 
Dividends and Distributions declared:
Preferred Shares— — — — — — — — (6,044)(6,044)— — (6,044)
Share Based Compensation:
Grants— 85,168 1 — — — 365 — — 366 19,477 65 431 
Amortization— — — — — — 681 — — 681 — 1,468 2,149 
Change in Fair Value of Derivative Instruments— — — — — — — 1,485 — 1,485 — 912 2,397 
Adjustment to Record Noncontrolling Interest at Redemption Value1,968 — — — — — (1,968)— — (1,968)— — (1,968)
Net Income — — — — — — — (20,578)(20,578)(2,945)(23,523)
Balance at June 30, 20211,968 39,217,475 392  14,703,214 147 1,153,657 (11,024)(557,157)586,015 5,962,491 48,672 634,687 















9

HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARES)













Redeemable Noncontrolling InterestsShareholders' EquityNoncontrolling Interests
Consolidated Joint Venture ($)Common SharesClass A Common Shares ($)Class B Common Shares ($)Preferred SharesPreferred Shares ($)Additional Paid-In Capital ($)Accumulated Other Comprehensive Loss ($)Distributions in Excess of Net Income ($)Total Shareholders' Equity ($)Common Units and LTIP UnitsCommon Units and LTIP Units ($)Total Equity ($)
Balance at December 31, 20212,310 39,325,025 394  14,703,214 147 1,155,034 (2,747)(595,454)557,374 6,926,253 50,922 608,296 
Issuance Costs / Other— — — — — — (48)— — (48)— — — 
Unit Conversion— 50,000 1 — — — 425 — — 426 (50,000)(426)— 
Dividends and Distributions declared:
     Preferred Shares— — — — — — — — (12,088)(12,088)— — (12,088)
Share Based Compensation:
     Grants— 139,6361 — — — (1)— —  194,427   
     Amortization— — — — — — 1,921— — 1,9213,919 5,840
Change in Fair Value of Derivative Instruments— — — — — — — 18,376— 18,376— 2,466 20,842
Adjustment to Record Noncontrolling Interest at Redemption Value2,964 — — — — — (2,964)— — (2,964)— — (2,964)
Net Income— — — — — — — — (5,409)(5,409)— (2,345)(7,754)
Balance at June 30, 20225,274 39,514,661396  14,703,214 147 1,154,367 15,629 (612,951)557,588 7,070,680 54,536 612,124 
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.











10

HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARES)













Redeemable Noncontrolling InterestsShareholders' EquityNoncontrolling Interests
Consolidated Joint Venture ($)Common SharesClass A Common Shares ($)Class B Common Shares ($)Preferred SharesPreferred Shares ($)Additional Paid-In Capital ($)Accumulated Other Comprehensive Loss ($)Distributions in Excess of Net Income ($)Total Shareholders' Equity ($)Common Units and LTIP UnitsCommon Units and LTIP Units ($)Total Equity ($)
Balance at December 31, 2020 38,843,482 389  14,703,214 147 1,150,985 (19,275)(509,243)623,003 5,392,808 49,246 672,249 
Unit Conversion— 225,000 2 — — — 2,870 — — 2,872 (225,000)(2,872) 
Dividends and Distributions declared:
Preferred Shares— — — — — — — — (36,262)(36,262)— — (36,262)
Share Based Compensation:
Grants— 148,993 1 — — — 356 — —