Hersha chief says firm still hopes to buy Rittenhouse Hotel

Rittenhouse Hotel general manager David Benton (left) and Neil Shah, brother of Jay Shah, at the dedication of a special suite.
Rittenhouse Hotel general manager David Benton (left) and Neil Shah, brother of Jay Shah, at the dedication of a special suite. (ELIZABETH ROBERTSON / Staff Photographer)
Posted: January 20, 2012

Jay Shah, chief executive officer of Hersha Hospitality Trust, said his company still hoped to buy the upscale Rittenhouse Hotel.

"We're continuing to look at it," Shah said Thursday during an informal lunch inside his ninth-floor office at Penn Mutual Towers at Fifth and Walnut Streets. "We're still talking."

It was reported in early December that Hersha had set its sights on the luxury 98-room hotel with 152 residential condos on Rittenhouse Square. The deal was set to close around New Year's. The two sides are still involved in due diligence and reviewing the finances, say those familiar with the talks.

The boutique hotel is owned by Rittenhouse Development Co. - a partnership between local developer David Marshall and General Electric Investment Corp.

Since Hersha is a publicly traded company, Shah declined to give specifics on how negotiations were going, but he praised the hotel, rated Five Diamond (the highest in the industry), and assessed how it would fit in with Hersha's niche.

"It ties in with the portfolio we have, but caters to a different segment," he said. "I wouldn't say [owning] it would be an upgrade because we have other very nice hotels.

"But it is consistent with our value-creation thesis, which is the urban hotel," said Shah, who runs Hersha with his brother, Neil. "We've really only focused on urban hotels and really know the hotel mix in these urban markets."

Hersha, a Baltimore Real Estate Investment Trust, owns 80 hotels in the United States, many under the Holiday Inn and Courtyard by Marriott brands on the East Coast. They include Hotel 373 in Manhattan, Courtyard by Marriott in South Boston, and the Hampton Inn in Center City Philadelphia.

The Rittenhouse Hotel, which opened in 1989, is ranked the top hotel in Philadelphia and one of the finest in the world by Travel and Leisure Magazine in its 2012 survey.

The 364-room Four Seasons - part of an international chain of luxury hotels - is its chief rival. Both go after affluent business and leisure travelers, and meetings. Three years ago, the Rittenhouse began courting families vacationing closer to home vs. going abroad because of the economy.

Contact staff writer Suzette Parmley at 215-854-2594 or sparmley@phillynews.com.

comments powered by Disqus