PHILADELPHIA--(BUSINESS WIRE)--May 3, 2006--

Purchases Holiday Inn Express Cambridge for $12 Million;

Purchases Three Southeastern Massachusetts Hotels for a Combined $32

Million; Obtains Right to Purchase Additional Residence Inn

Hersha Hospitality Trust (AMEX: HT), a real estate investment trust (REIT) and owner of 58 nationally franchised, upper-upscale, upscale and midscale limited service and extended-stay hotels, today announced that it has acquired four metro-Boston area hotels for a total of $44 million and has acquired a right of first refusal on a fifth Boston area hotel.

The Company closed the purchase of the 112-room Holiday Inn Express Cambridge, Massachusetts from an affiliated company for $12 million. The Holiday Inn Express Cambridge is well-located with multiple demand drivers from the large business presence of Cambridge, the many educational institutions in the area, and the desirable tourist attractions of Cambridge and Boston.

Hersha also closed the purchase of a three hotel portfolio with locations just south of Boston, Massachusetts from KW Hotel Corp for $32 million. These include a 96-room Residence Inn in North Dartmouth, 100-room Hawthorn Suites in Franklin and an 84-room Comfort Inn in North Dartmouth. As part of this transaction, the Company obtained a right of first refusal to purchase a 100-room Residence Inn in Norwood, Massachusetts, which is currently under construction and expected to open in August 2006.

Jay H. Shah, Chief Executive Officer commented, "These acquisitions are a strong addition to our New England cluster of hotels, which brings us to a total of nine hotel properties in the high growth state of Massachusetts. These areas surrounding the vibrant Boston market are expected to show better economic activity for years to come. We are also pleased to be adding more upscale extended stay hotels to our portfolio and the addition of our eighth Residence Inn fits quite well with our strategy.

Mr. Shah continued, "We are particularly pleased with the quality of the Hawthorn Suites, which last year won Hawthorn's prestigious hotel of the year award and this year was ranked among the top three Hawthorn properties. Hyatt has invited us to convert the hotel to a Hyatt Summerfield Suites. We look forward to this partnership with Hyatt as they continue to develop this new upscale extended stay brand."

The purchase of the Holiday Inn Express Cambridge was financed with a combination of cash and a floating rate mortgage in the amount of $8.6 million.

The hotels acquired from KW Hotel Corp were also financed with cash and fixed mortgages. The loan for the Hawthorn is in the amount of $8.5 million and carries a fixed interest rate of 6.40%. The purchase of the Comfort Inn and Suites was financed with a new loan in the amount of $3.2 million at a fixed interest rate of 6.5%. The Company assumed a $9.4 million mortgage with a fixed rate of 5.67% for the purchase of the Residence Inn in North Dartmouth.

Separately, the Company also closed the sale of its Holiday Inn Express in Hartford, Connecticut for $3.6 million, which includes the transfer of the existing land lease obligations.

About Hersha Hospitality

Hersha Hospitality Trust is a self-advised real estate investment trust that owns interest in 58 midscale, upscale and upper upscale hotel properties with 7,211 rooms located in high barrier to entry markets primarily from Metro Boston, Massachusetts to Metro Washington, D.C with strong, national franchise affiliations. The Company focuses on acquisition and joint venture opportunities in primary and secondary markets near major metropolitan. More information on the Company is available on the Company's web site at www.hersha.com.

Forward Looking Statement

Certain matters within this press release are discussed using forward-looking language as specified in 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 projected in the forward-looking statement.

    CONTACT: Hersha Hospitality Trust
             Investors
             Ashish Parikh, 215-238-1046

    SOURCE: Hersha Hospitality Trust