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February 23, 2017

Hersha pays Vulcan $79M for Pan Pacific

By BRIAN MILLER
Journal staff reporter

Photo by Vulcan Real Estate [enlarge]
Vulcan said 2200 Westlake “helped put South Lake Union on the map.”

Vulcan Real Estate and Hersha Hospitality Trust jointly announced the $79 million sale of the 153-room Pan Pacific Hotel at 2200 Westlake Ave N.

Hersha acquired the property from Vulcan, which developed the condo-hotel-retail complex in 2006.

Hersha is based in Philadelphia and Harrisburg, Pennsylvania, and this is its first local investment. The publicly traded firm operates Larkspur Landing hotels in Bellevue and Renton through a subsidiary, Hersha Hospitality Management.

In two transactions last year, Vulcan sold the garage and retail portions of 2200 Westlake for $73 million to Houston-based Weingarten Realty Investors. Whole Foods is the largest tenant in the complex, which is at the corner of Denny Way.

Vulcan has now sold all its interest in 2200 Westlake, which was designed by CollinsWoerman and built by Turner Construction.

In a statement, Vulcan's Ada M. Healey said, “The Pan Pacific Hotel was one of our most pioneering projects. It helped put South Lake Union on the map, and was a key asset that helped attract numerous tenants and investment to the neighborhood.”

There also are 261 residential condominiums in the three-tower complex, which has a total size of about 450,000 square feet.

Hersha CEO Jay H. Shah said, “We are pleased to enter the dynamic Seattle market with the Pan Pacific Hotel. [Its] superior location, luxury amenities, and well-appointed meeting space, combined with the submarket's embedded corporate and leisure demand, provide meaningful upside. We expect to leverage the expertise garnered at our other independent lifestyle hotels to add to the success of the Pan Pacific.”

Shah is the son of company founder Hasu P. Shah, an immigrant who bought his first hotel in Harrisburg, Pennsylvania in 1984. The company went public as a REIT in 1998.

The Pan Pacific also has a restaurant, 9,100 square feet of meeting space, veranda, fitness center and 60 designated parking spaces.

Nationally, Hersha now owns and operates 53 hotels with 7,943 rooms in urban markets, mostly on the East Coast and in California.

Linked to the Pan Pacific acquisition, the company said it will sell three West Coast hotels with the Hyatt brand in a tax-deferred reverse like-kind exchange. Hersha's current market capitalization is about $941 million.

Vulcan was represented by CBRE's Chris Burdett and Matt Behrens.


 


Brian Miller can be reached by email at brian.miller@djc.com or by phone at (206) 219-6517.




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