8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):   February 28, 2008

HERSHA HOSPITALITY TRUST

(Exact name of registrant as specified in its charter)

Maryland	001-14765	251811499
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

510 Walnut Street, 9th Floor

Philadelphia, Pennsylvania 19106

(Address and zip code of

principal executive offices)

Registrant’s telephone number, including area code: (215) 238-1046

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing

obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

£ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

£ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

£ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

£ Pre-commencement communications pursuant to Rule 13e4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On February 28, 2008, Hersha Hospitality Trust issued a press release announcing results of operations for the quarter and year ending December 31, 2007.  A copy of that press release is attached hereto as Exhibit 99.1.

The information in this report shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") or otherwise subject to the liability of that section, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation by reference language contained therein, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits.

99.1 Press release dated February 28, 2008.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HERSHA HOSPITALITY TRUST
Date:  February 28, 2008	By:	/s/Ashish R. Parikh
		Ashish R. Parikh
		Chief Financial Officer

EX-99.1

Exhibit 99.1

	HERSHA HOSPITALITY TRUST
		510 Walnut Street, 9th Floor
		Philadelphia, PA 19016
		Phone: 215-238-1046
		Fax: 215-238-0157 www.hersha.com

For Immediate Release

Contact: Ashish Parikh, CFO

Ph: (215) 238-1046

HERSHA HOSPITALITY ANNOUNCES

FOURTH QUARTER 2007 EARNINGS

Year-over-Year Fourth Quarter 2007

· Adjusted FFO (“AFFO”) Increased 47.1% to $0.25 Per Diluted Share/Unit

· Consolidated RevPAR Grew 17.2%

· Consolidated Hotel EBITDA Improved 60.3% to $21.0 Million

· Consolidated Same Store RevPAR Grew 12.2%

· Initial 2008 AFFO Guidance of $1.27 to $1.30 Per Share /Unit

PHILADELPHIA, PA--(Business Wire)—February 27, 2008-- Hersha Hospitality Trust (AMEX: HT) owner of nationally franchised  premium full service and limited service hotels, today announced earnings for the fourth quarter and full year ended December 31, 2007.

Financial Highlights for the Fourth Quarter 2007

Strong hotel revenue and increased profitability along with growth in Hersha’s development loan program resulted in a significant increase in net income applicable to common shareholders.  For the fourth quarter of 2007, net income applicable to common shareholders increased to $4.6 million, or $0.11 per common share, from a net loss of ($1.4) million, or ($0.04) per common share for the fourth quarter of 2006.  Fourth quarter 2007 results include a gain on the disposition of two hotel assets of approximately $3.7 million, or $0.09 per common share.  The fourth quarter results also include an expense for accrued 2007 incentive compensation totaling approximately $0.02 per common share.  In prior years, incentive compensation was determined and recorded in the first quarter after the end of each fiscal year.

Operating income for the fourth quarter ended December 31, 2007 grew 75.0% to $11.9 million from $6.8 million for the same period in 2006.  The growth in operating income was a result of Hersha’s larger portfolio, increased operating margins from rate-led hotel revenue growth and improved expense efficiency.

Adjusted funds from operations (AFFO) for the fourth quarter of 2007 increased 47.1% to $0.25 per diluted common share and unit from $0.17 per diluted common share and unit for the same quarter of 2006. A reconciliation of AFFO to net income applicable to common shares, the most directly applicable U.S. GAAP measure, is included at the end of this release.

Mr. Jay H. Shah, Chief Executive Officer, commented, “Our 2007 performance was very strong.  The significant internal growth from both our stabilized and newer hotels contributed to our 16.1% revenue per available room (RevPAR) growth and 24.7% increase in AFFO for the year.  On a geographic basis, our properties in metro-New York City, metro-Boston and metro-Washington, D.C. compared very well to their markets achieving RevPAR growth of 28.4%, 20.6% and 18.6%, respectively, compared to industry estimates of 13.5%, 18.6% and 7.4%, respectively for those same markets during the fourth quarter.  We slowed the pace of our external growth by purchasing seven hotels into the portfolio in 2007 as compared to 44 hotels in the previous two years.  As we discussed in the first half of the year, we purposefully shifted our primary focus to internal growth and asset management in order to drive our portfolio RevPAR and hotel profitability. Our fourth quarter and full year 2007 revenue growth and positive operating leverage demonstrates what we expect to be a continued priority in the years ahead.”

For the three-month period ended December 31, 2007, consolidated total hotel operating revenues increased 52.9% to $57.5 million from $37.6 million in the fourth quarter of 2006.  This increase was primarily driven by our growth in same-store room revenues and revenue contributions from acquisitions completed in prior periods.  RevPAR for the Company’s consolidated hotels (55 hotels) increased 17.2% on a year-over-year basis to $94.46, which was driven by an average daily rate (ADR) increase of 15.3% to $136.93 and an improvement in occupancy, which grew 111 basis points to 68.98% as compared to 67.87% for the fourth quarter of 2006.

Hotel Earnings before interest, taxes, depreciation and amortization (Hotel EBITDA) for Hersha’s consolidated hotels grew 60.3% to $21.0 million for the fourth quarter of 2007 compared to the fourth quarter of 2006.  Hotel EBITDA margins for the quarter increased 151 basis points to 36.3% for the Company’s consolidated hotel portfolio.  Hotel EBITDA margins improved as a result of growth in ADR and expense control measures successfully implemented by our asset managers.

On a same-store basis for Hersha’s consolidated hotels (42 hotels), RevPAR for the fourth quarter of 2007 increased 12.2% on a year-over-year basis to $90.42, which was driven by an 11.3% increase in ADR to $132.17 and 54 basis points of improvement in occupancy, which increased to 68.41% from 67.87%. Same-store Hotel EBITDA for the fourth quarter of 2007 increased 18.4% to $14.8 million. The Company’s same-store Hotel EBITDA margin improved 190 basis points to 35.2% for the fourth quarter of 2007, as compared to the fourth quarter of 2006.

Other Highlights

v At the end of November, 2007, the Company completed the sale of the 118-room Fairfield Inn located in Mt. Laurel, New Jersey and the 149-room Hampton Inn located in Linden, New Jersey at an approximate 7.0% blended capitalization rate.

Subsequent Events

v In January, 2008, the Company completed the purchase of the 45-room independent boutique hotel, the Duane Street Hotel in the Tribeca section of New York City for $24.75 million.  The purchase price included $2.0 million in cash, the assumption of $15.0 million of fixed rate debt and the issuance of units of limited partnership interest in Hersha Hospitality Limited Partnership, our operating subsidiary, valued at approximately $7.75 million.

2

v Separately, in January, 2008, Hersha purchased a 93-room independent upscale hotel development project at 75 Smith Street in Brooklyn, New York for $17.24 million from Atlantic Court, LLC.  The mixed-used project also contains 50 residential units, 2 ground level retail units, a community unit and a garage unit that are separately owned by unrelated entities.  The independent boutique hotel, which will be named the “Nu Hotel”, is expected to be open by the end of the third quarter of 2008.

Balance Sheet

The Company ended the fourth quarter of 2007 with $58.2 million in development loans and $23.4 million in land leases outstanding to 11 hotel development projects.   During the fourth quarter of 2007, Lehman Brothers acquired one of Hersha’s $15.0 million development loans, at par, and the Company also received a $2.0 million repayment on another loan.  The Company also made an additional loan of $5 million for an existing Manhattan, New York hotel project.

At December 31, 2007, Hersha Hospitality Trust had approximately $663.0 million of total consolidated debt outstanding, which included approximately $51.5 million of trust preferred securities and $43.7 million outstanding on the Company’s line of credit.  Fixed rate debt, including variable rate debt fixed by an interest rate swap, amounted to approximately 89.3% of total consolidated debt.  The weighted average interest rate on all of the Company’s fixed rate debt was approximately 6.19% for the fourth quarter of 2007.  The weighted average life to maturity of the Company’s debt was 8.2 years.  Total common shares and units of limited partnership interest of Hersha Hospitality Limited Partnership outstanding at December 31, 2007 were 47.6 million.

“During the fourth quarter of 2007, we continued to execute our plan to reduce our consolidated debt.  In the fourth quarter, we repaid a total of $46.3 million in debt, including amounts reduced as a result of the sale of two of the Company’s hotels. We feel comfortable with our strategy of how our assets are financed given our significant percentage of fixed rate debt and favorable maturity schedule,” noted Mr. Shah.

Dividend

For the fourth quarter of 2007, Hersha Hospitality Trust declared common share and limited partnership unit dividends of $0.18 per common share and unit.   Hersha’s annualized dividend of $0.72 per common share is approximately 71% of the Company’s AFFO less maintenance capital expenditures for the fiscal year ending December 31, 2007. The Board of Trustees also declared a fourth quarter cash dividend of $0.50 per Series A Preferred Share.

Initial Financial Outlook for 2008

The Company concurs with the consensus forecast that economic growth in the U.S. may slow significantly compared to the levels achieved in 2007.  Assuming an environment of more modest U.S. economic growth, and no material increases in the supply of available rooms in its markets, the Company anticipates that its current portfolio is expected to post another year of AFFO growth for the full year ended December 31, 2008 as compared to the full year ended December 31, 2007.

3

The Company’s initial financial guidance and underlying assumptions for the full year ended December 31, 2008 are as follows:

	Guidance
Consolidated same-store RevPAR growth compared to the full year 2007	4.0% to 5.0%
Consolidated portfolio RevPAR growth compared to the full year 2007	5.0% to 6.0%
Net income available to common shareholders	$13.0 to $14.5 million
Adjusted EBITDA	$119.1 to $121.0 million
AFFO per share	$1.27 to $1.30

Fourth Quarter 2007 Earnings Conference Call

The Company will host a conference call to discuss its financial results tomorrow, Thursday, February 28, 2008 at 9:30 AM Eastern time.  Hosting the call will be Mr. Jay H. Shah, Chief Executive Officer, Mr. Neil H. Shah, President and Chief Operating Officer, and Mr. Ashish Parikh, Chief Financial Officer.

The live conference call can be accessed by dialing (877) 704-5381 or (913) 981-5526 for international participants.  A replay of the call will be available from 12:30 PM Eastern time on February 28, 2008, through midnight Eastern time on March 13, 2008. The replay can be accessed by dialing (888) 203-1112 or (719) 457-0820 for international participants.  The passcode for the call and the replay is 6371884.

About Hersha Hospitality

Hersha Hospitality Trust is a self-advised real estate investment trust, which owns interests in 73 hotels, totaling 9,267 rooms, primarily along the Northeast Corridor from Boston to Washington DC.  The Company also owns hotels in Northern California and Scottsdale, Arizona.  Hersha focuses on high quality upscale hotels in high barrier to entry markets.  More information on the Company and its portfolio of hotels is available on Hersha’s Web site at http://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.  For a description of these factors, please review the information under the heading “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2006, filed with the Securities Exchange Commission (SEC).

4

HERSHA HOSPITALITY TRUST

Balance Sheet

(in thousands, except shares and per share data)

	December 31, 2007			December 31, 2006
Assets:
Investment in Hotel Properties, net of Accumulated Depreciation	$	893,297		$	807,784
Investment in Joint Ventures		51,851			50,234
Development Loans Receivable		58,183			47,016
Cash and Cash Equivalents		12,327			10,316
Escrow Deposits		13,706			14,927
Hotel Accounts Receivable, net of allowance for doubtful accounts of $47 and $30		7,165			4,608
Deferred Costs, net of Accumulated Amortization of $3,252 and $1,543		8,048			7,525
Due from Related Parties		1,256			4,930
Intangible Assets, net of Accumulated Amortization of $764 and $618		5,619			5,594
Other Assets		16,155			15,274
Total Assets	$	1,067,607		$	968,208
Liabilities and Shareholders’ Equity:
Line of Credit	$	43,700		$	24,000
Mortgages and Notes Payable, net of unamortized discount of $72 and $1,312		619,308			556,542
Accounts Payable, Accrued Expenses and Other Liabilities		17,728			14,740
Dividends and Distributions Payable		9,688			8,985
Due to Related Parties		2,025			3,297
Total Liabilities		692,449			607,564
Minority Interests:
Common Units	$	42,845		$	25,933
Interest in Consolidated Joint Ventures		1,908			3,092
Total Minority Interests		44,753			29,025
Shareholders' Equity:
Preferred Shares - 8% Series A, $.01 Par Value, 29,000,000 and 10,000,000 Shares Authorized at December 31, 2007 and 2006, 2,400,000 Shares Issued and Outstanding at December 31, 2007 and 2006 (Aggregate Liquidation Preference $60,000 at December 30, 2007 and 2006)		24			24
Common Shares - Class A, $.01 Par Value, 80,000,000 and 50,000,000 Shares Authorized at December 2007 and 2006, 41,203,612 and 40,671,950 Shares Issued and Outstanding at December 31, 2007 and 2006		412			405
Common Shares - Class B, $.01 Par Value, 1,000,000 and 50,000,000 Shares Authorized at December 31, 2007 and 2006 None Issued and Outstanding		-			-
Accumulated Other Comprehensive Income		(23	)		233
Additional Paid-in Capital		397,127			381,592
Distributions in Excess of Net Income		(67,135	)		(50,635	)
Total Shareholders' Equity		330,405			331,619
Total Liabilities and Shareholders’ Equity	$	1,067,607		$	968,208

5

HERSHA HOSPITALITY TRUST

Summary Results

(in thousands, except shares and per share data)

	Three Months Ended					Year Ended
	December 31, 2007		December 31, 2006			December 31, 2007		December 31, 2006
Revenues:
Hotel Operating Revenues	$	57,478	$	37,581		$	229,462	$	135,274
Interest Income from Development Loans		2,033		925			6,046		2,487
Land Lease Revenue		1,331		1,663			4,860		2,071
Hotel Lease Revenue		195		254			781		391
Other Revenue		387		182			980		737
Total Revenues		61,424		40,605			242,129		140,960
Expenses:
Hotel Operating Expenses		33,577		22,466			130,925		79,430
Hotel Ground Rent		206		204			856		804
Land Lease Expense		747		1,189			2,721		1,189
Real Estate and Personal Property Taxes and Property Insurance		3,073		1,938			11,426		6,089
General and Administrative		2,664		1,912			8,185		6,238
Depreciation and Amortization		9,213		6,060			34,336		18,954
Total Operating Expenses		49,480		33,769			188,449		112,704
Operating Income		11,944		6,836			53,680		28,256
Interest Income		96		259			686		1,182
Interest Expense		10,988		7,746			42,402		25,423
Loss on Debt Extinguishment		-		322			-		1,485
Income (Loss) before income from Unconsolidated Joint Venture Investments, Minority Interests and Discontinued Operations		1,052		(973	)		11,964		2,530
Income from Unconsolidated Joint Venture Investments		893		367			3,476		1,799
Income (Loss) before Minority Interests and Discontinued Operations		1,945		(606	)		15,440		4,329
Income allocated to Minority Interest in Continuing Operations		210		11			1,765		536
Income from Continuing Operations		1,735		(617	)		13,675		3,793
Discontinued Operations
Gain on Disposition of Hotel Properties		3,745		257			3,745		693
Income from Discontinued Operations		314		186			427		612
Income from Discontinued Operations		4,059		443			4,172		1,305
Net Income (Loss)		5,794		(174	)		17,847		5,098
Preferred Distributions		1,200		1,200			4,800		4,800
Net Income (Loss) applicable to Common Shareholders	$	4,594	$	(1,374	)	$	13,047	$	298
Basic earnings per share
Income (Loss) from continuing operations applicable to common shareholders	$	0.01	$	(0.05	)	$	0.22	$	(0.04	)
Discontinued Operations		0.10		0.01			0.10		0.05
Net Income (Loss) applicable to common shareholders	$	0.11	$	(0.04	)	$	0.32	$	0.01
Diluted earnings per share
Income (Loss) from continuing operations applicable to common shareholders	$	0.01	$	(0.05	)	$	0.22	$	(0.04	)
Discontinued Operations		0.10		0.01			0.10		0.05
Net Income (Loss) applicable to common shareholders	$	0.11	$	(0.04	)	$	0.32	$	0.01
Weighted Average Common Shares Outstanding
Basic		40,882,090		34,115,606			40,718,724		27,118,264
Diluted		40,882,685		34,115,606			40,718,724		27,118,264

6

FFO and GAAP Reconciliation

The National Association of Real Estate Investment Trusts (“NAREIT”) developed Funds from Operations (“FFO”) as a non-GAAP financial measure of performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP.  We calculate FFO applicable to common shares and Partnership units in accordance with the April 2002 National Policy Bulletin of NAREIT, which we refer to as the White Paper.   The White Paper defines FFO as net income (loss) (computed in accordance with GAAP) excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated assets, plus certain non-cash items, such as depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.  Our interpretation of the NAREIT definition is that minority interest in net income (loss) should be added back to (deducted from) net income (loss) as part of reconciling net income (loss) to FFO. Our FFO computation may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than we do.

The GAAP measure that we believe to be most directly comparable to FFO, net income (loss) applicable to common shares, includes depreciation and amortization expenses, gains or losses on property sales and minority interest.  In computing FFO, we eliminate these items because, in our view, they are not indicative of the results from our property operations.

Hersha also presents Adjusted Funds from Operations (AFFO), which reflects FFO in accordance with the NAREIT definition further adjusted by:

· adding back write-offs of deferred financing costs on debt extinguishment, both for consolidated and unconsolidated properties;

· adding back amortization of deferred financing costs;

· adding back non-cash stock expense;

· adding back FFO attributed to our partners in consolidated joint ventures; and

· making adjustments to ground lease payments, which are required by GAAP to be amortized on a straight-line basis over the term of the lease, to reflect the actual lease payment.

FFO and AFFO do not represent cash flows from operating activities in accordance with GAAP and should not be considered an alternative to net income as an indication of Hersha’s performance or to cash flow as a measure of liquidity or ability to make distributions. We consider FFO and AFFO to be meaningful, additional measures of our operating performance because they exclude the effects of the assumption that the value of real estate assets diminishes predictably over time, and because they are widely used by industry analysts as performance measures. We show both FFO from consolidated hotel operations and FFO from unconsolidated joint ventures because we believe it is meaningful for the investor to understand the relative contributions from our consolidated and unconsolidated hotels. The display of both FFO from consolidated hotels and FFO from unconsolidated joint ventures allows for a detailed analysis of the operating performance of our hotel portfolio by management and investors.  We present FFO and AFFO applicable to common shares and Partnership units because our Partnership units are redeemable for common shares.  We believe it is meaningful for the investor to understand FFO applicable to all common shares and Partnership units.

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The following table reconciles FFO and AFFO for the periods presented to the most directly comparable GAAP measure, net income (loss) applicable to common shares, for the same periods:

HERSHA HOSPITALITY TRUST

Adjusted Funds from Operations (AFFO)

(in thousands, except shares and per share data)

	Three Months Ended						Year Ended
	December 31, 2007			December 31, 2006			December 31, 2007			December 31, 2006
Net income applicable to common shares	$	4,594		$	(1,374	)	$	13,047		$	298
Income allocated to minority interest		210			11			1,765			536
Income from discontinued operations allocated to minority interest		43			20			57			80
Income from unconsolidated joint ventures		(893	)		(367	)		(3,476	)		(1,799	)
Gain on sale of assets		(3,745	)		(257	)		(3,745	)		(693	)
Depreciation and amortization		9,213			6,060			34,336			18,954
Depreciation and amortization from discontinued operations		-			290			794			1,316
FFO related to the minority interests in consolidated joint ventures		(91	)		(390	)		(652	)		(714	)
Funds from consolidated hotel operations applicable to common shares and Partnership units		9,331			3,993			42,126			17,978
Income from Unconsolidated Joint Ventures		893			367			3,476			1,799
Add:
Depreciation and amortization of purchase price in excess of historical cost		523			448			2,055			1,817
Interest in deferred financing costs written off in unconsolidated joint venture debt extinguishment		-			-			(2,858	)		(207	)
Interest in depreciation and amortization of unconsolidated joint ventures		407			360			5,022			4,549
Funds from unconsolidated joint venture operations applicable to common shares and Partnership units		1,823			1,175			7,695			7,958
Funds from Operations applicable to common shares and Partnership units		11,154			5,168			49,821			25,936
Add:
FFO related to the minority interests in consolidated joint ventures		91			390			652			714
Amortization of deferred financing costs		534			329			1,780			953
Deferred financing costs written off in debt extinguishment		-			322			-			1,485
Interest in deferred financing costs written off in unconsolidated joint venture debt extinguishment		-			-			2,858			207
Amortization of discounts and premiums		(139	)		23			(134	)		38
Non cash stock expense		260			95			766			293
Straight-line Amortization of ground lease expense		56			65			258			262
Adjusted Funds from Operations	$	11,956		$	6,392		$	56,001		$	29,888
AFFO per Diluted Weighted Average Common Shares and Units Outstanding	$	0.25		$	0.17		$	1.21		$	0.97
Diluted Weighted Average Common Shares and Units Outstanding		47,311,796			37,951,192			46,183,394			30,672,625

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EBITDA and GAAP Reconciliation

Earnings Before Interest, Taxes, and Depreciation and Amortization (EBITDA) and Adjusted EBITDA are non-GAAP financial measure within the meaning of the Securities and Exchange Commission rules. Our interpretation of Adjusted EBITDA is that EBITDA derived from our investment in unconsolidated joint ventures should be added back to net income (loss) as part of reconciling net income (loss) to Adjusted EBITDA. Our Adjusted EBITDA computation may not be comparable to EBITDA reported by other companies that interpret the definition of EBITDA differently than we do. Management believes EBITDA to be a meaningful measure of a REIT's performance and that it should be considered along with, but not as an alternative to, net income, cash flow, FFO and AFFO, as a measure of the company's operating performance.

Hotel EBITDA is a commonly used measure of performance in the hotel industry for a specific hotel or group of hotels. We believe Hotel EBITDA provides a more complete understanding of the operating results of the individual hotel or group of hotels. We calculate Hotel EBITDA by utilizing the total revenues generated from hotel operations less all operating expenses, property taxes, insurance and management fees, which calculation excludes Company expenses not specific to a hotel. Because Hotel EBITDA is specific to individual hotels or groups of hotels and not to the Company as a whole, it is not reconcilable to any comparable GAAP measure for the Company.

HERSHA HOSPITALITY TRUST

Adjusted EBITDA

(in thousands, except shares and per share data)

	Three Months Ended						Year Ended
	December 31, 2007			December 31, 2006			December 31, 2007			December 31, 2006
Net Income applicable to common shares	$	4,594		$	(1,374	)	$	13,047		$	298
Less:
Income from Unconsolidated Joint Ventures		(893	)		(367	)		(3,476	)		(1,799	)
Interest income		(96	)		(259	)		(686	)		(1,182	)
Add:
Income allocated to minority interest for continuing operations		210			11			1,765			536
Income allocated to minority interest for discontinued operations and gain on disposition of hotel properties		546			50			560			171
Interest expense from continuing operations		10,988			7,746			42,402			25,423
Interest expense from discontinued operations		178			399			989			1,915
Deferred financing costs written off in debt extinguishment		-			322			-			1,485
Distributions to Series A Preferred Shareholders		1,200			1,200			4,800			4,800
Depreciation and amortization from continuing operations		9,213			6,060			34,336			18,954
Depreciation from discontinued operations		-			290			794			1,316
Non-cash stock expense		260			95			766			293
Straight-line Amortization of ground lease expense		56			65			258			262
Adjusted EBITDA from consolidated hotel operations		26,256			14,238			95,555			52,472
Income from Unconsolidated Joint Ventures		893			367			3,476			1,799
Add:
Depreciation and amortization of purchase price in excess of historical cost		523			448			2,055			1,817
Adjustment for interest in interest expense, depreciation and amortization of unconsolidated joint ventures		2,269			2,884			16,077			15,890
Adjusted EBITDA from unconsolidated joint venture operations		3,685			3,699			21,608			19,506
Adjusted EBITDA	$	29,941		$	17,937		$	117,163		$	71,978

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HERSHA HOSPITALITY TRUST

Adjusted Funds from Operations (FFO) - 2008 FORECAST RECONCILIATION

(in thousands, except shares and per share data)

	Low			High
	Twelve Months Ending
	12/31/2008			12/31/2008
Net Income applicable to common shares	$	13,000		$	14,500
Less:
(Income) from Unconsolidated Joint Ventures		(3,500	)		(3,500	)
FFO related to the minority interests in consolidated joint ventures		(450	)		(550	)
Add:
Income allocated to minority interest in our operating partnership		3,000			3,100
Depreciation and amortization		37,000			37,000
Funds from Consolidated Hotel Operations		49,050			50,550
Income  from Unconsolidated Joint Ventures		3,500			3,500
Add:
Depreciation and amortization		5,750			5,750
Funds from Unconsolidated Joint Venture Operations		9,250			9,250
Funds from Operations		58,300			59,800
Add:
FFO related to the minority interests in consolidated joint ventures		450			550
Amortization of deferred financing costs		1,650			1,650
Non cash stock expense		1,050			1,050
Amortization of ground lease expense		265			265
Adjusted Funds from Operations	$	61,715		$	63,315
Diluted Weighted Average Common Shares and Units Outstanding		48,600,000			48,600,000
Adjusted FFO per Diluted Weighted Average Common Shares and Units Outstanding	$	1.27		$	1.30

10

HERSHA HOSPITALITY TRUST

Adjusted EBITDA - 2008 FORECAST RECONCILIATION

(in thousands, except shares and per share data)

	Twelve Months Ended
	December 31, 2008			December 31, 2008
Net Income applicable to common shares	$	13,000		$	14,500
Less:
Income from Unconsolidated Joint Ventures		(3,500	)		(3,500	)
Interest income		(1,000	)		(1,000	)
Add:
Income allocated to minority interest in common units		3,000			3,100
Interest expense		42,000			42,000
Distributions to Series A Preferred Shareholders		4,800			4,800
Depreciation and amortization from continuing operations		37,000			37,000
Amortization of deferred financing costs		1,650			1,650
Non cash stock expense		1,050			1,050
Amortization of ground lease expense		265			265
Adjusted EBITDA from consolidated hotel operations		98,265			99,865
Income (Loss) from Unconsolidated Joint Ventures		3,500			3,500
Add:
Interest expense		11,550			11,850
Depreciation and amortization of purchase price in excess of historical cost		2,350			2,350
Interest in depreciation and amortization of unconsolidated joint venture		3,400			3,400
Adjusted EBITDA from unconsolidated joint venture operations		20,800			21,100
Adjusted EBITDA	$	119,065		$	120,965

11

Supplemental Schedules

The company has provided supplemental schedules to this press release in order to provide additional disclosure and financial information for the benefit of the company's stakeholders.  These can found in the “Presentations and Supplemental Schedules” page of the Company’s Web site.

12

HERSHA HOSPITALITY TRUST

KEY PERFORMANCE INDICATORS

December 31, 2007

(Unaudited)

CONSOLIDATED HOTELS:
(Recorded from date of acquisition or investment)	(2007 Includes 55 Hotels 2006 includes 42 Hotels)									(2007 Includes 55 Hotels 2006 includes 43 Hotels)
				Three Months Ended									Twelve Months Ended
				December 31,									December 31,
	2007			2006			% Variance			2007			2006			% Variance
Rooms Available		577,050			436,797						2,248,253			1,507,003
Rooms Occupied		398,062			296,460						1,656,158			1,086,476
Occupancy		68.98	%		67.87	%		1.6	%		73.66	%		72.10	%		2.2	%
Average Daily Rate (ADR)	$	136.93		$	118.75			15.3	%	$	131.26		$	115.49			13.7	%
Revenue Per Available Room (RevPAR)	$	94.46		$	80.60			17.2	%	$	96.69		$	83.26			16.1	%
Room Revenues	$	54,507,924		$	35,205,086					$	217,393,817		$	125,475,166
Food & Beverage	$	1,677,767		$	1,434,780					$	6,792,524		$	6,616,034
Other Revenues	$	1,292,283		$	940,961					$	5,275,899		$	3,182,584
Total Revenues	$	57,477,974		$	37,580,826					$	229,462,240		$	135,273,785
Discontinued Assets	$	1,287,345		$	2,664,263					$	6,683,896		$	12,926,991
EBITDA	$	20,893,148		$	13,092,533					$	86,588,589		$	49,118,656
EBITDA Margin		36.3	%		34.8	%					37.7	%		36.3	%
EBITDA Margin Growth		1.51	%								1.42	%
SAME STORE CONSOLIDATED HOTELS:	(Includes 42 Hotels for both 2007 and 2006)									(Includes 27 Hotels for both 2007 and 2006)
(Owned for the entire reporting period)				Three Months Ended									Twelve Months Ended
				December 31,									December 31,
	2007			2006			% Variance			2007			2006			% Variance
Rooms Available		436,794			436,797						1,001,848			1,002,290
Rooms Occupied		298,812			296,460						721,503			710,967
Occupancy		68.41	%		67.87	%		0.8	%		72.02	%		70.93	%		1.5	%
Average Daily Rate (ADR)	$	132.17		$	118.75			11.3	%	$	121.95		$	113.60			7.4	%
Revenue Per Available Room (RevPAR)	$	90.42		$	80.60			12.2	%	$	87.83		$	80.58			9.0	%
Room Revenues	$	39,494,894		$	35,205,086					$	87,987,824		$	80,763,944
Food & Beverage	$	1,489,697		$	1,434,780					$	3,933,469		$	4,033,231
Other Revenues	$	1,041,121		$	940,961					$	1,901,064		$	1,804,590
Total Revenues	$	42,025,711		$	37,580,826					$	93,822,358		$	86,601,765
EBITDA	$	14,772,573		$	12,494,336					$	33,710,719		$	30,729,290
EBITDA Margin		35.2	%		33.2	%					35.9	%		35.5	%
EBITDA Margin Growth		1.90	%								0.45	%
SAME STORE HOTELS:	(Includes 56 Hotels for both 2007 and 2006)									(Includes 40 Hotels for both 2007 and 2006)
(Owned for the entire reporting period)				Three Months Ended									Twelve Months Ended
				December 31,									December 31,
	2007			2006			% Variance			2007			2006			% Variance
Rooms Available		658,146			658,262						1,733,241			1,734,115
Rooms Occupied		450,314			439,306						1,255,748			1,241,252
Occupancy		68.42	%		66.74	%		2.5	%		72.45	%		71.58	%		1.2	%
Average Daily Rate (ADR)	$	133.86		$	122.36			9.4	%	$	129.86		$	121.31			7.0	%
Revenue Per Available Room (RevPAR)	$	91.59		$	81.66			12.2	%	$	94.08		$	86.83			8.3	%
Room Revenues	$	60,278,339		$	53,755,622					$	163,066,365		$	150,581,288
Food & Beverage	$	8,456,380		$	8,051,706					$	18,579,406		$	19,308,896
Other Revenues	$	3,050,988		$	2,861,929					$	8,872,738		$	8,491,904
Total Revenues	$	71,785,707		$	64,669,257					$	190,518,509		$	178,382,088
EBITDA	$	21,141,699		$	17,699,493					$	59,011,067		$	53,565,773
EBITDA Margin		29.5	%		27.4	%					31.0	%		30.0	%
EBITDA Margin Growth		2.08	%								0.95	%
ALL HOTELS INCLUDING JOINT VENTURE ASSETS:
(Recorded from date of acquisition or investment)	(2007 Includes 70 Hotels 2006 Includes 56 Hotels)									(2007 Includes 70 Hotels 2006 Includes 57 Hotels)
				Three Months Ended									Twelve Months Ended
				December 31,				0					December 31,
	2007			2006			% Variance			2007			2006			% Variance
Rooms Available		819,150			658,262						3,202,367			2,386,387
Rooms Occupied		569,241			439,306						2,338,327			1,699,748
Occupancy		69.49	%		66.74	%		4.1	%		73.02	%		71.23	%		2.5	%
Average Daily Rate (ADR)	$	141.10		$	122.36			15.3	%	$	135.13		$	121.64			11.1	%
Revenue Per Available Room (RevPAR)	$	98.05		$	81.66			20.1	%	$	98.67		$	86.64			13.9	%
Room Revenues	$	80,318,588		$	53,755,622					$	315,974,446		$	206,760,910
Food & Beverage	$	8,644,450		$	8,051,706					$	30,313,420		$	29,160,358
Other Revenues	$	3,326,621		$	2,861,929					$	13,341,825		$	10,653,865
Total Revenues	$	92,289,659		$	64,669,257					$	359,629,690		$	246,575,133
Discontinued Assets	$	1,287,345		$	2,664,263					$	6,683,896		$	12,926,991
EBITDA	$	29,926,684		$	17,697,691					$	121,110,583		$	72,873,064
EBITDA Margin		32.4	%		27.4	%					33.7	%		29.6	%
EBITDA Margin Growth		5.06	%								4.12	%

13

Hersha Hospitality Trust

Total Portfolio

December 31, 2007

(Dollars in thousands)

	Name	Rooms		Year Opened/Complete Renovation	Acquisition Date	Debt Balance as of 12/31/07			Ownership %			Hersha Preferred Equity Return
	Marriott
1.	Mystic, CT		285	2001	8/9/2005	$	43,000			66.7	%		8.50	%
2.	Hartford, CT		409	2005	2/8/2006	$	45,000			15.0	%		8.50	%
	Hilton
3.	Hartford, CT		393	2005	10/6/2005	$	22,000			8.8	%		8.50	%
	Courtyard
4.	Alexandria		203	2006	09/29/06	$	25,000			100.0	%
5.	Scranton		120	1996	2/1/2006	$	6,300			100.0	%
6.	Langhorne, PA		118	2002	1/3/2006	$	15,575			100.0	%
7.	Brookline/Boston, MA		188	2003	6/16/2005	$	38,913			100.0	%
8.	Norwich, CT		144	1997	8/9/2005	$	9,400			66.7	%		8.50	%
9.	South Boston, MA		164	2005	7/1/2005	$	16,134			50.0	%
10.	Wilmington, DE		78	1999	6/17/2005	$	8,000			100.0	%
11.	Warwick, RI		92	2003	8/9/2005	$	6,450			66.7	%		8.50	%
12.	Ewing/Princeton, NJ		130	2004	7/1/2004	$	13,500			50.0	%		11.00	%
	Hampton Inn
13.	Farmingville		161	2002	9/6/2006	$	15,089			100.0	%
14.	Philadelphia, PA		250	2001	2/15/2006		(	*)		100.0	%
15.	Chelsea/Manhattan, NY		144	2003	8/29/2003	$	36,000			100.0	%
16.	Hershey, PA		110	1999	1/1/2000	$	3,177			100.0	%
17.	Carlisle, PA		95	1997	1/26/1999	$	3,562			100.0	%
18.	Danville, PA		72	1998	9/1/1999	$	2,255			100.0	%
19.	Selinsgrove, PA		75	1996	1/26/1999	$	2,976			100.0	%
20.	Herald Square, Manhattan, NY		136	2005	4/1/2005	$	26,500			100.0	%
21.	Seaport, NY		65	2006	2/1/2007	$	20,116			100.0	%	(a)
	Residence Inn
22.	North Dartmouth, MA		96	2002	5/1/2006	$	8,777			100.0	%	(a)
23.	Tysons Corner, VA		96	1984	2/2/2006	$	9,249			100.0	%
24.	Danbury, CT		78	1999	8/9/2005	$	8,050			66.7	%		8.50	%
25.	Framingham, MA		125	2000	3/26/2004	$	9,036			100.0	%
26.	Greenbelt, MD		120	2002	7/16/2004	$	12,302			100.0	%
27.	Mystic, CT		133	1996	09/15/2005	$	7,692			66.7	%		8.50	%
28.	Southington, CT		94	2002	8/9/2005	$	10,950			44.7	%		8.50	%
29.	Williamsburg, VA		108	2002	11/22/2005	$	7,922			75.0	%		12.00	%
30.	Norwood, MA		96	2006	7/27/2006		(	*)		100.0	%
31.	Langhorne, PA		100	2007	1/8/2007		(	*)		100.0	%
32.	Carlisle, PA		78	2007	1/10/2007	$	7,000			100.0	%
	Summerfield Suites
33.	White Plains, NY		159	2000	12/28/2006	$	33,030			100.0	%
34.	Bridgewater, NJ		128	1998	12/28/2006	$	14,492			100.0	%
35.	Gaithersburg, MD		140	1998	12/28/2006	$	13,720			100.0	%
36.	Pleasant Hill, CA		142	2003	12/28/2006	$	20,160			100.0	%
37.	Pleasanton, CA		128	1998	12/28/2006	$	14,490			100.0	%
38.	Scottsdale, AZ		164	1999	12/28/2006	$	16,778			100.0	%
39.	Charlotte, NC		144	1989	12/28/2006	$	7,330			100.0	%
	Homewood Suites
40.	Glastonbury, CT		136	2006	6/15/2006	$	12,826			48.0	%		10.00	%
	Holiday Inn Express
41.	Hauppauge		133	2001	09/01/06	$	9,961			100.0	%	(a)
42.	Cambridge, MA		112	1997	05/03/06	$	8,389			100.0	%
43.	Hershey, PA		85	1997	1/26/1999	$	4,238			100.0	%
44.	New Columbia, PA		81	1997	1/26/1999	$	1,623			100.0	%
45.	Malvern, PA		88	2004	5/24/2005	$	4,070			100.0	%
46.	Oxford Valley, PA		88	2004	5/26/2005	$	6,550			100.0	%
47.	South Boston, MA		118	1998	10/7/2005	$	6,023			50.0	%
48.	Chester, NY		80	2006	1/25/2007	$	6,700			100.0	%
49.	Madison Square Garden		228	2006	2/1/2007	$	70,000			50.0	%
	Hilton Garden Inn
50.	JFK Airport, NY		188	2005	2/16/2006	$	21,000			100.0	%
51.	Edison, NJ		132	2003	10/1/2003	$	7,709			100.0	%
52.	Glastonbury, CT		150	2003	11/13/2003	$	13,500			48.0	%		11.00	%
53.	Gettysburg, PA		88	2004	7/23/2004	$	5,140			100.0	%
	Springhill Suites
54.	Waterford, CT		80	1998	8/9/2005	$	6,335			66.7	%		8.50	%
55.	Williamsburg, VA		120	2002	11/22/2005	$	5,394			75.0	%		12.00	%
	Holiday Inn Express & Suites
56.	Harrisburg, PA		77	1997	9/1/1999		(	*)		100.0	%
57.	King of Prussia, PA		155	2004	5/23/2005	$	12,950			100.0	%
	Four Points - Sheraton
58.	Revere/Boston, MA		180	2001	3/11/2004	$	8,328			55.0	%		12.00	%
	Mainstay
59.	Valley Forge, PA		69	2000	6/1/2001		(	*)		100.0	%
60.	Frederick, MD		72	2001	1/1/2002	$	2,638			100.0	%
	Holiday Inn (HICC)
61.	Harrisburg, PA		196	1970	1/26/1999	$	3,066			100.0	%
62.	Norwich, CT		134	2006	7/1/2007		(	*)		100.0	%
	Comfort Inn
63.	North Dartmouth, MA		84	1986	05/01/06	$	3,145			100.0	%
64.	Harrisburg, PA		81	1998	1/26/1999	$	2,164			100.0	%
65.	Frederick, MD		73	2004	5/27/2004	$	3,387			100.0	%
	Fairfield Inn
66.	Bethlehem, PA		103	1997	1/3/2006	$	6,225			100.0	%
67.	Laurel, MD		109	1999	1/31/2005		(	*)		100.0	%
	Hawthorne Suites
68.	Franklin, MA		100	1999	4/25/2006	$	8,500			100.0	%
	Independent
69.	Inn at Wilmington		71	1999	6/17/2005	$	4,730			100.0	%
70.	373 Fifth Avenue		70	2007	6/1/2007	$	22,000			100.0	%
	Sleep Inn
71.	Valley Forge, PA		87	2000	6/1/2001		(	*)		100.0	%
	TOTAL		9,129
	(*) - Asset is encumbered by the Company's credit facility
	(a) - Debt balance reflects original issue premium or discount

14

Hersha Hospitality Trust

2007 Acquisition Activity

December 31, 2007

(Dollars in thousands)

	Name	Rooms		Year Opened/ Complete Renovation	Acquisition Date	Purchase Price		Debt Balance		Ownership %			HERSHA % OF ACQUISITIONS		HERSHA % OF DEBT		Hersha Preferred Equity Return
1.	Residence Inn - Langhorne, PA (*)		100	2007	01/08/2007	$	15,500	$	0		100.0	%	$	15,500	$	0		N/A
2.	Residence Inn - Carlisle, PA		78	2007	01/10/2007	$	9,945	$	7,000		100.0	%	$	9,945	$	7,000		N/A
3.	Holiday Inn Express - Chester, NY		80	2006	01/25/2007	$	9,200	$	6,700		100.0	%	$	9,200	$	6,700		N/A
4.	Hampton Inn Seaport		65	2006	02/01/2007	$	27,625	$	20,116		100.0	%	$	27,625	$	20,116		N/A
5.	Holiday Inn Express - Madison Square Garden, NY		228	2006	02/01/2007	$	85,500	$	70,000		50.0	%	$	42,750	$	35,000		N/A
6.	Hotel 373 and Starbucks Leasehold, Manhattan, NY		70	2007	06/01/2007	$	34,000	$	22,000		100.0	%	$	34,000	$	22,000		N/A
7.	Holiday Inn - Norwich, CT (*)		134	2006	07/01/2007	$	16,080	$	0		100.0	%	$	16,080	$	0		N/A
	Sub-Total		755			$	197,850	$	125,816				$	155,100	$	90,816
	(*) - Encumbered by the Company's credit facility.
	Note: On October 1, 2007, the Company acquired the remaining 20% interest in the Hampton Inn Philadelphia from its joint venture partners for the amount of $3.58M.

Hersha Hospitality Trust

2007 Disposition Activity

December 31, 2007

(Dollars in thousands)

	Name	Rooms		Disposition Date	Disposition Price			Debt Outstanding		Ownership %
Fairfield Inn
	Mt. Laurel, NJ (*)		118	11/30/07		(	*)	$	7,400		100.0	%
Hampton Inn
	Linden, NJ (*)		149	11/30/07		(	*)	$	9,652		100.0	%
SUBTOTAL			267		$	29,500		$	17,052
	(*) - The Fairfield Inn, Mt. Laurel and Hampton Inn, Linden New Jersey were sold as a portfolio for $29.5 million.
	These assets are classified as "Discontinued Assets" and were sold in Q4 2007.

15

Hersha Hospitality Trust

Mortgages and Notes Payable

December 31, 2007

	12/31/2007			Capped or			12/31/2007
	Fixed Rate			Fixed			Floating Rate		Floating
Consolidated Properties	Balance			Rate			Balance		Rate		Maturity
Four Points Sheraton - Revere, MA (SBA Loan)	$	543,208			4.00	%						01/2032
Courtyard - Brookline, MA	$	38,913,000			5.35	%						07/2015
Summerfield Suites - White Plains, NY	$	33,030,000			5.59	%						01/2017
Summerfield Suites - Bridgewater, NJ	$	14,492,000			5.59	%						01/2017
Summerfield Suites - Gaithersburg, MD	$	13,720,000			5.59	%						01/2017
Summerfield Suites - Pleasant Hill, CA	$	20,160,000			5.59	%						01/2017
Summerfield Suites - Pleasanton, CA	$	14,490,000			5.59	%						01/2017
Summerfield Suites - Scottsdale, AZ	$	16,778,000			5.59	%						01/2017
Summerfield Suites - Charlotte, NC	$	7,330,000			5.59	%						01/2017
Holiday Inn Express - Chester, NY	$	6,700,000			5.63	%						03/2017
Residence Inn - North Dartmouth, MA	$	9,073,415			5.67	%						07/2015
Original Issue Discount: Residence Inn - North Dartmouth, MA	$	(296,406	)		0.00	%						07/2015
Holiday Inn Express - Hauppauge, NY	$	10,357,847			5.70	%						03/2015
Original Issue Discount: Holiday Inn Express - Hauppauge, NY	$	(397,224	)		0.00	%						03/2015
Fairfield Inn & Suites - Bethlehem, PA	$	6,225,000			5.75	%						02/2016
Courtyard - Langhorne, PA	$	15,575,000			5.75	%						02/2016
Hilton Garden Inn - JFK Airport, NY	$	21,000,000			5.82	%						04/2017
Courtyard - Scranton, PA	$	6,300,000			5.83	%						02/2016
Hampton Inn - Herald Square, NY	$	26,500,000			6.09	%						04/2016
Hampton Inn - Chelsea, NY	$	36,000,000			6.24	%						10/2016
Hilton Garden Inn - Edison, NJ	$	7,709,257			6.25	%						10/2008
Residence Inn - Greenbelt, MD	$	12,301,681			6.25	%						10/2014
Courtyard - Alexandria, VA	$	25,000,000			6.25	%						10/2016
Residence Inn - Williamsburg, VA	$	7,921,838			6.32	%						01/2013
Springhill Suites - Williamsburg, VA	$	5,393,739			6.32	%						01/2013
Courtyard - Wilmington, DE	$	8,000,000			6.33	%						06/2016
Independent Hotel - Wilmington, DE	$	4,730,000			6.33	%						06/2016
Holiday Inn Express & Suites - King of Prussia, PA	$	12,950,000			6.33	%						06/2016
Holiday Inn Express - Langhorne, PA	$	6,550,000			6.33	%						06/2016
Holiday Inn Express - Malvern, PA	$	4,070,000			6.33	%						06/2016
Hampton Inn - Seaport, NY	$	19,250,000			6.36	%						10/2016
Original Issue Premium: Hampton Inn - Seaport, NY	$	865,855			0.00	%						10/2016
Residence Inn - Framingham, MA	$	9,036,245			6.38	%						07/2019
Hawthorne Suites - Franklin, MA	$	8,500,000			6.40	%						05/2016
Hampton Inn - Brookhaven, NY	$	15,088,999			6.41	%						07/2014
Land - 41st Street, Manhattan, NY	$	12,100,000			6.50	%						08/2009
Residence Inn - Tysons Corner, VA	$	9,249,207			6.52	%						08/2013
Comfort Inn - North Dartmouth, MA	$	3,145,206			6.55	%						05/2016
Hilton Garden Inn - Gettysburg, PA	$	5,140,149			6.62	%						09/2009
Four Points Sheraton - Revere, MA	$	7,784,924			6.73	%						07/2009
Hampton Inn - Carlisle, PA	$	3,562,115			8.94	%						04/2010
Hampton Inn - Selinsgrove, PA	$	2,975,944			8.94	%						04/2010
Holiday Inn Express - Hershey, PA	$	4,238,465			8.94	%						04/2010
Hampton Inn - Danville, PA	$	2,254,502			8.94	%						04/2010
HICC - New Cumberland, PA	$	3,066,124			8.94	%						04/2010
Comfort Inn - West Hanover, PA	$	2,164,323			8.94	%						04/2010
Holiday Inn Express - New Columbia, PA	$	1,623,242			8.94	%						04/2010
Note Payable Lodgeworks	$	498,000			0.00	%						01/2017
Original Issue Discount: Notes Payable - Lodgeworks	$	(243,917	)		0.00	%						01/2017
Hotel 373 - Manhattan, NY							$	22,000,000	30 Day LIBOR + 2.00%			04/2009
Holiday Inn Express - Cambridge, MA							$	8,388,733	PRIME minus 0.75%			09/2009
Residence Inn - Carlisle, PA							$	7,000,000	PRIME minus 0.75%			01/2010
Hampton Inn - Hershey, PA							$	3,176,646	30 Day LIBOR + 2.75%			06/2014
Mainstay Suites and Comfort Suites - Frederick,MD (*)							$	6,025,751	30 Day LIBOR + 2.00%			12/2012
Land - 8th Avenue							$	13,250,000	PRIME + 0.75%	(a)		07/2008
Land - Nevins Street							$	6,500,000	90 Day LIBOR + 2.70%	(b)		08/2009
Trust Preferred Tranche I	$	25,774,000			7.34	%						05/2035
Trust Preferred Tranche II	$	25,774,000			7.17	%						06/2035
Sub-Total	$	552,967,736					$	66,341,130
Total Consolidated Mortgage Debt	$	619,308,866
Unconsolidated Joint Ventures
Courtyard - Ewing, NJ	$	13,500,000			5.54	%						08/2012
Courtyard - Norwich, CT	$	9,400,000			5.63	%						08/2015
Springhill Suites - Waterford, CT	$	6,335,000			5.63	%						08/2015
Residence Inn - Southington, CT	$	10,950,000			5.63	%						08/2015
Residence Inn - Danbury, CT	$	8,050,000			5.63	%						08/2015
Courtyard - Warwick, RI	$	6,450,000			5.63	%						08/2015
Hilton Garden Inn - Glastonbury, CT	$	13,500,000			5.98	%						03/2016
Marriott - Mystic, CT	$	43,000,000			6.24	%						11/2010
HIEXP - Madison Square Garden, NY	$	55,000,000			6.50	%						11/2016
HIEXP - Madison Square Garden, NY - Mezzanine Loan	$	15,000,000			10.00	%						11/2012
HIEXP - South Boston	$	6,022,602			6.75	%						01/2015
Residence Inn - Mystic, CT	$	7,692,372			6.89	%						02/2014
Homewood Suites Glastonbury	$	12,826,359			7.50	%						09/2008
Courtyard - South Boston, MA							$	16,134,000	30 Day LIBOR + 2.25%			10/2009
Hilton - Hartford, CT							$	22,000,000	30 Day LIBOR + 2.75%			11/2009
Marriott - Hartford, CT							$	45,000,000	30 Day LIBOR + 2.90%			02/2010
Sub-Total	$	207,726,333					$	83,134,000
Total Unconsolidated Joint Venture Debt	$	290,860,333
(a) - Prime + 0.75% was less than the required minimum rate of 8.75%
(b) - Floating rate of 90 Day LIBOR + 2.70% was less than the required minimum rate of 8.06%

16

HERSHA HOSPITALITY TRUST

PORTFOLIO INFORMATION

December 31, 2007

HOTELS BY REGION
	No.	No.
	of	of
	Properties	Rooms
Connecticut, RI & Other	14	2,308
New York City Metro	12	1,624
Philadelphia Metro	11	1,234
Boston Metro	8	1,083
Central PA	13	1,261
Washington DC Metro	7	813
CA/AZ Metro	3	434
Mid-Atlantic	3	372
All Regions	71	9,129
HOTELS BY PROPERTY TYPE
	No.	No.
	of	of
	Properties	Rooms
Suburban	46	5,263
Urban	21	3,224
Airport	4	642
All Types	71	9,129
HOTELS BY SEGMENT TYPE
	No.	No.
	of	of
	Properties	Rooms
Upper Upscale	3	1,087
Upscale Transient	15	2,075
Upscale Extended Stay	21	2,465
Midscale	32	3,502
All Segments	71	9,129

17

Hersha Hospitality Trust

Development Loans Receivable

December 31, 2007

		Principal
		Outstanding		Interest			Maturity
Hotel Property	Borrower	12/31/2007		Rate			Date
Hilton Garden Inn/Homewood Suites - Brooklyn, NY	167 Johnson Street, LLC	$	11,000,000		11.0	%	September 21, 2008
Hilton Garden Inn/Homewood Suites - Brooklyn, NY	167 Johnson Street, LLC		9,000,000		13.5	%	September 24, 2008
Hilton Garden Inn - New York, NY	York Street LLC		15,000,000		11.0	%	July 1, 2008
Sheraton - JFK Airport, NY	Risingsam Hospitality, LLC		10,016,000		10.0	%	September 30, 2008
Boutique Hotel - Union Square, NY	Risingsam Union Square, LLC		10,000,000		10.0	%	May 31, 2008
Hampton Inn & Suites - West Haven, CT	44 West Haven Hospitality, LLC		2,000,000		10.0	%	October 9, 2008
Hampton Inn - Smithfield, RI	44 Hersha Smithfield, LLC		2,000,000		10.0	%	October 9, 2008
Homewood Suites - Newtown, PA	Reese Hotels, LLC		700,000		11.0	%	June 1, 2008
		$	59,716,000
Development Loan Receivable Discount			1,533,000
		$	58,183,000
Land Lease
Boutique Hotel - 39th and 8th Avenue, NY	Metro 39th Street Associates, LLC	$	9,065,000		10.0	%	June 28, 2031
Boutique Hotel - 41st and 9th Avenue, NY	Metro Forty First Street, LLC	$	9,882,000		10.0	%	July 28, 2031
Boutique Hotel - Nevins St., Brooklyn, NY	H Nevins Street Associates, LLC	$	4,419,000		10.0	%	June 11, 2032

18

Hersha Hospitality Trust

Enterprise Value

December 31, 2007

(Dollars in thousands)

	December 31,
	2007
Cash	$	12,327
Line of Credit		43,700
Mortgages and Notes Payable - Consolidated Assets		567,761
Less:  JV Portion of Mortgages Payable for Consolidated JV Assets		(7,077	)
Mortgages Payable - HT Portion of Unconsolidated JV Assets		133,024
Trust Preferred Securities		51,548
Series A Preferred Shares		60,000
Operating Partnership Units (6,424,915 @ $9.50)*		61,037
Class A Common Shares (41,203,612 @ $9.50)*		391,434
ENTERPRISE VALUE @ December 31, 2007	$	1,289,100
* Stock price as of December 31, 2007

19

HERSHA HOSPITALITY TRUST

Unconsolidated Joint Venture EBITDA

(in thousands, except shares and per share data)

				Hilton Garden			Homewood						Holiday Inn
	Courtyard			Inn			Suites			Courtyard			Express			Mystic
	Ewing			Glastonbury			Glastonbury			South Boston			South Boston			Partners
Hersha Ownership		50.0	%		48.0	%*		48.0	%*		50.0	%		50.0	%		(66.7%,15%, 8.8	%)
Hersha Participating Preferred %		10.0	%		11.0	%		10.0	%		N/A	**		N/A			8.5	%
THREE MONTHS ENDED DECEMBER 31, 2007
Joint Venture Net Income	$	(36	)	$	(79	)	$	(110	)	$	23		$	55		$	(1,517	)
Hotel Cash Available for Distribution
Hotel EBITDA	$	356		$	346		$	325		$	545		$	227		$	4,361
Debt Service		(195	)		(207	)		(328	)		(400	)		(154	)		(3,704	)
Other		(46	)		(58	)		(26	)		(60	)		(41	)		467
Cash Available for Distribution	$	115		$	81		$	(29	)	$	85		$	32		$	1,124
EBITDA
Hersha Income from Unconsolidated JV	$	(19	)	$	(39	)	$	(2	)	$	(4	)	$	(1	)	$	358
Addback:
Step up and Outside Basis Amortization		1			2			2			16			29			403
Adjustment for interest in interest expense, depreciation and amortization of unconsolidated joint venture		196			203			325			261			86			542
Hersha EBITDA from Unconsolidated JV	$	178		$	166		$	325		$	273		$	114		$	1,303
YEAR ENDED DECEMBER 31, 2007
Joint Venture Net Income	$	149		$	112		$	(677	)	$	425		$	369		$	(9,033	)
Hotel Cash Available for Distribution
Hotel EBITDA	$	1,744		$	1,691		$	1,059		$	2,566		$	1,036		$	17,328
Debt Service		(819	)		(821	)		(1,297	)		(1,458	)		(605	)		(11,507	)
Other		(196	)		(216	)		(119	)		(208	)		(159	)		(1,199	)
Cash Available for Distribution	$	729		$	654		$	(357	)	$	900		$	272		$	4,622
EBITDA
Hersha Income from Unconsolidated JV	$	72		$	47		$	(7	)	$	305		$	191		$	1,611
Addback:
Step up and Outside Basis Amortization		2			6			7			64			114			1,610
Adjustment for interest in interest expense, depreciation and amortization of unconsolidated joint venture		798			724			1,059			1,459			618			8,930
Hersha EBITDA from Unconsolidated JV	$	872		$	777		$	1,059		$	1,828		$	923		$	12,151

* On April 1, 2007 we increased our ownership in the Hilton Garden Inn Glastonbury and the Homewood Suites Glastonbury to 48%.  Prior to April 1, 2007 we owned a 40% interest in these two properties.

** On June 30, 2007 our 2 year, 10% cumulative participating preference expired.

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