IRSA Inversiones y Representaciones Sociedad Anonima Announces Strategic Investment in Hersha Hospitality Trust

BUENOS AIRES, Argentina, Aug. 4 /PRNewswire-FirstCall/ -- IRSA Inversiones y Representaciones Sociedad Anonima (NYSE: IRS) (BCBA: IRSA) ("IRSA"), the leading real estate company in Argentina, announces the acquisition of 5.7 million common shares of Hersha Hospitality Trust (NYSE: HT) ("Hersha") through its majority owned and controlled subsidiary Real Estate Investment Group L.P. ("REIG") at $2.50 per common share for a total purchase price of $14.25 million pursuant to a purchase agreement executed between the parties.

This transaction represents an important entry point for IRSA in the North American hospitality industry with REIG becoming the single largest shareholder of Hersha, with an approximated 10.5% stake in the company. Hersha owns an impressive portfolio of select service and upscale hotels in major metropolitan markets primarily along the northeast corridor including the cities of New York, New Jersey, Boston, Philadelphia and Washington D.C., including interests in 73 hotels totaling 9,294 rooms.

"We are delighted to have found a seasoned and highly regarded management team, led by the Shah Family, which has a demonstrated track record in the hospitality industry for several decades," said Eduardo S. Elsztain, Chairman and CEO of IRSA. "Our investment in Hersha is a vote of confidence in the company's focused strategy of investing in select service and upscale hotels with superior internationally-recognized hotel brands. This investment gives IRSA access to a prime hotel portfolio and a great management team with a clear strategy rather than investing in single assets." Elsztain continued: "In the past, our company has had to face some very challenging economic downturns, including deep recessions and liquidity crises in Latin America. We have successfully met those challenges and have had the good fortune to have not only survived them but to have found ways to thrive, despite some rather daunting circumstances. We believe that the Hersha management team will also find ways to identify great opportunities in this very difficult environment which will create long term value for shareholders."

"We are very pleased with the confidence in our business model that an offshore capital investment by a firm such as IRSA represents," said Mr. Jay H. Shah, Hersha's Chief Executive Officer. "Their investment goes beyond their financial commitment. This capital investment provides us with a strategic partner. IRSA will support us as we navigate the current economic challenges and contribute to our efforts as we take advantage of opportunities to grow Hersha's platform as the lodging cycle turns."

In connection with the investment, Hersha has also entered into an Investor Rights and Option Agreement with REIG and IRSA pursuant to which REIG has the option to buy up to 5.7 million additional common shares at a price of $3.00 per share at any time prior to July 31, 2014. If at any time after July 31, 2011 the closing price for the common shares on the New York Stock Exchange exceeds $5.00 for twenty consecutive trading days, Hersha may call in and cancel the option by issuing common shares with a market value equal to the difference between the exercise price and the market value of the shares.

As part of the investment agreements, Hersha announced today the appointment of Eduardo S. Elsztain to its Board of Trustees.

John Sabin, Chair of Hersha's Nominating and Corporate Governance committee, commented, "The Board is pleased to appoint Eduardo as a member and believes that his global real estate and capital markets experience will provide Hersha with a unique perspective as it maneuvers through the current challenges and looks to capture opportunities over the next several years."

About Hersha Hospitality Trust

Hersha Hospitality Trust is a self-advised real estate investment trust that owns interests in 73 hotels totaling 9,294 rooms, primarily along the northeast corridor including the cities of New York, New Jersey, Boston, Philadelphia and Washington D.C. Hersha also owns hotels in northern California and Arizona. Hersha focuses on select service and upscale hotels in major metropolitan markets with a high barrier to entry. The properties are operated under leading and prestigious franchises including Marriott International, Intercontinental Hotel Group, Starwood Hotels, Hilton Hotels Corporation, Global Hyatt Corporation and Choice Hotels International. To see Hersha's properties, please visit: http://www.hersha.com/property.html. For more information of Hersha please visit www.hersha.com

About IRSA Inversiones y Representaciones Sociedad Anonima

IRSA is one of Argentina's leading real estate companies in terms of total assets. IRSA is engaged, directly and indirectly through subsidiaries and joint ventures, in a range of diversified real estate related activities in Argentina, including: acquisition development and ownership of shopping centers, office properties, lodging and residential land. Its shares are listed and traded on the Bolsa de Comercio de Buenos Aires and Global Depositary Shares representing its shares are listed and traded on the New York Stock Exchange under the ticker symbol "IRS". For more information of IRSA please visit www.irsa.com.ar

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of 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 reflected 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 20-F for the year ended June 30, 2008, filed with the U.S. Securities Exchange Commission.

    For further information
    Alejandro Elsztain - II VP
    Gabriel Blasi - CFO
    +(5411) 4323 7449
    finanzas@irsa.com.ar
    www.irsa.com.ar

SOURCE IRSA Inversiones y Representaciones Sociedad Anonima