Pebblebrook Hotel Trust (NYSE: PEB) today announced that it has closed on the sale of the 335-room, Hotel Palomar Washington, DC for $141.5 million. The sale closed on February 22, 2019.
The sale price of $141.5 million reflects a 14.9x EBITDA multiple and a 5.9% net operating income capitalization rate (after an assumed annual capital reserve of 4.0% of total hotel revenues) based on the hotel’s operating performance for 2018. When combined with the recently announced sale of The Liaison Capitol Hill, the aggregate sales proceeds of $252.5 million for these two sales reflect a 15.7x EBITDA multiple and a 5.5% net operating income capitalization rate based on the operating performance of the hotels in 2018.
Proceeds from the sale of Hotel Palomar Washington, DC will be utilized for general business purposes which may include reducing the Company’s outstanding debt. As a result of this completed sale, the Company estimates its total net debt to trailing 12-month corporate EBITDA will be approximately 4.7 times at the end of the first quarter 2019.
Pebblebrook Hotel Trust is a publicly traded real estate investment trust organized to opportunistically acquire and invest primarily in upper upscale, full-service hotels located in urban markets in major gateway cities. The Company owns 61 hotels, totaling approximately 14,600 guest rooms, located in 10 states and the District of Columbia, in the following markets: Del Mar, California; Los Angeles, California (Beverly Hills, Santa Monica and West Hollywood); San Diego, California; San Francisco, California; Santa Cruz, California; Washington, DC; Coral Gables, Florida; Key West, Florida; Naples, Florida; Buckhead, Georgia; Chicago, Illinois; Boston, Massachusetts; New York, New York; Portland, Oregon; Philadelphia, Pennsylvania; Nashville, Tennessee; Columbia River Gorge, Washington; and Seattle, Washington.
| Pebblebrook Hotel Trust | |||
| Hotel Palomar Washington, DC | |||
| Reconciliation of Hotel Net Income to Hotel EBITDA and Hotel Net Operating Income | |||
| Trailing Twelve Months | |||
| (Unaudited, in millions) | |||
| Twelve months ended December 31, | |||
| 2018 | |||
| Hotel net income | $4.3 | ||
| Adjustment: | |||
| Depreciation and amortization | 5.2 | ||
| Hotel EBITDA | $9.5 | ||
| Adjustment: | |||
| Capital reserve | (1.1 | ) | |
| Hotel Net Operating Income | $8.4 | ||
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| The Company has presented trailing twelve-month hotel EBITDA and trailing twelve-month hotel net operating income after capital reserves because it believes these measures provide investors and analysts with an understanding of the hotel-level operating performance. These non-GAAP measures do not represent amounts available for management’s discretionary use, because of needed capital replacement or expansion, debt service obligations or other commitments and uncertainties, nor are they indicative of funds available to fund the Company’s cash needs, including its ability to make distributions. |
| The Company’s presentation of the hotel’s trailing twelve-month EBITDA and trailing twelve-month net operating income after capital reserves should not be considered as an alternative to net income (computed in accordance with GAAP) as an indicator of the hotel’s financial performance. The table above is a reconciliation of the hotel’s trailing twelve-month EBITDA and net operating income after capital reserves calculations to net income in accordance with GAAP. Any differences are a result of rounding. |
| Pebblebrook Hotel Trust | ||||||||||
| Historical Operating Data | ||||||||||
| ($ in millions, except ADR and RevPAR) | ||||||||||
| (Unaudited) | ||||||||||
| Historical Operating Data: | ||||||||||
| First Quarter 2017 | Second Quarter 2017 | Third Quarter 2017 | Fourth Quarter 2017 | Full Year 2017 | ||||||
| Occupancy | 78% | 87% | 88% | 77% | 83% | |||||
| ADR | $240 | $259 | $255 | $239 | $249 | |||||
| RevPAR | $188 | $225 | $225 | $184 | $206 | |||||
| Hotel Revenues | $356.1 | $426.0 | $421.2 | $368.4 | $1,571.6 | |||||
| Hotel EBITDA | $107.6 | $160.4 | $155.0 | $111.8 | $534.7 | |||||
| Hotel EBITDA Margin | 30.2% | 37.6% | 36.8% | 30.3% | 34.0% | |||||
| First Quarter 2018 | Second Quarter 2018 | Third Quarter 2018 | ||||||||
| Occupancy | 76% | 87% | 89% | |||||||
| ADR | $236 | $262 | $260 | |||||||
| RevPAR | $180 | $228 | $230 | |||||||
| Hotel Revenues | $347.8 | $435.1 | $434.0 | |||||||
| Hotel EBITDA | $97.5 | $161.7 | $158.6 | |||||||
| Hotel EBITDA Margin | 28.0% | 37.2% | 36.5% | |||||||
| These historical hotel operating results include information for all of the hotels the Company owned as of February 25, 2019. These historical operating results include periods prior to the Company's ownership of the hotels. The information above does not reflect the Company's corporate general and administrative expense, interest expense, property acquisition costs, depreciation and amortization, taxes and other expenses. Any differences are a result of rounding. |
| The information above has not been audited and has been presented only for comparison purposes. |
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