Hotel Transaction Washington D.C.

137 Room Rouge Hotel in Washington, D.C. Sold for $42.0 Million

The contracted sale price reflects a 17.4x EBITDA multiple and a 5.0% net operating income capitalization rate based on the hotel’s operating performance for 2018.
Rouge Hotel - Lobby
137 Room Rouge Hotel in Washington, D.C. Sold for $42.0 million

Pebblebrook Hotel Trust

Pebblebrook Hotel Trust (NYSE: PEB) today announced that it executed a contract to sell the 137-room Rouge Hotel in Washington, D.C. for $42.0 million to a third party.

The contracted sale price reflects a 17.4x EBITDA multiple and a 5.0% net operating income capitalization rate based on the hotel’s operating performance for 2018. Based on the trailing 12-month period ended March 2019, the contracted sales price reflects a 17.7x EBITDA multiple and a 4.9% net operating income capitalization rate. The net operating income capitalization rates are after an assumed annual capital reserve of 4.0% of total hotel revenues.

The sale of Rouge Hotel is subject to normal closing conditions, and the Company offers no assurances that this sale will be completed on these terms, or at all. The Company is targeting to complete the sale in the third quarter of 2019 and continues to be encouraged with pricing levels and overall buyer interest in the investment markets. Following the completion of the sale, the Company’s estimated total net debt to trailing 12-month corporate EBITDA ratio will be approximately 4.6 times.

Pebblebrook Hotel Trust (NYSE: PEB) is a publicly traded real estate investment trust (“REIT”) and the largest owner of urban and resort lifestyle hotels in the United States. The Company owns 60 hotels, totaling approximately 14,500 guest rooms across 16 urban and resort markets with a focus on the west coast gateway cities.

Pebblebrook Hotel Trust
Hotel Rouge
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

$1.4

Adjustment:
Depreciation and amortization

1.0

Hotel EBITDA

$2.4

Adjustment:
Capital reserve

(0.3

)

Hotel Net Operating Income

$2.1

Pebblebrook Hotel Trust
Hotel Rouge
Reconciliation of Hotel Net Income to Hotel EBITDA and Hotel Net Operating Income
Trailing Twelve Months
(Unaudited, in millions)

Twelve months ended

March 31,

2019

Hotel net income

$1.4

Adjustment:
Depreciation and amortization

1.0

Hotel EBITDA

$2.4

Adjustment:
Capital reserve

(0.3

)

Hotel Net Operating Income

$2.1



Logos, product and company names mentioned are the property of their respective owners.