Hotel Transaction Washington, DC

Pebblebrook Hotel Trust Completes Sale of Hotel Madera in Washington, DC

Pebblebrook Hotel Trust (NYSE: PEB) last week announced that it closed on the sale of the 82-room Hotel Madera in Washington, D.C. for $23.3 million to a third party.
Hotel Madera - Entrance
Pebblebrook Hotel Trust Completes Sale of Hotel Madera in Washington, DC

Pebblebrook Hotel Trust

Pebblebrook Hotel Trust (NYSE: PEB) last week announced that it closed on the sale of the 82-room Hotel Madera in Washington, D.C. for $23.3 million to a third party.

The sale price of $23.3 million reflects a 14.3x EBITDA multiple and a 5.7% net operating income capitalization rate based on the hotel’s operating performance for 2018. Based on the trailing 12-month period ended June 30, 2019, the contracted sales price reflects a 14.1x EBITDA multiple and a 5.9% net operating income capitalization rate.

Following the sale of Hotel Madera, the Company has completed a total of $1.3 billion of asset sales as part of its strategic disposition plan, and year to date, the Company has completed a total of $449.0 million of asset sales towards its goal of $600.0 million, which reflects a 15.7x EBITDA multiple and a 5.5% net operating income capitalization rate based on the hotels’ performance for 2018. The net operating income capitalization rates above are after an assumed annual capital reserve of 4.0% of total hotel revenues.

Proceeds from the sale of Hotel Madera 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 4.6 times at the end of the third quarter 2019.

Pebblebrook Hotel Trust (NYSE: PEB) is a publicly traded real estate investment trust and the largest owner of urban and resort lifestyle hotels in the United States. The Company owns 57 hotels, totaling approximately 14,100 guest rooms across 16 urban and resort markets with a focus on the west coast gateway cities.

Pebblebrook Hotel Trust
Hotel Madera
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    

$0.8

       
Adjustment:      
Depreciation and amortization    

0.8

       
Hotel EBITDA    

$1.6

       
Adjustment:      
Capital reserve    

(0.3)

       
Hotel Net Operating Income    

$1.3

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

June 30,

     

2019

       
Hotel net income    

$1.0

       
Adjustment:      
Depreciation and amortization    

0.7

       
Hotel EBITDA    

$1.7

       
Adjustment:      
Capital reserve    

(0.3)

       
Hotel Net Operating Income    

$1.4

       
 
                     
Pebblebrook Hotel Trust
Historical Operating Data
($ in millions, except ADR and RevPAR)
(Unaudited)
                     
                     
Historical Operating Data:                    
   

First Quarter

 

Second Quarter

 

Third Quarter

 

Fourth Quarter

 

Full Year

   

2018

 

2018

 

2018

 

2018

 

2018

                     
Occupancy  

76%

 

87%

 

89%

 

77%

 

82%

ADR  

$238

 

$263

 

$262

 

$247

 

$253

RevPAR  

$181

 

$229

 

$232

 

$192

 

$208

                     
Hotel Revenues  

$340.1

 

$424.1

 

$424.6

 

$371.1

 

$1,559.8

Hotel EBITDA  

$95.6

 

$156.9

 

$155.1

 

$109.1

 

$516.8

Hotel EBITDA Margin  

28.1%

 

37.0%

 

36.5%

 

29.4%

 

33.1%

                     
   

First Quarter

 

Second Quarter

           
   

2019

 

2019

           
                     
Occupancy  

76%

 

87%

           
ADR  

$251

 

$268

           
RevPAR  

$190

 

$232

           
                     
Hotel Revenues  

$355.8

 

$433.2

           
Hotel EBITDA  

$98.4

 

$157.5

           
Hotel EBITDA Margin  

27.7%

 

36.3%

           
                     
 
 
Pebblebrook Hotel Trust
Strategic Disposition Program Summary
(Unaudited)
                     
    Date of

disposition

  Sales price

($ in millions)

  EBITDA

multiple

  Net operating

capitalization rate

  Sales price

per key

($ in thousands)

   
                     
Hotel dispositions:                    
Park Central San Francisco and Park Central New York / WestHouse New York   11/30/2018  

$

715.0

  16.5x  

5.1%

 

$

443

Gild Hall, New York   11/30/2018  

 

38.8

  15.8x  

5.3%

 

 

298

Embassy Suites Philadelphia Center City   11/30/2018  

 

67.0

  11.0x  

8.1%

 

 

233

The Grand Hotel Minneapolis   12/4/2018  

 

30.0

  8.5x  

10.4%

 

 

214

The Liaison Capitol Hill   2/14/2019  

 

111.0

  16.9x  

4.9%

 

 

324

Hotel Palomar Washington, DC   2/22/2019  

 

141.5

  14.9x  

5.9%

 

 

422

Onyx Hotel   5/29/2019  

 

58.3

  15.3x  

5.9%

 

 

521

Hotel Amarano Burbank   7/16/2019  

 

72.9

  15.8x  

5.7%

 

 

552

Rouge Hotel   9/12/2019  

 

42.0

  17.4x  

5.0%

 

 

307

Hotel Madera   9/26/2019  

 

23.3

  14.3x  

5.7%

 

 

284

                     
Total / Average      

$

1,300

  15.5x  

5.54%

 

$

392

                     
Total / Average (Completed in 2019)      

$

449

  15.7x  

5.53%

 

$

394

                     
 



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