Pebblebrook Hotel Trust (NYSE: PEB) yesterday announced that it has closed on the sale of the 270-room, upscale, full-service DoubleTree by Hilton Hotel Bethesda-Washington DC in Bethesda, Maryland for $50.1 million.
The sale price of $50.1 million reflects an 11.6x EBITDA multiple and a 7.4% net operating income capitalization rate (after an assumed annual capital reserve of 4.0% of total hotel revenues) based on the trailing twelve-month operating performance for the period ended September 30, 2016.
“We are pleased with the sale of the DoubleTree Bethesda,” noted Jon E. Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. “This marks the third hotel sold under our strategic disposition plan that we initiated earlier this year. Following the sale of the DoubleTree Bethesda and the execution of our Manhattan asset exchange agreement, our strategic disposition plan has generated almost $250 million in gross proceeds. These property sales allow us to take advantage of the value differential seen across our portfolio between the public and private markets. We continue to remain confident in the buyer interest shown by a wide variety of both domestic and international hotel investors, particularly for high-quality, unencumbered hotels.”
Proceeds from the sale of DoubleTree Bethesda will be utilized for general business purposes which may include reducing the Company’s outstanding debt. The sale of DoubleTree Bethesda closed on November 2, 2016.
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 30 hotels, with a total of 7,837 guest rooms. The Company owns hotels located in 10 states and the District of Columbia, including: Los Angeles, California (Beverly Hills, Santa Monica and West Hollywood); San Diego, California; San Francisco, California; Washington, DC; Coral Gables, Florida; Naples, Florida; Buckhead, Georgia; Boston, Massachusetts; Minneapolis, Minnesota; New York, New York; Portland, Oregon; Philadelphia, Pennsylvania; Nashville, Tennessee; Columbia River Gorge, Washington; and Seattle, Washington.
|Pebblebrook Hotel Trust|
|DoubleTree by Hilton Hotel Bethesda - Washington DC|
|Reconciliation of Hotel Net Income to Hotel EBITDA and Hotel Net Operating Income|
|Trailing Twelve Months|
|(Unaudited, in millions)|
|Twelve months ended
|Hotel net income||$1.9|
|Depreciation and amortization||2.4|
|Hotel Net Operating Income||$3.7|
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.
|These historical hotel operating results include information for all of the hotels the Company owned as of November 2, 2016. These historical hotel operating results exclude the Company's 49% ownership interest in the Manhattan Collection and include the Company's 100% ownership interest in the Manhattan NYC and Dumont NYC due to the Company's previously announced asset exchange agreement. 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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