BETHESDA, Md.--(BUSINESS WIRE)--Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) today announced that it has closed on the sale of the 826-space parking garage, which included 10,500 square feet of vacant ground floor space, at Revere Hotel Boston Common for $95.0 million.
The sale price of $95.0 million reflects a 23.5x EBITDA multiple and a 4.0% net operating income capitalization rate (after an assumed annual capital reserve of 4.0% of revenues) based on the trailing twelve-month operating performance for the period ended May 31, 2017.
“We are extremely pleased with the sale of the parking garage at Revere Hotel Boston Common,” noted Jon E. Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. “This sale generates significant value for our shareholders at a very favorable price and overall capitalization rate. To date, we have sold 5 hotels and 2 non-hotel assets under our strategic disposition plan that we initiated early last year, which has generated $676.8 million in gross proceeds. These property sales continue to allow us to take advantage of the value differential between the higher private market prices and values and the lower public market valuation of our company.”
Proceeds from the sale of the parking garage at Revere Hotel Boston Common will be utilized for general business purposes, which may include further reducing the Company’s outstanding debt or repurchasing the Company’s common shares. The sale of the parking garage at Revere Hotel Boston Common closed on June 23, 2017.
Due to the sale, the garage will not be reported in the Company’s Same-Property statistics for the second, third or fourth quarters; however, the results during the Company’s ownership period during the second quarter will continue to be included in Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted Funds From Operations (“FFO”), Adjusted FFO per diluted share and Net Income. As a result of the sale, the Company expects that the Company’s financials will be impacted by the following amounts:
Second Quarter Impact
- Net Income increased by approximately $12.8 million as a result of the estimated gain on sale of hotel properties of approximately $13.0 million
- Same-Property EBITDA reduced by approximately $1.1 million
- Adjusted EBITDA reduced by approximately $0.2 million
- Adjusted FFO reduced by approximately $0.2 million
- Adjusted FFO per diluted share reduced by approximately $0.00 per share
Second, Third and Fourth Quarters Combined Impact
- Net Income increased by approximately $11.7 million as a result of the estimated gain on sale of hotel properties of approximately $13.0 million
- Same-Property EBITDA reduced by approximately $3.6 million
- Adjusted EBITDA reduced by approximately $2.7 million
- Adjusted FFO reduced by approximately $1.3 million
- Adjusted FFO per diluted share reduced by approximately $0.02 per share
The Company is not re-projecting or reaffirming its outlook for the second quarter or the full year issued on April 27, 2017 in any way other than to take into account the sale of the parking garage at Revere Hotel Boston Common.
If any of the foregoing estimates and assumptions prove to be inaccurate, actual results, including the outlook, may vary, and could vary significantly, from the amounts detailed above.
About Pebblebrook Hotel Trust
Pebblebrook Hotel Trust is a publicly traded real estate investment trust (“REIT”) organized to opportunistically acquire and invest primarily in upper upscale, full-service hotels located in urban markets in major gateway cities. The Company owns 28 hotels, with a total of 6,970 guest rooms. The Company owns hotels located in 9 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; Portland, Oregon; Philadelphia, Pennsylvania; Nashville, Tennessee; Columbia River Gorge, Washington; and Seattle, Washington. For more information, please visit us at www.pebblebrookhotels.com and follow us on Twitter at @PebblebrookPEB.
This press release contains certain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “seek,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” “forecast,” “continue,” “assume,” “plan,” references to “outlook” or other similar words or expressions. These forward-looking statements relate to the use of proceeds from the sale of the parking garage at Revere Hotel Boston Common and the estimated impact on the Company’s financial statements. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections and forecasts and other forward-looking information and estimates. These forward-looking statements are subject to various risks and uncertainties, many of which are beyond the Company’s control, which could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to, the state of the U.S. economy and the supply of hotel properties, and other factors as are described in greater detail in the Company’s filings with the Securities and Exchange Commission, including, without limitation, the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
For further information about the Company’s business and financial results, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the Company’s SEC filings, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Investor Relations section of the Company’s website at www.pebblebrookhotels.com.
All information in this press release is as of June 26, 2017. The Company undertakes no duty to update the statements in this press release to conform the statements to actual results or changes in the Company’s expectations.
For additional information or to receive press releases via email, please visit our website at www.pebblebrookhotels.com
|Pebblebrook Hotel Trust|
|Parking Garage at Revere Hotel Boston Common|
|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||$2.5|
Depreciation and amortization
|Hotel Net Operating Income||$3.8|
Note: Historically, the parking garage at Revere Hotel Boston
Common's financial results were included in the financial results
of Revere Hotel Boston Common. The amounts above, however, reflect
the parking garage alone, and do not include the financial results
of the hotel.
|Pebblebrook Hotel Trust|
|Historical Operating Data|
|($ in millions, except ADR and RevPAR)|
|Historical Operating Data:|
|Hotel EBITDA Margin||32.2%||37.2%||38.6%||32.0%||35.1%|
|Hotel EBITDA Margin||30.7%|
These historical hotel operating results include information
for all of the hotels the Company owned as of June 23, 2017. 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.