A Focus on Debt Reduction

Six years later, Pebblebrook's financial focus is on debt reduction and the disposition of non-core assets.

Earlier this month it dissolved the 49% JV it had with Denihan Hospitality Group via an asset exchange. Pebblebrook and Denihan split the six-asset portfolio with Pebblebrook taking two of the properties, with the intention to sell them. The portfolio was valued at $820 million in the transaction.

That transaction also helped to whittle down Pebblebrook's overall debt balance by approximately $73 million. Here too, it recorded an impairment charge — in this case for $62.6 million — for the third quarter.

Pebblebrook launched a strategic disposition plan that we initiated earlier this year, which to date has generated $250 million in gross proceeds, including the DoubleTree Bethesda and Denihan transactions.

“These property sales allow us to take advantage of the value differential seen across our portfolio between the public and private markets,” CEO Jon E. Bortz said in a prepared statement.

BETHESDA, MD–Days after it announced it had put the DoubleTree Bethesda under contract, Pebblebrook Hotel Trust reports that the deal has closed, with the 270-room upscale hotel trading for $50.1 million. The buyer has not been announced.

The sale price implies an 11.6 times EBITDA multiple and a 7.4% NOI cap rate based on the trailing twelve-month operating performance for the period ended Sept. 30, 2016. The REIT recorded an impairment charge of $12.1 million relating to the sale for the third quarter.

Pebblebrook is receiving approximately $48 million of net proceeds from the sale, which the company will use to reduce its outstanding debt on its credit facility.

Pebblebrook acquired the hotel in 2010 shortly after it went public. It paid $67.1 million for property, using the proceeds from its initial public offering.

A Focus on Debt Reduction

Six years later, Pebblebrook's financial focus is on debt reduction and the disposition of non-core assets.

Earlier this month it dissolved the 49% JV it had with Denihan Hospitality Group via an asset exchange. Pebblebrook and Denihan split the six-asset portfolio with Pebblebrook taking two of the properties, with the intention to sell them. The portfolio was valued at $820 million in the transaction.

That transaction also helped to whittle down Pebblebrook's overall debt balance by approximately $73 million. Here too, it recorded an impairment charge — in this case for $62.6 million — for the third quarter.

Pebblebrook launched a strategic disposition plan that we initiated earlier this year, which to date has generated $250 million in gross proceeds, including the DoubleTree Bethesda and Denihan transactions.

“These property sales allow us to take advantage of the value differential seen across our portfolio between the public and private markets,” CEO Jon E. Bortz said in a prepared statement.