Pebblebrook Hotel Trust has entered into a contract to sell the Villa Florence San Francisco for $87.5. An unaffiliated and unnamed third party has agreed to purchase the property, which is subject to standard closing costs and expected to close in the third quarter 2021.

Villa Florence San Francisco is a 189-room hotel in San Francisco's Union Square, along the Powell Street Cable Car Line. It is walking distance to Chinatown and Moscone Center.

Pebblebrook Hotel Trust sold another San Francisco asset in April, the 416-room Kimpton Sir Francis Drake Hotel in San Francisco for $157.6 million. The property sold to an unaffiliated and unnamed third party. Pebblebrook Hotel Trust acquired the hotel in 2010 for $90 million. The property delivered significant gain on sale and an 11-year compounded internal rate of return of over 12% a year, representing an 11.8x EBITDA multiple and a 7.2% net operating income capitalization rate, after an assumed annual capital reserve of 4% of total hotel revenues, based on the hotel's 2019 operating performance. The company plans to use the proceeds for normal business purposes.