Pebblebrook Hotel Trust completes sale of two hotels for $331m

10th March 2020 (Last Updated March 10th, 2020 15:31)

Pebblebrook Hotel Trust has completed the sale of InterContinental Buckhead Atlanta and Sofitel Washington DC Lafayette Square for $331m.

Pebblebrook Hotel Trust completes sale of two hotels for $331m
The 422-room InterContinental Buckhead Atlanta in Atlanta, Georgia. Credit: InterContinental Hotels and Resorts.

Pebblebrook Hotel Trust has completed the sale of InterContinental Buckhead Atlanta and Sofitel Washington DC Lafayette Square for $331m.

The transaction was completed on 6 March.

The sale price for the 422-room InterContinental Buckhead Atlanta in Atlanta, Georgia reflects a 13.7x EBITDA multiple and a 6.4% net-operating income capitalisation rate, based on the hotel’s 2018 operating performance.

The sales price reflects a 13.0x EBITDA multiple and a 6.8% net-operating income capitalisation rate, based on the hotel’s 2019 operation performance.

For the 237-room Sofitel Washington DC Lafayette Square in Washington DC, the sale price reflects a 15.1x EBITDA multiple and a 5.7% net-operating income capitalisation rate, based on the hotel’s 2018 operating performance.

The sales price reflects a 15.2x EBITDA multiple and a 5.7% net-operating income capitalisation rate, based on the hotel’s 2019 operation performance.

Pebblebrook Hotel Trust stated: “For both properties combined, the contracted sale price reflects a 14.2x EBITDA multiple and a 6.1% net operating income capitalization rate based on the hotels’ operating performance for 2018.

“Based on the hotels’ operating performance for 2019, the contracted sales price reflects a 13.7x EBITDA multiple and a 6.4% net operating income capitalization rate.

“All the above net operating income capitalization rates are after an assumed annual capital reserve of 4.0% of total hotel revenues.”

Pebblebrook Hotel Trust added that the funds raised from the sale of its two hotels will be used for general business purposes including reducing the firm’s outstanding debt.

In July 2019, Pebblebrook Hotel Trust had completed the sale of Hotel Amarano Burbank in the US.

The real estate investment trust company owns 54 hotels, totaling nearly 13,400 guest rooms across 15 urban and resort markets with a focus on the West Coast gateway cities.