Pebblebrook Hotel Trust Completes Sale of Onyx Hotel

Posted by Business Wire May 30, 2019

BETHESDA, Md.–(BUSINESS WIRE)–lt;a href=”https://twitter.com/search?q=%24PEB&src=ctag” target=”_blank”gt;$PEBlt;/agt; lt;a href=”https://twitter.com/hashtag/PEB?src=hash” target=”_blank”gt;#PEBlt;/agt;–Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) announced that it
closed on the sale of the 112-room Onyx Hotel in Boston, Massachusetts
for $58.3 million on May 29, 2019.

The sale price of $58.3 million reflects a 15.3x EBITDA multiple and a
5.9% net operating income capitalization rate (after an assumed annual
capital reserve of 4.0% of total hotel revenues) based on the hotel’s
operating performance for 2018.

Proceeds from the sale of the Onyx Hotel will be utilized for general
business purposes which may include reducing the Company’s outstanding
debt. As a result of this completed sale, the Company estimates its
total net debt to trailing 12-month corporate EBITDA will be
approximately 4.7 times at the end of the second quarter 2019.

About Pebblebrook Hotel Trust

Pebblebrook Hotel Trust (NYSE: PEB) is a publicly traded real estate
investment trust (“REIT”) and the largest owner of urban and resort
lifestyle hotels in the United States. The Company owns 60 hotels,
totaling approximately 14,500 guest rooms across 16 urban and resort
markets with a focus on the west coast gateway cities. For more
information, visit www.pebblebrookhotels.com
and follow us at @PebblebrookPEB.

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.

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. 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. Examples of
forward-looking statements include the following: the Company’s net debt
and EBITDA; descriptions of the Company’s plans; forecasts of the
Company’s future economic performance and its share of future markets;
forecasts of hotel industry performance; and descriptions of assumptions
underlying or relating to any of the foregoing expectations including
assumptions regarding the timing of their occurrence. 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,
2018. 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 May 30, 2019. 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
Onyx Hotel
Reconciliation of Hotel Net Income to Hotel EBITDA and Hotel Net
Operating Income
Trailing Twelve Months
(Unaudited, in millions)
 

Twelve months ended
December 31,

2018  
 
Hotel net income $2.4
 
Adjustment:
Depreciation and amortization 1.4
 
Hotel EBITDA $3.8  
 
Adjustment:
Capital reserve (0.4 )
 
Hotel Net Operating Income $3.4  
 
 

This press release includes certain non-GAAP financial measures
as defined under Securities and Exchange Commission (SEC) rules.
These measures are not in accordance with, or an alternative to,
measures prepared in accordance with U.S. generally accepted
accounting principles, or GAAP, and may be different from non-GAAP
measures used by other companies. In addition, these non-GAAP
measures are not based on any comprehensive set of accounting
rules or principles. Non-GAAP measures have limitations in that
they do not reflect all of the amounts associated with the hotel’s
results of operations determined in accordance with GAAP.

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.

 
 
Pebblebrook Hotel Trust
Historical Operating Data
($ in millions, except ADR and RevPAR)
(Unaudited)
         
 
Historical Operating Data:
 
First Quarter Second Quarter Third Quarter Fourth Quarter Full Year
2018 2018 2018 2018 2018
 
Occupancy 76% 87% 89% 77% 82%
ADR $237 $262 $260 $246 $252
RevPAR $180 $228 $230 $190 $207
 
Hotel Revenues $346.2 $432.3 $431.1 $377.2 $1,586.8
Hotel EBITDA $97.3 $160.4 $157.3 $110.8 $525.8
Hotel EBITDA Margin 28.1% 37.1% 36.5% 29.4% 33.1%
 
First Quarter
2019
 
Occupancy 75%
ADR $250
RevPAR $188
 
Hotel Revenues $361.4
Hotel EBITDA $99.7
Hotel EBITDA Margin 27.6%
 
 

These historical hotel operating results include information
for all of the hotels the Company owned as of May 29, 2019. 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.

 

Contacts

Raymond D. Martz, Chief Financial Officer, Pebblebrook Hotel Trust –
(240) 507-1330

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