Pebblebrook Hotel Trust Completes Sale of the Dumont NYC

Business Wire 20-Jun-2017 4:01 PM

BETHESDA, Md.--(BUSINESS WIRE)-- Pebblebrook Hotel Trust (NYSE: PEB) (the Company) today announced that it has closed on the sale of the 252-room, upper upscale Dumont NYC in New York, New York for $118.0 million.

The sale price of $118.0 million reflects a 25.2x EBITDA multiple and a 3.3% net operating income capitalization rate (after an assumed annual capital reserve of 4.0% of total hotel revenues) based on the trailing twelve-month operating performance for the period ended May 31, 2017.

We are very excited to announce the sale of the Dumont NYC, noted Jon E. Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. With the completion of this sale, we have now completely exited the New York market. To date, our strategic disposition plan has generated a total of $581.8 million in gross proceeds, and were pleased with the success weve achieved as we continue to take advantage of the disparity between private market values and public market values.

Proceeds from the sale of the Dumont NYC will be utilized for general business purposes, which may include reducing the Companys outstanding debt or repurchasing the Companys common shares. Following the sale of the Dumont NYC, the Companys estimated net debt to trailing 12-month corporate EBITDA will decline to approximately 4.0 times.

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 Dumont NYC and the expected impact on the Companys 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 Companys 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 Companys filings with the Securities and Exchange Commission, including, without limitation, the Companys 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 Companys business and financial results, please refer to the Managements Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors sections of the Companys 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 Companys website at www.pebblebrookhotels.com .

All information in this press release is as of June 20, 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 Companys expectations.

For additional information or to receive press releases via email, please visit our website at www.pebblebrookhotels.com

Pebblebrook Hotel Trust
Dumont NYC
Reconciliation of Hotel Net Income to Hotel EBITDA and Hotel Net Operating Income
Trailing Twelve Months
(Unaudited, in millions)
Twelve months ended
May 31,
2017
Hotel net income $ 2.8
Adjustment:
Depreciation and amortization 1.9
Hotel EBITDA $ 4.7
Adjustment:
Capital reserve (0.9 )
Hotel Net Operating Income $ 3.8

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 hotels 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 managements 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 Companys cash needs, including its ability to make distributions.

The Companys presentation of the hotels 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 hotels financial performance. The table above is a reconciliation of the hotels 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
2016 2016 2016 2016 2016
Occupancy 83% 88% 89% 81% 85%
ADR $240 $255 $264 $235 $249
RevPAR $199 $224 $234 $190 $212
Hotel Revenues $183.0 $202.0 $205.6 $182.0 $772.6
Hotel EBITDA $59.6 $75.8 $79.9 $58.8 $274.0
Hotel EBITDA Margin 32.6% 37.5% 38.9% 32.3% 35.5%
First Quarter
2017
Occupancy 81%
ADR $243
RevPAR $196
Hotel Revenues $178.7
Hotel EBITDA $55.3
Hotel EBITDA Margin 31.0%

These historical hotel operating results include information for all of the hotels the Company owned as of June 20, 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.

The information above has not been audited and has been presented only for comparison purposes.

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Pebblebrook Hotel Trust Raymond D. Martz Chief Financial Officer240-507-1330

Source: Pebblebrook Hotel Trust