Pebblebrook Hotel Trust has closed on the sale of the 335-room, Hotel Palomar Washington, DC for $141.5 million. The sale price reflects a 14.9x 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.
According to a prepared release, when combined with the recently announced sale of The Liaison Capitol Hill, the aggregate sales proceeds of $252.5 million for these two sales reflect a 15.7x EBITDA multiple and a 5.5% net operating income capitalization rate based on the operating performance of the hotels in 2018.
Proceeds from the sale of Hotel Palomar Washington, DC will be utilized for general business purposes which may include reducing the company’s outstanding debt, the release notes. As a result of the 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 first quarter 2019.
Pebblebrook currently owns 61 hotels, totaling approximately 14,600 guest rooms, located in 10 states and the District of Columbia, in the following markets: Del Mar, California; Los Angeles, California (Beverly Hills, Santa Monica and West Hollywood); San Diego, California; San Francisco, California; Santa Cruz, California; Washington, DC; Coral Gables, Florida; Key West, Florida; Naples, Florida; Buckhead, Georgia; Chicago, Illinois; Boston, Massachusetts; New York, New York; Portland, Oregon; Philadelphia, Pennsylvania; Nashville, Tennessee; Columbia River Gorge, Washington; and Seattle, Washington.