Pebblebrook Hotel Trust has closed on the sale of the 99-room Topaz Hotel in Washington, D.C. for $33.1 million to a third party. The sale price of $33.1 million reflects a 19.5x EBITDA multiple and a 4.4% net operating income capitalization rate based on the hotel’s operating performance for 2018.
According to a prepared statement, based on the trailing 12-month period ended September 30, 2019, the contracted sales price reflects a 17.9x EBITDA multiple and a 4.9% net operating income capitalization rate.
Following the sale of Topaz Hotel, the company has completed a total of $1.33 billion of asset sales as part of its strategic disposition plan, and year to date, the company has completed a total of $482.1 million of asset sales towards its goal of $600 million, which reflects a 16.0x EBITDA multiple and a 5.45% net operating income capitalization rate based on the hotels’ performance for 2018.
The release notes that the net operating income capitalization rates above are after an assumed annual capital reserve of 4.0% of total hotel revenues. Proceeds from the sale of Topaz Hotel will be utilized for general business purposes which may include reducing the Company’s outstanding debt.