Pebblebrook Hotel Trust has acquired The Westin Colonnade Coral Gables, in Miami, for $59.4 million. The 157-room upper-upscale hotel is located on what is known as Miracle Mile. The hotel will continue to be operated by Davidson Hotels and Resorts.
“We’re excited about the acquisition of The Westin Colonnade Coral Gables and the ability to further expand our presence in Miami, one of the fastest growing markets in the country,” said Jon Bortz, chairman and CEO of Pebblebrook Hotel Trust. “This hotel is our second hotel investment in Miami, and our first in the Coral Gables submarket. The property’s excellent location in this affluent and dynamic market makes the hotel a leader among its competitors, and its upside opportunity makes it an excellent addition to our high-quality portfolio.”
The Westin Colonnade is a 157-room, upper-upscale, full-service hotel, just south of downtown Miami. The REIT acquired a fee simple condominium interest in The Westin Colonnade. The hotel, which was originally built in 1989, was converted into a Westin in 2007. One of its selling points is its 23,000 square feet of meeting space.
For the trailing twelve months ended September 2014, the Westin Colonnade operated at 80-percent occupancy, with an average daily rate of $198 and room revenue per available room of $159. During the next 12 months, the company currently forecasts that the hotel will generate earnings before interest, taxes, depreciation and amortization of $2.9 to $3.4 million and net operating income after capital reserves of $2.3 to $2.8 million. These forecasted numbers have been reduced by $1.0 million due to the forecasted negative impact of a comprehensive $7.0 to $9.0 million renovation that the company is planning to commence in the second half of 2015.
“We’re thrilled with the opportunity to further develop our relationship with Davidson,” continued Mr. Bortz. “We believe their expertise in operating high-quality hotels and their extensive market knowledge will allow us to unlock significant additional long term value at The Westin Colonnade.”
“We are excited about the opportunity to work with Pebblebrook Hotel Trust at another exceptional hotel property, as this marks our third property managed for Pebblebrook,” said Davidson’s president and CEO, John Belden. “We believe the hotel has immense long term growth potential and upside opportunity, and we look forward to positioning the property as the market leader in the strong and growing Coral Gables submarket.”
The Company expects to incur approximately $0.3 million of costs related to the acquisition of the hotel that will be expensed as incurred.
The acquisition of The Westin Colonnade Coral Gables brings the total number of properties in the company’s portfolio to 32 and marks the company’s second investment in the Miami market.