Pebblebrook Hotel Trust agreed to sell the 132-room Hotel Amarano Burbank in Los Angeles to a third party for about $72.9 million. The company expects to complete the deal in the third quarter of 2019.
The contracted sale price represents a 15.8 multiple on earnings before interest, tax, depreciation and amortization and a 5.7 percent net operating income capitalization rate (after an assumed annual capital reserve of 4 percent of total hotel revenues) based on the hotel’s operating performance for 2018. For the 12-month period ending in March 2019, it reflects a 16.9 EBITDA multiple and a 5.3 percent net operating income capitalization rate (also after an assumed capital reserve of 4.0 percent of total hotel revenues). The measures are adjusted for the estimated annualized impact of real estate taxes for California’s Proposition 13.
The sale is subject to normal closing conditions. After its completion, Pebblebrook’s estimate total net debt to trailing 12-month corporate EBITDA ratio will decline to approximately 4.6 times.
In Washington, D.C., Pebblebrook has decided to switch management of two hotels to Viceroy Hotels & Resorts on July 1. The properties, both part of IHG’s Kimpton Hotels & Restaurants brand, will relaunch under a new name following renovations.
The 178-room Kimpton Mason & Rook Hotel will undergo a comprehensive property renovation and improvement plan beginning in late summer and finishing by early 2020. Upon completion, it will switch over to the Viceroy Hotels & Resorts brand as a part of The Viceroy Lifestyle Series and become the Viceroy Hotel Washington D.C.
Dawson Design Group, the same group that designed Viceroy’s three San Francisco-based “Unofficial Z Collection” hotels, will begin interior renovations on the 193-room Kimpton Donovan Hotel in late 2019. Reopening in 2020, the rebranded hotel will mark Pebblebrook’s first Unofficial Z Collection hotel on the East Coast.