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Analyst Blog

Pebblebrook Hotel Trust (PEB - Snapshot Report), a real estate investment trust (REIT), recently announced a public offering of 4.5 million shares.To cover the overallotment options, Pebblebrook also plans to offer a 30-day option to the underwriters for purchasing an additional 675,000 shares.

The net proceeds from this offering will be utilized to repay debt, and for general corporate purposes including acquisition and investment on hotel properties, in line with the company’s investment strategy.

As of March 31, 2012, the company had $211.1 million in consolidated debt and $280.6 million in unconsolidated, non-recourse debt at weighted average interest rates of 4.8% and 3.2 %, respectively. The company had no outstanding balance on its $200.0 million senior unsecured credit facility. As of March 31, 2012, the company had $45.2 million of consolidated cash, cash equivalents and restricted cash.

Pebblebrook reported first quarter 2012 adjusted FFO (funds from operations) of 11 cents per share compared with 8 cents per share in the year-earlier quarter. Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

Pebblebrook acquires and invests primarily in upper upscale, full service hotels located in urban markets in major gateway cities.The company has an ownership interest in hotels located in nine states and the District of Columbia, including 14 markets.

Pebblebrook currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We have a long-term Neutral recommendation on the stock. One of its competitors, Host Hotels & Resorts Inc ((HST - Analyst Report) holds a Zacks #2 Rank, which implies a short- term Buy rating.

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