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Pebblebrook (PEB) Sells The Marker San Francisco for $77M
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Pebblebrook Hotel Trust (PEB - Free Report) completed the sale of its 208-room The Marker San Francisco in San Francisco, CA, to a third party for $77.0 million. With the proceeds, the company will reduce its outstanding debt borrowings related to its recent hotel acquisitions as well as general corporate needs.
The move is a strategic fit as for the trailing 12 months ended May 31, 2022, the hotel’s estimated net operating loss was $2.0 million and estimated Hotel EBITDA was ($1.8) million. Also, based on the hotel’s 2019 operating performance, the $77.0-million sale price represents a 10.0X EBITDA multiple and an 8.8% net operating income capitalization rate.
Such a timely execution of asset disposition will boost long-term operating profitability and aid in value creation for the company.
Recently, Pebblebrook announced the acquisition of the AAA Four Diamond 257-room Gurney’s Newport Resort & Marina in Newport, RI, for $174.0 million. This resort buyout strengthens the company’s portfolio with an attractive asset within the vibrant, high-barrier-to-entry Newport market.
The acquisition seems beneficial as the resort is expected to augment the company’s top line. Based on the estimated May 2022 trailing-twelve-month performance, the hotel generated total revenues per available room of $401, hotel EBITDA of $13.6 million and hotel net operating income, after a 4% capital reserve, of $12.1 million.
Markedly, with the relaxation of regulations, an acceleration in vaccine distribution and favorable holiday travel trends, the lodging industry is likely to continue recovering. Amid this, with a superior location and premium features, this resort in Newport is anticipated to attract both leisure and corporate group customers.
Moreover, there is increased optimism, backed by the rebounding fundamentals of the lodging industry, with strong leisure demand and improving levels of corporate and group demand across several markets.
Some other key picks from the REIT sector include Extra Space Storage Inc. (EXR - Free Report) and OUTFRONT Media (OUT - Free Report) .
The Zacks Consensus Estimate for Extra Space Storage’s 2022 funds from operations (FFO) per share has moved marginally upward in the past month to $8.25. EXR presently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for OUTFRONT Media’s ongoing year’s FFO per share has been raised 7.7% over the past two months to $2.09. OUT sports a Zacks Rank #1 currently.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Pebblebrook (PEB) Sells The Marker San Francisco for $77M
Pebblebrook Hotel Trust (PEB - Free Report) completed the sale of its 208-room The Marker San Francisco in San Francisco, CA, to a third party for $77.0 million. With the proceeds, the company will reduce its outstanding debt borrowings related to its recent hotel acquisitions as well as general corporate needs.
The move is a strategic fit as for the trailing 12 months ended May 31, 2022, the hotel’s estimated net operating loss was $2.0 million and estimated Hotel EBITDA was ($1.8) million. Also, based on the hotel’s 2019 operating performance, the $77.0-million sale price represents a 10.0X EBITDA multiple and an 8.8% net operating income capitalization rate.
Such a timely execution of asset disposition will boost long-term operating profitability and aid in value creation for the company.
Recently, Pebblebrook announced the acquisition of the AAA Four Diamond 257-room Gurney’s Newport Resort & Marina in Newport, RI, for $174.0 million. This resort buyout strengthens the company’s portfolio with an attractive asset within the vibrant, high-barrier-to-entry Newport market.
The acquisition seems beneficial as the resort is expected to augment the company’s top line. Based on the estimated May 2022 trailing-twelve-month performance, the hotel generated total revenues per available room of $401, hotel EBITDA of $13.6 million and hotel net operating income, after a 4% capital reserve, of $12.1 million.
Markedly, with the relaxation of regulations, an acceleration in vaccine distribution and favorable holiday travel trends, the lodging industry is likely to continue recovering. Amid this, with a superior location and premium features, this resort in Newport is anticipated to attract both leisure and corporate group customers.
Moreover, there is increased optimism, backed by the rebounding fundamentals of the lodging industry, with strong leisure demand and improving levels of corporate and group demand across several markets.
Shares of this Zacks Rank #1 (Strong Buy) company have declined 23.2% over the past six months compared with the industry’s fall of 18.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other key picks from the REIT sector include Extra Space Storage Inc. (EXR - Free Report) and OUTFRONT Media (OUT - Free Report) .
The Zacks Consensus Estimate for Extra Space Storage’s 2022 funds from operations (FFO) per share has moved marginally upward in the past month to $8.25. EXR presently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for OUTFRONT Media’s ongoing year’s FFO per share has been raised 7.7% over the past two months to $2.09. OUT sports a Zacks Rank #1 currently.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.