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Pebblebrook (PEB) Sells Hotel Colonnade Coral Gables for $63M
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Pebblebrook Hotel Trust (PEB - Free Report) recently announced that it has completed the disposition of The Hotel Colonnade Coral Gables, Autograph Collection in Coral Gables, FL. The 157-room property was sold to a third party for $63 million. The move is in line with the company’s investment strategy.
PEB recorded a net operating income of $4.1 million and a Hotel EBITDA of $4.8 million for the hotel in the trailing 12 months ended Dec 31, 2022.
The sale price of Hotel Colonnade Coral Gables denotes an EBITDA multiple of 15.4X and a net operating income capitalization rate of 5.5% based on the hotel’s operating performance for 2019. Thus, the disposition of the property seems a strategic fit for Pebblebrook.
The company intends to use the sale proceeds for general corporate purposes, which may include reducing its outstanding debt, and repurchasing its common and preferred equity shares.
In a similar move, earlier in March 2023, PEB completed the disposition of 909 North Michigan Avenue, a 5,860 square feet, three-tenant fully occupied high-street retail parcel, to a third party for $27.3 million. The sale price of the property reflected almost a 7.7% cap rate based on its net operating income for 2022.
Further, in February 2023, it carried out the sale of The Heathman Hotel in Portland, OR, for $45 million to a third party. PEB recorded a net operating income of $1 million and a Hotel EBITDA of $1.2 million for the hotel in the trailing 12 months ended Dec 31, 2022.
The sale price of the property denoted an EBITDA multiple of 10.7X and a net operating income capitalization rate of 8.4% based on the hotel’s operating performance for 2019.
The lodging industry is presently witnessing a rebound in traffic owing to the relaxations in the pandemic-related regulations. The company recently released its operating update and noted that overall demand for first-quarter 2023 aligns with its expectations.
The group room night and average daily rate pace for 2023 remain strongly ahead of 2022. Also, leisure demand continues to stay healthy with spring break season around the corner.
Additionally, PEB’s strategic capital-deployment efforts to capitalize on growth opportunities through acquisitions and developments bode well. The company also aims to optimize the use of its dispositions’ proceeds.
In 2022, the company acquired the 119-room Inn on Fifth in Naples, FL, for $156 million, excluding prorations and transactions costs, and the 257-room Newport Harbor Island Resort (formerly Gurney's Newport Resort & Marina) in Newport, RI, for $174 million. It disposed of properties worth $260.9 million in 2022.
PEB currently carries a Zacks Rank #3 (Hold). Its shares have gained 0.3% in the past three months against the industry’s fall of 2.1%.
Image Source: Zacks Investment Research
Nonetheless, rising interest rates and macroeconomic uncertainty raise concerns for the company.
The Zacks Consensus Estimate for Alexandria Real Estate’s 2023 FFO per share is pegged at $8.95.
The Zacks Consensus Estimate for Terreno Realty’s current-year FFO per share stands at $2.17.
The Zacks Consensus Estimate for Service Properties Trust’s 2023 FFO per share is pegged at $1.89.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Pebblebrook (PEB) Sells Hotel Colonnade Coral Gables for $63M
Pebblebrook Hotel Trust (PEB - Free Report) recently announced that it has completed the disposition of The Hotel Colonnade Coral Gables, Autograph Collection in Coral Gables, FL. The 157-room property was sold to a third party for $63 million. The move is in line with the company’s investment strategy.
PEB recorded a net operating income of $4.1 million and a Hotel EBITDA of $4.8 million for the hotel in the trailing 12 months ended Dec 31, 2022.
The sale price of Hotel Colonnade Coral Gables denotes an EBITDA multiple of 15.4X and a net operating income capitalization rate of 5.5% based on the hotel’s operating performance for 2019. Thus, the disposition of the property seems a strategic fit for Pebblebrook.
The company intends to use the sale proceeds for general corporate purposes, which may include reducing its outstanding debt, and repurchasing its common and preferred equity shares.
In a similar move, earlier in March 2023, PEB completed the disposition of 909 North Michigan Avenue, a 5,860 square feet, three-tenant fully occupied high-street retail parcel, to a third party for $27.3 million. The sale price of the property reflected almost a 7.7% cap rate based on its net operating income for 2022.
Further, in February 2023, it carried out the sale of The Heathman Hotel in Portland, OR, for $45 million to a third party. PEB recorded a net operating income of $1 million and a Hotel EBITDA of $1.2 million for the hotel in the trailing 12 months ended Dec 31, 2022.
The sale price of the property denoted an EBITDA multiple of 10.7X and a net operating income capitalization rate of 8.4% based on the hotel’s operating performance for 2019.
The lodging industry is presently witnessing a rebound in traffic owing to the relaxations in the pandemic-related regulations. The company recently released its operating update and noted that overall demand for first-quarter 2023 aligns with its expectations.
The group room night and average daily rate pace for 2023 remain strongly ahead of 2022. Also, leisure demand continues to stay healthy with spring break season around the corner.
Additionally, PEB’s strategic capital-deployment efforts to capitalize on growth opportunities through acquisitions and developments bode well. The company also aims to optimize the use of its dispositions’ proceeds.
In 2022, the company acquired the 119-room Inn on Fifth in Naples, FL, for $156 million, excluding prorations and transactions costs, and the 257-room Newport Harbor Island Resort (formerly Gurney's Newport Resort & Marina) in Newport, RI, for $174 million. It disposed of properties worth $260.9 million in 2022.
PEB currently carries a Zacks Rank #3 (Hold). Its shares have gained 0.3% in the past three months against the industry’s fall of 2.1%.
Image Source: Zacks Investment Research
Nonetheless, rising interest rates and macroeconomic uncertainty raise concerns for the company.
Stocks to Consider
Some better-ranked stocks from the REIT sector are Alexandria Real Estate Equities (ARE - Free Report) and Terreno Realty (TRNO - Free Report) , each currently carrying a Zacks Rank #2 (Buy), and Service Properties Trust (SVC - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Alexandria Real Estate’s 2023 FFO per share is pegged at $8.95.
The Zacks Consensus Estimate for Terreno Realty’s current-year FFO per share stands at $2.17.
The Zacks Consensus Estimate for Service Properties Trust’s 2023 FFO per share is pegged at $1.89.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.