We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Pebblebrook's (PEB) November Results Exceed Expectations
Read MoreHide Full Article
Per Pebblebrook Hotel Trust’s (PEB - Free Report) recently released operating update, the operating results for November outpaced expectations, underpinning solid performance in the urban portfolio.
Shares of the company witnessed a marginal gain in the regular trading session on the NYSE on Dec 20, following the announcement.
The company noted that for the overall portfolio, same-property Hotel revenue per available room (”RevPAR”) exhibited year-over-year growth of 6.4%, mainly driven by an increase in occupancy and average daily rate (”ADR”). This was, in turn, led by a strong performance in the urban portfolio, moderate declines in resort rates from normalizing trends and significant share gains throughout the portfolio from redevelopment investments over the last few years.
Total revenues increased around 7% year over year, while same-property Hotel EBITDA rose more than 10% due to normalization in operating expense growth.
For PEB’s urban portfolio, robust business transient and group business, as well as gains in RevPAR share from properties redeveloped in the last few years, resulted in same-property urban total revenues growth of 10% on a year-over-year basis. An increase in occupancy and rate led to a 9.4% rise in RevPAR. Non-room revenues climbed 11.6% from the year-ago period.
Market-wise, PEB’s properties in San Francisco reported 31% year-over-year RevPAR growth on the back of solid business transient and group travel and a favorable convention calendar. Properties in Washington DC and Boston witnessed RevPAR growth of 23% and 16%, respectively, while Los Angeles and Chicago experienced positive single-digit year-over-year improvements.
For the resort portfolio, same-property occupancy rose 5.5% in November from the same period in 2022. ADR declined 6.6% year-over-year as the increase in group demand was partially offset by normalization in leisure trends. From the beginning of the year through Dec 19, 2023, same-property resort occupancy fell 12% compared with 2019 levels, while ADR grew at a solid 40%.
The resorts are also benefiting from significant repositioning and transformational investments throughout the portfolio.
Per the operating update, Pebblebrook is on schedule to complete a substantial part of the restoration of the 79-room LaPlaya Beach Resort & Club, in Naples, FL. It projects to complete and reopen the resort by the first quarter of 2024.
The company is on track to complete the $12.5 million redevelopment of four guest houses, consisting of 50 guestrooms and suites at Southernmost Beach Resort. Of the 50 rooms, 11 are completed and in service. The remaining guestrooms are expected to be operational before the end of this year.
PEB is actively carrying out the redevelopments at the Newport Harbor Island Resort for $48 million and Estancia La Jolla Hotel & Spa for $25 million. The Estancia La Jolla is in the second and final phase of the transformation. Both projects are anticipated to complete the targets by the second quarter of 2024.
Amid the favorable lodging industry fundamentals, the real estate investment trust (REIT) expects fourth-quarter 2023 adjusted funds from operations per share in the range of 9-14 cents. The Zacks Consensus Estimate is currently pegged at 12 cents.
Same-property RevPAR is projected between $183 million and $188 million, indicating year-over-year growth of 1-4%. Same-property Hotel EBITDA is estimated between $57 million and $63 million.
Nonetheless, the company’s ability to maintain rates in its resort markets in the near term is likely to be affected by persistent macroeconomic uncertainty and a high interest rate environment.
PEB currently carries a Zacks Rank #3 (Hold). Its shares have gained 13.6% in the quarter-to-date period compared with the industry’s growth of 17.8%.
The Zacks Consensus Estimate for Lamar Advertising’s current-year funds from operations (”FFO”) per share has been raised by 1.7% over the past two months to $7.31.
The Zacks Consensus Estimate for EastGroup Properties’ 2023 FFO per share has moved marginally north in the past two months to $7.70.
The Zacks Consensus Estimate for Stag Industrial’s ongoing year’s FFO per share has been raised 1.3% upward over the past two months to $2.28.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Pebblebrook's (PEB) November Results Exceed Expectations
Per Pebblebrook Hotel Trust’s (PEB - Free Report) recently released operating update, the operating results for November outpaced expectations, underpinning solid performance in the urban portfolio.
Shares of the company witnessed a marginal gain in the regular trading session on the NYSE on Dec 20, following the announcement.
The company noted that for the overall portfolio, same-property Hotel revenue per available room (”RevPAR”) exhibited year-over-year growth of 6.4%, mainly driven by an increase in occupancy and average daily rate (”ADR”). This was, in turn, led by a strong performance in the urban portfolio, moderate declines in resort rates from normalizing trends and significant share gains throughout the portfolio from redevelopment investments over the last few years.
Total revenues increased around 7% year over year, while same-property Hotel EBITDA rose more than 10% due to normalization in operating expense growth.
For PEB’s urban portfolio, robust business transient and group business, as well as gains in RevPAR share from properties redeveloped in the last few years, resulted in same-property urban total revenues growth of 10% on a year-over-year basis. An increase in occupancy and rate led to a 9.4% rise in RevPAR. Non-room revenues climbed 11.6% from the year-ago period.
Market-wise, PEB’s properties in San Francisco reported 31% year-over-year RevPAR growth on the back of solid business transient and group travel and a favorable convention calendar. Properties in Washington DC and Boston witnessed RevPAR growth of 23% and 16%, respectively, while Los Angeles and Chicago experienced positive single-digit year-over-year improvements.
For the resort portfolio, same-property occupancy rose 5.5% in November from the same period in 2022. ADR declined 6.6% year-over-year as the increase in group demand was partially offset by normalization in leisure trends. From the beginning of the year through Dec 19, 2023, same-property resort occupancy fell 12% compared with 2019 levels, while ADR grew at a solid 40%.
The resorts are also benefiting from significant repositioning and transformational investments throughout the portfolio.
Per the operating update, Pebblebrook is on schedule to complete a substantial part of the restoration of the 79-room LaPlaya Beach Resort & Club, in Naples, FL. It projects to complete and reopen the resort by the first quarter of 2024.
The company is on track to complete the $12.5 million redevelopment of four guest houses, consisting of 50 guestrooms and suites at Southernmost Beach Resort. Of the 50 rooms, 11 are completed and in service. The remaining guestrooms are expected to be operational before the end of this year.
PEB is actively carrying out the redevelopments at the Newport Harbor Island Resort for $48 million and Estancia La Jolla Hotel & Spa for $25 million. The Estancia La Jolla is in the second and final phase of the transformation. Both projects are anticipated to complete the targets by the second quarter of 2024.
Amid the favorable lodging industry fundamentals, the real estate investment trust (REIT) expects fourth-quarter 2023 adjusted funds from operations per share in the range of 9-14 cents. The Zacks Consensus Estimate is currently pegged at 12 cents.
Same-property RevPAR is projected between $183 million and $188 million, indicating year-over-year growth of 1-4%. Same-property Hotel EBITDA is estimated between $57 million and $63 million.
Nonetheless, the company’s ability to maintain rates in its resort markets in the near term is likely to be affected by persistent macroeconomic uncertainty and a high interest rate environment.
PEB currently carries a Zacks Rank #3 (Hold). Its shares have gained 13.6% in the quarter-to-date period compared with the industry’s growth of 17.8%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Lamar Advertising (LAMR - Free Report) , EastGroup Properties (EGP - Free Report) and Stag Industrial (STAG - Free Report) each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Lamar Advertising’s current-year funds from operations (”FFO”) per share has been raised by 1.7% over the past two months to $7.31.
The Zacks Consensus Estimate for EastGroup Properties’ 2023 FFO per share has moved marginally north in the past two months to $7.70.
The Zacks Consensus Estimate for Stag Industrial’s ongoing year’s FFO per share has been raised 1.3% upward over the past two months to $2.28.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.