Pebblebrook Hotel Trust Sells Hotel in D.C. for $141.5M
WASHINGTON, D.C. — Pebblebrook Hotel Trust (NYSE: PEB) has closed on the sale of Hotel Palomar Washington DC, a 335-room hotel located at 2121 P St. N.W. in Washington, D.C.’s Dupont Circle neighborhood. An undisclosed buyer purchased the hotel for $141.5 million.
According to Pebblebrook, the sales price reflects a cap rate of 5.9 percent based on the hotel’s 2018 net operating income. The Bethesda, Md.-based hotel REIT will use proceeds from the sale for general business purposes, which may include reducing the company’s outstanding debt.
San Francisco-based Kimpton manages Hotel Palomar, which features an outdoor pool and sundeck, spa services, 24-hour fitness center, business center, bike sharing services and Urbana, an onsite Italian restaurant.
Pebblebrook has been on a selling spree for its Washington, D.C., hotels.
Last week, the company sold The Liaison Capitol Hill, a 343-room hotel, to REIT Bldg Management Co. Inc. for $111 million. According to Washington Business Journal, Pebblebrook is currently marketing three Kimpton-managed hotels it owns near Dupont Circle.
In an investor presentation posted yesterday, Pebblebrook disclosed that its Washington, D.C., hotels comprise 7 percent of the company’s 2018 EBITDA (earnings before interest, tax, depreciation and amortization).
Pebblebrook announced last year its intent to sell between $700 million to $1.1 billion in assets within a year of its $5.2 billion merger with LaSalle Hotel Properties, which closed in early December 2018.
Pebblebrook currently owns 61 hotels totaling approximately 14,600 guest rooms in 10 states and Washington, D.C. The REIT’s stock price closed at $33.62 per share on Monday, Feb. 25, down from $34.96 a year ago.
— John Nelson