Pebblebrook Hotel Trust Completes Sale of InterContinental Buckhead Atlanta and Sofitel Washington DC Lafayette Square
Pebblebrook Hotel Trust (NYSE: PEB) (the "Company") has announced that it closed on the sale of the 422-room InterContinental Buckhead Atlanta in Atlanta, Georgia and the 237-room Sofitel Washington DC Lafayette Square in Washington, D.C. for $331.0 million to a third party on March 6, 2020.
For InterContinental Buckhead Atlanta, the contracted sale price reflects a 13.7x EBITDA multiple and a 6.4% net operating income capitalization rate based on the hotel's operating performance for 2018. Based on the hotel's operating performance for 2019, the contracted sales price reflects a 13.0x EBITDA multiple and a 6.8% net operating income capitalization rate. Both the EBITDA multiple and net operating income capitalization rate based on operating performance for 2019 are adjusted for the estimated impact of one-time extraordinary events.
For Sofitel Washington DC Lafayette Square, the contracted sale price reflects a 15.1x EBITDA multiple and a 5.7% net operating income capitalization rate based on the hotel's operating performance for 2018. Based on the hotel's operating performance for 2019 , the contracted sales price reflects a 15.2x EBITDA multiple and a 5.7% net operating income capitalization rate.
For both properties combined, the contracted sale price reflects a 14.2x EBITDA multiple and a 6.1% net operating income capitalization rate based on the hotels' operating performance for 2018. Based on the hotels' operating performance for 2019, the contracted sales price reflects a 13.7x EBITDA multiple and a 6.4% net operating income capitalization rate. All the above net operating income capitalization rates are after an assumed annual capital reserve of 4.0% of total hotel revenues.
Proceeds from the sale of InterContinental Buckhead Atlanta and Sofitel Washington DC Lafayette Square will be utilized for general business purposes which may include reducing the Company's outstanding debt.
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