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8-K - FORM 8-K - Pebblebrook Hotel Trust | w82339e8vk.htm |
EX-99.3 - EX-99.3 - Pebblebrook Hotel Trust | w82339exv99w3.htm |
EX-99.1 - EX-99.1 - Pebblebrook Hotel Trust | w82339exv99w1.htm |
EX-99.4 - EX-99.4 - Pebblebrook Hotel Trust | w82339exv99w4.htm |
Exhibit 99.2
2 Bethesda Metro Center, Suite 1530, Bethesda, MD 20814 T: (240) 507-1300, F: (240) 396-5626 www.pebblebrookhotels.com |
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News Release |
Pebblebrook Hotel Trust Acquires Hotel Monaco Seattle
Bethesda, MD, April 7, 2011 Pebblebrook Hotel Trust (NYSE: PEB) (the
Company) today announced that it has acquired the Hotel Monaco Seattle for $51.2 million. The
189-room, upper upscale, full-service boutique hotel is located in the central business district of
downtown Seattle, Washington. The hotel will continue to be managed by Kimpton Hotels &
Restaurants (Kimpton). The transaction was funded by the Company entirely with available cash.
We are very pleased to be acquiring the Hotel Monaco Seattle and further diversifying our
portfolio through this investment in the Seattle market, said Jon Bortz, Chairman, President and
Chief Executive Officer of Pebblebrook Hotel Trust. The hotel is located in the center of
downtown Seattle, in close proximity to all of the citys major shopping, office, entertainment and
dining locations. The hotel is near Pike Place Market, Pioneer Square, the Washington State Trade
& Convention Center and five of Seattles largest and highest quality office buildings, all of
which provide the hotel with a diverse array of demand drivers. Furthermore, the Seattle market
historically has been subject to strong recoveries in demand and RevPAR following economic
downturns. Increased demand, coupled with minimal lodging supply growth and high
barriers-to-entry, provide for excellent operating fundamentals at the hotel moving forward.
The Hotel Monaco Seattle is located at the corner of Fourth Avenue and Spring Street in the
high barrier-to-entry downtown submarket of Seattle, Washington. Downtown Seattle offers
premier office, dining, convention, entertainment and shopping locations, all of which provide for
a diverse collection of corporate, convention and leisure demand. The hotel is in close proximity
to Pike Place Market, one of the nations longest-running farmers markets and an attraction of
Seattle that draws approximately 10 million visitors annually. Pike Place Market is home to more
than 220 year-round commercial businesses and is generally known as The Soul of Seattle. In
addition, the hotel is within a short walk of Pioneer Square, Seattles most historic area, which
offers sightseeing opportunities, nightlife activities and boutique shopping, and is the epicenter
of the Seattle art scene. Downtown Seattle contains over 33 million square feet of office space,
and the 726,000-square foot Washington State Trade & Convention Center, one of Seattles main
lodging demand drivers, which hosts between 40 and 50 city-wide events annually.
The Hotel Monaco Seattle is a boutique-style hotel located in the geographic center of
downtown Seattle in what was originally constructed in 1969 as the Pacific Northwest Bell office
building. The property was converted by Kimpton to a hotel in 1997 and features 189 upper upscale
guestrooms, including 45 suites, with plush pillow-top beds and premium bath amenities. The hotel
has over 6,000 square feet of flexible meeting space spread across nine meeting rooms, including
the 2,160-square foot Paris Ballroom. Additionally, the Hotel Monaco Seattle has 56 subterranean
parking spaces and is home to Sazerac, a 135-seat, award-winning, three-meal-a-day, stand-alone
restaurant and bar that offers
southern-style cuisine in a contemporary and inviting atmosphere that is popular with both Seattle
locals and visitors to the city.
In 2010, the Hotel Monaco Seattle operated at 81% occupancy, with an average daily rate of
$147, and RevPAR of $119, a decline of approximately 27% from the propertys prior peak in RevPAR
in 2007. During the next 12 months, the Company currently forecasts that the hotel will generate
earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately $2.8 to
$3.1 million and net operating income after capital reserves of approximately $2.3 to $2.6 million.
The Company expects to commence a comprehensive $3.0 million rooms renovation in the fourth
quarter of 2011, with completion expected by the end of the first quarter of 2012, typically the
slowest period in Seattles lodging market. The Company expects these improvements to allow the
hotel to regain its prior competitive positioning by substantially outperforming the markets
recovery in 2012 and beyond.
The hotel will continue to be managed by Kimpton Hotels & Restaurants, which has managed the
hotel since 1997. In addition to the Hotel Monaco Seattle, Kimpton also manages Pebblebrooks
416-room Sir Francis Drake Hotel and 252-room Argonaut Hotel in downtown San Francisco, California,
the 183-room Hotel Monaco Washington DC in downtown Washington, DC and the 140-room Grand Hotel
Minneapolis in downtown Minneapolis, Minnesota.
We are very excited to further our relationship with Kimpton Hotels & Restaurants, continued
Mr. Bortz. They are well-educated about the urban hotel market and have a unique history of
operating high-quality boutique properties such as the Hotel Monaco Seattle.
We are thrilled to be expanding our relationship with Pebblebrook Hotel Trust, said
Kimptons President, Mike Depatie. We are extremely pleased that our strong relationship with
Pebblebrook continues to grow, and we believe this shows a strong vote of confidence in Kimptons
operational expertise. We look forward to continued collaborative success from our relationship
going forward.
The Company expects to incur approximately $0.5 million of costs related to the acquisition of
the Hotel Monaco Seattle that will be expensed as incurred.
The Hotel Monaco Seattle is the eleventh acquisition for the Company, which has invested an
aggregate of $860 million in 11 hotel properties since completing its initial public offering in
December 2009.
The Company has previously announced a signed agreement to purchase one other hotel:
$89.5 million for a hotel in the Boston, Massachusetts region
Closing for this hotel is subject to bankruptcy court approval, as well as the satisfaction of
customary closing requirements and conditions. Accordingly, the Company can give no assurance that
the transaction will be consummated on the terms initially disclosed, or at all.
About Pebblebrook Hotel Trust
Pebblebrook Hotel Trust is a publicly traded real estate investment trust (REIT) organized
to opportunistically acquire and invest primarily in upper upscale, full-service hotels located in
large urban and resort markets with an emphasis on the major coastal cities. The company owns 11
hotels, totaling 3,191 guest rooms in six states and the District of Columbia, including 10
markets: Bethesda, Maryland; San Francisco, California; Buckhead, Georgia; Washington, DC;
Minneapolis, Minnesota; Stevenson, Washington; Santa Monica, California; Philadelphia,
Pennsylvania; San Diego, California and Seattle, Washington. For more information, please visit
www.pebblebrookhotels.com.
Click here to visit the Hotel Monaco Seattle hotel website
About Kimpton
San Francisco-based Kimpton Hotels & Restaurants, a collection of boutique hotels and
chef-driven restaurants in the US, is an acknowledged industry pioneer and was the first to bring
the boutique hotel concept to America. Celebrating its 30th anniversary in 2011, Bill Kimpton
founded the company in
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1981 and today it is well-known for making travelers feel welcomed and
comfortable while away from home through intuitive and unscripted customer care, stylish ambience
and having a certain playfulness in its approach to programs and amenities. Adjacent to the hotels
are locally-loved, top-rated, destination Kimpton restaurants. Kimpton leads the hospitality
industry in ecological practices through its innovative EarthCare program that spans all hotels and
restaurants. Market Metrix, a recognized authority and leader in feedback solutions, consistently
ranks Kimpton above other hotel companies in luxury and upper upscale segments for customer
satisfaction. Privately held Kimpton operates 51 hotels and 54 restaurants in 24 cities. For more
information visit www.KimptonHotels.com or call 1-800-KIMPTON.
Click here to visit the Kimpton Hotel & Restaurant website
This press release contains certain forward-looking statements relating to, among other
things, potential property acquisitions and projected earnings, expenses and demand.
Forward-looking statements are generally identifiable by use of forward-looking terminology such as
may, will, should, potential, intend, expect, seek, anticipate, estimate,
approximately, believe, could, project, predict, forecast, continue, plan or other
similar words or expressions. Forward-looking statements are based on certain assumptions and can
include future expectations, future plans and strategies, financial and operating projections or
other forward-looking information. Examples of forward-looking statements include the following:
projections of hotel-level EBITDA and net operating income after capital reserves, the Companys
expenses, share count or other financial items; descriptions of the Companys plans or objectives
for future operations, acquisitions or services; forecasts of the Companys future economic
performance and potential increases in average daily rate, occupancy and room demand; and
descriptions of assumptions underlying or relating to any of the foregoing expectations regarding
the timing of their occurrence. These forward-looking statements are subject to various risks and
uncertainties, many of which are beyond the Companys control, which could cause actual results to
differ materially from such statements. These risks and uncertainties include, but are not limited
to, the state of the U.S. economy, supply and demand in the hotel industry and other factors as are
described in greater detail in the Companys filings with the Securities and Exchange Commission
(SEC), including, without limitation, the Companys Annual Report on Form 10-K for the year ended
December 31, 2010. Unless legally required, the Company disclaims any obligation to update any
forward-looking statements, whether as a result of new information, future events or otherwise.
For further information about the Companys business and financial results, please refer to
the Managements Discussion and Analysis of Financial Condition and Results of Operations and
Risk Factors sections of the Companys SEC filings, including, but not limited to, its Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the
Investor Relations section of the Companys website at www.pebblebrookhotels.com and at www.sec.gov.
All information in this release is as of April 7, 2011. The Company undertakes no duty to
update the statements in this release to conform the statements to actual results or changes in the
Companys expectations. The Company assumes no responsibility for the contents or
accuracy of the information on any of the non-Company websites mentioned herein, which are included
solely for ease of reference.
Contact:
Raymond D. Martz, Chief Financial Officer, Pebblebrook Hotel Trust (240) 507-1330
For additional information or to receive press releases via email, please visit our website at
www.pebblebrookhotels.com
www.pebblebrookhotels.com
###
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Pebblebrook Hotel Trust
Hotel Monaco Seattle
Reconciliation of Hotel Net Income to Hotel EBITDA and Hotel Net Operating Income
12-Month Forecast
Hotel Monaco Seattle
Reconciliation of Hotel Net Income to Hotel EBITDA and Hotel Net Operating Income
12-Month Forecast
(Unaudited, in millions)
Range | ||||||||
Low | High | |||||||
Hotel net income |
$ | 1.4 | to | $ | 1.7 | |||
Adjustment: |
||||||||
Depreciation and amortization (1) |
1.4 | 1.4 | ||||||
Hotel EBITDA |
$ | 2.8 | $ | 3.1 | ||||
Adjustment: |
||||||||
Capital reserve |
(0.5 | ) | (0.5 | ) | ||||
Hotel Net Operating Income |
$ | 2.3 | $ | 2.6 | ||||
(1) | Depreciation and amortization has been estimated based on a preliminary purchase price allocation. A change, if any, in the allocation will affect the amount of depreciation and amortization and the resulting change may be material. |
This press release includes certain non-GAAP financial measures as defined under
Securities and Exchange Commission (SEC) Rules. These measures are not in accordance with, or
an alternative to, measures prepared in accordance with U.S. generally accepted accounting
principles, or GAAP, and may be different from non-GAAP measures used by other companies. In
addition, these non-GAAP measures are not based on any comprehensive set of accounting rules
or principles. Non-GAAP measures have limitations in that they do not reflect all of the
amounts associated with the hotels results of operations
determined in accordance with GAAP.
The Company has presented forecasted hotel EBITDA and forecasted hotel net operating
income after capital reserves, because it believes these measures provide investors and
analysts with an understanding of the hotel-level operating performance. These non-GAAP
measures do not represent amounts available for managements discretionary use because
of needed capital replacement or expansion, debt service obligations or other
commitments and uncertainties, nor are they indicative of funds available to fund the
Companys cash needs, including its ability to make
distributions.
The Companys presentation of the hotels forecasted EBITDA and forecasted net
operating income after capital reserves should not be considered as an alternative to
net income (computed in accordance with GAAP) as an indicator of the hotels financial
performance.
The table above is a reconciliation of the hotels forecasted EBITDA and net
operating income after capital reserves calculations to net income in accordance
with GAAP.
Pebblebrook Hotel Trust
Historical Hotel Pro Forma Operating Data
(In thousands)
(Unaudited)
Historical Hotel Pro Forma Operating Data
(In thousands)
(Unaudited)
Historical Operating Data
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||||
2009 | 2009 | 2009 | 2009 | 2009 | ||||||||||||||||
Pro forma Occupancy |
65.6 | % | 74.9 | % | 79.4 | % | 69.1 | % | 72.3 | % | ||||||||||
Pro forma ADR |
$ | 180.06 | $ | 170.79 | $ | 165.67 | $ | 168.39 | $ | 170.86 | ||||||||||
Pro forma RevPAR |
$ | 116.67 | $ | 126.55 | $ | 130.33 | $ | 114.96 | $ | 122.15 | ||||||||||
Pro forma Hotel Revenues |
$ | 51,971 | $ | 56,394 | $ | 57,422 | $ | 53,281 | $ | 219,068 | ||||||||||
Pro forma Hotel EBITDA |
$ | 9,555 | $ | 15,191 | $ | 15,336 | $ | 12,425 | $ | 52,507 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||||
2010 | 2010 | 2010 | 2010 | 2010 | ||||||||||||||||
Pro forma Occupancy |
70.3 | % | 80.4 | % | 80.8 | % | 70.7 | % | 75.6 | % | ||||||||||
Pro forma ADR |
$ | 157.85 | $ | 167.94 | $ | 171.74 | $ | 170.73 | $ | 167.31 | ||||||||||
Pro forma RevPAR |
$ | 109.48 | $ | 133.59 | $ | 137.48 | $ | 119.14 | $ | 124.98 | ||||||||||
Pro forma Hotel Revenues |
$ | 49,583 | $ | 59,355 | $ | 59,804 | $ | 56,108 | $ | 224,850 | ||||||||||
Pro forma Hotel EBITDA |
$ | 8,864 | $ | 15,560 | $ | 15,223 | $ | 12,106 | $ | 51,753 |
These historical hotel operating results include results from the hotels
the Company owned as of April 7, 2011 including: DoubleTree by Hilton
Bethesda-Washington DC, Sir Francis Drake, InterContinental Buckhead,
Hotel Monaco Washington DC, Skamania Lodge, Sheraton Delfina, Sofitel
Philadelphia, Argonaut Hotel, The Westin Gaslamp Quarter and Hotel
Monaco Seattle. This schedule excludes The Grand Hotel Minneapolis.
These historical operating results include results for periods prior to
the Companys ownership of the hotels. The Company expects to include
historical operating results for The Grand Hotel Minneapolis after the
Company has owned the hotel for one year.
The data above is not audited and has been presented only for comparison purposes.