
Dealmaker: Pebblebrook Sells Two D.C. Hotels for $253M
Pebblebrook Hotel Trust, Bethesda, Md., sold 335-room Hotel Palomar Washington, D.C. to Hospitality Properties Trust, Newton, Mass., for $141.5 million, or $422,388 per key.
The sale closed on February 22. The sale price reflects a 5.9 percent net operating income capitalization rate based on the hotel’s 2018 operating performance.
Kimpton Hotel & Restaurant Group, San Francisco, will continue to operate the property at 2121 P Street NW, Washington, D.C.
Pebblebrook acquired real estate investment trust LaSalle Hotel Properties for $5.2 billion in November. Pebblebrook CEO Jon Bortz founded and ran LaSalle until leaving the REIT in 2009 to start Pebblebrook. Last May, private equity fund Blackstone, New York, tried to acquire LaSalle in a $4.8 billion all-cash transaction until it was outbid by Pebblebrook.
Since the merger, Pebblebrook also sold the 343-room Liaison Capitol Hill Liaison Capitol Hill at 415 New Jersey Ave NW in Washington. Metrovest Equities and Bldg Management Co., both headquartered in New York, purchased that property for $111 million.
Pebblebrook said it will use both sales’ proceeds for general business purposes including reducing outstanding debt. The $252.5 million aggregate proceeds reflect a 15.7x EBITDA multiple and a 5.5 percent net operating income capitalization rate based on the hotels’ 2018 operating performance.