Pebblebrook Acquires Viceroy Hotel - Analyst Blog
May 31 2011 - 10:30AM
Zacks
Pebblebrook Hotel
Trust (PEB), a lodging real estate investment trust
(REIT), has recently acquired the Viceroy Miami hotel in downtown
Miami, Florida, for $36.5 million, as part of its continuous
acquisition spree to capitalize on improving market fundamentals.
The recent transaction marks the thirteenth acquisition by the
company with over $1 billion of capital investments since its
initial public offering in December 2009.
The 148-room Viceroy Miami hotel is
an upper upscale full-service hotel strategically located within
the ICON Brickell complex along Brickell Avenue – a high-end
business district in Miami that has historically performed
relatively well during the recession. The region is also home to
one of the premier business, dining, entertainment and shopping
destinations of Miami. Furthermore, the Miami metropolitan market
has benefited from a healthy growth in the tourism industry,
attracting more than 38 million visitors annually from all over the
world.
In addition to its superior
location advantage, the hotel offers panoramic views of the Miami
River and Biscayne Bay. Viceroy Miami hotel features over
4,000-square feet of meeting space spread across 3 rooms and 3 food
and beverage outlets. In addition, the hotel offers other amenities
such as a gym, Spa, a swimming pool, oversized guest rooms,
convenience kitchen, and flat screen HDTVs.
Post-acquisition, the hotel will
continue to be managed by the Viceroy Hotel Group, which has
managed it since its opening in 2009. The hotel is anticipated to
generate earnings before interest, taxes, depreciation and
amortization (EBITDA) of $2.4 to $2.7 million and net operating
income (NOI) after capital reserves of $1.7 to $2.0 million in the
next 12 months of its operation.
Pebblebrook operates premium hotel
properties in major cities across the U.S., with an emphasis on the
coastal markets typified by high barriers to entry. In addition,
the company invests in resort properties located near its primary
urban target markets, as well as in select destination markets such
as Hawaii, south Florida and southern California. The company
currently owns 13 hotels, with a total of 3,428 guest rooms.
We presently have a ‘Neutral’
recommendation on Pebblebrook, which currently has a Zacks #3 Rank
that translates into a short-term ‘Hold’ rating and indicates that
the stock is expected to perform in line with the overall U.S.
equity market for the next 1–3 months. However, we have an
‘Outperform’ recommendation and a Zacks #2 Rank (short-term ‘Buy’)
for Ashford Hospitality Trust Inc. (AHT), one of
the peers of Pebblebrook.
ASHFORD HOSPTLY (AHT): Free Stock Analysis Report
PEBBLEBROOK HTL (PEB): Free Stock Analysis Report
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