Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) today
announced that it acquired the AAA Four Diamond 119-room Inn on
Fifth in Naples, Florida for $156.0 million on May 11, 2022. As
previously announced, the Company retained Noble House Hotels &
Resorts (“Noble House”) to manage this unique independent luxury
resort property at the center of Downtown Naples.
The acquisition of Inn on Fifth brings the total number of
properties in the Company’s portfolio to 54, including 12 unique
drive-to, independent lifestyle resorts and 6 properties in South
Florida.
The Company funded the acquisition with approximately $78.0
million of cash and approximately $77.6 million of perpetual
preferred operating partnership units (3.104 million units at
$25.00 per unit) with an annual distribution rate of 6.0% and
approximately $0.4 million of common units.
The Company has revised its Q2 2022 outlook to take the
acquisition into account. The Company’s revised outlook for Q2 2022
is as follows:
New Q2 2022 Outlook As of May
12, 2022
Variance to Old Outlook As of
April 26, 2022
Low
High
Low
High
($ and shares/units in millions,
except per share and RevPAR data)
Net income
$19.1
$29.1
$0.6
$0.6
Adjusted EBITDAre
$108.5
$118.5
$1.0
$1.0
Adjusted FFO
$73.5
$83.5
$0.0
$0.0
Adjusted FFO per diluted share
$0.56
$0.63
$0.00
$0.00
This revised Q2 2022 outlook is
based, in part, on the following estimates and assumptions:
Same-Property RevPAR
$209
$214
$0
$0
Same-Property RevPAR vs. 2019
(10.0%)
(8.0%)
0.0%
0.0%
Same-Property RevPAR vs. 2021
92.8%
97.0%
(4.0%)
(4.2%)
Same-Property EBITDA
$121.0
$131.0
$1.0
$1.0
Same-Property EBITDA vs. 2019
(18.3%)
(11.6%)
0.2%
0.1%
About Pebblebrook Hotel
Trust
Pebblebrook Hotel Trust (NYSE: PEB) is a publicly traded real
estate investment trust (“REIT”) and the largest owner of urban and
resort lifestyle hotels and resorts in the United States. The
Company owns 54 hotels and resorts, totaling approximately 13,400
guest rooms across 15 urban and resort markets. For more
information, visit www.pebblebrookhotels.com and follow us at
@PebblebrookPEB.
About Noble House Hotels &
Resorts
Built on a philosophy that emphasizes location, distinction, and
soul, Noble House Hotels & Resorts dedicates itself to creating
and managing exceptional properties that celebrate their local
communities. Headquartered in Seattle, Washington and continuously
growing, the Noble House portfolio features a luxury and upper
upscale portfolio of 20 distinct and visually captivating hotel
properties, over 60 restaurants, bars, and lounges, the Napa Valley
Wine Train, and a collection of spas, marinas, and private
residences throughout the U.S. and Canada. A range of beachfront
resorts spanning California and Florida, luxury retreats in Jackson
Hole, WY, British Columbia, and Colorado, and award-winning urban
hotels in Seattle and San Francisco punctuate the diverse
collection. Centered within destinations worthy of every bucket
list and layered with unique amenities that inspire adventure, the
curated collection of one-of-a-kind hotels, resorts, and
adventures, are known for creating unforgettable travel
experiences. For more information, visit www.noblehousehotels.com
or call Noble House Hotels & Resorts at 877.NOBLE.TRIP.
This press release contains certain “forward-looking statements”
made pursuant to the safe harbor provisions of the Private
Securities Reform Act of 1995. Forward-looking statements are
generally identifiable by the use of forward-looking terminology
such as “may,” “will,” “should,” “potential,” “intend,” “expect,”
“seek,” “anticipate,” “estimate,” “approximately,” “believe,”
“could,” “project,” “predict,” “forecast,” “continue,” “assume,”
“plan,” references to “outlook” 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 and forecasts and
other forward-looking information and estimates. Examples of
forward-looking statements include the following: projections of
hotel operating performance, descriptions of the Company’s plans or
objectives for future operations, acquisitions or services, all
amounts shown in the Company’s Q2 2022 outlook, and descriptions of
assumptions underlying or relating to any of the foregoing
expectations including assumptions regarding the timing of their
occurrence. These forward-looking statements are subject to various
risks and uncertainties, many of which are beyond the Company’s
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 and the supply of hotel
properties, and other factors as are described in greater detail in
the Company’s filings with the Securities and Exchange Commission,
including, without limitation, the Company’s Annual Report on Form
10-K for the year ended December 31, 2021. 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 Company’s business and
financial results, please refer to the “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and
“Risk Factors” sections of the Company’s 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 Company’s website at
www.pebblebrookhotels.com.
All information in this press release is as of May 12, 2022. The
Company undertakes no duty to update the statements in this press
release to conform the statements to actual results or changes in
the Company’s expectations.
For additional information or to receive press
releases via email, please visit our website at
www.pebblebrookhotels.com
Pebblebrook Hotel
Trust
Reconciliation of Revised Q2
2022 Outlook Net Income (Loss) to FFO and Adjusted FFO
($ in millions, except per
share data)
(Unaudited)
Three months ending June 30,
2022
Low
High
Net income (loss)
$
19
$
29
Adjustments: Real estate depreciation and amortization
60
60
(Gain) loss on sale of hotel properties
-
-
FFO
$
79
$
89
Distribution to preferred shareholders
(12
)
(12
)
FFO available to common share and unit holders
$
67
$
77
Non-cash ground rent
2
2
Non-cash interest expense
-
-
Amortization of share-based compensation expense
3
3
Other
2
2
Adjusted FFO available to common share and unit holders
$
74
$
84
FFO per common share - diluted
$
0.51
$
0.58
Adjusted FFO per common share - diluted
$
0.56
$
0.63
Weighted-average number of fully diluted common shares and
units
131.9
131.9
To supplement the Company’s consolidated financial statements
presented in accordance with U.S. GAAP, this press release includes
certain non-GAAP financial measures as defined under SEC rules.
These measures are not in accordance with, or an alternative to,
measures prepared in accordance with GAAP and may be different from
similarly titled non-GAAP financial measures used by other
companies. In addition, these non-GAAP financial measures are not
based on any comprehensive set of accounting rules or principles.
Non-GAAP financial measures have limitations in that they do not
reflect all of the amounts associated with the Company’s results of
operations determined in accordance with GAAP.
Funds from Operations (“FFO”) - FFO represents net income
(computed in accordance with GAAP), excluding gains or losses from
sales of properties, plus real estate-related depreciation and
amortization and after adjustments for unconsolidated partnerships.
The Company considers FFO a useful measure of performance for an
equity REIT because it facilitates an understanding of the
Company's operating performance without giving effect to real
estate depreciation and amortization, which assume that the value
of real estate assets diminishes predictably over time. Since real
estate values have historically risen or fallen with market
conditions, the Company believes that FFO provides a meaningful
indication of its performance. The Company also considers FFO an
appropriate performance measure given its wide use by investors and
analysts. The Company computes FFO in accordance with standards
established by the Board of Governors of Nareit in its March 1995
White Paper (as amended in November 1999 and April 2002), which may
differ from the methodology for calculating FFO utilized by other
equity REITs and, accordingly, may not be comparable to that of
other REITs. Further, FFO does not represent amounts available for
management’s discretionary use because of needed capital
replacement or expansion, debt service obligations or other
commitments and uncertainties, nor is it indicative of funds
available to fund the Company’s cash needs, including its ability
to make distributions. The Company presents FFO per diluted share
calculations that are based on the outstanding dilutive common
shares plus the outstanding Operating Partnership units for the
periods presented.
The Company also evaluates its performance by reviewing Adjusted
FFO because it believes that adjusting FFO to exclude certain
recurring and non-recurring items described below provides useful
supplemental information regarding the Company's ongoing operating
performance and that the presentation of Adjusted FFO, when
combined with the primary GAAP presentation of net income (loss),
more completely describes the Company's operating performance. The
Company adjusts FFO for the following items, which may occur in any
period, and refers to this measure as Adjusted FFO:
- Non-cash ground rent: The Company excludes the non-cash ground
rent expense, which is primarily made up of the straight-line rent
impact from a ground lease. - Non-cash interest expense: The
Company excludes non-cash interest expense because the Company
believes that including this adjustment in FFO does not reflect the
underlying financial performance of the Company and its hotels. -
Amortization of share-based compensation expense: The Company
excludes the amortization of share-based compensation expense
because the Company believes that including this adjustment in FFO
does not reflect the underlying financial performance of the
Company and its hotels. - Other: The Company excludes other
expenses, which include transaction costs, management/franchise
contract transition costs, interest expense adjustment for acquired
liabilities, capital lease adjustment and non-cash amortization of
acquired intangibles because the Company believes that including
these non-cash adjustments in FFO does not reflect the underlying
financial performance of the Company and its hotels.
The Company’s presentation of FFO in accordance with the Nareit
White Paper, and as adjusted by the Company, should not be
considered as an alternative to net income (computed in accordance
with GAAP) as an indicator of the Company’s financial performance
or to cash flow from operating activities (computed in accordance
with GAAP) as an indicator of its liquidity.
Any differences are a result of rounding.
Pebblebrook Hotel
Trust
Reconciliation of Revised Q2
2022 Outlook Net Income (Loss) to EBITDA, EBITDAre and Adjusted
EBITDAre
($ in millions)
(Unaudited)
Three months ending June 30,
2022
Low
High
Net income (loss)
$
19
$
29
Adjustments: Interest expense and income tax expense
24
24
Depreciation and amortization
60
60
EBITDA
$
103
$
113
(Gain) loss on sale of hotel properties
-
-
EBITDAre
$
103
$
113
Non-cash ground rent
2
2
Amortization of share-based compensation expense
3
3
Other
1
1
Adjusted EBITDAre
$
109
$
119
To supplement the Company’s consolidated financial statements
presented in accordance with U.S. GAAP, this press release includes
certain non-GAAP financial measures as defined under SEC rules.
These measures are not in accordance with, or an alternative to,
measures prepared in accordance with GAAP and may be different from
similarly titled non-GAAP financial measures used by other
companies. In addition, these non-GAAP financial measures are not
based on any comprehensive set of accounting rules or principles.
Non-GAAP financial measures have limitations in that they do not
reflect all of the amounts associated with the Company’s results of
operations determined in accordance with GAAP.
Earnings before Interest, Taxes, and Depreciation and
Amortization ("EBITDA") - The Company believes that EBITDA provides
investors a useful financial measure to evaluate its operating
performance, excluding the impact of our capital structure
(primarily interest expense) and our asset base (primarily
depreciation and amortization).
Earnings before Interest, Taxes, and Depreciation and
Amortization for Real Estate ("EBITDAre") - The Company believes
that EBITDAre provides investors a useful financial measure to
evaluate its operating performance, and the Company presents
EBITDAre in accordance with the National Association of Real Estate
Investment Trusts ("Nareit") guidelines, as defined in its
September 2017 white paper "Earnings Before Interest, Taxes,
Depreciation and Amortization for Real Estate." EBITDAre adjusts
EBITDA for the following items, which may occur in any period, and
refers to these measures as Adjusted EBITDAre: (1) gains or losses
of on the disposition of depreciated property, including gains or
losses on change of control; (2) impairment write-downs of
depreciated property and of investments in unconsolidated
affiliates caused by a decrease in value of depreciated property in
the affiliate; and (3) adjustments to reflect the entity's share of
EBITDAre of unconsolidated affiliates.
The Company also evaluates its performance by reviewing Adjusted
EBITDAre because it believes that adjusting EBITDAre to exclude
certain recurring and non-recurring items described below provides
useful supplemental information regarding the Company's ongoing
operating performance and that the presentation of Adjusted
EBITDAre, when combined with the primary GAAP presentation of net
income (loss), more completely describes the Company's operating
performance. The Company adjusts EBITDAre for the following items,
which may occur in any period, and refers to these measures as
Adjusted EBITDAre:
- Non-cash ground rent: The Company excludes the non-cash ground
rent expense, which is primarily made up of the straight-line rent
impact from a ground lease. - Amortization of share-based
compensation expense: The Company excludes amortization of
share-based compensation expense because the Company believes that
including this non-cash adjustment in EBITDAre does not reflect the
underlying financial performance of the Company and its hotels. -
Other: The Company excludes other expenses, which include
transaction costs, management/franchise contract transition costs,
non-cash amortization of acquired intangibles and estimated
hurricane related repairs and cleanup costs because the Company
believes that including these non-cash adjustments in EBITDAre does
not reflect the underlying financial performance of the Company and
its hotels.
The Company’s presentation of EBITDAre, and as adjusted by the
Company, should not be considered as an alternative to net income
(computed in accordance with GAAP) as an indicator of the Company’s
financial performance or to cash flow from operating activities
(computed in accordance with GAAP) as an indicator of its
liquidity.
Any differences are a result of rounding.
Pebblebrook Hotel
Trust
Inn on Fifth
Reconciliation of Hotel Net
Income to Hotel EBITDA and Hotel Net Operating Income
March 2022 Trailing Twelve
Months
(Unaudited, in
millions)
Trailing Twelve Months
Ended March 31, 2022
Hotel net income
$8.9
Adjustment: Depreciation and amortization(1)
3.7
Hotel EBITDA
$12.6
Adjustment: Capital reserve
(0.9
)
Hotel Net Operating Income
$11.7
(1) Depreciation and amortization have been estimated based on a
preliminary purchase price allocation. A change, if any, in the
allocation will affect the amount of depreciation and amortization
and the resulting change may be material.
This press release includes certain non-GAAP financial measures
as defined under Securities and Exchange Commission (SEC) Rules.
These measures are not in accordance with, or an alternative to,
measures prepared in accordance with U.S. generally accepted
accounting principles, or GAAP, and may be different from non-GAAP
measures used by other companies. In addition, these non-GAAP
measures are not based on any comprehensive set of accounting rules
or principles. Non-GAAP measures have limitations in that they do
not reflect all of the amounts associated with the hotel’s results
of operations determined in accordance with GAAP.
The Company has presented hotel EBITDA and hotel net operating
income after capital reserves, because it believes these measures
provide investors and analysts with an understanding of the
hotel-level operating performance. These non-GAAP measures do not
represent amounts available for management’s discretionary use,
because of needed capital replacement or expansion, debt service
obligations or other commitments and uncertainties, nor are they
indicative of funds available to fund the Company’s cash needs,
including its ability to make distributions.
The Company’s presentation of the hotel’s EBITDA and net
operating income after capital reserves should not be considered as
an alternative to net income (computed in accordance with GAAP) as
an indicator of the hotel’s financial performance. The table above
is a reconciliation of the hotel’s EBITDA and net operating income
after capital reserves calculations to hotel net income in
accordance with GAAP.
Pebblebrook Hotel Trust Historical Operating Data -
Entire Portfolio ($ in millions, except ADR and RevPAR)
(Unaudited) Historical Operating Data:
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year
2019
2019
2019
2019
2019
Occupancy
75%
87%
87%
78%
82%
ADR
$254
$269
$262
$246
$258
RevPAR
$192
$234
$227
$193
$211
Hotel Revenues
$349.7
$423.5
$409.0
$365.3
$1,547.5
Hotel EBITDA
$96.5
$150.6
$137.1
$101.0
$485.1
Hotel EBITDA Margin
27.6%
35.6%
33.5%
27.6%
31.4%
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year
2021
2021
2021
2021
2021
Occupancy
22%
41%
52%
52%
42%
ADR
$260
$258
$277
$260
$265
RevPAR
$58
$107
$146
$134
$111
Hotel Revenues
$110.2
$201.7
$269.2
$257.9
$839.0
Hotel EBITDA
($4.9)
$42.1
$74.3
$56.9
$168.5
Hotel EBITDA Margin
(4.4%)
20.9%
27.6%
22.1%
20.1%
First Quarter
2022
Occupancy
48%
ADR
$307
RevPAR
$147
Hotel Revenues
$267.2
Hotel EBITDA
$61.3
Hotel EBITDA Margin
23.0%
These historical hotel operating results include information for
all of the hotels the Company owned as of May 11, 2022, following
the acquisition of Inn on Fifth. These historical operating results
include periods prior to the Company's ownership of the hotels. The
information above does not reflect the Company's corporate general
and administrative expense, interest expense, property acquisition
costs, depreciation and amortization, taxes and other expenses. Any
differences are a result of rounding.
The information above has not been audited and has been
presented only for comparison purposes.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220512005259/en/
Raymond D. Martz, Chief Financial Officer, Pebblebrook Hotel
Trust - (240) 507-1330
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