Real estate investment trust Pebblebrook Hotel Trust announced it has acquired the Gurney's Newport Resort & Marina in Newport, Rhode Island, for $174 million.
Jon Bortz, chairman, president and CEO of Pebblebrook said in a news release announcing the deal that the 257-room Newport resort is located in a high-barrier-to-entry market, drawing strong demand from New York, Boston and Providence.
"With group and individual travelers increasingly seeking a unique resort experience with open-air amenities, Gurney’s Newport is well-positioned to continue to grow in the highly attractive Newport market," he said in the release.
According to CoStar property data, the resort was last owned by Square Mile Capital. It was renovated in 2012 and last sold in January 2017 for $92 million, or $357,977 per key.
Pebblebrook believes the best opportunity for the property is to reposition it "to a higher level, given its unique location and amenities," the release states. The resort will become part of Pebblebrook's Curator Hotel & Resort Collection, which is expected to result in expense reductions as well as enhanced technology and operating initiatives.
Potential physical and operational improvements that the REIT is evaluating for the resort include fully renovating the guestrooms and guestroom bathrooms, upgrading the lobby, arrival experience, restaurants and bars as well as adding in a market and relocating/upgrading its spa. Pebblebrook also has the opportunity to acquire the marina in 2027.
May 2022 trailing-12-month performance shows the hotel produced revenue per available room of $401, according to the release.
This acquisition brings Pebblebrook's portfolio to 55 properties, including 13 drive-to, independent lifestyle resorts. The REIT funded this purchase with cash and proceeds from its senior unsecured revolving credit facility.