Pebblebrook Hotel Trust completed the sale of the 157-room Hotel Colonnade Coral Gables, Autograph Collection for $63 million.
The hotel real estate investment trust sold the property to an undisclosed third-party buyer, according to a news release. Pebblebrook intends to use the proceeds from the sale for general corporate purposes, which could include reducing outstanding debt as well as repurchasing common and preferred equity shares.
For the trailing 12 months that ended Dec. 31, 2022, the Hotel Colonnade’s net operating income was $4.1 million, with hotel earnings before interest, taxes, depreciation and amortization of $4.8 million. Based on 2019 performance, the $63 million sales price represents a 15.4-times EBITDA multiple and a 5.5% NOI capitalization rate. Both NOI periods are after an assumed annual capital reserve of 4% of total hotel revenue.
Pebblebrook acquired the hotel for $59 million in 2014 when it was operating as a Westin, according to CoStar data.
This is Pebblebrook’s third property sale so far in 2023. It sold a 5,680-square-foot, fully occupied retail parcel adjacent to its Westin Michigan Avenue Chicago for $27.3 million earlier this month. It also sold the 151-room Heathman Hotel in Portland, Oregon, for $45 million to a third party.
Through 2022, the REIT sold four hotels for a total of $260.9 million, according to its full-year 2020 earnings report.
During the company’s most recent earnings call, Pebblebrook Co-President and Chief Financial Officer Raymond Martz said that since 2020, the REIT has sold 11 urban hotels — including the then-pending Heathman deal — for $957 million and acquired six leisure-focused resort properties for more than $820 million.
“We’ve recycled almost 30% of our portfolio, representing a dramatic transformation of our company,” he said. “As a result of these investments and divestitures, we have increased our market segmentation from leisure, both group and transient, to roughly 50%.”