Attached files
file | filename |
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8-K - FORM 8-K - Pebblebrook Hotel Trust | w81668ae8vk.htm |
EX-10.8 - EX-10.8 - Pebblebrook Hotel Trust | w81668aexv10w8.htm |
EX-10.7 - EX-10.7 - Pebblebrook Hotel Trust | w81668aexv10w7.htm |
EX-10.2 - EX-10.2 - Pebblebrook Hotel Trust | w81668aexv10w2.htm |
EX-10.3 - EX-10.3 - Pebblebrook Hotel Trust | w81668aexv10w3.htm |
EX-10.1 - EX-10.1 - Pebblebrook Hotel Trust | w81668aexv10w1.htm |
EX-10.5 - EX-10.5 - Pebblebrook Hotel Trust | w81668aexv10w5.htm |
EX-10.4 - EX-10.4 - Pebblebrook Hotel Trust | w81668aexv10w4.htm |
EX-10.6 - EX-10.6 - Pebblebrook Hotel Trust | w81668aexv10w6.htm |
EX-99.2 - EX-99.2 - Pebblebrook Hotel Trust | w81668aexv99w2.htm |
Exhibit 99.1
2 Bethesda Metro Center, Suite 1530, Bethesda, MD 20814 | ||
T: (240) 507-1300, F: (240) 396-5626 | ||
www.pebblebrookhotels.com | ||
News Release
Pebblebrook Hotel Trust Acquires the Argonaut Hotel
Bethesda, MD, February 16, 2011 Pebblebrook Hotel Trust (NYSE: PEB) (the
Company) today announced that it has acquired the Argonaut Hotel for $84.0 million. The
252-room, upper-upscale, full-service, boutique-style hotel is located in San Francisco,
California, in the heart of Fishermans Wharf. The property will continue to be managed by Kimpton
Hotels & Restaurants (Kimpton). The transaction includes the assumption of a $42.0 million
secured loan, with the balance of the purchase price funded by the Company with available cash.
We are pleased to acquire such a distinctive hotel in one of the most dynamic areas of San
Francisco, said Jon Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel
Trust. The hotel is situated in an excellent location in Fishermans Wharf and is in close
proximity to the areas major attractions. The hotel is a spectacular historic landmark that is
surrounded by a wealth of entertainment and leisure activities. Moreover, the Argonaut is the
market leader in the internationally known Fishermans Wharf market. The strong leisure and group
demand in this market, combined with extremely high barriers to entry, makes the Argonaut a very
compelling addition to our growing portfolio.
The Argonaut Hotel is located in the popular Fishermans Wharf area of San Francisco,
California, within the San Francisco Maritime National Historical Park and just blocks from
numerous fine dining, entertainment and shopping establishments. Fishermans Wharf is an historic
part of San Francisco that has long been known for its vibrant, marine-oriented atmosphere and is
home to the Aquarium by the Bay, Anchorage Square, Ghirardelli Square and PIER 39, a 110-shop,
two-story, festival marketplace. The area is also the main departure point for Alcatraz Island, a
prime tourist attraction. San Francisco has consistently been featured as a top tourist
destination in North America for both domestic and international travelers and boasts an
exceptional array of natural attractions. In addition to the abundant and diverse collection of
leisure activities, the citys location on the west coast makes it a natural gateway to travelers
from Asia.
The hotel was originally constructed in 1907 as the Haslett Warehouse, before its conversion
to a hotel in 2003. The Argonaut Hotel is a boutique-style property located directly across from
San Francisco Bay with stunning views of Alcatraz Island, the Golden Gate Bridge and the
Transamerica Pyramid. The property consists of 252 well-appointed guestrooms, with decor that
celebrates the nautical history of the citys waterfront. The property highlights the historic
features of the property, including exposed red brick walls, high ceilings and original redwood
columns and beams. The hotel features over 8,000 square feet of meeting space, including the 4,200
square-foot Golden Gate Ballroom and the 1,800 square-foot Maritime Room. The property also
features the Blue Mermaid Chowder House, a 170-seat, three-meal-a-day restaurant that serves fresh
seafood fare and is locally known for its excellent chowder. Additionally, the hotel is home to
the San Francisco Maritime National Historical Park Visitors Center, along with several retail
outlets including Starbucks, Ben & Jerrys Homemade Ice Cream, Blazing Saddles Bike Rentals and
Tours, and the Winery Collective Tasting Room.
In 2010, the Argonaut Hotel operated at 87% occupancy, with an average daily rate of $185.
During the next 12 months, the Company currently forecasts that the hotel will generate earnings
before interest, taxes, depreciation and amortization (EBITDA) of approximately $5.1 to $5.6
million and net operating income after capital reserves of approximately $4.2 to $4.7 million.
The Company will own a leasehold interest in the property through a long-term ground lease
with the Department of the Interior National Park Service by way of the United States of America.
There are currently 49 years remaining on the long-term ground lease, which expires in 2059. The
$42.0 million secured loan that is being assumed in connection with the acquisition is a
non-recourse, interest-only loan, subject to a fixed annual interest rate of 5.67%. The loan
matures in March 2012.
The hotel will continue to be managed by Kimpton, which has managed the property since 2003.
In addition to the Argonaut Hotel, Kimpton also manages Pebblebrooks 416-room Sir Francis Drake in
downtown San Francisco, California, 183-room Monaco Washington DC in downtown Washington, DC and
140-room The Grand Hotel Minneapolis in downtown Minneapolis, Minnesota.
We are excited to expand our very successful relationship with Kimpton Hotels & Restaurants,
continued Mr. Bortz. They are extremely experienced with the San Francisco market and we believe
they will continue to drive market-leading performance at the Argonaut Hotel.
The Company expects to incur approximately $1.4 million of costs related to the acquisition of
this hotel that will be expensed as incurred.
The Argonaut Hotel marks the ninth acquisition for the Company since completing its initial
public offering in December 2009.
About Pebblebrook Hotel Trust
Pebblebrook Hotel Trust is a publicly traded real estate investment trust (REIT) organized
to opportunistically acquire and invest primarily in upper-upscale, full-service
hotels located in large urban and resort markets with an emphasis on the major coastal cities. The
company owns nine hotels with a total of 2,552 guest rooms in six states and the District of
Columbia including, San Francisco, California; Washington, DC; Santa Monica, California;
Minneapolis, Minnesota; Bethesda, Maryland; Buckhead, Georgia; Stevenson, Washington; and
Philadelphia, Pennsylvania.
Click here to visit the Pebblebrook Hotel Trust website
Click here to visit the Argonaut Hotel website
About Kimpton
San Francisco-based Kimpton Hotels & Restaurants, a collection of boutique hotels and
chef-driven restaurants in the US, is an acknowledged industry pioneer and was the first to bring
the boutique hotel concept to America. Celebrating its 30th anniversary in 2011, Bill Kimpton
founded the company in 1981 and today it is well-known for making travelers feel welcomed and
comfortable while away from home through intuitive and unscripted customer care, stylish ambience
and having a certain playfulness in its approach to programs and amenities. Adjacent to the hotels
are locally-loved, top-rated, destination Kimpton restaurants. Kimpton leads the hospitality
industry in ecological practices through its innovative EarthCare program that spans all hotels and
restaurants. Market Metrix, a recognized authority and leader in feedback solutions, consistently
ranks Kimpton above other hotel companies in luxury and upper upscale segments for customer
satisfaction. Privately held Kimpton operates 51 hotels and 54 restaurants in 24 cities. For more
information visit www.KimptonHotels.com or call 1-800-KIMPTON.
Click here to visit the Kimpton Hotel & Restaurant website
This press release contains certain forward-looking statements relating to, among other
things, potential property acquisitions and projected earnings, expenses and demand.
Forward-looking
Page 2
statements are generally identifiable by use of forward-looking terminology such as
may, will, should, potential, intend, expect, seek, anticipate, estimate,
approximately, believe, could, project, predict, forecast, continue, plan 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 or
other forward-looking information. Examples of forward-looking statements include the following:
projections of hotel-level EBITDA and net operating income after capital reserves, the Companys
expenses, share count or other financial items; descriptions of the Companys plans or objectives
for future operations, acquisitions or services; forecasts of the Companys future economic
performance and potential increases in average daily rate, occupancy and room demand; and
descriptions of assumptions underlying or relating to any of the foregoing expectations regarding
the timing of their occurrence. These forward-looking statements are subject to various risks and
uncertainties, many of which are beyond the Companys 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, supply and demand in the hotel industry and other factors as are
described in greater detail in the Companys filings with the Securities and Exchange Commission
(SEC),
including, without limitation, the Companys Prospectus filed pursuant to Rule 424(b)(1) on July
23, 2010. 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 Companys business and financial results, please refer to
the Managements Discussion and Analysis of Financial Condition and Results of Operations and
Risk Factors sections of the Companys 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 Companys website at www.pebblebrookhotels.com and at www.sec.gov
.
All information in this release is as of February 16, 2011. The Company undertakes no duty to
update the statements in this release to conform the statements to actual results or changes in the
Companys expectations. The Company assumes no responsibility for the contents or
accuracy of the information on any of the non-Company websites mentioned herein, which are included
solely for ease of reference.
Contact:
Raymond D. Martz, Chief Financial Officer, Pebblebrook Hotel Trust - (240) 507-1330
For additional information or to receive press releases via email, please visit our website at
www.pebblebrookhotels.com
www.pebblebrookhotels.com
###
Page 3
Pebblebrook Hotel Trust
Argonaut Hotel
Reconciliation of Hotel Net Income to Hotel EBITDA and Hotel Net Operating Income
12-Month Forecast
(Unaudited, in millions)
Argonaut Hotel
Reconciliation of Hotel Net Income to Hotel EBITDA and Hotel Net Operating Income
12-Month Forecast
(Unaudited, in millions)
Range | ||||||||
Low | High | |||||||
Hotel net income |
$ | 2.5 | to | $ | 3.0 | |||
Adjustment: |
||||||||
Depreciation and amortization (1) |
2.6 | 2.6 | ||||||
Hotel EBITDA |
$ | 5.1 | $ | 5.6 | ||||
Adjustment: |
||||||||
Capital reserve |
(0.9 | ) | (0.9 | ) | ||||
Hotel Net Operating Income |
$ | 4.2 | $ | 4.7 | ||||
(1) Depreciation and amortization has 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 hotels results of operations determined in
accordance with GAAP.
The Company has presented forecasted hotel EBITDA and forecasted 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 managements 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 Companys cash needs, including its ability to
make distributions.
The Companys presentation of the hotels forecasted EBITDA and
forecasted 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 hotels financial performance. The table
above is a reconciliation of the hotels forecasted EBITDA and net
operating income after capital reserves calculations to net income in
accordance with GAAP.
Pebblebrook Hotel Trust
Historical Hotel Pro Forma Operating Data
(In thousands)
(Unaudited)
Historical Hotel Pro Forma Operating Data
(In thousands)
(Unaudited)
Historical Operating Data
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||||
2009 | 2009 | 2009 | 2009 | 2009 | ||||||||||||||||
Pro forma Occupancy |
65.6 | % | 75.4 | % | 78.9 | % | 69.4 | % | 72.4 | % | ||||||||||
Pro forma ADR |
$ | 179.36 | $ | 168.66 | $ | 165.48 | $ | 170.32 | $ | 170.58 | ||||||||||
Pro forma RevPAR |
$ | 117.72 | $ | 127.14 | $ | 130.57 | $ | 118.25 | $ | 123.44 | ||||||||||
Pro forma Hotel Revenues |
$ | 41,839 | $ | 46,039 | $ | 46,511 | $ | 44,239 | $ | 178,628 | ||||||||||
Pro forma Hotel EBITDA |
$ | 6,670 | $ | 12,192 | $ | 11,751 | $ | 10,340 | $ | 40,953 |
First Quarter | Second Quarter | Third Quarter | ||||||||||
2010 | 2010 | 2010 | ||||||||||
Pro forma Occupancy |
68.8 | % | 81.0 | % | 79.9 | % | ||||||
Pro forma ADR |
$ | 160.43 | $ | 169.28 | $ | 174.56 | ||||||
Pro forma RevPAR |
$ | 110.40 | $ | 137.12 | $ | 139.48 | ||||||
Pro forma Hotel Revenues |
$ | 39,869 | $ | 49,291 | $ | 49,200 | ||||||
Pro forma Hotel EBITDA |
$ | 6,331 | $ | 12,548 | $ | 12,331 |
Notes:
These historical hotel operating results include results from the hotels the Company owned as of February 16, 2011 including:
DoubleTree by Hilton Bethesda-Washington DC, Sir Francis Drake, InterContinental Buckhead, Monaco Washington DC, Skamania Lodge,
Sheraton Delfina, Sofitel Philadelphia and the Argonaut Hotel. This schedule excludes The Grand Hotel Minneapolis. These
historical operating results include results for periods prior to the Companys ownership of the hotels. The Company expects to
include historical operating results for The Grand Hotel Minneapolis after the Company has owned the hotel for one year.
The data above is not audited and has been presented only for comparison purposes.