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Pebblebrook Hotel Trust Closes USD 30m Sale of the Grand Hotel Minneapolis
Thursday 06 December 2018

6 December 2018 - US-based lodging REIT Pebblebrook Hotel Trust (NYSE: PEB) has closed on the sale of the 140-room, Grand Hotel Minneapolis in Minneapolis, Minnesota for USD 30m, the company said.

The sale price of USD30m includes the 140-room hotel and the 57,000 square foot fitness center which is fully leased to a third-party tenant until June 2019.

Pebblebrook said the sales price reflects a 7.9x EBITDA multiple and an 11.2% net operating income capitalisation rate (after an assumed annual capital reserve of 4.0% of total hotel revenues) based on the trailing twelve-month operating performance for the period ended October 31, 2018.

Excluding the approximate USD1.3 m of net rental income generated by the third-party lease, the sales price reflects a 12.2x EBITDA multiple and a 6.7% net operating income capitalization rate.

The company estimates that the taxable loss associated with the sale will be approximately USD 4m.

Proceeds from the sale of the Grand Hotel Minneapolis will be utilised for general business purposes which may include reducing the company's outstanding debt.

As of result of this completed sale, the company's total net debt to trailing 12-month corporate EBITDA is estimated to be 5.1 times.

In mid-December, the company intends to provide an updated 4Q18 outlook incorporating the sale of the Grand Hotel Minneapolis and all acquisitions and dispositions associated with the closing of the acquisition of LaSalle Hotel Properties.

Pebblebrook Hotel Trust is a publicly traded real estate investment trust organized to opportunistically acquire and invest primarily in upper upscale, full-service hotels located in urban markets in major gateway cities.

The company owns 63 hotels, totaling approximately 15,300 guest rooms, located in 10 states and the District of Columbia.
Date Published: 06/12/2018
Target: Grand Hotel Minneapolis in Minneapolis, Minnesota
Country: USA
Deal Size: 30m (USD)
Sector: Hotels/Restaurants/Casinos/Catering
Type: Divestment
Financing: Cash
Status: Closed
Vendor: Pebblebrook Hotel Trust
Terms of the deal were not disclosed