Pebblebrook Hotel Trust buys beachfront resort in Hollywood for $270m

Pebblebrook Hotel Trust buys beachfront resort in Hollywood for $270m
Pebblebrook Hotel Trust acquired Margaritaville Hollywood Beach Resort

Pebblebrook Hotel Trust has acquired the 369-room oceanfront Margaritaville Hollywood Beach Resort in Hollywood, Florida for $270 million from an affiliate of KSL Capital Partners, LLC.

“We’re thrilled to acquire this irreplaceable, lifestyle beachfront resort in the growing South Florida market, which is known as Margaritaville’s flagship property on the east coast,” said Jon Bortz, Chairman and Chief Executive Officer of Pebblebrook Hotel Trust.

“This premier lifestyle resort attracts both leisure and corporate group customers who seek a unique laid-back experience with a wide array of restaurant, bar, and entertainment venues. In addition, Margaritaville’s strategic oceanfront location on the Hollywood Broadwalk makes it a natural destination for residents and tourists in the South Florida market,” he added.

Margaritaville Hollywood Beach Resort is located on 6.2 oceanfront acres, along 450 linear feet of direct beach frontage, and is the focal point of the famous Hollywood Beach Broadwalk. The resort was built in 2015 and features 369 guestrooms, including 43 well-appointed suites, and over 30,000 square feet of indoor and outdoor event space for leisure and corporate groups overlooking the Atlantic Ocean.

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Davidson Hospitality Group will continue to manage Margaritaville Hollywood Beach Resort. Following the acquisition of Margaritaville Hollywood Beach Resort, Davidson now operates 6 of Pebblebrook’s properties.

”For full-year 2021, following a slow start to the year due to the pandemic, Margaritaville Hollywood Beach Resort is forecasted to produce between $475 and $480 of total revenue per available room (TRevPAR). The resort is expected to generate hotel earnings before interest, taxes, depreciation, and amortization (“hotel EBITDA) of $16.8 to $17.2 million and hotel net operating income (hotel NOI), after a 4% capital reserve, of $14.3 to $14.5 million,” said Pebblebrook Hotel Trust in a statement.

The company funded the acquisition with approximately $108.5 million of cash on hand, and assumed the $161.5 million of existing non-recourse, secured debt. The debt matures in May 2022 and provides for up to two one-year extensions to May 2024.

Following the acquisition of Margaritaville Hollywood Beach Resort, the company will have liquidity of approximately $800 million, including an estimated $160 million of consolidated cash, cash equivalents, and restricted cash in addition to $644.2 million of undrawn availability on its senior unsecured revolving credit facility.