Pebblebrook Hotel Trust, a publicly traded real estate investment trust (REIT), announced it has agreed to sell two hotels, the 422-room InterContinental Buckhead Atlanta in Atlanta, Georgia and the 237-room Sofitel Washington DC Lafayette Square in Washington, D.C. for $331.0 million to a third party.
For both properties combined, the contracted sale price reflects a 14.2x EBITDA multiple and a 6.1% net operating income capitalization rate based on the hotels’ operating performance for 2018.
Based on the hotels’ estimated 2019 operating performance, the contracted sales price reflects a 13.7x EBITDA multiple and a 6.4% net operating income capitalization rate. All the above net operating income capitalization rates are after an assumed annual capital reserve of 4.0% of total hotel revenues.
The sale of InterContinental Buckhead Atlanta and Sofitel Washington DC Lafayette Square is subject to normal closing conditions, and the Company offers no assurances that this sale will be completed on these terms, or at all.
Pebblebrook Hotel Trust is targeting to complete the sale in the first quarter of 2020 and continues to be encouraged with pricing levels and overall buyer interest in the investment markets.