BETHESDA, Md. — Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) today announced that it executed a contract to sell the 137-room Rouge Hotel in Washington, D.C. for $42.0 million to a third party.
The contracted sale price reflects a 17.4x EBITDA multiple and a 5.0% net operating income capitalization rate based on the hotel’s operating performance for 2018. Based on the trailing 12-month period ended March 2019, the contracted sales price reflects a 17.7x EBITDA multiple and a 4.9% net operating income capitalization rate. The net operating income capitalization rates are after an assumed annual capital reserve of 4.0% of total hotel revenues.
The sale of Rouge Hotel is subject to normal closing conditions, and the Company offers no assurances that this sale will be completed on these terms, or at all. The Company is targeting to complete the sale in the third quarter of 2019 and continues to be encouraged with pricing levels and overall buyer interest in the investment markets. Following the completion of the sale, the Company’s estimated total net debt to trailing 12-month corporate EBITDA ratio will be approximately 4.6 times.
