BETHESDA, MD – October 21, 2021 – Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) today announced that it acquired the 19-room Avalon Bed & Breakfast (“Avalon”) and 12-room Duval Gardens (“Duval”), both in Key West, Florida, for $20.0 million. The two well-maintained properties will be consolidated and operated as part of the Company’s Southernmost Beach Resort (“Southernmost”) and managed by Highgate, which currently manages the Company’s two Key West resorts, Southernmost and The Marker Key West Harbor Resort.
Avalon and Duval have highly desirable locations along the vibrant Duval Street, which showcases Key West’s most visited attractions, restaurants and bars. Avalon is physically surrounded by Southernmost on three sides, allowing for a seamless incorporation into Southernmost’s operations. Avalon contains 19 guestrooms, and the property features an outdoor plunge pool. Duval, located just a few blocks north of Southernmost, features 12 guestrooms and an outdoor swimming pool.
“We are very excited to acquire these two well maintained and historically charming properties in the heart of Key West,” said Jon E. Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. “The location of both Avalon and Duval will allow us to incorporate these properties into our existing Southernmost Beach Resort, enabling us to generate significant operating and marketing synergies. We also look forward to implementing our best practices and operating initiatives to enhance the profitability of these properties, which we believe offer tremendous upside potential.”
Based on the Company’s initial investment in Avalon and Duval, it expects to generate a forward 12-month incremental annualized hotel net operating income (“hotel NOI”), after a 4% capital reserve, of $1.6 to $2.4 million.
