BETHESDA, Md.–Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) today announced that it has acquired The Tuscan Fisherman’s Wharf, a Best Western Plus Hotel (“The Tuscan”) for $122.0 million. The 221-room hotel is located in the heart of Fisherman’s Wharf in San Francisco, California. The property will continue to be managed by Kimpton Hotels & Restaurants (“Kimpton”).
“We’re excited about our acquisition of The Tuscan, which marks our seventh hotel investment in the highly desirable San Francisco market and our third in the dynamic Fisherman’s Wharf submarket,” said Jon Bortz, Chairman and Chief Executive Officer of Pebblebrook Hotel Trust. “The hotel’s location is central to many popular area attractions including Pier 39, Ghirardelli Square, and many dining and retail venues, and is reflected in the hotel’s high occupancy levels and strong cash flows. The repositioning opportunity at The Tuscan combined with the revitalization of the entire Fisherman’s Wharf market makes us excited to add this hotel to our expanding portfolio.”
The 221-room, full-service hotel is located just one block from the Company’s Hotel Zephyr (formerly Radisson Fisherman’s Wharf). The property benefits from its location within San Francisco, which continues to serve as a West Coast hub for tourism, technology, biomedical, life sciences, banking and financial services.
The Tuscan, which was built in 1990, underwent a $3.6 million renovation in 2012, impacting all areas of the hotel. The property’s unique features, such as the hotel’s corner location and central, open-air garden courtyard, allows for abundant natural light throughout the guestrooms, and an on-site, 69-space subterranean parking lot, distinguishes this boutique hotel amongst its competitors. Pescatore, the hotel’s signature 84-seat restaurant, is popular among guests and locals, offering contemporary Italian cuisine and outdoor dining along the well-traveled Fisherman’s Wharf frontage. The hotel also offers 2,000 square feet of meeting and banquet facilities, a business center, access to a 24-hour fitness facility and valet parking in the hotel’s 69-space below-grade parking facility.
In 2014, The Tuscan operated at 90 percent occupancy, with an average daily rate (“ADR”) of $219 and room revenue per available room (“RevPAR”) of $198. During the next 12 months, the Company currently forecasts that the hotel will generate earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $8.4 to $8.9 million and net operating income after capital reserves (“NOI”) of $7.5 to $8.0 million.
The Company plans to invest $13.0 to $15.0 million between 2016 and 2017 in a complete renovation and repositioning of the hotel, including all guestrooms and public areas. The renovation is expected to commence in the fourth quarter of 2016.
“We’re thrilled to continue to grow our successful relationship with Kimpton Hotels & Restaurants,” noted Mr. Bortz. “The acquisition of The Tuscan marks our eleventh Kimpton-managed property, and our fifth Kimpton-managed hotel in San Francisco, and we look forward to working with Kimpton to create additional value at this hotel.”
“We are confident that partnering with Pebblebrook Hotel Trust on The Tuscan will position the property for continued success in the years to come,” said Kimpton’s Chief Executive Officer, Mike DeFrino.
The Company expects to incur approximately $3.4 million of costs related to the acquisition of the hotel.
The acquisition of The Tuscan brings the total number of properties in the Company’s portfolio to 37 and marks the Company’s seventh investment in San Francisco, California, including its third hotel in the highly desirable Fisherman’s Wharf submarket.
