Pebblebrook Hotel Trust has successfully finalized the sale of the 133-key Montrose at Beverly Hills, located in West Hollywood, for a sum of $44.25 million. This strategic divestment is part of the company’s ongoing efforts to optimize its portfolio and enhance shareholder value.
Key Takeaways
- Pebblebrook Hotel Trust sold the Montrose at Beverly Hills for $44.25 million.
- The sale price represents an EBITDA multiple of 16.1x and a NOI cap rate of 5.2%.
- Proceeds will be used for general corporate purposes, including debt reduction and share repurchases.
- Another hotel sale is expected to close in Q4 for $72.0 million.
Transaction Details
The sale of the Montrose at Beverly Hills was completed with a third-party buyer. Based on the hotel’s financial performance over the trailing twelve months ending September 30, the sale price translates to an EBITDA multiple of 16.1 times and a Net Operating Income (NOI) capitalization rate of 5.2%, assuming a 4.0% capital reserve.
Use of Proceeds
The Bethesda, Maryland-based lodging Real Estate Investment Trust (REIT) plans to allocate the proceeds from this sale towards general corporate purposes. These include reducing outstanding debt, repurchasing the company’s common or preferred shares, and supporting other capital allocation strategies aimed at boosting long-term shareholder value.
Impact on Outlook
Pebblebrook Hotel Trust anticipates that this transaction will not negatively impact its current fourth-quarter or full-year 2025 financial outlook, which was previously issued earlier this month. This suggests the company is confident in its financial stability and future performance.
Future Divestments
In addition to the Montrose at Beverly Hills sale, Pebblebrook has another hotel under contract for sale at a price of $72.0 million. This subsequent transaction is projected to close during the fourth quarter, indicating a continued strategy of portfolio management and asset disposition.