Pebblebrook Hotel Trust completes sale of Sofitel Philadelphia in Rittenhouse Square

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BETHESDA, Maryland–(BUSINESS WIRE)–Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) announced today that on August 2, 2022, it closed the sale of the 306-room Sofitel Philadelphia at Rittenhouse Square in Philadelphia, PA for 80.0 million dollars to a third party.

For the last twelve months ended June 30, 2022, the hotel’s net operating income was $3.1 million and its hotel EBITDA was $3.8 million. Based on the hotel’s operating performance for 2019, the selling price of $80.0 million reflects an EBITDA multiple of 10.0x and a net operating income capitalization rate of 8.6%. Net operating income for the two periods mentioned above is after an assumed annual capital reserve of 4.0% of total hotel revenues.

Proceeds from the sale of Sofitel Philadelphia at Rittenhouse Square will be used for general corporate purposes and to reduce the Company’s outstanding debt associated with recent hotel acquisitions, consistent with the Company’s investment strategy.

About Pebblebrook Hotel Trust

Pebblebrook Hotel Trust (NYSE:PEB) is a publicly traded real estate investment trust (“REIT”) and the largest owner of city and resort hotels and resorts in the United States. The Company owns 53 hotels and resorts, totaling approximately 13,100 rooms in 15 city and resort markets. For more information, visit www.pebblebrookhotels.com and follow us at @PebblebrookPEB.

This press release contains certain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements are generally identifiable by the use of forward-looking terms such as “estimated” and “will” or other similar words or expressions. Forward-looking statements are based on certain assumptions and may include future expectations, future plans and strategies, financial and operating projections and forecasts, and other forward-looking information and estimates. The intended use of the product is a forward-looking statement. These forward-looking statements are subject to various risks and uncertainties, many of which are beyond the Company’s control, which could cause actual results to differ materially from these statements. These risks and uncertainties include, but are not limited to, the state of the U.S. economy, the operating performance of our hotels and the supply of hotel properties, and other factors described in more detail in the Company’s filings with the Securities and Exchange Commission, including, without limitation, Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Except as required by law, the Company disclaims any obligation to update forward-looking statements, whether as a result of new information, future events or otherwise.

For more information on the Company’s activities and financial results, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the documents filed by the Company with the SEC, including, but not limited to, its annual report. on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained from the Investor Relations section of the Company’s website at www.pebblebrookhotels.com.

All information contained in this press release is as of August 3, 2022. The Company undertakes no obligation to update the statements contained in this press release to conform to actual results or to changes in the expectations of the Company.

For more information or to receive press releases by email, please visit our website at www.pebblebrookhotels.com

Pebblebrook Hotel Trust
Sofitel Philadelphia at Rittenhouse Square
Reconciliation of hotel net income with hotel EBITDA and hotel net operating income
June 2022 Twelve rolling months
(Unaudited, in millions)
Twelve month period ended
June 30th,

2022

Hotel net income

$

0.5

Adjustment:
Depreciation and amortization

3.3

Hotel EBITDA

$

3.8

Adjustment:
Capital reserve

(0.7

)

Hotel net operating income

$

3.1

This press release includes certain non-GAAP financial measures as defined by the rules of the Securities and Exchange Commission (SEC). These measures are not in accordance with or an alternative to measures prepared in accordance with United States generally accepted accounting principles, or GAAP, and may differ from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all amounts associated with the hotel’s results of operations determined in accordance with GAAP.

The company has presented estimated hotel trailing 12-month EBITDA and estimated hotel trailing 12-month net operating income after capital reserves, as the company believes these measures provide investors and analysts with an understanding of operating performance at the hotel level. These non-GAAP measures do not represent amounts available for management’s discretion, due to necessary capital replacement or expansion, debt service obligations or other commitments and uncertainties, and nor are they indicative of the funds available to fund the Company’s cash requirements, including its ability to make distributions.

The Company’s presentation of the hotel’s estimated EBITDA over the last twelve months and the estimated net operating income for the last twelve months after capital reserves should not be considered as an alternative to net income (calculated in accordance with GAAP) as an indicator of the hotel’s financial performance. The table above is a reconciliation of the hotel’s estimated trailing 12-month EBITDA and net operating income after calculation of capital reserves to GAAP net income. Any difference is the result of rounding.

Pebblebrook Hotel Trust
Sofitel Philadelphia at Rittenhouse Square
Reconciliation of hotel net income with hotel EBITDA and hotel net operating income
December 2019 Twelve rolling months
(Unaudited, in millions)
Twelve months ended
The 31st of December,

2019

Hotel net income

$

4.7

Adjustment:
Depreciation and amortization

3.3

Hotel EBITDA

$

8.0

Adjustment:
Capital reserve

(1.2

)

Hotel net operating income

$

6.8

This press release includes certain non-GAAP financial measures as defined by the rules of the Securities and Exchange Commission (SEC). These measures are not in accordance with or an alternative to measures prepared in accordance with United States generally accepted accounting principles, or GAAP, and may differ from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all amounts associated with the hotel’s results of operations determined in accordance with GAAP.

The Company has presented Hotel Trailing 12-Month EBITDA and Hotel Trailing 12-Month Net Operating Income after Capital Reserves, as it believes these measures provide investors and analysts with an understanding of performance. operating at the hotel level. These non-GAAP measures do not represent amounts available for management’s discretion, due to necessary capital replacement or expansion, debt service obligations or other commitments and uncertainties, and nor are they indicative of the funds available to fund the Company’s cash requirements, including its ability to make distributions.

The company’s presentation of the hotel’s trailing twelve months EBITDA and trailing twelve months net operating income after capital reserves should not be considered an alternative to net income (calculated in accordance with GAAP) as hotel financial performance indicator. The table above is a reconciliation of the hotel’s trailing twelve month EBITDA and net operating income after calculation of capital reserves to net income in accordance with GAAP. Any difference is the result of rounding.

Pebblebrook Hotel Trust
Historical operating data
(in millions of dollars, except ADR and RevPAR)
(Unaudited)
Historical operating data:

first quarter

second quarter

Third quarter

Fourth trimester

Full year

2019

2019

2019

2019

2019

Occupation

75

%

86

%

86

%

77

%

81

%

ADR

$

253

$

271

$

268

$

247

$

260

RevPAR

$

189

$

233

$

231

$

191

$

211

Hotel revenue

$

340.6

$

418.1

$

411.9

$

358.1

$

1,528.8

Hotel EBITDA

$

91.8

$

148.0

$

139.9

$

97.2

$

476.8

Hotel EBITDA margin

26.9

%

35.4

%

34.0

%

27.1

%

31.2

%

first quarter

second quarter

Third quarter

Fourth trimester

Full year

2021

2021

2021

2021

2021

Occupation

22

%

42

%

53

%

52

%

42

%

ADR

$

264

$

264

$

289

$

264

$

272

RevPAR

$

59

$

111

$

155

$

136

$

116

Hotel revenue

$

110.8

$

207.0

$

282.5

$

259.2

$

859.5

Hotel EBITDA

($

4.5

)

$

45.9

$

83.8

$

57.8

$

183.0

Hotel EBITDA margin

(4.1

%)

22.2

%

29.7

%

22.3

%

21.3

%

first quarter

second quarter

2022

2022

Occupation

48

%

68

%

ADR

$

310

$

322

RevPAR

$

148

$

220

Hotel revenue

$

265.9

$

400.7

Hotel EBITDA

$

60.7

$

139.0

Hotel EBITDA margin

22.8

%

34.7

%

These historical hotel operating results include information for all hotels the Company owned as of August 2, 2022, following the sale of Sofitel Philadelphia in Rittenhouse Square. These historical operating results include periods prior to the Company’s ownership of the hotels. The above information does not reflect general and administrative expenses, interest expense, property acquisition costs, depreciation and amortization, taxes and other expenses of the Company. Any difference is the result of rounding.

The above information has not been audited and is presented for comparison purposes only.

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