Pebblebrook Hotel Trust Reports 2016 Yearly Net Income of $74 Million, Down from $95 Million; Yearly RevPAR Grew 2.4%
February 24, 2017 4:33am
BETHESDA, Md.--Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) today reported results for the fourth quarter and year ended December 31, 2016. The Company’s results include the following:
(1)See tables later in this press release for a description of same-property information and reconciliations from net income (loss) to non-GAAP financial measures, including Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), Adjusted EBITDA, Funds from Operations ("FFO"), FFO per share, Adjusted FFO and Adjusted FFO per share.
For the details as to which hotels are included in Same-Property Revenue Per Available Room (“RevPAR”), Average Daily Rate (“ADR”), Occupancy, Revenues, Expenses, EBITDA and EBITDA Margin appearing in the table above and elsewhere in this press release, refer to the Same-Property Inclusion Reference Table later in this press release.
“We are very pleased with our 2016 results and the continued improvements we made throughout our portfolio in 2016, both operationally and from value-enhancing renovations,” said Jon E. Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. “In addition, we had significant success with our strategic disposition plan, completing numerous property and asset dispositions totaling $463.8 million. The U.S. hotel industry ended yet another year at its highest occupancy ever, despite weak business travel, an uptick in new supply and continued headwinds from global economic challenges including a strong U.S. dollar. For Pebblebrook, in 2016, we grew Same-Property Wholly Owned EBITDA by 4.5 percent, Adjusted EBITDA by 5.3 percent and Adjusted FFO per share by 11.2 percent, and we increased our dividend by 22.6 percent, all representing record levels. We experienced this growth and record numbers while also completing several property dispositions, which reduced the size of the Company’s portfolio, but lowered leverage and increased liquidity.”
“Our recently renovated and repositioned hotels continued to increase market share and grow cash flow in 2016, which we expect to continue in 2017,” said Mr. Bortz. “We also applaud our hotel management teams who continue to work collaboratively with our asset managers to find efficiencies in our operations. Our teams were able to drive impressive operating results in our wholly owned portfolio, which improved margins by 65 basis points despite modest revenue growth and negative disruptions from our renovation projects during the year.”
Fourth Quarter Highlights
“Although there is more optimism regarding the prospects for accelerated hotel demand growth and improved industry performance following the presidential election, we have yet to see any noteworthy increases in business or leisure travel demand since the election,” advised Mr. Bortz. “Leading economic indicators and business sentiment have improved, but until we see actual travel demand increase, we will remain tempered regarding our near-term outlook.”
Strategic Disposition Plan
During 2016, the Company completed numerous strategic property dispositions that harvested significant value for shareholders. In the second quarter of 2016, Pebblebrook sold Viceroy Miami for $64.5 million and The Redbury Hotel for $40.9 million, as well as an excess land parcel adjacent to Revere Hotel Boston Common for $6.0 million. In the fourth quarter of 2016, the Company executed an asset exchange with its joint venture partner to redeem the Company’s 49 percent interest in the Manhattan Collection. The Company then sold the Manhattan NYC for $217.5 million. The Company also sold the DoubleTree by Hilton Hotel Bethesda – Washington DC for $50.1 million in the fourth quarter.
These strategic property dispositions created value for shareholders by taking advantage of the valuation differences between the private and public markets. In addition, the Company utilized the proceeds from these sales to pay down debt, strengthen the Company’s balance sheet and increase liquidity.
During 2016, the Company completed $124.0 million of capital improvements throughout its portfolio. The Company’s capital improvements included $22.6 million at Hotel Zeppelin San Francisco (part of a $32.0 million project), $15.8 million at Union Station Hotel Nashville, an Autograph Collection Hotel (which included a $15.5 million transformation), $12.0 million at Hotel Colonnade Coral Gables, a Tribute Portfolio Hotel, formerly The Westin Colonnade, Coral Gables, (part of a $17.5 million redevelopment) and $10.7 million at Hotel Monaco Washington DC (part of a $13.0 million renovation), including the reconcepting and renovation of the hotel’s restaurant and bar, Dirty Habit DC, formerly Poste.
In 2017, the Company intends to complete several major renovation and repositioning projects including:
Capital Markets and Balance Sheet
During 2016, the Company originated $150.0 million of new term loans, paid off $169.3 million of debt maturities and redeemed $225.2 million of its outstanding preferred shares. The Company also issued $125.0 million through an underwritten public offering of 5.0 million shares of its 6.375% Series D Cumulative Redeemable Preferred Shares.
“We made very positive strides in 2016 to lower our overall leverage, increase our coverage ratios, extend our debt maturities and increase our liquidity,” noted Raymond D. Martz, Chief Financial Officer of Pebblebrook Hotel Trust. “We appreciate the continued support and longstanding positive relationships shown by our banking partners.”
As of December 31, 2016, the Company had $1.0 billion in consolidated debt at an effective weighted-average interest rate of 3.4 percent. The Company had $675.0 million outstanding in the form of unsecured term loans and $82.0 million outstanding on its $450.0 million senior unsecured revolving credit facility. As of December 31, 2016, the Company had $40.8 million of consolidated cash, cash equivalents and restricted cash.
On December 31, 2016, as defined in the Company’s credit agreement, the Company’s fixed charge coverage ratio was 3.6 times and total net debt to trailing 12-month corporate EBITDA was 3.8 times.
To view full financial release and corresponding tables please click the PDF icon or visit:
Tags: pebblebrook hotel trust,
q4 2016 results
Pebblebrook Hotel Trust is a publicly traded real estate investment trust (“REIT”) organized to opportunistically acquire and invest primarily in upper upscale, full-service hotels located in urban markets in major gateway cities. The Company owns 29 hotels, with a total of 7,222 guest rooms. The Company owns hotels located in 10 states and the District of Columbia, including: Los Angeles, California (Beverly Hills, Santa Monica and West Hollywood); San Diego, California; San Francisco, California; Washington, DC; Coral Gables, Florida; Naples, Florida; Buckhead, Georgia; Boston, Massachusetts; Minneapolis, Minnesota; New York, New York; Portland, Oregon; Philadelphia, Pennsylvania; Nashville, Tennessee; Columbia River Gorge, Washington; and Seattle, Washington. For more information, please visit us at www.pebblebrookhotels.com
Contact: Raymond D. Martz, Chief Financial Officer
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