Pebblebrook Hotel Trust Reports First Quarter 2014 Results; RevPAR Grew 8.5%
April 25, 2014 10:21am
BETHESDA, Md.--(April 24, 2014)--Pebblebrook Hotel Trust (NYSE: PEB) (the "Company") today reported results for the first quarter ended March 31, 2014. 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 Margins 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're very pleased with our portfolio's strong operating performance in the first quarter, as revenue growth and profitability margin results exceeded both our outlook and the performance of the overall U.S. hotel industry," said Jon E. Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. "Our hotels continued to benefit from strong underlying hotel industry fundamentals, despite weather related travel disruptions throughout the east coast in the first quarter. Industry demand significantly outpaced supply due to healthy increases in business transient, leisure and international inbound travel, as well as the first signs of meaningful improvement in group demand, all of which benefited our hotels, particularly those on the west coast. Significant revenue growth throughout our portfolio was widespread, though our hotels that were renovated in the last few years led the way, including Hotel Zetta, Sir Francis Drake, Sofitel Philadelphia, and Monaco Seattle – all properties where we've been successful at both improving and creating a unique customer experience. Our 2014 outlook remains very positive and we expect these favorable growth trends to continue throughout the year."
First Quarter Highlights
"We had an excellent first quarter, with an increase in Same-Property RevPAR of 8.5 percent driving Same-Property EBITDA growth of 19.9 percent over the prior year," added Mr. Bortz. "We continue to benefit from our focused strategy of acquiring high-quality hotels located in high barrier to entry coastal gateway cities, and then renovating and repositioning them to create a unique experience for our hotels' guests. Our hotels are not meant to be commodities, and we're experiencing extremely positive results following the property renovations and improvements that we completed from 2011 through 2013, as well as from successfully executing on operational changes, particularly in food and beverage. In addition, our asset managers and property management teams continue to work together implementing our asset management and best practice initiatives. We expect to see further improvement in our operating profitability throughout 2014 and beyond."
Capital Reinvestment and Asset Management
During the first quarter, the Company invested $8.1 million in capital improvements throughout its portfolio, which includes the Company's 49 percent interest in its six hotel joint venture with Denihan Hospitality Group (the "Manhattan Collection"). The Company's capital improvements included $1.5 million at Hotel Palomar San Francisco, $1.0 million at Hotel Vintage Seattle, $0.7 million at Vintage Plaza Portland and $0.5 million at Le Méridien Delfina Santa Monica.
As of April 2014, the Company has substantially completed a comprehensive renovation and repositioning of the 125-room Hotel Vintage Park Seattle, which has been renamed Hotel Vintage Seattle. The Company has also largely completed the restaurant and lobby renovations at the 196-room Hotel Palomar San Francisco and plans to soon commence a rooms and corridor refresh as well as the addition of four guestrooms at the property.
During the fourth quarter of 2014, the Company plans to commence a comprehensive renovation and repositioning at the 355-room Radisson Hotel Fisherman's Wharf, a guest rooms and public areas renovation of the 258-room W Los Angeles-Westwood, including the potential of adding 36 guest rooms, and the renovation of the lobby and atrium at the 337-room Embassy Suites San Diego Bay Downtown, including the addition of four guest rooms.
As of March 31, 2014, the Company had $546.1 million in consolidated debt and $225.4 million in unconsolidated, non-recourse, secured debt at weighted-average interest rates of 4.4 percent and 3.6 percent, respectively. The Company's total combined consolidated and unconsolidated weighted-average interest rate on its debt is 4.2 percent. The Company had $100.0 million outstanding in the form of an unsecured term loan and no outstanding balance on its $200.0 million senior unsecured revolving credit facility. As of March 31, 2014, the Company had $58.7 million of consolidated cash, cash equivalents and restricted cash and $13.5 million of unconsolidated cash, cash equivalents and restricted cash. The unconsolidated debt, cash, cash equivalents and restricted cash amounts represent the Company's 49 percent pro rata interest in the Manhattan Collection.
On March 31, 2014, as defined in the Company's credit agreement, the Company's fixed charge coverage ratio was 2.4 times and total net debt to trailing 12-month corporate EBITDA was 4.2 times. The Company's total debt to total assets ratio was 32 percent. Excluding its interest in the off-balance sheet Manhattan Collection, the Company's fixed charge coverage ratio was 2.2 times, total net debt to trailing 12-month corporate EBITDA was 3.4 times and total debt to total assets ratio was 29 percent.
The Company's outlook for 2014 incorporates the expected impact of the Company's various capital investment projects and assumes continued improvement in economic activity, positive business travel trends and other significant assumptions. The Company's outlook for 2014 is as follows:
The Company's outlook for the second quarter of 2014 is as follows:
The Company's outlook for 2014 and Second Quarter 2014 reflects the Company's 49 percent pro rata interest in the Manhattan Collection.
The Company's estimates and assumptions for Same-Property RevPAR, Same-Property RevPAR growth rate, Same-Property EBITDA, Same-Property EBITDA Margin and Same-Property EBITDA Margin growth rate for 2014 include the hotels owned as of March 31, 2014, as if they had been owned by the Company for the entire year of 2014 and 2013. The Company's 2014 outlook assumes no additional acquisitions beyond the hotels the Company owned as of March 31, 2014.
To view corresponding tables associated to this release please visit:
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Pebblebrook Hotel Trust (NYSE: PEB) 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, including 23 wholly owned hotels with a total of 5,547 guest rooms and a 49% joint venture interest in six hotels with a total of 1,775 guest rooms. The Company owns, or has an ownership interest in, hotels located in ten states and the District of Columbia, in the following markets: Los Angeles, California (Hollywood, Santa Monica, West Hollywood and Westwood); San Diego, California; San Francisco, California; Miami, Florida; Buckhead, Georgia; Bethesda, Maryland; Boston, Massachusetts; Minneapolis, Minnesota; New York, New York; Portland, Oregon; Philadelphia, Pennsylvania; Columbia River Gorge, Washington; Seattle, Washington; and Washington, DC. For more information, please visit us at www.pebblebrookhotels.com and follow us on Twitter at @PebblebrookPEB.
Contact: Raymond D. Martz,
Chief Financial Officer
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