Portfolio Repositioning - Pebblebrook has strategically shifted its portfolio towards leisure-oriented and group-focused properties, reducing exposure to urban and corporate transient markets since 2019[15] - Resort EBITDA contribution increased from 17% to 45%, while Urban EBITDA contribution decreased from 83% to 55%[19] - East Coast properties now contribute 54% of EBITDA, up from 38%[19] - San Francisco's EBITDA contribution declined by 19%, and West Coast properties now contribute 43% of EBITDA, down from 56%[19] Financial Performance and Growth Opportunities - The company estimates a Hotel EBITDA upside of approximately $71 million, translating to $0.46 per share of Adjusted FFO (AFFO) upside[11, 23] - Urban markets recovery is expected to contribute $45+ million in Hotel EBITDA upside[23, 37] - ROI from redevelopment projects is expected to contribute $10 million in Hotel EBITDA upside[23] - LaPlaya EBITDA growth opportunity is estimated at $16 million[23, 24] Valuation and Balance Sheet - Pebblebrook's recent public market valuation reflects an approximate 65% discount to its recently calculated private market valuation of $2500 per share[11, 56] - As of March 31, 2025, the company had $2182 million in cash and $6426 million of undrawn availability on its senior unsecured revolving credit facility[69] - The company's weighted-average interest rate is 42%, and its weighted-average debt maturity is approximately 28 years[69]

Core Insights - Pebblebrook Hotel (PEB) reported revenue of $320.27 million for Q1 2025, a 2% year-over-year increase, with an EPS of $0.16 compared to -$0.32 a year ago, indicating a significant turnaround [1] - The revenue exceeded the Zacks Consensus Estimate by 0.75%, while the EPS surprise was 23.08% above the consensus estimate of $0.13 [1] Financial Performance Metrics - Same-Property RevPAR growth rate was 0%, below the average estimate of 2.2% from three analysts [4] - Food and beverage revenue reached $86.31 million, surpassing the average estimate of $83.15 million, reflecting a year-over-year increase of 6.4% [4] - Other operating revenue was $36.95 million, slightly above the estimated $36.15 million, marking a 5.9% year-over-year increase [4] - Room revenue was reported at $197.01 million, slightly below the estimated $198.58 million, showing a 0.6% decline compared to the previous year [4] - Net Earnings Per Share (Diluted) was -$0.37, slightly worse than the estimated -$0.36 [4] Stock Performance - Pebblebrook Hotel's shares have returned -13.7% over the past month, contrasting with the Zacks S&P 500 composite's -0.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Pebblebrook Hotel (PEB) came out with quarterly funds from operations (FFO) of $0.16 per share, beating the Zacks Consensus Estimate of $0.13 per share. This compares to FFO of $0.21 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of 23.08%. A quarter ago, it was expected that this hotel investment company would post FFO of $0.12 per share when it actually produced FFO of $0.20, delivering a surprise of 66.67%.Over the last four quart ...

PEBBLEBROOK HOTEL TRUST REPORTS FIRST QUARTER 2025 RESULTS | | ▪ Net loss: ($32.2) million | | --- | --- | | Q1 FINANCIAL HIGHLIGHTS | ▪ Same-Property Hotel EBITDA: $62.3 million, exceeding the midpoint of the Company's outlook by $4.3 million, | | | primarily driven by proactive cost reduction and efficiency efforts | | | ▪ Adjusted EBITDAre: $56.6 million, surpassing the midpoint of the outlook by $4.1 million | | | ▪ Adjusted FFO per diluted share: $0.16, outperforming the midpoint of the outlook by $0.0 ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) Unaudited consolidated financial statements for Q1 2025, covering balance sheets, operations, equity, cash flows, and detailed notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Table: Consolidated Balance Sheet Summary | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------ | | Total assets | $5,650,621 | $5,693,338 | | Total liabilities | $2,924,205 | $2,905,464 | | Total equity | $2,726,416 | $2,787,874 | - Total assets decreased by **$42.7 million** from December 31, 2024, to March 31, 2025, primarily due to a decrease in investment in hotel properties, net[12](index=12&type=chunk) - Total equity decreased by **$61.4 million**, mainly driven by distributions in excess of retained earnings and a decrease in accumulated other comprehensive income (loss)[12](index=12&type=chunk) [Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Table: Consolidated Statements of Operations Summary | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | Change (YoY) | | :--------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :----------- | | Total revenues | $320,266 | $314,069 | +$6,197 | | Total operating expenses | $327,503 | $315,448 | +$12,055 | | Operating income (loss) | $(7,237) | $(1,379) | -$5,858 | | Net income (loss) | $(32,180) | $(27,520) | -$4,660 | | Net income (loss) attributable to common shareholders | $(43,578) | $(38,981) | -$4,597 | | Net income (loss) per share, basic | $(0.37) | $(0.32) | -$0.05 | | Comprehensive income (loss) attributable to the Company | $(38,641) | $(21,657) | -$16,984 | - Total revenues increased by **$6.2 million** year-over-year, primarily driven by recoveries at LaPlaya Beach Resort & Club, Estancia La Jolla Hotel & Spa, and Newport Harbor Island Resort[15](index=15&type=chunk)[133](index=133&type=chunk) - Operating loss widened to **$(7.2) million** in Q1 2025 from **$(1.4) million** in Q1 2024, mainly due to a larger increase in total operating expenses (**$12.1 million**) compared to revenue growth[15](index=15&type=chunk)[134](index=134&type=chunk) [Consolidated Statements of Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Equity) Table: Consolidated Statements of Equity Summary | Item | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Balance at December 31, 2024/2023 | $2,787,874 | $2,850,345 | | Repurchase of common shares | $(14,612) | $(6,851) | | Share-based compensation | $2,054 | $2,091 | | Distributions on common shares/units | $(1,184) | $(1,205) | | Distributions on preferred shares/units | $(10,631) | $(10,631) | | Net income (loss) | $(32,180) | $(27,520) | | Balance at March 31, 2025/2024 | $2,726,416 | $2,813,509 | - The company repurchased **$14.6 million** of common shares in Q1 2025, an increase from **$6.9 million** in Q1 2024[20](index=20&type=chunk) - Total equity decreased by **$61.4 million** in Q1 2025, primarily due to net loss and distributions, partially offset by share-based compensation[20](index=20&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Table: Consolidated Statements of Cash Flows Summary | Activity | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | Change (YoY) | | :--------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :----------- | | Net cash provided by operating activities | $50,341 | $46,000 | +$4,341 | | Net cash used in investing activities | $(20,864) | $(38,513) | +$17,649 | | Net cash used in financing activities | $(28,882) | $(136,154) | +$107,272 | | Net change in cash and cash equivalents and restricted cash | $595 | $(128,667) | +$129,262 | | Cash and cash equivalents and restricted cash, end of period | $218,186 | $64,974 | +$153,212 | - Net cash provided by operating activities increased by **$4.3 million**, driven by adjustments to reconcile net income (loss) and changes in assets and liabilities[22](index=22&type=chunk)[155](index=155&type=chunk) - Net cash used in investing activities decreased significantly by **$17.6 million**, primarily due to lower capital improvements and additions to hotel properties in Q1 2025 compared to Q1 2024[22](index=22&type=chunk)[156](index=156&type=chunk)[158](index=158&type=chunk) - Net cash used in financing activities decreased by **$107.3 million**, mainly due to lower debt repayments and deferred financing costs in Q1 2025[22](index=22&type=chunk)[157](index=157&type=chunk)[159](index=159&type=chunk) [Notes to the Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) [Note 1. Organization](index=9&type=section&id=Note%201.%20Organization) - Pebblebrook Hotel Trust is an internally managed hotel investment REIT, primarily acquiring and investing in hotel properties in major U.S. cities and resort markets[25](index=25&type=chunk) - As of March 31, 2025, the Company owned interests in **46 hotels** with **11,933 guest rooms** across various U.S. markets[26](index=26&type=chunk) - The Company operates through Pebblebrook Hotel, L.P. (Operating Partnership), owning **99.0%** of common units, and leases properties to a taxable REIT subsidiary (PHL) which engages third-party managers[27](index=27&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=9&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) - The unaudited interim consolidated financial statements are prepared in accordance with U.S. GAAP and SEC rules, with certain disclosures omitted[28](index=28&type=chunk) - Interim results are not necessarily indicative of full-year performance due to seasonal variations and property transactions[28](index=28&type=chunk) - The adoption of ASU 2023-09 (Income Taxes) and ASU 2024-01 (Stock Compensation) is not expected to have a material impact on the financial statements, while ASU 2024-03 (Expense Disaggregation) and ASU 2024-04 (Convertible Debt) are currently being assessed[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) [Note 3. Acquisition and Disposition of Hotel Properties](index=10&type=section&id=Note%203.%20Acquisition%20and%20Disposition%20of%20Hotel%20Properties) - The Company did not acquire or dispose of any hotel properties during the three months ended March 31, 2025, or March 31, 2024[37](index=37&type=chunk)[38](index=38&type=chunk) [Note 4. Investment in Hotel Properties](index=11&type=section&id=Note%204.%20Investment%20in%20Hotel%20Properties) Table: Investment in Hotel Properties | Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------ | | Investment in hotel properties, net | $5,281,599 | $5,319,029 | | Accumulated depreciation | $(1,588,140) | $(1,530,854) | | Operating lease liabilities | $320,752 | $320,741 | | Financing lease liabilities | $44,200 | $44,000 | - LaPlaya Beach Resort & Club was impacted by Hurricanes Helene and Milton in late 2024, leading to **$4.3 million** in business interruption insurance income recognized in Q1 2025, with **$11.5 million** in preliminary insurance advances received through March 31, 2025[40](index=40&type=chunk)[41](index=41&type=chunk) - No impairment losses were incurred on hotel properties during the three months ended March 31, 2025, or 2024[43](index=43&type=chunk) [Note 5. Debt](index=11&type=section&id=Note%205.%20Debt) Table: Debt Principal Breakdown | Debt Type | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------ | | Total debt principal | $2,263,916 | $2,264,465 | | Unsecured term loans principal | $916,652 | $916,652 | | Convertible senior notes principal | $750,000 | $750,000 | | Senior unsecured notes principal | $402,400 | $402,400 | | Mortgage loans principal | $194,864 | $195,413 | Table: Interest Expense Categories | Interest Expense Category | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Total interest expense | $27,133 | $26,421 | | Unsecured term loan facilities | $10,971 | $18,912 | | Senior unsecured notes | $6,192 | $30 | | Mortgage debt | $3,163 | $3,225 | - The Company had **$642.6 million** borrowing capacity remaining on its senior unsecured revolving credit facility as of March 31, 2025, with no outstanding borrowings[51](index=51&type=chunk) - The Company uses interest rate swap agreements to hedge against interest rate fluctuations, with an aggregate notional value of **$855.0 million** as of March 31, 2025, and expects **$10.3 million** to be reclassified from accumulated other comprehensive income (loss) to interest expense within the next 12 months[70](index=70&type=chunk)[71](index=71&type=chunk) [Note 6. Revenue](index=16&type=section&id=Note%206.%20Revenue) Table: Revenue by Geographic Location | Geographic Location | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :-------------------- | :--------------------------------------------- | :--------------------------------------------- | | Southern Florida/Georgia | $85,455 | $80,957 | | San Diego, CA | $75,211 | $71,495 | | Boston, MA | $46,773 | $45,920 | | Los Angeles, CA | $34,297 | $44,209 | | San Francisco, CA | $33,741 | $30,545 | | Total Revenues | $320,266 | $314,069 | - Total revenues increased by **$6.2 million** year-over-year, with significant growth in Southern Florida/Georgia, San Diego, CA, and San Francisco, CA[72](index=72&type=chunk) - Los Angeles, CA, experienced a notable decrease in revenue from **$44.2 million** in Q1 2024 to **$34.3 million** in Q1 2025[72](index=72&type=chunk) [Note 7. Equity](index=16&type=section&id=Note%207.%20Equity) - The Company repurchased **1,186,797 common shares** for **$13.3 million** (average **$11.23/share**) in Q1 2025, with **$117.6 million** remaining under the common share repurchase program[75](index=75&type=chunk) Table: Preferred Shares Outstanding | Preferred Share Series | Shares Outstanding (March 31, 2025 & Dec 31, 2024) | | :--------------------- | :------------------------------------------------- | | 6.375% Series E | 4,400,000 | | 6.30% Series F | 6,000,000 | | 6.375% Series G | 9,200,000 | | 5.70% Series H | 8,000,000 | | Total | 27,600,000 | - No preferred shares were repurchased in Q1 2025, with **$84.2 million** remaining available under the preferred share repurchase program[81](index=81&type=chunk) - As of March 31, 2025, the Operating Partnership had **1,154,431 LTIP units** outstanding, of which **710,156 have vested**, and **3,104,400 Series Z Preferred Units** outstanding[87](index=87&type=chunk)[90](index=90&type=chunk) [Note 8. Share-Based Compensation Plan](index=18&type=section&id=Note%208.%20Share-Based%20Compensation%20Plan) - The Company recognized **$0.7 million** and **$0.8 million** in share-based compensation expense for service condition restricted shares in Q1 2025 and Q1 2024, respectively[93](index=93&type=chunk) - Approximately **$1.3 million** of share-based compensation expense related to performance-based equity awards was recognized in both Q1 2025 and Q1 2024[95](index=95&type=chunk) - Expense related to LTIP units was **$1.2 million** in Q1 2025, up from **$1.0 million** in Q1 2024, with **159,594 LTIP Class B units** granted to executive officers in February 2025[97](index=97&type=chunk)[99](index=99&type=chunk) [Note 9. Income Taxes](index=19&type=section&id=Note%209.%20Income%20Taxes) - As a REIT, the Company is generally not subject to federal corporate income taxes on distributed taxable income but is subject to state, local, federal excise taxes, and corporate income taxes on its taxable REIT subsidiaries (TRSs)[100](index=100&type=chunk) - **Tax years 2020 through 2024** remain open to examination by major taxing jurisdictions due to net operating loss carryforwards[101](index=101&type=chunk) [Note 10. Earnings (Loss) Per Share](index=19&type=section&id=Note%2010.%20Earnings%20(Loss)%20Per%20Share) Table: Earnings (Loss) Per Share Details | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net income (loss) available to common shareholders | $(43,587) | $(38,990) | | Weighted-average number of common shares, basic/diluted | 119,204,243 | 120,085,226 | | Net income (loss) per share, basic/diluted | $(0.37) | $(0.32) | - Unvested service condition restricted shares and performance-based equity awards (**1,390,560 in 2025** and **1,217,150 in 2024**) and common shares underlying Convertible Notes (**29,441,175 in both periods**) were excluded from diluted EPS calculations as their effect would have been anti-dilutive[103](index=103&type=chunk) [Note 11. Commitments and Contingencies](index=20&type=section&id=Note%2011.%20Commitments%20and%20Contingencies) - Combined base and incentive management fees paid to hotel managers were **$7.6 million** in Q1 2025, down from **$8.0 million** in Q1 2024[107](index=107&type=chunk) Table: Ground Rent Components | Ground Rent Component | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :-------------------- | :--------------------------------------------- | :--------------------------------------------- | | Fixed ground rent | $4,810 | $4,796 | | Variable ground rent | $4,186 | $4,006 | | Total ground rent | $8,996 | $8,802 | - The Company had **$10.1 million** in restricted cash as of March 31, 2025, held for cash management, furniture/fixture replacement reserves, and real estate taxes/ground rent/property insurance[109](index=109&type=chunk) - The Company is not currently subject to any material litigation[113](index=113&type=chunk) [Note 12. Supplemental Information to Statements of Cash Flows](index=22&type=section&id=Note%2012.%20Supplemental%20Information%20to%20Statements%20of%20Cash%20Flows) Table: Supplemental Cash Flow Information | Item | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Interest paid, net of capitalized interest | $15,445 | $23,041 | | Income taxes paid (refunded) | $(170) | $0 | | Accrued additions and improvements to hotel properties | $1,600 | $9,551 | | Write-down of investment | $2,662 | $0 | - Interest paid decreased by **$7.6 million** year-over-year, while accrued additions and improvements to hotel properties significantly decreased by **$7.9 million**[115](index=115&type=chunk) [Note 13. Operating Segment Information](index=22&type=section&id=Note%2013.%20Operating%20Segment%20Information) Table: Operating Segment Performance | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Hotel revenues | $319,888 | $312,351 | | Hotel EBITDA | $60,827 | $66,104 | | Net income (loss) | $(32,180) | $(27,520) | - Hotel revenues increased by **$7.5 million** year-over-year, but Hotel EBITDA decreased by **$5.3 million**, indicating higher hotel operating expenses relative to revenue growth[116](index=116&type=chunk) [Note 14. Subsequent Events](index=22&type=section&id=Note%2014.%20Subsequent%20Events) - Subsequent to March 31, 2025, the Company repurchased an additional **111,599 common shares** at an average price of **$8.96 per share**[117](index=117&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management's analysis of Q1 2025 financial condition and operations, covering results, key metrics, revenue, expenses, liquidity, and market factors [Overview](index=24&type=section&id=Overview) - Q1 operating results showed gains in occupancy and ancillary revenue at resorts and redeveloped properties, while urban properties experienced a decline in total revenue per available room due to wildfires and renovations[123](index=123&type=chunk) - Washington D.C. properties benefited from the inauguration, and San Francisco saw strong results from a positive convention calendar and rising business demand[123](index=123&type=chunk) - The Company repurchased **1,186,797 common shares** for **$13.3 million** at an average of **$11.23 per share** during Q1 2025[124](index=124&type=chunk) [Forward-Looking Statements](index=23&type=section&id=Forward-Looking%20Statements) - The report contains forward-looking statements subject to known and unknown risks, uncertainties, and other factors that could materially affect actual results[120](index=120&type=chunk) - Key risks include those associated with the hotel industry (competition, operating costs, demand fluctuations), global economic conditions, financing availability, dependence on third-party managers, REIT qualification, uninsured losses, and redevelopment project risks[122](index=122&type=chunk) [Key Indicators of Financial Condition and Operating Performance](index=24&type=section&id=Key%20Indicators%20of%20Financial%20Condition%20and%20Operating%20Performance) - The Company measures performance using metrics such as RevPAR, Total RevPAR, ADR, Occupancy, FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA[125](index=125&type=chunk) [Hotel Operating Statistics](index=24&type=section&id=Hotel%20Operating%20Statistics) Table: Hotel Operating Statistics | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Change (YoY) | | :---------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Same-Property Occupancy | 61.9 % | 61.1 % | +0.8 pp | | Same-Property ADR | $301.48 | $305.47 | -$3.99 | | Same-Property RevPAR | $186.57 | $186.58 | -$0.01 | | Same-Property Total RevPAR | $301.22 | $295.04 | +$6.18 | - Same-Property Occupancy increased by **0.8 percentage points**, while Same-Property ADR decreased by **$3.99**, resulting in a flat Same-Property RevPAR[126](index=126&type=chunk) - Same-Property Total RevPAR increased by **$6.18**, indicating growth in ancillary revenues[126](index=126&type=chunk) [Non-GAAP Financial Measures](index=24&type=section&id=Non-GAAP%20Financial%20Measures) Table: Non-GAAP Financial Measures | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | FFO | $25,307 | $29,606 | | FFO available to common share and unit holders | $13,512 | $17,811 | | Adjusted FFO available to common share and unit holders | $18,741 | $25,002 | | EBITDA and EBITDAre | $49,334 | $56,156 | | Adjusted EBITDAre | $56,589 | $60,805 | | Hotel EBITDA | $60,827 | $66,104 | - FFO decreased from **$29.6 million** in Q1 2024 to **$25.3 million** in Q1 2025, and Adjusted FFO available to common share and unit holders also declined from **$25.0 million** to **$18.7 million**[130](index=130&type=chunk) - Hotel EBITDA decreased by **$5.3 million** year-over-year, reflecting a decline in hotel-level operating performance[131](index=131&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) - Total revenues increased by **$6.2 million**, primarily due to improved performance at LaPlaya Beach Resort & Club, Estancia La Jolla Hotel & Spa, and Newport Harbor Island Resort, partially offset by lower revenue at Hyatt Centric Delfina Santa Monica[133](index=133&type=chunk) - Total hotel operating expenses increased by **$11.2 million**, mainly due to increased operations at the recovering properties and higher wage rates and benefits[134](index=134&type=chunk) - Interest expense increased by **$0.7 million** due to no interest capitalization in 2025, offsetting lower interest rates, while general and administrative expenses rose by **$1.0 million** due to increased legal costs[136](index=136&type=chunk)[138](index=138&type=chunk) [Critical Accounting Policies](index=27&type=section&id=Critical%20Accounting%20Policies) - The consolidated financial statements are prepared using U.S. GAAP, requiring management to make estimates and assumptions that affect reported amounts, with actual results potentially differing from these estimates[141](index=141&type=chunk) [New Accounting Pronouncements](index=27&type=section&id=New%20Accounting%20Pronouncements) - Refer to Note 2 for details on recently issued accounting pronouncements and their potential impact on the Company[142](index=142&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) - Primary liquidity sources include cash from operations, credit facilities, equity/debt offerings, and property sales, totaling **$860.8 million** as of March 31, 2025 (cash, cash equivalents, restricted cash, and available credit facility)[143](index=143&type=chunk) - Material cash requirements include **$2.3 billion** in total debt (face value) as of March 31, 2025, **$1.8 billion** in future fixed minimum payments for long-term operating and finance leases, and approximately **$47.2 million** in annual preferred dividends and Series Z preferred OP unit distributions[146](index=146&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) - The Company expects to invest **$65.0 million to $75.0 million** in capital investments in 2025, excluding hurricane-related repairs, for refurbishments and repositioning projects[163](index=163&type=chunk) - The Company was in compliance with all debt covenants as of March 31, 2025, and none of its mortgage loans were in a cash trap[148](index=148&type=chunk)[149](index=149&type=chunk) [Sources and Uses of Cash](index=28&type=section&id=Sources%20and%20Uses%20of%20Cash) Table: Sources and Uses of Cash | Cash Flow Activity | Three months ended March 31, 2025 (in millions) | Three months ended March 31, 2024 (in millions) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash from operating activities | $50.3 | $46.0 | | Net cash used in investing activities | $(20.9) | $(38.5) | | Net cash used in financing activities | $(28.9) | $(136.2) | - Cash from operating activities increased by **$4.3 million**, while cash used in investing activities decreased by **$17.6 million** due to lower capital improvements[155](index=155&type=chunk)[156](index=156&type=chunk)[158](index=158&type=chunk) - Cash used in financing activities significantly decreased by **$107.3 million**, driven by lower debt repayments and deferred financing costs compared to the prior year[157](index=157&type=chunk)[159](index=159&type=chunk) [Capital Investments](index=29&type=section&id=Capital%20Investments) - The Company invested **$20.7 million** in capital investments in Q1 2025, including **$16.7 million** excluding hurricane repair and remediation at LaPlaya Beach Resort & Club[162](index=162&type=chunk) - Planned capital investments for 2025 are projected to be **$65.0 million to $75.0 million**, focusing on normal refurbishments and repositioning projects at properties like Hyatt Centric Delfina Santa Monica and Paradise Point Resort & Spa[163](index=163&type=chunk) [Common Share Repurchase Programs and Preferred Share Repurchase Program](index=29&type=section&id=Common%20Share%20Repurchase%20Programs%20and%20Preferred%20Share%20Repurchase%20Program) - During Q1 2025, the Company repurchased **1,186,797 common shares** for **$13.3 million**, with **$117.6 million** remaining available under the **$150.0 million** common share repurchase program[165](index=165&type=chunk) - No preferred shares were repurchased in Q1 2025, leaving **$84.2 million** available under the **$100.0 million** preferred share repurchase program[168](index=168&type=chunk) [Inflation](index=30&type=section&id=Inflation) - The Company relies on hotel performance to increase revenues to keep pace with inflation, with operators generally able to adjust room rates daily, though competitive pressures may limit rate increases[170](index=170&type=chunk) [Seasonality](index=30&type=section&id=Seasonality) - The lodging industry experiences recurring seasonal patterns, with lower revenue, operating income, and cash flow typically in the first quarter and higher in the third quarter of each year[171](index=171&type=chunk) [Derivative Instruments](index=30&type=section&id=Derivative%20Instruments) - The Company uses interest rate swap agreements with an aggregate notional amount of **$855.0 million** to hedge variable interest rates on unsecured term loans, designated as cash flow hedges[173](index=173&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=page&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) Discusses market risk exposure, focusing on interest rate sensitivity and derivative-based risk management strategies [Interest Rate Sensitivity](index=30&type=section&id=Interest%20Rate%20Sensitivity) - As of March 31, 2025, **8.9%** (**$201.7 million**) of the Company's aggregate indebtedness was subject to variable interest rates, excluding hedged amounts[174](index=174&type=chunk) - A **0.1%** increase or decrease in interest rates on unhedged variable rate debt would result in an approximate **$0.2 million** annual increase or decrease in interest expense[174](index=174&type=chunk) - The Company uses interest rate swaps and other hedging contracts to limit the impact of interest rate changes, though these instruments carry counterparty credit risk and enforceability risks[174](index=174&type=chunk) [Item 4. Controls and Procedures](index=29&type=page&id=Item%204.%20Controls%20and%20Procedures.) Addresses the effectiveness of disclosure controls and procedures and reports on changes in internal control over financial reporting [Disclosure Controls and Procedures](index=30&type=section&id=Disclosure%20Controls%20and%20Procedures) - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025[175](index=175&type=chunk) [Changes in Internal Control Over Financial Reporting](index=30&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - There were no changes to the Company's internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, these controls[176](index=176&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=31&type=page&id=Item%201.%20Legal%20Proceedings.) Confirms the absence of any material legal proceedings against the Company - The Company is not currently subject to any material litigation, nor is any material litigation threatened against it[178](index=178&type=chunk) [Item 1A. Risk Factors](index=31&type=page&id=Item%201A.%20Risk%20Factors.) Confirms no material changes to risk factors previously disclosed in the Company's Annual Report on Form 10-K - There have been no material changes from the risk factors disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[179](index=179&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) Details the Company's common and preferred share repurchase activities during Q1 2025 [Issuer Purchases of Equity Securities](index=31&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) Table: Issuer Purchases of Equity Securities | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :-------------------------------- | :----------------------------- | :--------------------------- | | January 1, 2025 - March 31, 2025 | 1,282,621 | $11.39 | - During Q1 2025, the Company repurchased **1,186,797 common shares** under its publicly announced program, with **$117.6 million** remaining available for repurchase[180](index=180&type=chunk) - No preferred shares were repurchased during Q1 2025, with **$84.2 million** remaining available under the preferred share repurchase program[181](index=181&type=chunk) [Item 3. Defaults Upon Senior Securities](index=31&type=page&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) Confirms no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[182](index=182&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=page&id=Item%204.%20Mine%20Safety%20Disclosures.) Mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable to the Company[183](index=183&type=chunk) [Item 5. Other Information](index=32&type=page&id=Item%205.%20Other%20Information.) Reports on Rule 10b5-1 trading arrangements by officers and trustees - No officers or trustees adopted or terminated any **Rule 10b5-1(c)** trading arrangements during the three months ended March 31, 2025[185](index=185&type=chunk) [Item 6. Exhibits](index=33&type=page&id=Item%206.%20Exhibits.) Lists exhibits filed with the Form 10-Q report, including organizational documents, indentures, and certifications - The exhibits include the Declaration of Trust, Bylaws, Amended and Restated Agreement of Limited Partnership, Indentures for notes, and certifications from the CEO and CFO[186](index=186&type=chunk)

Core Insights - Analysts project Pebblebrook Hotel (PEB) will report quarterly earnings of $0.13 per share, a decline of 38.1% year over year, with revenues expected to reach $317.88 million, reflecting a 1.2% increase from the same quarter last year [1] Earnings Estimates - The consensus EPS estimate for the quarter has been adjusted upward by 0.9% over the past 30 days, indicating a reassessment by covering analysts [2] - Revisions to earnings projections are crucial for predicting investor behavior, as empirical studies show a strong correlation between earnings estimate trends and short-term stock performance [3] Revenue Projections - Analysts estimate 'Revenue- Food and beverage' at $83.15 million, a 2.5% increase year over year [5] - 'Revenue- Other operating' is projected at $36.15 million, suggesting a 3.7% year-over-year change [5] - The consensus estimate for 'Revenue- Room' stands at $198.58 million, indicating a 0.2% increase from the previous year [5] Operational Metrics - The estimated 'Total Guest Rooms' is 11,797, down from 12,000 year over year [6] - Analysts predict 'Depreciation and amortization' will be $55.28 million, compared to $57.21 million from the previous year [6] Stock Performance - Over the past month, Pebblebrook Hotel shares have declined by 9.8%, while the Zacks S&P 500 composite has decreased by 4.3% [7] - Pebblebrook Hotel holds a Zacks Rank 3 (Hold), suggesting its performance will likely align with the overall market in the near term [7]

Core Viewpoint - Pebblebrook Hotel Trust's preferred shares have experienced significant sell-offs despite the REIT reporting adjusted funds from operations (FFO) of $0.20 per share for the fourth quarter of fiscal 2024 [1] Group 1: Company Performance - Pebblebrook Hotel Trust recorded an adjusted FFO of $0.20 per share for the fourth quarter of fiscal 2024 [1] Group 2: Market Dynamics - The equity market serves as a powerful mechanism where daily price fluctuations can lead to substantial wealth creation or destruction over the long term [1] - Pacifica Yield focuses on long-term wealth creation by targeting undervalued high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

Group 1 - The article emphasizes the importance of making informed investment choices to improve financial outcomes [1] - The investing group Trade With Beta offers services such as frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, hedging strategies, and an actively managed portfolio [1] - The article indicates that the author has a beneficial long position in the shares of PEB, highlighting personal investment interests [1]

Financial Data and Key Metrics Changes - For the full year 2024, same-property total RevPAR increased by 2.1%, driven by gains across both urban and resort properties along with stronger out-of-room spending [5] - Adjusted EBITDA rose by 0.8% to $359.2 million, exceeding the midpoint of the outlook by $11.2 million [5] - Adjusted FFO per diluted share grew by 5% to $1.68, surpassing the outlook midpoint by $0.09 [5] Business Line Data and Key Metrics Changes - In Q4, same-property total RevPAR increased by 1.8%, with resorts growing by 4% and urban hotels by 0.7% [6] - Same-property resort occupancy jumped by 3.7% to 65%, while urban occupancy rose by 2.9% to 68.1% [11] - Same-property resort revenue grew by 4.3% in Q4, outpacing the 0.7% growth at urban properties [13] Market Data and Key Metrics Changes - San Diego, the second-largest market by EBITDA, saw a 6.9% increase in occupancy, while San Francisco and Chicago improved by 2.8% [12] - For the full year, resort total revenues rose by 1.2%, while urban properties posted a 3.1% gain [14] - Excluding challenges in San Francisco, LA, and Portland, same-property urban total revenue growth would have been 7.7% [14] Company Strategy and Development Direction - The company completed a $525 million portfolio-wide redevelopment program, with early returns from recent investments being encouraging [21] - In 2025, capital investments are projected at $65 million to $75 million, reflecting the portfolio's excellent condition and reduced need for additional capital [22] - The company anticipates continued upside from strategic investments made in recent years, with significant RevPAR share gains expected [36] Management's Comments on Operating Environment and Future Outlook - Management noted that the normalization of resort rates has largely run its course, with no further meaningful declines expected in 2025 [15] - The company expressed optimism about the recovery of urban properties, despite challenges in key markets like San Francisco, LA, and Portland [35] - Management highlighted potential economic concerns due to domestic policy announcements, which could impact the overall outlook [44] Other Important Information - The company reduced net debt to EBITDA to 5.8 times from about 6.5 times in 2023, reflecting strong operating performance and proceeds from the Hurricane Ian settlement [28] - The company received about $10 million in real estate tax and municipal tax credits in 2024, which are not assumed in the 2025 outlook, creating a headwind to expense growth [20] Q&A Session Summary Question: Expectations for out-of-room spend growth in 2025 - Management expects out-of-room spend to increase at a rate greater than RevPAR growth, driven by positive client feedback and increased spending in various non-room revenue areas [66][68] Question: Insights on the DC market and government exposure - Management noted high anxiety among government employees but highlighted positive demand drivers such as the inauguration and increased activity in the first year after elections [72][75] Question: Confidence in leisure rates and potential for growth - Management indicated that some properties are expected to see rate increases, with confidence stemming from strong bookings and rate trends [85][86] Question: Impact of LA wildfires on the portfolio - Management acknowledged the uncertainty of the impact but noted recent positive trends in travel recovery, with expectations for significant demand from rebuilding efforts [90][92] Question: Updates on San Francisco market developments - Management reported improvements in San Francisco, including increased demand and a more business-friendly environment, with expectations for mid to high single-digit RevPAR growth [127]

Core Insights - Pebblebrook Hotel (PEB) reported revenue of $337.6 million for Q4 2024, a year-over-year increase of 1.1% and an EPS of $0.20 compared to -$0.37 a year ago, exceeding the Zacks Consensus Estimate of $330.16 million by 2.25% and delivering an EPS surprise of 66.67% [1] Financial Performance - Same-Property RevPAR growth rate was 0.9%, outperforming the average estimate of -0.7% from three analysts [4] - Total Guest Rooms stood at 12,000, exceeding the two-analyst average estimate of 11,702 [4] - Revenue from Food and Beverage reached $93.76 million, surpassing the estimated $89.04 million by five analysts, reflecting a 3.4% increase year-over-year [4] - Revenue from Other Operating activities was $36.13 million, slightly above the estimated $35.53 million, marking a 0.4% increase year-over-year [4] - Room Revenue was reported at $207.72 million, exceeding the estimated $205.58 million, with a year-over-year increase of 0.2% [4] - Net Earnings Per Share (Diluted) was -$0.51, compared to the average estimate of -$0.40 from five analysts [4] Stock Performance - Shares of Pebblebrook Hotel have declined by 16.8% over the past month, while the Zacks S&P 500 composite decreased by 2.3%, indicating potential underperformance in the near term with a Zacks Rank of 4 (Sell) [3]