Pebblebrook Disposes of Westin Michigan to Strengthen Its Financials

Core Insights - Pebblebrook Hotel Trust (PEB) has sold the Westin Michigan Avenue Chicago for $72 million to enhance financial flexibility [1][9] - The sale reflects a 15.6X EBITDA multiple and a 3.5% NOI capitalization rate based on recent performance [2][9] - Proceeds from the sale will be used to improve the company's debt position and repurchase common shares [3][4] Financial Position - Following the recent asset sales, Pebblebrook's consolidated debt and convertible notes are expected to total $2.1 billion, with $761 million in preferred equity [4] - The net debt to trailing 12-month corporate EBITDA ratio is projected to decrease to approximately 5.9X [4] - The company anticipates that the loss of hotel-level EBITDA will be offset by reduced interest expenses from the lower outstanding debt balance, leaving the 2025 financial outlook largely unchanged [5] Market Challenges - Pebblebrook is experiencing pressure from weak performance in Los Angeles and Washington, D.C., exacerbated by a prolonged government shutdown [6] - Factors such as cancellations, soft group business, weak international inbound travel, and macroeconomic uncertainty are limiting pricing power and RevPAR growth [6] - Over the past three months, PEB shares have declined by 6.7%, contrasting with the industry's growth of 1.7% [6]