Boston Hotel Parking, Vacant Ground Floor Sell for $95M

By IvyLee Rosario

Revere Hotel Boston Common Parking Garage

Pebblebrook Hotel Trust closed the sale of the 826-space parking garage at Revere Hotel Boston Common, in addition to the 10,500-square-foot vacant ground-floor space, for $95 million. 

The sale price reflects a 23.5x adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) multiple and a 4 percent net operating income capitalization rate, based on the trailing 12-month operating performance for the period. Proceeds from the sale will be used for general business purposes, including reducing the company’s outstanding debt or repurchasing common shares. 

Sale Impact

The garage will not be reported in the company’s Same-Property statistics for the second, third or fourth quarters due to the sale, but results during the company’s ownership period during the second quarter will continue to be included in EBITDA, adjusted funds from operations (FFO), adjusted FFO per diluted share and net income. As a result of the sale, Pebblebrook Hotel Trust expects its financials will be impacted by the following amounts:

Second quarter 

• Net income increased by $12.8 million, as a result of the estimated gain on sale of hotel properties of $13 million;
• Same property EBITDA reduced by $1.1 million;
• Adjusted EBITDA reduced by $0.2 million;
• Adjusted FFO reduced by $0.2 million;
• Adjusted FFO per diluted share reduced by $0.0 per share

Second, third and fourth quarters combined

• Net income increased by $11.7 million, as a result of the estimated gain on sale of hotel properties of $13 million;
• Same-property EBITDA reduced by $3.6 million;
• Adjusted EBITDA reduced by $2.7 million;
• Adjusted FFO reduced by $1.3 million;
• Adjusted FFO per diluted share reduced by $0.02 per share

“We are extremely pleased with the sale of the parking garage at Revere Hotel Boston Common,” said Jon Bortz, chairman, president & chief executive officer of Pebblebrook Hotel Trust, in prepared remarks. “This sale generates significant value for our shareholders at a very favorable price and overall capitalization rate. To date, we have sold five hotels and two non-hotel assets under our strategic disposition plan that we initiated early last year, which has generated $676.8 million in gross proceeds. These property sales continue to allow us to take advantage of the value differential between the higher private market prices and values and the lower public market valuation of our company.”

Image courtesy of Pebblebrook Hotel Trust