Pebblebrook Hotel Trust (PEB) recently acquired a luxury W Boston hotel in downtown Boston, Massachusetts for $89.5 million. Pebblebrook Hotel expects to incur $0.6 million of acquisition costs related to the deal. Post acquisition, the acquired property will be managed by Starwood Hotels & Resorts Worldwide Inc (HOT).
The 235 rooms, luxury hotel is located at the junction of Theatre District, Financial District and the Back Bay District. The location is in close proximity to the city’s most fashionable neighborhood. The hotel has 5000 square feet of indoor space across 90 meeting rooms with audio/visual systems, an upscale spa and a retail store.
With this transaction, Pebblebrook Hotel gets an opportunity to strengthen its position in the Boston market. With the improving fundamentals in the Boston market, the occupancy is expected to increase which in turn would increase the RevPAR (Revenue per available room).
During the next 12 months, the hotel is expected to generate earnings before interest, taxes, depreciation and amortization (EBITDA) of $5.1 to $5.6 million and net operating income after capital reserves of $4.0 to $4.5 million. Pebblebrook is optimistic that Starwood would manage the new hotel, as the company has an extensive knowledge of the Boston market.
Pebblebrook Hotel acquires and invests in hotel properties located primarily in major United States cities, with an emphasis on the major coastal markets. The company intends to focus on full-service hotel properties in the upscale segment of the lodging industry.
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