Pebblebrook Hotel Buys Radisson Hotel Fisherman's Wharf And Retail For $132 Mln

(RTTNews) - Pebblebrook Hotel Trust (PEB) announced that it has acquired the Radisson Hotel Fisherman's Wharf and Retail for $132.0 million. The 355-room hotel, which includes approximately 44,000 square feet of street retail space, is located in the heart of Fisherman's Wharf in San Francisco, CA. The property will be managed by Davidson Hotels & Resorts.

In 2013, the Radisson Hotel Fisherman's Wharf is forecasted to operate at 89 percent occupancy, with an average daily rate of $184, room revenue per available room or "RevPAR" of $165, earnings before interest, taxes, depreciation and amortization or "EBITDA" of $11.9 million and net operating income after capital reserves of $11.0 million.

In 2014, the company currently forecasts that the hotel will generate earnings before interest, taxes, depreciation and amortization of $10.2 to $10.7 million and net operating income after capital reserves of $9.3 to $9.8 million. The Company's 2014 forecasted financial performance for the property includes the negative impacts of Prop 13 property tax reassessment increases, insurance increases and a negative impact in the fourth quarter from a planned renovation of the hotel.

The company will own a leasehold interest in the property through a ground lease, which currently has 48 years remaining and expires in 2062.

The company noted that it plans to invest $18.0 to $20.0 million between 2014 and 2015 in a complete renovation and repositioning of the hotel, including all guest rooms and public areas, both interior and exterior. The property's design will be overseen by Dawson Design Associates, the same design team that repositioned the Company's Hotel Zetta, also in San Francisco, CA. The hotel's comprehensive guest room and public area improvements are expected to commence in the fourth quarter of 2014 and the Company plans to rename the property upon completion of the renovation.

In conjunction with the company's acquisition of the Radisson Hotel Fisherman's Wharf and Retail, the Company has selected Davidson as manager for the hotel. Davidson also manages the Company's DoubleTree by Hilton Bethesda - Washington, DC.

The company stated that it expects to incur about $2.1 million of costs related to the acquisition of the hotel and $1.0 million of costs related to the transition of a new management team that will be expensed as incurred.