Pebblebrook Hotel Trust today announced that it has acquired the Hotel Monaco Seattle for $51.2 million. Property Management will remain with Kimpton Hotels & Restaurants.
The Hotel Monaco Seattle is the eleventh acquisition for the Company, which has invested an aggregate of $860 million in 11 hotel properties since completing its initial public offering in December 2009. The Company has previously announced a signed agreement to purchase one other hotel: $89.5 million for a hotel in the Boston, Massachusetts region Closing for this hotel is subject to bankruptcy court approval, as well as the satisfaction of customary closing requirements and conditions. Accordingly, the Company can give no assurance that the transaction will be consummated on the terms initially disclosed, or at all.The hotel will continue to be managed by Kimpton Hotels & Restaurants, which has managed the hotel since 1997. In addition to the Hotel Monaco Seattle, Kimpton also manages Pebblebrook’s 416-room Sir Francis Drake Hotel and 252-room Argonaut Hotel in downtown San Francisco, California, the 183-room Hotel Monaco Washington DC in downtown Washington, DC and the 140-room Grand Hotel Minneapolis in downtown Minneapolis, Minnesota.The 189-room, upper upscale, full-service boutique hotel is located in the central business district of downtown Seattle, Washington. The hotel will continue to be managed by Kimpton Hotels & Restaurants (“Kimpton”). The transaction was funded by the Company entirely with available cash. “We are very pleased to be acquiring the Hotel Monaco Seattle and further diversifying our portfolio through this investment in the Seattle market,” said Jon Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. “The hotel is located in the center of downtown Seattle, in close proximity to all of the city’s major shopping, office, entertainment and dining locations. The hotel is near Pike Place Market, Pioneer Square, the Washington State Trade & Convention Center and five of Seattle’s largest and highest quality office buildings, all of which provide the hotel with a diverse array of demand drivers. Furthermore, the Seattle market historically has been subject to strong recoveries in demand and RevPAR following economic downturns. Increased demand, coupled with minimal lodging supply growth and high barriers-to-entry, provide for excellent operating fundamentals at the hotel moving forward.”The Hotel Monaco Seattle is located at the corner of Fourth Avenue and Spring Street in the high barrier-to-entry downtown submarket of Seattle, Washington. Downtown Seattle offers premier office, dining, convention, entertainment and shopping locations, all of which provide for a diverse collection of corporate, convention and leisure demand. The hotel is in close proximity to Pike Place Market, one of the nation’s longest-running farmers markets and an attraction of Seattle that draws approximately 10 million visitors annually. Pike Place Market is home to more than 220 year-round commercial businesses and is generally known as “The Soul of Seattle.” In addition, the hotel is within a short walk of Pioneer Square, Seattle’s most historic area, which offers sightseeing opportunities, nightlife activities and boutique shopping, and is the epicenter of the Seattle art scene. Downtown Seattle contains over 33 million square feet of office space, and the 726,000-square foot Washington State Trade & Convention Center, one of Seattle’s main lodging demand drivers, which hosts between 40 and 50 city-wide events annually.The Hotel Monaco Seattle is a boutique-style hotel located in the geographic center of downtown Seattle in what was originally constructed in 1969 as the Pacific Northwest Bell office building. The property was converted by Kimpton to a hotel in 1997 and features 189 upper upscale guestrooms, including 45 suites, with plush pillow-top beds and premium bath amenities. The hotel has over 6,000 square feet of flexible meeting space spread across nine meeting rooms, including the 2,160-square foot Paris Ballroom. Additionally, the Hotel Monaco Seattle has 56 subterranean parking spaces and is home to Sazerac, a 135-seat, award-winning, three-meal-a-day, stand-alone restaurant and bar that offers southern-style cuisine in a contemporary and inviting atmosphere that is popular with both Seattle locals and visitors to the city.In 2010, the Hotel Monaco Seattle operated at 81% occupancy, with an average daily rate of $147, and RevPAR of $119, a decline of approximately 27% from the property’s prior peak in RevPAR in 2007. During the next 12 months, the Company currently forecasts that the hotel will generate earnings before interest, taxes, depreciation and amortization (“EBITDA”) of approximately $2.8 to $3.1 million and net operating income after capital reserves of approximately $2.3 to $2.6 million. The Company expects to commence a comprehensive $3.0 million rooms renovation in the fourth quarter of 2011, with completion expected by the end of the first quarter of 2012, typically the slowest period in Seattle’s lodging market. The Company expects these improvements to allow the hotel to regain its prior competitive positioning by substantially outperforming the market’s recovery in 2012 and beyond.The hotel will continue to be managed by Kimpton Hotels & Restaurants, which has managed the hotel since 1997. In addition to the Hotel Monaco Seattle, Kimpton also manages Pebblebrook’s 416-room Sir Francis Drake Hotel and 252-room Argonaut Hotel in downtown San Francisco, California, the 183-room Hotel Monaco Washington DC in downtown Washington, DC and the 140-room Grand Hotel Minneapolis in downtown Minneapolis, Minnesota.
