137 Room Rouge Hotel in Washington, D.C. Sold for US$42m

Main Photo: The Rouge Hotel lobby

Date: June 2019

Location: Washington D.C., USA

Names: The Rouge Hotel

No. of Keys: 137

Seller: Pebblebrook Hotel Trust….The contracted sale price reflects a 17.4x EBITDA multiple and a 5.0% net operating income capitalisation rate based on the hotel’s operating performance for 2018.

The sale of Rouge Hotel is subject to normal closing conditions. The Company is targeting to complete the sale in the third quarter of 2019 and continues to be encouraged with pricing levels and overall buyer interest in the investment markets. Following the completion of the sale, the Company’s estimated total net debt to trailing 12-month corporate EBITDA ratio will be approximately 4.6 times.

Pebblebrook Hotel Trust is a publicly traded real estate investment trust (“REIT”) and the largest owner of urban and resort lifestyle hotels in the United States. The Company owns 60 hotels, totalling approximately 14,500 guest rooms across 16 urban and resort markets with a focus on the west coast gateway cities.

The hotel was originally one of 11 Kimpton hotels in the Washington Metropolitan area and one of three put up for sales in February 2019.

The 82-room Hotel Madera, the 99-room Topaz Hotel and the 137-room Rouge Hotel, all Kimpton-managed properties, were being marketed for sale, according to a listing with the owner’s broker, CBRE.

All three hotels are in Dupont Circle — the Madera at 1310 New Hampshire Ave. NW, Rouge at 1315 16th St. NW and the Topaz at 1733 N St. NW.

The three hotels are part of a large footprint Kimpton has in D.C. In all, the company manages 10 hotels in D.C. and one in Alexandria.

The potential sales are not surprising. Pebblebrook’s acquisition of fellow real estate investment trust LaSalle Hotel Properties in 2018 gave the combined company a total of 10 hotels in D.C., more than Pebblebrook CEO Jon Bortz said he was willing to keep.

Pebblebrook prefers to keep its portfolio more West Coast-heavy, Bortz said in an interview with WBJ back in December.

Buyer: TBA

Price: US$42m

Price per Key: US$306,569

THPT Comment: Good buy for the unknown buyer and allows Pebblebrook to concentrate on it’s remaining portfolio of hotels, mostly on America’s West Coast, with a few in Boston and a handful in Florida, under various brands including Mondrian, Viceroy, Hilton, Sofitel and InterContinental.

First Seen: Marketwatch

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