Pebblebrook Hotel Trust Acquire 200 Key Jekyll Island Club, Georgia USA US$94m

Main Photo: The Jekyll Island Resort, comprising two hotels

Date: August 2021

Name: Jekyll Island Club Resort and Jekyll Ocean Club

Location: Jekyll Island, Georgia, USA

Number of Keys: 159 and 41 – 200 in total

Seller: The hotel has a rich history… The State of Georgia tried operating the club as a resort, but this was not financially successful and the entire complex was closed in 1971. The complex was designated a historic landmark in 1978. It was restored and reopened as a luxury resort hotel in 1985, as a Radisson Hotel.

Buyer: Pebblebrook Hotel Trust has acquired the Jekyll Island Club Resort for $94 million. The 200-room resort is listed in the National Register of Historic Places and is located in the heart of Jekyll Island, one of the Golden Isles off the coast of Georgia. The company retained Noble House Hotels & Resorts to manage the resort.

The company also has executed a contract to sell Villa Florence San Francisco on Union Square for $87.5 million to an unaffiliated third party.

Jekyll Island Club Resort includes the Jekyll Island Club, located on the East River, which features 159 guestrooms and suites inspired by late 19th-century charm and decor across four landmarked buildings, each with a custom design and layout including three Victorian-style private mansions. The resort also features the oceanfront Jekyll Ocean Club, which offers 41 guestrooms, including 40 suites, with ocean views and access to the Atlantic Ocean. Jekyll Island Club Resort also has more than 14,000 sq. ft. of indoor meeting space; five restaurants and lounges; two outdoor pools; numerous outdoor verandas and event lawns; access to beaches; and a 19th-century-style croquet lawn.

“We’re very excited to acquire this iconic resort on historic Jekyll Island,” said Jon Bortz, chairman/president/CEO, Pebblebrook Hotel Trust. “This regional drive-to retreat is the island’s premier destination, strategically located in the center of the Jekyll Island National Landmark Historic District. There are many opportunities at the resort to increase the property’s financial performance through operational enhancements and physical improvements, including elevating the entire guest experience; expanding the restaurant and bar offerings; re-imagining the merchandising and quality of the retail space; and creating many more revenue-generating venues. Our redevelopment expertise combined with our asset management initiatives should generate tremendous value creation at this storied resort.”

When initially established in 1888, the Jekyll Island Club Resort was positioned as an exclusive retreat and playground for the nation’s wealthiest families, including the Vanderbilts, Morgans, Pulitzers and Rockefellers, who built the resort’s Victorian mansions. For more than 100 years, Jekyll Island Club Resort has been famed for its elegant design, unrivalled surroundings, island stewardship and environmental sustainability, the company reports.

With the addition of Jekyll Island Club Resort, Noble House now manages six of Pebblebrook’s properties.

“We are excited to partner with Noble House on another prestigious resort,” continued Bortz. “Noble House has extensive experience transforming and creatively operating high-quality, iconic resorts, including our LaPlaya Beach Resort & Club in Naples, FL; our redeveloped San Diego Mission Bay Resort; and our recently renovated L’Auberge Del Mar in Southern California. We look forward to adding Jekyll Island Club Resort to our growing resort collection with Noble House.”

“We are honored to have this once-in-a-lifetime opportunity to manage this iconic resort and to celebrate its storied history and natural beauty,” said Sean Mullen, president, acquisitions, sales & revenue management, Noble House Hotels & Resorts. “This unique resort features the island’s finest sunset and ocean views; spacious verandas and lawns; canopies of ancient oak trees; and stunning natural gardens. This positions Jekyll Island Resort as the perfect destination for celebrations and gatherings of all sizes, hosting over 100 weddings each year while also welcoming families and other small groups that are attracted to the history and natural beauty of Jekyll Island.”

For full-year 2021, Jekyll Island Club Resort is forecasted to operate at 68% occupancy, with a $268 ADR, $182 RevPAR and $360 of total revenue per available room (TRevPAR). The resort is expected to generate hotel earnings before interest, taxes, depreciation and amortization (EBITDA) of $7.6 million and hotel net operating income after a 4% capital reserve of $6.6 million.

The acquisition of Jekyll Island Club Resort brings the total number of properties in the company’s portfolio to 52, which includes nine drive-to, independent lifestyle resorts.

As for the Villa Florence San Francisco on Union Square, Pebblebrook expects the sale to be completed in the third quarter of this year. The sale is subject to normal closing conditions, and the company offers no assurances that this sale will be completed on these terms or at all.

Price: US$94m

Price per Key: $470k

THPT Comment: Pebblebook have assembled a great collection of bijou hotels, and this 130-year old resort is no exception.

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