Pebblebrook Closes $71MM Sale of Struggling Hotel Spero in San Francisco

Fairwood Capital, Pebblebrook Hotel Trust, Hotel Spero, San Francisco

(EDITOR’S NOTE: According to industry reports, the buyer is an entity associated with Memphis, Tenn.-based Fairwood Capital, a real estate investment firm focused exclusively on the acquisition and recapitalization of hospitality real estate and operating platforms. Pebblebrook has owned the hotel since August of 2013 when it paid $68,976,000 for the asset. In 2018, The Registry reported that the hotel was reopening after a $16 million renovation that included a transformed lobby, new sustainability and philanthropic programs and a new guest services program. The property is located at 405 Taylor Street in San Francisco, Calif.)

BETHESDA, Md.–Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) today announced that on August 25, 2022, it closed on the sale of the 236-room Hotel Spero in San Francisco, CA for $71.0 million to a third party ($300,846 per room).

For the trailing twelve months ended June 30, 2022, the hotel’s net operating loss was ($1.6) million, and its Hotel EBITDA was ($1.4) million. Based on the hotel’s operating performance for 2019, the $71.0 million sales price reflects a 9.1x EBITDA multiple and a 9.8% net operating income capitalization rate. The net operating income (loss) for both periods mentioned above is after an assumed annual capital reserve of 4.0% of total hotel revenues.

Proceeds from the sale of Hotel Spero will be used for general corporate purposes and reducing the Company’s outstanding debt borrowings associated with recent hotel acquisitions, in accordance with the Company’s investment strategy.

About Pebblebrook Hotel Trust

Pebblebrook Hotel Trust (NYSE: PEB) is a publicly traded real estate investment trust (“REIT”) and the largest owner of urban and resort lifestyle hotels and resorts in the United States. The Company owns 52 hotels and resorts, totaling approximately 12,900 guest rooms across 15 urban and resort markets.

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