Pebblebrook Hotel Trust Acquires W Los Angeles - Westwood
BETHESDA, Md.—Pebblebrook Hotel Trust (the “Company”) announced that it has acquired the W Los Angeles - Westwood hotel for $125 million. The 258-room, all-suite, luxury, full-service hotel is located in the Westwood neighborhood of Los Angeles, California. The property will continue to be managed by Starwood Hotels and Resorts (“Starwood”). READER COMMENTS
“We’re thrilled with the acquisition of W Los Angeles - Westwood in the dynamic, high-barrier-to-entry West Los Angeles neighborhood of Westwood,” said Jon Bortz, Chairman, president and chief executive officer of Pebblebrook Hotel Trust. “The hotel is ideally located adjacent to UCLA and Westwood Village, one of Los Angeles’ most popular shopping, dining and entertainment destinations, and is near the iconic Wilshire Corridor and Century City. Los Angeles attracts over 25 million total visitors annually and is the second-most visited city by overseas visitors. Steady demand growth along with a historically highly constrained supply environment, provide excellent operating fundamentals for the market and the hotel.”
W Los Angeles – Westwood features all-suite guestrooms with signature W Beds and in-room technology and entertainment. The hotel features landscaped outdoor areas, as well as WET, a heated pool and cabana, and The Backyard, casual poolside bar and restaurant. The hotel offers 3,300 square feet of indoor meeting space and Bliss Spa that offers massages, body treatments/wraps, manicures/pedicures, facials, waxing, and a retail store. The property is also home to SWEAT, a 24-hour fitness center, as well as a 132-space parking garage with valet service and 24-hour room service. In addition to The Backyard, the hotel boasts two other food and beverage venues: NineThirty, a full-service restaurant that serves three meals daily and Whiskey Blue, a music-oriented, art-inspired bar.
In 2011, W Los Angeles - Westwood operated at 84 percent occupancy, with an average daily rate (“ADR”) of $258 and room revenue per available room (“RevPAR”) of $216, 16 percent below the property’s prior RevPAR peak in 2008. During the next 12 months, the Company currently forecasts that the hotel will generate earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $8.3 to $8.8 million and net operating income after capital reserves (“NOI”) of $7.0 to $7.5 million.
Pebblebrook Hotel Trust and Starwood are planning a multi-million dollar public space renovation that will re-concept and renovate the NineThirty restaurant, completely renovate the ground floor lobby, lobby bar, and public space, and upgrade and refurbish the meeting space, pool area, and The Backyard.
The hotel will continue to be managed by Starwood, pursuant to a long-term management agreement. Starwood also manages two of the Company’s other hotels: The Westin Gaslamp Quarter hotel in San Diego, California and W Boston in Boston, Massachusetts.
The Company expects to incur approximately $0.5 million of costs related to the acquisition of the hotel that will be expensed as incurred.
The acquisition of W Los Angeles - Westwood brings the total number of properties in the Company’s portfolio to 24, comprising $1.9 billion of invested capital since the Company completed its initial public offering in December 2009. This acquisition marks the Company’s third investment in the Los Angeles market, including the 237-room Mondrian Los Angeles in West Hollywood, California and the 310-room Sheraton Delfina Santa Monica in Santa Monica, California.
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