BETHESDA, Md.—Pebblebrook Hotel Trust announced that it has acquired the award-winning Redbury Hotel for $34 million. The 57-room, all-suite, luxury, full-service hotel is located in the center of Hollywood, Calif. The property will continue to be managed by sbe Hotel Group.
“We’re thrilled with the acquisition of the Redbury in the dynamic, high-barrier-to-entry Hollywood neighborhood,” said Jon Bortz, chairman, president and chief executive officer of Pebblebrook Hotel Trust. “The steady demand growth of the market, along with a historically constrained supply environment, provides excellent operating fundamentals for the market and the hotel.”
Designed by Creative Director and photographer Matthew Rolston, in collaboration with sbe Founder and CEO Sam Nazarian, The Redbury Hotel is situated at the convergence of Hollywood and Vine. It boasts 57 all-suite guestrooms that average 790 square feet, each with design elements drawn from a variety of old-world cultures. Each suite offers a home-like atmosphere with 40- or 46-inch high-definition LCD TVs with DVD and DVR, high-speed wi-fi, walk-in rain showers, floor-to-ceiling windows, private patio or balcony, and European-style kitchens with gas burners. The hotel’s signature dining concept, Cleo, is a Mediterranean restaurant and bar, and The Library is a private indoor-outdoor lounge on the second floor that offers hand-crafted specialty cocktails. In addition, the property contains 154 on-site parking spaces and provides valet parking.
In 2012, The Redbury Hotel operated at 84 percent occupancy, with an average daily rate (ADR) of $274 and RevPAR of $230. During the next 12 months, the company currently forecasts that the hotel will generate earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $2.75 to $3.0 million and net operating income after capital reserves (NOI) of $2.25 to $2.5 million.
“We’re thrilled to be building a strategic relationship with sbe,” continued Mr. Bortz. “sbe has a strong presence in the Los Angeles market and terrific expertise in operating boutique hotel properties with high-quality restaurants and bars.”
“Partnering with Pebblebrook on the Redbury is a venture with tremendous upside and positions the property for continued success for years to come,” added Nazarian. “Our collective knowledge of the Los Angeles market and vast hotel industry expertise will add tremendous value to the property and provide a strong foundation for our partnership to thrive.”
The acquisition of The Redbury Hotel brings the total number of properties in the company’s portfolio to 27, comprising $2.1 billion of invested capital. This acquisition marks the company’s fourth investment in west Los Angeles.