BETHESDA, Md.—Pebblebrook Hotel Trust has acquired the Hotel Palomar Los Angeles – Westwood for $78.7 million. The 264-room, upper upscale, full-service boutique hotel is located in the Westwood neighborhood of Los Angeles, Calif. The property will continue to be managed by Kimpton Hotels & Restaurants.
“We’re thrilled with our acquisition of the Hotel Palomar Los Angeles – Westwood, located 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 at the corner of Wilshire Boulevard and Selby Avenue, with proximity to all of the major motion picture studios, prominent dining, retail and museums and the Wilshire Corridor, which contains some of the highest-quality residential and office space in Los Angeles. Furthermore, the healthy economic environment in the West Los Angeles market, which has benefitted from increased international inbound travel, provides excellent long-term operating fundamentals for the hotel.”
The hotel features a 40-foot outdoor pool and deck with poolside food and beverage service, a fitness center with floor-to-ceiling windows, a five-story, 435 space parking garage with valet parking, a 24-hour business center, and in-room spa services. The property offers eight meeting rooms with over 5,000 square feet of flexible space. The hotel’s signature dining concept, BLVD 16, serves three meals a day and features home-style American cooking and specialty handcrafted cocktails inspired by locally sourced ingredients.
For the trailing 12 months ended September 2014, the Hotel Palomar operated at 87 percent occupancy, with an average daily rate of $207 and room revenue per available room of $180. For 2015, the company currently forecasts that the hotel will generate earnings before interest, taxes, depreciation and amortization of $5.2 to $5.7 million and net operating income after capital reserves of $4.2 to $4.7 million.
The company will own a leasehold interest in the property through a ground lease which will expire in 2107, assuming all extension options are exercised.
“We couldn’t be happier about the opportunity to grow our successful relationship with Kimpton Hotels & Restaurants,” Bortz said. “The acquisition of the Hotel Palomar marks our 10th Kimpton-managed property, and we’re confident that together we can unlock additional value at this terrific hotel.”
The acquisition of the Hotel Palomar brings the total number of properties in the company’s portfolio to 33 and marks the company’s fifth investment in Los Angeles, Calif.