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Pebblebrook Hotel Advances Disposition Plan With Asset Sale
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Pebblebrook Hotel Trust (PEB - Free Report) recently completed the disposition of the company’s 99-room Topaz Hotel in Washington, D.C. to a third party for $33.1 million. The asset sale comes as part of the company’s disposition program aimed at optimizing its portfolio and reducing the leverage level.
The sale price indicates an EBITDA multiple of 19.5x and net operating income (NOI) capitalization rate of 4.4%, based on the property’s operating performance in 2018. Further, the sale price reflects a 17.9x EBITDA multiple and NOI capitalization rate of 4.9%, based on the trailing 12-month period ended Sep 30, 2019.
Pebblebrook plans to use sale proceeds for general business needs, which will likely include reducing the company’s outstanding borrowings.
The company’s strategic disposition plan, which commenced on Nov 30, 2018, aims to improve overall portfolio quality and leverage ratio to a target of 4-4.25 times. In addition, Pebblebrook is reinvesting the sale proceeds for additional renovation and repositioning projects throughout its portfolio. Therefore, such prudent use of sale proceeds will boost its portfolio’s growth profile.
As part of its strategic disposition program, the company has completed $1.33 billion of asset sales, including the sale of Topaz Hotel. In fact, in third-quarter 2019, it sold or executed contracts for sale of hotel properties worth $171.2 million. This included sale of Hotel Amarano Burbank for $72.9 million, Rouge Hotel for $42 million and Hotel Madera for $23.3 million.
Furthermore, amid favorable pricing levels and active transaction market with decent interest from buyers, the company remains on track to dispose $600 million in 2019, with $482.1 million of asset sales completed so far in the year.
Such timely execution of asset disposition will likely boost the long-term operating profitability and aid in value creation for the company. However, asset sales will likely result in near-term earnings dilution. This might also dampen its near-term profitability margins.
Currently, Pebblebrook carries a Zacks Rank #3 (Hold). Over the past six months, shares of the company have declined 12.2% as against the industry’s growth of 1.9%.
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Duke Realty Corporation’s funds from operations (FFO) per share estimates for the ongoing year have been revised marginally upward to $1.44 over the past month. The stock carries a Zacks Rank of 2 (Buy), at present.
Crown Castle International Corporation (CCI - Free Report) Zacks Consensus Estimate for 2019 FFO per share remained unchanged at $5.97 over the past month. It currently holds a Zacks Rank of 2.
Cousins Properties Incorporated’s (CUZ - Free Report) FFO per share estimates for the current year have moved 1.4% north to $2.94 over the past month. The company also carries a Zacks Rank #2, currently.
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Pebblebrook Hotel Advances Disposition Plan With Asset Sale
Pebblebrook Hotel Trust (PEB - Free Report) recently completed the disposition of the company’s 99-room Topaz Hotel in Washington, D.C. to a third party for $33.1 million. The asset sale comes as part of the company’s disposition program aimed at optimizing its portfolio and reducing the leverage level.
The sale price indicates an EBITDA multiple of 19.5x and net operating income (NOI) capitalization rate of 4.4%, based on the property’s operating performance in 2018. Further, the sale price reflects a 17.9x EBITDA multiple and NOI capitalization rate of 4.9%, based on the trailing 12-month period ended Sep 30, 2019.
Pebblebrook plans to use sale proceeds for general business needs, which will likely include reducing the company’s outstanding borrowings.
The company’s strategic disposition plan, which commenced on Nov 30, 2018, aims to improve overall portfolio quality and leverage ratio to a target of 4-4.25 times. In addition, Pebblebrook is reinvesting the sale proceeds for additional renovation and repositioning projects throughout its portfolio. Therefore, such prudent use of sale proceeds will boost its portfolio’s growth profile.
As part of its strategic disposition program, the company has completed $1.33 billion of asset sales, including the sale of Topaz Hotel. In fact, in third-quarter 2019, it sold or executed contracts for sale of hotel properties worth $171.2 million. This included sale of Hotel Amarano Burbank for $72.9 million, Rouge Hotel for $42 million and Hotel Madera for $23.3 million.
Furthermore, amid favorable pricing levels and active transaction market with decent interest from buyers, the company remains on track to dispose $600 million in 2019, with $482.1 million of asset sales completed so far in the year.
Such timely execution of asset disposition will likely boost the long-term operating profitability and aid in value creation for the company. However, asset sales will likely result in near-term earnings dilution. This might also dampen its near-term profitability margins.
Currently, Pebblebrook carries a Zacks Rank #3 (Hold). Over the past six months, shares of the company have declined 12.2% as against the industry’s growth of 1.9%.
Stocks to Consider
Duke Realty Corporation’s funds from operations (FFO) per share estimates for the ongoing year have been revised marginally upward to $1.44 over the past month. The stock carries a Zacks Rank of 2 (Buy), at present.
Crown Castle International Corporation (CCI - Free Report) Zacks Consensus Estimate for 2019 FFO per share remained unchanged at $5.97 over the past month. It currently holds a Zacks Rank of 2.
Cousins Properties Incorporated’s (CUZ - Free Report) FFO per share estimates for the current year have moved 1.4% north to $2.94 over the past month. The company also carries a Zacks Rank #2, currently.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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