Pebblebrook (PEB) Completes $30M Acquisition of Hotel Milano in San Fran
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Pebblebrook Hotel Trust (NYSE: PEB) has acquired the Hotel Milano for $30.0 million. The 108-room, full-service hotel is located in the South of Market and Convention Center submarket of downtown San Francisco, California. The property will be managed by Viceroy Hotel Group.
The San Francisco hotel market has been subject to strong recoveries following previous economic downturns, experiencing a double digit compounded annual room revenue per available room (“RevPAR”) growth rate during the last recovery cycle, as well as 19.7% RevPAR growth in 2011, the highest of any of the United States’ Top 25 markets. In addition, the market has extremely high barriers to entry, as exhibited by a compounded annual growth in supply of 0.5% over the past 20 years.
The Company plans to invest between $8.0 and $10.0 million over the next 12 months in a complete renovation and repositioning of the hotel, including all guestrooms, public areas and the restaurant. The hotel’s comprehensive guest room and public area improvements are expected to commence in the second half of 2012 and the Company plans to rename the property upon completion of the renovation.
The San Francisco hotel market has been subject to strong recoveries following previous economic downturns, experiencing a double digit compounded annual room revenue per available room (“RevPAR”) growth rate during the last recovery cycle, as well as 19.7% RevPAR growth in 2011, the highest of any of the United States’ Top 25 markets. In addition, the market has extremely high barriers to entry, as exhibited by a compounded annual growth in supply of 0.5% over the past 20 years.
The Company plans to invest between $8.0 and $10.0 million over the next 12 months in a complete renovation and repositioning of the hotel, including all guestrooms, public areas and the restaurant. The hotel’s comprehensive guest room and public area improvements are expected to commence in the second half of 2012 and the Company plans to rename the property upon completion of the renovation.
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