Pebblebrook Buying Florida Margaritaville Resort For $270M
Bethesda, Maryland-based Pebblebrook Hotel Trust, a publicly traded REIT that owns 51 hotels in the U.S., announced Wednesday that it will acquire the 18-story, 369-room Margaritaville Hollywood Beach Resort in Hollywood, Florida, for $270M. The sale price amounts to more than $731K per room.
The seller, Denver-based KSL Capital Partners, bought the beachfront property at 1111 North Ocean Drive for $190M in April 2018, or 42.1% less than Pebblebrook is paying three years later, the South Florida Business Journal reported.
There are 27 Margaritaville hotels and resorts worldwide, including 14 open in the U.S. Jimmy Buffett, whose songs inspired the resort name and branding, on June 18 presided over the debut of a Margaritaville in Times Square that will open to the public on July 1.
The Hollywood Beach property includes eight bars and restaurants, a spa, a rooftop pool and a FlowRider surfing simulator. A May report from Recode found that travelers in the wake of the coronavirus pandemic are opting toward all-inclusive trips and that luxury resorts could recover more quickly than the travel industry at large.
The Hollywood Beach acquisition will be funded from existing cash on hand and completed by the end of Q3 2021, according to Pebblebrook, which may also assume up to $161.5M of secured, nonrecourse debt in place for the resort.
In a presentation on operating trends, portfolio and liquidity, Pebblebrook reported that as of mid-June, it has total liquidity of approximately $970M, which includes $19M netted from the June 10 sale of The Roger New York, a 193-room hotel in Midtown, to Electra America Hospitality Group.
The REIT also reported that for the week ending June 20, its hotels and resorts ran at 48% occupancy and a $252 average rate, while Pebblebrook’s resorts ran at 77% occupancy and a $398 average rate. Weekly room revenue more than doubled since the second week of March.
In Wednesday's announcement, Pebblebrook also announced that it intends to market for sale the 189-room Villa Florence San Francisco on Union Square in California.