Pebblebrook completes $72M sale of The Westin Michigan Avenue Chicago

Pebblebrook Hotel Trust has completed the sale of The Westin Michigan Avenue Chicago for $72 million to a third party.

For the trailing 12 months ended Sept. 30, the 752-room hotel generated earnings before interest, taxes, depreciation and amortization (EBITDA) of $4.6 million and net operating income of $2.5 million, assuming a capital reserve of 4% of total hotel revenues. The $72 million sales price equates to a 15.6x EBITDA multiple and a 3.5% NOI capitalization rate, before consideration of a brand-mandated property improvement plan and other significant capital expenditures.

Pebblebrook expects to use the sale proceeds for general corporate purposes, with a primary focus on reducing outstanding debt and preferred equity, and opportunistically repurchasing the company’s common shares, while supporting other capital allocation priorities to enhance long-term shareholder value.

Following the sale and the previously announced $44.25 million sale of Montrose at Beverly Hills, the company will have reduced its outstanding debt by $100 million and its preferred securities outstanding by approximately $5 million. Following these transactions, Pebblebrook expects to have approximately $2.1 billion of consolidated debt and convertible notes outstanding and $761 million of preferred equity, with net debt to trailing 12-month corporate EBITDA reduced to approximately 5.9x.

As a result of these two property sales, Pebblebrook has updated its prior fourth-quarter and full-year 2025 outlook, previously provided on Nov. 5. The sold hotels have been removed from the company’s Q4 2025 Same-property hotel EBITDA and operating metrics, but their EBITDA from operations through their respective sale dates will continue to be included in adjusted EBITDAre. Because the loss of hotel-level EBITDA for the remainder of the year is expected to be fully offset by lower interest expense from reduced outstanding debt, the company does not anticipate any meaningful impact to adjusted funds from operations (FFO), and its outlook for key fourth-quarter and full-year 2025 earnings metrics remains largely unchanged.