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Organization
12 Months Ended
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization Organization
Pebblebrook Hotel Trust (the "Company") is an internally managed hotel investment company, formed as a Maryland real estate investment trust in October 2009 to opportunistically acquire and invest in hotel properties located primarily in major United States cities, with an emphasis on major gateway coastal markets.
As of December 31, 2021, the Company owned 53 hotels with a total of 13,247 guest rooms. The hotel properties are located in: Boston, Massachusetts; Chicago, Illinois; Hollywood, Florida; Jekyll Island, Georgia; Key West, Florida; Miami (Coral Gables), Florida; Los Angeles, California (Beverly Hills, Santa Monica, and West Hollywood); Naples, Florida; Philadelphia, Pennsylvania; Portland, Oregon; San Diego, California; San Francisco, California; Santa Cruz, California; Seattle, Washington; Stevenson, Washington; and Washington, D.C.
Substantially all of the Company’s assets are held by, and all of the Company's operations are conducted through, Pebblebrook Hotel, L.P. (the "Operating Partnership"). The Company is the sole general partner of the Operating Partnership. As of December 31, 2021, the Company owned 99.3% of the common limited partnership units issued by the Operating Partnership ("common units"). The remaining 0.7% of the common units are owned by the other limited partners of the Operating Partnership. For the Company to maintain its qualification as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"), it cannot operate the hotels it owns. Therefore, the Operating Partnership and its subsidiaries lease the hotel properties to subsidiaries of Pebblebrook Hotel Lessee, Inc. (collectively with its subsidiaries, "PHL"), a taxable REIT subsidiary ("TRS"), which in turn engage third-party eligible independent contractors to manage the hotels. PHL is consolidated into the Company’s financial statements.
COVID-19 and Liquidity Update
In March 2020, the World Health Organization declared the novel coronavirus ("COVID-19") to be a global pandemic and the virus spread throughout the United States and the world. As a result of this pandemic and subsequent government mandates, health official recommendations, corporate policy changes and individual responses, hotel demand dramatically declined. In response, the Company implemented significant cost controls, salary reductions and temporarily suspended operations at 47 of its hotels and resorts in 2020. In addition, to improve liquidity, the Company raised capital by issuing convertible notes and additional preferred shares as summarized below. As demand improved as a result of an increase in vaccinations and corresponding lifting of governmental restrictions and recommendations, the Company gradually reopened its hotels and resorts. As of December 31, 2021, all of the Company's hotels and resorts were open, with the exception of Hotel Vitale, whose operations will remain suspended until the completion of its renovations and repositioning, which we expect to occur in the second quarter of 2022.
The COVID-19 pandemic had a significant negative impact on the Company's operations and financial results throughout 2021. Although results improved relative to 2020, the Company cannot estimate with certainty when travel demand will fully recover. However, the Company anticipates further recovery in 2022. Leisure travel in 2021 exceeded expectations, particularly at the Company's warmer-weather and resort properties, and we expect this trend to continue in 2022. However, business travel continues to be substantially lower.
During 2021, the Company amended the agreements governing its existing credit facilities, term loan facilities and unsecured senior notes to, among other changes:
waive quarterly financial covenants until the second quarter of 2022, with substantially less-restrictive covenants through the end of the first quarter of 2023;
extend or provide the option for us to extend more than $1.0 billion of debt maturities including our revolving credit facility;
increase pricing until the end of the covenant waiver period; and
impose certain restrictions during the covenant waiver period on share repurchases, dividends, capital improvements, and hotel property acquisitions.
Based on the amendments to the Company's credit agreements, actions noted above, and assumptions regarding the recovery of demand, the Company believes it has sufficient liquidity to meet its obligations for the next 12 months. For further discussion on the Company's liquidity, see Liquidity and Capital Resources included in Part II, Item 7 of this Annual Report on Form 10-K.
During the year ended December 31, 2021, other significant transactions included:
On February 9, 2021, the Company issued, at a 5.5% premium to par, an additional $250.0 million aggregate principal amount of the convertible notes originally issued in December 2020.
On April 1, 2021, the Company sold the Sir Francis Drake for $157.6 million.
On May 13, 2021, the Company raised $222.6 million of net proceeds from the issuance of 9,200,000 6.375% Series G Cumulative Redeemable Preferred Shares.
On June 10, 2021, the Company sold The Roger New York for $19.0 million.
On July 22, 2021, the Company acquired the leasehold interest in Jekyll Island Club Resort for $94.0 million.
On July 27, 2021, the Company raised $242.1 million of net proceeds from the issuance of 10,000,000 5.70% Series H Cumulative Redeemable Preferred Shares.
On August 21, 2021, the Company redeemed all outstanding 6.375% Series D Cumulative Redeemable Preferred Shares.
On August 22, 2021, the Company redeemed all outstanding 6.50% Series C Cumulative Redeemable Preferred Shares.
On September 9, 2021, the Company sold Villa Florence San Francisco on Union Square for $87.5 million.
On September 23, 2021, the Company acquired the leasehold interest in Margaritaville Hollywood Beach Resort for $270.0 million, including the assumption of a $161.5 million mortgage loan.
On October 20, 2021, the Company acquired Avalon Bed & Breakfast and Duval Gardens for $20.0 million, with both properties consolidated into the Company's Southernmost Beach Resort.
On December 1, 2021, the Company acquired the leasehold interest in Estancia La Jolla Hotel & Spa for $108.0 million, including the assumption of a $61.7 million mortgage loan.
The Company paid down $431.9 million of debt, consisting of $341.9 million of term loans, $50.0 million of senior unsecured notes and $40.0 million on the senior unsecured credit facility.