Pebblebrook Hotel Trust

What they do

Pebblebrook, a Maryland REIT formed in 2009, owns full-service upper-upscale hotels and resorts in major U.S. cities and destination resort markets, with an emphasis on gateway coastal markets. It cannot operate hotels itself, so its operating partnership leases properties to its taxable REIT subsidiary, Pebblebrook Hotel Lessee, which engages third-party managers. As of December 31, 2025, it owned interests in 44 hotels totaling 11,052 guest rooms. Properties are located in markets including Boston, Chicago, Los Angeles, San Francisco, San Diego, Key West, Naples, and Washington, D.C.

Revenue drivers

• Urban hotel portfolio — Rooms and food-and-beverage revenue at city hotels in markets such as San Francisco, Chicago, Boston, Los Angeles and Washington, D.C.; the bulk of the 44-hotel portfolio.
• Resort properties — Resorts in southern Florida, southern California and similar leisure destinations; Q2 2026 resort RevPAR rose 12.0% and Total RevPAR 10.9%, the strongest portfolio segment.
• Same-property hotel operations — Same-property RevPAR was $213.49 in 2025, essentially flat versus $214.42 in 2024, as ADR fell to $294.96 from $303.14 while occupancy rose to 72.4% from 70.7%; Total RevPAR rose to $339.48 from $335.88.
• Out-of-room and ancillary spend — Restaurants, lounges, meeting facilities and other amenities at full-service hotels; cited as growing in Q2 2026, particularly at resorts.

Recent performance

Q2 2026 net income was $24.9 million, up 29.2% from $19.3 million in Q2 2025, with same-property hotel EBITDA of $123.3 million, 7.1% higher year over year. Same-property RevPAR rose 6.5% on ADR of +4.7% and occupancy of +1.7%, and same-property Total RevPAR rose 4.7%. Adjusted FFO per diluted share was $0.68, $0.06 above the high end of outlook. Resorts led growth (RevPAR +12.0%, hotel EBITDA +18.5%) and San Francisco RevPAR rose 16.0%, while Washington, D.C. RevPAR fell 9.9% and the four urban San Diego hotels fell 9.1%. Full-year 2025 revenue was $1.48 billion with a net loss of $65.8 million.

Strategy

Management targets upper-upscale, full-service hotels in barrier-to-entry urban and resort markets, and evaluates acquisitions partly on discount to replacement cost and repositioning potential. In 2025 it sold the Montrose at Beverly Hills for $44.3 million and The Westin Michigan Avenue Chicago for $72.0 million, repurchased 6,277,068 common shares for $71.4 million and 531,038 preferred shares for $10.1 million, and refinanced convertible notes. The company emphasizes operating efficiency and technology to improve margins and cash flow, and expects $65 to $75 million of capital investments in 2026. In Q2 2026 it sold the Chamberlain West Hollywood Hotel for $43.5 million and accepted preferred shares valued at $26.1 million, retiring them at a 23% discount to liquidation preference.

Risks

• Market-specific demand weakness — Washington, D.C. RevPAR fell 9.9% in Q2 2026 on weak government-related demand and the four urban San Diego hotels fell 9.1% on a weaker convention calendar.
• Dependence on third-party managers — Pebblebrook cannot operate its hotels directly and relies on third-party eligible independent contractors, limiting its ability to implement strategic decisions.
• Macro and policy uncertainty — The company cites ongoing geopolitical, policy and broader economic uncertainty, and says it takes the year one quarter at a time.
• Debt and interest-rate exposure — Long-term debt was $2.08 billion at June 30, 2026, with $350 million of December 2026 convertible notes remaining; net debt to trailing corporate EBITDA was 5.3x.

Outlook

For full-year 2026, management guides net income of negative $1.7 million to positive $6.3 million, with same-property Total RevPAR growth of 4.1% to 5.3%. Adjusted EBITDA re is forecast at $345.0 to $353.0 million and Adjusted FFO per diluted share at $1.69 to $1.76, both raised at the midpoint. Free cash flow per diluted share is guided to $1.04 to $1.11. The outlook assumes second-half results in line with prior assumptions.