Pebblebrook Buys San Diego Hotel for $122M

SAN DIEGO—Pebblebrook Hotel Trust has purchased the 337-suite Embassy Suites San Diego Bay – Downtown for $112.5 million.

Built in 1988, the hotel was fully renovated in 2006 and completed a $3.5 million guest suites renovation in May 2012. The hotel features a 12-story atrium and panoramic views of San Diego Bay and the city.

The property will be managed by HEI Hotels and Resorts. The property operated at about 83-percent occupied in 2012 with an average daily rate of $198 and RevPAR of $165.

As a part of this transaction, Pebblebrook said it is assuming a $66.8 million secured, non-recourse loan, with the balance of the purchase price being funded by the trust with available cash. The loan, which matures in June 2016, is subject to a fixed interest rate of 6.275 percent.

Jon Bortz, chairman and CEO of the trust, said in a statement that the hotel exhibits strong growth potential. “The hotel is extremely well located at the corner of Harbor Drive and Pacific Highway, just steps away from Seaport Village and the waterfront. This ideal location is only four blocks from the San Diego Convention Center, and six blocks from Westfield Horton Plaza Shopping Mall, as well as a variety of restaurant and entertainment options in the vibrant Gaslamp Quarter. The strong leisure, group and convention demand for San Diego, particularly in this location along the waterfront, makes the Embassy Suites San Diego Bay – Downtown an excellent investment for our company.”

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