Pebblebrook Hotel Trust (PEB) acquires Newport Resort & Marina from Gurney in Newport, RI
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Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) announced today that on June 23, 2022, it acquired the 257-room AAA Four Diamond Gurney’s Newport Resort & Marina (“Gurney’s Newport”) in Newport, Rhode Island for $174.0. million.
Gurney’s Newport is an irreplaceable ten-acre resort located on the highly visible island of Goat Island in famed Newport, Rhode Island. The self-contained resort offers breathtaking 360 degree views of Narragansett Bay as well as Newport Harbor and the iconic Newport Bridge, creating the ultimate New England coastal experience. Gurney’s Newport offers 257 rooms, including 18 spacious suites and 80,000 square feet of flexible indoor and outdoor event space, surrounded by expansive lawns, stunning water views, a marina and historic lighthouse. The resort features a wide variety of waterfront restaurants, including Showfish Newport and The Pineapple Club, which offer ingredient-driven menus with healthy bites, local favorites, and seasonal classics. The resort also includes a full-service 22-berth marina with direct access to Newport from Gurney. Additional resort amenities include a 3,000 square foot spa with nine treatment rooms, outdoor fireplaces throughout, a lobby bar, take-out coffee, a 3,200 square foot waterfront pavilion with fantastic views, a resort-style outdoor saltwater pool with poolside cabanas, an indoor pool, fitness center, and seasonal skating rink.
“We are thrilled to acquire this premier complex that is extremely unique within the dynamic, high barrier-to-entry market of Newport,” said Jon E. Bortz, Chairman, President and Chief Executive Officer of Pebblebrook. Hotel Trust (“Pebblebrook”). “Gurney’s Newport is the only resort-style property in Newport, and it’s one of the very few true resorts on the northeast coast, attracting high demand from New York, Boston and Providence. This unique New England retreat features a sprawling footprint overlooking Newport Harbor and Narragansett Bay, where guests can enjoy upscale dining, spa treatments, sailboat excursions, outdoor spaces outdoor events, a private marina, cabana experiences, and many other resort-style amenities. As group and individual travelers increasingly seek a unique resort experience with outdoor amenities, Gurney’s Newport is well positioned to continue to grow in the highly attractive Newport market.
Known as “America’s First Beach Resort” and the “Sailing Capital of the World”, Newport is considered the jewel in the crown of the New England coast and draws on a long history of travel and of tourism. Newport is one of America’s fastest growing tourist destinations, with a unique combination of qualities that attracts millions of people from around the world each year and is only 1.5 hours drive from Boston and 3.5 hours drive from New York. This renowned leisure destination boasts authentic historic sites, the famous Cliff Walk, the Newport Mansions, Ocean Drive, quaint shops and waterfront restaurants, the International Tennis Hall of Fame, sailing, fishing, golf, beaches and internationally renowned events such as the Newport Folk Festival and many spectacular wedding venues. Newport remains one of the highest barrier-to-entry markets in the country, with extremely limited potential for new supply. Gurney’s exceptional location surrounded by water in the heart of Newport Harbor offers guests an elevated experiential stay in a highly desirable destination.
The company is evaluating numerous operational and physical improvements to the customer experience to increase cash flow. Pebblebrook believes the overall opportunity is to reposition the property to a higher level, given its unique location and amenities. Potential upgrades include completely renovating guest rooms and bathrooms, upgrading the lobby, arrival experience and landscaping, renovating restaurants and bars, adding a market, relocating/upgrading the spa, reimagining the Grand Ballroom, South Lawn and pavilion outdoor spaces, and adding new guest activities and amenities. Additionally, the company has the right to purchase the marina (which includes 22 docks that can accommodate boats up to 240 feet) in 2027. The resort will also become part of the Curator Hotel & Resort Collection, which is expected to generate a wide range expenses. reductions combined with improved technology and operational initiatives.
Based on estimated performance for the last twelve months of May 2022, the hotel generated total revenue per available room (“TRevPAR”) of $401, hotel earnings before interest, taxes, depreciation and amortization (“EBITDA of Hotel’s) of $13.6 million, and Hotel’s NOI (“Hotel’s NOI”), after a 4% capital reserve, of $12.1 million.
The acquisition of Gurney’s Newport brings the total number of properties in the company’s portfolio to 55, including 13 unique, independent, drive-in resorts. Pebblebrook financed the acquisition with cash and proceeds from its senior unsecured revolving credit facility.