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Record price paid for asset in hot Nashville

Pebblebrook Hotel Trust has acquired from Florida-based Turnberry Associates and locally based Corner Partnership the 125-room Union Station Hotel in downtown Nashville, Tennessee, for US$52.3 million (US$415,000 per key), which reportedly represents a record purchase price for the hot growth market.

Bethesda, Maryland-based Pebblebrook will maintain the hotel’s association with Marriott’s Autograph Collection and Sage Hospitality will act as the new operator. The company will own a leasehold interest in the property through a ground lease, which will expire in 2105.

For the trailing 12 months ended October 2014, the Union Station operated at 82% occupancy with an ADR of US$249 and RevPAR of US$204. In 2015, Pebblebrook forecasts that the hotel will generate EBITDA of US$4.5 to US$5.0 million and NOI after capital reserves of US$3.8 to US$4.3 million.

Pebblebrook said it will invest US$5 to US$7 million to refresh the guestrooms and public areas, which it anticipates completing by no later than the middle of 2016.

The acquisition brings the number of properties in the Pebblebrook’s portfolio to 34 and marks the company’s first investment in Nashville.

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