Pebblebrook Hotel Trust completed the sale of The Westin Michigan Avenue Chicago for $72 million on December 3, 2025. The transaction, which closed with suburban investor and IT executive Ketu Amin, represents a write‑down from the hotel’s 2018 acquisition price of roughly $156 million and a 15.6‑times EBITDA multiple based on the property’s trailing‑12‑month EBITDA of $4.6 million.
The proceeds add $72 million to Pebblebrook’s cash balance and are earmarked for general corporate purposes, including a $100 million reduction in outstanding debt and a $5 million cut in preferred securities. The sale brings the company’s net debt to trailing‑12‑month EBITDA ratio down to about 5.9×, improving liquidity and reducing interest expense for the remainder of 2025.
Strategically, the divestiture aligns with Pebblebrook’s portfolio‑optimization plan, which has focused on shedding lower‑yielding urban hotels and concentrating on leisure and group‑oriented properties. The Westin Michigan Avenue Chicago, a downtown lifestyle hotel, was deemed less attractive in the current high‑interest, business‑travel‑constrained environment, and its sale frees capital for redevelopment projects and potential share repurchases.
The transaction has a neutral impact on Pebblebrook’s 2025 outlook. Management indicated that the removal of the property from same‑property metrics will be offset by lower interest expense, leaving the company’s adjusted FFO guidance largely unchanged. The sale also supports the firm’s broader goal of maintaining a strong balance sheet while pursuing higher‑yielding growth opportunities.
CEO Jon Bortz emphasized Pebblebrook’s “gross‑seller” strategy, noting that the company is actively selling assets that trade at a discount to intrinsic value to unlock shareholder value. He added that the proceeds will be used to strengthen the capital structure and potentially fund share repurchases, reinforcing confidence in the company’s long‑term strategy.
The sale reflects broader market conditions that have pressured downtown hotel valuations. Rising interest rates and a slowdown in business travel have led to significant discounts for urban properties, while the company’s focus on leisure assets positions it to benefit from upcoming events such as the 2026 World Cup and the 2028 Olympics, which are expected to lift demand in core markets.
The transaction also follows a prior divestiture of the hotel’s ground‑floor retail space in 2023, which fetched $27.3 million. Together, these moves demonstrate Pebblebrook’s disciplined approach to portfolio management and capital allocation.
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