Pebblebrook Hotel reports Q3 FFO 51c, consensus 50c

Reports Q3 revenue $397.7M, consensus $396.8M. Jon E. Bortz, Chairman and Chief Executive Officer: “Our third-quarter results were in line with our outlook, reflecting strong operating execution and continued outperformance in driving portfolio-wide operating efficiencies in a challenging and uncertain environment. San Francisco once again led the portfolio, fueled by robust citywide conventions and healthy business and leisure transient demand growth. Chicago also exceeded expectations, with broad-based strength across group, corporate, and leisure segments. As anticipated, the quarter’s results were negatively impacted by the year-over-year timing shift of the Jewish holidays and ongoing softness in group attendance. Among our resorts, Newport Harbor Island Resort, Jekyll Island Club Resort, and Estancia La Jolla Hotel & Spa each delivered strong gains as they continue to capture market share and expand profitability as they ramp up from their transformational redevelopments. Leisure demand across our portfolio remained resilient in the third quarter, although many leisure customers continued to be price sensitive. Weekday and weekend occupancies continued to increase across our resort and urban markets. ‘We also achieved a key strategic milestone with the successful completion of our $400 million convertible notes offering at a very attractive 1.625% rate, extending our maturities, lowering our borrowing costs, and enhancing our financial flexibility. We plan to utilize current cash and additional free cash flow generation to address the remaining 2026 convertible notes that mature near the end of next year. ‘Looking ahead, while we’ve made modest adjustments to our 2025 outlook due to the negative impact of the federal government shutdown, we are increasingly optimistic about our 2026 prospects for renewed growth. Next year sets up well with a uniquely robust list of major events, an improving convention calendar across most of our markets, a more favorable holiday calendar, easier comps in LA and D.C., and continued improving trends across our portfolio.”