Pebblebrook Hotel Trust Acquires Avalon and Duval Gardens in Key West for $20m
Main Photo: The Southernmost Beach Resort
Date: October 2021
Name: Avalon Bed & Breakfast, Duval Gardens – to become The Guesthouses at Southernmost Beach Resort
Location: Key West, Florida, USA
Number of Keys: 31
Seller: TBA…we’re guessing a private family
Buyer: Pebblebrook Hotel Trust
Pebblebrook Hotel Trust has acquired the 19-room Avalon Bed & Breakfast and 12-room Duval Gardens in Key West, Florida, for $20.0 million. The two properties will be consolidated and operated as part of the company’s Southernmost Beach Resort and managed by Highgate, which currently manages the company’s two Key West resorts, Southernmost and The Marker Key West Harbor Resort.
This latest deal follows Pebblebrook’s acquisition in September 2021 of the 369-room oceanfront Margaritaville Hollywood Beach Resort in Hollywood, Florida for $270M from an affiliate of KSL Capital Partners. Prior to adding Avalon and Duval to their portfolio, Pebblebrook Hotel Trust was already the largest owner of urban and resort lifestyle hotels in the United States, owning 52 hotels, totaling approximately 13,000 guest rooms across 15 urban and resort markets.
Avalon and Duval have a number of locations along the vibrant Duval Street, which showcases Key West’s most visited attractions, restaurants and bars. Avalon is physically surrounded by Southernmost on three sides, allowing for a seamless incorporation into Southernmost’s operations. Avalon contains 19 guestrooms, and the property features an outdoor plunge pool. Duval, located just a few blocks north of Southernmost, features 12 guestrooms and an outdoor swimming pool.
“We are very excited to acquire these two well maintained and historically charming properties in the heart of Key West,” said Jon E. Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. “The location of both Avalon and Duval will allow us to incorporate these properties into our existing Southernmost Beach Resort, enabling us to generate significant operating and marketing synergies. We also look forward to implementing our best practices and operating initiatives to enhance the profitability of these properties, which we believe offer tremendous upside potential.”
Based on the Company’s initial investment in Avalon and Duval, it expects to generate a forward 12-month incremental annualized hotel net operating income (“hotel NOI”), after a 4% capital reserve, of $1.6 to $2.4 million.
Price: $20m
Price per Key: $645,161
THPT Comment: More evidence that destination is driving sector investment right now, although a relatively small purchase for Pebblebrook
First Seen: Hotel News Resource
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