Pebblebrook Hotel Trust Buys Union Station Hotel for $52.3M
- Dec 17, 2014
Pebblebrook Hotel Trust has purchased its first hotel asset in Nashville’s CBD, paying $52.3 million for the 125-key Union Station Hotel, Autograph Collection. After operating at an 82 percent occupancy rate over the 12 months ending in October 2014, with a $249 ADR and $204 RevPar, Pebblebrook expects the hotel to generate a NOI of $3.8 to $4.3 million and EBITDAs between $4.5 and $5 million in 2015.
The REIT will own a leasehold interest in the CBD property through a ground lease expiring in 2105. Sage Hospitality, one of the largest privately held hospitality investment, management and development companies in the US, will operate the hotel under a new agreement. This makes Union Station Hotel the second Pebblebrook property in Sage Hospitality’s management portfolio.
Pebblebrook will take on the hotel’s existing franchise agreement with Marriott’s Autograph Collection. Union Station Hotel joined the independent hotel collection in 2012, after a $1.9 million renovation. Prior to the conversion, Union was last upgraded in 2007, at a cost of $11 million. Pebblebrook will invest between $5 and $7 million to spruce up Union Station by mid-2016. As suggested by its name, the hotel was initially constructed as a railroad station. The National Historic Landmark first opened in 1900 as the L&N Railroad Station. It was converted to a hotel in 1986.
Located on Broadway, in Nashville’s downtown core, Union Station is within walking distance of the 1.2-million-square-foot Music City Convention Center, the Frist Center for the Visual Arts, Bridgestone Arena, Ryman Auditorium, the State Capitol, Vanderbilt University and the famous Honky Tonk Row. It’s also in close proximity to the CBD’s 8 million square feet of office space including the regional headquarters of Regions Bank, SunTrust Bank and Bank of America and prestigious corporate tenants such as AT&T, HCA, Johnson & Johnson, BMI and WEB MD.
The 125-key hotel offers amenities such as a business center, fitness center, valet parking and the Forbes Four Diamond-rated onsite restaurant and lounge, Prime 108. Union Station also features 12,000 square feet of meeting space. Its event space includes the Veranda, an outdoor covered terrace and the Grand Lobby boasting a 65-foot barrel-vaulted ceiling with Tiffany-style stained glass, gold-leaf medallions and rare bas-relief sculptures. All 125 rooms, 12 of which are deluxe suites, are unique.
Union Station Hotel is Pebblebrook Hotel Trust’s 34th property. The REIT primarily invests in upscale, full-service hotels located in urban markets in major gateway cities.
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Image credits: Pebblebrook Hotel Trust