Pebblebrook Hotel Trust’s integration of LaSalle Hotel Properties, which it acquired in a deal finalized in January, is going smoothly, according to Pebblebrook CEO Jon Bortz, who shared details of the process—and what’s next for the company—with Hotel News Now at the recent NYU International Hotel Industry Investment Conference.
NEW YORK—Little more than six months after Pebblebrook Hotel Trust closed its deal to acquire LaSalle Hotel Properties, Pebblebrook CEO Jon Bortz said the integration is going well, but much work remains in selling or repositioning the LaSalle hotels the company has added to its portfolio.
Pebblebrook has sold nine of the 41 hotels it gained from LaSalle, and ultimately the real estate investment trust looks to retain and reposition about half of that portfolio, Bortz said.
“We’ve come up for a plan for every asset. We laid out upfront that we’d sell somewhere about $1.5 billion of the portfolio that we acquired, and we’ve sold $1.2 billion so far. We are going to sell probably another $600 million between this year and next year,” he said. “Of what’s left, about half of the portfolio we acquired, we’re redeveloping, and transforming either into a Z Collection hotel, which is a proprietary brand, or we’re bringing in new operators, we’re changing the names, a really exhaustive process.”
For more of what Bortz had to say about the LaSalle integration, watch the video below.
As for what’s next for Pebblebrook, Bortz said his company is largely in sell mode right now, and is more of “an active looker” than “an active pursuer” when it comes to acquisitions.
Within the larger REIT landscape, he sees continued consolidation “in all aspects of the space, whether it’s in the operating company side, the brand side, the REIT side, the institutional owner side or even the brokerage side, with JLL buying HFF,” he said.
He noted that the recently announced attempt by Park Hotels & Resorts to acquire Chesapeake Lodging Trust for $2.7 billion is still somewhat up in the air.
“On the corporate side, we’ve already seen a potential deal between Park and Chesapeake. It will be interesting to see if anyone comes out of the woodwork to make an offer on that given the decline in the stock prices since the deal was offered,” he said. “I have no idea whether that will happen or not. That would be a private equity buyer, and maybe the kind of buyer who is looking at a strategic (buy) but maybe at a slightly lower quality of asset base.”