Pebblebrook Hotel Trust - 10-Q Summary (Q2 2026)
Business Context and Reporting Period
Pebblebrook Hotel Trust (PEB) is a Maryland REIT owning 43 hotels with 10,937 guest rooms as of June 30, 2026. The portfolio is concentrated in major U.S. gateway cities and resort markets, including San Diego, Boston, San Francisco, and Southern Florida. This report covers the quarterly period ended June 30, 2026, and the six-month period ended on the same date.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Total Revenues | $407.1M | $407.5M | $752.8M | $727.8M |
| Net Income (Loss) | $24.9M | $19.3M | $6.5M | $(12.9M) |
| Net Income (Loss) to Common | $20.7M | $7.4M | $(9.0M) | $(36.2M) |
| Hotel EBITDA | $123.8M | $121.0M | $206.0M | $181.8M |
| FFO (Funds from Operations) | $78.1M | $76.9M | $119.2M | $102.2M |
| Adjusted FFO to Common | $77.5M | $77.4M | $114.5M | $96.2M |
| Operating Cash Flow (YTD) | $170.4M (2026) vs $140.9M (2025) | |||
| Total Debt (Net) | $2.08B (as of June 30, 2026) | |||
| Cash & Equivalents | $261.0M (as of June 30, 2026) |
Material Changes vs. Prior Period
- Revenue Growth: YTD revenues increased $25.0M (3.4%) driven by recovery in Los Angeles (post-wildfire) and San Francisco, and strong performance at resort properties. Q2 revenues were flat year-over-year due to the sale of non-comparable properties offsetting organic growth.
- Profitability: Net income attributable to common shareholders improved significantly in Q2 ($20.7M vs $7.4M) but remained negative YTD ($(9.0M) vs $(36.2M)) due to an $8.8M impairment charge recognized in the first half of 2026.
- Portfolio Changes: The Company sold the Chamberlain West Hollywood Hotel in May 2026 for $43.5M. Two other properties (Montrose at Beverly Hills and The Westin Michigan Avenue Chicago) were sold in late 2025, reducing the portfolio to 43 hotels.
- Debt Management: The Company extended the maturity of a $360M term loan to 2031 and repaid the remaining $40M mortgage on the Margaritaville Hollywood Beach Resort.
- Share Repurchases: The Company repurchased 944,452 common shares ($12.9M) and 1.49M preferred shares ($28.6M) during the first half of 2026.
Guidance, Outlook, and Risks
- Outlook: Management notes continued growth in business and leisure demand, with resort properties and San Francisco leading performance. However, they remain cautious regarding the remainder of 2026 due to an uncertain macroeconomic environment.
- Capital Investments: The Company expects to invest $65.0M to $75.0M in capital improvements in 2026, including repositioning projects at Paradise Point Resort & Spa and Chaminade Resort & Spa.
- Liquidity: Total liquidity (cash, restricted cash, and available credit facility) stands at approximately $911.6M. The Company has $641.2M available on its senior unsecured revolving credit facility.
- Risks: Key risks include interest rate fluctuations (though $865M of debt is hedged via swaps), potential declines in travel demand due to global events, and the cyclical nature of the hotel industry. The Company is compliant with all debt covenants.
- Unusual Items: An $8.8M impairment loss was recorded for one hotel in the first half of 2026. No business interruption insurance income was recognized in 2026, compared to $7.5M in 2025 related to hurricane settlements.
Investor Verification Checklist
- Impairment Details: Verify the specific property subject to the $8.8M impairment and the assumptions used in the fair value assessment.
- Debt Maturity Wall: Review the $351M in debt principal payments due in the remainder of 2026 and the refinancing strategy for the Convertible Notes 2026 maturing in December 2026.
- Preferred Share Redemption: Confirm the impact of the ongoing preferred share repurchase program on future distribution obligations and earnings per share.
- San Francisco Recovery: Assess the sustainability of the RevPAR growth in San Francisco given the reliance on corporate travel and conventions.
- Capital Expenditure Execution: Monitor the $65M-$75M capital investment plan to ensure it aligns with projected returns and does not strain liquidity.