Pebblebrook Hotel Trust: Q1 2026 10-Q Summary
Business Context and Reporting Period
Pebblebrook Hotel Trust (PEB) is a Maryland real estate investment trust (REIT) owning 44 hotels with 11,052 guest rooms as of March 31, 2026. The portfolio is concentrated in major U.S. gateway cities including Los Angeles, San Francisco, San Diego, Boston, and Washington, D.C. This report covers the quarterly period ended March 31, 2026.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $345.7 million | $320.3 million |
| Operating Income | $8.1 million | ($7.2 million) loss |
| Net Income (Loss) Attributable to Common | ($29.7 million) | ($43.6 million) |
| Diluted EPS (Common) | ($0.26) | ($0.37) |
| Hotel EBITDA | $82.2 million | $60.8 million |
| FFO Available to Common | $29.6 million | $13.5 million |
| Adjusted FFO Available to Common | $37.0 million | $18.7 million |
| Cash from Operating Activities | $84.1 million | $50.3 million |
| Total Debt (Principal) | $2.10 billion | $2.15 billion |
| Cash and Cash Equivalents | $196.2 million | $184.2 million |
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased by $25.4 million (7.9%) driven by recovery in Los Angeles (post-wildfire) and San Francisco (Super Bowl impact), offset by the absence of two properties sold in late 2025.
- Profitability Improvement: Operating income turned positive ($8.1M) compared to a loss of $7.2M in Q1 2025. Net loss attributable to common shareholders narrowed significantly from $43.6M to $29.7M.
- Impairment Charge: The Company recognized a $7.7 million impairment loss on one hotel property in Q1 2026; no impairment was recorded in Q1 2025.
- Insurance Income: Q1 2025 included $4.3 million in business interruption insurance income related to hurricanes; Q1 2026 had none.
- Debt Refinancing: The Company extended the maturity of a $360 million term loan from 2027 to 2031 and repaid the remaining $40 million mortgage on the Margaritaville Hollywood Beach Resort.
Outlook, Commentary, and Risks
- Management Commentary: Operating results "significantly exceeded expectations" with strong performance in San Francisco, Los Angeles, and San Diego. Management remains cautious regarding the remainder of 2026 due to an "increasingly uncertain macroeconomic environment."
- Capital Investments: The Company invested $11.9 million in capital improvements in Q1 2026. Guidance for full-year 2026 capital investments is $65.0 million to $75.0 million, including repositioning projects at Paradise Point and Chaminade Resort & Spa.
- Share Repurchases: The Company repurchased 405,821 common shares for $4.9 million under its $150 million program. $145.1 million remains available.
- Liquidity: Total liquidity (cash, restricted cash, and available revolver) stood at $845.8 million as of March 31, 2026.
- Risks: Key risks include interest rate fluctuations, macroeconomic downturns affecting travel demand, and the cyclical nature of the hotel industry. The Company has $865 million in notional interest rate swaps to hedge variable rate debt.
Investor Verification Checklist
- Impairment Details: Verify the specific property subject to the $7.7 million impairment and the assumptions used in the fair value assessment.
- Debt Maturity Wall: Confirm the impact of the $351.7 million debt principal due in 2026 (including the Convertible Notes 2026) on liquidity and refinancing plans.
- Same-Property Metrics: Review the sustainability of the 11.8% increase in Same-Property RevPAR ($215.78 vs $193.08) given the macroeconomic caution expressed by management.
- Convertible Notes: Assess the conversion risk and potential dilution for the $350 million Convertible Notes 2026 maturing in December 2026.
- Ground Lease Obligations: Evaluate the impact of variable ground rent increases tied to revenue growth on future operating margins.