Pebblebrook Hotel Trust originated a $1.75 billion term loan for the funding needed to merge with LaSalle Hotel Properties, which includes paying off LaSalle’s current outstanding debt balances and other transaction closing costs.
The loan is allocated into five individual tranches, maturing between 2020 and 2024, each of which is prepayable without penalty. The financing will only be funded when the pending merger with LaSalle is completed. Closing is targeted for Nov. 30 and is subject to approvals of shareholders of both companies. Shareholders are expected to meet on Nov. 27.
In Pebblebrook’s third-quarter earnings release, the company reported that its adjusted funds from operations decreased 8.1% to $51.2 million from $55.8 million in the prior-year period. The real estate investment trust cited increased interest expense related to the strategic acquisition of LaSalle common shares, which amounted to an estimated $3.8 million of additional expense during the quarter.
Photo of The Roger lobby: Courtesy of LaSalle Hotel Properties