Pebblebrook Hotel Trust (NYSE: PEB):

Second Quarter and Year-to-Date Highlights

“Our resorts benefited from the surge in leisure travel, which accelerated throughout the quarter,” noted Mr. Bortz. “Compared with the second quarter of 2019, ADR at our resorts increased by a whopping 38% and RevPAR at our resorts increased by 16%. This allowed our resorts to generate Hotel EBITDA 17.5% higher and Hotel EBITDA margins more than 615 basis points better than the second quarter of 2019, an impressive accomplishment in this environment. Although a shortage of hotel workers continues to be a challenge throughout our portfolio, we have adapted through various initiatives, including expanded use of technology, increased cross-training, increased voluntary overtime, and managers broadening their job functions. We believe the labor challenges in our industry are mostly temporary in nature and should lessen as the year progresses, particularly in September.”

Capital Investments and Strategic Property Redevelopments

In the second quarter of 2021, the Company completed $17.4 million of capital investments throughout its portfolio, including the completion of the $11.7 million redevelopment of L’Auberge Del Mar. The Company has completed $27.0 million of capital investments and projects year to date through June 2021. The Company expects to invest a total of $70.0 to $90.0 million during 2021, including investments for the following redevelopments and repositioning projects that the Company believes will generate significant growth and returns:

• Southernmost Beach Resort (estimated at $15.0 million), a comprehensive guestroom renovation, including all case goods, soft goods and bathrooms, including tub to shower conversions. The renovation commenced in July 2021, and is expected to be completed in the fourth quarter of 2021;

• Hotel Vitale (estimated at $25.0 million), a total transformation to the sustainability-focused, mission-driven, and luxury experiential 1 Hotel San Francisco, which will offer nature-inspired designs and environmentally focused aesthetics throughout guestrooms and suites, public areas, and meeting and event venues. The redevelopment began in July 2021, and the hotel will remain closed until the redevelopment’s targeted completion at year-end; and

• Grafton on Sunset (estimated at $5.5 million), a comprehensive redevelopment of the hotel’s indoor and outdoor public areas and suites and a refresh of guestrooms, expected to commence in the fourth quarter of 2021 and be completed in the first quarter of 2022 when it is renamed, repositioned and becomes part of the Company’s Unofficial Z Collection.

As plans are completed and governmental approvals are received, the Company will evaluate commencing additional previously planned major renovation and repositioning projects later in 2021.

Update on Strategic Acquisitions

On June 23, 2021, the Company announced that it executed a contract to acquire the 369-room Margaritaville Hollywood Beach Resort in Hollywood, Florida, for $270.0 million. The acquisition is anticipated to be funded from existing cash on hand and is targeted to be completed by the end of the third quarter of 2021. As part of the acquisition, the Company may assume up to $161.5 million of secured, non-recourse debt currently in place. The purchase is subject to customary closing conditions, and the Company offers no assurances that this acquisition will be completed on these terms or at all.

On July 22, 2021, the Company acquired the iconic Jekyll Island Club Resort for $94.0 million. The historic resort features 200 guestrooms and suites with modern amenities featuring beautiful beaches, two pools, numerous restaurants and bars, low-country landscaping, spectacular photogenic event lawns, island-wide bike paths, historical tours and family activities on one of Georgia’s Golden Isles.

Update on Strategic Dispositions

On April 1, 2021, the Company completed the sale of Sir Francis Drake in San Francisco, California for $157.6 million of net proceeds. On June 10, 2021, the Company completed the sale of The Roger New York in New York, New York for $19.0 million. Year-to-date, the Company has sold a total of $188.6 million of assets.

On July 22, 2021, the Company announced that it executed a contract to sell Villa Florence San Francisco on Union Square for $87.5 million to an unaffiliated third party. The Company expects the sale to be completed in the third quarter of 2021. The sale is subject to normal closing conditions, and the Company offers no assurances that this sale will be completed on these terms or at all.

Balance Sheet and Liquidity

On May 13, 2021, the Company closed on its offering of $230.0 million of its new 6.375% Series G Cumulative Redeemable Preferred Shares, allowing for debt paydowns and additional capital for acquiring and investing in hotel properties in accordance with the Company’s investment strategy.

On July 27, 2021, the Company closed on its offering of $250.0 million of its new 5.70% Series H Cumulative Redeemable Preferred Shares. Proceeds from this offering will be used to fully redeem the $125.0 million 6.50% Series C Cumulative Redeemable Preferred Shares and the $125.0 million 6.375% Series D Cumulative Redeemable Preferred Shares, reducing the Company’s annualized preferred equity dividends by approximately $1.8 million. Both redemptions are anticipated to be completed in August 2021.

As of June 30, 2021, the Company had $323.0 million of consolidated cash, cash equivalents, and restricted cash in addition to $644.2 million of additional undrawn availability on its senior unsecured revolving credit facility, for total liquidity of $967.2 million.

The Company had $2.3 billion in consolidated unsecured debt and convertible notes at an effective weighted-average interest rate of 3.3 percent. Approximately $2.2 billion, or 98 percent of the Company’s total outstanding debt and convertible notes, was at a weighted-average fixed interest rate of 3.4 percent, and approximately $57.0 million, or 2 percent, was at a weighted-average floating interest rate of 2.1 percent. The Company had $1.5 billion of unsecured term loans, and there was no outstanding balance on its $650.0 million senior unsecured revolving credit facility. The Company has no significant loans maturing until the fourth quarter of 2022.

Common and Preferred Dividends

On June 15, 2021, the Company declared a quarterly cash dividend of $0.01 per share on its common shares as well as a regular quarterly cash dividend for the following preferred shares of beneficial interest:

• $0.40625 per 6.50% Series C Cumulative Redeemable Preferred Share;
• $0.39844 per 6.375% Series D Cumulative Redeemable Preferred Share;
• $0.39844 per 6.375% Series E Cumulative Redeemable Preferred Share; and
• $0.39375 per 6.30% Series F Cumulative Redeemable Preferred Share.

Update on Curator Hotel and Resort Collection

Curator Hotel and Resort Collection (“Curator”) is a distinct collection of hand-selected small brands and independent lifestyle hotels and resorts worldwide founded by Pebblebrook and several industry-leading independent hotel operators. Curator now has 68 member hotels. Curator also announced strategic partnerships with several leading travel and technology companies, including Travel Outlook Premium Hotel Call Center, Duetto, StayNTouch, Allbridge, Canary Technologies, Pegasus Intelligence Solutions, ResortPass, Tripleseat, and Sabre Corporation. Curator now has more than 50 master service agreements with preferred vendor partners, providing Curator member hotels with preferred pricing and enhanced operating terms.

2021 Outlook

The Company continues to be unable to provide a full-year outlook for 2021 due to the uncertainties caused by the COVID-19 pandemic. The Company intends to issue new guidance when it has more clarity on the economy, travel demand, and more predictable overall operating fundamentals and trends.

Second Quarter 2021 Earnings Call

The Company will conduct its quarterly analyst and investor conference call on Friday, July 30, 2021, at 9:00 AM ET. Please dial (877) 705-6003 approximately ten minutes before the call begins to participate. Additionally, a live webcast of the conference call will be available through the Investor Relations section of www.pebblebrookhotels.com. To access the webcast, click on https://investor.pebblebrookhotels.com/news-and-events/webcasts/default.aspx ten minutes before the conference call. A replay of the conference call webcast will be archived and available online.

About Pebblebrook Hotel Trust

Pebblebrook Hotel Trust (NYSE: PEB) is a publicly traded real estate investment trust ("REIT") and the largest owner of urban and resort lifestyle hotels in the United States. The Company owns 52 hotels, totaling approximately 12,800 guestrooms across 14 urban and resort markets, with a focus on the west coast gateway cities. For more information, visit www.pebblebrookhotels.com and follow us at @PebblebrookPEB.

This press release contains certain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements are generally identifiable by the use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “seek,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” “forecast,” “continue,” “assume,” “plan,” references to “outlook” or other similar words or expressions. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections and forecasts and other forward-looking information and estimates. Examples of forward-looking statements include the following: descriptions of the Company’s plans or objectives for future capital investment projects, operations or services; forecasts of the Company’s future economic performance; forecasts of hotel industry performance; and descriptions of assumptions underlying or relating to any of the foregoing expectations including assumptions regarding the timing of their occurrence. These forward-looking statements are subject to various risks and uncertainties, many of which are beyond the Company’s control, which could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to, the state of the U.S. economy and the supply of hotel properties, and other factors as are described in greater detail in the Company’s filings with the SEC, including, without limitation, the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

For further information about the Company’s business and financial results, please refer to the "Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the Company’s filings with the U.S. Securities and Exchange Commission, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Investor Relations section of the Company’s website at www.pebblebrookhotels.com.

All information in this press release is as of July 29, 2021. The Company undertakes no duty to update the statements in this press release to conform the statements to actual results or changes in the Company’s expectations.

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