Jon Bortz, chairman, president and CEO of Pebblebrook Hotel Trust (NYSE: PEB), joined REIT.com for a CEO Spotlight video interview at REITWorld 2014: NAREIT’s Annual Convention for All Things REIT at the Atlanta Marriott Marquis.
Pebblebrook went public nearly five years ago as a blind pool REIT with no assets. Since then, the firm has taken a number of steps to build a balance sheet that Bortz described as “beautiful.” Pebblebrook’s debt level currently sits at approximately 20 percent of the company’s total enterprise value, and the lodging REIT recently extended its credit facility.
“As we’ve gotten larger, we’ve developed a need for more ongoing liquidity,” he said. “As our credit has improved, we’ve become a real company in the last four-and-a-half years. Our terms have gotten a lot better, along with the improving environment for debt.”
Pebblebrook focuses on operating in the largest, gateway cities in the United States. Bortz described conditions in those markets as a “goldilocks” scenario. Bolstered by an improving economy, demand in the marquee markets remains strong, according to Bortz. Additionally, group travel demand is growing, he said. Supply also has been constrained, according to Bortz.
“We have a large gap of demand outpacing supply,” he said.
Occupancy rates are at record levels in “pretty much every city” where Pebblebrook operates, Bortz noted.
“The gateway cities are very strong, and they look to get stronger on an ongoing basis,” he said.