Pebblebrook Hotel Trust announced that on June 23, 2022, it acquired the AAA Four Diamond 257-room Gurney's Newport Resort & Marina (“Gurney's Newport”) in Newport, Rhode Island for $174.0 million. Gurney's Newport is an irreplaceable ten-acre waterside resort located on highly visible Goat Island in world-famous Newport, Rhode Island. The independent resort boasts 360-degree unobstructed water views of Narragansett Bay as well as Newport Harbor, and the iconic Newport Bridge, creating the quintessential coastal New England experience.

Gurney's Newport features 257 guestrooms, including 18 spacious suites, and 80,000 square feet of flexible indoor and outdoor event space, surrounded by expansive lawns, sweeping water views, a marina, and a historic lighthouse. The resort contains a wide variety of waterside eateries, including Showfish Newport and The Pineapple Club, which feature ingredient-driven menus with healthy bites, locally sourced dishes, and seasonal classics. The resort also contains a 22-slip full-service marina with direct access to Gurney's Newport.

Additional resort amenities include a 3,000-square foot spa with nine treatment rooms, outdoor fireplaces throughout, a lobby bar, a grab-and-go coffee shop, a 3,200-square foot waterside pavilion with fantastic views, a resort-style saltwater outdoor pool with poolside cabanas, an indoor pool, a fitness center, and a seasonal ice-skating rink. The Company is evaluating numerous operating and physical enhancements to the guest experience to drive increased cash flow. Pebblebrook believes the overall opportunity is to reposition the property to a higher level, given its unique location and amenities.

Potential improvements include fully renovating the guestrooms and guest bathrooms, upgrading the lobby, arrival experience, and landscaping, refurbishing the restaurants and bars, adding a market, relocating/upgrading the spa, reimagining the Grand Ballroom, South Lawn, and outdoor pavilion spaces, and adding new guest activities and amenities. In addition, the Company has the right to purchase the marina (which includes 22 slips accommodating boats up to 240 feet) in 2027. The resort will also become part of Curator Hotel & Resort Collection, which is expected to generate a wide array of expense reductions combined with enhanced technology and operating initiatives.

Based on the estimated May 2022 trailing-twelve-month performance, the hotel generated total revenue per available room (“TRevPAR”) of $401, hotel earnings before interest, taxes, depreciation, and amortization (“hotel EBITDA”) of $13.6 million, and hotel net operating income (“hotel NOI”), after a 4% capital reserve, of $12.1 million. The acquisition of Gurney's Newport brings the total number of properties in the Company's portfolio to 55, including 13 unique drive-to, independent lifestyle resorts. Pebblebrook funded the acquisition with cash on hand and proceeds from its senior unsecured revolving credit facility.