UPDATE 3-Pebblebrook IPO holds steady in NYSE debut

* Shares close up 45 cents at $20.45

* Pebblebrook sold 17.5 mln shares, raised $350 mln

* Pebblebrook trading on NYSE under "PEB"
(Adds analyst comments and byline, updates shares to close)

By Clare Baldwin and Deepa Seetharaman

NEW YORK, Dec 9 (Reuters) - Shares of Pebblebrook Hotel
Trust (PEB.N) held steady in their debut on the New York Stock
Exchange, trading up only 45 cents from Tuesday's initial
public offering price of $20.

The Maryland-based real estate investment trust (REIT) on
Tuesday raised about $350 million after matching pricing
expectations. Pebblebrook, which was formed in October, does
not currently own any properties, but plans to buy hotels in
major U.S. cities and in major coastal markets.

Roughly $30 billion in hotel debt backed by commercial
mortgage-backed securities comes due over the next three years,
according to Trepp LLC. It is unclear how many hotel owners
will be able to meet their payments and some owners could sell
their hotels, presenting an opportunity for companies like
Pebblebrook.

"Whether this hotel distress is a wave or a trickle --
that's pretty uncertain. That's going to affect whether or not
they're (Pebblebrook) going to have any buying opportunities,"
said Morningstar hotel REIT analyst Jason Ren.

"They (Pebblebrook) might not find the fire sales they're
looking for."

On Tuesday another REIT, Chesapeake Lodging Trust,
postponed indefinitely its initial public offering, an
underwriter said, citing "market conditions." Chesapeake was
hoping to raise roughly $250 million.

Another hotel REIT, Massachusetts-based Pyramid Hotels &
Resorts Inc, filed with the U.S. Securities and Exchange
Commission for a $275 million IPO earlier this week.

Analysts say low property prices and a steadying stock
market are attractive but warn that high-end hotels have been
hurt by a sharp fall-off in business travel, and have cut rates
to attract guests, leaving owners with high levels of debt.

The Dow Jones U.S. Hotels index has shot up more than 60
percent this year on signs of an economic recovery, but the
pace of its growth has slowed in recent months. The outlook
from industry bellwethers Marriott International Inc (MAR.N)
and Starwood Hotels & Resorts Worldwide Inc (HOT.N), is weak.

"I think it's rather bold in this particular market for
anyone to come out with any real estate investment trusts,"
said IPOfinancial.com President David Menlow. "The fundamentals
of the hotel industry are still questionable in the eyes of
investors.

LEANING ON MANAGEMENT

Pebblebrook does not have an operating history, but instead
is leaning on the experience of management.

Chief Executive Officer Jon Bortz founded LaSalle Hotel
Properties (LHO.N), which is now the third-largest REIT by
market capitalization on the Dow Jones U.S. Hotels index, and
served as its chairman and CEO.

Green Street Advisors' John Arabia said that Bortz, as head
of LaSalle, was able to deliver "outsized shareholder returns"
compared with rival hotel REITs.

"The simple fact that he was able to raise money in a blind
pool REIT speaks volumes about his reputation," Arabia said.

Other analysts also mentioned that Pebblebrook will face
stiff competition from established publicly-traded hotel REITs.
Companies like Host Hotels & Resorts (HST.N), the largest U.S.
hotel REIT by market capitalization, have expressed interest in
buying hotels that fit its profile.

"There are publicly traded hotel REITs that have excellent
liquidity, resources and debt maturities," Ren said. "They have
the healthy balance sheet, they can be aquisitive and you have
those years of financial statements and records."

After the offering and concurrent private placement the
company will have roughly $30 million and no debt, according to
the filing.

The IPOs underwriters, led by Bank of America Merrill Lynch
(BAC.N), Raymond James (RJF.N), and Wells Fargo Securities
(WFC.N), have the option to buy an additional 2.625 million
shares.
(Reporting by Clare Baldwin and Deepa Seetharaman, editing by
Gerald E. McCormick, Dave Zimmerman and Matthew Lewis)