UPDATE 1-Pebblebrook buys first hotel since going public

Mon Jun 7, 2010 7:08am EDT

* Buys Bethesda hotel for $67.1 mln

* Co's first buy since going public last year

June 7 (Reuters) - Pebblebrook Hotel Trust (PEB.N) said it bought the Doubletree Bethesda Hotel and Executive Meeting Center for $67.1 million, the first deal for the company that was formed to take advantage of acquisition opportunities in the lodging space.

Pebblebrook said it funded the acquisition of the 269-room, upscale hotel located in downtown Bethesda, through its initial public offering.

The hotel will continue to be operated according to a franchise agreement with Doubletree, a subsidiary of Hilton Worldwide, and will be managed by Thayer Lodging Group.

Pebblebrook was formed in October and went public in December for about $350 million.

The Maryland-based company said it expects the hotel to generate earnings before interest, tax, depreciation and amortization of about $5.1 million to $5.6 million and net operating income, after capital reserves, of about $4.4 million to $4.9 million.

This does not include the amount the company plans to shell out over the next 12 to 24 months on guest room improvements and repairs to the hotel's underground garage and the impact of the revamps on the hotel's EBITDA and net operating income.

The company, led by LaSalle Hotel Properties (LHO.N) founder Jon Bortz, has also signed agreements for four other hotels.

Shares of the company closed at $18.36 Friday on the New York Stock Exchange. (Reporting by Abhishek Takle in Bangalore; Editing by Don Sebastian)

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