NASHVILLE, TN—Pebblebrook Hotel Trust has acquired Union Station Hotel, Autograph Collection for $52.3 million. The 125-room historic hotel is located on Broadway in downtown Nashville. The property will maintain its association with Marriott’s Autograph Collection and will be operated by Sage Hospitality.
“This iconic hotel represents our first hotel investment in Nashville’s central business district,” said Jon Bortz, chairman and CEO of Pebblebrook Hotel Trust. “The property is adjacent to the Frist Center for Visual Arts, down the street from the recently opened and well-received Music City Center Convention Center, and just blocks from both Vanderbilt University and the city’s financial district, downtown Nashville’s most prominent demand generators. The hotel’s excellent accessibility and irreplaceable, historic architecture, including its spectacular lobby and public spaces, make this acquisition an impressive addition to our high-quality portfolio.”
Union Station Hotel is an upper-upscale, full-service hotel. The hotel, a National Historic Landmark, first opened in 1900 as the L&N Railroad Station. The property was converted to a hotel in 1986 and underwent an $11-million renovation in 2007, as well as an additional $1.9-million renovation to convert the property to an Autograph Collection by Marriott hotel in 2012.
The hotel features a grand lobby with a 65-ft.-high, barrel-vaulted ceiling and the veranda, an outdoor covered terrace. Union Station Hotel has 125 guestrooms, including 12 suites, and 12,000 sq. ft. of meeting and event space. The property’s restaurant, Prime 108, offers an array of signature cocktails and an extensive wine list. Prime 108 lounge features premium cocktails and is located directly off the lobby. Union Station Hotel also features a fitness center, business center and valet parking.
For the trailing 12 months ended October 2014, Union Station Hotel operated at 82% occupancy, with an average daily rate of $249 and RevPAR of $204. In 2015, the company currently forecasts that the hotel will generate EBITDA of $4.5 to $5.0 million and net operating income after capital reserves of $3.8 to $4.3 million.
The company expects to invest $5.0 to $7.0 million of capital to refresh the guestrooms and public areas, which it anticipates completing by no later than the middle of 2016.
Sage will manage Union Station Hotel under a new hotel operating agreement, and the company will assume the hotel’s existing franchise agreement with Marriott’s Autograph Collection.