Pebblebrook Hotel Trust Acquires the 160-room Prescott Hotel in San Francisco, CA for $49 Million

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. May 27, 2014

BETHESDA, MD - May 27, 2014 - Pebblebrook Hotel Trust (NYSE:PEB) (the "Company") today announced that it has acquired the Prescott Hotel for $49.0 million. The 160-room hotel is located in the heart of Union Square in San Francisco, California. The property will continue to be managed by Kimpton Hotels & Restaurants ("Kimpton").

"We're excited about our acquisition of the Prescott Hotel and our opportunity to further expand our already strong presence in the highly desirable San Francisco market," said Jon Bortz, Chairman and Chief Executive Officer of Pebblebrook Hotel Trust. "Just one block west of Union Square, this hotel, which represents our sixth hotel investment in San Francisco, is attractively located in the city's world-renowned shopping and entertainment district. The property is central to San Francisco's primary business demand drivers, including the Financial District, the Moscone Convention Center and the Union Square submarket, which has historically outperformed all other submarkets within San Francisco due to its well-balanced, diversified mix of leisure, corporate, group and convention demand."

The 160-room, upper upscale, full-service Prescott Hotel is located on Post Street just one block from Union Square, the city's most popular retail and visitor attraction. This hotel is also just three blocks from the Company's Sir Francis Drake Hotel, as well as just blocks away from the Moscone Convention Center, the world famous Powell & Market cable car turntable and the Westfield San Francisco Centre urban shopping mall. San Francisco consistently ranks among the top tourist destinations in the world and serves as a West Coast hub for tourism, technology, biomedical, life sciences, banking and financial services.

The Prescott Hotel is comprised of two buildings, 545 Post Street, in which the Company will own a fee simple interest consisting of 96 guest rooms (seven stories), and 555 Post Street, an adjacent attached building, in which the Company will own a leasehold interest consisting of 64 guest rooms (located on floors three though seven). The Company's leasehold interest in the 555 Post Street building currently has 75 years remaining and expires in 2089.

545 Post Street was originally built in 1913 as the Cecil Hotel and 555 Post Street was originally built in 1922 for the Union League Club. Both buildings were renovated, repositioned and opened as The Prescott Hotel in 1989. The hotel's 160 guest rooms feature high-speed wireless internet access, fully stocked honor bars, 37" LG flat screen televisions, upscale bath amenities and Kimpton signature leopard-print bathrobes. The hotel also includes 600 square feet of meeting space, a fitness center and offers valet parking.

In 2013, the Prescott Hotel operated at 88 percent occupancy, with an average daily rate ("ADR") of $206 and room revenue per available room ("RevPAR") of $181. During the next 12 months, the Company currently forecasts that the hotel will generate earnings before interest, taxes, depreciation and amortization ("EBITDA") of $3.2 to $3.8 million and net operating income after capital reserves ("NOI") of $2.7 to $3.3 million.

The Company plans to undertake a comprehensive renovation and repositioning of the hotel sometime between 2015 and 2016, including all guest rooms, bathrooms and public areas. The property's design will be overseen by Dawson Design Associates, the same design team that helped reposition the Company's Hotel Zetta and that is helping reposition the Company's Radisson Hotel Fisherman's Wharf, both of which are also located in San Francisco, California. The full scope and timing of the renovation are not yet fully defined, but concept and design work will commence shortly.

"We are thrilled with the opportunity to creatively reposition the Prescott Hotel," noted Mr. Bortz. "We believe a renovated and repositioned product will be positively received in the vibrant Union Square market and the comprehensive nature of the repositioning will bring a new and unique guest experience to San Francisco - stay tuned."

The Prescott Hotel will continue to be managed by Kimpton, which has managed the Prescott Hotel since 1989. In addition to the Prescott Hotel, Kimpton also manages eight of the Company's other hotels: Argonaut Hotel in Fisherman's Wharf; Hotel Palomar in SOMA just off Market Street; Sir Francis Drake Hotel on Powell Street; Hotel Monaco Seattle and Hotel Vintage Seattle in downtown Seattle, Washington; Hotel Vintage Plaza Portland in downtown Portland, Oregon; Hotel Monaco Washington DC in downtown Washington, DC; and Grand Hotel Minneapolis in downtown Minneapolis, Minnesota.

"We're pleased with the opportunity to expand our very successful relationship with Kimpton Hotels & Restaurants," continued Mr. Bortz. "Their strong track record, market knowledge and extensive experience in operating high-quality boutique properties such as the Prescott Hotel gives us immense confidence in the future for this property."

"We are delighted to be furthering our relationship with Pebblebrook Hotel Trust," said Kimpton's CEO and President, Mike Depatie. "Our successful relationship continues to grow, and we look forward to further collaborative successes."

The Company expects to incur approximately $0.3 million of costs related to the acquisition of the hotel and $1.4 million of costs associated with the defeasance of an existing loan.

The acquisition of the Prescott Hotel brings the total number of properties in the Company's portfolio to 30 and marks the Company's sixth investment in San Francisco, California.

This press release contains certain "forward-looking statements" relating to, among other things, potential property acquisitions, hotel EBITDA, hotel net operating income after capital reserves, acquisitions costs and projected demand. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," "forecast," "continue," "plan" or other similar words or expressions. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections or other forward-looking information. Examples of forward-looking statements include the following: projections of hotel-level EBITDA and net operating income after capital reserves; projections of acquisition costs; descriptions of the Company's plans or objectives for future operations, acquisitions or services; forecasts of future economic performance; and descriptions of assumptions underlying or relating to any of the foregoing expectations regarding the timing of their occurrence. These forward-looking statements are subject to various risks and uncertainties, many of which are beyond the Company's control, which could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to, the state of the U.S. economy, supply and demand in the hotel industry and other factors as are described in greater detail in the Company's filings with the Securities and Exchange Commission ("SEC"), including, without limitation, the Company's Annual Report on Form 10-K for the year ended December 31, 2013. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

For further information about the Company's business and financial results, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's SEC filings, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Investor Relations section of the Company's website at www.pebblebrookhotels.com and at www.sec.gov.

All information in this release is as of May 22, 2014. The Company undertakes no duty to update the statements in this release to conform the statements to actual results or changes in the Company's expectations. The Company assumes no responsibility for the contents or accuracy of the information on any of the non-Company websites mentioned herein, which are included solely for ease of reference.

For additional information or to receive press releases via email, please visit our website at www.pebblebrookhotels.com