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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM | 10-Q

☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024
OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .
Commission File Number 001-34571

PEBBLEBROOK HOTEL TRUST
| (Exact Name of Registrant as Specified in Its Charter) |

Maryland |  | 27-1055421
(State of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)
4747 Bethesda Avenue, Suite 1100, Bethesda, Maryland |  | 20814
(Address of Principal Executive Offices) |  | (Zip Code)

(240) | 507-1300
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: |  |  |  |
Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Common Shares, $0.01 par value per share |  | PEB |  | New York Stock Exchange
Series E Cumulative Redeemable Preferred Shares, $0.01 par value |  | PEB-PE |  | New York Stock Exchange
Series F Cumulative Redeemable Preferred Shares, $0.01 par value |  | PEB-PF |  | New York Stock Exchange
Series G Cumulative Redeemable Preferred Shares, $0.01 par value |  | PEB-PG |  | New York Stock Exchange
Series H Cumulative Redeemable Preferred Shares, $0.01 par value |  | PEB-PH |  | New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☑ |  |  | Accelerated filer | ☐
Non-accelerated filer | ☐ |  |  | Smaller reporting company | ☐
|  |  |  | Emerging growth company | ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class |  | Outstanding at November 1, 2024
Common shares of beneficial interest ($0.01 par value per share) |  | 119,693,442

Pebblebrook Hotel Trust TABLE OF CONTENTS

| Page
PART I. FINANCIAL INFORMATION
Item 1. | Financial Statements. | 3
| Consolidated Balance Sheets - September 30, 2024 (unaudited) and December 31, 2023 | 3
| Consolidated Statements of Operations and Comprehensive Income (unaudited) - Three and nine months ended September 30, 2024 and 2023 | 4
| Consolidated Statements of Equity (unaudited) - Three and nine months ended September 30, 2024 and 2023 | 6
| Consolidated Statements of Cash Flows (unaudited) - Nine months ended September 30, 2024 and 2023 | 8
| Notes to the Consolidated Financial Statements (unaudited) | 9
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations. | 24
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 32
Item 4. | Controls and Procedures. | 32
PART II. OTHER INFORMATION
Item 1. | Legal Proceedings. | 33
Item 1A. | Risk Factors. | 33
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 33
Item 3. | Defaults Upon Senior Securities. | 33
Item 4. | Mine Safety Disclosures. | 33
Item 5. | Other Information. | 34
Item 6. | Exhibits. | 35

2

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.

Pebblebrook Hotel Trust Consolidated Balance Sheets (in thousands, except share and per-share data)
| September 30, 2024 |  | December 31, 2023
| (Unaudited) |  |
ASSETS |  |  |
Investment in hotel properties, net | $ | 5,400,440 |  |  | $ | 5,490,776 |
Cash and cash equivalents | 133,965 |  |  | 183,747 |
Restricted cash | 10,292 |  |  | 9,894 |
Hotel receivables (net of allowance for doubtful accounts of $428 and $689, respectively) | 61,039 |  |  | 43,912 |
Prepaid expenses and other assets | 116,841 |  |  | 96,644 |
Total assets | $ | 5,722,577 |  |  | $ | 5,824,973 |
LIABILITIES AND EQUITY |  |  |
Debt | $ | 2,207,714 |  |  | $ | 2,319,801 |
Accounts payable, accrued expenses and other liabilities | 243,904 |  |  | 238,644 |
Lease liabilities - operating leases | 320,714 |  |  | 320,617 |
Deferred revenues | 86,878 |  |  | 76,874 |
Accrued interest | 9,612 |  |  | 6,830 |
Distribution payable | 11,857 |  |  | 11,862 |
Total liabilities | 2,880,679 |  |  | 2,974,628 |
Commitments and contingencies (Note 11) |  |  |
Shareholders’ equity: |  |  |
Preferred shares of beneficial interest, $.01 par value (liquidation preference $690,000 at September 30, 2024 and December 31, 2023), 100,000,000 shares authorized; 27,600,000 shares issued and outstanding at September 30, 2024 and December 31, 2023 | 276 |  |  | 276 |
Common shares of beneficial interest, $.01 par value, 500,000,000 shares authorized; 119,285,394 shares issued and outstanding at September 30, 2024 and 120,191,349 shares issued and outstanding at December 31, 2023 | 1,193 |  |  | 1,202 |
Additional paid-in capital | 4,069,808 |  |  | 4,078,912 |
Accumulated other comprehensive income (loss) | 11,263 |  |  | 24,374 |
Distributions in excess of retained earnings | (1,330,539) |  |  | (1,341,264) |
Total shareholders’ equity | 2,752,001 |  |  | 2,763,500 |
Non-controlling interests | 89,897 |  |  | 86,845 |
Total equity | 2,841,898 |  |  | 2,850,345 |
Total liabilities and equity | $ | 5,722,577 |  |  | $ | 5,824,973 |

The accompanying notes are an integral part of these financial statements.
3

Table of Contents

Pebblebrook Hotel Trust Consolidated Statements of Operations and Comprehensive Income (in thousands, except share and per-share data)
(Unaudited)
| For the three months ended September 30, |  | For the nine months ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Revenues: |  |  |  |  |  |  |
Room | $ | 262,755 |  |  | $ | 259,397 |  |  | $ | 714,633 |  |  | $ | 706,705 |
Food and beverage | 95,998 |  |  | 91,661 |  |  | 278,613 |  |  | 261,172 |
Other operating | 45,777 |  |  | 44,741 |  |  | 122,463 |  |  | 117,984 |
Total revenues | 404,530 |  |  | 395,799 |  |  | 1,115,709 |  |  | 1,085,861 |
Expenses: |  |  |  |  |  |  |
Hotel operating expenses: |  |  |  |  |  |  |
Room | 68,721 |  |  | 68,065 |  |  | 188,747 |  |  | 189,179 |
Food and beverage | 71,346 |  |  | 69,091 |  |  | 203,281 |  |  | 196,748 |
Other direct and indirect | 116,953 |  |  | 112,596 |  |  | 328,705 |  |  | 324,164 |
Total hotel operating expenses | 257,020 |  |  | 249,752 |  |  | 720,733 |  |  | 710,091 |
Depreciation and amortization | 57,546 |  |  | 63,272 |  |  | 172,051 |  |  | 179,598 |
Real estate taxes, personal property taxes, property insurance, and ground rent | 35,274 |  |  | 32,905 |  |  | 92,681 |  |  | 91,380 |
General and administrative | 11,814 |  |  | 11,549 |  |  | 35,937 |  |  | 32,739 |
Impairment | 1,908 |  |  | 71,416 |  |  | 1,908 |  |  | 71,416 |
Gain on sale of hotel properties | — |  |  | — |  |  | — |  |  | (30,219) |
Business interruption insurance income | (7,059) |  |  | (10,881) |  |  | (18,340) |  |  | (32,985) |
Other operating expenses | 963 |  |  | 3,829 |  |  | 4,083 |  |  | 9,876 |
Total operating expenses | 357,466 |  |  | 421,842 |  |  | 1,009,053 |  |  | 1,031,896 |
Operating income (loss) | 47,064 |  |  | (26,043) |  |  | 106,656 |  |  | 53,965 |
Interest expense | (27,925) |  |  | (31,022) |  |  | (82,285) |  |  | (87,996) |
Other | 793 |  |  | 1,403 |  |  | 1,336 |  |  | 2,538 |
Income (loss) before income taxes | 19,932 |  |  | (55,662) |  |  | 25,707 |  |  | (31,493) |
Income tax (expense) benefit | 25,213 |  |  | (822) |  |  | 24,157 |  |  | (853) |
Net income (loss) | 45,145 |  |  | (56,484) |  |  | 49,864 |  |  | (32,346) |
Net income (loss) attributable to non-controlling interests | 1,488 |  |  | 658 |  |  | 3,621 |  |  | 2,999 |
Net income (loss) attributable to the Company | 43,657 |  |  | (57,142) |  |  | 46,243 |  |  | (35,345) |
Distributions to preferred shareholders | (10,631) |  |  | (10,988) |  |  | (31,894) |  |  | (32,963) |
Net income (loss) attributable to common shareholders | $ | 33,026 |  |  | $ | (68,130) |  |  | $ | 14,349 |  |  | $ | (68,308) |
Net income (loss) per share available to common shareholders, basic | $ | 0.27 |  |  | $ | (0.57) |  |  | $ | 0.12 |  |  | $ | (0.56) |
Net income (loss) per share available to common shareholders, diluted | $ | 0.24 |  |  | $ | (0.57) |  |  | $ | 0.12 |  |  | $ | (0.56) |
Weighted-average number of common shares, basic | 119,640,463 |  |  | 120,057,744 |  |  | 119,938,931 |  |  | 122,394,293 |
Weighted-average number of common shares, diluted | 149,351,866 |  |  | 120,057,744 |  |  | 120,367,351 |  |  | 122,394,293 |

4

Table of Contents

Pebblebrook Hotel Trust Consolidated Statements of Operations and Comprehensive Income - Continued (in thousands, except share and per-share data)
(Unaudited)
| For the three months ended September 30, |  | For the nine months ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Comprehensive Income: |  |  |  |  |  |  |
Net income (loss) | $ | 45,145 |  |  | $ | (56,484) |  |  | $ | 49,864 |  |  | $ | (32,346) |
Other comprehensive income (loss): |  |  |  |  |  |  |
Change in fair value of derivative instruments | (12,177) |  |  | 9,897 |  |  | 5,067 |  |  | 30,971 |
Amounts reclassified from other comprehensive income | (5,995) |  |  | (8,003) |  |  | (18,299) |  |  | (20,766) |
Comprehensive income (loss) | 26,973 |  |  | (54,590) |  |  | 36,632 |  |  | (22,141) |
Comprehensive income (loss) attributable to non-controlling interests | 1,334 |  |  | 674 |  |  | 3,500 |  |  | 3,094 |
Comprehensive income (loss) attributable to the Company | $ | 25,639 |  |  | $ | (55,264) |  |  | $ | 33,132 |  |  | $ | (25,235) |

The accompanying notes are an integral part of these financial statements.
5

Table of Contents

Pebblebrook Hotel Trust Consolidated Statements of Equity (in thousands, except share data)
(Unaudited)
|  | For the three months ended September 30, 2024
|  | Preferred Shares |  | Common Shares |  | Additional Paid-In Capital |  | Accumulated Other Comprehensive Income (Loss) |  | Distributions in Excess of Retained Earnings |  | Total Shareholders' Equity |  | Non-Controlling Interests |  | Total Equity
|  | Shares |  | Amount |  | Shares |  | Amount |  |  |  |  |  |
Balance at June 30, 2024 |  | 27,600,000 |  | $ | 276 |  |  | 120,094,380 |  |  | $ | 1,201 |  |  | $ | 4,077,360 |  |  | $ | 29,281 |  |  | $ | (1,362,359) |  |  | $ | 2,745,759 |  |  | $ | 88,676 |  |  | $ | 2,834,435 |
Repurchase of common shares |  | — |  | — |  |  | (854,993) |  |  | (9) |  |  | (9,991) |  |  | — |  |  | — |  |  | (10,000) |  |  | — |  |  | (10,000) |
Share-based compensation |  | — |  | — |  |  | 46,007 |  |  | 1 |  |  | 2,439 |  |  | — |  |  | — |  |  | 2,440 |  |  | 1,061 |  |  | 3,501 |
Distributions on common shares/units |  | — |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,206) |  |  | (1,206) |  |  | (10) |  |  | (1,216) |
Distributions on preferred shares/units |  | — |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (10,631) |  |  | (10,631) |  |  | (1,164) |  |  | (11,795) |
Other comprehensive income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Change in fair value of derivative instruments |  | — |  | — |  |  | — |  |  | — |  |  | — |  |  | (12,023) |  |  | — |  |  | (12,023) |  |  | (154) |  |  | (12,177) |
Amounts reclassified from other comprehensive income |  | — |  | — |  |  | — |  |  | — |  |  | — |  |  | (5,995) |  |  | — |  |  | (5,995) |  |  | — |  |  | (5,995) |
Net income (loss) |  | — |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 43,657 |  |  | 43,657 |  |  | 1,488 |  |  | 45,145 |
Balance at September 30, 2024 |  | 27,600,000 |  | $ | 276 |  |  | 119,285,394 |  | $ | 1,193 |  |  | $ | 4,069,808 |  |  | $ | 11,263 |  |  | $ | (1,330,539) |  |  | $ | 2,752,001 |  |  | $ | 89,897 |  |  | $ | 2,841,898 |

|  | For the three months ended September 30, 2023
|  | Preferred Shares |  | Common Shares |  | Additional Paid-In Capital |  | Accumulated Other Comprehensive Income (Loss) |  | Distributions in Excess of Retained Earnings |  | Total Shareholders' Equity |  | Non-Controlling Interests |  | Total Equity
|  | Shares |  | Amount |  | Shares |  | Amount |  |  |  |  |  |
Balance at June 30, 2023 |  | 28,600,000 |  |  | $ | 286 |  |  | 120,057,744 |  |  | $ | 1,201 |  |  | $ | 4,094,680 |  |  | $ | 43,956 |  |  | $ | (1,225,748) |  |  | $ | 2,914,375 |  |  | $ | 89,737 |  |  | $ | 3,004,112 |
Share-based compensation |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,450 |  |  | — |  |  | — |  |  | 2,450 |  |  | 870 |  |  | 3,320 |
Distributions on common shares/units |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,211) |  |  | (1,211) |  |  | (11) |  |  | (1,222) |
Distributions on preferred shares/units |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (10,988) |  |  | (10,988) |  |  | (1,164) |  |  | (12,152) |
Other comprehensive income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Change in fair value of derivative instruments |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 9,881 |  |  | — |  |  | 9,881 |  |  | 16 |  |  | 9,897 |
Amounts reclassified from other comprehensive income |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (8,003) |  |  | — |  |  | (8,003) |  |  | — |  |  | (8,003) |
Net income (loss) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (57,142) |  |  | (57,142) |  |  | 658 |  |  | (56,484) |
Balance at September 30, 2023 |  | 28,600,000 |  |  | $ | 286 |  |  | 120,057,744 |  |  | $ | 1,201 |  |  | $ | 4,097,130 |  |  | $ | 45,834 |  |  | $ | (1,295,089) |  |  | $ | 2,849,362 |  |  | $ | 90,106 |  |  | $ | 2,939,468 |

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Pebblebrook Hotel Trust Consolidated Statements of Equity - Continued (in thousands, except share data)
(Unaudited)
|  | For the nine months ended September 30, 2024
|  | Preferred Shares |  | Common Shares |  | Additional Paid-In Capital |  | Accumulated Other Comprehensive Income (Loss) |  | Distributions in Excess of Retained Earnings |  | Total Shareholders' Equity |  | Non-Controlling Interests |  | Total Equity
|  | Shares |  | Amount |  | Shares |  | Amount |  |  |  |  |  |
Balance at December 31, 2023 |  | 27,600,000 |  | $ | 276 |  |  | 120,191,349 |  |  | $ | 1,202 |  |  | $ | 4,078,912 |  |  | $ | 24,374 |  |  | $ | (1,341,264) |  |  | $ | 2,763,500 |  |  | $ | 86,845 |  |  | $ | 2,850,345 |
Issuance of common shares for Board of Trustees compensation |  | — |  | — |  |  | 47,497 |  |  | 1 |  |  | 744 |  |  | — |  |  | — |  |  | 745 |  |  | — |  |  | 745 |
Repurchase of common shares |  | — |  | — |  |  | (1,242,644) |  |  | (13) |  |  | (16,838) |  |  | — |  |  | — |  |  | (16,851) |  |  | — |  |  | (16,851) |
Share-based compensation |  | — |  | — |  |  | 289,192 |  |  | 3 |  |  | 6,990 |  |  | — |  |  | — |  |  | 6,993 |  |  | 3,091 |  |  | 10,084 |
Distributions on common shares/units |  | — |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,624) |  |  | (3,624) |  |  | (47) |  |  | (3,671) |
Distributions on preferred shares/units |  | — |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (31,894) |  |  | (31,894) |  |  | (3,492) |  |  | (35,386) |
Other comprehensive income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Change in fair value of derivative instruments |  | — |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,188 |  |  | — |  |  | 5,188 |  |  | (121) |  |  | 5,067 |
Amounts reclassified from other comprehensive income |  | — |  | — |  |  | — |  |  | — |  |  | — |  |  | (18,299) |  |  | — |  |  | (18,299) |  |  | — |  |  | (18,299) |
Net income (loss) |  | — |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 46,243 |  |  | 46,243 |  |  | 3,621 |  |  | 49,864 |
Balance at September 30, 2024 |  | 27,600,000 |  | $ | 276 |  |  | 119,285,394 |  | $ | 1,193 |  |  | $ | 4,069,808 |  |  | $ | 11,263 |  |  | $ | (1,330,539) |  |  | $ | 2,752,001 |  |  | $ | 89,897 |  |  | $ | 2,841,898 |

|  | For the nine months ended September 30, 2023
|  | Preferred Shares |  | Common Shares |  | Additional Paid-In Capital |  | Accumulated Other Comprehensive Income (Loss) |  | Distributions in Excess of Retained Earnings |  | Total Shareholders' Equity |  | Non-Controlling Interests |  | Total Equity
|  | Shares |  | Amount |  | Shares |  | Amount |  |  |  |  |  |
Balance at December 31, 2022 |  | 28,600,000 |  |  | $ | 286 |  |  | 126,345,293 |  |  | $ | 1,263 |  |  | $ | 4,182,359 |  |  | $ | 35,724 |  |  | $ | (1,223,117) |  |  | $ | 2,996,515 |  |  | $ | 88,028 |  |  | $ | 3,084,543 |
Issuance of common shares for Board of Trustees compensation |  | — |  |  | — |  |  | 55,480 |  |  | 1 |  |  | 753 |  |  | — |  |  | — |  |  | 754 |  |  | — |  |  | 754 |
Repurchase of common shares |  | — |  |  | — |  |  | (6,578,436) |  |  | (65) |  |  | (92,688) |  |  | — |  |  | — |  |  | (92,753) |  |  | — |  |  | (92,753) |
Share-based compensation |  | — |  |  | — |  |  | 235,407 |  |  | 2 |  |  | 6,706 |  |  | — |  |  | — |  |  | 6,708 |  |  | 2,523 |  |  | 9,231 |
Distributions on common shares/units |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,664) |  |  | (3,664) |  |  | (47) |  |  | (3,711) |
Distributions on preferred shares/units |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (32,963) |  |  | (32,963) |  |  | (3,492) |  |  | (36,455) |
Other comprehensive income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Change in fair value of derivative instruments |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 30,876 |  |  | — |  |  | 30,876 |  |  | 95 |  |  | 30,971 |
Amounts reclassified from other comprehensive income |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (20,766) |  |  | — |  |  | (20,766) |  |  | — |  |  | (20,766) |
Net income (loss) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (35,345) |  |  | (35,345) |  |  | 2,999 |  |  | (32,346) |
Balance at September 30, 2023 |  | 28,600,000 |  | $ | 286 |  |  | 120,057,744 |  | $ | 1,201 |  |  | $ | 4,097,130 |  |  | $ | 45,834 |  |  | $ | (1,295,089) |  |  | $ | 2,849,362 |  |  | $ | 90,106 |  |  | $ | 2,939,468 |

The accompanying notes are an integral part of these financial statements.
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Pebblebrook Hotel Trust Consolidated Statements of Cash Flows (in thousands)
(Unaudited)
| For the nine months ended September 30,
| 2024 |  | 2023
Operating activities: |  |  |
Net income (loss) | $ | 49,864 |  |  | $ | (32,346) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |  |
Depreciation and amortization | 172,051 |  |  | 179,598 |
Benefit for deferred income taxes | (26,976) |  |  | — |
Share-based compensation | 10,084 |  |  | 9,231 |
Amortization of deferred financing costs, non-cash interest and other amortization | 9,295 |  |  | 9,578 |
Gain on sale of hotel properties | — |  |  | (30,219) |
Impairment | 1,908 |  |  | 71,416 |
Non-cash ground rent | 7,385 |  |  | 7,426 |
Other adjustments | (4,181) |  |  | (7,348) |
Changes in assets and liabilities: |  |  |
Hotel receivables | (16,866) |  |  | (12,087) |
Prepaid expenses and other assets | (13,899) |  |  | (26,200) |
Accounts payable and accrued expenses | 4,529 |  |  | 28,619 |
Deferred revenues | 12,556 |  |  | 4,615 |
Net cash provided by (used in) operating activities | 205,750 |  |  | 202,283 |
Investing activities: |  |  |
Improvements and additions to hotel properties | (100,862) |  |  | (140,057) |
Proceeds from sales of hotel properties | — |  |  | 224,384 |
Property insurance proceeds | 21,737 |  |  | 14,361 |
Other investing activities | (742) |  |  | (2,414) |
Net cash provided by (used in) investing activities | (79,867) |  |  | 96,274 |
Financing activities: |  |  |
Payment of deferred financing costs | (6,379) |  |  | (2,423) |
Proceeds from debt | — |  |  | 140,000 |
Repayments of debt | (111,377) |  |  | (162,988) |
Repurchases of common shares | (16,851) |  |  | (92,753) |
Distributions — common shares/units | (3,659) |  |  | (3,756) |
Distributions — preferred shares/units | (35,386) |  |  | (36,455) |
Other financing activities | (1,615) |  |  | (840) |
Net cash provided by (used in) financing activities | (175,267) |  |  | (159,215) |
Net change in cash and cash equivalents and restricted cash | (49,384) |  |  | 139,342 |
Cash and cash equivalents and restricted cash, beginning of year | 193,641 |  |  | 52,269 |
Cash and cash equivalents and restricted cash, end of period | $ | 144,257 |  |  | $ | 191,611 |

The accompanying notes are an integral part of these financial statements.
8

PEBBLEBROOK HOTEL TRUST
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Organization
Pebblebrook Hotel Trust (the "Company") is an internally managed hotel investment company, formed as a Maryland real estate investment trust in October 2009 to opportunistically acquire and invest in hotel properties located primarily in major U.S. cities and resort properties located near our primary target urban markets and select destination resort markets, with an emphasis on major gateway coastal markets.
As of September 30, 2024, the Company owned interests in 46 hotels with a total of 11,933 gue st rooms. The hotel properties are located in: Boston, Massachusetts; Chicago, Illinois; Hollywood, Florida; Jekyll Island, Georgia; Key West, Florida; Los Angeles, California (Beverly Hills, Santa Monica, and West Hollywood); Naples, Florida; Newport, Rhode Island; Portland, Oregon; San Diego, California; San Francisco, California; Santa Cruz, California; Stevenson, Washington; and Washington, D.C.
Substantially all of the Company’s assets are held by, and all of the Company's operations are conducted through, Pebblebrook Hotel, L.P. (the "Operating Partnership"). The Company is the sole general partner of the Operating Partnership. As of September 30, 2024, the Company owned 99.2% of the common limited partnership units issued by the Operating Partnership ("common units"). The remaining 0.8% of the common units are owned by the other limited partners of the Operating Partnership. For the Company to maintain its qualification as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"), it cannot operate the hotels it owns. Therefore, the Operating Partnership and its subsidiaries lease the hotel properties to subsidiaries of Pebblebrook Hotel Lessee, Inc. (collectively with its subsidiaries, "PHL"), a taxable REIT subsidiary ("TRS"), which in turn engage third-party eligible independent contractors to manage the hotels. PHL is consolidated into the Company’s financial statements.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and in conformity with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) applicable to interim financial information. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC. These unaudited consolidated financial statements include all adjustments considered necessary for a fair presentation of the consolidated balance sheets, consolidated statements of operations and comprehensive income, consolidated statements of equity and consolidated statements of cash flows for the periods presented. Interim results are not necessarily indicative of full-year performance, as a result of the impact of seasonal and other short-term variations and the acquisitions and or dispositions of hotel properties. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
The Company and its subsidiaries are separate legal entities and maintain records and books of account separate and apart from each other. The consolidated financial statements include all of the accounts of the Company and its subsidiaries and are presented in accordance with U.S. GAAP. All significant intercompany balances and transactions have been eliminated in consolidation. Investments in entities that the Company does not control, but over which the Company has the ability to exercise significant influence regarding operating and financial policies, are accounted for under the equity method.
Certain reclassifications have been made to the prior period's financial statements to conform to the current year presentation.
Use of Estimates
The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management’s best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from these estimates.
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Risks and Uncertainties
The state of the overall economy can significantly impact hotel operational performance and thus the Company's financial position. Global events as well as national and local events may impact travel trends and the operations of the Company's hotels. In addition, inflation and interest rates may also impact the overall economy as well as the availability of debt. A decline in travel or a significant increase in costs may impact the Company's cash flow and ability to service debt or meet other financial obligations.
New Accounting Pronouncements
Disclosure Improvements
In October 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative ("ASU 2023-06"). ASU 2023-06 incorporates 14 of the 27 disclosure requirements published in SEC Release No. 33-10532 - Disclosure Update and Simplification into various topics within the Accounting Standards Codification ("ASC"). ASU 2023-06's amendments represent clarifications to, or technical corrections of, current requirements. For SEC registrants, the effective date for each amendment will vary based on the date on which the SEC removes that related disclosure from its rules. If the SEC does not act to remove its related requirement by June 30, 2027, any related FASB amendments will be removed from the ASC and will not be effective. Early adoption is prohibited. The Company is currently assessing the potential impacts of ASU 2023-06 and does not expect it to have a material effect on its consolidated financial statements and disclosures.
Segment Reporting
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the impacts of adopting ASU 2023-07 on its consolidated financial statements and disclosures.
Income Taxes
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied on a prospective basis, with the option to apply retrospectively. The Company is currently assessing the impacts of adopting ASU 2023-09 on its consolidated financial statements and disclosures.
Stock Compensation
In March 2024, the FASB issued ASU 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”), to clarify the scope application of profits interest and similar awards by adding illustrative guidance in ASC 718, Compensation—Stock Compensation ("ASC 718"). ASU 2024-01 clarifies how to determine whether profits interest and similar awards should be accounted for as a share-based payment arrangement (ASC 718) or as a cash bonus or profit-sharing arrangement (ASC 710, Compensation—General, or other guidance) and applies to all reporting entities that account for profits interest awards as compensation to employees or non-employees. In addition to adding the illustrative guidance, ASU 2024-01 modified the language in paragraph 718-10-15-3 to improve its clarity and operability without changing the guidance. ASU 2024-01 is effective for fiscal years beginning after December 15, 2024, including interim periods within those annual periods. Early adoption is permitted. The amendments should be applied either retrospectively to all prior periods presented in the financial statements, or prospectively to profits interest and similar awards granted or modified on or after the adoption date. The Company is currently assessing the impacts of adopting ASU 2024-01 on its consolidated financial statements and disclosures.
Note 3. Acquisition and Disposition of Hotel Properties
Acquisitions
There were no acquisitions of hotel properties during the nine months ended September 30, 2024.
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Dispositions
There were no dispositions of hotel properties during the nine months ended September 30, 2024.
The following table summarizes disposition transactions during 2023 (in thousands):

Hotel Property Name |  | Location |  | Sale Date |  | Sale Price
The Heathman Hotel |  | Portland, OR |  | February 22, 2023 |  | $ | 45,000 |
Retail at The Westin Michigan Avenue Chicago |  | Chicago, IL |  | March 17, 2023 |  | 27,300 |
Hotel Colonnade Coral Gables |  | Coral Gables, FL |  | March 28, 2023 |  | 63,000 |
Hotel Monaco Seattle |  | Seattle, WA |  | May 9, 2023 |  | 63,250 |
Hotel Vintage Seattle |  | Seattle, WA |  | May 24, 2023 |  | 33,700 |
Hotel Zoe Fisherman's Wharf |  | San Francisco, CA |  | November 14, 2023 |  | 68,500 |
Marina City Retail at Hotel Chicago Downtown, Autograph Collection |  | Chicago, IL |  | December 21, 2023 |  | 30,000 |
2023 Total |  |  |  |  |  | $ | 330,750 |

For the three and nine months ended September 30, 2023, the accompanying consolidated statements of operations and comprehensive income included operating income (loss) of $0.9 million and $(0.8) million, respectively, excluding impairment loss and gain on sale of hotel properties related to the hotel properties sold or held for sale. There was no impact for the three and nine months ended September 30, 2024.
The sales of the hotel properties described above did not represent a strategic shift that had a major effect on the Company’s operations and financial results, and therefore, did not qualify as discontinued operations.
Note 4. Investment in Hotel Properties
Investment in hotel properties as of September 30, 2024 and December 31, 2023 consisted of the following (in thousands):

| September 30, 2024 |  | December 31, 2023
Land | $ | 810,951 |  |  | $ | 810,633 |
Buildings and improvements | 5,075,632 |  |  | 5,005,894 |
Furniture, fixtures and equipment | 531,877 |  |  | 511,451 |
Finance lease asset | 91,181 |  |  | 91,181 |
Construction in progress | 15,826 |  |  | 27,123 |
| $ | 6,525,467 |  |  | $ | 6,446,282 |
Right-of-use asset, operating leases | 353,552 |  |  | 360,761 |
Investment in hotel properties | $ | 6,879,019 |  |  | $ | 6,807,043 |
Less: Accumulated depreciation | (1,478,579) |  |  | (1,316,267) |
Investment in hotel properties, net | $ | 5,400,440 |  |  | $ | 5,490,776 |

Hurricane Ian
On September 27, 2022, LaPlaya Beach Resort & Club ("LaPlaya") located in Naples, Florida, was impacted by the effects of Hurricane Ian. LaPlaya was closed in anticipation of the storm and required remediation and repairs from the damage and remained closed. In 2023, LaPlaya began reopening in stages as its buildings and facilities were repaired and repairs were substantially complete in the first quarter of 2024. The Company’s insurance policies provide coverage for property damage, business interruption and other costs that were incurred relating to damages sustained during Hurricane Ian. The Company has an insurance receivable for amounts it anticipates to collect from the insurance providers in excess of the applicable deductibles.
For the nine months ended September 30, 2024 and 2023, the Company incurred $0.2 million and $5.1 million, respectively, of costs related to payroll, repair and claims administration for which reimbursement from insurance policies is uncertain and therefore is included in other operating expenses in the Company's consolidated statements of operations and comprehensive income. Through September 30, 2024, the Company received a total of $118.0 million in preliminary advances from the insurance providers. The Company continues to work with the insurance providers on the settlement of the property and business interruption claims.
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Hurricane Helene
On September 26, 2024, LaPlaya was impacted by the effects of Hurricane Helene. Two of its three guestroom buildings, Gulf Tower and Bay Tower, reopened and were operational. However, the Beach House was closed for repairs, with initial assessments indicating the primary impact was to the ground floor. The Company’s insurance policies provide coverage for property damage, business interruption and other costs that were incurred relating to damages sustained during Hurricane Helene in excess of the applicable deductibles. For the nine months ended September 30, 2024, the Company recognized a loss of $1.9 million for damage to LaPlaya, which is included in impairment on the Company’s consolidated statement of operations and comprehensive income. The Company recorded an insurance receivable for the remediation costs incurred and the estimate of the book value of the property and equipment written off in excess of the applicable deductibles. The Company is continuing to evaluate the financial impact of Hurricane Helene and its ability to recover, through insurance policies, any loss due to business interruption or damage to the hotel property.
Impairment
The Company reviews its investment in hotel properties for impairment whenever events or circumstances indicate potential impairment. The Company periodically adjusts its estimate of future operating cash flows and estimated hold periods for certain properties. As a result of this review, the Company may identify an impairment trigger has occurred and assess its investment in hotel properties for recoverability.
During the nine months ended September 30, 2024, no impairment losses were incurred. During the nine months ended September 30, 2023, the Company recognized an impairment loss of $71.4 million related to three hotels as a result of their fair values being lower than their carrying values.
Right-of-use Assets and Lease Liabilities
The Company recognized right-of-use assets and related liabilities related to its ground leases, all of which are operating leases. When the rate implicit in the lease could not be determined, the Company used incremental borrowing rates, which ranged from 4.7% to 7.6%. In addition, the term used includes any options to exercise extensions when it is reasonably certain the Company will exercise such option. See Note 11. Commitments and Contingencies for additional information about the ground leases.
The right-of-use assets and liabilities are amortized to ground rent expense over the term of the underlying lease agreements. As of September 30, 2024, the Company's lease liabilities consisted of operating lease liabilities of $320.7 million and financing lease liabilities of $43.8 million. As of December 31, 2023, the Company's lease liabilities consisted of operating lease liabilities of $320.6 million and financing lease liabilities of $43.4 million. The financing lease liabilities are included in accounts payable, accrued expenses and other liabilities on the Company's accompanying consolidated balance sheets.
Note 5. Debt
On October 13, 2022, the Company entered into the Fifth Amended and Restated Credit Agreement with Bank of America, N.A., as administrative agent and certain other agents and lenders ("Credit Agreement"). The Credit Agreement provides for a $650.0 million senior unsecured revolving credit facility and three $460.0 million unsecured term loan facilities totaling $1.38 billion. The Company may request additional lender commitments to increase the aggregate borrowing capacity under the Credit Agreement up to an additional $970.0 million.
On January 3, 2024, the Company entered into the First Amendment to the Credit Agreement which extended the maturity date of $356.7 million borrowed under Term Loan 2024 to January 2028. This extended indebtedness is referred to as Term Loan 2028. In connection with the extension, the Company also repaid $60.0 million of its borrowings under Term Loan 2024 with available cash. The remaining $43.3 million of Term Loan 2024's balance remained outstanding. On January 3, 2024, the Company also repaid $50.0 million of its outstanding Term Loan 2025 obligation with available cash.
On October 3, 2024, the Company issued $400.0 million aggregate principal amount of its 6.375% senior notes due October 15, 2029. The net proceeds were approximately $390.0 million after deducting discounts and offering expenses paid by the Company, of which $353.3 million was used to repay all $43.3 million of its borrowings under Term Loan 2024, $210.0 million of its borrowings under Term Loan 2025 and $100.0 million of its borrowings under Term Loan 2027.
On November 1, 2024, the Company entered into the Third Amendment to the Credit Agreement which extended the maturity date of $185.2 million borrowed under Term Loan 2025 to January 2029. The Company also extended the maturity date of $602.0 million of its senior unsecured revolving credit facility from October 2026 to October 2028, with the option to extend the new maturity date for two six-month periods.
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The Company's debt consisted of the following as of September 30, 2024 and December 31, 2023 (dollars in thousands):

|  |  |  |  |  | Balance Outstanding as of |
| Interest Rate at September 30, 2024 |  | Maturity Date |  |  | September 30, 2024 |  | December 31, 2023 |
Revolving credit facilities |  |  |  |  |  |  |  |  |
Senior unsecured credit facility | — | (1)(2) | October 2026 |  |  | $ | — |  |  | $ | — |  |
PHL unsecured credit facility | — | (1) | October 2026 |  |  | — |  |  | — |  |
Total revolving credit facilities |  |  |  |  |  | $ | — |  |  | $ | — |  |
Unsecured term loans |  |  |  |  |  |  |  |  |
Term Loan 2024 | 7.05% | (1)(4) | October 2024 |  |  | 43,348 |  |  | 460,000 |  |
Term Loan 2025 | 4.40% | (1) | October 2025 |  |  | 410,000 |  |  | 460,000 |  |
Term Loan 2027 | 5.23% | (1) | October 2027 |  |  | 460,000 |  |  | 460,000 |  |
Term Loan 2028 | 7.05% | (1) | January 2028 |  |  | 356,652 |  |  | — |  |
Term loan principal |  |  |  |  |  | $ | 1,270,000 |  |  | $ | 1,380,000 |  |
Convertible senior notes principal | 1.75% |  | December 2026 |  |  | $ | 750,000 |  |  | $ | 750,000 |  |
Senior unsecured notes principal | 4.93% |  | December 2025 |  |  | $ | 2,400 |  |  | $ | 2,400 |  |
Mortgage loans |  |  |  |  |  |  |  |  |
Margaritaville Hollywood Beach Resort | 7.04% | (3) | September 2026 |  |  | 140,000 |  |  | 140,000 |  |
Estancia La Jolla Hotel & Spa | 5.07% |  | September 2028 |  |  | 56,120 |  |  | 57,497 |  |
Mortgage loans principal |  |  |  |  |  | $ | 196,120 |  |  | $ | 197,497 |  |
Total debt principal |  |  |  |  |  | $ | 2,218,520 |  |  | $ | 2,329,897 |  |
Unamortized debt premiums, discount and deferred financing costs, net |  |  |  |  |  | (10,806) |  |  | (10,096) |  |
Debt, net |  |  |  |  |  | $ | 2,207,714 |  |  | $ | 2,319,801 |  |

______________________
(1) Borrowings bear interest at floating rates. Interest rate at September 30, 2024 gives effect to interest rate hedges.
(2) The Company has the option to extend the maturity date for up to two six-month periods, pursuant to certain terms and conditions and payment of an extension fee.
(3) This loan bears interest at a floating rate equal to daily SOFR plus a spread of 3.75%. The interest rate at September 30, 2024 gives effect to an interest rate swap. The Company has the option to extend the maturity date for up to two one-year periods, pursuant to certain terms and conditions and payment of an extension fee.
(4) Term Loan 2024 was repaid in October 2024 from proceeds of the senior notes offering.
Unsecured Revolving Credit Facilities
The $650.0 million senior unsecured revolving credit facility provided for in the Credit Agreement matures in October 2026 and provides for two six-month extension options, subject to certain terms and conditions and payment of an extension fee. All borrowings under the senior unsecured revolving credit facility bear interest at a rate per annum equal to, at the option of the Company, (i) the Secured Overnight Financing Rate ("SOFR") plus 0.10% (the “SOFR Adjustment”) plus a margin that is based upon the Company’s leverage ratio or (ii) the Base Rate (as defined by the Credit Agreement) plus a margin that is based on the Company’s leverage ratio. The margins for revolving credit facility loans range in amount from 1.45% to 2.50% for SOFR-based loans and 0.45% to 1.50% for Base Rate-based loans, depending on the Company’s leverage ratio. As of September 30, 2024, the Company had no outstanding borrowings, $13.7 million of outstanding letters of credit and a borrowing capacity of $636.3 million remaining on the senior unsecured revolving credit facility. The Company is required to pay an unused commitment fee at an annual rate of 0.20% or 0.30% of the unused portion of the senior unsecured revolving credit facility, depending on the amount of borrowings outstanding. The credit agreement contains certain financial covenants, including a maximum leverage ratio, a minimum fixed charge coverage ratio and a maximum percentage of secured debt to total asset value.
Under the terms of the Credit Agreement, one or more standby letters of credit, up to a maximum aggregate outstanding balance of $30.0 million, may be issued on behalf of the Company by the lenders under the senior unsecured revolving facility. The Company pays a fee for outstanding standby letters of credit at a rate per annum equal to the applicable margin based upon the Company's leverage ratio. Any outstanding standby letters of credit reduce the available borrowings on the senior unsecured revolving credit facility by a corresponding amount. Standby letters of credit of $13.7 million and $13.6 million were outstanding as of September 30, 2024 and December 31, 2023, respectively.
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As of September 30, 2024, the Company also has a $20.0 million unsecured revolving credit facility (the "PHL Credit Facility") to be used for PHL's working capital and general corporate purposes. On October 13, 2022, PHL amended and restated the agreement governing the PHL Credit Facility to extend the maturity to October 2026. The PHL Credit Facility has substantially similar terms as the Company's senior unsecured revolving credit facility. Borrowings on the PHL Credit Facility bear interest at a rate per annum equal to, at the option of the Company, (i) SOFR plus the SOFR Adjustment plus a margin that is based upon the Company’s leverage ratio or (ii) the Base Rate (as defined by the Credit Agreement) plus a margin that is based on the Company’s leverage ratio. The PHL Credit Facility is subject to debt covenants substantially similar to the covenants under the Credit Agreement, which governs the Company's senior unsecured revolving credit facility. As of September 30, 2024, the Company had no borrowings under the PHL Credit Facility and had $20.0 million borrowing capacity remaining available under the PHL Credit Facility.
As of September 30, 2024, the Company was in compliance with all debt covenants of the credit agreements that govern the unsecured revolving credit facilities.
Unsecured Term Loan Facilities
The term loan facilities provided for in the Credit Agreement bear interest at a rate per annum equal to, at the option of the Company, (i) SOFR plus the SOFR Adjustment plus a margin that is based upon the Company’s leverage ratio or (ii) the Base Rate (as defined by the Credit Agreement) plus a margin that is based on the Company’s leverage ratio. The margins for term loans range in amount from 1.40% to 2.45% for SOFR-based loans and 0.40% to 1.45% for Base Rate-based loans, depending on the Company's leverage ratio. The term loans are subject to the debt covenants in the Credit Agreement. As of September 30, 2024, the Company was in compliance with all debt covenants of its term loans.
The Company entered into interest rate swap agreements to fix the SOFR rate on a portion of these unsecured term loan facilities. See Derivative and Hedging Activities for further discussion on the interest rate swaps.
Convertible Senior Notes
In December 2020, the Company issued $500.0 million aggregate principal amount of 1.75% Convertible Senior Notes due December 2026 (the "Convertible Notes"). The net proceeds from the offering of the Convertible Notes were approximately $487.3 million after deducting the underwriting fees and other expenses paid by the Company.
In February 2021, the Company issued an additional $250.0 million aggregate principal amount of Convertible Notes. These additional Convertible Notes were sold at a 5.5% premium to par and generated net proceeds of approximately $257.2 million after deducting the underwriting fees and other expenses paid by the Company of $6.5 million, which was offset by a premium received in the amount of $13.8 million.
The Convertible Notes are governed by an indenture (the “Base Indenture”) between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee. The Convertible Notes bear interest at a rate of 1.75% per annum, payable semi-annually in arrears on June 15th and December 15th of each year, beginning on June 15, 2021. The Convertible Notes will mature on December 15, 2026.
Prior to June 15, 2026, the Convertible Notes will be convertible upon certain circumstances. On and after June 15, 2026, holders may convert any of their Convertible Notes into the Company’s common shares of beneficial interest (“common shares”) at the applicable conversion rate at any time at their election two days prior to the maturity date. The initial conversion rate is 39.2549 common shares per $1,000 principal amount of Convertible Notes, which represents an initial conversion price of approximately $25.47 per share. The conversion rate is subject to adjustment in certain circumstances. As of September 30, 2024 and December 31, 2023, the if-converted value of the Convertible Notes did not exceed the principal amount.
The Company may redeem for cash all or a portion of the Convertible Notes, at its option, after December 20, 2023, upon certain circumstances. The redemption price will be equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If certain make-whole fundamental changes occur, the conversion rate for the Convertible Notes may be increased.
In connection with the Convertible Notes issuances, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain of the underwriters of the offerings of the Convertible Notes or their respective affiliates and other financial institutions. The Capped Call Transactions initially cover, subject to anti-dilution adjustments substantially similar to those applicable to the Convertible Notes, the number of common shares underlying the Convertible Notes. The Capped Call Transactions are expected generally to reduce the potential dilution to holders of common shares upon conversion of the Convertible Notes and/or offset the potential cash payments that the Company could be required to make in excess of the principal amount of any converted Convertible Notes upon conversion thereof, with such reduction and/or offset subject to a cap. The upper strike price of the Capped Call Transactions is $33.0225 per share.
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Senior Unsecured Notes
The Company has $2.4 million of senior unsecured notes outstanding bearing a fixed interest rate of 4.93% per annum maturing in December 2025. The debt covenants of these notes are substantially similar to those of the Company's senior unsecured revolving credit facility. As of September 30, 2024, the Company was in compliance with all such debt covenants.
Mortgage Loans
On December 1, 2021, the Company assumed a $61.7 million loan secured by a first-lien mortgage on the leasehold interest of Estancia La Jolla Hotel & Spa ("Estancia"). The loan requires both principal and interest monthly payments based on a fixed interest rate of 5.07%. The loan matures on September 1, 2028.
On September 7, 2023, the Company entered into a $140.0 million first-lien mortgage on the leasehold interest of Margaritaville Hollywood Beach Resort ("Margaritaville"), which requires interest-only payments based on a floating rate equal to daily SOFR plus a spread of 3.75%. This loan matures on September 7, 2026 and may be extended for up to two one-year periods, subject to certain terms and conditions and payment of an extension fee.
The Company's mortgage loans associated with Margaritaville and Estancia are non-recourse to the Company except for customary carve-outs to the general non-recourse liability. The loans contain customary provisions regarding events of default, as well as customary cash management, cash trap and lockbox provisions. Cash trap provisions are triggered if the hotel's performance is below a certain threshold. Once triggered, all of the cash flow generated by the hotel is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of the lender. These properties are not in a cash trap and no event of default has occurred under the loan documents.
Interest Expense
The components of the Company's interest expense consisted of the following for the three and nine months ended September 30, 2024 and 2023 (in thousands):

| For the three months ended September 30, |  | For the nine months ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Unsecured revolving credit facilities | $ | 504 |  |  | $ | 504 |  |  | $ | 1,499 |  |  | $ | 1,570 |
Unsecured term loan facilities | 18,239 |  |  | 18,777 |  |  | 56,366 |  |  | 53,750 |
Convertible senior notes | 3,281 |  |  | 3,281 |  |  | 9,844 |  |  | 9,844 |
Senior unsecured notes | 30 |  |  | 589 |  |  | 89 |  |  | 1,767 |
Mortgage debt | 3,247 |  |  | 4,094 |  |  | 9,690 |  |  | 11,437 |
Amortization of deferred financing fees, (premiums) and discounts | 1,541 |  |  | 2,755 |  |  | 6,149 |  |  | 6,486 |
Other | 1,083 |  |  | 1,022 |  |  | (1,352) |  |  | 3,142 |
Total interest expense | $ | 27,925 |  |  | $ | 31,022 |  |  | $ | 82,285 |  |  | $ | 87,996 |

Fair Value
The Company estimates the fair value of its fixed rate debt by discounting the future cash flows of each instrument at estimated market rates, taking into consideration general market conditions and maturity of the debt with similar credit terms and is classified within Level 2 of the fair value hierarchy. The estimated fair value of the Company’s fixed rate debt (unsecured senior notes, convertible senior notes and the Estancia mortgage loan) as of September 30, 2024 and December 31, 2023 was $711.0 million and $686.3 million, respectively. The fair value of the Company's variable rate debt approximates its carrying value.
Derivative and Hedging Activities
The Company enters into interest rate swap agreements to hedge against interest rate fluctuations. All of the Company's interest rate swaps are cash flow hedges. All unrealized gains and losses on these hedging instruments are reported in accumulated other comprehensive income (loss) and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.
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The Company's interest rate swaps at September 30, 2024 and December 31, 2023 consisted of the following, by maturity date (dollars in thousands):

|  |  |  |  |  | Aggregate Notional Value as of
Hedge Type |  | Interest Rate Range (SOFR) |  | Maturity |  | September 30, 2024 |  | December 31, 2023
Swap-cash flow |  | 2.47% - 2.50% |  | January 2024 |  | $ | — |  |  | $ | 300,000 |
Swap-cash flow |  | 3.22% - 3.25% |  | October 2025 |  | 200,000 |  |  | 200,000 |
Swap-cash flow |  | 1.33% - 1.36% |  | February 2026 |  | 290,000 |  |  | 290,000 |
Swap-cash flow |  | 3.02% - 3.03% |  | October 2026 |  | 200,000 |  |  | 200,000 |
Swap-cash flow |  | 3.29% |  | October 2027 |  | 165,000 |  |  | 165,000 |
Total |  |  |  |  |  | $ | 855,000 |  |  | $ | 1,155,000 |

The Company records all derivative instruments at fair value in the accompanying consolidated balance sheets. Fair values of interest rate swaps and caps are determined using the standard market methodology of netting the discounted future fixed cash receipts/payments and the discounted expected variable cash payments/receipts. Variable interest rates used in the calculation of projected receipts and payments on the swaps are based on an expectation of future interest rates derived from observable market interest rate curves (Overnight Index Swap curves) and volatilities (Level 2 inputs). Derivatives expose the Company to credit risk in the event of non-performance by the counterparties under the terms of the interest rate hedge agreements. The Company incorporates these counterparty credit risks in its fair value measurements. The Company believes it minimizes the credit risk by transacting with major creditworthy financial institutions.
As of September 30, 2024, the Company's interest rate swap assets had an aggregate fair value of $11.3 million and its interest rate swap liabilities were immaterial. Interest rate swap assets are included in prepaid expenses and other assets and interest rate swap liabilities are included in accounts payable, accrued expenses and other liabilities in the accompanying consolidated balance sheets. The Company expects approximately $10.5 million will be reclassified from accumulated other comprehensive income (loss) to interest expense within the next 12 months.
Note 6. Revenue
The Company presents revenue on a disaggregated basis in the accompanying consolidated statements of operations and comprehensive income. The following table presents revenues by geographic location for the three and nine months ended September 30, 2024 and 2023 (in thousands):

| For the three months ended September 30, |  | For the nine months ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
San Diego, CA | $ | 101,639 |  |  | $ | 95,885 |  |  | $ | 258,117 |  |  | $ | 239,653 |
Boston, MA | 77,605 |  |  | 75,650 |  |  | 203,483 |  |  | 194,908 |
Southern Florida/Georgia | 46,390 |  |  | 43,174 |  |  | 196,281 |  |  | 173,183 |
Los Angeles, CA | 49,574 |  |  | 51,303 |  |  | 142,382 |  |  | 144,445 |
San Francisco, CA | 36,291 |  |  | 43,755 |  |  | 99,710 |  |  | 113,084 |
Portland, OR | 25,574 |  |  | 24,538 |  |  | 60,101 |  |  | 61,510 |
Chicago, IL | 25,513 |  |  | 22,233 |  |  | 57,033 |  |  | 57,036 |
Washington, D.C. | 16,432 |  |  | 16,522 |  |  | 53,336 |  |  | 51,326 |
Seattle, WA | — |  |  | — |  |  | — |  |  | 5,551 |
Other(1) | 25,512 |  |  | 22,739 |  |  | 45,266 |  |  | 45,165 |
Total Revenues | $ | 404,530 |  |  | $ | 395,799 |  |  | $ | 1,115,709 |  |  | $ | 1,085,861 |

______________________
(1) Other includes: Newport, RI and Santa Cruz, CA.
Payments from customers are primarily made when services are provided. Due to the short-term nature of the Company's contracts and the almost simultaneous receipt of payment, almost all of the contract liability balance at the beginning of the period is expected to be recognized as revenue over the following 12 months.
Note 7. Equity
Common Shares
The Company is authorized to issue up to 500,000,000 common shares. Each outstanding common share entitles the holder to one vote on each matter submitted to a vote of shareholders. Holders of common shares are entitled to receive dividends when authorized by the Board of Trustees.
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Common Share Repurchase Programs
On July 27, 2017, the Company's Board of Trustees authorized a share repurchase program of up to $100.0 million of common shares. Under this program, the Company could repurchase common shares from time to time in transactions on the open market or by private agreement. As of June 30, 2023, no common shares remained available for repurchase under this program.
On February 17, 2023, the Company's Board of Trustees authorized a share repurchase program of up to $150.0 million of common shares. Under this program, the Company may repurchase common shares from time to time in transactions on the open market or by private agreement. The Company may suspend or discontinue this program at any time. Common shares repurchased by the Company cease to be outstanding and become authorized but unissued common shares.
During the nine months ended September 30, 2024, the Company repurchased 1,127,255 common shares for an aggregate purchase price of $15.0 million, or an average of approximately $13.31 per share. As of September 30, 2024, $131.0 million of common shares remained available for repurchase under this program.
Common Dividends
The Company declared the following dividends on common shares/units for the nine months ended September 30, 2024:

Dividend per Share/Unit |  | For the Quarter Ended |  | Record Date |  | Payable Date
$ | 0.01 |  |  | March 31, 2024 |  | March 29, 2024 |  | April 15, 2024
$ | 0.01 |  |  | June 30, 2024 |  | June 28, 2024 |  | July 15, 2024
$ | 0.01 |  |  | September 30, 2024 |  | September 30, 2024 |  | October 15, 2024

Preferred Shares
The Company is authorized to issue up to 100,000,000 preferred shares of beneficial interest, $0.01 par value per share (“preferred shares”).
The following preferred shares were outstanding as of September 30, 2024 and December 31, 2023:

Security Type |  | September 30, 2024 |  | December 31, 2023
6.375% Series E |  | 4,400,000 |  |  | 4,400,000 |
6.30% Series F |  | 6,000,000 |  |  | 6,000,000 |
6.375% Series G |  | 9,200,000 |  |  | 9,200,000 |
5.70% Series H |  | 8,000,000 |  |  | 8,000,000 |
|  | 27,600,000 |  |  | 27,600,000 |

The Series E, Series F, Series G and Series H Cumulative Redeemable Preferred Shares (collectively, the “Preferred Shares”) rank senior to the common shares and on parity with each other with respect to payment of distributions. The Preferred Shares do not have any maturity date and are not subject to mandatory redemption. The Company may redeem the Series E and Series F Preferred Shares at any time. The Series G and Series H Preferred Shares may not be redeemed prior to May 13, 2026 and July 27, 2026, respectively, except in limited circumstances relating to the Company’s continuing qualification as a REIT or as discussed below. On or after such dates, the Company may, at its option, redeem the Preferred Shares, in each case in whole or from time to time in part, by payment of $25.00 per share, plus any accumulated, accrued and unpaid distributions through the date of redemption. Upon the occurrence of a change of control, as defined in the Company's declaration of trust, the result of which the common shares and the common securities of the acquiring or surviving entity are not listed on the New York Stock Exchange, the NYSE American or Nasdaq, or any successor exchanges, the Company may, at its option, redeem the Preferred Shares in whole or in part within 120 days following the change of control by paying $25.00 per share, plus any accrued and unpaid distributions through the date of redemption. If the Company does not exercise its right to redeem the Preferred Shares upon a change of control, the holders of the Preferred Shares have the right to convert some or all of their shares into a number of common shares based on defined formulas subject to share caps. The share cap on each Series E Preferred Share is 1.9372 common shares, on each Series F Preferred Share is 2.0649 common shares, on each Series G Preferred Share is 2.1231 common shares, and on each Series H Preferred Share is 2.2311 common shares.
Preferred Share Repurchase Program
On February 17, 2023, the Company's Board of Trustees authorized a share repurchase program of up to $100.0 million of the Preferred Shares. Under the terms of the program, the Company may repurchase up to an aggregate of $100.0 million of our 6.375% Series E Cumulative Redeemable Preferred Shares, 6.30% Series F Cumulative Redeemable Preferred Shares, 6.375% Series G Cumulative Redeemable Preferred Shares and 5.70% Series H Cumulative Redeemable Preferred Shares from time to time in transactions on the open market or by private agreement.
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During the nine months ended September 30, 2024, no Preferred Shares were repurchased under this program. As of September 30, 2024, $84.2 million of Preferred Shares remained available for repurchase under this program.
The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will depend on a variety of factors, including legal requirements, price, liquidity and economic considerations, and market conditions. The program does not require the Company to repurchase any specific number of Preferred Shares. The program does not have an expiration date and may be suspended, modified or discontinued at any time.
Preferred Dividends
The Company declared the following dividends on preferred shares for the nine months ended September 30, 2024:

Security Type |  | Dividend per Share/Unit |  | For the Quarter Ended |  | Record Date |  | Payable Date
6.375% Series E |  | $ | 0.40 |  |  | March 31, 2024 |  | March 29, 2024 |  | April 15, 2024
6.375% Series E |  | $ | 0.40 |  |  | June 30, 2024 |  | June 28, 2024 |  | July 15, 2024
6.375% Series E |  | $ | 0.40 |  |  | September 30, 2024 |  | September 30, 2024 |  | October 15, 2024
6.30% Series F |  | $ | 0.39 |  |  | March 31, 2024 |  | March 29, 2024 |  | April 15, 2024
6.30% Series F |  | $ | 0.39 |  |  | June 30, 2024 |  | June 28, 2024 |  | July 15, 2024
6.30% Series F |  | $ | 0.39 |  |  | September 30, 2024 |  | September 30, 2024 |  | October 15, 2024
6.375% Series G |  | $ | 0.40 |  |  | March 31, 2024 |  | March 29, 2024 |  | April 15, 2024
6.375% Series G |  | $ | 0.40 |  |  | June 30, 2024 |  | June 28, 2024 |  | July 15, 2024
6.375% Series G |  | $ | 0.40 |  |  | September 30, 2024 |  | September 30, 2024 |  | October 15, 2024
5.70% Series H |  | $ | 0.36 |  |  | March 31, 2024 |  | March 29, 2024 |  | April 15, 2024
5.70% Series H |  | $ | 0.36 |  |  | June 30, 2024 |  | June 28, 2024 |  | July 15, 2024
5.70% Series H |  | $ | 0.36 |  |  | September 30, 2024 |  | September 30, 2024 |  | October 15, 2024

Non-controlling Interest of Common Units in Operating Partnership
Holders of Operating Partnership units ("OP units") have certain redemption rights that enable OP unit holders to cause the Operating Partnership to redeem their units in exchange for, at the Company’s option, cash per unit equal to the market price of common shares at the time of redemption or common shares on a one-for-one basis. The number of shares issuable upon exercise of the redemption rights will be adjusted upon the occurrence of share splits, mergers, consolidations or similar pro-rata share transactions, which otherwise would have the effect of diluting the ownership interests of the Operating Partnership's limited partners or the Company's shareholders.
On November 30, 2018, in connection with the merger with LaSalle Hotel Properties ("LaSalle"), the Company issued 133,605 OP units in the Operating Partnership to third-party limited partners of LaSalle's operating partnership. In December 2023, these OP units were redeemed for common shares on a one-for-one basis.
On May 11, 2022, in connection with the acquisition of Inn on Fifth in Naples, Florida, the Company issued 16,291 OP units in the Operating Partnership.
As of September 30, 2024 and December 31, 2023, the Operating Partnership had 16,291 OP units held by third parties, excluding LTIP units.
As of September 30, 2024, the Operating Partnership had two classes of long-term incentive partnership units ("LTIP units"), LTIP Class A units and LTIP Class B units. All of the outstanding LTIP units are held by officers of the Company.
On February 17, 2023, the Board of Trustees granted 131,276 LTIP Class B units to executive officers.
On February 15, 2024, the Board of Trustees granted 136,353 LTIP Class B units to executive officers.
As of September 30, 2024, the Operating Partnership had 994,837 LTIP units outstanding, of which 470,920 LTIP units have vested. As of December 31, 2023, the Operating Partnership had 858,484 LTIP units outstanding, of which 277,136 LTIP units have vested. Only vested LTIP units may be converted to OP units, which in turn can be tendered for redemption as described above.
Non-controlling Interest of Preferred Units in Operating Partnership
On May 11, 2022, in connection with the acquisition of Inn on Fifth, the Company issued 3,104,400 preferred units in the Operating Partnership, designated as 6.0% Series Z Cumulative Perpetual Preferred Units ("Series Z Preferred Units"). The Series Z Preferred Units rank senior to the OP units and on parity with the Operating Partnership's Series E, Series F, Series G and Series H Preferred Units. Holders of Series Z Preferred Units are entitled to receive quarterly distributions at an annual rate of 6.0% of the liquidation preference value of $25.00 per share.
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At any time, holders of Series Z Preferred Units may elect to convert some or all of their units into any other series of the Operating Partnership’s preferred units outstanding at that time. After the second anniversary of the issuance of the Series Z Preferred Units, holders may elect to redeem some or all of their units for, at the Company’s election, cash, common shares having an equivalent value or preferred shares on a one-for-one basis. After the fifth anniversary of their issuance, the Company may redeem the Series Z Preferred Units for cash, common shares having an equivalent value or preferred shares on a one-for-one basis. At any time following a change of control of the Company, holders of Series Z Preferred Units may elect to redeem some or all of their units for, at the Company’s election, cash or common shares having an equivalent value.
As of September 30, 2024, the Operating Partnership had 3,104,400 Series Z Preferred Units outstanding.
Note 8. Share-Based Compensation Plan
Available Shares
The Company maintains the 2009 Equity Incentive Plan, as amended and restated (as amended, the "Plan"), to attract and retain independent trustees, executive officers and other key employees and service providers. The Plan provides for the grant of options to purchase common shares, share awards, share appreciation rights, performance units and other equity-based awards. Share awards under the Plan vest over a period determined by the Board of Trustees, generally over three to five years. The Company pays or accrues for dividends on share-based awards. All outstanding share awards are subject to full or partial accelerated vesting upon a change in control and upon death or disability or certain other employment termination events as set forth in the award agreements.
As of September 30, 2024, there were 1,177,236 common shares available for issuance under the Plan.
Service Condition Share Awards
From time to time, the Company awards restricted common shares under the Plan to members of the Board of Trustees, officers and employees. These shares generally vest over three to five years based on continued service or employment. The following table provides a summary of service condition restricted share activity during the nine months ended September 30, 2024:

| Shares |  | Weighted-Average Grant Date Fair Value
Unvested at December 31, 2023 | 443,549 |  |  | $ | 19.88 |
Granted | 139,134 |  |  | $ | 16.11 |
Vested | (171,508) |  |  | $ | 21.20 |
Forfeited | (3,127) |  |  | $ | 15.69 |
Unvested at September 30, 2024 | 408,048 |  |  | $ | 18.07 |

For the three and nine months ended September 30, 2024, the Company recognized approximately $0.9 million and $2.6 million, respectively, of share-based compensation expense related to these awards in the accompanying consolidated statements of operations and comprehensive income.
For the three and nine months ended September 30, 2023, the Company recognized approximately $0.9 million and $2.6 million, respectively, of share-based compensation expense related to these awards in the accompanying consolidated statements of operations and comprehensive income.
Performance-Based Equity Awards
On February 15, 2024, the Board of Trustees approved a target award of 322,950 performance-based equity awards to officers and employees of the Company. These awards will vest, if at all, in 2027. The actual number of common shares that ultimately vest will be from 0% to 200% of the target award and will be determined in 2027 based on the performance criteria defined in the award agreements for the period of performance from January 1, 2024 through December 31, 2026.
For the three and nine months ended September 30, 2024, the Company recognized approximately $1.5 million and $4.4 million, respectively, of share-based compensation expense related to performance-based equity awards in the accompanying consolidated statements of operations and comprehensive income.
For the three and nine months ended September 30, 2023, the Company recognized approximately $1.5 million and $4.1 million, respectively, of share-based compensation expense related to performance-based equity awards in the accompanying consolidated statements of operations and comprehensive income.
Long-Term Incentive Partnership Units
As of September 30, 2024, the Operating Partnership had two classes of LTIP units, LTIP Class A units and LTIP Class B units. All of the outstanding LTIP units are held by officers of the Company.
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On February 15, 2024, the Board of Trustees granted 136,353 LTIP Class B units to executive officers. These LTIP units will vest ratably on January 1, 2025, 2026 and 2027, contingent upon continued employment with the Company. The fair value of each award was determined based on the closing price of the Company’s common shares on the grant date of $16.13 per unit with an aggregate grant date fair value of $2.2 million.
As of September 30, 2024, the Operating Partnership had 994,837 LTIP units outstanding, of which 470,920 LTIP units have vested. As of December 31, 2023, the Operating Partnership had 858,484 LTIP units outstanding, of which 277,136 LTIP units have vested. Only vested LTIP units may be converted to OP units, which in turn can be tendered for redemption as described in Note 7. Equity.
For the three and nine months ended September 30, 2024, the Company recognized approximately $1.1 million and $3.1 million, respectively, in expense related to these LTIP units. The aggregate expense related to the LTIP unit grants is presented as non-controlling interest in the Company’s accompanying consolidated balance sheets.
For the three and nine months ended September 30, 2023, the Company recognized approximately $0.9 million and $2.5 million, respectively, in expense related to these LTIP units. The aggregate expense related to the LTIP unit grants is presented as non-controlling interest in the Company’s accompanying consolidated balance sheets.
Note 9. Income Taxes
As a REIT, the Company generally is not subject to federal corporate income taxes on the portion of its taxable income that is distributed to shareholders. However, the Company is still subject to certain state and local taxes on its revenues, income and property, and to federal income and excise taxes on its undistributed taxable income. In addition, taxable income of TRSs, including PHL, is subject to federal, state and local corporate income taxes at statutory tax rates. A valuation allowance on deferred tax assets is recorded when the Company has determined it more likely than not that future results will not generate sufficient taxable income to realize the deferred tax assets for each jurisdiction.
The Company evaluates its deferred tax assets each reporting period to determine if it is more likely than not that those assets will be realized or if a valuation allowance is needed. During the third quarter of 2024, due to continued improvement in the Company's financial results coming out of the COVID-19 pandemic and the projected future taxable income of its TRS, the Company determined that the release of a significant portion of its federal and state valuation allowance was appropriate and was recorded as an income tax benefit in the consolidated statement of operations. The release of the valuation allowance of $32.8 million is partially offset by current income tax expense of $7.6 million and $8.7 million for the three and nine months ended September 30, 2024, respectively.
The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal, state and local jurisdictions, where applicable. As of September 30, 2024 and December 31, 2023, the statute of limitations remains open for all major jurisdictions for tax years dating back to 2021 and 2020, respectively.
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Note 10. Earnings (Loss) Per Share
The following is a reconciliation of basic and diluted earnings (loss) per common share (in thousands, except share and per-share data):

| For the three months ended September 30, |  | For the nine months ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Numerator: |  |  |  |  |  |  |
Net income (loss) attributable to common shareholders | $ | 33,026 |  |  | $ | (68,130) |  |  | $ | 14,349 |  |  | $ | (68,308) |
Less: Dividends paid on unvested share-based compensation | (9) |  |  | (10) |  |  | (28) |  |  | (31) |
Less: Undistributed earnings attributable to share-based compensation | (247) |  |  | — |  |  | (83) |  |  | — |
Net income (loss) available to common shareholders — basic | $ | 32,770 |  |  | $ | (68,140) |  |  | $ | 14,238 |  |  | $ | (68,339) |
Plus: Interest expense on convertible notes | 3,281 |  |  | — |  |  | — |  |  | — |
Net income (loss) available to common shareholders — diluted | $ | 36,051 |  |  | $ | (68,140) |  |  | $ | 14,238 |  |  | $ | (68,339) |
Denominator: |  |  |  |  |  |  |
Weighted-average number of common shares — basic | 119,640,463 |  |  | 120,057,744 |  |  | 119,938,931 |  |  | 122,394,293 |
Effect of dilutive share-based compensation | 270,228 |  |  | — |  |  | 428,420 |  |  | — |
Effect of dilutive convertible notes | 29,441,175 |  |  | — |  |  | — |  |  | — |
Weighted-average number of common shares — diluted | 149,351,866 |  |  | 120,057,744 |  |  | 120,367,351 |  |  | 122,394,293 |
Net income (loss) per share available to common shareholders — basic | $ | 0.27 |  |  | $ | (0.57) |  |  | $ | 0.12 |  |  | $ | (0.56) |
Net income (loss) per share available to common shareholders — diluted | $ | 0.24 |  |  | $ | (0.57) |  |  | $ | 0.12 |  |  | $ | (0.56) |

For the three and nine months ended September 30, 2024, 467,452 and 157,010, respectively, unvested service condition restricted shares and performance-based equity awards were excluded from diluted weighted-average number of common shares, as their effect would have been anti-dilutive. For the three and nine months ended September 30, 2023, 1,110,184 unvested service condition restricted shares and performance-based equity awards were excluded from diluted weighted-average number of common shares, as their effect would have been anti-dilutive.
For the nine months ended September 30, 2024, 29,441,175 common shares underlying the Convertible Notes were excluded from diluted shares as their effect would have been anti-dilutive. For the three and nine months ended September 30, 2023, 29,441,175 common shares underlying the Convertible Notes were excluded from diluted shares as their effect would have been anti-dilutive.
The LTIP units and OP units held by the non-controlling interest holders have been excluded from the denominator of the diluted earnings per share as there would be no effect on the amounts since the limited partners' share of income (loss) would also be added or subtracted to derive net income (loss) available to common shareholders.
Note 11. Commitments and Contingencies
Hotel Management Agreements
The Company’s hotel properties are operated pursuant to management agreements with various management companies. The remaining terms of these management agreements are up to 10 years, not including renewals, and up to 28 years, including renewals. The majority of the Company’s management agreements are terminable at will by the Company upon paying a termination fee and some are terminable by the Company upon sale of the property, with, in some cases, the payment of termination fees. Most of the agreements also provide the Company the ability to terminate based on failure to achieve defined operating performance thresholds. Termination fees range from zero to up to three times the annual base management and incentive management fees, depending on the agreement and the reason for termination. Certain of the Company’s management agreements are non-terminable except upon the manager’s breach of a material representation or the manager’s failure to meet performance thresholds as defined in the management agreement.
The management agreements require the payment of a base management fee generally between 1% and 4% of hotel revenues. Under certain management agreements, the management companies are also eligible to receive an incentive management fee if hotel operating income, cash flows or other performance measures, as defined in the agreements, exceed certain performance thresholds. The incentive management fee is generally calculated as a percentage of hotel operating income after the Company has received a priority return on its investment in the hotel.
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For the three and nine months ended September 30, 2024, combined base and incentive management fees were $11.8 million and $31.0 million, respectively. For the three and nine months ended September 30, 2023, combined base and incentive management fees were $11.1 million and $29.9 million, respectively. Base and incentive management fees are included in other direct and indirect expenses in the Company's accompanying consolidated statements of operations and comprehensive income.
Reserve Funds
Certain of the Company’s agreements with its hotel managers, franchisors, ground lessors and lenders have provisions for the Company to provide funds, typically 4.0% of hotel revenues, sufficient to cover the cost of (a) certain non-routine repairs and maintenance to the hotels and (b) replacements and renewals to the hotels’ furniture, fixtures and equipment.
Restricted Cash
At September 30, 2024 and December 31, 2023, the Company had $10.3 million and $9.9 million, respectively, in restricted cash, which consisted of funds held in cash management accounts held by a lender, reserves for replacement of furniture and fixtures, and reserves to pay for real estate taxes, ground rent or property insurance under certain hotel management agreements or loan agreements.
Hotel, Ground and Finance Leases
As of September 30, 2024, the following hotels were subject to leases as follows:

Lease Properties |  | Lease Type |  | Lease Expiration Date |
Restaurant at Southernmost Beach Resort |  | Operating lease |  | April 2029 |
Paradise Point Resort & Spa |  | Operating lease |  | May 2050 |
Harbor Court Hotel San Francisco |  | Finance lease |  | August 2052 |
Hotel Monaco Washington DC |  | Operating lease |  | November 2059 |
Argonaut Hotel |  | Operating lease |  | December 2059 |
Hotel Zephyr Fisherman's Wharf and Retail |  | Operating lease |  | February 2062 |
Viceroy Santa Monica Hotel |  | Operating lease |  | September 2065 |
Estancia La Jolla Hotel & Spa |  | Operating lease |  | January 2066 |
San Diego Mission Bay Resort |  | Operating lease |  | July 2068 |
1 Hotel San Francisco |  | Operating lease |  | March 2070 | (1)
Hyatt Regency Boston Harbor |  | Operating lease |  | April 2077 |
The Westin Copley Place, Boston |  | Operating lease |  | December 2077 | (2)
The Liberty, a Luxury Collection Hotel, Boston |  | Operating lease |  | May 2080 |
Jekyll Island Club Resort and Restaurant |  | Operating lease |  | January 2089 |
Hotel Zeppelin San Francisco |  | Operating and finance lease |  | June 2089 | (4)
Hotel Zelos San Francisco |  | Operating lease |  | June 2097 |
Hotel Palomar Los Angeles Beverly Hills |  | Operating lease |  | January 2107 | (3)
Margaritaville Hollywood Beach Resort |  | Operating lease |  | July 2112 |

______________________
(1) The expiration date assumes the exercise of a 14-year extension option.
(2) No payments are required through maturity.
(3) The expiration date assumes the exercise of all 19 five-year extension options.
(4) The expiration date assumes the exercise of a 30-year extension option.
The Company's leases may require minimum fixed rent payments, percentage rent payments based on a percentage of revenues in excess of certain thresholds or rent payments equal to the greater of a minimum fixed rent or percentage rent. Minimum fixed rent may be adjusted annually by increases in the consumer price index and may be subject to minimum and maximum increases. Some leases also contain certain restrictions on modifications that can be made to the hotel structures due to their status as national historic landmarks.
The Company records expense on a straight-line basis for leases that provide for minimum rental payments that increase in pre-established amounts over the remaining terms of the leases. Ground rent expense is included in real estate taxes, personal property taxes, property insurance and ground rent in the Company's accompanying consolidated statements of operations and comprehensive income.
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The components of ground rent expense for the three and nine months ended September 30, 2024 and 2023 are as follows (in thousands):

| For the three months ended September 30, |  | For the nine months ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Fixed ground rent | $ | 4,795 |  |  | $ | 4,795 |  |  | $ | 14,387 |  |  | $ | 14,359 |
Variable ground rent | 6,327 |  |  | 6,362 |  |  | 15,390 |  |  | 15,481 |
Total ground rent | $ | 11,122 |  |  | $ | 11,157 |  |  | $ | 29,777 |  |  | $ | 29,840 |

Litigation
The nature of the operations of hotels exposes the Company's hotels, the Company and the Operating Partnership to the risk of claims and litigation in the normal course of their business. The Company has insurance to cover certain potential material losses. The Company is not presently subject to any material litigation nor, to the Company’s knowledge, is any material litigation threatened against the Company.
Note 12. Supplemental Information to Statements of Cash Flows (in thousands)

| For the nine months ended September 30,
| 2024 |  | 2023
Interest paid, net of capitalized interest | $ | 76,703 |  |  | $ | 74,111 |
Interest capitalized | $ | 4,710 |  |  | $ | — |
Income taxes paid (refunded) | $ | 2,043 |  |  | $ | (2,612) |
Non-Cash Investing and Financing Activities: |  |  |
Distributions payable on common shares/units | $ | 1,256 |  |  | $ | 1,255 |
Distributions payable on preferred shares/units | $ | 10,601 |  |  | $ | 10,902 |
Issuance of common shares for Board of Trustees compensation | $ | 745 |  |  | $ | 754 |
Accrued additions and improvements to hotel properties | $ | 4,500 |  |  | $ | 5,526 |
Write-off of fully amortized deferred financing costs | $ | 682 |  |  | $ | 630 |

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this report. Pebblebrook Hotel Trust is a Maryland real estate investment trust that conducts its operations so as to qualify as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"). Substantially all of the operations are conducted through Pebblebrook Hotel, L.P. (our "Operating Partnership"), a Delaware limited partnership of which Pebblebrook Hotel Trust is the sole general partner. In this report, we use the terms "the Company", "we" or "our" to refer to Pebblebrook Hotel Trust and its subsidiaries and "hotels" and "hotel properties" to refer to hotels and resorts, unless the context indicates otherwise.
FORWARD-LOOKING STATEMENTS
This report, together with other statements and information publicly disseminated by us, contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words "may", "will", "should", "potential", "could", "seek", "assume", "forecast", "believe", "expect", "intend", "anticipate", "estimate", "project" or similar expressions. Forward-looking statements in this report include, among others, statements about our business strategy, including acquisition and disposition strategies, industry trends, estimated revenues and expenses, estimated costs and durations of renovation or restoration projects, timing and extent of debt refinancings, estimated insurance recoveries, our ability to realize deferred tax assets and expected liquidity needs and sources (including capital expenditures and our ability to obtain financing or raise capital). You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and which could materially affect actual results, performance or achievements. These factors include, but are not limited to, the following:
•world events impacting the ability or desire of people to travel may lead to a decline in demand for hotels;
•risks associated with the hotel industry, including competition, changes in visa and other travel policies by the U.S. government making it less convenient, more difficult or less desirable for international travelers to enter the U.S., increases in employment costs, energy costs and other operating costs, or decreases in demand caused by events beyond our control, including, without limitation, actual or threatened terrorist attacks, natural disasters, cyber attacks, any type of flu or disease-related pandemic, or downturns in general and local economic conditions;
•the availability and terms of financing and capital and the general volatility of securities markets;
•our dependence on third-party managers of our hotels, including our inability to implement strategic business decisions directly;
•risks associated with the U.S. and global economies, the cyclical nature of hotel properties and the real estate industry, including environmental contamination and costs of complying with new or existing laws, including the Americans with Disabilities Act and similar laws;
•interest rate increases;
•our possible failure to qualify as a REIT under the Code and the risk of changes in laws affecting REITs;
•the timing and availability of potential hotel acquisitions, our ability to identify and complete hotel acquisitions and our ability to complete hotel dispositions in accordance with our business strategy;
•the possibility of uninsured losses;
•risks associated with redevelopment and repositioning projects, including delays and cost overruns; and
•the other factors discussed under Risk Factors in Part II, Item 1A of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2023.
Accordingly, there is no assurance that our expectations will be realized. Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
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Overview
Our third-quarter operating results showed continued recovery of business group, transient and leisure demand across our properties. Strong performance in Chicago, San Diego, Boston and Portland drove increased occupancy for our urban hotels. Higher weekday demand from business group and improving weekend leisure travel drove increase occupancy for our resort hotels. We expect continued occupancy growth due to a sustained recovery in demand from both business and leisure travelers, despite concerns regarding the macroeconomic environment and the presidential election. As occupancy recovered we continued to focus on cost controls.
During the nine months ended September 30, 2024, we had the following transactions and events:
•We repurchased 1,127,255 common shares for an aggregate purchase price of $15.0 million, or an average of $13.31 per share, under our existing common share repurchase program.
•We paid down $110.0 million of our term loans and extended the maturity of $356.7 million borrowed under Term Loan 2024 to January 2028.
On September 26, 2024, LaPlaya Beach Resort & Club sustained damage as a result of Hurricane Helene, and on October 9, 2024, sustained additional damage as a result of Hurricane Milton. The damage primarily impacted the ground floor of the Beach House, the pool complex and landscaping. The hotel closed following Hurricane Milton to undertake clean-up, repairs and a full assessment of damages. The Bay Tower and Gulf Tower were reopened on November 1, 2024. The Beach House is expected to be largely operational by the end of the first quarter of 2025. Our property and flood insurance proceeds are expected to cover the physical damage and business interruption losses from the hurricanes, net of deductibles.
On October 3, 2024, we issued $400 million aggregate principal amount of its 6.375% senior notes due October 15, 2029. The net proceeds were approximately $390.0 million after deducting discounts and offering expenses paid by the Company, of which $353.3 million was used to repay all $43.3 million of its borrowings under Term Loan 2024, $210.0 million of its borrowings under Term Loan 2025 and $100.0 million of its borrowings under Term Loan 2027.
On November 1, 2024, we extended the maturity date of $185.2 million borrowed under Term Loan 2025 to January 2029. We also extended the maturity date of $602.0 million of our senior unsecured revolving credit facility from October 2026 to October 2028, with the option to extend the new maturity date for two six-month periods.
While we do not operate our hotel properties, both our asset management team and our executive management team monitor and work cooperatively with our hotel managers by advising and making recommendations in all aspects of our hotels’ operations, including property positioning and repositioning, revenue and expense management, operations analysis, physical design, renovation and capital improvements, guest experience and overall strategic direction. Through these efforts, we seek to improve property efficiencies, lower costs, maximize revenues and enhance property operating margins, which we expect will enhance returns to our shareholders.
Key Indicators of Financial Condition and Operating Performance
We measure hotel results of operations and the operating performance of our business by evaluating financial and non-financial metrics such as room revenue per available room ("RevPAR"); total revenue per available room ("Total RevPAR"); average daily rate ("ADR"); occupancy rate ("Occupancy"); funds from operations ("FFO"); earnings before interest, income taxes, depreciation and amortization ("EBITDA"); and EBITDA for real estate ("EBITDA re"). We evaluate individual hotel and company-wide performance with comparisons to budgets, prior periods and competing properties. ADR, occupancy and RevPAR may be impacted by macroeconomic factors as well as regional and local economies and events. See Non-GAAP Financial Measures for further discussion of FFO, EBITDA and EBIDTA re.
Hotel Operating Statistics
The following table represents the key same-property hotel operating statistics for our hotels for the three and nine months ended September 30, 2024 and 2023:

| For the three months ended September 30, |  | For the nine months ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Same-Property Occupancy | 78.5 | % |  | 75.4 | % |  | 72.2 | % |  | 69.6 | %
Same-Property ADR | $ | 306.03 |  |  | $ | 312.05 |  |  | $ | 303.78 |  |  | $ | 309.42 |
Same-Property RevPAR | $ | 240.28 |  |  | $ | 235.16 |  |  | $ | 219.30 |  |  | $ | 215.39 |
Same-Property Total RevPAR | $ | 364.36 |  |  | $ | 354.87 |  |  | $ | 334.88 |  |  | $ | 327.81 |

For the three months ended September 30, 2024 and 2023, the above table of hotel operating statistics includes information from all hotels owned as of September 30, 2024, except for LaPlaya Beach Resort & Club due to its closure following Hurricane Ian.
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For the nine months ended September 30, 2024 and 2023, the above table of hotel operating statistics includes information from all hotels owned as of September 30, 2024, except for LaPlaya Beach Resort & Club due to its closure following Hurricane Ian and Newport Harbor Island Resort for the first and second quarters only due to its redevelopment.
Non-GAAP Financial Measures
Non-GAAP financial measures are measures of our historical or future financial performance that are different from measures calculated and presented in accordance with U.S. GAAP. We report FFO, EBITDA and EBITDA re, which are non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance.
We calculate FFO in accordance with standards established by Nareit, formerly known as the National Association of Real Estate Investment Trusts, which defines FFO as net income (calculated in accordance with U.S. GAAP), excluding real estate related depreciation and amortization, gains (losses) from sales of real estate, impairments of real estate assets (including impairment of real estate related joint ventures), the cumulative effect of changes in accounting principles and adjustments for unconsolidated partnerships and joint ventures. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. By excluding the effect of real estate related depreciation and amortization including our share of the joint venture depreciation and amortization, gains (losses) from sales of real estate and impairments of real estate assets (including impairment of real estate related joint ventures), all of which are based on historical cost accounting and which may be of lesser significance in evaluating current performance, we believe that FFO provides investors a useful financial measure to evaluate our operating performance.
The following table reconciles net income (loss) to FFO and FFO available to common share and unit holders for the three and nine months ended September 30, 2024 and 2023 (in thousands):

| For the three months ended September 30, |  | For the nine months ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Net income (loss) | $ | 45,145 |  |  | $ | (56,484) |  |  | $ | 49,864 |  |  | $ | (32,346) |
Adjustments: |  |  |  |  |  |  |
Real estate depreciation and amortization | 57,466 |  |  | 63,186 |  |  | 171,807 |  |  | 179,341 |
Gain on sale of hotel properties | — |  |  | — |  |  | — |  |  | (30,219) |
Impairment | 1,908 |  |  | 71,416 |  |  | 1,908 |  |  | 71,416 |
FFO | $ | 104,519 |  |  | $ | 78,118 |  |  | $ | 223,579 |  |  | $ | 188,192 |
Distribution to preferred shareholders and unit holders | (11,795) |  |  | (12,152) |  |  | (35,386) |  |  | (36,455) |
FFO available to common share and unit holders | $ | 92,724 |  |  | $ | 65,966 |  |  | $ | 188,193 |  |  | $ | 151,737 |

EBITDA is defined as earnings before interest, income taxes, depreciation and amortization. The white paper issued by Nareit entitled “Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate” defines EBITDA re as net income or loss (computed in accordance with U.S. GAAP), excluding interest expense, income tax, depreciation and amortization, gains or losses on the disposition of depreciated property (including gains or losses on change of control), impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, and after comparable adjustments for our portion of these items related to unconsolidated affiliates. We believe that EBITDA and EBITDA re provide investors useful financial measures to evaluate our operating performance, excluding the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization).
The following table reconciles net income (loss) to EBITDA and EBITDA re for the three and nine months ended September 30, 2024 and 2023 (in thousands):

| For the three months ended September 30, |  | For the nine months ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Net income (loss) | $ | 45,145 |  |  | $ | (56,484) |  |  | $ | 49,864 |  |  | $ | (32,346) |
Adjustments: |  |  |  |  |  |  |
Interest expense | 27,925 |  |  | 31,022 |  |  | 82,285 |  |  | 87,996 |
Income tax expense (benefit) | (25,213) |  |  | 822 |  |  | (24,157) |  |  | 853 |
Depreciation and amortization | 57,546 |  |  | 63,272 |  |  | 172,051 |  |  | 179,598 |
EBITDA | $ | 105,403 |  |  | $ | 38,632 |  |  | $ | 280,043 |  |  | $ | 236,101 |
Gain on sale of hotel properties | — |  |  | — |  |  | — |  |  | (30,219) |
Impairment | 1,908 |  |  | 71,416 |  |  | 1,908 |  |  | 71,416 |
EBITDA re | $ | 107,311 |  |  | $ | 110,048 |  |  | $ | 281,951 |  |  | $ | 277,298 |

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FFO, EBITDA and EBITDA re do not represent cash generated from operating activities as determined by U.S. GAAP and should not be considered as alternatives to U.S. GAAP net income (loss), as indications of our financial performance, or to U.S. GAAP cash flow from operating activities, as measures of liquidity. In addition, FFO, EBITDA and EBITDA re are not indicative of funds available to fund cash needs, including the ability to make cash distributions.
Results of Operations
At September 30, 2024 and 2023, we had 46 and 47, respectively, properties and leasehold interests. All properties owned during these periods have been included in our results of operations during the respective periods since their dates of acquisition or through their dates of disposition, as applicable. Based on when a property was acquired or disposed, operating results for certain properties are not comparable for the three and nine months ended September 30, 2024 and 2023. The properties listed in the table below are hereinafter referred to as "non-comparable properties" for the periods indicated and all other properties are referred to as "comparable properties":

Property |  | Location |  | Disposition Date
The Heathman Hotel |  | Portland, OR |  | February 22, 2023
Retail at The Westin Michigan Avenue Chicago |  | Chicago, IL |  | March 17, 2023
Hotel Colonnade Coral Gables |  | Coral Gables, FL |  | March 28, 2023
Hotel Monaco Seattle |  | Seattle, WA |  | May 9, 2023
Hotel Vintage Seattle |  | Seattle, WA |  | May 24, 2023

Comparison of the three months ended September 30, 2024 to the three months ended September 30, 2023
Revenues — Total revenues increased by $8.7 million primarily due to increases at LaPlaya Beach Resort & Club, which was partially closed in 2023 due to Hurricane Ian, at Margaritaville Hotel San Diego Gaslamp Quarter, which was under renovation in 2023 and at The Westin Michigan Avenue Chicago. This increase was partially offset by a $4.7 million decrease due to the sales of our non-comparable properties in 2023.
Hotel operating expenses — Total hotel operating expenses increased by $7.3 million primarily due to increased operations at LaPlaya Beach Resort & Club, Margaritaville Hotel San Diego Gaslamp Quarter and The Westin Michigan Avenue Chicago, as well as an increase in staffing, wage rates and benefits at our comparable properties due to higher demand levels. This increase was partially offset by a $2.7 million decrease due to the sales of our non-comparable properties in 2023.
Depreciation and amortization — Depreciation and amortization expense decreased by $5.7 million primarily due to Newport Harbor Island Resort's useful life reduction of its furniture, fixtures and equipment in 2023 due to its scheduled renovation in November 2023 as well as the sales of our non-comparable properties in 2023.
Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent increased by $2.4 million primarily due to an increase in real estate tax assessments.
Impairment — We recognized an impairment loss of $1.9 million in 2024 related to damage caused by Hurricane Helene at LaPlaya Beach Resort & Club. We recognized an impairment loss of $71.4 million in 2023 related to three hotels.
Business interruption insurance income — We recognized business interruption insurance income in 2024 and 2023 related to partial settlements with our insurance carriers for lost income at LaPlaya Beach Resort & Club.
Other operating expenses — Other operating expenses decreased by $2.9 million primarily due to a decrease in hurricane related payroll costs and claims administration costs at LaPlaya Beach Resort & Club and a decrease in preopening expenses.
Interest expense — Interest expense decreased by $3.1 million due to pay-downs on our term loans during the first quarter of 2024 and our senior notes during the fourth quarter of 2023. This decrease was partially offset by higher interest rates on our unhedged debt.
Income tax (expense) benefit - The income tax benefit in 2024 was a result of the release of $32.8 million valuation allowance offset by current year income tax expense of $7.6 million.
Non-controlling interests — Non-controlling interests represents the allocation of income or loss of the Operating Partnership to third-party common OP unit holders and to the preferred OP unit holders.
Comparison of the nine months ended September 30, 2024 to the nine months ended September 30, 2023
Revenues — Total revenues increased by $29.8 million primarily due to an increase at LaPlaya Beach Resort & Club, which was partially closed in 2023 due to Hurricane Ian, at Margaritaville Hotel San Diego Gaslamp Quarter and Hilton San Diego Gaslamp Quarter, which were under renovation in 2023, and at The Westin Michigan Avenue Chicago. This increase was partially offset by a $22.0 million decrease due to the sales of our our non-comparable properties in 2023.
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Hotel operating expenses — Total hotel operating expenses increased by $10.6 million primarily due to increased operations at LaPlaya Beach Resort & Club, Margaritaville Hotel San Diego Gaslamp Quarter, Hilton San Diego Gaslamp Quarter and The Westin Michigan Avenue Chicago, as well as an increase in staffing, wage rates and benefits at our comparable properties due to higher demand levels. This increase was partially offset by a $16.6 million decrease due to the sales of our non-comparable properties in 2023 as well as a decrease at Newport Harbor Island Resort due to its closure for redevelopment during the first quarter and part of the second quarter of 2024.
Depreciation and amortization — Depreciation and amortization expense decreased by $7.5 million primarily due to the sales of our non-comparable properties in 2023 and Newport Harbor Island Resort's useful life reduction of its furniture, fixtures and equipment in 2023 due to its scheduled renovation in November 2023. This decrease was partially offset by an increase at LaPlaya Beach Resort & Club.
Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent increased by $1.3 million primarily due to a $3.7 million increase in property insurance due to higher insurance premiums, partially offset by a $2.1 million decrease in real estate taxes due to lower tax assessments.
General and administrative — General and administrative expenses increased by $3.2 million primarily due to an increase in employee compensation expense. General and administrative expenses consist of employee compensation costs, legal and professional fees, insurance and other expenses.
Impairment — We recognized an impairment loss of $1.9 million in 2024 related to damage caused by Hurricane Helene at LaPlaya Beach Resort & Club. We recognized an impairment loss of $71.4 million in 2023 related to three hotels.
Gain on sale of hotel properties — We recognized a gain on sale of $30.2 million related to the sales of The Heathman Hotel, the retail component of The Westin Michigan Avenue Chicago, Hotel Colonnade Coral Gables, Hotel Monaco Seattle and Hotel Vintage Seattle in 2023.
Business interruption insurance income — We recognized business interruption insurance income in 2024 and 2023 related to partial settlements with our insurance carriers for lost income at LaPlaya Beach Resort & Club.
Other operating expenses — Other operating expenses decreased by $5.8 million primarily due to a decrease in hurricane related payroll costs and claims administration costs at LaPlaya Beach Resort & Club.
Interest expense — Interest expense decreased by $5.7 million due to interest being capitalized related to our Newport Harbor Island Resort renovation and due to pay-downs on our term loans during the first quarter of 2024 and our senior notes during the fourth quarter of 2023. This decrease was partially offset by higher interest rates on our unhedged debt.
Other — Other decreased by $1.2 million due to a decrease in interest income earned on excess cash.
Income tax (expense) benefit - The income tax benefit in 2024 was a result of the release of $32.8 million valuation allowance offset by current year income tax expense of $8.7 million.
Non-controlling interests — Non-controlling interests represents the allocation of income or loss of the Operating Partnership to third-party common OP unit holders and to the preferred OP unit holders.
Critical Accounting Policies
Our consolidated financial statements have been prepared in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. While we do not believe the reported amounts would be materially different, application of these policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on experience and on various other assumptions that are believed to be reasonable under the circumstances. All of our significant accounting policies, including certain critical accounting policies, are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.
New Accounting Pronouncements
See Note 2. Summary of Significant Accounting Policies to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for recently issued accounting pronouncements that may affect us.
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Liquidity and Capital Resources
Our primary sources of liquidity are cash provided by our operations, borrowings under our credit facilities, net proceeds from equity and debt offerings, and net proceeds from property sales. Our primary cash requirements in the short term (i.e., those requiring cash on or before September 30, 2025) will be to fund property lease obligations, interest and current principal on debt, capital improvements, dividends on common and preferred shares, and working capital of our property operations. We believe our cash and cash equivalents, restricted cash and the amount available on our senior unsecured revolving credit facility, which totaled $780.6 million as of September 30, 2024, along with cash generated from ongoing operations will be sufficient to satisfy our short-term cash requirements. As of September 30, 2024, we had no off-balance sheet arrangements.
In order to maintain our qualification as a REIT, we must pay dividends to our shareholders of at least 90% of our taxable income. As a result of this requirement, we cannot rely on retained earnings to fund long-term liquidity requirements such as hotel property acquisitions, redevelopments and repayments of long-term debt. As such, we expect to continue to raise capital through equity and debt offerings to fund our growth.
Our material cash requirements include the following contractual and other obligations.
Debt
Our outstanding debt consisted of floating- and fixed-rate unsecured term loans, convertible senior notes, senior unsecured notes and mortgage loans with varying maturities. Our total debt had an aggregate face value of $2.2 billion as of September 30, 2024, as summarized below:

| September 30, 2024
| (in thousands)
Revolving credit facilities | $ | — |
Term loans | 1,270,000 |
Convertible senior notes | 750,000 |
Senior unsecured notes | 2,400 |
Mortgage loans | 196,120 |
Total debt at face value | $ | 2,218,520 |

For further discussion on the components of our debt, see Note 5. Debt to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
On October 3, 2024, the Operating Partnership issued $400.0 million aggregate principal amount of its 6.375% senior notes due October 15, 2029. The net proceeds were approximately $390.0 million after deducting discounts and offering expenses paid by the Company, of which $353.3 million was used to repay all $43.3 million of its borrowings under Term Loan 2024, $210.0 million of its borrowings under Term Loan 2025 and $100.0 million of its borrowings under Term Loan 2027.
On November 1, 2024, we entered into the Third Amendment to the Credit Agreement which extended the maturity date of $185.2 million borrowed under Term Loan 2025 to January 2029 and extended the maturity date of $602.0 million of the $602.0 million senior unsecured revolving credit facility from October 2026 to October 2028.
We have the option to extend certain of our current debt maturities with the payment of extension fees. Assuming we exercise all extension options available in our debt agreements and after adjusting for the aforementioned term loan extension and repayments, we expect that future principal and interest payments associated with our remaining debt obligations outstanding as of September 30, 2024 will be $2.7 billion through their maturity, with $2.2 million of principal and $85.3 million of interest payable on or before September 30, 2025. We intend to pay amounts due with available cash, borrowings under our revolving credit facility, proceeds from property sales and/or to refinance amounts due with long-term debt.
We are in compliance with all covenants governed by our existing credit facilities, term loan and senior note facilities.
Our mortgage loans contain customary provisions regarding events of default, as well as customary cash management, cash trap and lockbox provisions. Cash trap provisions may be triggered if the hotel's performance is below a certain threshold. Once triggered, all of the cash flow generated by the hotel is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our lender. As of September 30, 2024, none of the mortgage loans was in a cash trap.
Hotel, ground and finance lease obligations
Our properties that are subject to hotel, ground or finance leases, as noted in Note 11. Commitment and Contingencies to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, may require minimum fixed rent payments, percentage rent payments based on a percentage of revenues in excess of certain thresholds or rent payments equal to the greater of a minimum fixed rent or percentage rent. Minimum fixed rent may be adjusted annually by increases in consumer price index ("CPI") and may be subject to minimum and maximum increases.
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Future fixed minimum payments associated with our hotel, ground and finance leases total $1.8 billion as of September 30, 2024, with $22.9 million payable on or before September 30, 2025.
Purchase commitments
As of September 30, 2024, we had $4.9 million of outstanding purchase commitments, all of which will be paid on or before September 30, 2025. These purchase commitments represent outstanding purchase orders and contracts that have been executed for capital and renovation projects at our properties. See Capital Investments for discussion on planned capital investments.
Preferred dividends and Series Z operating partnership units
We expect to pay aggregate annual dividends and distributions of approximately $47.2 million on our outstanding Series E, Series F, Series G and Series H Cumulative Redeemable Preferred Shares and Series Z Cumulative Perpetual Preferred Units on or before September 30, 2025 and in future years until the shares/units are redeemed. For further discussion on our preferred shares and preferred units, see Note 7. Equity to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Sources and Uses of Cash
Our principal sources of cash are cash from operations, draws on our credit facilities, net proceeds from equity and debt offerings, and net proceeds from property sales. Our principal uses of cash are asset acquisitions, debt service payments, the redemption of equity securities, capital investments, operating costs, corporate expenses and dividends.
Operating Activities. Our net cash provided by operating activities was $205.8 million for the nine months ended September 30, 2024, and $202.3 million for the nine months ended September 30, 2023. Fluctuations in our net cash provided by (used in) operating activities are primarily the result of changes in hotel revenues, operating cash requirements and corporate expenses.
Investing Activities. Our net cash provided by (used in) investing activities was $(79.9) million for the nine months ended September 30, 2024, and $96.3 million for the nine months ended September 30, 2023. Fluctuations in our net cash provided by (used in) investing activities are primarily the result of acquisition and disposition activities, as well as capital improvements and additions to our properties.
•During the nine months ended September 30, 2024, we invested $100.9 million in improvements to our hotel properties and received $21.7 million in property insurance proceeds.
•During the nine months ended September 30, 2023, we invested $140.1 million in improvements to our hotel properties, received $224.4 million from the sales of four hotel properties and one retail component of a hotel property and received $14.4 million in property insurance proceeds.
Financing Activities. Our net cash used in financing activities was $175.3 million for the nine months ended September 30, 2024, and $159.2 million for the nine months ended September 30, 2023. Fluctuations in our net cash provided by (used in) financing activities are primarily the result of our issuance and repurchase of debt and equity securities and distributions paid on our preferred and common shares.
•During the nine months ended September 30, 2024, we repaid $111.4 million in other debt, repurchased $16.9 million of common shares through our common share repurchase program and for tax withholding purposes in connection with vestings of share-based equity awards, paid $6.4 million in deferred financing costs and paid $39.0 million in preferred and common distributions.
•During the nine months ended September 30, 2023, we repurchased $92.8 million of common shares through our common share repurchase program and for tax withholding purposes in connection with vestings of share-based equity awards; repaid $21.5 million of other debt, net of refinancing proceeds; and paid $40.2 million in preferred and common distributions.
Capital Investments
We maintain and intend to continue maintaining all of our hotels in good repair and condition, in conformity with applicable laws and regulations, in accordance with franchisor standards when applicable and in accordance with agreed-upon requirements in our management agreements. Routine capital investments will be administered by the hotel management companies. However, we maintain approval rights over the capital investments as part of the annual budget process and as otherwise required from time to time.
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Certain of our hotel properties may undergo renovations as a result of our decision to upgrade portions of the hotels, such as guest rooms, meeting space and restaurants, in order to better compete with other hotels in our markets. In addition, after we acquire a hotel property, we are often required by the franchisor or brand manager, if any, to complete a property improvement plan (“PIP”) in order to bring the hotel property up to the franchisor’s or brand’s standards. Generally, we expect to fund renovations and improvements with available cash, restricted cash, borrowings under our credit facility or proceeds from new debt or equity offerings.
For the nine months ended September 30, 2024, we invested $100.9 million in capital investments (or $81.7 million excluding the repair and remediation of LaPlaya Beach Resort & Club) to reposition and improve our properties, including the renovations of Newport Harbor Island Resort, Estancia La Jolla Hotel & Spa, Skamania Lodge, Southernmost Beach Resort and Jekyll Island Club Resort.
Depending on market conditions, and in some instances subject to approval from governmental authorities, we expect to invest a total of $90.0 million to $95.0 million in capital investments in 2024, which includes normal hotel capital refurbishments as well as redevelopment and repositioning projects at Newport Harbor Island Resort, Estancia La Jolla Hotel & Spa and Skamania Lodge, and excludes capital expenditures related to the repair and remediation of LaPlaya Beach Resort & Club.
Common Share Repurchase Programs and Preferred Share Repurchase Program
Common Share Repurchase Programs
On July 27, 2017, our Board of Trustees authorized a share repurchase program of up to $100.0 million of common shares. Under this program, we could repurchase common shares from time to time in transactions on the open market or by private agreement. As of June 30, 2023, no common shares remained available for repurchase under this program.
On February 17, 2023, our Board of Trustees authorized a share repurchase program of up to $150.0 million of common shares. Under this program, we may repurchase common shares from time to time in transactions on the open market or by private agreement. We may suspend or discontinue this program at any time. Common shares repurchased by the Company cease to be outstanding and become authorized but unissued common shares.
During the nine months ended September 30, 2024, we repurchased 1,127,255 common shares for an aggregate purchase price of $15.0 million, or an average of approximately $13.31 per share. As of September 30, 2024, $131.0 million of common shares remained available for repurchase under this program.
The timing, manner, price and amount of any repurchases will be determined by us in our discretion and will depend on a variety of factors, including legal requirements, price, liquidity and economic considerations, and market conditions. The program does not require us to repurchase any specific number of common shares. The program does not have an expiration date and may be suspended, modified or discontinued at any time.
Preferred Share Repurchase Program
On February 17, 2023, our Board of Trustees authorized a repurchase program of up to $100.0 million of preferred shares. Under the terms of the program, we may repurchase up to an aggregate of $100.0 million of our 6.375% Series E Cumulative Redeemable Preferred Shares, 6.30% Series F Cumulative Redeemable Preferred Shares, 6.375% Series G Cumulative Redeemable Preferred Shares and 5.70% Series H Cumulative Redeemable Preferred Shares from time to time in transactions on the open market or by private agreement.
During the nine months ended September 30, 2024, no preferred shares were repurchased under this program. As of September 30, 2024, $84.2 million of preferred shares remained available for repurchase under this program.
The timing, manner, price and amount of any repurchases will be determined by us in our discretion and will depend on a variety of factors, including legal requirements, price, liquidity and economic considerations, and market conditions. The program does not require us to repurchase any specific number of Preferred Shares. The program does not have an expiration date and may be suspended, modified or discontinued at any time.
Inflation
We rely on the performance of the hotels to increase revenues to keep pace with inflation. Generally, our hotel operators possess the ability to adjust room rates daily, except for group or corporate rates contractually committed to in advance, although competitive pressures may limit the ability of our operators to raise rates faster than inflation or even at the same rate.
Seasonality
Demand in the lodging industry is affected by recurring seasonal patterns which are greatly influenced by overall economic cycles, geographic locations, weather and customer mix at the hotels. Generally, our hotels have lower revenue, operating income and cash flow in the first quarter of each year and higher revenue, operating income and cash flow in the third quarter of each year.
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Derivative Instruments
In the normal course of business, we are exposed to the effects of interest rate changes. We may enter into derivative instruments including interest rate swaps, caps and collars to manage or hedge interest rate risk. Derivative instruments are subject to fair value reporting at each reporting date and the increase or decrease in fair value is recorded in net income (loss) or accumulated other comprehensive income (loss), based on the applicable hedge accounting guidance. Derivatives expose the Company to credit risk in the event of non-performance by the counter parties under the terms of the interest rate hedge agreements. We believe we minimize the credit risk by transacting with major credit-worthy financial institutions.
As of September 30, 2024, we have interest rate swap agreements with an aggregate notional amount of $855.0 million to hedge variable interest rates on our unsecured term loans. We have designated these pay-fixed, receive-floating interest rate swap derivatives as cash flow hedges. For a further discussion of our derivative instruments, see Note 5. Debt to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Interest Rate Sensitivity
We are exposed to market risk from changes in interest rates. We seek to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs by closely monitoring our variable rate debt and converting such debt to fixed rates when we deem such conversion advantageous. From time to time, we may enter into interest rate swap agreements or other interest rate hedging contracts. While these agreements are intended to lessen the impact of rising interest rates, they also expose us to the risks that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly effective cash flow hedges under guidance included in ASC 815 "Derivatives and Hedging."
As of September 30, 2024, $555.0 million, or 25.0%, of our aggregate indebtedness, was subject to variable interest rates, excluding amounts outstanding under the term loan facilities and mortgage loans that have been effectively swapped into fixed rates. If interest rates on our variable rate debt increase or decrease by 0.1%, our annual interest expense will increase or decrease by approximately $0.6 million, respectively.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.
Changes in Internal Control Over Financial Reporting
There were no changes to our internal control over financial reporting during our most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
The nature of the operations of our hotels exposes the hotels and us to the risk of claims and litigation in the normal course of business. We are not presently subject to any material litigation nor, to our knowledge, is any litigation threatened against us, other than routine actions for negligence or other claims and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance and all of which collectively are not expected to have a material adverse effect on our liquidity, results of operations or our financial condition.
Item 1A. Risk Factors.
There have been no material changes from the risk factors disclosed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2023.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Purchases of Equity Securities
Common Shares

Period |  | Total Number of Shares Purchased |  | Average Price Paid Per Share |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |  | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (in millions)
July 1, 2024 - July 31, 2024 |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
August 1, 2024 - August 31, 2024 |  | 808,986 |  |  | $ | 12.36 |  |  | 808,986 |  |  | $ | — |
September 1, 2024 - September 30, 2024 |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
Total |  | 808,986 |  |  | $ | — |  |  | 808,986 |  |  | $ | 131.0 |

______________________
(1) On February 17, 2023, our Board of Trustees authorized a share repurchase program of up to $150.0 million of our outstanding common shares. This $150.0 million share repurchase program commenced in June 2023, upon the completion of our prior $100.0 million share repurchase program which began in 2017. Under this program, we may repurchase common shares from time to time in transactions on the open market or by private agreement. We may suspend or discontinue this program at any time. As of September 30, 2024, $131.0 million of common shares remained available for repurchase under this program.
Preferred Shares

Period |  | Total Number of Shares Purchased |  | Average Price Paid Per Share |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |  | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (in millions)
July 1, 2024 - July 31, 2024 |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
August 1, 2024 - August 31, 2024 |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
September 1, 2024 - September 30, 2024 |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
Total |  | — |  |  | $ | — |  |  | — |  |  | $ | 84.2 |

______________________
(1) On February 17, 2023, our Board of Trustees authorized a share repurchase program of up to $100.0 million of our outstanding preferred shares. Under this program we may repurchase up to an aggregate of $100.0 million of our 6.375% Series E Cumulative Redeemable Preferred Shares, 6.30% Series F Cumulative Redeemable Preferred Shares, 6.375% Series G Cumulative Redeemable Preferred Shares and 5.70% Series H Cumulative Redeemable Preferred Shares from time to time in transactions on the open market or by private agreement. We may suspend or discontinue this program at any time. As of September 30, 2024, $84.2 million of preferred shares remained available for repurchase under this program.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
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Item 5. Other Information.
During the three months ended September 30, 2024, none of our officers or trustees adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement."
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Item 6. Exhibits.

Exhibit Number |  | Description of Exhibit
4.1 |  | Indenture, dated October 3, 2024, among Pebblebrook Hotel, L.P., PEB Finance Corp., Pebblebrook Hotel Trust, the subsidiary guarantors party thereto and UMB Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on October 3, 2024 (File No. 001-34571)).
4.2 |  | Form of note of 6.375% Senior Notes due 2029 (included in Indenture in Exhibit 4.1) (incorporated by reference to Exhibit 4.2 to Pebblebrook Hotel Trust's Current Report on Form 8-K filed with the SEC on October 3, 2024 (File No. 001-34571)).
10.1 |  | Second Amendment to Fifth Amended and Restated Credit Agreement, dated as of September 18, 2024, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, Bank of America, N.A., as administrative agent and L/C issuer, and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust’s Current Report on Form 8-K filed with the SEC on September 23, 2024 (File No. 001‑34571)).
10.2 |  | Third Amendment to Fifth Amended and Restated Credit Agreement, dated as of November 1, 2024, among Pebblebrook Hotel, L.P., as the borrower, Pebblebrook Hotel Trust, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Bank of America, N.A., as administrative agent and L/C issuer, and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to Pebblebrook Hotel Trust’s Current Report on Form 8-K filed with the SEC on November 4, 2024 (File No. 001‑34571)).
31.1† |  | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2† |  | Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1†† |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2†† |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS |  | XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.(1)
101.SCH |  | Inline XBRL Taxonomy Extension Schema Document(1)
101.CAL |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document(1)
101.LAB |  | Inline XBRL Taxonomy Extension Label Linkbase Document(1)
101.DEF |  | Inline XBRL Taxonomy Extension Definition Linkbase Document(1)
101.PRE |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document(1)
104 |  | Cover Page Interactive Date File (embedded within the Inline XBRL document)(1)
* |  | Management agreement or compensatory plan or arrangement
† |  | Filed herewith.
†† |  | Furnished herewith.
(1) |  | Submitted electronically herewith. Attached as Exhibit 101 to this report are the following documents formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations and Comprehensive Income; (iii) Consolidated Statements of Equity; (iv) Consolidated Statements of Cash Flows; (v) Notes to Consolidated Financial Statements; and (vi) Cover Page (in connection with Exhibit 104).

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|  |  | PEBBLEBROOK HOTEL TRUST
Date: | November 7, 2024 |  | /s/ J ON E. B ORTZ
|  |  | Jon E. Bortz
|  |  | Chief Executive Officer and Chairman of the Board

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