Company: PEB
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001474098-25-000119
Chunk: 34

Company: Pebblebrook Hotel Trust
Filing Date: 2025-07-29
Form: 10-Q
Item: Item 1
Chunk 34
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 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.

14

Interest ExpenseThe components of the Company's interest expense consisted of the following for the three and six months ended June 30, 2025 and 2024 (in thousands):For the three months ended June 30,For the six months ended June 30,2025202420252024Unsecured revolving credit facilities$502 $497 $999 $995 Unsecured term loans10,956 19,215 21,927 38,127 Convertible senior notes3,282 3,282 6,563 6,563 Unsecured senior notes6,405 29 12,597 59 Mortgage loans3,191 3,218 6,354 6,443 Amortization of debt (premiums) and deferred financing fees1,911 1,537 3,821 4,608 Other1,035 161 2,154 (2,435)Total interest expense$27,282 $27,939 $54,415 $54,360 Fair ValueThe Company estimates the fair value of its fixed rate mortgage loans and unsecured senior notes 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 Company estimates the fair value of its fixed rate convertible senior notes using public market prices and is classified within Level 1 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 June 30, 2025 and December 31, 2024 was $1.2 billion and $1.1 billion, respectively. The fair value of the Company's variable rate debt approximates its carrying value.

Derivative and Hedging ActivitiesThe Company enters into interest rate swap agreements to hedge against interest rate fluctuations. All of the Company's interest rate swaps are designated as cash flow hedges. All unrealized gains and losses on these hedging instruments are reported in accumulated other comprehensive income