Company: PEB
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001474098-25-000138
Chunk: 30

Company: Pebblebrook Hotel Trust
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 1
Chunk 30
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 Milton, 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 work with its insurance providers on its remaining Hurricane Milton claims. Through September 30, 2025, the Company received a total of $14.5 million in preliminary advances from the insurance providers for damage due to Hurricane Milton. For the nine months ended September 30, 2025, the Company recognized $11.4 million of business interruption insurance income and gain on insurance settlement for damage due to Hurricanes Helene and Milton.ImpairmentThe 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, 2025, the Company recognized an impairment loss of $46.5 million for three hotels as a result of their fair values being lower than their carrying values. The impairment losses were determined using Level 2 inputs under authoritative guidance for fair value measurements using purchase and sale agreements and information from marketing efforts for these properties.  During the nine months ended September 30, 2024, no impairment losses were incurred. 

12

Lease Assets and Lease LiabilitiesThe Company recognized right-of-use assets and related liabilities related to its ground leases, all of which are operating leases. The Company recognized finance lease assets and related finance lease liabilities for properties subject to finance 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 operating lease right-of-use assets and liabilities are amortized to ground rent expense over the term of the underlying lease agreements. As of September 30, 2025, the Company's lease liabilities consisted of operating lease liabilities of $333.1 million and financing lease liabilities of $44.4 million. As of December 31, 2024, the Company's lease liabilities consisted of operating lease liabilities of $320.7 million and financing lease