Company: PEB
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001474098-25-000070
Chunk: 20

Company: Pebblebrook Hotel Trust
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 1
Chunk 20
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,071 Other1,119 (2,596)Total interest expense$27,133 $26,421 Fair ValueThe Company estimates the fair value of its fixed rate mortgage loans and senior unsecured 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 March 31, 2025 and December 31, 2024 was $1.1 billion. 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 (loss) and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.The Company's interest rate swaps at March 31, 2025 and December 31, 2024 consisted of the following, by maturity date (dollars in thousands):Aggregate Notional Value as of Hedge TypeInterest Rate Range (SOFR)MaturityMarch 31, 2025December 31, 2024Swap-cash flow3.22% - 3.25%October 2025$200,000 $200,000 Swap-cash flow1.33% - 1.36%February 2026290,000 290,000 Swap-cash flow3.02% - 3.03%October 2026200,000 200,000 Swap-cash flow3.29%October 2027165,000 165,000 Total$855,000 $855,000 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