Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) today announced that it has acquired the Hotel Palomar San Francisco for $58.0 million. The 196-room, AAA four-diamond, upper upscale, full-service boutique hotel is located in downtown San Francisco, California. The property will continue to be managed by Kimpton Hotels & Restaurants (“Kimpton”). The transaction includes the assumption of a $27.2 million secured loan, with the balance of the purchase price funded by the Company with available cash. “We’re extremely excited about the acquisition of the Hotel Palomar and the opportunity to further expand our presence in the highly desirable San Francisco market,” said Jon Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. “The hotel is attractively located at the nexus of three of San Francisco’s most dynamic neighborhoods: the South of Market district, the Financial District and Union Square. This ideal location is adjacent to the Westfield San Francisco Centre as well as the world famous Powell & Market cable car turntable, and just blocks from Moscone Convention Center and Union Square. In addition to the abundant and diverse collection of demand generators, the city’s location on the West Coast makes it a natural gateway to travelers from Asia. The strong leisure and business demand in this market, coupled with the extremely high barriers to entry, makes the Hotel Palomar San Francisco a very exciting addition to our portfolio.” The 196-room Hotel Palomar San Francisco is conveniently located at the corner of Fourth and Market Streets in the heart of downtown San Francisco, and is on the same block as the Company’s recently acquired Hotel Milano. The location is ideal for business and leisure travelers alike, within walking distance of the Moscone Convention Center and Union Square, and proximate to the financial district and the rapidly growing South of Market (“SoMa”) office district. This hotel is adjacent to the Westfield San Francisco Shopping Centre, an iconic shopping destination that is home to Bloomingdale’s West Coast flagship store, the second largest Nordstrom in the United States, 170 world-class boutique shops and exceptional dining venues. In addition to the strong base of permanent demand generators, San Francisco will host the 34 th America’s Cup, a world renowned sailing event that is projected to draw over 2.5 million spectators to the Bay Area in 2012 and 2013. Built in 1907, the hotel opened as the Hotel Palomar San Francisco in 1999 and features 196 guest rooms with high-speed wireless internet access, a fully stocked honor bar, 37” flat screen televisions, luxury Etro bath amenities and Kimpton signature brand bathrobes. The hotel offers 3,000 square feet of flexible meeting space across four rooms, as well as an award-winning signature restaurant, Fifth Floor Restaurant & Lounge. Fifth Floor Restaurant & Lounge serves breakfast and dinner daily, and features New American food paired with contemporary cocktails and an extensive global wine list. The hotel also features a fitness center, hosted evening wine reception and valet parking.