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The Hotel Zags

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Portland, OR
4.8 of 5

Scored using an estimated 88% discount to replacement cost; spread not graded (trailing NOI was negative); supply not graded (no dated room count or pipeline share public); 3 of 5 factors graded.

Rubric v1.1 (current)Rubric v1 (original): Insufficient public data

Public-data underwrite. The buyer's information set was larger. Decision support, not a recommendation.

Price
$10M
Price per key
$57k per key
Keys
174
Buyer
Third party (not named)
Seller
Pebblebrook Hotel Trust (PEB)
Announced
Oct 9, 2026
Status
Closed Oct 8, 2026

Grade at announcement

As of Oct 9, 2026

Price and basis

Cited figures shown for reference. They don’t enter the grade.

Price per key vs replacement cost per key

  • Deal price per key ÷ HVS full-service replacement cost per key: 0.123 ($57,471 ÷ $467,244). Full-service class based on the hotel's on-site restaurant. source · Jul 13, 2026

Operating performance

  • Implied cap rate vs 10-year Treasury spread 25%Not graded: trailing NOI was negative (net operating loss of $0.8M, trailing 12 months to August 2026), so there is no meaningful cap rate.Not graded

    Not graded: trailing NOI was negative (net operating loss of $0.8M, trailing 12 months to August 2026), so there is no meaningful cap rate.

    None (not graded)

  • Demand trajectory 15%4

    Lodging tax liability +0.94% (our calculation) (trailing 12 months vs prior 12, Oregon state lodging tax liability, Portland Metro region, fiscal year Jul 2024 to Jun 2025 vs the prior fiscal year: $11,210k vs $11,106k, each the sum of four quarterly rows; the latest full year published by Oct 9, 2026)

    Band: 4 = flat to up under 5%

    RecordOct 14, 2025 (opens source)+ Dataset revision history: 860 rows published Oct 14, 2025

Cited figures shown for reference. They don’t enter the grade.

Implied cap rate vs 10-year Treasury spread

  • 10-year Treasury par yield, Oct 9, 2026 close: 5.24%. No qualifying cap rate, so no spread is computed. source · Oct 9, 2026
  • Sold with negative trailing net operating income (NOI): a net operating loss of $0.8M and hotel EBITDA of ($0.6M) for the trailing 12 months ended August 2026, as printed. source · Oct 9, 2026

Demand trajectory

  • Multnomah County lodging tax received by the convention venues, FY2025-26: $16.4M, up $246,000 (+1.5% by our calculation; the document says 2 percent). A formula-based allocation, so context only. source · Sep 30, 2026

Access: airlift and drive (not a rubric factor; no weight)

  • Airlift: Portland International (PDX) passengers, trailing 12 months Jul 2025 to Jun 2026, +4.61%. No drive-corridor data. source · Jul 29, 2026

Financing and material risks

  • Supply backdrop 15%No dated room count or single-source pipeline share for central Portland was public by Oct 9, 2026.Not graded

    No dated room count or single-source pipeline share for central Portland was public by Oct 9, 2026.

    None (not graded)

  • Debt and transaction context 15%5

    Cash sale to an unnamed third party; the hotel was unencumbered; no loan event or distress disclosed (PEB 8-K filed Oct 9, 2026).

    Band: 5 = Clean arm's-length sale with no distress

    FilingOct 9, 2026 (opens source)

Cited figures shown for reference. They don’t enter the grade.

Supply backdrop

  • Travel Portland's new-hotels list includes Toyoko Inn (610 rooms, planned, March 2027). A project list, not a pipeline share. source · Aug 11, 2026

Debt and transaction context

  • Cited context only: PEB recorded an $8.8M impairment on one unnamed hotel in the first half of 2026; no filing ties it to The Hotel Zags. source · Jul 29, 2026
  • Cited context only: net book value $27.8M at Dec 31, 2025 (10-K Schedule III). source · Feb 25, 2026

Weights of ungraded factors are spread across graded ones.

Overall4.8 of 5 · 3 of 5 factors graded
Rubric v1 (original), graded Oct 26, 2026: Insufficient public data

Scored using an estimated 88% discount to replacement cost; spread not graded; 2 of 5 factors graded; insufficient public data.

  • Price per key vs replacement cost per key 30%5

    $57k per key vs $467k replacement cost per key (HVS 2026 full-service median including land, $467,244; single class); 88% below

    Band: 5 = 40% or more below replacement cost

    PressJul 13, 2026 (opens source)+ Price $10.0M, PEB 8-K filed Oct 9, 2026

  • Implied cap rate vs 10-year Treasury spread 25%Not graded: trailing NOI was negative (net operating loss of $0.8M, trailing 12 months to August 2026), so there is no meaningful cap rate.Not graded

    Not graded: trailing NOI was negative (net operating loss of $0.8M, trailing 12 months to August 2026), so there is no meaningful cap rate.

    None (not graded)

  • Supply backdrop 15%No dated room count or single-source pipeline share for central Portland was public by Oct 9, 2026.Not graded

    No dated room count or single-source pipeline share for central Portland was public by Oct 9, 2026.

    None (not graded)

  • Demand trajectory 15%Not graded: the only public 2026 receipts series (Multnomah County lodging tax as received by the convention venues) is a formula-based allocation, not total lodging tax. Shown as context.Not graded

    Not graded: the only public 2026 receipts series (Multnomah County lodging tax as received by the convention venues) is a formula-based allocation, not total lodging tax. Shown as context.

    None (not graded)

  • Debt and transaction context 15%5

    Cash sale to an unnamed third party; the hotel was unencumbered; no loan event or distress disclosed (PEB 8-K filed Oct 9, 2026).

    Band: 5 = Clean arm's-length sale with no distress

    FilingOct 9, 2026 (opens source)

After the deal

Tracked separately. Not part of the grade.

  1. T0 · at announcement
    Oct 9, 2026
  2. T+1
    Lands Oct 2027
  3. T+2
    Lands Oct 2028
Sources (5)
The Hotel Zags · Recent Deals · Bungah Capital Intel