Diamondrock Buys Minneapolis Hotel
Date
11/19/2024 12:39:59 AM
(MENAFN- Baystreet)
DiamondRock Hospitality Company (NYSE: DRH) shares edged higher Friday, on the announcement it has acquired the fee simple interest in the 245-room AC Hotel Minneapolis Downtown for $30 million, or approximately $122,000 per key with cash on hand. The Hotel, constructed in 2016, is located in downtown Minneapolis, which has one of the largest concentrations of Fortune 1000 companies in the world and is also a major hub for biotechnology and medical innovation.
"The AC Hotel Minneapolis Downtown represents an opportunity to acquire a recently constructed urban hotel with good in-place cash flow in a rapidly recovering hotel market with a strong roster of companies increasing their return to the office," said CEO Jeffrey Donnelly. "The acquisition is aligned with our strategic objectives as we evaluate our portfolio and look to recycle capital efficiently into hotels at a significant discount to replacement cost with minimal future capital requirements while also providing the Company with immediate yield."
The acquisition represents a 8.2% capitalization rate on the Hotel's forecasted 2024 net operating income and brings the total number of properties in the Company's portfolio to 37 hotels. The acquisition of the Hotel was not contemplated in the Company's updated full-year 2024 guidance issued on November 7, 2024. Given the timing of the acquisition, the Hotel will not contribute meaningfully to the Company's full year 2024
Adjusted EBITDA or Adjusted FFO per share.
DRH shares took on eight cents to $9.12.
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