DiamondRock Hospitality announced that it's entered into an agreement to purchase the Hilton Garden Inn Chelsea New York City for $68.4 million. The Hilton Garden Inn is a 169-room hotel recently constructed and opened in 2007 on West 28th Street between 6th and 7th Avenues in New York City. The purchase price of $68.4 million represents a 12.9 multiple of the Hotel's 2010 full-year forecasted EBITDA of $5.3 million and better than a 7% capitalization rate on forecasted 2010 full-year net operating income of $4.8 million.
DiamondRock CEO Mark Brugger said in a Bloomberg BusinessWeek statement that the company wanted the hotel because the property has the "ability to charge essentially full-service room rates with a more profitable limited service cost structure as a result of its strong Hilton Garden Inn branding, access to Hilton Worldwide's powerful reservations system and traveler loyalty generated from the Hilton guest rewards program." DiamondRock retained the current hotel manager subject to a new, short-term management agreement.
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