DiamondRock Acquires Blackstone Portfolio for $495M

DiamondRock Hospitality Company announced this week that it had entered into a purchase agreement to acquire a 4-hotel portfolio from affiliates of Blackstone Real Estate Partners VI for $495 million. The portfolio includes the Hilton Boston, the Westin Washington D.C., the Westin San Diego and the Hilton Burlington, representing a sale price of approximately $339,000 per key. Blackstone is taking a $75 million stake in DiamondRock as part of the deal, which will help DiamondRock pay for the hotels, according to a CBS News report. Goldman, Sachs & Co. acted as financial advisor to DiamondRock in the transaction. According to a Bloomberg report, the hotels are from the Columbia Sussex portfolio that Blackstone seized in December 2010 after buying junior debt tied to the assets.

Mark Brugger, Chief Executive Officer of DiamondRock, said, "We are excited to acquire these four high quality hotels from affiliates of Blackstone in an off-market deal and equally pleased that Blackstone is taking a $75 million ownership stake in DiamondRock as part of this transaction. We believe that these four hotels with higher RevPAR and EBITDA margins than those of our existing assets will enhance the overall quality of our portfolio."

Jonathan D. Gray, Global Head of Real Estate at Blackstone stated: "We are pleased to announce this transaction with DiamondRock, a company with solid assets and a strong management team led by Mark Brugger. We believe in the continued lodging recovery and are excited about receiving an ownership stake in the company."

For more news and information visit Blumberg Capital Partners.

JW Marriott Denver Sold for $72.6 Million

The JW Marriott Denver Cherry Creek has been contracted for purchase by DiamondRock Hospitality, a a self-advised real estate investment trust (REIT) based in Bethesda, MD, for $72.6 million according to a Denver Post article. The 196-room hotel at 150 Clayton Lane was sold by Denver's Sage Hospitality, which bought the property in 2006. Sage has also managed the property since 2005 and will continue to do so under the new owner under contract.

"There's been a lot of activity in the commercial real estate side, this was a good and fair price and we just thought it was the right time," said Sage CEO Walter Isenberg.

"We are excited to acquire this high-quality, newly renovated hotel in Denver," said Mark Brugger, CEO of DiamondRock. "Denver has long been one of our target markets, in part because of its superior RevPAR growth rates over the past 25 years and excellent growth prospects. With luxury finishes and a 2011 RevPAR of $165, this acquisition enhances the overall quality of the DiamondRock portfolio."

For more news and information visit Blumberg Capital Partners.

DiamondRock Acquires NYC Hilton for $68.4M

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.

For more news and information visit Blumberg Capital Partners.