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Hotel Industry News

Thursday January 8th, 2009

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DiamondRock Has Closed the $315 Million Acquisition of Portfolio of Full-Service Hotels
	DiamondRock Hospitality Company (NYSE: DRH) announced that it acquired a 2,330 room portfolio of four full-service hotels for a contractual purchase price of $315 million from a New York based real estate investment fund.
The portfolio includes the Marriott Los Angeles Airport (Los Angeles, California), Renaissance Worthington (Fort Worth, Texas), Marriott Atlanta Alpharetta (Alpharetta, Georgia), and Frenchman's Reef & Morning Star Resort (U.S. Virgin Islands). The hotels will continue to be managed by Marriott International (NYSE: MAR). The hotels are expected to produce approximately $36.2 million of earnings before interest, taxes, depreciation and amortization (or "EBITDA") for the full year 2005. As part of the purchase price, DiamondRock will receive more than $10 million in cash reserves for capital improvements. In addition to using a portion of these reserves, DiamondRock will invest an additional $5 million over the next two years to improve and reposition the hotels to further enhance their ability to capture higher rated business and improve profitability. "This acquisition represents a portfolio of very high quality, full- service hotels branded under premium flags. The acquisition opportunity was made possible because of our management team's longstanding relationship with the sellers and prior knowledge of the hotels," said Bill McCarten, chairman and chief executive officer of DiamondRock. "We believe that the hotels are located in markets that will have solid growth as the lodging recovery continues." Additionally, Wachovia Bank provided an aggregate of $140 million of fixed rate mortgage debt financing in connection with the acquisitions. The two loans are secured by the Marriott Los Angeles Airport and Renaissance Worthington.