Join hospitality professionals

Enter your email address:



Get all the latest job, news, views, ideas and more FREE!!

1,004 Room Los Angeles Airport Marriott Sold for $160 Million

DiamondRock Hospitality Company (NYSE: DRH) announced today that it has entered into a purchase and sale agreement to sell the 1,004-room Los Angeles Airport Marriott. This transaction is the result of a reverse inquiry from the same buyer who purchased the Torrance Marriott from the Company in late 2013.


 The Company will receive total gross consideration from the sale of the Hotel of approximately $160 million, including payment for the Hotel's capital reserve. The total consideration represents a 6.6% capitalization rate on the Hotel's net operating income of $10.5 million for the trailing twelve month period ended September 30, 2014. The Company expects the transaction to close late in 2014, subject to the satisfaction of customary closing conditions.

 "Over the past few years, we have transformed our portfolio through strategic divestitures of non-core hotels and targeted acquisitions to focus on premium lodging assets in urban gateway markets. We are pleased to announce the agreement to sell this non-core, airport hotel, illustrating our commitment to take advantage of an attractive transaction market," said Mark W. Brugger, President and Chief Executive Officer of DiamondRock Hospitality Company. The Company acquired the Hotel in 2005 for approximately $118 million.

The Company expects to generate a leveraged internal rate of return over 16 percent on its investment. The Hotel was last renovated by the Company during 2006. The total consideration plus an estimated $15.0 million of incremental capital expenditures represents a 6.0% capitalization rate on the Hotel's net operating income of $10.5 million for the trailing twelve month period ended September 30, 2014. The Company expects to record a gain on the sale, which will be excluded from its reported Adjusted EBITDA and Adjusted FFO.