DiamondRock Finalizes $185M Sale of Midtown Manhattan Hotel
DiamondRock Hospitality Company said Thursday today that it completed the disposition of the 725-key Lexington Hotel in Midtown Manhattan to an undisclosed buyer for $185.3 million. Bethesda, MD-based DiamondRock acquired the property in 2011.
Including DiamondRock’s projected capital expenditures, the sale price represents a 14.2x multiple on 2019 hotel EBITDA and a 5.4% cap rate on 2019 hotel NOI. The company intends to redeploy net proceeds from the sale to acquire high-growth experiential resort and urban lifestyle hotels aligned with its investment strategy.
“We are pleased to announce the closing of this transaction, which right-sizes our portfolio’s exposure to New York City,” said Mark W. Brugger, president and CEO of DiamondRock. “This disposition also provides DiamondRock with significant investment capacity for on-strategy acquisitions.”
Following the sale, DiamondRock’s New York City footprint has decreased from 1,517 keys across four properties to 792 keys across three, according to CoStar.
