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holiday investment property for sale overseas
News and Information Article
BETHESDA, Md., Nov. 29 /-FirstCall/ -- DiamondRock Hospitality
Company ("DiamondRock") (NYSE: DRH) today announced that it has entered into a
definitive, binding agreement to acquire the 486-room Orlando Airport Marriott
Hotel. The purchase price for the hotel is $70 million.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040708/DCTH028 )
DiamondRock plans to reposition the hotel with a $10 to $12 million
capital improvement plan, replace the current independent manager with
Marriott International, and increase room rates by adjusting customer
segmentation. As part of the transaction, Marriott International is providing
financial support and is receiving a long-term management agreement. Although
we anticipate some disruption in 2006 associated with the capital plan
improvements and adjusting segmentation, the investment in the hotel
represents a less than 9.5 multiple of projected 2007 earnings before interest
expense, taxes, depreciation and amortization ("EBITDA").
The Orlando International Airport is one of the fastest growing airports
in the country. Forecasts indicate air traffic to increase 67% from 2005
through 2020 -- accommodating over 51,800,000 travelers per year.
Additionally, the Orange County Convention Center is the second largest
convention center in the country with over 2 million square feet.
"This off-market opportunity came to us through our first look sourcing
relationship with Marriott International. We are excited about the asset, the
Orlando market, and our ability to drive returns with our repositioning
strategy," stated Bill McCarten, Chairman and Chief Executive Officer of
DiamondRock. "By more closely aligning with Marriotts dominant Orlando
marketing engine and the repositioning of the asset through product
investment, we feel confident with the hotels upside -- particularly 2007
when the hotels repositioning is complete," added John Williams, President
and Chief Operating Officer of DiamondRock.
DiamondRock expects to close on this acquisition before the end of the
year.
This press release contains "forward-looking statements" within the
meaning of federal securities law, including statements concerning business
strategies and their intended results and similar statements concerning
anticipated future events and expectations that are not historical facts. The
forward-looking statements in this press release are subject to numerous risks
and uncertainties, including the risk that the audit is not completed in a
timely manner as well as effects of economic conditions, supply and demand
changes for hotel rooms, competitive conditions in the lodging industry,
relationships with clients and property owners, the impact of government
regulations, the availability, terms and development of capital to finance
growth, all of which could cause actual results to differ materially from
those expressed in or implied by the statements herein.
Reconciliation of Net Income to EBITDA
2007
Estimated Net Income (Loss) 1,830,696
Income Taxes 162,338
Depreciation Expense 2,405,000
Interest Expense 4,515,300
Estimated EBITDA 8,913,333
About DiamondRock Hospitality Company
DiamondRock Hospitality Company is a self-advised real estate company that
owns and acquires upper upscale and upscale hotel properties located in North
America and operated under nationally recognized brand names. To a lesser
extent, it acquires premium limited-service and extended-stay hotel properties
in urban locations. DiamondRock has a strategic acquisition sourcing
relationship with Marriott International. After completing the acquisition of
the Orlando Airport Marriott Hotel, DiamondRock will own 15 hotels with 6,119
rooms in 10 States and one U.S. territory. For more information about
DiamondRock or to receive future press releases, please see the Companys
website at http://www.drhc.com
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