BETHESDA, Md. – DiamondRock Hospitality Company (the “Company” or “DiamondRock”) (NYSE: HRD) today announced that it has acquired a fee simple interest in The Kimpton Fort Lauderdale Beach Resorta boutique-style resort in Fort Lauderdale, Floridafor a total investment of $35.3 million ($367,700/key). The station will be operated by HEI Hotels and Resorts under a franchise agreement with Kimpton Hotels and Restaurants.
“This acquisition marks our 14th resort, and we are extremely pleased to add The Kimpton Fort Lauderdale Beach Resort to our portfolio and extend DiamondRock’s leadership with the preeminent portfolio of leisure and lifestyle-focused hotels and resorts,” said Mark W. BruggerPresident and CEO of DiamondRock Hospitality Company. “The complex was acquired in an off-market transaction at a significant discount to recently closed market deals. We plan to capitalize on synergies by having HEI Hotels and Resorts manage this complex in addition to managing the proximity of DiamondRock Westin Fort Lauderdale Beach Resort. There are significant opportunities to create value by leveraging our industry-leading resort expertise to improve revenue management and fundamentally reprogram the underutilized rooftop bar and restaurant. We expect the station to ramp up rapidly over the next two years and stabilize at over 8% steady state efficiency.
The Company purchased the 96 rooms Kimpton Fort Lauderdale Beach Resort in Fort Lauderdale, Florida on April 1, 2022. The resort reopened in mid-2021 after a comprehensive rebuild that fully upgraded the resort to current building codes while preserving its iconic Art Deco architecture. The station offers many competitive advantages:
Area dedicated to the seafront
Rooftop bar and pool with panoramic views of the Intracoastal Waterway Intimate street-level outdoor restaurant and bar with lush courtyard pool Significant brand distribution potential as sole IHG Hotels and Resorts and Kimpton-affiliated property in Fort Lauderdale Beach Architecturally unique Art Deco style with historic features and modern amenities
DiamondRock’s acquisition also includes ownership of a 230-space parking lot supporting both the resort as well as the adjacent Tiffany House residences. Although not factored into our underwriting, we believe there is a significant opportunity to generate high margin revenue from parking as well as creating a rental management agreement program for landlords of units in the 129 units Tiffany House. Additionally, we believe the rooftop can provide a significant opportunity to add clean energy solar panels to reduce annual electricity costs and the complex’s carbon footprint.
About the company
DiamondRock Hospitality Company is a self-administered real estate investment trust (REIT) that owns a leading portfolio of geographically diverse hotels concentrated in major gateway markets and resort destinations. The company currently owns 34 premium hotels and resorts with over 9,500 rooms.
The company has strategically curated its portfolio to consist of unique lifestyle properties, as well as those enhanced by leading global brands. For more information on the Company and its portfolio, please see DiamondRock Host Company website www.drhc.com.
This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of words and phrases such as “believe”, “expect”, “intend”, “project”, “plan”, “plan” and other similar terms and expressions, including references to assumptions. and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: national and local economic and business conditions; operational risks related to the hotel business; the risks associated with the Company’s level of indebtedness; relationships with property managers; the ability to be competitive in areas such as access, location, quality of accommodations and room rate structures; changes in travel habits, taxes and government regulations that influence or determine wages, prices, construction procedures and costs; and other risk factors contained in the documents filed by the Company with the Security and Exchange Commission. Although the Company believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions, it cannot guarantee that the expectations will be achieved or that any deviations will not be material. All information contained in this release speaks as of the date of this release, and the Company undertakes no obligation to update any forward-looking statements to conform to actual results or to changes in the Company’s expectations.
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