DiamondRock Hospitality Company announced the acquisition of the 245-room AC Hotel Minneapolis Downtown for $30 million, utilizing cash on hand. The purchase price equates to approximately $122,000 per key for the hotel, which was constructed in 2016.
The acquisition was executed at an 8.2% capitalization rate based on the hotel's forecasted 2024 net operating income. This addition increases DiamondRock's portfolio to 37 properties, aligning with the company's strategy to acquire hotels at a discount to replacement cost with minimal future capital requirements.
While the acquisition was not included in the company's updated full-year 2024 guidance, it is expected to contribute approximately 20 basis points to comparable full-year RevPAR growth and 10 basis points to comparable full-year Total RevPAR growth.
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