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January 11, 2022

DiamondRock buys two luxury coastal Florida resorts for $175.5m

DiamondRock owns 33 hotels and resorts with more than 9,400 rooms.

DiamondRock Hospitality has purchased Henderson Beach Resort and Tranquility Bay Beachfront Resort in Florida, US for $175.5m.

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The investments in the two luxury coastal Florida resorts marked the end of the company’s capital recycling activities in 2021.

The acquisitions are in line with the company’s strategy to have a leading portfolio of resort and leisure-oriented hotels.

DiamondRock president and chief executive officer Mark Brugger said: “The six transactions we successfully completed over the last year solidify DiamondRock’s strategic initiative to curate a preeminent portfolio of leisure-oriented, lifestyle hotels and resorts.

“These investments cap off an active year where DiamondRock recycled $220m from low-yield, encumbered, capital-intensive properties into $293m of high-quality, unencumbered, independent hotels and resorts.

“We project our recycling initiative will immediately and meaningfully increase our investment yield and drive long-term cash flow growth.”

Henderson Beach Resort in Destin features 170 rooms, 40,000ft2 of meeting space, separate family and adult pools, a spa, as well as numerous restaurant and bar outlets, including Destin’s only rooftop bar.

The luxury oceanfront resort was built recently and acquired in an off-market transaction on 23 December 2021 for $112.5m.

The deal includes income from 46 luxury residences adjacent to the hotel.

The 103-unit Tranquility Bay Beachfront Resort in Marathon offers 231 bedrooms comprising of 87 two-bedroom and three-bedroom beach houses, as well as 16 tropical garden guest rooms.

Located on 12 acres in Marathon, Florida, the property was purchased on 6 January 2022 for $63m.

The purchase price for this property represents an 11.5% yield on 2021 forecasted net operating income (NOI).

In July last year, the company acquired the 220-room Bourbon Orleans Hotel for $89.9m and the 37-room Henderson Park Inn for $27.5m.

During the nine months that ended 30 September 20221, DiamondRock invested approximately $30.1m in capital improvements at its operating hotels.

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What’s missing from your IPO industry assessment?

IPO activity all but stopped in 2020, as the investment community grew wary of the effects of COVID-19 on economies. No matter how deserving a business was of flotation, momentum was halted by concerns of when a ‘new normal’ of working patterns and trade would set in. Recently, sentiment has changed. Flotations picked up again during the second half of 2021, and now in 2022 the mood is decidedly optimistic. Business leaders have their eyes on fast rebounding economies, buoyant market indices and the opportunity once again to take their businesses public. As a result, global IPOs are expected to hit back this year. With GlobalData’s new whitepaper, ‘IPOs in Consumer and Retail: 5 must-include elements for your prospectus industry report’, you can explore exactly what is needed in the essential literature. GlobalData’s focus lies in the critical areas to get right:
  • Macroeconomic and demographic environment
  • Consumer context
  • Industry environment
  • Competitive environment
  • Route to market
Interested to learn more about what to include in your IPO Industry Assessment report? Download our free whitepaper.
by GlobalData
Enter your details here to receive your free Report.

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