SHERIDAN, WYOMING – Feb. 23, 2025 – DiamondRock Hospitality Company has officially concluded the sale of the Westin Washington, D.C. City Center, a significant transaction that underscores the company's strategic focus on maximizing shareholder value. The sale, which was finalized on February 19, 2025, involved the 410-room property and was completed for a contract price of $92.0 million.
Financial Highlights of the Sale
The financial metrics of this sale demonstrate a strong return on investment. The sales price represents an 11.2x multiple on 2024 hotel EBITDA and a 7.5 percent capitalization rate on 2024 hotel net operating income. When considering the company’s projected capital expenditures, the capitalization rate stands at 5.6 percent.
Moreover, if we exclude the one-time property tax credit and temporary discount on franchise fees that the hotel received in 2024, the sales price reflects an even more robust performance. Specifically, the sales price represents an 11.9x multiple on 2024 hotel EBITDA and a 7.0 percent capitalization rate on 2024 hotel net operating income. Inclusive of projected capital expenditures, the capitalization rate is 5.2 percent.
Strategic Implications and Future Plans
The sale of the Westin Washington, D.C. City Center is a pivotal move for DiamondRock Hospitality Company. The company intends to strategically redeploy the proceeds from this sale to further enhance its portfolio and generate substantial returns for its shareholders.
“The sale of the Westin D.C. City Center marks an important step in our strategy to drive long-term earnings and cash flow per share growth and we plan to prudently redeploy the proceeds to create exceptional value for our shareholders,” said Jeffrey J. Donnelly, CEO, DiamondRock Hospitality Company.
This statement highlights the company's commitment to strategic asset management and its focus on delivering long-term financial benefits. The decision to sell the Westin Washington, D.C. City Center aligns with DiamondRock Hospitality’s broader objective of optimizing its portfolio for sustainable growth and profitability.
Impact on DiamondRock Hospitality’s Portfolio
The divestiture of the Westin Washington, D.C. City Center allows DiamondRock Hospitality to streamline its holdings and focus on properties that offer the highest potential for growth. By strategically selling assets, the company can reallocate capital to more promising opportunities, thereby enhancing its overall financial performance.
This transaction reflects DiamondRock Hospitality’s proactive approach to asset management and its dedication to maximizing shareholder returns. The company's ability to achieve favorable sales multiples and capitalization rates underscores its strategic acumen and market expertise.
Looking Ahead
DiamondRock Hospitality Company’s successful sale of the Westin Washington, D.C. City Center is a testament to its strategic vision and operational excellence. The company’s focus on prudent capital allocation and value creation positions it for continued success in the competitive hospitality market. As the company moves forward, it will continue to evaluate opportunities to optimize its portfolio and drive long-term growth.
This strategic move is expected to have a positive impact on DiamondRock Hospitality's financial performance and shareholder value. The company's disciplined approach to asset management and its commitment to delivering exceptional results will continue to be key drivers of its success.
For more information visit.