DiamondRock Hospitality has purchased Henderson Beach Resort and Tranquility Bay Beachfront Resort in Florida, US for $175.5m.
The investments in the two luxury coastal Florida resorts marked the end of the company’s capital recycling activities in 2021.
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By GlobalDataThe 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.
