BETHESDA, MD—DiamondRock Hospitality Company acquired two properties—a lifestyle boutique property in Phoenix and a lakefront resort in Lake Tahoe, CA.
The Kimpton Hotel Palomar, located in downtown Phoenix, was purchased for $80 million, or $331,000 per key, which represents a 12.6x multiple of the forward 12 months of hotel EBITDA.
The company also purchased The Landing Resort & Spa in Lake Tahoe, CA, for $42 million, or $545,000 per key. This acquisition represents a 7% yield on 2017 hotel adjusted EBITDA.
Kimpton Hotel Palomar has 242 guestrooms averaging 450 sq. ft., the Blue Hound Kitchen and Cocktails restaurant, a rooftop bar and pool, and over 15,000 sq. ft. of flexible indoor and outdoor function space. The property will continue to be managed by Kimpton, which also manages the company’s Shorebreak Hotel. The property will become unencumbered in two years, according to the company.
The Landing boasts 77 guestrooms, each with stone fireplaces, private balconies and views of Lake Tahoe and the Sierra Nevada mountains.
DiamondRock has engaged Two Roads Hospitality, which currently operates the company’s L’Auberge de Sedona and Orchards Inn hotels, to replace the current owner-operator. Additionally, the company expects to increase the resort’s key count.
“The acquisition aligns well with our strategic goals and increases our exposure to West and West Coast markets and urban lifestyle boutique hotels. Moreover, we have already identified a number of asset management opportunities to enhance the hotel’s revenues and cost structure,” said Mark W. Brugger, president and CEO of DiamondRock Hospitality Company.