by Marriott for $34 Million, Enters Agreement to
Purchase the Oak Brook Hills Resort &
Conference Center for $64 Million
|BETHESDA, Md., July 25, 2005 - DiamondRock Hospitality Company (NYSE:
DRH) today announced that it acquired the 220-suite Buckhead SpringHill
Suites by Marriott located in the Buckhead area of Atlanta. The hotel is
newly constructed and opened on July 1, 2005. The 11 story hotel contains
its own structured parking facility. The purchase price for the all suite
hotel was $34 million.
"This hotel is located on Lenox Road on the famed Buckhead Loop in the high-end urban market of Buckhead, which has become known for its high barriers to entry," commented Bill McCarten, chairman and chief executive officer of DiamondRock.
"Similar to our two Courtyard hotels in New York City, we continue to look for urban select-service hotels to round out our portfolio of predominately full-service hotels. These urban select-service hotels often get room rates similar to full-service hotels while maintaining the higher profit margins from the cost structure of a select-service hotel," added John Williams, chief operating officer of DiamondRock.
DiamondRock Hospitality also announced that it has entered into a definitive binding agreement to acquire the 384-room Oak Brook Hills Resort & Conference Center located in Oak Brook, Illinois, a suburb of Chicago. The 127-acre resort includes an 18-hole championship golf course at The Willow Crest Gold Club. The purchase price for the resort is $64 million.
The resort is currently not affiliated with a national hotel brand. DiamondRock intends to convert the resort to a Marriott Hotel; it will be known as the "Oak Brook Hills Marriott Resort." As part of the brand conversion, DiamondRock will spend more than $14 million to renovate and reposition the resort into the premier conference center in the greater Chicago market.
We expect that the closing of this acquisition will occur on or before August 23, 2005, subject to the satisfaction of closing conditions.
We consider the acquisition of Oak Brook to be both "significant" and "probable" under the U.S. securities laws. Therefore, under the requirements of both Form S-11 and Form 8-K, we are required to provide our stockholders with audited financial statements for Oak Brook for the two most recent fiscal year periods. As the fiscal year of the current owner of the hotel ends on June 30th of each year, we expect the audit of the most recent fiscal year, ended June 30, 2005, to be completed in the latter part of August. Until we are able to include such audited financial statements for Oak Brook, we are not permitted to request the Securities and Exchange Commission declare effective the resale registration statement that we filed on April 4, 2005, as amended, pursuant to our Registration Rights Agreement, dated as of July 7, 2004. As a result, stockholders who acquired restricted securities issued by us in our 2004 private placement will continue to hold restricted securities until such audit is completed and the resale registration statement is declared effective.
This press release contains "forward-looking statements" within the meaning of federal securities law, including statements concerning business strategies and their intended results and similar statements concerning anticipated future events and expectations that are not historical facts.
About DiamondRock Hospitality Company
DiamondRock Hospitality Company is a self-advised real estate company that owns and acquires upper upscale and upscale hotel properties located in North America and operated under nationally recognized brand names. To a lesser extent, it acquires premium limited-service and extended-stay hotel properties in urban locations. DiamondRock has a strategic acquisition sourcing relationship with Marriott International.
DiamondRock Hospitality Company
|Also See:||DiamondRock Hospitality Acquires a 2,330 room Portfolio of Four Hotels for $315 million / June 2005|
|Vail Resorts Selling the Vail Marriott Mountain Resort & Spa for $62 Million; Retains 15-Year Management Contract / May 2005|