DiamondRock Hospitality Co., a Bethesda, Md.-based real estate investment trust, has entered the San Francisco market with its $29.5 million acquisition of the Hotel Rex.
‘We are excited to be announcing our first acquisition in San Francisco at an attractive initial yield and a significant discount to replacement cost,’ says Mark W. Brugger, CEO of DiamondRock Hospitality. ‘With no supply on the horizon, we believe San Francisco can achieve several years of outsized growth. This acquisition, combined with the recent disposition of the Westin Atlanta, continues the company's strategy of disposing of non-core hotels and reallocating proceeds into faster growing markets at comparable or better returns.’
The 94-room Hotel Rex is located in the Union Square district, one block from the heart of Union Square. Originally built in 1907, the location opened as the Hotel Rex in 1996. According to DiamondRock Hospitality, the hotel enjoys an occupancy rate of more than 85% and is forecasted to achieve 2012 revenue per available room of over $150, an increase of 20% over the prior year.
DiamondRock Hospitality owns 27 premium hotels with approximately 11,600 rooms and holds the senior mortgage loan on another premium hotel. The company's hotels are generally operated under recognized brands such as Hilton, Marriott and Westin.
(Photo courtesy of Pubsub.com)