Bethesda-based real estate investment trust DiamondRock Hospitality has completed the sale of the 410-room Westin Washington, D.C. City Center for $92 million.
Though DiamondRock did not disclose the name of the buyer, CoStar data shows the new owner is hotel owner/operator Columbia Sussex Corp.
In the news release, DiamondRock CEO Jeffrey Donnelly said the sale of the hotel “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.”
According to the release, the sales price represented an 11.2-times multiple on 2024 hotel earnings before interest, taxes, depreciation and amortization, and a 7.5% capitalization rate on 2024 hotel net operating income, or a capitalization rate of 5.6% inclusive of the company’s projected capital expenditures.
It added that “excluding a one-time property tax credit and temporary discount on franchise fees the hotel received in 2024, the sales price represents an 11.9-times multiple on 2024 hotel EBITDA and a 7% capitalization rate on 2024 hotel net operating income, or a capitalization rate of 5.2% inclusive of the company’s projected capital expenditures.”
DiamondRock bought the hotel in July 2012 for approximately $149 million in a four-hotel deal of approximately $495 million with investment firm Blackstone. The other three hotels in that portfolio deal were the 403-room Dagny Boston; 436-room Westin San Diego Downtown; and 258-room Hotel Champlain Burlington, Curio Collection.
The other three hotels from that deal remain in DiamondRock’s portfolio.
The Westin Washington, D.C. City Center opened in 1982, became a Westin in 2007 and was renovated in 2023. After its sale, DiamondRock has a portfolio of 36 owned, independent and branded hotels and resorts with a room count of 9,594.
In December, DiamondRock Hospitality acquired the 245-room AC Hotel Minneapolis Downtown for $30 million, or approximately $122,000 per room.