DiamondRock acquires AC Hotel Minneapolis Downtown for $30M

DiamondRock (DRH) Hospitality announced it has acquired the fee simple interest in the 245-room AC Hotel Minneapolis Downtown for $30M, or approximately $122,000 per key with cash on hand. The Hotel, constructed in 2016, is located in downtown Minneapolis, which has one of the largest concentrations of Fortune 1000 companies in the world and is also a major hub for biotechnology and medical innovation. The acquisition represents a 8.2% capitalization rate on the Hotel’s forecasted 2024 net operating income and brings the total number of properties in the company’s portfolio to 37 hotels. The acquisition of the Hotel was not contemplated in the Company’s updated full-year 2024 guidance issued on November 7. Given the timing of the acquisition, the Hotel will not contribute meaningfully to the company’s full year 2024 Adjusted EBITDA or Adjusted FFO per share. However, the Hotel is expected to be included in the company’s comparable metrics and add approximately 20 basis points to the company’s comparable full-year RevPAR growth and 10 basis points to the comparable full-year Total RevPAR growth.