DiamondRock Hospitality Company (DRH) completed the sale of its leasehold interest in the 189‑room Courtyard by Marriott New York Manhattan/Fifth Avenue on May 1 2026, with the transaction announced on May 4 2026. The hotel sold for $33.0 million, representing a 6.3× multiple on 2025 Hotel Adjusted EBITDA and a 13.3% capitalization rate on 2025 Hotel Net Operating Income. After accounting for required capital expenditures, ground lease payments, and labor costs, the stabilized capitalization rate is approximately 7.8%.
The divestiture is part of DRH’s “net seller” strategy, which focuses on selling non‑core assets to free capital for share repurchases and high‑return renovations. CEO Jeffrey J. Donnelly said, “From 2019 to 2025, the Hotel’s Net Operating Income more than doubled, reflecting the value created by our asset management team and operating partners. When evaluating the Hotel’s upcoming capital expenditure needs and structural expense headwinds, the expected returns did not meet our investment thresholds.”
Financially, the sale reduces DRH’s 2026 guidance: Adjusted EBITDA is lowered by $5.9 million and Adjusted FFO per share is reduced by $0.025. The proceeds will be deployed opportunistically, potentially toward share repurchases under the company’s authorized $300 million program or other value‑creating initiatives. DRH also has $137 million of remaining buyback capacity and recently completed a preferred equity redemption, further strengthening its balance sheet.
The transaction reduces DRH’s portfolio size, but the company maintains an unencumbered balance sheet and continues to focus on its core lifestyle and resort properties. The sale aligns with the company’s broader capital allocation plan, which prioritizes high‑return investments and shareholder returns.
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