DiamondRock Buys Westin Florida Property for $149M
- Nov 20, 2014
DiamondRock Hospitality Co., a Bethesda, Md.-based lodging REIT, has acquired the fee simple interest in The Westin Beach Resort & Spa, Fort Lauderdale in South Florida, for $149 million.
The deal, which translates to $345,000 per guest room, is expected to close in December.
The seller was not identified by the REIT but The Sun-Sentinel newspaper reported it was Starwood Capital Group. The South Florida newspaper stated Starwood Capital Group bought the hotel in 2005 and Starwood Hotels & Resorts Worldwide operated it for the Connecticut private investment firm.
The beachfront hotel has 432 guest rooms, 32,000 square feet of meeting space and a modern spa. In 2009, it underwent a comprehensive $89 million redevelopment project that included the construction of the Westin Conference Center building, according to a DiamondRock news release. The pool and deck were also redesigned, adding a sushi bar and private cabanas.
Diamond Rock said it doesn’t expect to make any major capital improvements in the near future.
“The Westin Beach Resort & Spa, Fort Lauderdale represents a rare opportunity to acquire a prime beachfront property in Southern Florida, a high-RevPAR, high-growth market,” Mark Brugger, DiamondRock president & CEO, said in the release. “Not only is the hotel in very good condition, there is opportunity to implement our rigorous asset management initiatives to drive further upside and additional synergies at the hotel following acquisition.”
DiamondRock said the resort is close to the Fort Lauderdale-Hollywood Airport and Port Everglades Cruise Terminal and is also within walking distance of the Fort Lauderdale marina, which hosts one of the world’s largest boat shows annually.
The market has seen strong demand with year-to-date RevPAR growth of approximately 10.7 percent, according to DiamondRock. The REIT also noted that the beachfront market has high barriers-to-entry with a limited new hotel supply.
The acquisition comes two days after DiamondRock announced it was selling the 1,004-room Los Angeles Airport Marriott for approximately $160 million. DiamondRock said it purchased the hotel in 2005 for $118 million.
The Fort Lauderdale purchase is the second hotel acquisition DiamondRock has made in Florida in recent months. The REIT said in early September it had acquired the fee simple interest in the Inn at Key West, a 106-room boutique hotel in Key West, Fla., for $47.5 million.
Also in September, DiamondRock paid $127.2 million for the new 282-room Hilton Garden Inn in New York/Times Square Central. The hotel at 136 West 42nd St. between Avenue of the Americas and Broadway was developed by a joint venture of Highgate Holdings, Crown Acquisitions and Ashkenazy Acquisitions.
DiamondRock, which has hotels in top gateway markets and destination resort locations, owned 27 hotels with more than 11,000 rooms as of Sept. 30. Its hotels operate under brands such as Hilton, Marriott and Westin.