Dive Brief:
- Bethesda, Maryland-based real estate investment trust DiamondRock Hospitality sold the 410-room Westin Washington, D.C. City Center hotel for $92 million, the trust announced in a release.
- While DiamondRock did not disclose the buyer, CoStar reported that Crestview Hills, Kentucky-based Columbia Sussex acquired the Westin property, adding it to a portfolio of more than two dozen hotels across the country. Columbia Sussex did not respond to a Hotel Dive request for comment.
- The sale comes as investment activity is slated to ramp up this year for deals valued between $50 million and $150 million, particularly in urban markets.
Dive Insight:
For DiamondRock, the sale of the D.C. Westin “marks an important step in our strategy to drive long-term earnings and cash flow per share growth,” CEO Jeffrey Donnelly said in a statement.
DiamondRock acquired the hotel in July 2012 for $149 million in a four-hotel deal valued at $495 million with investment firm Blackstone, CoStar reported. The other hotels in that portfolio sale, including the Dagny Boston, Westin San Diego Downtown and Hotel Champlain Burlington, Curio Collection remain in DiamondRock’s portfolio, per CoStar.
DiamondRock has also invested in properties in recent months, including the 245-room AC Hotel Minneapolis Downtown for $30 million.
The property provided the “opportunity to acquire a recently constructed urban hotel with good in-place cash flow in a rapidly recovering hotel market with a strong roster of companies increasing their return to the office,” Donnelly said in a November statement.
More hotel investors will turn to urban assets this year as corporate groups increasingly convene in cities, Global Head of JLL Hotels Research Zach Demuth previously told Hotel Dive. There will also likely be more mid-sized deals in 2025, Demuth said.
Additionally, hotel investors will prioritize full-service hotel acquisitions in urban markets over new development, as it’s much cheaper to buy than to build, JLL reported in August.
