Bethesda-based real estate investment trust (REIT) DiamondRock Hospitality Company (DRH) completed the comprehensive renovation of a 725-room hotel – Lexington New York City hotel – in order to join Marriott International Inc.’s (MAR) luxury brand, the Autograph Collection. The renovation is in line with the company’s ongoing portfolio restructuring activity.
Lexington New York City hotel was revamped through a $46 million renovation program, which included addition of 15 rooms and other amenities to match Marriott’s class. Post-reinvention, Lexington New York City hotel became one of the most exclusive hotels in New York with its Art Deco theme throughout the iconic building.
Management expects the above-mentioned property to be a significant growth driver for DiamondRock in 2014, given the property’s modish renovation and Autograph Collection's ability to exploit Marriott's potent reservation system and guest loyalty programs.
DiamondRock is actively positioning its portfolio by selling off non-core properties and using the proceeds to acquire assets in fast growing regional markets in the U.S. Moreover, the company is continuing with its renovation program to realize the upside potential of its properties. We expect the activity to benefit DiamondRock and drive earnings going forward.
DiamondRock owns, acquires, and invests in upscale hotels under the Hilton, Marriott and Westin brands across the U.S. Currently, the company owns 27 premium hotels with approximately 11,600 rooms.
DiamondRock currently carries a Zacks Rank #3 (Hold). Other Lodging REITs that are performing better include Hospitality Properties Trust (HPT) and RLJ Lodging Trust (RLJ). Both these stocks have a Zacks Rank #2 (Buy).
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