UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 16, 2005
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DiamondRock Hospitality Company |
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(Exact name of registrant as specified in charter) |
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Maryland |
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001-32514 |
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20-1180098 |
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(State or Other Jurisdiction |
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(Commission |
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(IRS Employer |
6903 Rockledge Drive, Suite 800
Bethesda, MD 20817
(Address of Principal Executive Offices) (Zip Code)
10400 Fernwood Road, Suite 300
Bethesda, MD 20817
(Former Address of Principal Executive Offices)(Former Zip Code)
(240) 744-1150
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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ITEM 2.01. Completion of Acquisition or Disposition of Assets.
On December 16, 2005, an affiliate of DiamondRock Hospitality Company (“DiamondRock”) completed the acquisition of the Orlando Airport Marriott Hotel, located in Orlando, Florida, from the Teacher’s Retirement System of the State of Illinois.
DiamondRock acquired the hotel for a purchase price of $70 million and expects to spend approximately $11.5 million in renovations at the hotel over the next eighteen months, approximately $1 million of which will be funded through the FF&E escrow at the hotel. Lehman Brothers financed a portion of the purchase price with a $59 million limited recourse loan secured by a mortgage on the hotel. The loan bears interest at the fixed rate of 5.68%, has a term of 10 years, and is interest-only for the first 5 years.
On December 16, 2005, an affiliate of Marriott International, Inc. assumed the management of the hotel following the acquisition. Pursuant to the thirty year management agreement, our taxable REIT subsidiary (our “Tenant”) has agreed to pay Marriott a base management fee of 3% of gross revenues and an incentive management fee of 20% of hotel operating profits in excess of a priority return equal to 10.75% of the capital invested in the hotel by us. The incentive management fee increases to 25% during a ten year period starting in 2011. In addition, Marriott has agreed to pay our Tenant $1 million in “key money” and an additional $1 million in the event that our Tenant fails to receive an agreed upon financial return from the hotel in 2006.
ITEM 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press Release dated December 21, 2005.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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DIAMONDROCK HOSPITALITY COMPANY |
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Date: December 21, 2005 |
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/s/ Michael D. Schecter |
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Michael D. Schecter |
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General Counsel and Secretary |
EXHIBIT INDEX
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Exhibit No. |
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Description |
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99.1 |
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Press release dated December 21, 2005. |
Exhibit 99.1
DiamondRock Announces That It Has Purchased the Orlando Airport Marriott for $70 Million
BETHESDA, Md., Dec. 21 /PRNewswire-FirstCall/ -- DiamondRock Hospitality Company (“DiamondRock”) (NYSE: DRH) today announced that it has completed the acquisition of the 486-room Orlando Airport Marriott Hotel for $70 million. DiamondRock plans to reposition the hotel with a $10 to $12 million capital improvement plan.
Lehman Brothers provided the financing on the transaction with a $59M loan. The loan bears interest at the fixed rate of 5.68%, has a term of 10 years, and is interest-only for the first 5 years.
This press release contains “forward-looking statements” within the meaning of federal securities law, including statements concerning business strategies and their intended results and similar statements concerning anticipated future events and expectations that are not historical facts. The forward-looking statements in this press release are subject to numerous risks and uncertainties, including the risk that the audit is not completed in a timely manner as well as effects of economic conditions, supply and demand changes for hotel rooms, competitive conditions in the lodging industry, relationships with clients and property owners, the impact of government regulations, the availability, terms and development of capital to finance growth, all of which could cause actual results to differ materially from those expressed in or implied by the statements herein.
About DiamondRock Hospitality Company
DiamondRock Hospitality Company is a self-advised real estate company that owns and acquires upper upscale and upscale hotel properties located in North America and operated under nationally recognized brand names. To a lesser extent, it acquires premium limited-service and extended-stay hotel properties in urban locations. DiamondRock has a strategic acquisition sourcing relationship with Marriott International. DiamondRock owns 15 hotels with 6,119 rooms in 10 States and one U.S. territory. For more information about DiamondRock or to receive future press releases, please see the Company’s website at http://www.drhc.com.
SOURCE DiamondRock Hospitality Company
-0- 12/21/2005
/CONTACT: Mark Brugger of DiamondRock Hospitality Company, +1-240-744-1150, info@drhc.com/
/Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20040708/DCTH028
AP
Archive: http://photoarchive.ap.org
PRN Photo Desk photodesk@prnewswire.com/
/Web site: http://www.drhc.com /
(DRH)