Under Construction Hotel Property in Times Square Sold to Buyer

January 19, 2011 / Albert Hamon, Mergers and Acquisitions Reporter

A lodging-centered real estate investment company that holds a portfolio of about 23 top hotels and resorts— DiamondRock has recent publicized its intention to acquire a hotel property that is still under construction until 2013. The company agrees to acquire the hotel property until its completion for $112.5 million to $135 million.

Under Construction Hotel Property in Times Square Sold to Buyer

The hotel property is located at 42nd Street ata New York City’s Times Square. DiamondRock will pay between the figures above or about $450,000 per room, depending on the number of rooms upon completion.

Upon completion, about 250 to 300 rooms will be available in the hotel property. The number of guestrooms, if certain permits are acquired, could increase to about 400, which could level- up the company’s purchase price to approximately $178 million, the company said in a press release.

DiamondRock’s acquisition of the hotel property is subject to an assortment of conditions, including considerable completion of the property by its third-party developer, and the construction of the hotel development within the contractual period, as well as the agreement of other regular closing conditions.

The hotel, developed by an associate of Walton Street Capital and Highgate Holdings, a private real estate investment company, is projected to be completed in about 24- 30 months, with an expected opening year— 2013.

According to a press release, Highgate Hotels will be operating the hotel upon its completion.

The company commits to make a $20 million deposit based on the purchase and sale agreement, and upon the completion of certain parts of the hotel property, another $5 million additional deposit will be made.

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