DiamondRock Agrees to Buy Manhattan Hotel for $335 Million

DiamondRock Hospitality Co., a real estate investment trust that owns hotels operated by Marriott International Inc., agreed to buy the 712-room Radisson Lexington Hotel New York in midtown Manhattan for $335 million.

The property, on the corner of Lexington Avenue and 48th Street, is likely to produce $198 of revenue per available room this year, the Bethesda, Maryland-based company said in a statement today. That is 70 percent above the DiamondRock portfolio average for revpar, a measure of rates and occupancy used by hoteliers, the REIT said.

New York City hotel sales probably will double to as much as $2.4 billion this year as Manhattan is the most active U.S. market for lodging transactions, Jones Lang LaSalle Hotels said in February.

DiamondRock, which expects to complete the acquisition within 30 days, said it will keep Highgate Hotels as the property’s operator and is considering whether to retain the Radisson flag for the hotel. The seller is a joint venture of Blackstone Group LP, Highgate Holdings Inc., Chartres Lodging Group LLC and Oxford Capital Group LLC, according to New York-based property-research company Real Capital Analytics Inc.

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