DiamondRock sells Manhattan Courtyard for $33 Million, trims 2026 outlook

DiamondRock Hospitality Company (NYSE:DRH) announced today the sale of its leasehold interest in the 189-room Courtyard by Marriott New York Manhattan/Fifth Avenue for $33 million.

The transaction price reflects a 6.3x multiple on the hotel’s 2025 adjusted EBITDA and a 13.3% capitalization rate on its 2025 Net Operating Income (NOI).

The strategic divestiture was driven by a combination of structural expense headwinds and looming reinvestment needs.

Management identified $12 million in required capital expenditures over the next 12 months, alongside a contractual increase in ground-lease payments and rising labor costs.

When accounting for these factors, the company estimated the stabilized capitalization rate on the sale to be approximately 7.8%.

As a result of the sale, DiamondRock has revised its full-year 2026 financial guidance, which was initially provided on April 30.

While the company maintained its Comparable RevPAR growth targets, it lowered its profitability and cash flow expectations to account for the loss of the New York asset.

The company intends to deploy the proceeds from the sale opportunistically, which may include further debt reduction or share repurchases under its recently authorized $300 million program.