DiamondRock raises US$100m via Hilton Minneapolis mortgage

BETHESDA, MARYLAND DiamondRock Hospitality Co. has closed on a new US$100 million loan secured by a mortgage on its Hilton Minneapolis.

The loan has a 10-year term, bears interest at an annual fixed rate of 5.464% and will amortize on a 25-year schedule. The REIT acquired the hotel in June for US$157 million, and it was previously unencumbered by debt.

“The US$100 million in cash proceeds from this loan bolsters the company’s already strong cash position and further positions DiamondRock to be a preferred buyer in this hotel acquisition market,” says CEO Mark Brugger. “At the midpoint of our guidance, we project to have over US$300 million of cash available for acquisitions in 2011, not including any incremental debt. The Company will continue to focus on the attractive pipeline of acquisition opportunities on the market.”

DiamondRock owns 23 hotels with more than 10,700 guestrooms in the United States and holds the senior loan on another hotel.