DRH · DiamondRock Hospitality Company

DiamondRock Hospitality Company sold its leasehold interest in the 189-room Courtyard by Marriott New York Manhattan/Fifth Avenue for $33.0 million on May 1, 2026, as disclosed under Item 8.01. The transaction, detailed in Exhibit 99.1 press release dated May 4, 2026, priced at a 6.3x multiple on 2025 Hotel Adjusted EBITDA and 13.3% cap rate on 2025 Hotel NOI, with a stabilized cap rate estimated at 7.8% factoring in $12 million capex, ground lease increases, and labor costs. CEO Jeffrey J. Donnelly highlighted that from 2019-2025, the hotel's NOI more than doubled due to asset management, but upcoming capex needs and expense headwinds led to returns below investment thresholds, aligning with disciplined capital allocation to grow free cash flow per share. The sale prompted adjustments to full-year 2026 guidance originally provided April 30, 2026: Adjusted EBITDA reduced by $5.9 million to $290.2-$302.2 million, Adjusted FFO by $5.1 million to $228.4-$240.4 million, and per share by $0.025 to $1.10-$1.16, while RevPAR growth ranges held steady. Reconciliations in Exhibit 99.1 confirm non-GAAP metrics, with net income guidance at $103.2-$116.2 million underpinning the revisions. Item 7.01 furnishes the press release and investor slide deck (Exhibit 99.2), not deemed filed, emphasizing Regulation FD compliance without incorporation by reference.