DiamondRock Acquires NYC Courtyard by Marriott

DiamondRock Hospitality Company announced today that it has acquired the Courtyard by
Marriott Midtown East, located on Third Avenue in New York City. The
307-room hotel opened in 1999. DiamondRock acquired the hotel through an
assignment of Marriott International’s contractual right to purchase the
property. The hotel was purchased for a capitalization rate of
approximately 8.5% on the forecasted 2004 income. A subsidiary of Marriott
will continue to operate the hotel under a long-term management agreement. “We are extremely pleased to find a high quality asset with strong cash
flow in Midtown Manhattan. This is another excellent example of an
off-market transaction that was made possible by our strategic
relationship with Marriott International,” said Bill McCarten, chairman
and chief executive officer of DiamondRock. John Williams, president of
DiamondRock, added: “This is an excellent addition to our portfolio. The
hotel is going to benefit both from the dynamic recovery of the New York
lodging market and more than $3 million of capital which we will invest in
a renovation of this hotel’s guest rooms, bathrooms and public areas in
2005. The renovation will enable us to enhance the Courtyard’s position in
the upscale segment of a dramatically recovering New York market.”

DiamondRock was formed in July 2004 and will elect to be a lodging real
estate investment trust upon filing its first corporate tax return.
DiamondRock intends to list with the New York Stock Exchange in 2005.
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