Baltimore-based DiamondRock Hospitality Company has acquired the Bourbon Orleans Hotel, a lifestyle boutique hotel in the French Quarter from local developer MCC Real Estate Group, led by prominent businessman Joe Jaeger.
Terms of the sale were not disclosed, but according to the company, the total investment in the 220-room Bourbon Orleans Hotel represents a 7% capitalization rate on 2019 net operating income (“NOI”). The Hotel recently reopened and is expected to generate approximately a 6.3% NOI yield in 2022 and is underwritten to achieve a stabilized 8% NOI yield. The hotel was formerly part of MCC’s J Collection of Hotels.
“These high-quality acquisitions continue DiamondRock’s multi-year strategic initiative to assemble a leading portfolio of leisure-oriented, experiential hotels and resorts,” said Mark W. Brugger, President and Chief Executive Officer of DiamondRock Hospitality Company.
According to the company, when the property was rebuilt into a modern hotel it retained its historic façade and Parisian grandeur from its time as The Orleans Theatre & Ballroom (1817-1881) and convent for the Sisters of the Holy Family (1881-1964). Today, the Hotel offers guests all the rich legacy of a historic building without having to comprise on modern amenities or services.
DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) with a portfolio that includes 31 hotels and resorts with over 9,000 rooms.
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