DiamondRock acquires interest in Chico Hot Springs Resort

DiamondRock Hospitality announced that it has acquired the fee-simple interest in the Chico Hot Springs Resort, a lifestyle resort in Paradise Valley, Montana and near Yellowstone National Park. The purchase price for the Resort and adjacent ranch is $33M. Chico was acquired from an individual owner-operator and is an independent resort, completely unencumbered by brand and management agreements. The $27M purchase price for the 117-room, 153-acre Resort represents an 8.1% capitalization rate on 2022 net operating income, or NOI. Year-to-date comparable RevPAR growth through the Q2 was 8.7%. The adjacent ranch, a 595-acre parcel purchased for approximately $6M, provides extensive on-site trails for hiking and horseback riding as well as potential for future expansion of the Resort or residential lot sales. The company expects Chico to generate a 10.5% NOI yield on the total $33M purchase price upon stabilization. The acquisition was funded from corporate cash on hand.