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DiamondRock Hospitality Company Acquires the 276 suite Bethesda Suites Marriott Hotel in Bethesda, Maryland
for Approximately $41.6 million
.
BETHESDA, Md., Dec. 20, 2004 - DiamondRock Hospitality Company ("DiamondRock") announced today that it has acquired the Bethesda Suites Marriott Hotel, located in Bethesda, Maryland.  The hotel was purchased from Rock Spring Park Hotel Limited Partnership for approximately $41.6 million dollars.  The purchase price represents over a 9% capitalization rate based on the 2005 budget for the hotel.  The hotel contains 276 suites, and it will continue to be branded and operated as a Marriott hotel.

"Bethesda Suites Marriott represents a very high quality asset in an excellent market with strong cash flow," said Bill McCarten, chairman and chief executive officer of DiamondRock.  John Williams, president of DiamondRock, added: "Over the next several months we will renovate the suites and upgrade the lobby and food and beverage facilities of the hotel, which will enhance the property's position as the premium lodging product in the I-270 technology corridor."
    
The broker of record on the transaction is Rob Koger of Molinaro Koger.
    
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.

In November 2004, DiamondRock acquired the Courtyard by Marriott Manhattan/Midtown East. This 307-room hotel is located on Manhattan’s East Side on Third Avenue between 52nd and 53rd Street and is within walking distance to the Midtown business district. The 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.

In October 2004, DiamondRock acquired The Lodge at Sonoma, a Renaissance Resort and Spa for $33 million – which represents a substantial discount to original cost. The Lodge is a 182-room luxury resort that was built and opened by a local developer in 2000 at a cost in excess of $50 million. The Lodge will be operated by Renaissance, a subsidiary of Marriott International.
    
This press release contains "forward-looking statements" within the meaning of federal securities law, including statements concerning business strategies and their intended results and similar statements concerning anticipated future events and expectations that are not historical facts. 

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Contact:
DiamondRock Hospitality
10400 Fernwood Road, Suite 300  
Bethesda, Maryland 20817  
Tel:  (301) 380-7100
http://www.diamondrockhospitality.com
Also See: Outlook 2005: Hotel Industry Fundamentals, Where have we been? Where are we going? / The Global Hospitality Advisor / JMBM / December 2004
$46 million dollar The Lodge at Sonoma Being Developed by Barbara Thomas and ArtChatham; Project Will Be Managed by Renaissance Hotels and Spas / April 2000


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