Company: DRH-PA
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001298946-25-000015
Chunk: 75

Company: DiamondRock Hospitality Co
Filing Date: 2025-02-28
Form: 10-K
Item: Item 7
Chunk 75
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 on our senior unsecured credit facility. We have a preference to maintain a significant portion of our portfolio as unencumbered in order to provide balance sheet flexibility. We expect that our strategy will enable us to maintain a balance sheet with an appropriate amount of debt throughout all phases of the lodging cycle. We believe that it is prudent to reduce the inherent risk of highly cyclical lodging fundamentals through a low leverage capital structure. 

We prefer a relatively simple yet efficient capital structure. We generally structure our hotel acquisitions to be straightforward and to fit within our capital structure; however, we will consider a more complex transaction, such as the issuance of common OP units in connection with the acquisition of Cavallo Point, The Lodge at the Golden Gate, if we believe that the projected returns to our stockholders will significantly exceed the returns that would otherwise be available. 

We believe that we maintain a reasonable amount of debt. As of December 31, 2024, we had $1.1 billion of debt outstanding with a weighted average interest rate of 5.21% and a weighted average maturity date of approximately 1.7 years, assuming all extension options available in our debt agreements are exercised. We have three mortgage loans that mature in the next twelve months. We are actively pursuing a financing transaction the proceeds of which will be used to repay the three mortgage loans that mature in 2025. In the case that we are unsuccessful with obtaining this new financing, we may repay such mortgage loans using cash on hand and our senior unsecured revolving credit facility. We expect that our weighted average interest rate will increase as we refinance our debt at less favorable rates. As of December 31, 2024, 34 of our 37 hotels are unencumbered by mortgage debt. We remain committed to our core strategy of prudent leverage.

The following table outlines the timing and extent of our debt principal maturities and estimated interest payments for our mortgage debt and unsecured term loans as of December 31, 2024 (in thousands), assuming all extension options available in our debt agreements are exercised.

PrincipalInterest (1)Total Principal and Interest2025$295,808 $51,682 $347,490 2026300,000 26,714 326,714 2027— 27,633 27,633 2028500,000 236 500,236 2029— — — $1,095,808 $106,265 $1,202,073