The forfeited hotels, valued at $173 million by Sunstone,include three in San Diego, Courtyard by Marriott San Diego andHoliday Inn Express San Diego, both in Old Town, and Holiday InnDowntown. Others in California are Courtyard by Marriott LosAngeles; and Residence Inn by Marriott in Manhattan Beach.

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Assets in other states include two in Rochester, NY: Kahler Inn& Suites and Marriott Rochester. On Long Island, NY, there isthe Hilton Long Island/Huntington. In Utah, it is giving backMarriott Salt Lake City, in University Park; and Marriott Provo.Also included is Renaissance Atlanta Concourse.

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Last year Sunstone gave three other hotels back to lenders,including the San Diego Whotel. In November, the firm said it was considering makingacquisitions.Sunstone reiterated that intention in a businessupdate that the company issued Thursday, saying that it "believesthat the recent declines in demand for lodging and continuingcapital constraintsmay lead to opportunities to acquire hotels atdiscount valuations." The company is actively analyzing variouspotential hotel acquisitions, it said.

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The default on the Massachussets Mutual Portfolio is part of astrategy that Sunstone outlined last year to reduce its debt andimprove its balance sheet. Among other measures, the SanClemente-based REIT went into voluntary default on the $65 millionmortgage on its 258-room W Hotel in San Diego.

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Sunstone now owns interests in 26 hotels. For those assets,fourth-quarter RevPAR dropped 14.1% , to $97.85, and it fell 18.5%for the full year, to $102.71.

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