SAN CLEMENTE, CA-Negotiations have terminated for the time beingin locally based Sunstone Investors' reported bid to buy the1,625-room Hyatt Manchester San Diego for a price that was believedto be in the range of $580 million. However, analysts David Loeband Andrew Wittmann of Milwaukee-based Robert W. Baird & Co.say that "We would not rule out the potential for Sunstone oranother REIT buying the hotel eventually."

The Baird analysts, in a newly issued report on Sunstone, notethat the attorney for hotel owner Doug Manchester informed the SanDiego Unified Port District that the prospective deal with Sunstonehas been terminated. The deal would require the port district'sapproval for a change of ownership because the hotel is land leasedfrom the district.

Loeb and Wittmann say that they and other initially viewed theHyatt Manchester deal as positive, but eventually observers came tobelieve that Sunstone needed to offer potentially significantequity to finance the deal―and that caused shares ofSunstone's stock to weaken.