MAUI, HI—Sunstone has entered into a definitive agreement to acquire the fee-simple interest in the 544-room Wailea Beach Marriott Resort & Spa for $325.7 million (or around $598,600 per key).

The sale price represents a 5.2% cap rate.

Sunstone is purchasing the hotel from Blackstone in an off-market transaction involving cash and stock issuance. Sunstone expects to spend an additional $65 million in order to complete upgrades to the hotel's public space.

“We are pleased to announce our planned acquisition of the 544-room Wailea Beach Marriott Resort & Spa, our first acquisition in the strong Hawaiian market,” said Ken Cruse, CEO. “This acquisition fits squarely within our strategy of increasing our portfolio quality and scale while improving our financial flexibility.”

The resort is located on 22 acres of fee-simple, ocean-front land in the heart of Wailea, one of Maui's most desirable locations, Sunstone says.

“Wailea is one of the most attractive and supply-constrained leisure and group destinations in the United States, Cruse noted. “While the hotel currently produces superior RevPAR relative to our portfolio average, we believe the Hotel's market penetration, cash flows and long-term value will materially benefit from our asset management process and a carefully planned and executed repositioning program. Accordingly, we intend to optimize the hotel's 22-acre footprint within this exceptional market by creating a more well-defined, cohesive destination resort experience.  This project is highly consistent with our skill set, as our team has deep experience in the development and oversight of comprehensive resort hotel repositioning programs. Lastly, Marriott has demonstrated their commitment to the long-term success of this hotel by working with us to provide operational support during our planned renovation.”

Blackstone acquired the hotel in 2004 for about $99 million. Two years ago, Sunstone purchased the Wyndham Chicago (now Hyatt Chicago Magnificent Mile) from Blackstone in a similarly structured transaction.

The deal is expected to close in third quarter. Sunstone plans to renovate the hotel in 2015-2016, concurrent with major renovations at both the Boston Park Plaza and Hyatt Regency San Francisco.