Sunstone Hotel Investors has entered into a definitive agreement with an affiliate of Hyatt Hotels Corp. to acquire the 339-room The Confidante Miami Beach for $232 million, or $684,000 per key. The hotel is located on 1.5 acres of fee-simple, oceanfront land in Miami Beach and following the acquisition, the REIT is planning a $60 million repositioning of the property and will rebrand it Andaz Miami Beach.    

Once the renovation is complete, the company expects the hotel to generate an 8% to 9% stabilized net operating income yield on the total investment in the property. It also anticipates an all-in basis of approximately $900,000 per key for a fully renovated, oceanfront, luxury Miami Beach resort where valuations for similar assets are well in excess of $1 million per key, it says. 

"The acquisition of The Confidante Miami Beach allows us to recycle capital from our recent sales of three Chicago hotels into this higher growth and better NAV enhancing investment," CEO  Bryan Giglia said in prepared remarks.