Terms of both deals were undisclosed, but Sunstone says it expects to close on the Sutton Place purchase by mid-May, funding it with proceeds from its recently completed preferred stock offering, and will spend $22 million in a major renovation of the hotel's guest rooms and public areas that it expects to complete in early 2006.
Sunstone, which already owns the 403-room Hyatt Regency at 1107 Jamboree Rd.in Newport Beach, revealed late Wednesday that it has struck a deal withFairmont Hotels & Resorts Inc. of Toronto to manage Sutton Place, which isat 4500 MacArthur Blvd. in the John Wayne Airport area. Following the saleand the renovations, Sunstone plans to rename the property the FairmontNewport Beach, a change that will reflect what Robert A. Alter, Sunstone'sCEO, calls a repositioning of an underperforming property back into apremier luxury business hotel.
The acquisition of the Sutton Place property will be Sunstone's firstpurchase since its October initial public offering, in which it outlined astrategy of acquiring upscale hotels. The company has already been executinganother part of the strategy, however, which involves disposing of hotelsthat don't fit its long-term vision, including the Doubletree property inCarson and its Mesa Holiday Inn and Suites in Mesa, AZ.
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