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 with Fairmont Hotels & Resorts Inc. of Toronto to manage Sutton Place, which is at 4500 MacArthur Blvd. in the John Wayne Airport area. Following the sale and the renovations, Sunstone plans to rename the property the Fairmont Newport Beach, a change that will reflect what Robert A. Alter, Sunstone's CEO, calls a repositioning of an underperforming property back into a premier 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 a strategy of acquiring upscale hotels. The company has already been executing another part of the strategy, however, which involves disposing of hotels that don't fit its long-term vision, including the Doubletree property in Carson and its Mesa Holiday Inn and Suites in Mesa, AZ.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.