Sunstone Spends $187M for Two Hotels

Sunstone had acquired its initial 25% interest in the Renaissance Washington as part of the six-hotel Renaissance acquisition announced on April 27, which was previously reported by GlobeSt.com. The hotel is at the intersection of 9th and K streets on Mt. Vernon Square, midway between the White House and the Capitol, and is the closest hotel to the new 2.3-million-sf Washington Convention Center.

The $160-million purchase price includes the previously announced 25% interest, closing costs and the assumption of a $56-million fixed-rate note bearing interest at 7.5% per year with a maturity date of April 2008. The deal includes the repayment of a capital improvement loan previously funded by Marriott International. The hotel will continue to be operated by Marriott International under the Renaissance Hotels & Resorts name. Sunstone expects the transaction to close simultaneously with its acquisition of the six-hotel Renaissance portfolio in June.

Sunstone also expects the Cerritos deal to close in June. The hotel is managed by Sheraton, but after the closing it will be operated under a franchise agreement with Sheraton and managed by Sunstone Hotel Properties Inc., a division of Interstate Hotels and Resorts. The purchase price includes transaction closing costs and the assumption of a $9.1-million fixed-rate note bearing interest at nearly 8.9% per year with a maturity date of December 2009, along with $1.25 million of capital expenditures.