Alter also notes that the 13 hotels, although they represented 21% of the REIT's properties, accounted for only approximately 5.3% of its EBITDA for the six months ended June 30. With the sale of the 13 hotels, he says, Sunstone will be able to focus its efforts on "larger, higher growth assets that have a more meaningful impact on the company."
The disposition of the hotels is the latest example of Sunstone's announced strategy of selling non-core assets and reinvesting capital in larger hotels. Since 2001, the company and its predecessors have sold 45 hotels with an average of 177 rooms per hotel and have acquired 32 hotels with an average of 367 rooms per hotel.
The hotels that Sunstone has been buying are usually located in top markets with high barriers to entry, according to Jon Kline, president and CFO of Sunstone, who notes that the 13 hotels the company has acquired since its October 2004 IPO produce on average more than twice the RevPAR of the hotels in the 13-property portfolio that it sold. The Sunstone holdings include some of the premier properties in the markets where it does business, such as the Hyatt Century Plaza in Century City.
The properties that sold in the 13-hotel portfolio included Holiday Inns in Boise, ID; Craig, CO; Price, UT; Renton, WA; and San Diego; Crowne Plazas in Englewood, NJ and Williamsburg, VA; a Hawthorn Suites in Kent, WA; Marriotts in Ogden, UT and Pueblo, CO; Courtyards in Lynnwood, WA; Fresno, CA; and Santa Fe, NM.
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