Sunstone Agrees to Pay $293M for Century Plaza

CENTURY CITY, CA-Sunstone Hotel Investors Inc. and Global Hyatt Corp. have struck a deal to acquire the 728-room Century Plaza Hotel & Spa for $293 million before expenses and renovation costs. The San Clemente-based hotel REIT and Hyatt plan to reposition the property as Hyatt Regency Century Plaza.The deal will provide Hyatt a continued presence in Century City, according to Alan X. Reay, president of Costa Mesa-based Atlas Hospitality Group, who tells GlobeSt.com that the flag on a nearby Park Hyatt in Century City is due to expire this year and that hotel is expected to either be re-flagged or go independent. The Century Plaza also has substantially more rooms than the 367-room Park Hyatt and a higher profile in the market, adds Reay, whose company is a hotel industry consulting and brokerage firm.The Sunstone contract to acquire the Century Plaza Hotel & Spa is subject to customary closing requirements and conditions, but the REIT says that once the deal closes it plans to “immediately embark on a $22.5-million renovation that will include all guest rooms and common areas and the addition of a Regency level and Hyatt Regency Club.” Sunstone plans to obtain approximately $175 million of debt financing to finance a portion of the purchase price, which is expected to close in the fourth quarter of this year. The REIT will acquire one of the highest-profile hotels in Los Angeles, a site that is popular for meetings, conventions and other business gatherings.Sunstone will be acquiring the Century Plaza from the Phoenix-based Pivotal Group, which bought the Century Plaza and the adjacent St. Regis Hotel for $260 million in 1999, according to Reay. Pivotal subsequently invested about $60 million in the two properties and later sold the St. Regis for $123 million to a group that plans to convert the St. Regis site to condominiums.