Among the noteworthy deals of the past week was Sunstone Hotel
Investors’ acquisition of the Hyatt Regency San Antonio Riverwalk from Hyatt
Hotels.
SAN ANTONIO, Texas – Last
week, Irvine, California-based REIT Sunstone Hotel Investors acquired the
630-key Hyatt Regency San Antonio Riverwalk for a gross purchase price of $230
million.
In
October 2023, Sunstone sold Boston Park Plaza for $370 million and is recycling
a portion of the sale proceeds into the acquisition of the Hyatt Regency San
Antonio Riverwalk at an approximately 8% cap rate. This avoids the incremental
capital spend and earnings disruption that would have been incurred through
continued ownership of Boston Park Plaza. Sunstone currently expects to close
the acquisition in late April.
Hyatt
will continue to manage the hotel under the Hyatt Regency brand and contribute
approximately $8 million of key money as part of the transaction. The
acquisition includes nearly two acres of riverfront land and a 516-space
parking garage. The hotel recently underwent a comprehensive $37 million
guestroom renovation and has no meaningful required near-term capital needs.
The
net purchase price implies a value of approximately $352,000 per key and
represents an 11.1x multiple on the midpoint of the REIT’s estimate of 2024
hotel EBITDA.
Click
here to read more about this deal.
To
download our list of deals from the past week in Excel format, click here.