Sunstone Hotel Investors Inc. (NYSE: SHO), a lodging real estate investment trust, announced the sale of the 821-room Hyatt Regency San Francisco to funds affiliated with Blackstone Real Estate (NYSE: BX), for a gross sale price of $279 million, or approximately $340,000 per key.
Located at the foot of Market Street and The Embarcadero in the city’s financial district, the hotel opened in 1973 and has been featured in several classic films including “The Towering Inferno,” “High Anxiety” and “Time After Time.”
Sunstone acquired the property in December 2013 for $262 million. Eastdil Secured marketed the hotel and served as exclusive broker for the sale.
“We are pleased to announce the disposition of Hyatt Regency San Francisco and our ability to realize an attractive private market value for a lower yielding asset,” said CEO Bryan A. Giglia. “To date, we have successfully redeployed nearly $70 million of the proceeds into the repurchase of our common and preferred stock, at discounts to net asset value and liquidation value. The sale is consistent with our strategy of more actively managing the portfolio to capitalize on higher private market values and recycle the proceeds into more accretive options on a risk-adjusted basis.”
Giglia added, “While we have already generated value by deploying a portion of the proceeds, the remaining liquidity increases our flexibility and facilitates our ability to reinvest in a manner that will provide our investors with superior returns and greater per-share NAV growth. The Board and management remain committed to maximizing value for shareholders and pursuing any alternative that would reasonably be expected to result in value creation.”
Photo courtesy of Hyatt
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