IRVINE, Calif., June 1, 2022 /PRNewswire/ — Sunstone Hotel Investors, Inc. (the “Company” or “Sunstone”) (NYSE: SHO), the proprietor of Long-Term Relevant Real Estate® within the lodging trade, introduced that it has entered right into a definitive settlement with an affiliate of Park Hotels & Resorts Inc. (“Park”) to amass Park’s 25% curiosity within the three way partnership that owns the leasehold curiosity within the 1,190-room Hilton San Diego Bayfront (the “Hotel”). As a part of the transaction, Sunstone pays Park $102 million in money and can successfully assume Park’s $55 million share of the prevailing mortgage mortgage on the Hotel, which is already totally consolidated as a part of Sunstone’s monetary statements. Following the acquisition, Sunstone will personal 100% of the enterprise’s pursuits within the Hotel.
The buy value, together with the in-place debt, implies a $628 million worth for the Hotel, or $527,700 per key, and represents a 13.2x a number of on the Hotel’s 2022 forecasted EBITDA and a 6.6% capitalization charge on 2022 forecasted internet working earnings. The Company presently anticipates closing the transaction by the tip of the second quarter 2022 and expects to fund the acquisition primarily from borrowing on the Company’s revolving credit score facility.
Bryan Giglia, Chief Executive Officer, said, “We are pleased to announce our acquisition of the remaining 25% joint venture interest in the Hilton San Diego Bayfront. This is a very well-located, high-quality asset in a premier convention and leisure market. The hotel is in excellent physical condition, and with the recent addition of new meeting space, a refreshed lobby, and enhanced food & beverage offerings, the hotel is well positioned to benefit from strong leisure travel and recovering business transient and corporate group demand. We thank our partners at Park for their collaboration over the years and believe this transaction, which consolidates ownership for Sunstone and provides Park with a fair valuation for their ownership interest, is a mutually beneficial outcome for both parties.”
The acquisition is topic to the satisfaction of customary closing situations, and the Company may give no assurance that the transaction will shut. The forecast quantities referenced on this launch are primarily based on the Company’s assumptions of working efficiency and the Company can not guarantee you that the forecasts shall be achieved.
About Sunstone Hotel Investors
Sunstone Hotel Investors, Inc. is a lodging actual property funding belief (“REIT”). Sunstone’s technique is to create long-term stakeholder worth by way of the acquisition, energetic possession, and disposition of resorts thought of to be Long-Term Relevant Real Estate®. For additional info, please go to Sunstone’s web site at www.sunstonehotels.com.
For Additional Information
Aaron Reyes
Chief Financial Officer
Sunstone Hotel Investors, Inc.
(949) 382-3018
Forward-Looking Statements
This press launch accommodates forward-looking statements inside the which means of federal securities legal guidelines and rules. These forward-looking statements are recognized by their use of phrases and phrases akin to “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will” and different comparable phrases and phrases, together with opinions, references to assumptions and forecasts of future outcomes. Forward-looking statements are usually not ensures of future efficiency and contain identified and unknown dangers, uncertainties and different elements which will trigger the precise outcomes to vary materially from these anticipated on the time the forward-looking statements are made. These dangers embody, however are usually not restricted to: the affect the COVID-19 pandemic has on the Company’s enterprise and the financial system, in addition to the response of governments and the Company to the pandemic, and the way shortly and efficiently efficient vaccines and therapies are distributed and administered; elevated dangers associated to worker issues, together with elevated employment litigation and claims for severance or different advantages tied to termination or furloughs on account of short-term lodge suspensions or diminished lodge operations because of COVID-19; basic financial and enterprise situations, together with a U.S. recession or elevated inflation, commerce conflicts and tariffs, regional or international financial slowdowns and any kind of flu or disease-related pandemic that impacts journey or the power to journey, together with COVID-19; the necessity for business-related journey, together with the elevated use of business-related expertise; rising lodge working prices because of labor prices, staff’ compensation and health-care associated prices, utility prices, property and legal responsibility insurance coverage prices, unanticipated prices akin to acts of nature and their penalties and different prices that is probably not offset by elevated room charges; the bottom or airspace leases for 2 of the resorts the Company has pursuits in as of the date of this launch; the necessity for renovations, repositionings and different capital expenditures for the Company’s resorts; the affect, together with any delays, of renovations and repositionings on lodge operations; new lodge provide, or various lodging choices akin to timeshare, trip leases or sharing companies akin to Airbnb, within the Company’s markets, which might hurt its occupancy ranges and income at its resorts; competitors from resorts not owned by the Company; relationships with, and the necessities, efficiency and popularity of, the managers of the Company’s resorts; relationships with, and the necessities and popularity of, the Company’s franchisors and lodge manufacturers; the Company’s resorts might develop into impaired, or its resorts which have beforehand develop into impaired might develop into additional impaired sooner or later, which can adversely have an effect on its monetary situation and outcomes of operations; competitors for the acquisition of resorts, and the Company’s capability to finish acquisitions and tendencies; efficiency of resorts after they’re acquired; adjustments within the Company’s enterprise technique or acquisition or disposition plans; the Company’s stage of debt, together with secured, unsecured, mounted and variable charge debt; monetary and different covenants within the Company’s debt and most well-liked inventory; the affect on the Company’s enterprise of potential defaults by the Company on its debt agreements or leases; volatility within the capital markets and the impact on lodging demand or the Company’s capability to acquire capital on favorable phrases or in any respect; the Company’s have to function as a REIT and adjust to different relevant legal guidelines and rules, together with new legal guidelines, interpretations or courtroom choices which will change the federal or state tax legal guidelines or the federal or state earnings tax penalties of the Company’s qualification as a REIT; potential adversarial tax penalties within the occasion that the Company’s working leases with its taxable REIT subsidiaries are usually not held to have been made on an arm’s-length foundation; system safety dangers, information safety breaches, cyber-attacks and programs integration points, together with these impacting the Company’s suppliers, lodge managers or franchisors; different occasions past the Company’s management, together with local weather change, pure disasters, terrorist assaults or civil unrest; and different dangers and uncertainties related to the Company’s enterprise described in its filings with the Securities and Exchange Commission. Although the Company believes the expectations mirrored in such forward-looking statements are primarily based upon cheap assumptions, it may give no assurance that the expectations shall be attained or that any deviation is not going to be materials. All forward-looking info offered herein is as of the date of this launch, and the Company undertakes no obligation to replace any forward-looking assertion to adapt the assertion to precise outcomes or adjustments within the Company’s expectations.
This launch must be learn along with the consolidated monetary statements and notes thereto included in our most up-to-date stories on Form 10-Ok and Form 10-Q. Copies of those stories can be found on our web site at www.sunstonehotels.com and thru the SEC’s Electronic Data Gathering Analysis and Retrieval System (“EDGAR”) at www.sec.gov.
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SOURCE Sunstone Hotel Investors, Inc.