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Sunstone Seeks Surface Opportunities

The California REIT fuels speculation after a ground-lease buy near SeaWorld in Orlando.

By Carl Cronan | Updated on September 26, 2008

Sunstone Hotel Investors Inc. has raised some speculation as to the future of its Renaissance Orlando Resort at SeaWorld after buying the land underneath the 778-room hotel earlier this month. The San Clemente, CA-based REIT paid $30.4 million for 32.6 acres that it has occupied for years under a third-party ground lease.

“This acquisition advances our strategy of creating stockholder value by redeploying capital into our existing portfolio,” Robert A. Alter, chairman and CEO of Sunstone, stated in a press release announcing the acquisition Sept. 5. He added that the transaction was “a unique opportunity to consolidate the fee interest in a core hotel.”

Bryan Giglia, Sunstone’s VP of corporate finance, tells GlobeSt.com that the all-cash buyout of the ground lease was done to take advantage of falling prices for commercial land in Florida. The owner recently completed $27 million worth of renovations to the Renaissance Orlando Resort, near SeaWorld and in proximity to other local theme parks.

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