MIAMI BEACH, FL-Sunstone Hotel Investors, an Aliso Viejo, CA-based investment group, paid $126.1 million for the 409-room Royal Palm Hotel in Miami Beach. Sunstone picked up the 1545 Collins Avenue property in a foreclosure auction.

Although the Royal Palm Hotel is not a typical REIT acquisition, Art Buser, president and CEO of Sunstone, says the Miami Beach property fit the company’s criteria: excellent real estate, well located in a perennially strong market, with a significant upside potential through a full renovation and repositioning program.

"We seek unique opportunities to acquire exceptionally well-located hotel real estate at discount valuations,” says Buser. “This is the right time in the cycle to undertake deep turnarounds as redevelopment costs are low and displacement will be minimized.”