SAN CLEMENTE, CA-Negotiations have terminated for the time being in locally based Sunstone Investors' reported bid to buy the 1,625-room Hyatt Manchester San Diego for a price that was believed to be in the range of $580 million. However, analysts David Loeb and Andrew Wittmann of Milwaukee-based Robert W. Baird & Co. say that "We would not rule out the potential for Sunstone or another REIT buying the hotel eventually."

The Baird analysts, in a newly issued report on Sunstone, note that the attorney for hotel owner Doug Manchester informed the San Diego Unified Port District that the prospective deal with Sunstone has been terminated. The deal would require the port district's approval for a change of ownership because the hotel is land leased from the district.

Loeb and Wittmann say that they and other initially viewed the Hyatt Manchester deal as positive, but eventually observers came to believe that Sunstone needed to offer potentially significant equity to finance the deal―and that caused shares of Sunstone's stock to weaken.