SAN FRANCISCO-Aliso Viejo, CA-based Sunstone Hotel Investors has completed the acquisition of the 802-room Hyatt Regency San Francisco hotel. The gross purchase price was $262.5 million or approximately $327,000 per key.
The acquisition was funded with proceeds from the company's November 1, 2013 issuance of common stock, as GlobeSt.com previously reported. And in the earlier article, we wrote that as of Sept. 30, 2013, the company had approximately $184.4 million of cash and cash equivalents, including restricted cash of $84.1 million. Adjusting for the funds received from the company's offering and the funds used to purchase the Hyatt Regency San Francisco, the company's pro forma cash balance as of September 30, 2013 was approximately $193.1 million of cash and cash equivalents, including restricted cash of $84.1 million.
Ken Cruse, chief executive officer of the company says that “The hotel is located in the heart of San Francisco's Central Business District and is anticipated to benefit from San Francisco's favorable supply and demand dynamic as well as the over three million square feet of additional office space under construction within a five block radius of the hotel.” He adds that “As we match-funded this acquisition with proceeds from an equity offering, this transaction is highly consistent with our stated plan to improve the quality and scale of our portfolio while gradually deleveraging our balance sheet.”
On a recent Q3 earnings call, Cruse noted that the firm will continue to focus on property-level efficiencies helped drive a 220 basis point expansion of its Hotel EBITDA Margins. During the third quarter “our operators set another record for same-store group bookings, and consequently our group pace for 2014 continues to strengthen,” Cruse said. He recently also spoke on this topic at NAREIT's REITWorld 2013 conference in San Francisco, as GlobeSt.com reported.
“With record-level occupancies, our operators are well-positioned to increase average daily rate. Accordingly, we currently anticipate our negotiated corporate business to increase more than 7% portfolio-wide in 2014,” Cruse previously explained. We believe Sunstone-specific factors, including the inclusion of hotels acquired during 2013 and the completion of major renovation work on a number of our hotels during 2013, should help fuel strong relative growth in 2014."
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
