Sunstone Hotel Investors to Acquire Hilton Garden Inn Chicago Downtown/Magnificent Mile
ALISO VIEJO, Calif.—Sunstone Hotel Investors, Inc. (the "Company" or "Sunstone") announced that it has entered into a purchase and sale agreement to acquire the fee-simple interest in the 357-room Hilton Garden Inn Chicago Downtown/Magnificent Mile (the "Hotel") for a gross purchase price of $91.75 million ($257,000/key). The purchase price represents an 11.7x multiple on 2012 forecasted hotel Adjusted EBITDA of $7.8 million and a 7.7% capitalization rate on 2012 forecasted hotel net operating income. During the Company's anticipated 2012 ownership period, the Hotel is expected to generate approximately $4.1 million of EBITDA and $3.7 million of net operating income. READER COMMENTS
In an announcement, Ken Cruse, president and chief executive officer, stated, "We are pleased to announce the acquisition of the Hilton Garden Inn Chicago, our second recent acquisition in the Magnificent Mile area of downtown Chicago. The hotel's strong urban location, superior RevPAR and EBITDA per key, the efficiency of the urban select-service model and the hotel's close proximity to our other downtown Chicago hotels make this a very attractive addition to our portfolio. We intend to capitalize on meaningful synergies across our three-hotel Magnificent Mile portfolio through coordinated revenue management and by combining operations management of the Hilton Garden Inn with our Embassy Suites Chicago, which is located directly across the street. Our acquisition of the Hilton Garden Inn will be funded entirely with cash and we will own the hotel free and clear of mortgage debt."
The Hilton Garden Inn Chicago Downtown/Magnificent Mile is a 357-room, 23-story hotel. It is one block from Chicago's famous "Magnificent Mile." Each guestroom and suite provides guests with views of downtown Chicago. The Hotel's meeting and break-out space is primarily located on the 12th floor and features views of the Chicago skyline. The Hotel offers approximately 5,700 square feet of combined meeting space.
The transaction is expected to close in the third quarter.
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