ALISO VIEJO, Calif.— Sunstone Hotel Investors Inc. announced that it has entered into agreements to sell a four-hotel, 1,222-room portfolio and commercial laundry facility (the Rochester Portfolio) in Rochester, Minnesota for a gross price of $230 million. The four hotels include the 660-room Kahler Grand, the 271-room Kahler Inn & Suites, the 202-room Marriott Rochester, and the 89-room Residence Inn by Marriott Rochester.
Ken Cruse, president and CEO, stated, “The Sunstone team continues to make solid progress against our plan to improve our portfolio quality while strengthening our balance sheet. For full-year 2012, the Rochester Portfolio generated RevPAR of approximately $80 and EBITDA per key of approximately $13,400, both of which are more than 30 percent below our portfolio average. By selling the Rochester hotels at a sub-7 percent cap rate on 2012 operating income, we will improve our portfolio RevPAR by over $5.50 (or by 4 percent), while increasing our Hotel EBITDA per key by approximately $625 (or by 3 percent), to over $20,000 on a pro forma basis for 2012.”
Sale of the Rochester Portfolio is expected to close in January 2013, subject to customary closing conditions.