Hotel & Spa in Century City, California for $293.0 million
Will Reposition as Hyatt Regency Century Plaza
CLEMENTE, Calif., Aug. 24, 2005 - Sunstone Hotel Investors, Inc. (NYSE:
SHO) and Global Hyatt Corporation announced today that they have entered
into an agreement to acquire the 728-room Century Plaza Hotel & Spa
located in Century City, California. Sunstone has signed an agreement
to acquire the hotel for $293.0 million before expenses and renovation
costs. Sunstone will reposition the hotel as Hyatt Regency Century
Plaza and will immediately embark on a $22.5 million renovation that will
include all guest rooms and common areas and the addition of a Regency
level and Hyatt Regency Club. Sunstone will enter into a long-term
management agreement with Hyatt, during which, Hyatt will provide a limited
performance guarantee that will ensure a return on equity to Sunstone.
Sunstone intends to obtain approximately $175.0 million of debt financing
to finance a portion of the purchase price, which is expected to close
in the fourth quarter of this year. The contract to acquire the Century
Plaza Hotel & Spa is subject to customary closing requirements and
conditions. Additional information regarding the transaction will
be provided with the company's SEC form 8-K filing.
Based upon Sunstone's operating projections and the Hyatt limited guarantee, the all-in consideration equates to an 11.4x multiple on 2006 EBITDA (reconciliation to net income below).
Robert A. Alter, Sunstone's Chief Executive Officer, stated, "The Century Plaza Hotel & Spa is an irreplaceable asset located in the heart of Century City, the premier Westside Los Angeles business address. We are excited to acquire this landmark Los Angeles hotel. The property will benefit from Hyatt's brand profile and global distribution network. We look forward to further expanding our partnership with Hyatt."
"We are extremely pleased to be adding Los Angeles' premier meeting and convention hotel to Hyatt's Southern California portfolio as well as to our family of top group properties across the country," said Steve Goldman, executive vice president, Global Hyatt Corporation. "Additionally, we are excited about enhancing our relationship with Sunstone and look forward to partnering with them on future transactions."
About Century Plaza Hotel & Spa
About Sunstone Hotel Investors, Inc.
About Global Hyatt Corporation
Sunstone Hotel Investors, Inc.
|Also See:||Tim Loughman Appointed General Manager of The Century Plaza Hotel & Spa / April 2003|
|Pivotal Century Plaza Hotel, LLC, Which Acquired The Century Plaza and Tower in February 1999, Will Renovate the Property into Two Hotels: The St. Regis, LosAngeles, and The Westin Century Plaza / April 2000|