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Amstar Group of Colorado Seeks to Cash in on the 210-room Sunburst Resort in Scottsdale, Ariz
By Donna Hogan, The Tribune, Mesa, Ariz.
Knight Ridder/Tribune Business News 

Jun. 18--The Sunburst Resort in Scottsdale, Ariz., is for sale. 

The 210-room hotel, owned by a real estate investment firm in Colorado, and managed by Noble House, is expected to fetch $26 million to $30 million, said John Strauss, vice president for Los Angeles-based Jones Lang LaSalle Hotels, which is marketing the inn. 

Sunburst general manager Darren Smith said the staff would stay the same after a sale, but an ownership change likely will mean new amenities. "This is a hot property because it has a great location," Smith said. "If you add a spa component and bring the guest rooms up another level it has really positive long-term prospects in Scottsdale." 

The Sunburst Resort, at 4925 North Scottsdale Road, is the closest full-service hotel to Scottsdale's city center. 

Smith said a major redo five years ago "brought the Sunburst up to a four-star level." But to remain competitive with nearby boutique inns like the Royal Palms Hotel & Casitas in Phoenix and Sanctuary Resort in Paradise Valley, the Sunburst needs a spa and five-star furnishings, he said. Smith estimates that could cost new owners about $4 million. Noble House, a hotel management company which owns as well as manages many of its branded properties, probably will enter the bidding to buy the Scottsdale hotel, Smith said. Strauss said he expects to attract other hotel companies as well as real estate investment groups. 

"There will be a host of national and regional investors attracted to this location," Strauss said. "The Phoenix (area) economy and the resort market have shown strong resilience. And this is Scottsdale. Scottsdale has a cachet in the overall hotel investment market. It's a good time to sell. There is a lot of capital looking for deals." 

Strauss said a sagging tourism industry nationwide and a trio of under-construction hotels about to launch 2,200 new rooms into the Valley market won't hurt sale prospects for the Sunburst. 

The new hotels -- Westin Kierland and Desert Ridge Marriott in northeast Phoenix and the Sheraton White Horse Pass in Gila River Community -- will attract large groups and conventions, not the kind of traveler who would typically stay at the Sunburst, he said. Sunburst owners Amstar Group of Colorado bought the hotel in 1995 with the intention of making improvements, increasing the value of the investment and selling it, said Kevin Mahoney, Amstar's executive director for hotel investments. 

But some technicalities regarding ownership of the land held up a sale until now. Those problems have been resolved, Mahoney said. 

"We are investors," he said. "We had a business plan. We've completed the plan. It's time to harvest the rewards and move on." 

Strauss said the Sunburst is pegged to be taken off the market if a deal isn't done by December. 

-----To see more of The Tribune, or to subscribe to the newspaper, go to http://www.eastvalleytribune.com. 

(c) 2002, The Tribune, Mesa, Ariz. Distributed by Knight Ridder/Tribune Business News. JLL, MAR, HOT, 


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