Sunstone Hotel Investors, Inc. Acquiring the 728-room Century Plaza Hotel & Spa in Century City, California for $293.0 million; Will Reposition as Hyatt Regency Century Plaza / August 2005

Hotel Online Special Report

Sunstone Hotel Investors, Inc. Acquiring the 728-room Century Plaza
Hotel & Spa in Century City, California for $293.0 million
-
Will Reposition as Hyatt Regency Century Plaza

SAN 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
Adjacent to Beverly Hills and minutes from Rodeo Drive, The Century Plaza Hotel & Spa is Los Angeles' most fashionable address. The AAA Four Diamond Hotel has hosted heads of state, presidents, celebrities and dignitaries for over 30 years. The Century Plaza is the premier meetings destination in Los Angeles with over 141,000 square feet of indoor and outdoor meeting space -- including the largest ballroom in the city. Set amidst seven acres of beautifully landscaped grounds, the hotel's accommodations feature private balconies with sweeping views of the Los Angeles skyline and the Pacific Ocean. The hotel also features Spa Mystique, a 35,000-square-foot, Asian influenced resort spa that offers guests a unique environment in which to relax and renew.

About Sunstone Hotel Investors, Inc.
Sunstone Hotel Investors, Inc. is a Southern California-based lodging real estate investment trust (REIT). The Company, following the completion of this acquisition, will own 61 hotels with an aggregate of 17,411 rooms primarily in the upper-upscale and upscale segments operated under franchises owned by nationally recognized brands such as Marriott, Hyatt, Hilton, InterContinental and Fairmont. For further information, please visit the Company's website at http://www.sunstonehotels.com.

About Global Hyatt Corporation
There are 212 Hyatt hotels and resorts (over 90,000 rooms) in 43 countries around the world, operating under the Hyatt(R), Hyatt Regency(R), Grand Hyatt(R) and Park Hyatt(R) brands. Currently, there are an additional 28 Hyatt hotels and resorts under development, including 10 new hotels in China. Hyatt Corporation (domestic U.S., Canada and Caribbean hotels) and Hyatt International Corporation (international properties) are subsidiaries of Chicago-based Global Hyatt Corporation. Global Hyatt Corporation is also the owner of Hyatt Vacation Ownership, Inc. (timeshare), Hyatt Equities, L.L.C. (hotel ownership), and U.S. Franchise Systems, Inc. (which franchises Hawthorn Suites, Microtel and Best Inns). In January 2005, Global Hyatt Corporation also added an additional 143 U.S. properties to its growing portfolio with the acquisition of the upscale, limited service AmeriSuites hotel chain. These properties will be renovated and repositioned under the new Hyatt Place select service brand in 2006.

Reconciliation of Net Income to EBITDA - Full Year 2006 Forecast (in millions)

Net Income                                                       $9.6
Depreciation expense (1)                                     8.1
Interest Expense                                               10.8
EBITDA                                                          $28.5

(1) Depreciation expense is a preliminary estimate based on the purchase price and renovation costs. The Company expects to obtain a purchase price allocation from an independent third party which may cause this estimate to change.

Contact:

Sunstone Hotel Investors, Inc.
(949) 369-4204
Web Site: http://www.sunstonehotels.com

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

To search Hotel Online data base of News and Trends Go to Hotel.Online Search