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Michael Rosenfeld’s Next Century Associates Acquires the 726 room
Hyatt Regency Century Plaza Hotel for $366.5 million, Approximately
$505,000 per room, from Sunstone Hotel Investors, Inc.


LOS ANGELES - June 2, 2008 - Los Angeles real estate investor Michael Rosenfeld’s Next Century Associates, a joint venture with an entity in the D. E. Shaw group, a global investment firm, has purchased the renowned Century Plaza Hotel for $366.5 million, approximately $505,000 per room, from Sunstone Hotel Investors, Inc. (NYSE:SHO). The 19-story hotel, a centerpiece of Century City in Los Angeles with a highly recognizable sweeping arc shape, has 726 guestrooms and 85,000 square feet of meeting space, including the Los Angeles Ballroom, largest in the Southland. 

“This is a rare opportunity to buy a jewel in my hometown,” said Michael Rosenfeld, founder and CEO of Century City-based Woodridge Capital Partners and managing partner of Next Century Associates. “The Century Plaza has been an LA icon since it opened in 1966. Further, its location in the heart of Century City is unbeatable,” he added, pointing to its position within walking distance of new luxury residential towers, the Westfield shopping center, and 10 million square feet of the finest office complexes in Los Angeles including the recently completed 2000 Avenue of the Stars directly across the street. 

“Properties like the Century Plaza Hotel are one-of-a-kind; they have lasting value in any economic environment,” Rosenfeld noted. “Prime Westside assets are maintaining their value and attractiveness to buyers, particularly international ones. It is not every day such a prime property becomes available.” 

Sunstone purchased the hotel in 2005 and immediately implemented a $36 million improvement program, installed Global Hyatt as the operator and added the highly popular X-Bar with its indoor/outdoor lounge and a 35,000 square foot Equinox health club as well as major improvements to all public areas. The X-Bar was named one of the top ten destinations for young professionals by the Hollywood Reporter. 

“Sunstone has done a great job in repositioning the hotel to a first-class property and we intend to continue this momentum,” according to Rosenfeld. “We want to expand its appeal to the growing entertainment industry now based in Century City including Creative Artists Agency (CAA) as well as to business travelers, affluent shoppers and international visitors.” 

Hyatt will continue to operate the hotel that sits on 5.75 acres at 2025 Avenue of the Stars. The property has extensive gardens as well as four outdoor swimming pools with private cabanas, a 20-room spa and several restaurants. 

Sunstone Hotel Investors Release

SAN CLEMENTE, Calif., June 2, 2008 - Sunstone Hotel Investors, Inc. (NYSE: SHO) announced today that it has sold its 726-room Hyatt Regency Century Plaza to Los Angeles real estate investor Next Century Associates, LLC for gross cash proceeds of approximately $366.5 million, which equates to approximately $505,000 per room and approximately 18.6x the hotel's 2007 EBITDA (excluding guaranty payments).

"Shortly after I returned as interim CEO, we received an offer, which ultimately led to today's announcement," said Bob Alter, Executive Chairman. "This sale marks the conclusion of yet another highly successful hotel investment for Sunstone through which we created significant value for our stockholders by renovating, rebranding and repositioning an underperforming asset."

"We acquired the Century Plaza hotel in October of 2005 for approximately $400,000 per room and implemented a business plan that included conducting a major renovation, installing Hyatt as our new manager and positioning the hotel to maximize its appeal to both group and business travelers in light of the reemergence of Century City as the premier entertainment business market. In addition to a complete rooms and public space renovation, we added the successful X-Bar lounge and created a high-end Equinox health club in an underutilized 35,000 square foot building on the hotel grounds."

"During our ownership period, we implemented a number of successful asset management initiatives aimed at unlocking new revenue streams and achieving a strong return on our invested capital. Due in large part to the successful execution of our plan and a strong performance by the Hyatt team, the hotel's annual EBITDA nearly tripled during our ownership period. Additionally, during our ownership period we received a total of $27 million in yield support payments from Hyatt, which guaranteed an annual 10% return on our equity through the third quarter of 2007. The combination of a well-planned renovation, creative asset management and meaningful yield support from Hyatt enabled Sunstone to realize a total internal rate of return of approximately 19% upon sale."

Century City was created in the early 1960s as a master-planned community on 176 acres that were originally part of the backlot of the 20th Century Fox Studios. It was designed as a self-contained, mixed-use mini-city and today it is on the verge of achieving this original vision as a world-class residential and mixed-use destination, Rosenfeld said. 

Woodridge Capital Partners, founded by Rosenfeld in 1988, is a broad-based real estate investment company with hotel, residential, commercial and industrial assets throughout the United States and Canada. Rosenfeld recently sold the 24-story Carlyle on Wilshire, a luxury residential tower on Wilshire Boulevard’s Golden Mile, to New York based Elad Group for $140 million. 

The D. E. Shaw group is a global investment and technology development firm with more than 1,300 employees; approximately $36 billion in aggregate investment capital as of April 1, 2008; and offices in North America, Europe, and Asia. Since its organization in 1988, the firm has earned an international reputation for financial innovation, technological leadership and an extraordinarily distinguished staff. 


Next Century Associates
Barbara Casey, 310-396-2400 

Also See: 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
David Horowitz Named General Manager for the New Hyatt Regency Century Plaza / March 2006
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
The 1,046 Room Century Plaza Hotel and Tower Sold to the Pivotal Group: Plan Dual-Brand Strategy / Feb 1999 


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