ALISO VIEJO, Calif., Feb. 13, 2017 — Sunstone Hotel Investors, Inc. (the "Company" or "Sunstone") (NYSE: SHO) today announced the sale of the 444-room Fairmont Newport Beach (the "Hotel") for a contractual gross sale price of $125.0 million, or approximately $281,500 per key (the "Sale"). The sale price of $125.0 million represents a 16.0x multiple on 2016 Hotel Adjusted EBITDA of $7.8 million and a 5.2% capitalization rate on the Hotel's 2016 net operating income. The Sale resulted in an estimated net book gain of approximately $44 million and is estimated to increase 2017 taxable income by approximately $37 million.
Robert Springer, Chief Investment Officer, stated, "We are pleased to announce the sale of the Fairmont Newport Beach which in 2016 produced RevPAR nearly 25% below our portfolio average. The Sale, which is consistent with our capital allocation strategy, monetizes an asset at an attractive valuation, increases our portfolio quality, RevPAR and near-term growth prospects and reduces near-term capital needs."
Eastdil Secured acted as exclusive advisor to Sunstone on the Sale.
