Sunstone Hotel Investors 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.“Shortly after I returned as interim CEO, we received an offer, which ultimately led to today’s announcement,” said Bob Alter, Executive Chairman.
“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.
“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.”