In Brief: Sunstone Hotel Investors has entered into a definitive agreement to sell the 821-room Hyatt Regency San Francisco to funds affiliated with Blackstone Real Estate for a gross sale price of $279 million.
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Hyatt Regency San Francisco – Image Credit Hyatt
Sunstone Hotel Investors has entered into a definitive agreement to sell the 821-room Hyatt Regency San Francisco to funds affiliated with Blackstone Real Estate for a gross sale price of $279 million, or approximately $340,000 per key. The sale price represents a 21.4x multiple on Hotel Adjusted EBITDAre and a 3.5% cap rate on Hotel Net Operating Income for the trailing twelve-month period ending May 31, 2026.
In anticipation of the sale, Sunstone deployed nearly $70 million of the sale proceeds into the discounted repurchase of its common and preferred stock during 2026. The company repurchased 4.4 million shares of its common stock at an average price of $9.24 per share, for an aggregate repurchase amount before expenses of $40.5 million, and 1.4 million combined shares of Series H and Series I Cumulative Redeemable Preferred stock at an average price of $20.37 per share, for an aggregate repurchase amount before expenses of $27.8 million.
Sunstone is evaluating additional opportunities to deploy the remaining proceeds from the sale. The company expects the transaction to close in late July or early August and plans to provide additional details regarding the disposition, including the expected impact on its full-year outlook, as part of its upcoming quarterly earnings release in early August.
Eastdil Secured marketed the hotel and served as exclusive broker for the sale. J.P. Morgan Securities LLC continues to serve as financial advisor to Sunstone.