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Sunstone Hotel Investors Inc. has sold the Hilton New Orleans St. Charles hotel for $47 million, or approximately $187,000 per key.
The Aliso Viejo-based REIT said it expects the 252-room Hilton to “require a cyclical renovation to maintain its competitive position and sustain its current level of earnings.”
Sunstone (NYSE: SHO) said it will provide more details on the disposition of the hotel and the expected impact on the company’s 2025 outlook in its upcoming second quarter earnings report.
“We were able to divest the hotel at attractive pricing, eliminate near-term defensive capital expenditures and recycle the proceeds into a higher yielding investment through the repurchase of our stock at a compelling discount,” Chief Executive Bryan Giglia said in a statement.
Sunstone still owns the JW Marriott New Orleans.
“While we maintain capacity to grow the portfolio and are evaluating hotel investment opportunities, the value we can realize through the repurchase of our stock near current levels will generally represent a more accretive allocation of capital for our shareholders,” Giglia added.
Sunstone shares were up 2.9% to $9.02 apiece with a market cap of $1.8 billion during midday trading.