Sunstone Hotel Investors : Montage Healdsburg Acquisition Presentation April 2021
April 28, 2021 at 04:25 pm EDT
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Montage Healdsburg Acquisition
April 2021
One of the Newest and Finest Luxury Resorts
Located in One of the World's Most Sought-After Destinations
Long-Term Relevant Real Estate®
Transaction Overview
Opportunistic Acquisition of Long-Term Relevant Real Estate®
Investment: Sunstone has acquired the fee-simple interest in the recently opened Montage Healdsburg, a 130-room luxury resort in Northern California's world-renowned wine region for $265 million.
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Property: The expansive resort sits across 117 secluded acres and is adjacent to 40 premium home sites being developed as part of Montage Residences Healdsburg(1). The destination resort has abundant amenities, including a vineyard, multiple restaurants, a full-service spa, numerous recreational activities and substantial purpose-built meeting space.
Off-MarketTransaction: The off-market acquisition is the result of a long-standing relationship with the seller, an affiliate of
Ohana Real Estate Investors ("Ohana" or the "Seller") who will continue to own and be responsible for the development and sales of Montage Residences Healdsburg.
Compelling Valuation: Sunstone is acquiring Montage Healdsburg at a discount to what it would cost to develop today. The resort is expected to generate a 6% to 7% net operating income yield upon stabilization of the hotel and inclusive of the expected earnings contribution from the residential rental program.
Funding: The purchase price was funded with $199 million of existing cash and the direct issuance of $66 million of attractively structured Series G preferred equity to the Seller. The dividend on the Series G preferred equity will initially be based on the hotel's net operating income and is tied to the completion of Montage Residences Healdsburg. The Series G preferred equity is callable at liquidation value, at Sunstone's election, at any time.
1. Montage Residences Healdsburg are not included as part of the resort acquisition but are eligible for participation in the resort's residential rental program.
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Sunstone Hotel Investors Inc. published this content on 28 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 April 2021 20:24:10 UTC.
Sunstone Hotel Investors, Inc. is a real estate investment trust. The Company owns approximately 14 hotels, comprised of 6,675 rooms, located in six states and in Washington, DC. The Companyâs portfolio consists of luxury hotels located in convention, resort destinations and urban markets. It is the owner of Long-Term Relevant Real Estate (LTRR) in the lodging industry, specifically hotels in urban and resort destination locations. The Company's hotels are operated by third-party managers under long-term management agreements with TRS Lessee or its subsidiaries. It is operated by third-party managers under long-term management agreements with the TRS Lessee or its subsidiaries. Its third-party managers include subsidiaries of Marriott International, Inc.; managers of six of the Companyâs hotels; Hyatt Hotels Corporation, manager of two of its hotels; and Four Seasons Hotels Limited, Highgate Hotels L.P. and an affiliate, Hilton Worldwide, and Interstate Hotels & Resorts, Inc.
SUNSTONE HOTEL INVESTORS, INC. 
