San Clemente-based Sunstone Hotel Investors Inc. said Thursday it’s completed the sale of a Riverside hotel for $19.3 million.
The company, which owns all or part of about 40 hotels, sold the 292-room Marriott-Riverside to an undisclosed buyer.
Sunstone Chief Executive Art Buser called the hotel “a non-core asset.”
The company made waves earlier this month by becoming the first public hotel owner in the downturn to hand back keys to a lender.
Sunstone walked away from the W Hotel in San Diego rather than keep paying interest on the hotel after failing to rework a loan.
It owed $65 million on the W with $4 million in payments due this year. It bought the hotel for $96 million in 2006.
Sunstone executives said they could walk away from “a handful” of hotels that are worth less than their mortgages, that aren’t generating enough cash to cover interest payments and where lenders are unwilling to rework loans.
The Marriott-Riverside is the second sale for the hotel in the past few months.
Sunstone sold a Marriott in Napa for $36 million in May. The hotel would have required about $6 million in renovations to comply with Marriott standards this year, the company said.
The company recently announced plans to sell about $100 million worth of shares to pay off credit lines and to buy back $123.5 million worth of debt due in 2027.
As part of the debt buyback, Sunstone included a provision that would allow it to default on mortgages of up to $300 million without triggering a default on its bonds,or immediate payment requests from lenders.
Sunstone had $174 million in cash at the end of the first quarter and $1.7 billion in debt with none of it due in the near term.
