San Clemente-based hotel owner Sunstone Hotel Investors Inc. is looking to acquire the 1,625-room Manchester Grand Hyatt in downtown San Diego.
Sunstone is said to be in talks with hotel developer Doug Manchester, who owns the Grand Hyatt and has been looking to sell his shares in the hotel.
Manchester is believed to have sought a deal with Chicago-based Hyatt Hotels Corp. earlier in the year to sell up his majority interest in exchange for a minority stake in the hotel and two other properties.
The deal never came to be, according to a memo last month from the San Diego Unified Port District.
The Grand Hyatt is on a land lease with the port district, which acts as the hotel’s landlord.
Manchester appears to be seeking the port’s approval for the change of ownership to Sunstone.
The port district board is expected to take up the request in September, according to the San Diego Union-Tribune.
There’s no word on how much Sunstone would pay for the largest hotel in Southern California.
Sunstone, which owns all or part of 40 hotels, made waves in San Diego last year when it decided to stop making loan payments on the W Hotel in downtown after deciding the hotel was no longer worth the $65 million it owed on it.
Sunstone has been on the hunt for acquisitions but “will continue to carefully pick our spots and will not rush to acquire assets,” said Art Buser, chief executive at Sunstone in July.
Like several buyers looking to buy assets at discounted prices, Sunstone has run up against a valuation gap where sellers are reluctant to sell, holding out instead for higher prices in anticipation of a recovery.
In an attempt to work around this, Sunstone says it has been exploring hotel debt and portfolio transactions.
