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Aliso Viejo-based Sunstone Hotel Investors Inc. has agreed to acquire the Wyndham Chicago in an $88.4 million cash and stock deal.

The company, which owns a portfolio of 32 hotels, will pay $30 million in cash and the rest in stock to an affiliate of New York-based investment firm The Blackstone Group.

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The deal for the 417-room hotel gives Blackstone a nearly 5% stake in Sunstone. The transaction is expected to close in the second quarter.

Sunstone plans to rebrand the hotel the Hyatt Chicago Magnificent Mile and later this year will begin a renovation aimed at making it “one of Chicago’s top business destinations,” Chief Executive Ken Cruse told analysts Thursday.

The deal is part of a strategy focused on investing in what Cruse called “top urban growth centers in the U.S.”