San Clemente-based Sunstone Hotel Investors Inc. is buying five hotels and a joint venture stake from Marriott International Inc. for $419 million.
Sunstone plans to spend $36 million to upgrade the six hotels, which still will be run under contract by Marriott.
The Sunstone buy comes on the heels of Marriott’s settlement of a legal row with CTF Holdings Ltd., part of Hong Kong’s New World Development Co.
Marriott is buying 32 hotels and some joint venture stakes from CTF for $1.45 billion. The hotel owner and operator then plans to sell 19 of the hotels to Sunstone and Walton Street Capital LLC.
The move ends a dispute in which CTF sued Marriott in 2002, alleging it secretly pocketed millions of dollars in kickbacks and fees relating to purchasing pacts with outside vendors, according to The Wall Street Journal.
Sunstone said it has equity and debt financing to finance hotel buys and upgrades.
As part of the financing, the company plans to sell 3.75 million shares to GIC Real Estate, an investment arm of the government of Singapore.
It also plans to sell $100 million worth of debt that converts into stock.
