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Wednesday, Jun 19, 2024

Sunstone’s Wine Trip Approaches $440M

Irvine’s Sunstone Hotel Investors Inc. is back on the acquisition track in a big way and is paying top dollar in the process.

The hospitality-focused real estate investment trust is under contract to buy a recently built Four Seasons in Napa Valley, an 85-room resort that opened a month ago near Mount Saint Helena.

The Four Seasons Resort and Residences Napa Valley in Calistoga is set amid a working winery and counts a collection of rooms and suites whose starting rates currently top $2,000 a night, according to its website.

Sunstone (NYSE: SHO) says it is paying about $177.5 million for the hotel, which was listed for sale earlier this year by Alcion Ventures.

At nearly $2.1 million per key, it’s set to be the third-highest valued hotel deal ever seen in California, according to data from Irvine hotel brokerage and consultancy Atlas Hospitality.

Sunstone confirmed the planned acquisition late last week.

Return Buyer

The Four Seasons buy will be the second-big ticket 2021 purchase in wine country for Sunstone.

At the end of April, the company paid a reported $265 million for another recently built hotel in Northern California, the 130-room Montage Healdsburg in Sonoma County.

That deal worked out to a price of a little more than $2 million a key and is the fourth-priciest hotel deal ever seen in California, according to Atlas’ records.

Affiliates of Ohana Real Estate Investors, which owns Dana Point’s Waldorf Astoria and has owned other high-end hotel properties in Orange County, sold the Montage Healdsburg.

Laguna Beach-based Montage International operates the 258-acre Healdsburg resort under a long-term management contract.

CEO Swap

The purchase of the Montage was the first acquisition for Sunstone since 2017, and the addition of the Four Seasons will bring its hotel portfolio to 18, about half what it was at the end of 2014.

The company had been shedding assets the prior few years, including all its OC properties. Another hotel it owns in La Jolla is under contract to be sold.

Sunstone’s long-serving Chief Executive John Arabia left Sunstone two months ago; his role has been filled on an interim basis by the REIT’s chairman, Douglas Pasquale.

Shares in Sunstone are nearly doubled in valued over the past year, and its valuation is approaching $3 billion. 

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.

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