The 284-room Marriott Del Mar, located in Carmel Valley, is being sold for $66 million to a Maryland-based investment company.
Sunstone Hotel Investors, which at one time owned the W hotel in downtown San Diego, announced that the Carmel Valley property is currently under contract, with escrow expected to close by the end of the month.
A real estate investment trust that last year acquired a 75 percent stake in the San Diego Hilton Bayfront for $475 million, Sunstone purchased the Marriott in 2006 for $64 million.
Sunstone CEO Ken Cruse said in a news release that the sale of the Marriott is consistent with the company’s strategy of selling off properties in suburban locations in favor of acquiring “high-quality central business district” hotels.
The Orange County-based trust recently acquired the 417-room Wyndham Chicago that it has since been rebranded as a Hyatt, and last year it purchased the Doubletree Times Square.
“The Marriott Del Mar is a great asset, but we had a lot of debt on the hotel, and in our efforts to reduce our leverage, the company decided to sell the hotel,” said John Arabia, chief financial officer. “And there was a lot of interest in that hotel.”
As part of the purchase, the buyer will assume Sunstone’s $47.2 million mortgage.
Arabia would not reveal the buyer, but according to hotel broker Alan Reay of Atlas Hospitality Group, it is Maryland-based Thayer Lodging Group, which currently owns 17 hotels. Its only California hotel is the J.W. Marriott in San Francisco.
“What Sunstone is doing is similar to a number of other REIT’s that are selling assets that are now deemed as not fitting with their portfolio,” said Reay. “REIT’s are governed by what Wall Street wants. Wall Street right now likes very high barriers to entry in urban centers like Chicago, Los Angeles, New York and San Francisco.”
Sunstone has also marketed the Del Mar Hilton for sale, but Arabia would not say whether the property is yet under contract.
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