Based upon the hotel's current forecasts, the purchase price equates to approximately 13.8x 2007 EBITDA and 12.7x 2008 EBITDA (reconciliation to net income below). Concurrent with the close of the acquisition, the Company closed on a mortgage financing totaling $176.0 million at a fixed interest rate of 5.58%. The loan is interest only for its life and matures in 2017. The balance of the purchase price was funded with a draw on the Company's credit facility which will ultimately be repaid through a partial settlement of the Company's $111.0 million forward equity agreement.
Steven R. Goldman, Sunstone's Chief Executive Officer, stated, "The acquisition of the Marriott Long Wharf fits well with our strategy of assembling a 'best-in-class' portfolio of institutional quality assets located in high growth, high barrier markets. The Marriott Long Wharf is arguably one of the best located hotels in all of Boston. The hotel's waterfront location and proximity to Boston's financial district make it the preferred location for both leisure and business travelers. Since its opening in 1982, the hotel's occupancy has never dropped below 80%. We plan to renovate the guestrooms, including new case goods, soft goods and flat screen televisions, which, combined with the hotel's high occupancy, will drive rate and profitability."
About Sunstone Hotel Investors, Inc.
Sunstone Hotel Investors, Inc. is a Southern California-based lodging real estate investment trust (REIT). The Company now has interests in 52 hotels with an aggregate of 17,119 rooms primarily in the upper-upscale and upscale segments operated under brands from nationally recognized hotel companies such as Marriott, Hyatt, Hilton, Starwood and Fairmont.
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