Sunstone announced on Wednesday that it signed an agreement to buy the 417-room Wyndham Chicago from an affiliate of The Blackstone Group for US$88.4 million.
Sunstone Hotel Investors, Aliso Viejo, California, said it plans to rebrand the hotel as Hyatt Chicago Magnificent Mile and give the property a US$25 million renovation, a portion of which will be funded by Hyatt Hotels Corp., Chicago. The hotel will be managed by Davidson Hotels & Resorts, Memphis, Tennessee, under a franchise agreement with Hyatt.
“We believe Hyatt is the most attractive brand for this hotel due to Hyatt’s ability to attract high-end business travel and corporate groups, including the vast number of medical meetings generated within walking distance of the hotel. Given the hotel’s unique upside opportunities and the mutual benefits of the transaction, Hyatt provided us with an attractive package of franchise and economic terms. There will be no debt incurred in connection with this acquisition,” said Ken Cruse, Sunstone’s president and CEO.
The purchase is being funded with US$30 million of cash on hand and a US$58.4 million sale of Sunstone’s common stock. The purchase is expected to close in the second quarter of this year.