Sunstone reportedly set to acquire Hyatt in SF

Sunstone Hotel Investors has announced it is issuing 20 million shares to fund an acquisition, which R.W. Baird analyst David Loeb believes is the 802-room Hyatt Regency San Francisco at the Embarcadero Center.

Loeb reported on Tuesday that it is expected that Sunstone will pay approximately US$262.5 million ($327,000/key) in the fee simple deal to a partnership between Dune Capital Management and DiNapoli Capital Partners, and that Hyatt will continue as the hotel’s manager. Dune and DiNapoli acquired the hotel in 2007 from Strategic Hotel Capital for US$200 million.

Loeb added that Dune and DiNapoli upgraded the Regency Club and the Regency Club rooms in 2007 after acquisition, and the meeting space was renovated in July 2011. He said he expects Sunstone to complete a rooms refresh at a minimum.