California-based REIT Sunstone Hotel Investors has sold its leasehold interest in a 468-room DoubleTree Guest Suites Times Square for US$540 million (US$1.15 million per key). The sale price represents 25.4x EBITDA and a 3.4% NOI cap rate on 2015E metrics.
Sunstone said it sold 100% of the membership interests in its subsidiary that is the indirect holder of the leasehold interest through which the hotel is operated.
Sunstone said the sale is expected to reduce its fourth-quarter and full-year adjusted EBITDA by about US$2.3 million and adjusted FFO by about US$2 million.
R.W. Baird analyst David Loeb said in his note about the transaction, “We view the sale positively given attractive valuation and reduced New York City exposure (now 5% of TTM Hotel EBITDA, down from 11% previously); the buyer appears to have paid a full valuation given the property’s redevelopment potential.”