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Chicago & Midwest  + Hospitality  | 
Sunstone Hotel REIT Exits Chicago Market, Unloads Hilton and Marriott Properties

Sunstone Hotel REIT Exits Chicago Market, Unloads Hilton and Marriott Properties

Sunstone Hotel Investors, Inc. has completed the sale of the 368-room Embassy Suites Chicago and the 361-room Hilton Garden Inn Chicago Downtown/Magnificent Mile. 

The Chicago Hotels were sold for a combined gross sale price of $129.5 million, or $178,000 per key, which represents a 9.8x multiple on 2019 Hotel Adjusted EBITDAre and an 8.8% cap rate on 2019 Hotel Net Operating Income. The Chicago Hotels generated an IRR of approximately 9% for the Company over the life of the investment. 

The Company anticipates that the Chicago Hotels will generate a combined first quarter 2022 net loss before any gain on sale of $3.1 million to $3.6 million and Hotel Adjusted EBITDAre loss of approximately $2.0 million to $2.5 million through the date of sale.   

CEO Bryan Giglia said that sale : “marks our exit from the Chicago market, which has been hindered by excess supply and an inability to drive meaningful rate and profitability growth. We expect to recycle the proceeds into higher growth and greater per-share NAV enhancing investments. With these sales, we have now largely completed our non-core disposition program and we are actively looking to grow the portfolio.”

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Bryan Giglia

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  • ◦Sale/Acquisition