ALISO VIEJO, CA—Sunstone Hotel Investors Inc. has acquired the fee-simple interest in the 175-room Oceans Edge Hotel & Marina in Key West, FL for $175 million.
The property is situated across 20 land and water acres on Stock Island and is the largest purpose-built luxury resort and marina in Key West, FL, according to the company. The hotel's rooms are spread across four buildings designed with signature Key West conch-style architecture and have an average size of 470 sq. ft. There are also six swimming pools, a full-service restaurant, a waterfront bar, on-site water sports, a paddle shop, and a fitness facility.
John Arabia, president and CEO, stated, “The acquisition of Oceans Edge Hotel & Marina demonstrates a continuation of our strategy to recycle capital into higher quality, long-term relevant real estate while maintaining an industry leading balance sheet with ample investment capacity. Over the past 19 months, we have sold nearly $735 million of real estate and used a portion of those proceeds to return capital to our shareholders, to strengthen our already low-levered balance sheet and to redeploy proceeds into exceptional real estate. The Oceans Edge Hotel & Marina is a brand new, purpose-built hotel and marina that is of significantly higher quality than the majority of the Key West hotel supply. The luxury resort and marina, which opened in January, is expected to provide meaningful growth in the near term as it reaches stabilization, and over the long term due to the supply restrictions in the Key West market.”
The company will provide an update to this year's guidance to incorporate the impact of these transactions with its second quarter earnings release on August 1. As part of the transaction, Sunstone also acquired a combined 52 wet and dry boat slips and amenities in the attached marina. The hotel will operate as an independent property and be managed by Singh Hospitality.
In addition, Sunstone has completed the disposition of the 199-room Marriott Park City in Park City, UT for a gross sale price of $27.6 million on June 14. The sale resulted in a net book gain of $1.2 million and will increase 2017 taxable income by $4.4 million.