Dive Brief:
- Sunstone Hotel Investors sold the 252-room Hilton New Orleans St. Charles for $47 million, or approximately $187,000 per key, the real estate investment trust announced Monday. Transaction terms, including the buyer, were undisclosed, and Sunstone could not be reached for a Hotel Dive request for comment.
- With the disposition, Irvine, California-based Sunstone avoids near-term capital expenditures on the hotel, including a renovation that will be required to “maintain its competitive position and sustain its current level of earnings,” the REIT detailed in a news release.
- Sunstone will use the sales proceeds to buy back company stock, which currently is “a more accretive allocation of capital for our shareholders” than property reinvestment, CEO Bryan Giglia said in a statement. With other assets still operating in New Orleans, though, Sunstone will continue to benefit from the city’s diverse travel demand fundamentals, according to Giglia.
Dive Insight:
Sunstone will invest all of the proceeds from its sale of the Hilton New Orleans St. Charles into additional share repurchases, “a higher yielding investment” than additional property acquisition, according to Giglia.
The deal aligns with an ongoing stock repurchase strategy being carried out by the REIT, according to its earnings report from the first quarter of 2025. During Q1, Sunstone repurchased 821,771 shares of its common stock for a total repurchase amount of $8 million, per the report.
Despite the recent New Orleans sale, Giglia said, Sunstone will continue to benefit from the city’s “attractive lodging market for group events and leisure travel” through its ownership of the JW Marriott New Orleans.
Sporting events drove groups to the market earlier this year, when New Orleans’ lodging industry got a boost from Super Bowl LIX.
Other hotel players making moves in New Orleans include global real estate investment firm Gencom, which acquired two Marriott International hotels, including the Ritz-Carlton, New Orleans, in March. At the time of the deal, Gencom Chief Investment Officer Alessandro Colantonio said New Orleans’ “rich cultural heritage and thriving tourism sector” played a role in the company’s investment.
Caesars Entertainment, meanwhile, last year debuted its $435 million Harrah’s New Orleans redevelopment, including a Nobu Hotel. And Omni Hotels & Resorts will build a 1,000-room headquarters hotel across the street from New Orleans’ Ernest N. Morial Convention Center.
Sunstone’s sale of Hilton New Orleans St. Charles comes roughly a month after the company opened Andaz Miami Beach, the first property under Hyatt’s newly formed Lifestyle Group.
