W Hotel San Diego Owners Default on Mortgage
Property still open for business
By RON DONOHO
Updated 6:45 AM PST, Wed, Jul 29, 2009
Hurt by a slide in occupancy rates and revenue, the owner of downtown’s upscale W Hotel San Diego will default on the June mortgage payment. Sunstone Hotel Investors Inc. will turn the underwater property over to its lenders.
What does that mean to job stability for employees and service for booked guests? “Nothing—everything will move forward as it has in the past,” the W Hotel San Diego general manager Stan Kaminski said Monday. “Starwood will retain the management contract, and continue to take care of all our clients and guests.”
Kaminski, who opened the Sheraton Carlsbad in February 2008, has been on the job at W Hotel for just a month and a half. He said coming into the position he knew the financial situation, but was still taken by surprise when the default occurred.
Kaminski said the company is still awaiting official word from the bank, and a statement will be released later Monday.
Sunstone Hotel Investors owned 43 hotel properties that are run by a variety of high-end management chains, including Hilton, Hyatt, Marriott and Fairmont. W Hotels is a management brand under the Starwood umbrella.
“While [Sunstone] maintains more than adequate liquidity to support or repay this mortgage, we believe a conveyance of this hotel in settlement of the debt would be in the best interest of our stockholders,” Sunstone chief financial officer Ken Cruse said in a statement.
When opened in December 2002, W Hotel San Diego was the new “it” hangout. Its sand-covered Beach rooftop bar was coveted by the “in” crowd. The property lost some of its luster as more and more rooftop bars—including Stingaree and The Gaslamp Marriott’s Altitude—entered the downtown arena.
To keep up with the influx of downtown luxury boutique properties—like The Ivy, The Keating and Hotel Solamar—W Hotel renovated its bars, pool area and lobby last year. The cost of that upgrade—overseen by “Queer Eye for the Straight Guy” design guru Thom Filicia—was not disclosed.
First Published: Jun 8, 2009 10:21 AM PST
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