Goldman Discusses Sunstone Hotel Investors, Inc. (SHO)

Goldman Sachs is out with a research report on Sunstone Hotel Investors, Inc. SHO after the company made a series of announcements after the bell. It has a Neutral rating on shares. In a note to investors, Goldman writes, "RevPAR for the quarter was below our expectations but the reason for this was unclear either from the release or talking to management after the call. In terms of the asset management actions we generally view them as positive. While the Royal Palm had the potential to work out over the long term it was a large undertaking and likely would not hit its full stride until 2013. By selling that asset and recycling capital into the Hilton San Diego Sunstone should be better able to participate in this cycle. Sunstone paid 13.8X 2010 EBITDA for the Hilton San Diego or $399,000 per key. This compares $351,000 per key Host paid for the Manchester Grand Hyatt San Diego. Regarding the preferred offering it is unclear at this time how much the company is looking to sell and what the use of proceeds will be. We expect more details about this on the call tomorrow." Shares of SHO gained 5 cents yesterday to close at $10.21.