Sunstone Investors Divesting?

Last week, Sunstone Hotel Investors defaulted on a San Diego W hotel and said it wanted to hand back the keys to its lender. This week, Sunstone is getting rid of another of its Southern California properties, the Marriott Riverside in Riverside, Calif. which has gross annual sales around $19.3 million. The San Clemente, Calif.-based Sunstone closed the sale today, so far without giving a price or who exactly bought the property.

Sunstone is a real estate investment trust that owns 42 hotels, mostly in higher-end chains -- the segment of the market most affected by the economy. Several analysts have said that many properties bought up until 2007 may be underwater with little recourse for owners. Sunstone executives also said in a news conference that the San Diego hotel may not be the only time it sends jingle mail to lenders. Other hotels may follow, especially those encumbered with too much debt.

So far, little information is being given about the Marriott Riverside sale. If it is a straight sale, it's definitely a sign that Sunstone is trying to shore up cash or pull out of a losing proposition. If it's a foreclosure, then Sunstone's executives have proven their words.