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Two Ways: Sunstone Loses San Diego W


Strengthen your portfolio in good times and bad.

Sunstone loses a W

Sunstone Hotel Investors (SHO), a real-estate investment trust, will likely turn over its 258-room W San Diego to its lenders after it failed to reach a compromise on the luxury hotel's $65 million securitized mortgage. The group paid $96 million for the hotel in 1996, according to The Wall Street Journal, but the W hasn't been able to generate enough monthly income to cover its operating costs and interest payments since 2007.

Last year the occupancy rate for the hotel averaged nearly 70% and generated revenue per room of almost $153. Sunstone says the hotel is worth less than the $65 million mortgage balance and is simply ready to convey the property to the lender in lieu of repayment.

See related column, Professor Fil Zucchi's How Long Can Commercial Real Estate Remain Irrational?

From the Bull Pen: In REITs, bulls can look to Hospitality Properties Trust (HPT) for a technical play if it can hang above $15. Remember to keep a tight sell stop below that level.

From the Bear Cave: Bears can consider Boston Properties (BXP). The stock spiked to a new high, followed by a lower close (a worrisome pattern). A buy stop can be set near $51-52.

Quick Check Around the World

Asian trading closed with the Hang Seng -2.28%, India -2.90%, Shanghai 0.52%, Nikkei 1.00%, and Taiwan -3.34%.

Glancing towards Europe, we see the FTSE -1.24%, CAC -1.55%, DAX -1.64%

As of 8:00 AM EST, S&P Futures are trading -9 to 931.00, and Nasdaq futures are -16 to 1479.25.

A Look at Commodities

Over in commodities, crude oil is trading -1.08 to 67.36 while gold is -12.0 at 950.60 this morning. Silver is -0.478 to 14.91 and copper -1.62 to 224.70.

The dollar index is +0.4700 to 81.2000.

No economic events today on the radar. Click here to see the full list of events for the week.

Welcome back, and good luck!
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No positions in stocks mentioned.

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