Sold out does not mean all the rooms have paying guests. It means the rooms are all commited.

I attemped rental at the Weston Fairfax for a major function at the hotel, and was told by Starwood, and hotel that it was sold out.

Bought a hotel room in the area on Priceline. Got a room at the Weston(for $100). Checked into the Weston, and got an upgrade.

The presold rooms had not yet been returned to the hotel inventory when I called. I don't know how the mechanics work, but I presume I bought a presold not available to Starwood when I called.