Completes Additional Accretive Common and Preferred Stock Repurchases
Further Increases Full Year Outlook
ALISO VIEJO, Calif., Nov. 6, 2026 /PRNewswire/ -- Sunstone Hotel Investors, Inc. (the "Company" or "Sunstone") (NYSE: SHO) today announced results for the third quarter ended September 30, 2026.
Third Quarter 2026 Operational Results (as compared to Third Quarter 2025):
- Net Income (Loss): Net income attributable to common stockholders was $38.7 million, or $0.21 per diluted share, as compared to a net loss attributable to common stockholders of $2.9 million, or $(0.02) per diluted share.
- RevPAR: RevPAR for all hotels in the portfolio increased 11.4% to $235.22. The average daily rate was $323.55 and occupancy was 72.7%. RevPAR excluding Andaz Miami Beach increased 10.3%.
- Total RevPAR: Total RevPAR for all hotels in the portfolio increased 10.5% to $394.97. Total RevPAR excluding Andaz Miami Beach increased 9.6%.
- Hotel Adjusted EBITDAre Margin: Hotel Adjusted EBITDAre Margin, excluding Andaz Miami Beach, increased 50 basis points to 26.7%. Excluding Hilton Key West Resort & Marina, which was under renovation during the quarter, and the impact of one-time items in the current and prior year, margins would have increased approximately 200 basis points.
- Adjusted EBITDAre: Adjusted EBITDAre increased 8.8% to $54.5 million.
- Adjusted FFO: Adjusted FFO attributable to common stockholders per diluted share increased 17.6% to $0.20.
Information regarding the non-GAAP financial measures disclosed in this release is provided below in "Non-GAAP Financial Measures." Reconciliations of non-GAAP financial measures to the most comparable GAAP measure for each of the periods presented are included later in this release.
Bryan A. Giglia, Chief Executive Officer, stated, "Our portfolio performed very well in the third quarter and generated revenue and earnings that meaningfully exceeded our expectations. Our well-located portfolio grew Total RevPAR by over 10% and Adjusted FFO per diluted share by nearly 18%, driven by broad-based strength across demand segments and from the contribution of our recent investments. Given our strong performance in the quarter and our revised expectations for near-term trends, we are once again increasing our full year outlook. While current year fundamentals have been better than expected, we are also encouraged by the trends we are seeing for next year, with robust group pace, further recovery in certain of our markets, and additional contribution from our investment activity."
Mr. Giglia continued, "Our capital allocation activity this year demonstrates the value creation potential of our strategy. By realizing private market values through opportunistic asset sales and redeploying proceeds into the repurchase of nearly $200 million of our common and preferred stock at meaningful discounts, we have increased Adjusted FFO and NAV per share while preserving our leverage profile. Our strong balance sheet and dynamic approach to capital allocation allow us to remain nimble and deploy capital toward the opportunities we believe will offer the most compelling risk-adjusted returns, whether through investments in our portfolio, acquisitions, or the repurchase of our securities."
Unaudited Selected Statistical and Financial Data ($ in millions, except RevPAR, ADR and per share amounts).
Three Months Ended September 30, Nine Months Ended September 30,
2026 2025 Change 2026 2025 Change
Net Income $
40.9 $
1.3 2,993.0 $
85.5 $
17.4 392.6
% %
Net Income (Loss) Attributable to Common $
38.7 $
(2.9) 1,416.1 $
80.6 $
5.2 1,442.8
% %
Stockholders
Net Income (Loss) Attributable to Common $
0.21 $
(0.02) 1,150.0 $
0.43 $
0.03 1,333.3
% %
Stockholders per Diluted Share
Total Portfolio Operating Statistics (1)
RevPAR $
235.22 $
211.15 11.4 $
249.34 $
225.00 10.8
% %
Occupancy 72.7 68.1 460 bps 74.4 70.5
% % % % 390 bps
Average Daily Rate $
323.55 $
310.06 4.4 $
335.13 $
319.15 5.0
% %
Total RevPAR $
394.97 $
357.35 10.5 $
416.18 $
378.54 9.9
% %
Operating Statistics, excluding Andaz
Miami Beach (2)
RevPAR $
238.48 $
216.20 10.3 $
245.25 $
233.37 5.1
% %
Occupancy 73.8 69.7 410 bps 74.6 73.1
% % % % 150 bps
Average Daily Rate $
323.15 $
310.18 4.2 $
328.75 $
319.25 3.0
% %
Total RevPAR $
399.89 $
364.94 9.6 $
411.07 $
392.11 4.8
% %
Hotel Adjusted EBITDAre Margin, 26.7 26.2 50 bps 28.7 28.9
% % % % (20) bps
excluding Andaz Miami Beach (2)
Adjusted EBITDAre $
54.5 $
50.1 8.8 $
198.9 $
180.0 10.5
% %
Adjusted FFO Attributable to Common $
37.2 $
31.7 17.1 $
146.3 $
129.0 13.5
% %
Stockholders
Adjusted FFO Attributable to Common $
0.20 $
0.17 17.6 $
0.79 $
0.66 19.7
% %
Stockholders per Diluted Share
(1)
Includes the 13 hotels owned by the Company as of September 30, 2026.
(2) Includes the 13 hotels owned by the Company as of September 30, 2026 except Andaz Miami Beach due to
its renovation activity
during 2025.
Recent Developments
Stock Repurchase Program. During the third quarter of 2026, the Company repurchased an aggregate amount of $117.8 million, before expenses, of its common and preferred stock. From the start of this year through November 5, 2026, the Company has allocated a total of $196.9 million, before expenses, into repurchases of its common and preferred stock. The Company believes this repurchase activity has been completed at a discount and generated significant value for its stockholders. As of November 5, 2026, the Company has $310.6 million remaining under its existing stock repurchase program authorization.
- Common stock: During the third quarter of 2026, the Company repurchased 9,368,434 shares at an average purchase price per share of $10.99 for a total repurchase amount before expenses of $103.0 million. From the start of this year through November 5, 2026, the Company has repurchased 13,748,527 shares at an average purchase price per share of $10.43 for a total repurchase amount before expenses of $143.4 million. The average purchase price per share represents a substantial discount to consensus estimates of net asset value and implies a highly attractive valuation multiple on the Company's stabilized cash flow.
- Series H Cumulative Redeemable Preferred Stock: During the third quarter of 2026, the Company repurchased 330,119 shares at an average purchase price per share of $22.30 for a total repurchase amount before expenses of $7.4 million. From the start of this year through November 5, 2026, the Company has repurchased 1,234,583 shares at an average purchase price per share of $21.52 for a total repurchase amount before expenses of $26.6 million. The average repurchase price per share reflects a 13.9% discount to the preferred stock liquidation value.
- Series I Cumulative Redeemable Preferred Stock: During the third quarter of 2026, the Company repurchased 344,439 shares at an average purchase price per share of $21.69 for a total repurchase amount before expenses of $7.5 million. From the start of this year through November 5, 2026, the Company has repurchased 1,308,051 shares at an average purchase price per share of $20.56 for a total repurchase amount before expenses of $26.9 million. The average repurchase price per share reflects a 17.7% discount to the preferred stock liquidation value.
Balance Sheet and Liquidity Update
As of September 30, 2026, the Company had $317.9 million of cash and cash equivalents, including restricted cash of $81.4 million. The Company ended the third quarter with $817.9 million of liquidity, including available cash and full availability under its $500.0 million revolving credit facility. The Company had total debt of $955.0 million with a weighted average interest rate of 5.22%, including the effect of the Company's interest rate derivative swaps entered into in October 2026, and no debt maturities until January 2028.
Capital Investments Update
The Company invested $76.6 million into its portfolio during the first nine months of 2026. The Company currently expects to invest approximately $105 million to $115 million into its portfolio in 2026, with a majority of the investment related to the previously completed renovation of the meeting space at Hilton San Diego Bayfront, renovation work at Hilton Key West Resort & Marina, storm-related restoration work at Wailea Beach Resort, and various other projects across the remaining hotels in the portfolio.
2026 Outlook
The Company is updating its 2026 outlook based on Management's expectations and information available as of the date of this release. Geopolitical developments, changes in economic policies, changes in the health of the economy, or changes in business and consumer sentiment, among other factors, could lead to further revisions to the Company's outlook or cause the Company to withdraw its outlook altogether.
For the full year 2026, the Company now expects:
Metric ($ in millions, except per share data) Prior Current Change in
Full Year Full Year
2026 2026 Full Year 2026
Guidance (1) Guidance (2) Guidance Midpoint
Net Income
$79 to $89
$92 to $97 +$10.5
Net Income Attributable to Common Stockholders per Diluted Share
$0.37 to $0.42
$0.46 to $0.49 +$0.08
RevPAR Growth (3) 7.0% to 9.0% 9.5% to 10.5% +200 bps
Total RevPAR Growth (3) 7.0% to 9.0% 8.5% to 9.5% +100 bps
Adjusted EBITDAre
$245 to $255
$254 to $259 +$6.5
Adjusted FFO Attributable to Common Stockholders
$174 to $184
$184 to $189 +$7.5
Adjusted FFO Attributable to Common Stockholders per Diluted Share
$0.93 to $0.98
$1.00 to $1.03 +$0.06
Diluted Weighted Average Shares Outstanding 187,000,000 183,500,000 -3,500,000
(1)
Reflects guidance presented on August 6, 2026.
(2) Detailed reconciliations of Net Income to non-GAAP financial measures are provided later in this
release.
(3) RevPAR and Total RevPAR Growth reflect comparisons to full year 2025 and include all 13 hotels owned by
the Company as of
the date of this release. Andaz Miami Beach is expected to contribute approximately 450 basis points of
RevPAR and Total RevPAR
growth.
Full year 2026 guidance is based in part on the following full year assumptions:
- Full year interest and other income (excluding amounts received from our insurance programs as reimbursement for restoration of property damage) of approximately $7 million to $8 million. This range is unchanged from the Company's prior estimate.
- Full year corporate overhead expense (excluding deferred stock amortization and management transition costs) of approximately $19 million. This estimate is $0.5 million lower than the midpoint of the Company's prior range.
- Full year interest expense of approximately $46 million to $49 million, including approximately $4 million in amortization of deferred financing costs and $7 million of noncash reduction to interest expense on derivatives. Excluding the noncash interest on derivatives, this range is unchanged from the Company's prior estimate.
- Full year preferred stock dividends of approximately $15 million, which includes the Series G, H, and I cumulative redeemable preferred stock. This estimate is $0.5 million lower than the midpoint of the Company's prior range.
Dividend Update
On November 5, 2026, the Company's Board of Directors authorized a cash dividend of $0.09 per share of its common stock. The Company's Board of Directors also authorized cash dividends of $0.937500 per share payable to its Series G cumulative redeemable preferred stockholder, $0.382813 per share payable to its Series H cumulative redeemable preferred stockholders, and $0.356250 per share payable to its Series I cumulative redeemable preferred stockholders. The common and preferred dividends will be paid on January 15, 2027 to stockholders of record as of December 31, 2026.
The amount of any future quarterly dividends will be determined by the Company's Board of Directors after considering long-term operating projections, expected capital requirements, and risks affecting the Company's business.
Supplemental Disclosures
Contemporaneous with this release, the Company has furnished a Form 8-K with unaudited financial information. This additional information is being provided as a supplement to the information in this release and other filings with the SEC. The Company has no obligation to update any of the information provided to conform to actual results or changes in the Company's portfolio, capital structure or future expectations.
Earnings Call
The Company will host a conference call to discuss third quarter results on November 6, 2026, at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time). A live webcast of the call will be available via the Investor Relations section of the Company's website at www.sunstonehotels.com. Alternatively, interested parties may dial 1-833-461-5787 and reference meeting ID 981 061 229 to listen to the live call. A transcript of the webcast will also be archived on the website.
About Sunstone Hotel Investors, Inc.
Sunstone Hotel Investors, Inc. is a lodging real estate investment trust ("REIT") that as of the date of this release owns 13 hotels comprised of approximately 6,200 rooms, all of which are operated under nationally recognized brands. Sunstone's strategy is to create long-term stakeholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate. For further information, please visit Sunstone's website at www.sunstonehotels.com. The Company's website is provided as a reference only and any information on the website is not incorporated by reference in this release.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms and phrases such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will" and other similar terms and phrases, including opinions, references to assumptions and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks, uncertainties, and other factors include, but are not limited to, those described in the sections entitled "Special Note Regarding Forward-Looking Statements," "Risk Factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 2025 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 27, 2026, and other risks and uncertainties associated with the Company's business described in its filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All forward-looking information provided herein is as of the date of this release, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.
This release should be read together with the consolidated financial statements and notes thereto included in our most recent reports on Form 10-K and Form 10-Q. Copies of these reports are available on our website at www.sunstonehotels.com and through the SEC's Electronic Data Gathering Analysis and Retrieval System ("EDGAR") at www.sec.gov.
Non-GAAP Financial Measures
We present the following non-GAAP financial measures that we believe are useful to investors as key supplemental measures of our operating performance: earnings before interest expense, taxes, depreciation and amortization for real estate, or EBITDAre; Adjusted EBITDAre (as defined below); funds from operations attributable to common stockholders, or FFO attributable to common stockholders; Adjusted FFO attributable to common stockholders (as defined below); hotel Adjusted EBITDAre; and hotel Adjusted EBITDAre margins. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. In addition, our calculation of these measures may not be comparable to other companies that do not define such terms exactly the same as we do. These non-GAAP measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to net income (loss), cash flow from operations, or any other operating performance measure prescribed by GAAP. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure.
We present EBITDAre in accordance with guidelines established by the National Association of Real Estate Investment Trusts ("Nareit"), as defined in its September 2017 white paper "Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate." We believe EBITDAre is a useful performance measure to help investors evaluate and compare the results of our operations from period to period in comparison to our peers. Nareit defines EBITDAre as net income (calculated in accordance with GAAP) plus interest expense, income tax expense, depreciation and amortization, gains or losses on the disposition of depreciated property (including gains or losses on change in control), impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in the value of depreciated property in the affiliate, and adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates.
We make additional adjustments to EBITDAre when evaluating our performance because we believe that the exclusion of certain additional items described below provides useful information to investors regarding our operating performance, and that the presentation of Adjusted EBITDAre, when combined with the primary GAAP presentation of net income, is beneficial to an investor's complete understanding of our operating performance. In addition, we use both EBITDAre and Adjusted EBITDAre as measures in determining the value of hotel acquisitions and dispositions.
We believe that the presentation of FFO attributable to common stockholders provides useful information to investors regarding our operating performance because it is a measure of our operations without regard to specified noncash items such as real estate depreciation and amortization, any real estate impairment loss and any gain or loss on sale of real estate assets, all of which are based on historical cost accounting and may be of lesser significance in evaluating our current performance. Our presentation of FFO attributable to common stockholders conforms to Nareit's definition of "FFO applicable to common shares." Our presentation may not be comparable to FFO reported by other REITs that do not define the terms in accordance with the current Nareit definition, or that interpret the current Nareit definition differently than we do.
We also present Adjusted FFO attributable to common stockholders when evaluating our operating performance because we believe that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance and may facilitate comparisons of operating performance between periods and our peer companies.
We adjust EBITDAre and FFO attributable to common stockholders for the following items, which may occur in any period, and refer to these measures as either Adjusted EBITDAre or Adjusted FFO attributable to common stockholders:
- Amortization of deferred stock compensation: we exclude the noncash expense incurred with the amortization of deferred stock compensation as this expense is based on historical stock prices at the date of grant to our corporate employees and does not reflect the underlying performance of our hotels.
- Amortization of contract intangibles: we exclude the noncash amortization of any favorable or unfavorable contract intangibles recorded in conjunction with our hotel acquisitions. We exclude the noncash amortization of contract intangibles because it is based on historical cost accounting and is of lesser significance in evaluating our actual performance for the current period.
- Gains or losses from debt transactions: we exclude the effect of finance charges and premiums associated with the extinguishment of debt, including the acceleration of deferred financing costs from the original issuance of the debt being redeemed or retired because, like interest expense, their removal helps investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure.
- Cumulative effect of a change in accounting principle: from time to time, the FASB promulgates new accounting standards that require the consolidated statement of operations to reflect the cumulative effect of a change in accounting principle. We exclude these one-time adjustments, which include the accounting impact from prior periods, because they do not reflect our actual performance for that period.
- Other adjustments: we exclude other adjustments that we believe are outside the ordinary course of business because we do not believe these costs reflect our actual performance for the period and/or the ongoing operations of our hotels. Such items may include: lawsuit settlement costs; the write-off of development costs associated with abandoned projects; non-real estate-related impairment losses; property-level restructuring, severance, and management transition costs; pre-opening costs associated with extensive renovation projects; debt resolution costs; lease terminations; property insurance restoration proceeds or uninsured losses; and other nonrecurring identified adjustments.
In addition, to derive Adjusted EBITDAre, we exclude the amortization of our right-of-use assets and related lease obligations as these expenses are based on historical cost accounting and do not reflect the actual rent amounts due to the respective lessors or the underlying performance of our hotels. We also exclude the effect of gains and losses on the disposition of undepreciated assets because we believe that including them in Adjusted EBITDAre is not consistent with reflecting the ongoing performance of our assets.
To derive Adjusted FFO attributable to common stockholders, we also exclude the noncash interest on our derivatives as we believe that these items are not reflective of our ongoing finance costs. Additionally, we exclude the real estate amortization of our right-of-use assets and related lease obligations (with the exception of our corporate operating lease) as these expenses are based on historical cost accounting and do not reflect the actual rent amounts due to the respective lessors or the underlying performance of our hotels. We also exclude gains or losses on the redemptions or repurchases of preferred stock, changes to deferred tax assets, liabilities or valuation allowances, and income tax benefits or provisions associated with the application of net operating loss carryforwards, uncertain tax positions or with the sale of assets.
In presenting hotel Adjusted EBITDAre and hotel Adjusted EBITDAre margins, miscellaneous non-hotel items have been excluded. We believe the calculation of hotel Adjusted EBITDAre results in a more accurate presentation of the hotel Adjusted EBITDAre margins for our hotels, and that these non-GAAP financial measures are useful to investors in evaluating our property-level operating performance.
Reconciliations of net income to EBITDAre, Adjusted EBITDAre, FFO attributable to common stockholders, Adjusted FFO attributable to common stockholders, hotel Adjusted EBITDAre and hotel Adjusted EBITDAre margins are set forth in the following pages of this release.
For Additional Information:
Aaron Reyes
Sunstone Hotel Investors, Inc.
(949) 382-3018
Sunstone Hotel Investors, Inc
Consolidated Balance Sheets
(In thousands, except share and per share data)
September 30, December 31,
2026 2025
(unaudited)
ASSETS
Investment in hotel properties, net
$ 2,491,537
$ 2,771,180
Operating lease right-of-use assets, net 3,704 4,418
Cash and cash equivalents 236,521 109,189
Restricted cash 81,365 76,531
Accounts receivable, net 39,817 33,662
Prepaid expenses and other assets, net 42,091 34,025
Total assets
$ 2,895,035
$ 3,029,005
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Debt, net of unamortized deferred financing costs
$ 944,032
$ 918,086
Operating lease obligations 5,959 7,348
Accounts payable and accrued expenses 52,928 63,146
Dividends and distributions payable 19,547 22,975
Other liabilities 85,968 72,832
Total liabilities 1,108,434 1,084,387
Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value, 100,000,000 shares authorized:
Series G Cumulative Redeemable Preferred Stock, 2,650,000 shares issued and 66,250 66,250
outstanding at both September 30, 2026 and December 31, 2025, stated at
liquidation preference of $25.00 per share
6.125% Series H Cumulative Redeemable Preferred Stock, 3,644,584 shares issued 91,115 113,648
and outstanding at September 30, 2026 and 4,545,903 shares issued and outstanding
at December 31, 2025, stated at liquidation preference of $25.00 per share
5.70% Series I Cumulative Redeemable Preferred Stock, 2,836,743 shares issued 70,919 99,774
and outstanding at September 30, 2026 and 3,990,973 shares issued and outstanding
at December 31, 2025, stated at liquidation preference of $25.00 per share
Common stock, $0.01 par value, 500,000,000 shares authorized, 176,575,057 shares 1,766 1,897
issued and outstanding at September 30, 2026 and 189,709,516 shares issued and
outstanding at December 31, 2025
Additional paid in capital 2,160,464 2,298,398
Distributions in excess of retained earnings (603,913) (635,349)
Total stockholders' equity 1,786,601 1,944,618
Total liabilities and stockholders' equity
$ 2,895,035
$ 3,029,005
Sunstone Hotel Investors, Inc.
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended September Nine Months Ended September
30, 30,
2026 2025 2026 2025
Revenues
Room $
140,053 $
139,523 $
469,368 $
440,492
Food and beverage 68,601 64,419 221,792 209,573
Other operating 25,064 25,381 79,376 73,095
Total revenues 233,718 229,323 770,536 723,160
Operating expenses
Room 37,818 39,303 122,958 119,272
Food and beverage 50,424 48,717 155,793 150,566
Other operating 7,123 6,337 21,763 18,707
Advertising and promotion 13,083 13,420 41,336 40,758
Repairs and maintenance 10,671 9,954 32,592 29,514
Utilities 7,648 7,832 22,049 21,624
Franchise costs 4,417 4,471 13,962 13,773
Property tax, ground lease and insurance 20,179 19,574 61,734 57,425
Other property-level expenses 27,853 26,926 95,550 88,184
Corporate overhead 6,410 6,970 22,005 24,221
Depreciation and amortization 30,287 33,928 98,724 100,328
Impairment and other losses 1,639
Total operating expenses 215,913 217,432 690,105 664,372
Interest and other income 2,620 3,160 7,944 7,024
Interest expense (10,729) (13,412) (33,788) (39,258)
Gain (loss) on sale of assets 31,489 31,489 (8,751)
Loss on extinguishment of debt (180) (180)
Income before income taxes 41,185 1,459 86,076 17,623
Income tax provision, net (296) (137) (605) (272)
Net income 40,889 1,322 85,471 17,351
Preferred stock dividends, net of gain on repurchases (2,196) (4,262) (4,844) (12,125)
Net income (loss) attributable to common stockholders $
38,693 $
(2,940) $
80,627 $
5,226
Basic and diluted income (loss) per share
Basic and diluted net income (loss) attributable to common $
0.21 $
(0.02) $
0.43 $
0.03
stockholders per common share
Basic weighted average common shares outstanding 181,502 189,253 185,040 195,110
Diluted weighted average common shares outstanding 181,502 189,253 185,212 195,866
Distributions declared per common share $
0.09 $
0.09 $
0.27 $
0.27
Sunstone Hotel Investors, Inc.
Reconciliation of Net Income to Non-GAAP Financial Measures
(Unaudited and in thousands)
Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre
Three Months Ended September Nine Months Ended September
30, 30,
2026 2025 2026 2025
Net income $
40,889 $
1,322 $
85,471 $
17,351
Depreciation and amortization 30,287 33,928 98,724 100,328
Interest expense 10,729 13,412 33,788 39,258
Income tax provision, net 296 137 605 272
(Gain) loss on sale of assets (31,489) (31,489) 8,751
Impairment and other losses 1,639
EBITDAre 50,712 48,799 188,738 165,960
Amortization of deferred stock compensation 2,015 1,905 7,461 6,741
Amortization of right-of-use assets and obligations (233) (158) (675) (458)
Loss on extinguishment of debt 180 180
(Gain) loss on property damage, net 1,144 (674) 601 (773)
Property-level pre-opening and management transition costs 841 959 6,471
Property-level legal settlement costs 935
Management transition costs 907 1,869
Adjustments to EBITDAre, net 3,767 1,253 10,188 14,030
Adjusted EBITDAre $
54,479 $
50,052 $
198,926 $
179,990
Sunstone Hotel Investors, Inc.
Reconciliation of Net Income to Non-GAAP Financial Measures
(Unaudited and in thousands, except per share data)
Reconciliation of Net Income to FFO Attributable to Common Stockholders and
Adjusted FFO Attributable to Common Stockholders
Three Months Ended September Nine Months Ended September
30, 30,
2026 2025 2026 2025
Net income $
40,889 $
1,322 $
85,471 $
17,351
Preferred stock dividends, net of gain on repurchases (2,196) (4,262) (4,844) (12,125)
Real estate depreciation and amortization 29,946 33,581 97,696 99,278
(Gain) loss on sale of assets (31,489) (31,489) 8,751
Impairment and other losses 1,639
FFO attributable to common stockholders 37,150 30,641 148,473 113,255
Amortization of deferred stock compensation 2,015 1,905 7,461 6,741
Real estate amortization of right-of-use assets and obligations (200) (130) (586) (390)
Amortization of contract intangibles, net 312 315 941 944
Noncash interest on derivatives, net (2,995) (495) (7,080) 668
Loss on extinguishment of debt 180 180
(Gain) loss on property damage, net 1,144 (674) 601 (773)
Property-level pre-opening and management transition costs 841 959 6,471
Property-level legal settlement costs 935
Management transition costs 907 1,869
Gain on preferred stock repurchases, net (1,452) (6,637)
Income tax related to hotel disposition 361 361
Adjustments to FFO attributable to common stockholders, net 26 1,101 (2,138) 15,710
Adjusted FFO attributable to common stockholders $
37,176 $
31,742 $
146,335 $
128,965
FFO attributable to common stockholders per diluted share $
0.20 $
0.16 $
0.80 $
0.58
Adjusted FFO attributable to common stockholders per diluted $
0.20 $
0.17 $
0.79 $
0.66
share
Basic weighted average shares outstanding 181,502 189,253 185,040 195,110
Shares associated with unvested restricted stock awards 320 859 405 863
Diluted weighted average shares outstanding 181,822 190,112 185,445 195,973
Sunstone Hotel Investors, Inc.
Reconciliation of Net Income to Non-GAAP Financial Measures
Guidance for Full Year 2026
(Unaudited and in thousands, except for per share amounts)
Reconciliation of Net Income to Adjusted EBITDAre
Year Ended
December 31, 2026
Low High
Net income
$ 92,000
$ 97,000
Depreciation and amortization 128,000 128,000
Interest expense 47,500 47,500
Income tax provision, net 1,000 1,000
Gain on sale of assets (31,500) (31,500)
Impairment and other losses 2,000 2,000
Amortization of deferred stock compensation 9,500 9,500
Property-level pre-opening and management transition costs 2,500 2,500
Property-level legal settlement costs 1,000 1,000
Management transition costs 1,000 1,000
Loss on property damage, net 1,000 1,000
Adjusted EBITDAre
$ 254,000
$ 259,000
Reconciliation of Net Income to Adjusted FFO Attributable to Common Stockholders
Year Ended
December 31, 2026
Low High
Net income
$ 92,000
$ 97,000
Preferred stock dividends, net of gain on repurchases (7,000) (7,000)
Net income attributable to common stockholders 85,000 90,000
Real estate depreciation and amortization 127,000 127,000
Gain on sale of assets (31,500) (31,500)
Impairment and other losses 2,000 2,000
Amortization of deferred stock compensation 9,500 9,500
Property-level pre-opening and management transition costs 2,500 2,500
Property-level legal settlement costs 1,000 1,000
Management transition costs 1,000 1,000
Loss on property damage, net 1,000 1,000
Amortization of intangibles, net 1,000 1,000
Noncash interest on derivatives, net (7,000) (7,000)
Gain on preferred stock repurchases, net (8,000) (8,000)
Income tax related to hotel disposition 500 500
Adjusted FFO attributable to common stockholders
$ 184,000
$ 189,000
Net income attributable to common stockholders per diluted share
$ 0.46
$ 0.49
Adjusted FFO attributable to common stockholders per diluted share
$ 1.00
$ 1.03
Diluted weighted average shares outstanding 183,500 183,500
Sunstone Hotel Investors, Inc.
Non-GAAP Financial Measures
Hotel Adjusted EBITDAre and Margins
(Unaudited and in thousands)
Three Months Ended September Nine Months Ended September
30, 30,
2026 2025 2026 2025
Total Portfolio Hotel Adjusted EBITDAre Margin 25.1 % 24.3 % 28.1 % 27.7 %
Hotel Adjusted EBITDAre Margin, excluding Andaz 26.7 % 26.2 % 28.7 % 28.9 %
Miami Beach
Actual revenues $
233,718 $
229,323 $
770,536 $
723,160
Sold hotel revenues (1) (8,556) (25,600) (66,589) (82,793)
Total Portfolio Hotel Revenues 225,162 203,723 703,947 640,367
Andaz Miami Beach revenues (2) (7,754) (5,312) (40,851) (7,773)
Hotel Revenues, excluding Andaz Miami Beach $
217,408 $
198,411 $
663,096 $
632,594
Net income $
40,889 $
1,322 $
85,471 $
17,351
Non-hotel operating expenses, net (3) 10 (280) 22 (971)
Property-level adjustments (4) 2,244 189 5,909 7,012
Corporate overhead 6,410 6,970 22,005 24,221
Depreciation and amortization 30,287 33,928 98,724 100,328
Impairment and other losses 1,639
Interest and other income (2,620) (3,160) (7,944) (7,024)
Interest expense 10,729 13,412 33,788 39,258
Gain (loss) on sale of assets (31,489) (31,489) 8,751
Loss on extinguishment of debt 180 180
Income tax provision, net 296 137 605 272
Actual Hotel Adjusted EBITDAre 56,756 52,698 208,730 189,378
Sold hotel Adjusted EBITDAre (1) (325) (3,139) (11,031) (11,843)
Total Portfolio Hotel Adjusted EBITDAre 56,431 49,559 197,699 177,535
Andaz Miami Beach Adjusted EBITDAre (2) 1,637 2,494 (7,652) 5,298
Hotel Adjusted EBITDAre, excluding Andaz Miami $
58,068 $
52,053 $
190,047 $
182,833
Beach
(1) Sold hotel revenues and Adjusted EBITDAre include results for Hyatt Regency San Francisco, which the Company sold in
July 2026,
and Hilton New Orleans St. Charles, which the Company sold in June 2025.
(2) Andaz Miami Beach underwent a transformational renovation during 2025, and as a result, our results for the third
quarter and first nine months
of 2026 are not comparable to those for the same periods in 2025.
(3) Non-hotel operating expenses, net include the amortization of hotel real estate-related right-of-use assets and
obligations, corporate-level current
year property taxes and insurance, as well as any prior year property taxes assessed on sold hotels, net of any
refunds received.
(4) Property-level adjustments include non-operational and nonrecurring items. For the three months ended September
30, 2026, adjustments
primarily consisted of severe weather-related restoration expenses. For the nine months ended September 30, 2026,
adjustments primarily
consisted of severe weather-related restoration expenses and legal settlement costs. For the nine months ended
September 30, 2025, adjustments
primarily consisted of pre-opening costs related to Andaz Miami Beach.
View original content:https://www.prnewswire.com/news-releases/sunstone-hotel-investors-reports-results-for-third-quarter-2026-302931458.html
SOURCE Sunstone Hotel Investors, Inc.
