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Nov 6, 2026, 7:35 AM ETReal Estate

Sunstone Hotel Investors, Inc. — Third Quarter 2026 Earnings Summary

SHOSUNSTONE HOTEL INVESTORS INC
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Financial Performance

  • Net income attributable to common stockholders was $38.7 million ($0.21 per diluted share) for the three months ended September 30, 2026, compared to a net loss of $2.9 million ($(0.02) per diluted share) in the same period in 2025.
  • Net income for the nine months ended September 30, 2026, was $85.5 million, compared to $17.4 million in the prior year period.
  • Adjusted EBITDAre increased 8.8% to $54.5 million for the quarter and 10.5% to $198.9 million for the nine-month period.
  • Adjusted FFO attributable to common stockholders per diluted share increased 17.6% to $0.20 for the quarter and 19.7% to $0.79 for the nine-month period.
  • Hotel Adjusted EBITDAre Margin, excluding Andaz Miami Beach, increased 50 basis points to 26.7% for the quarter.
  • Total debt was $955.0 million with a weighted average interest rate of 5.22% as of September 30, 2026.
  • The company held $317.9 million in cash and cash equivalents, including $81.4 million restricted cash, and $817.9 million in total liquidity.

Guidance and Future Outlook

  • Full-year 2026 Net Income guidance was raised to $92–$97 million from a prior range of $79–$89 million.
  • Full-year 2026 Adjusted FFO per diluted share guidance was raised to $1.00–$1.03 from a prior range of $0.93–$0.98.
  • Full-year 2026 RevPAR growth guidance was increased to 9.5%–10.5% from 7.0%–9.0%.
  • Full-year 2026 Total RevPAR growth guidance was increased to 8.5%–9.5% from 7.0%–9.0%.
  • Full-year 2026 Adjusted EBITDAre guidance was raised to $254–$259 million from $245–$255 million.
  • Full-year 2026 capital investment is expected to be approximately $105 million to $115 million.
  • Management anticipates robust group pace and further market recovery for the next year.

Business Segments and Product Lines

  • RevPAR for all hotels increased 11.4% to $235.22; Total RevPAR increased 10.5% to $394.97.
  • RevPAR excluding Andaz Miami Beach increased 10.3% to $238.48; Total RevPAR excluding Andaz Miami Beach increased 9.6% to $399.89.
  • Andaz Miami Beach is excluded from certain comparative metrics due to renovation activity during 2025.
  • The portfolio consists of 13 hotels with approximately 6,200 rooms as of September 30, 2026.
  • Capital investments during the first nine months of 2026 totaled $76.6 million, primarily for the Hilton San Diego Bayfront meeting space renovation, Hilton Key West Resort & Marina renovation, and storm-related restoration at Wailea Beach Resort.

Market and Competitive Landscape

  • The company noted broad-based strength across demand segments contributing to growth.
  • Geopolitical developments, economic policy changes, and shifts in business/consumer sentiment are cited as potential factors for future outlook revisions.

Risks and Challenges

  • Risks include geopolitical developments, changes in economic policies, economic health, and business/consumer sentiment.
  • Andaz Miami Beach renovation activity created non-comparable results for the current period versus the prior year.
  • Severe weather-related restoration expenses impacted property-level adjustments in the current period.

Management Commentary and Tone

  • CEO Bryan A. Giglia stated the portfolio performed very well, generating revenue and earnings that meaningfully exceeded expectations.
  • Management highlighted that Total RevPAR grew by over 10% and Adjusted FFO per diluted share by nearly 18%.
  • The CEO emphasized the value creation potential of the capital allocation strategy, specifically the repurchase of nearly $200 million of common and preferred stock at meaningful discounts.
  • Management expressed confidence in the strong balance sheet and dynamic capital allocation approach.

Other Key Points

  • The Company repurchased $117.8 million of common and preferred stock during the third quarter of 2026.
  • From the start of 2026 through November 5, 2026, the Company allocated a total of $196.9 million into stock repurchases.
  • Common stock repurchases occurred at an average price of $10.99 per share in the quarter and $10.43 year-to-date, representing a substantial discount to consensus NAV estimates.
  • Preferred stock repurchases occurred at a 13.9% discount to Series H liquidation value and a 17.7% discount to Series I liquidation value.
  • $310.6 million remains available under the existing stock repurchase program authorization as of November 5, 2026.
  • The Board authorized a common stock dividend of $0.09 per share and preferred dividends of $0.937500 (Series G), $0.382813 (Series H), and $0.356250 (Series I) per share, payable January 15, 2027.
  • The Company sold the Hyatt Regency San Francisco in July 2026 and the Hilton New Orleans St. Charles in June 2025.
  • No debt maturities are scheduled until January 2028.