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SUNSTONE HOTEL INVESTORS SCHEDULES THIRD QUARTER 2025 EARNINGS RELEASE AND CONFERENCE CALL
Prnewswire· 2025-09-19 12:00
Core Points - Sunstone Hotel Investors, Inc. will report its financial results for the third quarter of 2025 on November 7, 2025, before the market opens [1] - A quarterly conference call will be held on the same day at 11:00 a.m. Eastern Time [1] - The call will be accessible via a live webcast on the Company's website and through a dedicated phone line [2] Company Overview - Sunstone Hotel Investors, Inc. is a lodging real estate investment trust (REIT) focused on creating long-term stakeholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate [3]
Tarsadia calls on Sunstone Hotel board to pursue a sale of entire company
Yahoo Finance· 2025-09-13 13:05
Group 1 - Tarsadia Capital, holding a 3.4% economic interest in Sunstone Hotel Investors, has urged the board to initiate a dual process for either selling the entire company or liquidating its assets to maximize shareholder value [1] - The letter emphasizes that Sunstone's current position as a subscale lodging REIT is unsustainable and calls for immediate changes in the board to explore strategic alternatives [1] - Tarsadia Capital has expressed frustration over the board's inaction regarding the company's persistent undervaluation in public markets and is prepared to advocate for change among fellow shareholders if necessary [1]
Sunstone Hotel Investors Breaks Above 200-Day Moving Average - Bullish for SHO
Nasdaq· 2025-09-12 15:06
Group 1 - Sunstone Hotel Investors Inc shares crossed above their 200-day moving average of $9.82, reaching a high of $10.27 per share on Friday [2] - The shares are currently trading up approximately 4.1% for the day [2] - The 52-week low for SHO shares is $7.45, while the 52-week high is $12.41, with the last trade recorded at $9.84 [2]
Sunstone Hotel Investors(SHO) - 2025 Q2 - Quarterly Report
2025-08-06 18:09
[Introductory Information](index=1&type=section&id=Introductory%20Information) [Company Details and Filing Status](index=1&type=section&id=Company%20Details%20and%20Filing%20Status) Sunstone Hotel Investors, Inc. filed its Quarterly Report on Form 10-Q for the period ended June 30, 2025, identifying as a large accelerated filer, with 189,969,350 shares of common stock outstanding as of August 1, 2025 - **Sunstone Hotel Investors, Inc.** is a Maryland corporation[2](index=2&type=chunk) - The filing is a **Quarterly Report on Form 10-Q** for the period ended **June 30, 2025**[2](index=2&type=chunk) Filer Status | Status | Indication | | :---------------------- | :--------- | | Large accelerated filer | ☒ | - As of **August 1, 2025**, **189,969,350 shares** of common stock were outstanding[5](index=5&type=chunk) [PART I—FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The financial statements for the quarter and six months ended June 30, 2025, show a decrease in net income and income attributable to common stockholders compared to the prior year, primarily driven by a loss on the sale of assets and increased operating expenses, while total assets and stockholders' equity decreased and total liabilities increased [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :----------------------------------- | :------------------------ | :------------------ | | Total assets | $3,010,987 | $3,106,639 | | Total liabilities | $1,031,001 | $1,002,619 | | Total stockholders' equity | $1,979,986 | $2,104,020 | - **Total assets decreased by $95,652 thousand** from December 31, 2024, to June 30, 2025[10](index=10&type=chunk) - **Total liabilities increased by $28,382 thousand** from December 31, 2024, to June 30, 2025[10](index=10&type=chunk) - **Total stockholders' equity decreased by $124,034 thousand** from December 31, 2024, to June 30, 2025[10](index=10&type=chunk) [Unaudited Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $259,772 | $247,481 | $493,837 | $464,647 | | Total operating expenses | $229,346 | $211,932 | $446,940 | $411,839 | | Net income | $10,774 | $26,142 | $16,029 | $39,177 | | Income attributable to common stockholders | $6,842 | $22,459 | $8,166 | $31,811 | | Basic and diluted EPS | $0.03 | $0.11 | $0.04 | $0.16 | - **Net income decreased by 58.8%** for the three months and **59.1%** for the six months ended June 30, 2025, compared to 2024[12](index=12&type=chunk) - **Income attributable to common stockholders decreased by 69.5%** for the three months and **74.3%** for the six months ended June 30, 2025, compared to 2024[12](index=12&type=chunk) [Unaudited Consolidated Statements of Equity](index=6&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Equity) Consolidated Statements of Equity Highlights (in thousands) | Metric | December 31, 2024 (audited) | June 30, 2025 | | :-------------------------------- | :-------------------------- | :------------ | | Total Equity | $2,104,020 | $1,979,986 | | Common Stock Repurchases (6 months) | N/A | $(98,470) | | Net Income (6 months) | N/A | $16,029 | - The company repurchased **10,301,090 shares** of common stock for **$90,454 thousand** during the three months ended June 30, 2025[14](index=14&type=chunk) - For the six months ended June 30, 2025, **common stock repurchases totaled $98,470 thousand**[14](index=14&type=chunk) [Unaudited Consolidated Statements of Cash Flows](index=9&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | | :------------------------------------------ | :--------- | :--------- | | Net cash provided by operating activities | $90,763 | $93,277 | | Net cash used in investing activities | $(5,596) | $(297,848) | | Net cash used in financing activities | $(120,523) | $(55,123) | | Net decrease in cash and restricted cash | $(35,356) | $(259,694) | | Cash and restricted cash, end of period | $144,921 | $234,004 | - **Net cash used in investing activities significantly decreased in 2025** due to proceeds from a hotel sale and acquisition-related key money, contrasting with a large acquisition in 2024[18](index=18&type=chunk) - **Net cash used in financing activities increased substantially in 2025**, primarily driven by higher repurchases of outstanding common stock[18](index=18&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes provide detailed information on the company's organization, accounting policies, investments, debt, equity, and other financial commitments, including the sale of a hotel, changes in preferred stock dividend rates, significant common stock repurchases, and details on debt structure and interest rate derivatives [1. Organization and Description of Business](index=11&type=section&id=1.%20Organization%20and%20Description%20of%20Business) - **Sunstone Hotel Investors, Inc.** operates as a self-managed and self-administered **REIT** since December 31, 2004[22](index=22&type=chunk) - The company invests in hotels to add value through capital investment, repositioning, and asset management[22](index=22&type=chunk) - As of **June 30, 2025**, the Company owned **14 hotels**[24](index=24&type=chunk) [2. Basis of Presentation and Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) - The interim financial statements are prepared in accordance with **GAAP and SEC rules**, reflecting all necessary normal and recurring adjustments[26](index=26&type=chunk) - There have been **no changes to significant accounting policies** since December 31, 2024[30](index=30&type=chunk) - The company is evaluating **ASU 2024-03**, effective for fiscal years beginning after December 15, 2026, for additional disclosure requirements regarding income statement expense disaggregation[31](index=31&type=chunk) [3. Investment in Hotel Properties](index=13&type=section&id=3.%20Investment%20in%20Hotel%20Properties) Investment in Hotel Properties, Net (in thousands) | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :-------------------------------- | :------------------------ | :------------------ | | Investment in hotel properties, net | $2,788,498 | $2,856,032 | - In **June 2025**, the Company sold the **Hilton New Orleans St. Charles** for a gross sale price of **$47.0 million**, recording a **loss of $8.8 million**[32](index=32&type=chunk) [4. Fair Value Measurements and Interest Rate Derivatives](index=13&type=section&id=4.%20Fair%20Value%20Measurements%20and%20Interest%20Rate%20Derivatives) - The company uses **Level 2 measurements** for interest rate derivatives and **Level 3 measurements** for debt fair value[36](index=36&type=chunk)[37](index=37&type=chunk) - As of **June 30, 2025**, **51.0%** of the company's outstanding debt had fixed interest rates, including interest rate swap derivatives[37](index=37&type=chunk) Noncash Interest on Derivatives, Net (in thousands) | Period | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Three Months Ended June 30, | $181 | $(189) | | Six Months Ended June 30, | $1,163 | $(2,231) | [5. Prepaid Expenses and Other Assets](index=16&type=section&id=5.%20Prepaid%20Expenses%20and%20Other%20Assets) Prepaid Expenses and Other Assets, Net (in thousands) | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :----------------------------------- | :------------------------ | :------------------ | | Total prepaid expenses and other assets, net | $28,214 | $27,757 | [6. Debt](index=16&type=section&id=6.%20Debt) Debt Composition (in thousands) | Debt Type | June 30, 2025 (unaudited) | December 31, 2024 | | :--------------------------------------- | :------------------------ | :------------------ | | Unsecured Corporate Credit Facilities | $702,000 | $675,000 | | Unsecured Senior Notes | $170,000 | $170,000 | | Total debt | $872,000 | $845,000 | | Debt, net of unamortized deferred financing costs | $868,695 | $841,047 | - In **April 2025**, the Company drew down **$27.0 million** on its **$500.0 million credit facility**, leaving **$473.0 million available**[43](index=43&type=chunk) - The maturity of **Term Loan 3 was extended from May 1, 2025, to May 1, 2026**[44](index=44&type=chunk) Total Interest Expense (in thousands) | Period | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Three Months Ended June 30, | $13,164 | $12,693 | | Six Months Ended June 30, | $25,846 | $23,703 | [7. Other Liabilities](index=17&type=section&id=7.%20Other%20Liabilities) Other Liabilities (in thousands) | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :-------------------- | :------------------------ | :------------------ | | Total other liabilities | $73,413 | $72,694 | - The Company recognized approximately **$38.0 million in revenue** related to outstanding contract liabilities for the six months ended June 30, 2025[46](index=46&type=chunk) [8. Leases](index=17&type=section&id=8.%20Leases) Operating Lease Balances (in thousands) | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :-------------------------- | :------------------------ | :------------------ | | Right-of-use assets, net | $6,575 | $8,464 | | Lease obligations | $9,830 | $12,019 | Total Lease Cost (in thousands) | Period | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Three Months Ended June 30, | $3,331 | $3,412 | | Six Months Ended June 30, | $6,387 | $6,602 | [9. Stockholders' Equity](index=18&type=section&id=9.%20Stockholders%27%20Equity) - The annual dividend rate for **Series G preferred stock increased to the greater of 4.5%** or Montage Healdsburg's annual net operating income yield, and will increase to **6.5% in Q3 2025**[51](index=51&type=chunk) - The company's stock repurchase program allows for up to **$500.0 million** in common and preferred stock repurchases, with **$329.3 million remaining** as of June 30, 2025[54](index=54&type=chunk)[55](index=55&type=chunk) Common Shares Repurchased (in thousands, except share data) | Period | Number of Common Shares Repurchased | Cost, including fees and commissions | | :-------------------------- | :---------------------------------- | :----------------------------------- | | Three Months Ended June 30, 2025 | 10,301,090 | $90,454 | | Six Months Ended June 30, 2025 | 11,122,861 | $98,470 | [10. Incentive Award Plan](index=19&type=section&id=10.%20Incentive%20Award%20Plan) - The **Incentive Award Plan** allows for various discretionary awards to employees, consultants, and non-employee directors[57](index=57&type=chunk) Amortization Expense (in thousands) | Period | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Three Months Ended June 30, | $2,772 | $3,181 | | Six Months Ended June 30, | $4,836 | $5,951 | - In **January 2025**, 2022 RSR Three-Year Performance Period restricted stock units vested at **169.2% of target**, resulting in the vesting of an additional **176,286 shares**[62](index=62&type=chunk) [11. Earnings Per Share](index=21&type=section&id=11.%20Earnings%20Per%20Share) - The company applies the **two-class method** for computing earnings per share[64](index=64&type=chunk) Basic and Diluted EPS (per common share) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic income attributable to common stockholders | $0.03 | $0.11 | $0.04 | $0.16 | | Diluted income attributable to common stockholders | $0.03 | $0.11 | $0.04 | $0.16 | - The company excluded **685,065 anti-dilutive unvested time-based restricted stock awards** for the three months ended June 30, 2025[67](index=67&type=chunk) [12. Segment Information](index=22&type=section&id=12.%20Segment%20Information) - The company operates as a **single reportable segment: Hotel Ownership**[69](index=69&type=chunk) - The **Chief Operating Decision Maker (CODM)** reviews individual hotel performance using **Hotel Adjusted EBITDAre**[69](index=69&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) Hotel Adjusted EBITDAre (in thousands) | Period | 2025 | 2024 | | :-------------------------- | :--------- | :--------- | | Three Months Ended June 30, | $75,908 | $75,194 | | Six Months Ended June 30, | $136,680 | $127,489 | [13. Commitments and Contingencies](index=26&type=section&id=13.%20Commitments%20and%20Contingencies) Total Basic and Incentive Management Fees (in thousands) | Period | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Three Months Ended June 30, | $8,843 | $6,957 | | Six Months Ended June 30, | $16,825 | $15,960 | Total Franchise Costs (in thousands) | Period | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Three Months Ended June 30, | $4,843 | $4,819 | | Six Months Ended June 30, | $9,302 | $9,024 | - As of **June 30, 2025**, the company had **$53.9 million** in remaining commitments for ongoing hotel renovations[79](index=79&type=chunk) - The company's hotels are geographically concentrated in **California, Florida, Hawaii, and Washington, DC**, exposing it to unique regional risks[81](index=81&type=chunk)[82](index=82&type=chunk) [14. Subsequent Events](index=28&type=section&id=14.%20Subsequent%20Events) - On **July 9, 2025**, the company drew an additional **$23.0 million** on its credit facility, leaving **$450.0 million available**[86](index=86&type=chunk) - Subsequent to **June 30, 2025**, the company repurchased **201,314 shares** of common stock for **$1.8 million**, with **$327.5 million remaining** under the stock repurchase program[87](index=87&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an in-depth analysis of the company's financial performance, liquidity, and capital resources, highlighting a significant decrease in net income and EPS due to a loss on asset sale and increased operating expenses, despite revenue growth, and covering the impact of hotel acquisitions, renovations, dispositions, non-GAAP financial measures, and critical accounting estimates [Overview](index=33&type=section&id=Overview) - The company operates as a **REIT**, owning **14 hotels** in convention, urban, and resort destinations, with most operating under nationally recognized brands[95](index=95&type=chunk)[96](index=96&type=chunk) - Revenues are primarily derived from **room, food and beverage, and other operating activities**[97](index=97&type=chunk) - Key performance indicators include **Occupancy, ADR, RevPAR, EBITDAre, and FFO**[99](index=99&type=chunk)[102](index=102&type=chunk) [Factors Affecting Operating Results](index=37&type=section&id=Factors%20Affecting%20Operating%20Results) - Demand for lodging is closely linked to the general economy, with **upper upscale and luxury hotels more susceptible to revenue decreases** during economic difficulties[101](index=101&type=chunk)[102](index=102&type=chunk) - **New competitive hotel supply** and the growth of vacation rental services can negatively impact **RevPAR and profits**[102](index=102&type=chunk) - **Inflationary pressures can increase operating costs**, potentially limiting the effectiveness of operators in minimizing expenses[102](index=102&type=chunk) [Operating Results Analysis](index=38&type=section&id=Operating%20Results%20Analysis) Revenue Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | Change % (QoQ) | 6M 2025 | 6M 2024 | Change % (YoY) | | :---------------- | :-------- | :-------- | :------------- | :-------- | :-------- | :------------- | | Room revenue | $156,048 | $151,296 | 3.1% | $300,969 | $287,111 | 4.8% | | Food and beverage | $78,026 | $71,367 | 9.3% | $145,154 | $132,706 | 9.4% | | Other operating | $25,698 | $24,818 | 3.5% | $47,714 | $44,830 | 6.4% | | Total revenues | $259,772 | $247,481 | 5.0% | $493,837 | $464,647 | 6.3% | - **Room revenue growth** was significantly impacted by the ramp-up of 'Two Renovation Hotels' (Andaz Miami Beach and Marriott Long Beach Downtown) and the acquisition of Hyatt Regency San Antonio Riverwalk, partially offset by the sale of Hilton New Orleans St. Charles[106](index=106&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - **Food and beverage revenue increased** due to higher banquet revenues, particularly at Hilton San Diego Bayfront, Hyatt Regency San Francisco, Montage Healdsburg, and Wailea Beach Resort, and the Super Bowl in New Orleans[114](index=114&type=chunk)[115](index=115&type=chunk) Expense Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | Change % (QoQ) | 6M 2025 | 6M 2024 | Change % (YoY) | | :-------------------------- | :-------- | :-------- | :------------- | :-------- | :-------- | :------------- | | Total operating expenses | $229,346 | $211,932 | 8.2% | $446,940 | $411,839 | 8.5% | | Corporate overhead | $8,346 | $8,168 | 2.2% | $17,251 | $15,686 | 10.0% | | Depreciation and amortization | $34,125 | $31,112 | 9.7% | $66,400 | $60,152 | 10.4% | | Interest and other income | $2,300 | $3,503 | -34.3% | $3,864 | $8,956 | -56.9% | | Interest expense | $(13,164) | $(12,693) | -3.7% | $(25,846) | $(23,703) | -9.0% | | Loss on sale of assets, net | $(8,751) | $0 | -100.0% | $(8,751) | $457 | -2014.9% | | Net income | $10,774 | $26,142 | -58.8% | $16,029 | $39,177 | -59.1% | | Income attributable to common stockholders | $6,842 | $22,459 | -69.5% | $8,166 | $31,811 | -74.3% | - **Corporate overhead increased** due to professional fees, due diligence fees, board of director expenses, and a severance payment related to executive team restructuring[120](index=120&type=chunk)[121](index=121&type=chunk) - **Interest and other income decreased** primarily due to lower cash balances following the Hyatt Regency San Antonio Riverwalk acquisition in April 2024[125](index=125&type=chunk)[127](index=127&type=chunk) - **Interest expense increased** due to noncash changes in derivative fair values and amortization of deferred financing costs, partially offset by increased capitalized interest[129](index=129&type=chunk) - The company recognized an **$8.8 million loss** on the sale of the Hilton New Orleans St. Charles in Q2 and 6M 2025[131](index=131&type=chunk) [Non-GAAP Financial Measures](index=50&type=section&id=Non-GAAP%20Financial%20Measures) - The company uses non-GAAP measures like **EBITDAre, Adjusted EBITDAre, FFO, and Adjusted FFO** to provide investors with supplemental information on operating performance[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk) Adjusted EBITDAre (in thousands) | Period | 2025 | 2024 | Change % | | :-------------------------- | :--------- | :--------- | :--------- | | Three Months Ended June 30, | $72,682 | $73,523 | -1.1% | | Six Months Ended June 30, | $129,938 | $128,034 | 1.5% | - **Adjusted EBITDAre** was impacted by the acquisition of Hyatt Regency San Antonio Riverwalk, performance of 'Two Renovation Hotels', and corporate-level changes[143](index=143&type=chunk)[144](index=144&type=chunk) Adjusted FFO Attributable to Common Stockholders (in thousands) | Period | 2025 | 2024 | Change % | | :-------------------------- | :--------- | :--------- | :--------- | | Three Months Ended June 30, | $55,723 | $56,626 | -1.6% | | Six Months Ended June 30, | $97,223 | $94,144 | 3.3% | [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) - **Net cash provided by operating activities decreased to $90.8 million** for the first six months of 2025, primarily due to lower interest income and increased corporate expenses[151](index=151&type=chunk) - **Net cash used in investing activities significantly decreased to $5.6 million** for the first six months of 2025, driven by proceeds from a hotel sale and key money, contrasting with a large hotel acquisition in 2024[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - **Net cash used in financing activities increased to $120.5 million** for the first six months of 2025, mainly due to higher common stock repurchases[156](index=156&type=chunk)[157](index=157&type=chunk) - The company expects future cash sources to include operating activities, credit facility borrowings, debt/equity issuances, and dispositions, with primary uses being operating expenses, capital investments, debt repayment, stock repurchases, and dividends[158](index=158&type=chunk)[159](index=159&type=chunk) - As of **June 30, 2025**, the company had **$73.6 million in unrestricted cash** and **$473.0 million available** under its unsecured revolving credit facility[161](index=161&type=chunk) - As of **June 30, 2025**, **51.0%** of the company's **$872.0 million outstanding debt** had fixed interest rates or was swapped to fixed rates[162](index=162&type=chunk)[165](index=165&type=chunk) Contractual Obligations as of June 30, 2025 (in thousands) | Obligation | Total | Less Than 1 year | 1 to 3 years | 3 to 5 years | More than 5 years | | :--------------------------------------- | :---------- | :--------------- | :----------- | :----------- | :---------------- | | Debt | $872,000 | $290,000 | $582,000 | $0 | $0 | | Interest obligations on debt | $88,796 | $47,157 | $41,639 | $0 | $0 | | Operating lease obligations, including imputed interest | $11,410 | $4,250 | $5,046 | $1,148 | $966 | | Construction commitments | $53,881 | $53,881 | $0 | $0 | $0 | | Total | $1,026,087 | $395,288 | $628,685 | $1,148 | $966 | - The company invested **$56.0 million in capital expenditures** for renovations and additions during the first six months of 2025[168](index=168&type=chunk) - **Inflationary pressures on operating costs** are a concern, though hotel operators' ability to adjust room rates historically mitigates the impact[160](index=160&type=chunk)[172](index=172&type=chunk) [Critical Accounting Estimates](index=61&type=section&id=Critical%20Accounting%20Estimates) - Critical accounting estimates include the **impairment of investments in hotel properties**, involving significant judgment in determining fair value and recoverability[176](index=176&type=chunk) - **Income taxes**, particularly related to REIT qualification and the TRS Lessee, require estimates for deferred tax assets and liabilities and uncertain tax positions[176](index=176&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk exposure is to interest rate fluctuations on its variable rate debt, which it mitigates through interest rate derivatives, with 51.0% of its debt fixed or swapped to fixed rates as of June 30, 2025 - The company's future income and cash flows are dependent upon **prevailing market interest rates** due to variable interest rate debt[180](index=180&type=chunk) - As of **June 30, 2025**, **51.0%** of the company's debt obligations were fixed or subject to interest rate swap derivatives[181](index=181&type=chunk) - A **50 basis point increase or decrease** in the market interest rate on variable rate debt would result in an approximate **$2.1 million annual increase or decrease in interest expense**[181](index=181&type=chunk) [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The **CEO and CFO concluded that disclosure controls and procedures were effective** as of June 30, 2025[183](index=183&type=chunk) - **No material change in internal control over financial reporting** occurred during the quarter[184](index=184&type=chunk) [PART II—OTHER INFORMATION](index=63&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) There are no legal proceedings to report for the period - **No legal proceedings are reported**[186](index=186&type=chunk) [Item 1A. Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) No new material risk factors have been identified for the current reporting period, and readers are directed to the company's Annual Report on Form 10-K for a detailed discussion of existing risk factors - **No new risk factors are reported** in this quarterly report[186](index=186&type=chunk) - Readers should refer to the **Annual Report on Form 10-K** for a detailed discussion of risk factors[90](index=90&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the second quarter of 2025, the company repurchased 10,301,090 shares of its common stock for $90.5 million under its existing stock repurchase program, leaving $329.3 million available for future repurchases Common Stock Repurchases (Q2 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Appropriate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | | :----------------------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------- | :------------------------------------------------------------------------------------------------- | | April 1, 2025 - April 30, 2025 | 1,510,549 | $8.44 | 1,510,549 | $406,754,207 | | May 1, 2025 - May 31, 2025 | 3,784,152 | $8.81 | 3,784,152 | $373,413,087 | | June 1, 2025 - June 30, 2025 | 5,006,389 | $8.82 | 5,006,389 | $329,263,171 | | Total | 10,301,090 | $8.76 | 10,301,090 | $329,263,171 | - The company repurchased **10,301,090 shares** of common stock for a total purchase price of **$90.5 million** during the three months ended June 30, 2025[192](index=192&type=chunk) - **$329.3 million remains available** under the stock repurchase program as of June 30, 2025[192](index=192&type=chunk) [Item 3. Defaults Upon Senior Securities](index=65&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There are no defaults upon senior securities to report for the period - **No defaults upon senior securities are reported**[189](index=189&type=chunk) [Item 4. Mine Safety Disclosures](index=65&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) There are no mine safety disclosures to report for the period - **No mine safety disclosures are reported**[190](index=190&type=chunk) [Item 5. Other Information](index=65&type=section&id=Item%205.%20Other%20Information) This section reiterates details of the stock repurchase program and confirms no changes to Rule 10b5-1 trading arrangements by directors or officers during the quarter - The company's stock repurchase program, reauthorized in **February 2023**, allows for up to **$500.0 million** in common and preferred stock repurchases, with **$329.3 million remaining** as of June 30, 2025[192](index=192&type=chunk) - **No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement** during the quarter ended June 30, 2025[193](index=193&type=chunk) [Item 6. Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including organizational documents, employment agreements, incentive plans, certifications, and XBRL data - The report includes various exhibits such as **Articles of Amendment and Restatement, Bylaws, Articles Supplementary for preferred stock, and the Limited Liability Agreement of Sunstone Hotel Partnership LLC**[194](index=194&type=chunk) - **Employment agreements for Bryan A. Giglia and Aaron Reyes**, and an amendment to the **2022 Incentive Award Plan** are filed as exhibits[194](index=194&type=chunk) - **Certifications by the Principal Executive Officer and Principal Financial Officer**, as well as XBRL Instance Document and Taxonomy Extension Documents, are included[194](index=194&type=chunk) [SIGNATURES](index=67&type=section&id=SIGNATURES) The report was duly signed on August 6, 2025, by Aaron R. Reyes, Chief Financial Officer and Duly Authorized Officer - The report was signed on **August 6, 2025**[198](index=198&type=chunk) - The report was signed by **Aaron R. Reyes, Chief Financial Officer and Duly Authorized Officer**[198](index=198&type=chunk)
Sunstone Hotel Investors(SHO) - 2025 Q2 - Earnings Call Transcript
2025-08-06 16:00
Financial Data and Key Metrics Changes - The second quarter RevPAR increased by 2.2% compared to last year, while total RevPAR grew by 3.7% [29] - Adjusted EBITDAre for the second quarter was $73 million, and adjusted FFO was $0.28 per diluted share [29] - The company has a net leverage of 3.5 times trailing earnings or 4.8 times including preferred equity [29] Business Line Data and Key Metrics Changes - Urban hotels led the portfolio with RevPAR growth of over 9%, driven by strong corporate group and business travel demand [7] - The Marriott Long Beach Downtown saw RevPAR increase nearly 70% due to recent investments and brand conversion [7] - The Renaissance Orlando at SeaWorld reported a year-to-date production increase of 16% in room nights and over 30% in revenue [11] Market Data and Key Metrics Changes - The company experienced mixed performance across various markets, with San Francisco showing RevPAR growth of 6.5% and total RevPAR growth of over 16% [9] - Washington DC faced challenges due to government cancellations, impacting performance negatively [10] - Wailea and Key West saw increased price sensitivity, contributing to lower than expected growth [12] Company Strategy and Development Direction - The company is taking a cautious approach to fourth quarter expectations due to heightened uncertainty and limited visibility [6] - There is a focus on capital recycling, with the sale of Hilton New Orleans St. Charles and $100 million in share repurchases planned [18] - The company aims to drive earnings growth through renovations and strategic investments in existing properties [92] Management's Comments on Operating Environment and Future Outlook - Management noted a more cautious outlook for the remainder of the year, primarily due to continued weakness in government demand and softer leisure demand [19] - There are encouraging signs in leisure bookings in Miami and Wailea, which could lead to better-than-anticipated fourth quarter results [6] - The company expects total portfolio RevPAR growth to range from 3% to 5% compared to 2024, with adjusted EBITDAre projected between $226 million to $240 million [31][32] Other Important Information - The company has nearly $145 million in total cash and cash equivalents, equating to over $600 million in total liquidity [30] - The updated guidance reflects a more cautious expectation for the remainder of the year, particularly for Andaz Miami Beach [31] - The company has repurchased over 11 million shares this year, contributing to an estimated 6% accretion in earnings per share [34] Q&A Session Summary Question: Recent booking trends in Maui - Management noted that occupancy in Kaanapali has improved, which positively impacts Wailea's performance, leading to increased leisure bookings [40][41][44] Question: Change in outlook and EBITDA reduction - The reduction in outlook is attributed to softness in Wailea and Washington DC, along with a slower ramp-up at Andaz Miami Beach [50][54] Question: Comfortable leverage and buyback strategy - The company is comfortable with its current leverage and sees ample capacity for additional share repurchases, balancing this with other capital allocation opportunities [58][60] Question: Group business outlook for 2026 - Management indicated that DC, Miami, and New Orleans are expected to be stronger markets, with good growth anticipated in San Francisco and wine country [65][66] Question: Impact of renovations and future growth - Renovations in various properties are expected to contribute to future growth, with specific focus on improving transient bookings and group business [92][94]
Sunstone Hotel Investors (SHO) Q2 FFO and Revenues Surpass Estimates
ZACKS· 2025-08-06 13:41
Core Viewpoint - Sunstone Hotel Investors reported quarterly funds from operations (FFO) of $0.28 per share, exceeding the Zacks Consensus Estimate of $0.26 per share, with a year-over-year comparison showing no change in FFO [1] Group 1: Financial Performance - The company posted revenues of $259.77 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.92%, compared to $247.48 million in the same quarter last year [2] - Over the last four quarters, Sunstone Hotel has exceeded consensus FFO estimates three times [2] - The current consensus FFO estimate for the upcoming quarter is $0.20 on revenues of $235.57 million, and for the current fiscal year, it is $0.88 on revenues of $958.01 million [7] Group 2: Market Performance - Sunstone Hotel shares have declined approximately 25.9% since the beginning of the year, while the S&P 500 has gained 7.1% [3] - The company currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future [6] Group 3: Industry Context - The REIT and Equity Trust - Other industry, to which Sunstone Hotel belongs, is currently in the top 40% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in estimate revisions, which can be tracked by investors [5]
Sunstone Hotel Investors(SHO) - 2025 Q2 - Quarterly Results
2025-08-06 11:40
[Corporate Profile and Non-GAAP Financial Measures Disclosures](index=3&type=section&id=Corporate%20Profile%20And%20Disclosures%20Regarding%20Non-GAAP%20Financial%20Measures) This section introduces Sunstone Hotel Investors, Inc. as a lodging REIT and details the non-GAAP financial measures used for performance evaluation [About Sunstone](index=4&type=section&id=About%20Sunstone) Sunstone Hotel Investors, Inc. is a lodging real estate investment trust (REIT) that, as of August 6, 2025, owns 14 hotels with 6,999 rooms, predominantly under nationally recognized brands - Sunstone Hotel Investors, Inc. (NYSE: SHO) is a lodging REIT[8](index=8&type=chunk) - As of August 6, 2025, the company owns 14 hotels comprising 6,999 rooms, with the majority operated under nationally recognized brands[8](index=8&type=chunk) - Sunstone's strategy focuses on creating long-term stakeholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate[8](index=8&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) This section outlines the non-GAAP financial measures used by Sunstone, including EBITDAre, Adjusted EBITDAre, FFO attributable to common stockholders, Adjusted FFO attributable to common stockholders, hotel Adjusted EBITDAre, and hotel Adjusted EBITDAre margins - The company presents non-GAAP financial measures such as EBITDAre, Adjusted EBITDAre, FFO attributable to common stockholders, Adjusted FFO attributable to common stockholders, hotel Adjusted EBITDAre, and hotel Adjusted EBITDAre margins, which are considered useful supplemental measures of operating performance[12](index=12&type=chunk) - EBITDAre is presented in accordance with Nareit guidelines, defined as net income plus interest expense, income tax expense, depreciation and amortization, gains or losses on disposition of depreciated property, impairment write-downs, and adjustments for unconsolidated affiliates' EBITDAre[13](index=13&type=chunk) - Adjustments to EBITDAre and FFO include the exclusion of amortization of deferred stock compensation, amortization of contract intangibles, gains or losses from debt transactions, cumulative effect of changes in accounting principles, and other non-ordinary course adjustments like lawsuit settlement costs or pre-opening costs[18](index=18&type=chunk)[19](index=19&type=chunk)[21](index=21&type=chunk) [Comparable Corporate Financial Information](index=7&type=section&id=Comparable%20Corporate%20Financial%20Information) This section presents consolidated financial statements and reconciliations of net income to key non-GAAP metrics like EBITDAre, Adjusted EBITDAre, FFO, and Adjusted FFO across recent periods [Comparable Consolidated Statements of Operations](index=8&type=section&id=Comparable%20Consolidated%20Statements%20of%20Operations) This section provides a consolidated statement of operations for the quarter ended June 30, 2025, and prior quarters, along with trailing 12-month data Comparable Consolidated Statements of Operations (in thousands) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | Trailing 12 Months Ended June 30, 2025 | | :-------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------------------------------ | | Total revenues | $257,412 | $228,980 | $210,653 | $224,080 | $921,125 | | Total operating expenses | $227,204 | $214,279 | $202,262 | $207,380 | $851,125 | | Net income (loss) | $19,307 | $3,485 | $(159) | $2,969 | $25,602 | [Comparable Reconciliation of Net Income to EBITDAre, Adjusted EBITDAre, and Total Portfolio Hotel Adjusted EBITDAre](index=9&type=section&id=Comparable%20Reconciliation%20of%20Net%20Income%20to%20EBITDAre%2C%20Adjusted%20EBITDAre%2C%20and%20Total%20Portfolio%20Hotel%20Adjusted%20EBITDAre) This section reconciles net income to EBITDAre, Adjusted EBITDAre, and Total Portfolio Hotel Adjusted EBITDAre across recent quarters and the trailing 12 months Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre (in thousands) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | Trailing 12 Months Ended June 30, 2025 | | :-------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------------------------------ | | Net income | $10,774 | $5,255 | $836 | $3,249 | $20,114 | | EBITDAre | $66,851 | $50,310 | $43,925 | $50,437 | $211,523 | | Adjusted EBITDAre | $72,682 | $57,256 | $48,093 | $53,567 | $231,598 | | Total Portfolio Hotel Adjusted EBITDAre | $75,284 | $58,400 | $48,349 | $56,126 | $238,159 | [Comparable Reconciliation of Net Income to FFO and Adjusted FFO Attributable to Common Stockholders](index=10&type=section&id=Comparable%20Reconciliation%20of%20Net%20Income%20to%20FFO%20and%20Adjusted%20FFO%20Attributable%20to%20Common%20Stockholders) This section details the reconciliation of net income to FFO and Adjusted FFO attributable to common stockholders, including per share data and equity transactions Reconciliation of Net Income to FFO and Adjusted FFO (in thousands, except per share data) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | Trailing 12 Months Ended June 30, 2025 | | :-------------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------------------------------ | | Net income | $10,774 | $5,255 | $836 | $3,249 | $20,114 | | FFO attributable to common stockholders | $49,372 | $33,242 | $29,155 | $30,638 | $142,407 | | Adjusted FFO attributable to common stockholders | $55,723 | $41,500 | $32,020 | $36,851 | $166,094 | | Comparable Adjusted FFO per diluted share | $0.29 | $0.21 | $0.16 | $0.19 | $0.85 | - Equity transactions include pro forma adjustments for common stock repurchases made during the first and second quarters of 2025 and the third and fourth quarters of 2024, as if they occurred on July 1, 2024[30](index=30&type=chunk) [Capitalization](index=12&type=section&id=Capitalization) This section provides a comparative analysis of the company's capitalization structure, including debt and preferred stock, across recent quarters [Comparative Capitalization](index=13&type=section&id=Comparative%20Capitalization) This section provides a comparative overview of the company's capitalization from Q2 2024 to Q2 2025, highlighting changes in common shares outstanding and debt ratios Comparative Capitalization (in thousands, except per share data) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Common share price (end of quarter) | $8.68 | $9.41 | $11.84 | $10.32 | $10.46 | | Common dividends per share | $0.09 | $0.09 | $0.09 | $0.09 | $0.09 | | Common shares outstanding | 190,171 | 200,370 | 200,825 | 200,919 | 203,390 | | Market value of common equity | $1,650,681 | $1,885,477 | $2,377,768 | $2,073,489 | $2,127,464 | | Total debt | $872,000 | $845,000 | $845,000 | $817,437 | $817,978 | | Total capitalization | $2,803,931 | $3,011,727 | $3,504,018 | $3,172,176 | $3,226,692 | | Total debt to total capitalization | 31.1% | 28.1% | 24.1% | 25.8% | 25.4% | [Debt and Preferred Stock Summary Schedule](index=14&type=section&id=Debt%20and%20Preferred%20Stock%20Summary%20Schedule) This section provides a detailed breakdown of the company's unsecured debt and preferred stock as of June 30, 2025, including interest rates, maturities, and balances Unsecured Debt Summary (as of June 30, 2025, in thousands) | Unsecured Debt | Interest Rate / Spread | Maturity Date | Balance | | :------------- | :--------------------- | :------------ | :------ | | Series A Senior Notes | 4.69% | 01/10/2026 | $65,000 | | Term Loan 3 | 5.92% | 05/01/2026 | $225,000 | | Term Loan 4 | 5.52% | 11/07/2026 | $100,000 | | Term Loan 1 | 5.32% | 07/25/2027 | $175,000 | | Revolving Line of Credit | 5.86% | 07/25/2027 | $27,000 | | Series B Senior Notes | 4.79% | 01/10/2028 | $105,000 | | Term Loan 2 | 5.83% | 01/25/2028 | $175,000 | | **Total Unsecured Debt** | | | **$872,000** | Preferred Stock Summary (as of June 30, 2025, in thousands) | Preferred Stock | Dividend Rate | Maturity | Balance | | :-------------- | :------------ | :------- | :------ | | Series G | 4.500% | Perpetual | $66,250 | | Series H | 6.125% | Perpetual | $115,000 | | Series I | 5.700% | Perpetual | $100,000 | | **Total Preferred Stock** | | | **$281,250** | - The weighted average maturity of debt is **1.7 years**, and the average interest rate is **5.51%**[37](index=37&type=chunk) [Property-Level Data and Operating Statistics](index=15&type=section&id=Property-Level%20Data%20And%20Operating%20Statistics) This section details the company's hotel portfolio, including brand affiliations and key operating statistics such as ADR, Occupancy, RevPAR, and TRevPAR [Hotel Information as of August 6, 2025](index=16&type=section&id=Hotel%20Information%20as%20of%20August%206%2C%202025) As of August 6, 2025, Sunstone's portfolio consists of 14 hotels totaling 6,999 rooms, featuring properties under major brands like Hilton, Hyatt, Marriott, Montage, and Four Seasons across various U.S. locations - As of August 6, 2025, the company's portfolio includes **14 hotels** with a total of **6,999 rooms**[44](index=44&type=chunk) - The hotels are operated under nationally recognized brands such as Hilton, Hyatt, Marriott, Montage, and Four Seasons[44](index=44&type=chunk) - Andaz Miami Beach debuted in May 2025, following a transformative renovation and conversion from The Confidante Miami Beach[45](index=45&type=chunk) [Property-Level Operating Statistics (ADR, Occupancy, RevPAR and Total RevPAR (TRevPAR))](index=17&type=section&id=Property-Level%20Operating%20Statistics%20(ADR%2C%20Occupancy%2C%20RevPAR%20and%20Total%20RevPAR%20(TRevPAR))) This section presents property-level operating statistics, including ADR, Occupancy, RevPAR, and TRevPAR, for Q2 and YTD 2025 compared to 2024, highlighting impacts from renovation activities Total Portfolio Operating Statistics (Excluding Renovation Hotel) - Q2 2025 vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | YoY Change | | :------- | :------ | :------ | :--------- | | ADR | $323 | $328 | (1.3)% | | Occupancy | 77.2% | 75.1% | +210 bps | | RevPAR | $250 | $246 | +1.4% | | TRevPAR | $417 | $405 | +2.8% | Total Portfolio Operating Statistics (Excluding Renovation Hotel) - YTD 2025 vs. YTD 2024 | Metric | YTD 2025 | YTD 2024 | YoY Change | | :------- | :------- | :------- | :--------- | | ADR | $321 | $324 | (1.1)% | | Occupancy | 75.0% | 72.5% | +250 bps | | RevPAR | $241 | $235 | +2.3% | | TRevPAR | $397 | $384 | +3.4% | - Operating statistics for Q2 and YTD 2025 and 2024 were impacted by renovation activity at Marriott Long Beach Downtown and Andaz Miami Beach, with Andaz Miami Beach resuming operations in May 2025 after suspending them in March 2024 for renovation[53](index=53&type=chunk) [Property-Level Revenues, Adjusted EBITDAre & Adjusted EBITDAre Margins](index=20&type=section&id=Property-Level%20Revenues%2C%20Adjusted%20EBITDAre%20%26%20Adjusted%20EBITDAre%20Margins) This section analyzes property-level revenues, Adjusted EBITDAre, and corresponding margins for the total portfolio, highlighting performance for Q2 and YTD 2025 compared to 2024 [Q2 2025/2024](index=21&type=section&id=Q2%202025%2F2024) For Q2 2025, the total portfolio (excluding renovation hotels) generated **$255.08 million** in revenues and **$77.61 million** in Hotel Adjusted EBITDAre, with a margin of **30.4%**, a slight decrease of **50 bps** from Q2 2024 Total Portfolio (Excluding Renovation Hotel) Performance - Q2 2025 vs. Q2 2024 (in thousands) | Metric | Q2 2025 | Q2 2024 | Margin Change (bps) | | :-------------------- | :------ | :------ | :------------------ | | Total Revenues | $255,083 | $248,070 | | | Hotel Adjusted EBITDAre | $77,613 | $76,673 | | | Hotel Adjusted EBITDAre Margins | 30.4% | 30.9% | (50) bps | - Andaz Miami Beach, impacted by renovation, reported Total Revenues of **$2,329 thousand** and Hotel Adjusted EBITDAre of **$(2,329) thousand**, resulting in a **(100.0)% margin** for Q2 2025[56](index=56&type=chunk) - Marriott Long Beach Downtown experienced a significant increase in Hotel Adjusted EBITDAre margin from **(0.2)%** in Q2 2024 to **31.7%** in Q2 2025, a change of **3,190 bps**, likely reflecting recovery from prior renovation impacts[56](index=56&type=chunk) [Q2 YTD 2025/2024](index=22&type=section&id=Q2%20YTD%202025%2F2024) For the first six months of 2025, the total portfolio (excluding renovation hotels) achieved **$483.93 million** in revenues and **$136.49 million** in Hotel Adjusted EBITDAre, maintaining a **28.2%** margin, consistent with YTD 2024 Total Portfolio (Excluding Renovation Hotel) Performance - YTD 2025 vs. YTD 2024 (in thousands) | Metric | YTD 2025 | YTD 2024 | Margin Change (bps) | | :-------------------- | :------- | :------- | :------------------ | | Total Revenues | $483,931 | $470,531 | | | Hotel Adjusted EBITDAre | $136,488 | $132,701 | | | Hotel Adjusted EBITDAre Margins | 28.2% | 28.2% | — bps | Actual Portfolio Performance - YTD 2025 vs. YTD 2024 (in thousands) | Metric | YTD 2025 | YTD 2024 | | :-------------------- | :------- | :------- | | Total Revenues | $493,837 | $464,647 | | Hotel Adjusted EBITDAre | $136,680 | $127,489 | | Hotel Adjusted EBITDAre Margins | 27.7% | 27.4% | - Renovation activities at Andaz Miami Beach and Marriott Long Beach Downtown continued to impact YTD results, with Andaz Miami Beach showing a negative Hotel Adjusted EBITDAre margin of **(113.9)%** for YTD 2025[59](index=59&type=chunk)
SUNSTONE HOTEL INVESTORS REPORTS RESULTS FOR SECOND QUARTER 2025
Prnewswire· 2025-08-06 11:30
Core Viewpoint - Sunstone Hotel Investors, Inc. reported its second quarter results for 2025, highlighting a mixed performance with solid corporate group and business travel demand, but facing challenges from price-sensitive leisure travelers and weaker government volume [3][4]. Financial Performance - Net income for Q2 2025 was $10.8 million, a decrease of 58.8% from $26.1 million in Q2 2024 [4][9]. - Income attributable to common stockholders per diluted share was $0.03, down 72.7% from $0.11 in the same quarter last year [4][9]. - Total revenues increased to $259.8 million in Q2 2025 from $247.5 million in Q2 2024, reflecting a growth in room and food and beverage revenues [34]. Portfolio Operating Statistics - RevPAR (Revenue per Available Room) increased by 2.2% to $241.22 in Q2 2025 compared to $235.97 in Q2 2024 [4][9]. - Occupancy rates improved to 74.6%, up 260 basis points from 72.0% in the previous year [4][9]. - Average Daily Rate (ADR) decreased by 1.3% to $323.35 from $327.73 in Q2 2024 [4][9]. Capital Management - The company repurchased approximately $100 million of its common stock at an average price of $8.83 per share in 2025, representing nearly 14% of shares outstanding since the start of 2022 [3][7]. - The Hilton New Orleans St. Charles was sold for $47 million, with proceeds used for share repurchases [6][7]. Investment and Outlook - The company plans to invest $80 million to $100 million in its portfolio in 2025, focusing on renovations and improvements at various properties [10]. - The updated guidance for full-year 2025 includes a net income expectation of $14 million to $28 million, down from previous estimates [11][12]. Balance Sheet and Liquidity - As of June 30, 2025, the company had total assets of $3.0 billion, total debt of $872 million, and stockholders' equity of $2.0 billion [8][34]. - Cash and cash equivalents stood at $144.9 million, including $71.4 million in restricted cash [8].
SUNSTONE HOTEL INVESTORS SCHEDULES SECOND QUARTER 2025 EARNINGS RELEASE AND CONFERENCE CALL
Prnewswire· 2025-06-30 20:15
Core Viewpoint - Sunstone Hotel Investors, Inc. will report its financial results for the second quarter of 2025 on August 6, 2025, before market opening [1] Company Information - Sunstone Hotel Investors, Inc. is a lodging real estate investment trust (REIT) focused on creating long-term stakeholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate [3]
Sunstone Disposes Hilton New Orleans St. Charles Hotel for $47M
ZACKS· 2025-06-10 18:16
Core Insights - Sunstone Hotel Investors, Inc. (SHO) sold the Hilton New Orleans St. Charles for a gross sale price of $47 million, equating to approximately $187,000 per room [1][8] Financial Metrics - The sale price reflects a multiple of 10.1 times the 2024 Hotel Adjusted EBITDAre and an 8.7% cap rate on 2024 Hotel Net Operating Income (NOI) [2] - Including estimated near-term capital expenditures, the gross sale price reflects a multiple of 13.4 times the Hotel Adjusted EBITDAre and a 6.6% cap rate on 2024 Hotel NOI [2] Capital Allocation - Proceeds from the hotel sale were fully reinvested into share repurchases, taking advantage of favorable market conditions [3][8] - From early 2025 to June 6, the company repurchased 6.8 million shares at an average price of $8.84 per share, totaling $60 million before expenses [4] - Since the start of 2022, the company has allocated $252 million to repurchase 25.8 million shares, representing nearly 12% of shares outstanding at the beginning of the period, at an average price of $9.77 per share [4] Shareholder Value - The repurchase activity has resulted in an accretive allocation of capital, creating significant value for shareholders through an implied cash flow multiple and discount to net asset value [5] - The company anticipates that the hotel will require periodic renovations to maintain its competitive position and earnings level [5] Management Commentary - CEO Bryan Giglia stated that the company divested the hotel at attractive pricing, eliminated near-term capital expenditures, and reinvested proceeds into higher-yielding investments through stock repurchases [6] - The company continues to view New Orleans as an attractive lodging market for group events and leisure travel, maintaining exposure through ownership of the JW Marriott [6] Company Strategy - Sunstone's strategy focuses on creating long-term shareholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate [7] - Despite a challenging macroeconomic environment, the company remains engaged in capital allocation opportunities [7]