Sunstone Hotel Investors(SHO) - 2025 Q3 - Quarterly Results

Financial Performance - For the quarter ended September 30, 2025, total revenues were $229.32 million, a decrease from $257.41 million in the previous quarter[25] - Room revenue for Q3 2025 was $139.52 million, compared to $154.06 million in Q2 2025, reflecting a decline of approximately 9.4%[25] - Net income for the quarter was $1.27 million, significantly lower than $19.31 million in the previous quarter, indicating a decrease of about 93.4%[25] - Total operating expenses for Q3 2025 were $217.48 million, down from $227.20 million in Q2 2025, representing a reduction of approximately 4.8%[25] - Corporate overhead expenses were $6.97 million for Q3 2025, a decrease from $8.35 million in Q2 2025, reflecting cost management strategies[25] - Net income for Q3 2025 was $1,322,000, with a trailing 12-month total of $18,187,000[27] - Adjusted EBITDAre for Q3 2025 was $50,052,000, with a trailing 12-month total of $228,083,000[27] - FFO attributable to common stockholders for Q3 2025 was $30,641,000, with a trailing 12-month total of $142,410,000[28] - Total Portfolio Revenues for Q3 2025 reached $229.32 million, a slight increase from $224.08 million in Q3 2024, reflecting a 1.0% growth[56] - Adjusted EBITDA for the Total Portfolio in Q3 2025 was $52.65 million, down from $56.13 million in Q3 2024, resulting in a margin decrease from 25.0% to 23.0%[56] - For the nine months ended September 30, 2025, the Total Portfolio Revenues were $715.71 million, compared to $698.76 million in the same period of 2024, marking a 2.4% increase[57] - The Adjusted EBITDA margin for the Total Portfolio for the nine months ended September 30, 2025, was 26.0%, a decrease from 26.9% in 2024[57] Debt and Capitalization - The company reported a loss on extinguishment of debt amounting to $180, indicating ongoing financial restructuring efforts[25] - Total debt as of September 30, 2025, was $930,000,000, representing 31.1% of total capitalization[34] - Market value of common equity increased to $1,779,474,000 as of September 30, 2025, compared to $1,650,681,000 in the previous quarter[34] - Total capitalization as of September 30, 2025, was $2,990,724,000[34] - The average interest rate on total debt was 5.16% as of September 30, 2025[37] Operational Metrics - The company owns 14 hotels with a total of 6,999 rooms, primarily under nationally recognized brands, focusing on long-term stakeholder value[8] - The total portfolio consists of 6,999 rooms across various hotels, with the Hilton San Diego Bayfront accounting for 1,190 rooms, representing 17% of the total[44] - For Q3 2025, the Hilton San Diego Bayfront reported an ADR of $281, occupancy of 85.5%, and RevPAR of $240, reflecting an 8.6% increase compared to Q3 2024[49] - The Hyatt Regency San Francisco achieved an ADR of $292, with occupancy at 86.8%, resulting in a RevPAR of $253, marking a 15.3% increase year-over-year[49] - The total portfolio's TRevPAR for Q3 2025 was $355, a 2.4% increase from Q3 2024[49] - The Andaz Miami Beach, which opened in May 2025, reported a 100% occupancy rate for Q3 2025, with an ADR of $305[49] - The Four Seasons Resort Napa Valley experienced a 9.3% decrease in ADR to $1,231, with occupancy at 59.5% for the nine months ended September 30, 2025[51] - The Montage Healdsburg's RevPAR for Q3 2025 was $701, down 6.6% from Q3 2024, with occupancy at 62.9%[49] Strategic Initiatives - Future strategies include potential acquisitions and dispositions of well-located hotel properties to enhance portfolio value[8] - The company emphasizes the importance of non-GAAP measures like FFO and Adjusted FFO to assess ongoing operational performance[15][16] - The company continues to focus on strategic renovations and acquisitions to enhance portfolio performance and operational efficiency[59] - The company acquired the remaining 25% interest in the Hilton San Diego Bayfront in June 2022, resulting in full ownership of the hotel[44] - The Series G cumulative redeemable preferred stock's dividend rate will increase to a minimum of 3.0% and 4.5% starting in Q1 and Q3 2024, respectively, and to at least 6.5% from Q3 2025, based on the Montage Healdsburg's annual net operating income yield[39] Renovation Impact - The Andaz Miami Beach, under renovation, reported a significant negative Adjusted EBITDA of $(2.49) million for Q3 2025, compared to $(0.56) million in Q3 2024[56] - The Hyatt Regency San Antonio Riverwalk, acquired in April 2024, showed a significant decline in Q3 2025 Adjusted EBITDA margin to 15.9%, down from 33.5% in Q3 2024[56] - The Marriott Long Beach Downtown, also undergoing renovation, showed a notable improvement in Q3 2025 with an Adjusted EBITDA margin of 23.3%, up from 11.6% in Q3 2024[56]