Sunstone Hotel Investors(SHO) - 2023 Q4 - Annual Results

Financial Performance - Total revenues for Q4 2023 were $208.094 million, a decrease from $213.661 million in Q3 2023, and total revenues for FY 2023 reached $889.712 million[26] - Comparable Hotel Adjusted EBITDAre for Q4 2023 was $49.855 million, down from $54.009 million in Q3 2023, while FY 2023 total was $244.732 million[26] - Net income for Q4 2023 was $1.399 million, compared to $6.658 million in Q3 2023, with FY 2023 net income totaling $57.326 million[26] - Comparable Adjusted FFO attributable to common stockholders for Q4 2023 was $33.532 million, consistent with $33.424 million in Q3 2023, and FY 2023 total was $164.489 million[26] - Room revenues for Q4 2023 were $127.038 million, a decline from $134.428 million in Q3 2023, while total room revenues for FY 2023 were $552.646 million[26] - Food and beverage revenues for Q4 2023 increased to $61.284 million from $56.835 million in Q3 2023, contributing to a total of $254.250 million for FY 2023[26] - Total operating expenses for Q4 2023 were $194.927 million, slightly down from $195.725 million in Q3 2023, with FY 2023 total operating expenses at $790.342 million[26] - Interest expense for Q4 2023 was $16.768 million, up from $11.894 million in Q3 2023, with total interest expense for FY 2023 amounting to $51.679 million[26] Year-over-Year Comparisons - Total revenues for the year ended December 31, 2022, were $836,700,000, with a quarterly revenue of $217,329,000 for Q4 2022[28] - Net income for Q4 2022 was $14,045,000, a decrease from $15,786,000 in Q3 2022, while the annual net income was $70,933,000[28] - Comparable Adjusted EBITDAre for Q4 2022 was $60,995,000, compared to $54,762,000 in Q3 2022, indicating a 23% increase[28] - Comparable Adjusted FFO attributable to common stockholders for Q4 2022 was $45,951,000, up from $42,178,000 in Q3 2022[28] - The company reported a total operating expense of $191,558,000 for Q4 2022, slightly higher than $190,027,000 in Q3 2022[28] - Interest expense for Q4 2022 was $11,717,000, increasing from $9,269,000 in Q3 2022[28] - The company reported a gain on the sale of assets of $123,820 thousand for FY 2023[34] - The total operating expenses for the year ended December 31, 2022, were $737,748,000, reflecting a significant operational scale[28] Shareholder Returns and Equity - Total equity transactions in 2023 included repurchases totaling 2.0 million shares in Q1, 0.3 million in Q2, 1.6 million in Q3, and 2.1 million in Q4[35] - The common share price at the end of Q4 2023 was $10.73, up from $9.35 in Q3 2023, representing a 14.8% increase[47] - The market value of common equity increased to $2,183,336 thousand in Q4 2023 from $1,922,578 thousand in Q3 2023, a growth of 13.6%[47] - The company declared a common dividend of $0.13 per share in Q4 2023, an increase from $0.07 in Q3 2023[47] Debt and Capitalization - Total debt remained relatively stable at $819,050 thousand in Q4 2023 compared to $819,582 thousand in Q3 2023, showing a slight decrease of 0.1%[50] - The total debt to total capitalization ratio improved to 24.9% in Q4 2023 from 27.1% in Q3 2023, indicating a stronger capital structure[47] - The average interest rate on total debt was 5.80% as of December 31, 2023, with 51.2% of the debt being fixed rate[50] - The company achieved a weighted average maturity of debt of 3.0 years, up from 2.8 years due to the extension of certain loans[50] Operational Highlights - The company owns 14 hotels with a total of 6,675 rooms as of February 23, 2024, focusing on long-term stakeholder value through strategic acquisitions and active ownership[7] - Future outlook includes continued focus on market expansion and potential acquisitions to enhance portfolio performance and stakeholder value[7] - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency[32] - Future guidance indicates a focus on increasing comparable hotel adjusted EBITDAre through strategic acquisitions and operational improvements[32] Hotel Performance Metrics - For the year ended December 31, 2023, the Average Daily Rate (ADR) for Hilton San Diego Bayfront increased by 1.9% to $275.56 compared to $270.47 in 2022[64] - The occupancy rate for Hyatt Regency San Francisco improved to 69.6% in 2023, up from 58.5% in 2022, representing an increase of 1,110 basis points[64] - The Revenue Per Available Room (RevPAR) for the Comparable Portfolio, excluding Renovation Hotels, decreased by 1.0% to $324.58 in 2023 compared to $327.97 in 2022[64] - The ADR for the Four Seasons Resort Napa Valley decreased by 14.9% to $1,512.81 in 2023 from $1,778.25 in 2022[64] - The total RevPAR (TRevPAR) for the 11 Hotel Portfolio increased by 0.8% to $303.48 in 2023 compared to $301.18 in 2022[65] - The occupancy rate for Wailea Beach Resort decreased to 75.6% in 2023, down from 79.2% in 2022, a decline of 360 basis points[64] - The ADR for JW Marriott New Orleans increased by 0.8% to $240.59 in 2023 compared to $238.68 in 2022[64] - The RevPAR for Marriott Boston Long Wharf increased by 11.8% to $280.33 in 2023 from $250.67 in 2022[64] - The occupancy rate for Oceans Edge Resort & Marina was 76.6% in 2023, an increase of 270 basis points from 73.9% in 2022[64] - The ADR for Montage Healdsburg decreased by 3.5% to $1,065.10 in 2023 compared to $1,103.21 in 2022[64] Specific Hotel Performance - For Q4 2023, Hilton San Diego Bayfront reported total revenues of $41.36 million, with an Adjusted EBITDA of $11.48 million and a margin of 27.8%, down 170 bps from 2022[71] - The Westin Washington, DC Downtown experienced a significant revenue increase of 52.6% year-over-year, reaching $20.04 million in Q4 2023, with an Adjusted EBITDA margin of 18.1%[71] - The Comparable Portfolio, Excluding Renovation Hotel generated revenues of $203.35 million in Q4 2023, with an Adjusted EBITDA of $50.08 million, reflecting a margin of 24.6%[71] - The Confidante Miami Beach reported a revenue decline of 52.7% in Q4 2023, with total revenues of $4.75 million and an Adjusted EBITDA margin of -4.6%[71] - The total revenues for the Actual Portfolio in Q4 2023 were $219.23 million, with an Adjusted EBITDA of $55.28 million, resulting in a margin of 25.2%[71] - Hyatt Regency San Francisco saw a revenue increase of 9.6% year-over-year, totaling $23.12 million in Q4 2023, with an Adjusted EBITDA margin of 12.1%[71] - The Bidwell Marriott Portland achieved a revenue increase of 12.4% year-over-year, reaching $2.66 million in Q4 2023, with an Adjusted EBITDA margin of 10.7%[71] - Four Seasons Resort Napa Valley reported a revenue decrease of 15.6% in Q4 2023, totaling $9.50 million, with an Adjusted EBITDA margin of -5.0%[71] - The total revenue for the Comparable Portfolio in Q4 2023 was $208.09 million, with an Adjusted EBITDA of $49.86 million, reflecting a margin of 24.0%[71] - The overall Adjusted EBITDA margin for the Actual Portfolio decreased by 120 bps compared to the previous year, indicating a slight decline in profitability[71] Renovation and Asset Management - Hotel Adjusted EBITDAre for Q4 2023 is affected by renovation activities at The Confidante Miami Beach, impacting overall performance[1] - The Confidante Miami Beach is undergoing a transformational renovation in preparation for its conversion to Andaz Miami Beach[1] - The Comparable Portfolio excludes The Confidante Miami Beach due to its renovation activity during Q4 2023[1] - Sold Hotels include the Boston Park Plaza, which was sold in October 2023, affecting year-over-year comparisons[1] - The Actual Portfolio includes results for 15 hotels owned during Q4 and full year 2023, compared to 15 and 18 hotels in 2022[1] - The 11 Hotel Portfolio excludes Montage Healdsburg and Four Seasons Resort Napa Valley, which were newly developed and not open in 2019[1] - Prior Ownership results for The Confidante Miami Beach are included for analysis prior to its acquisition in June 2022[1]