2 COMPANY PRESENTATION MARCH 2026 FORWARD -LOOKING STATEMENTS This presentation 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 ...

Financial Data and Key Metrics Changes - The fourth quarter operating results exceeded expectations, with total RevPAR growth of 7.4%, or 12.5% including contributions from Andaz Miami Beach [8][31] - Adjusted EBITDAre for the fourth quarter was reported at $57 million, with Adjusted FFO of $0.20 per diluted share [32] - Full-year earnings were ahead of the midpoint of guidance, with comparable portfolio margin growth of 40 basis points on total RevPAR growth of 3.5% [17][32] Business Line Data and Key Metrics Changes - Resorts led the portfolio with a 19% RevPAR growth in Maui, while Andaz Miami Beach outperformed expectations [9][10] - Urban hotels showed mixed results, with Marriott Long Beach Downtown achieving 12% RevPAR growth, but Boston and New Orleans faced challenges [12][13] - Convention hotels reported RevPAR growth of 2.8%, with San Francisco being a standout performer [13] Market Data and Key Metrics Changes - The Wailea Beach Resort saw a significant recovery, with a RevPAR index increase of 17 points sequentially into the fourth quarter [26] - Group revenue production in Orlando increased over 10% last year, indicating a positive trend for future performance [15] - The D.C. market faced headwinds from government spending cuts and a government shutdown, impacting overall performance [16][102] Company Strategy and Development Direction - The company is focused on three strategic objectives: recycling capital, investing in the portfolio, and returning capital to shareholders [5][23] - The management team is committed to maximizing shareholder value through asset sales and stock repurchases [43][65] - The company anticipates continued growth from operations and investment projects, despite a cautious outlook for certain markets [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2026, expecting rooms RevPAR to increase between 4% and 7% [35] - The company noted potential headwinds from softer transient demand in San Diego and uncertainty in D.C. [20] - Positive signs of market recovery were highlighted, particularly in Northern California and Maui [19][20] Other Important Information - The company has over $200 million in cash and cash equivalents, with total liquidity exceeding $700 million [33][34] - A common dividend of $0.09 per share has been authorized for the first quarter, alongside a repurchase program reauthorized up to $500 million [40][41] Q&A Session Summary Question: Can you discuss the 1.5% midpoint of 2026 RevPAR growth ex-Andaz? - Management noted that Maui is showing growth, with a stabilization in the Kaanapali market, and transient demand is up [47][48] Question: What is the expense growth implied in guidance? - Expense growth is expected around 3%, with labor costs decreasing slightly and energy prices increasing [52][56] Question: Are you expecting to be a net seller of assets? - Management indicated a pickup in transactions and a focus on realizing private market values for assets [62][65] Question: Why is total RevPAR guidance lower than RevPAR outlook? - The impact of renovations and group business limitations in D.C. and San Diego were cited as factors [70][71] Question: What is the outlook for the San Diego market? - Management reported positive signs of recovery in transient demand, particularly from government contractors [75] Question: Can you elaborate on the operating environment's impact on guidance? - Management highlighted potential headwinds from government-related events and positive signs from transient demand recovery [101][102]

Core Insights - Sunstone Hotel Investors, Inc. returned over $170 million to common stockholders in 2025 through dividends and share repurchases, and restored a $500 million repurchase authorization [1][15]. Financial Performance - **Fourth Quarter 2025 Results**: - Net income was $7.2 million, up from $0.8 million, representing a 763.3% increase [6][7]. - Total Portfolio RevPAR increased by 9.6% to $220.12, with an average daily rate of $319.01 and occupancy at 69.0% [6][7]. - Adjusted EBITDAre rose by 17.6% to $56.6 million [6][7]. - Adjusted FFO attributable to common stockholders per diluted share increased by 25.0% to $0.20 [6][7]. - **Full Year 2025 Results**: - Net income was $24.6 million, down from $43.3 million, but would have been $33.3 million excluding the loss on the sale of Hilton New Orleans St. Charles [6][7]. - Total Portfolio RevPAR increased by 3.8% to $225.12, with an average daily rate of $317.07 and occupancy at 71.0% [6][7]. - Adjusted EBITDAre increased by 3.0% to $236.6 million [6][7]. - Adjusted FFO attributable to common stockholders per diluted share increased by 7.5% to $0.86 [6][7]. Strategic Developments - The company opened Andaz Miami Beach in May 2025, which is expected to generate significant earnings growth in 2026 [11]. - The company sold the Hilton New Orleans St. Charles for $47 million in June 2025, using proceeds to repurchase shares [12]. - In 2025, the company repurchased $103.6 million of its common and preferred stock, with an additional $7.5 million allocated in early 2026 [13][16]. Capital Structure and Liquidity - As of December 31, 2025, the company had total assets of $3.0 billion, total debt of $930 million, and stockholders' equity of $1.9 billion [20]. - The company completed a Third Amended and Restated Credit Agreement in September 2025, providing a borrowing capacity of $1.35 billion [14]. 2026 Outlook - For 2026, the company expects net income between $21 million and $46 million, with RevPAR growth of 4.0% to 7.0% [22]. - The company plans to invest approximately $95 million to $115 million into its portfolio in 2026 [21]. Dividend Information - On February 26, 2026, the company authorized a cash dividend of $0.09 per share for common stockholders, with additional dividends for preferred stockholders [24][25].

Financial Data and Key Metrics Changes - The first quarter adjusted EBITDA was $57 million, and adjusted FFO was $0.21 per diluted share, reflecting a 17% increase from the prior year [24] - Comparable rooms RevPAR increased by 3.8% in the first quarter, while total RevPAR grew by 4.3%, contributing to an 80 basis point expansion in hotel margins [24] - The company repurchased $21 million of stock at a blended repurchase price of $8.9 per share, indicating a strong capital return strategy [15] Business Line Data and Key Metrics Changes - The Andaz Miami Beach opened on May 3, 2025, and is expected to contribute significantly to earnings growth in the coming years [6][8] - The renovated Marriott Long Beach Downtown posted a solid 145% increase in RevPAR, showcasing the benefits of recent investments [12] - Group production at Wailea increased nearly 20% in the first quarter compared to the prior year, indicating positive trends in group demand [12] Market Data and Key Metrics Changes - Washington DC saw a 24% increase in RevPAR due to the inauguration, while New Orleans hotels grew RevPAR by 25% driven by the Super Bowl [9] - San Francisco experienced a 9% increase in RevPAR, supported by increased commercial activity in the downtown area [9] - The company noted softer performance in San Diego but expects solid growth in the second quarter as the market recovers [10] Company Strategy and Development Direction - The company aims to continue a balanced and nimble approach to capital allocation, utilizing a strong balance sheet and future asset recycling to drive growth in FFO and NAV per share [8][16] - The strategy includes capital investment activities ranging from $80 million to $100 million for the year, focusing on enhancing existing properties [20] - The company is looking to recycle additional capital into share repurchases, potentially through asset sales, to enhance shareholder value [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about increased macroeconomic uncertainty and declining business and consumer confidence, leading to a more cautious outlook for the year [14] - The updated outlook for total portfolio RevPAR growth is projected to range from 4% to 7% compared to 2024, reflecting a more moderated view [26] - Despite headwinds, the midpoints of the updated outlook for EBITDA and FFO still equate to healthy annual growth rates of 8-10% [27] Other Important Information - The company has nearly $150 million in total cash and cash equivalents, providing significant liquidity for future investments [25] - The opening of the Andaz Miami Beach is expected to drive substantial earnings growth, particularly in the fourth quarter [39] - The company is focused on maintaining a strong balance sheet with net leverage of only 4.5 times trailing EBITDA [24] Q&A Session Summary Question: Can you discuss the underwriting trajectory for the Andaz Miami Beach? - Management expressed confidence in the Andaz's market positioning and expected EBITDA of $6-7 million for the year, primarily in the fourth quarter [39] Question: Can you elaborate on the updated outlook and changes in Wailea? - The revised expectations for Andaz are $6-7 million, with a $4 million forecast revision for Wailea due to a challenging operating environment [45] Question: What held back performance in Maui during the first quarter? - Management noted that the luxury market in Wailea faced competition from Kaanapali, which is recovering faster, impacting occupancy [56] Question: What is the strategy regarding non-core assets? - The company is focused on recycling capital and will consider divesting non-core assets when appropriate, but no immediate sales are planned [68] Question: What are the expectations for luxury assets in the current market? - Management indicated that luxury assets have a focused group of investors, and while transaction volumes are slower, they remain open to capital recycling opportunities [79]

Financial Data and Key Metrics Changes - The first quarter adjusted EBITDA was $57 million, and adjusted FFO was $0.21 per diluted share, reflecting a 17% increase from the prior year [25] - Comparable rooms RevPAR increased by 3.8% in the first quarter, while total RevPAR grew by 4.3%, contributing to an 80 basis point expansion in hotel margins [24] - The company repurchased $21 million of stock at a blended repurchase price of $8.9 per share, equating to a compelling multiple on earnings [15][16] Business Line Data and Key Metrics Changes - The Andaz Miami Beach opened on May 3, 2025, and is expected to contribute significantly to earnings growth in the coming years [6][7] - The recently renovated Marriott Long Beach Downtown posted a solid 145% increase in RevPAR [12] - Group production at Wailea was up nearly 20% in the first quarter relative to the prior year, indicating optimism for future growth [12] Market Data and Key Metrics Changes - Washington DC saw a 24% increase in RevPAR due to the inauguration, while New Orleans hotels grew RevPAR by 25% driven by the Super Bowl [8][9] - San Francisco generated RevPAR growth of 9% due to increased commercial activity [9] - The company noted softer performance in Wailea, but expects recovery as the Kaanapali submarket normalizes [11][12] Company Strategy and Development Direction - The company is focused on a balanced and nimble approach to capital allocation, utilizing a strong balance sheet and future asset recycling to drive growth in FFO and NAV per share [7][17] - Capital investment activity for the year is expected to be in the range of $80 to $100 million, with ongoing renovations and upgrades across various properties [21] - The company aims to recycle capital and return value to shareholders through share repurchases and potential asset sales [16][66] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased macroeconomic uncertainty and declining business and consumer confidence, leading to a more cautious outlook for the year [14] - The updated outlook reflects expectations of total portfolio RevPAR growth ranging from 4% to 7% compared to 2024, with adjusted EBITDAre estimated between $235 million to $260 million [27][28] - Management remains optimistic about the long-term recovery in markets like San Francisco and Wailea, despite short-term challenges [10][56] Other Important Information - The company has nearly $150 million in total cash and cash equivalents, equating to approximately $650 million in total liquidity [26] - The Board of Directors authorized a $0.09 per share common dividend for the second quarter [29] Q&A Session Summary Question: Can you discuss the underwriting trajectory for the Andaz Miami Beach? - Management expressed confidence in the Andaz's market positioning and expected EBITDA of $6 to $7 million for the resort this year, primarily in the fourth quarter [34][37] Question: Can you elaborate on the updated outlook and changes in Wailea? - The revised expectation for Andaz is $6 million to $7 million, with a $4 million forecast revision for Wailea due to a challenging operating environment [43][44] Question: What held back performance in Maui and how does it compare to peers? - Management noted that Wailea's luxury market is recovering, and as Kaanapali normalizes, they expect to benefit from increased demand [50][52] Question: What is the strategy regarding non-core assets and potential sales? - Management indicated a focus on recycling capital and remains open to divesting non-core assets when appropriate, with a current inclination to repurchase shares [62][66] Question: What are the expectations for luxury assets in the current market? - Management highlighted ongoing conversations regarding luxury assets, noting that while transaction volumes are slower, they remain focused on capital recycling [74][75]

Core Insights - Sunstone Hotel Investors, Inc. reported first quarter results for 2025, highlighting a slight earnings increase despite a challenging operating environment [1][3] - The company opened the Andaz Miami Beach after a significant renovation, which is expected to enhance its portfolio value [3][8] - Adjustments to the full-year outlook were made due to increased economic uncertainty and variability in operating trends [3][14] Financial Performance - Net income for Q1 2025 was $5.3 million, down 59.7% from $13.0 million in Q1 2024 [4][7] - Adjusted FFO attributable to common stockholders increased by 10.6% to $41.5 million, with per diluted share rising 16.7% to $0.21 [4][7] - Total Portfolio RevPAR increased by 2.2% to $221.63, with occupancy at 70.1% [4][7] Operational Highlights - The Andaz Miami Beach features 287 guestrooms, a full-service spa, and premium dining options, positioning it as a key asset for future revenue growth [8][9] - The company repurchased 821,771 shares at an average price of $9.74 per share during Q1 2025, totaling $8.0 million [9] - As of March 31, 2025, the company had $148.8 million in cash and cash equivalents, with total assets of $3.1 billion [11] Capital Investments - Sunstone invested $28.2 million in its portfolio during Q1 2025, primarily for the Andaz Miami Beach transformation [12][13] - The company anticipates investing approximately $80 million to $100 million in 2025, focusing on ongoing renovations and improvements [13] Updated Guidance - The updated guidance for 2025 reflects a decrease in expected net income to a range of $33 million to $58 million, down from the previous estimate of $46 million to $71 million [14] - Total Portfolio RevPAR growth expectations were adjusted to 4.0% to 7.0%, down from 7.0% to 10.0% [14] Dividend Information - The Board of Directors authorized a cash dividend of $0.09 per share for common stock, payable on July 15, 2025 [16][17] - The company plans to continue quarterly cash dividends throughout 2025, subject to Board approval [17]