SHO

Interested in Sunstone Hotel Investors, Inc.? Here are five stocks we like better. Sunstone exceeded second-quarter expectations: Portfolio RevPAR rose 9.3% year over year, adjusted EBITDAre increased 6% to $77 million, and adjusted FFO per diluted share grew 14% to $0.32. Resorts and urban hotels led growth, particularly Wailea Beach Resort and Andaz Miami Beach. The company raised its 2026 outlook to 7%–9% RevPAR growth, adjusted EBITDAre of $245 million–$255 million, and FFO per diluted share of $0.93–$0.98. Higher capital spending of $105 million–$115 million reflects storm-related repairs at Wailea, which management expects insurance to largely cover. Sunstone sold the Hyatt Regency San Francisco at an implied multiple near 20 times trailing EBITDA and is deploying proceeds toward share repurchases, including about $40 million of common stock and nearly $30 million of preferred stock. Management said buybacks remain more attractive than acquisitions at current hotel valuations. August's Most Upgraded: 3 Stocks With +20 Price Target Increases Sunstone Hotel Investors (NYSE:SHO) reported second-quarter results that exceeded its expectations, supported by summer leisure travel, special events, and continued strength in group and corporate demand. The company also raised elements of its full-year outlook after the quarter and the July sale of the Hyatt Regency San Francisco. Chief Executive Officer Bryan Giglia said portfolio RevPAR increased 9.3% from a year earlier during the second quarter. Excluding the ramping Andaz Miami Beach property, RevPAR grew 4.3%. Adjusted EBITDAre rose 6% year over year to $77 million, while adjusted funds from operations per diluted share increased 14% to $0.32. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Shopify’s Risk-Reward Profile Is Suddenly Red Hot “Our portfolio benefited from robust leisure demand as a result of increased summer travel and special events, which added to sustained strength in group and corporate demand,” Giglia said. Sunstone’s resorts led portfolio performance, with combined RevPAR growth of nearly 27%, including the contribution from Andaz Miami Beach. Wailea Beach Resort posted nearly 15% RevPAR growth, while year-to-date occupancy rose 10 percentage points and EBITDA increased nearly 18% versus the prior year, according to Giglia. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High 3 Earnings Reports Give a Snapshot of Consumer Sentiment The company said group room-night production at Wailea for future periods was up 36% year to date, while 2027 group pace was up more than 10%. Its Wine Country resorts recorded 5% RevPAR growth, driven by improved group business. Andaz Miami Beach generated $2.8 million of EBITDA during the quarter on 72% occupancy and a $470 average rate. The company said it experienced less-than-expected occupancy compression from the World Cup, but expects a stronger fourth quarter as the local W Hotel is temporarily closed and Andaz prepares to open its Bazaar Meat restaurant during the fall high season. → No Hangover: Revisiting Microsoft One Week After Earnings Urban hotels recorded combined RevPAR growth of 5.2%, primarily driven by rate growth. JW Marriott New Orleans benefited from group demand and strong out-of-room spending, with second-half group pace up by double digits. Boston Marriott Long Wharf also benefited from demand across group, corporate and leisure segments, including stronger-than-anticipated demand surrounding World Cup events. Among convention-oriented hotels, San Francisco continued to perform well, with RevPAR increasing 16% during the quarter. Giglia said World Cup-related rate compression in June added to an already favorable corporate transient demand environment, although he expects growth in the market to moderate through the remainder of the year. Performance in Washington, D.C., exceeded the company’s expectations as transient demand helped offset subdued group activity tied to lower government-related demand. In response to an analyst question, Giglia said the company’s Washington property has benefited from its conversion from a Renaissance to a Westin, as well as renovation work. He said transient pace was up 30% going forward. Hilton San Diego Bayfront remained a drag on results, with total RevPAR declining 8.4% as a weaker convention calendar and meeting-space renovation affected group demand. Although transient demand rose 19%, that business did not fully offset the loss of group revenue and associated out-of-room spending. The hotel booked a record $26 million of group revenue during the second quarter, however, and Sunstone expects sequential improvement through the rest of the year, particularly in the fourth quarter. Comparable portfolio expenses, excluding Andaz Miami Beach, rose 4.4% in absolute terms and 3.6% per occupied room, resulting in a 100-basis-point margin headwind. Giglia attributed part of the pressure to a higher transient mix at larger group hotels, especially in San Diego. Excluding San Diego, expense growth per occupied room was 120 basis points lower and margins expanded 10 basis points. Sunstone closed the sale of the Hyatt Regency San Francisco in late July. Giglia described the property as a low-yielding asset and said the company sold it at an implied multiple of nearly 20 times trailing EBITDA. He said the transaction enabled Sunstone to realize future growth value immediately while reducing exposure to ongoing cost pressures in the San Francisco market. The company has used a portion of the proceeds for stock repurchases. Through the week of the call, Sunstone had repurchased approximately $40 million of common stock at a blended price of $9.24 per share and nearly $30 million of preferred stock at a blended price of $20.44 per share, an 18% discount to liquidation value. Management said the repurchases were accretive to net asset value and earnings per share. Giglia said the company expects to remain opportunistic with buybacks while considering other uses for the sale proceeds. While hotel transaction activity has picked up, he said pricing for potential acquisitions was not yet attractive enough relative to the returns available from repurchasing Sunstone securities at a discount to net asset value. Chief Financial Officer Aaron Reyes said Sunstone now expects RevPAR across its current 13-hotel portfolio to increase 7% to 9% in 2026, reaching a range of $239 to $244. Total RevPAR is also projected to increase 7% to 9%, to $404 to $411. Andaz Miami Beach is expected to contribute about 450 basis points to full-year growth at the midpoint of both ranges. Adjusted EBITDAre is projected to range from $245 million to $255 million. FFO per diluted share is expected to be between $0.93 and $0.98. Full-year capital expenditures are expected to total $105 million to $115 million. Reyes said the increased capital expenditure outlook reflects additional repair work at Wailea Beach Resort following severe March storms. The company has received about $6 million in insurance reimbursements so far, including $1.2 million of business-interruption proceeds, and expects most additional spending to be covered by insurance. President and Chief Investment Officer Robert Springer said Sunstone completed renovations to meeting space in San Diego and expects the project to support booking activity later this year and into 2027. The company also completed construction of Bazaar Meat at Andaz Miami Beach and plans to open the restaurant in the fall. In addition, Oceans Edge Resort was converted to Hilton Key West Resort & Marina on July 1, a change Sunstone expects will improve distribution, reduce customer acquisition costs and support incremental earnings. Sunstone Hotel Investors, Inc (NYSE:SHO) is a publicly traded real estate investment trust (REIT) focused on acquiring, owning and asset‐managing upper‐upscale extended‐stay and premium‐branded hotel properties in the United States. The company's business model centers on generating stable, long‐term cash flows through franchise agreements and third‐party management contracts with established hotel operators. As of the most recent reporting period, Sunstone's portfolio includes approximately 97 hotels and nearly 25,000 guest rooms across 19 states, with concentrations in major metropolitan and select high‐growth secondary markets. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Sunstone Hotel Investors Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Completes Sale of Hyatt Regency San Francisco and Increases Full Year Outlook ALISO VIEJO, Calif., Aug. 6, 2026 /PRNewswire/ -- Sunstone Hotel Investors, Inc. (the "Company" or "Sunstone") (NYSE: SHO) today announced results for the second quarter ended June 30, 2026. Second Quarter 2026 Operational Results (as compared to Second Quarter 2025): Net Income: Net income attributable to common stockholders was $26.0 million, or $0.14 per diluted share, as compared to $6.8 million, or $0.03 per diluted share. RevPAR: RevPAR for all hotels in the portfolio increased 9.3% to $263.61. The average daily rate was $339.71 and occupancy was 77.6%. RevPAR excluding Andaz Miami Beach increased 4.3%. Total RevPAR: Total RevPAR for all hotels in the portfolio increased 7.7% to $434.00. Total RevPAR excluding Andaz Miami Beach increased 3.0%. Adjusted EBITDAre: Adjusted EBITDAre increased 5.5% to $76.7 million. Adjusted FFO: Adjusted FFO attributable to common stockholders per diluted share increased 14.3% to $0.32. Information regarding the non-GAAP financial measures disclosed in this release is provided below in "Non-GAAP Financial Measures." Reconciliations of non-GAAP financial measures to the most comparable GAAP measure for each of the periods presented are included later in this release. Bryan A. Giglia, Chief Executive Officer, stated, "We are pleased with our performance in the second quarter as both revenue and profitability meaningfully exceeded expectations. Our well-located portfolio benefited from robust leisure demand as a result of increased summer travel and special events which added to sustained strength in group and corporate demand. Given our outperformance in the second quarter and stronger near-term trends, we are increasing our outlook for the year." Mr. Giglia continued, "In late July, we closed on the sale of Hyatt Regency San Francisco, realizing an attractive private market value for a low-yielding asset. The implied valuation multiple on the sale is well in excess of where we are trading and allows us to deliver to our shareholders the value of future growth, today. In anticipation of the sale, starting earlier this year, we began accretively deploying a portion of the sale proceeds into the discounted repurchase of common and preferred stock and expect to generate additional shareholder value and grow NAV per share through the redeployment of the remaining proceeds." Unaudited Selected Statistical and Financial Data ($ in millions, except RevPAR, ADR and per share amounts). Recent Developments Hyatt Regency San Francisco Disposition. On July 30, 2026, the Company sold the 821-room Hyatt Regency San Francisco to funds affiliated with Blackstone Real Estate for a gross sale price of $279 million, or approximately $340,000 per key. In anticipation of the sale, the Company deployed approximately $70 million of the sale proceeds into the discounted repurchase of its common and preferred stock during 2026. Hilton Key West Resort & Marina Conversion. On July 1, 2026, the Company converted its former Oceans Edge Resort & Marina to Hilton Key West Resort & Marina. The conversion is expected to drive incremental earnings at the resort as the property benefits from Hilton's stronger distribution channels and lower customer acquisition costs compared to its prior independent operating model. The resort will be managed by Hilton and will continue to offer 175 waterfront rooms and suites, six pools, a full-service marina, multiple food and beverage offerings, and a range of amenities and recreational activities. Stock Repurchase Program. During the second quarter of 2026, the Company repurchased an aggregate amount of $32.2 million, before expenses, of its common and preferred stock. From the start of this year through August 5, 2026, the Company has allocated a total of $70.1 million, before expenses, into repurchases of its common and preferred stock. The Company believes this repurchase activity has been completed at a discount and generated significant value for its stockholders. As of August 5, 2026, the Company has $437.4 million remaining under its existing stock repurchase program authorization. Common stock: During the second quarter of 2026, the Company repurchased 1,195,325 shares at an average purchase price per share of $9.52 for a total repurchase amount before expenses of $11.4 million. From the start of this year through August 5, 2026, the Company has repurchased 4,380,093 shares at an average purchase price per share of $9.24 for a total repurchase amount before expenses of $40.5 million. The average purchase price per share represents a substantial discount to consensus estimates of net asset value and implies a highly attractive valuation multiple on the Company's stabilized cash flow. Series H Cumulative Redeemable Preferred Stock: During the second quarter of 2026, the Company repurchased 328,438 shares at an average purchase price per share of $21.07 for a total repurchase amount before expenses of $6.9 million. From the start of this year through August 5, 2026, the Company has repurchased 586,488 shares at an average purchase price per share of $20.96 for a total repurchase amount before expenses of $12.3 million. The average repurchase price per share reflects a 16.1% discount to the preferred stock liquidation value. Series I Cumulative Redeemable Preferred Stock: During the second quarter of 2026, the Company repurchased 687,458 shares at an average purchase price per share of $20.25 for a total repurchase amount before expenses of $13.9 million. From the start of this year through August 5, 2026, the Company has repurchased 864,904 shares at an average purchase price per share of $20.09 for a total repurchase amount before expenses of $17.4 million. The average repurchase price per share reflects a 19.6% discount to the preferred stock liquidation value. Balance Sheet and Liquidity Update As of June 30, 2026, the Company had $203.7 million of cash and cash equivalents, including restricted cash of $109.3 million, total assets of $3.0 billion, including $2.7 billion of net investments in hotel properties and assets held for sale, total debt of $980.0 million and stockholders' equity of $1.9 billion. Subsequent to the end of the quarter, the Company completed its previously announced $279.0 million sale of Hyatt Regency San Francisco and used a portion of the proceeds to repay the outstanding $25.0 million balance on its revolving credit facility. Adjusting for the receipt of the gross sale proceeds, net of the $25.0 million disposition deposit, and the debt repayment, the Company had approximately $430.0 million of cash and cash equivalents, including restricted cash and total debt outstanding of $955.0 million. Capital Investments Update The Company invested $53.4 million into its portfolio during the first six months of 2026. The Company currently expects to invest approximately $105 million to $115 million into its portfolio in 2026. This revised range includes incremental investment for repair and restoration work at Wailea Beach Resort following damage incurred from severe weather that impacted the Hawaiian Islands in March 2026. The Company expects to be reimbursed for the majority of the incremental expenditures under its insurance programs. 2026 Outlook The Company is updating its 2026 outlook based on Management's expectations and information available as of the date of this release. Geopolitical developments, changes in economic policies, changes in the health of the economy, or changes in business and consumer sentiment, among other factors, could lead to further revisions to the Company's outlook or cause the Company to withdraw its outlook altogether. For the full year 2026, the Company now expects: Full year 2026 guidance is based in part on the following full year assumptions: Full year interest and other income (excluding amounts received from our insurance programs as reimbursement for restoration of property damage) of approximately $7 million to $8 million. This range is $4.0 million higher than the Company's prior estimate. Full year corporate overhead expense (excluding deferred stock amortization and management transition costs) of approximately $19 million to $20 million. This range is $1.0 million lower than the Company's prior estimate. Full year interest expense of approximately $49 million to $52 million, including approximately $4 million in amortization of deferred financing costs and $4 million of noncash reduction to interest expense on derivatives. Excluding the noncash interest on derivatives, this range is unchanged from the Company's prior estimate. Full year preferred stock dividends of approximately $15 million to $16 million, which includes the Series G, H, and I cumulative redeemable preferred stock. This range is $1.0 million lower than the Company's prior estimate. Dividend Update On August 5, 2026, the Company's Board of Directors authorized a cash dividend of $0.09 per share of its common stock. The Company's Board of Directors also authorized cash dividends of $0.382813 per share payable to its Series H cumulative redeemable preferred stockholders, and $0.356250 per share payable to its Series I cumulative redeemable preferred stockholders. The common and preferred dividends will be paid on October 15, 2026 to stockholders of record as of September 30, 2026. The Company currently expects to continue to pay a quarterly cash common dividend throughout 2026. The level of any future quarterly dividends will be determined by the Company's Board of Directors after considering long-term operating projections, expected capital requirements, and risks affecting the Company's business. Supplemental Disclosures Contemporaneous with this release, the Company has furnished a Form 8-K with unaudited financial information. This additional information is being provided as a supplement to the information in this release and other filings with the SEC. The Company has no obligation to update any of the information provided to conform to actual results or changes in the Company's portfolio, capital structure or future expectations. Earnings Call The Company will host a conference call to discuss second quarter results on August 6, 2026, at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time). A live webcast of the call will be available via the Investor Relations section of the Company's website at www.sunstonehotels.com. Alternatively, interested parties may dial 1-833-461-5787 and reference meeting ID 420 784 049 to listen to the live call. A transcript of the webcast will also be archived on the website. About Sunstone Hotel Investors, Inc. Sunstone Hotel Investors, Inc. is a lodging real estate investment trust ("REIT") that as of the date of this release owns 13 hotels comprised of 6,178 rooms, all of which are operated under nationally recognized brands. Sunstone's strategy is to create long-term stakeholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate. For further information, please visit Sunstone's website at www.sunstonehotels.com. The Company's website is provided as a reference only and any information on the website is not incorporated by reference in this release. Forward-Looking Statements This press release 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 results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks, uncertainties, and other factors include, but are not limited to, those described in the sections entitled "Special Note Regarding Forward-Looking Statements," "Risk Factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 2025 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 27, 2026, and other risks and uncertainties associated with the Company's business described in its filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All forward-looking information provided herein is as of the date of this release, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations. This release should be read together with the consolidated financial statements and notes thereto included in our most recent reports on Form 10-K and Form 10-Q. Copies of these reports are available on our website at www.sunstonehotels.com and through the SEC's Electronic Data Gathering Analysis and Retrieval System ("EDGAR") at www.sec.gov. Non-GAAP Financial Measures We present the following non-GAAP financial measures that we believe are useful to investors as key supplemental measures of our operating performance: earnings before interest expense, taxes, depreciation and amortization for real estate, or EBITDAre; Adjusted EBITDAre (as defined below); funds from operations attributable to common stockholders, or FFO attributable to common stockholders; Adjusted FFO attributable to common stockholders (as defined below); hotel Adjusted EBITDAre; and hotel Adjusted EBITDAre margins. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. In addition, our calculation of these measures may not be comparable to other companies that do not define such terms exactly the same as us. These non-GAAP measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to net income (loss), cash flow from operations, or any other operating performance measure prescribed by GAAP. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure. We present EBITDAre in accordance with guidelines established by the National Association of Real Estate Investment Trusts ("Nareit"), as defined in its September 2017 white paper "Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate." We believe EBITDAre is a useful performance measure to help investors evaluate and compare the results of our operations from period to period in comparison to our peers. Nareit defines EBITDAre as net income (calculated in accordance with GAAP) plus interest expense, income tax expense, depreciation and amortization, gains or losses on the disposition of depreciated property (including gains or losses on change in control), impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in the value of depreciated property in the affiliate, and adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates. We make additional adjustments to EBITDAre when evaluating our performance because we believe that the exclusion of certain additional items described below provides useful information to investors regarding our operating performance, and that the presentation of Adjusted EBITDAre, when combined with the primary GAAP presentation of net income, is beneficial to an investor's complete understanding of our operating performance. In addition, we use both EBITDAre and Adjusted EBITDAre as measures in determining the value of hotel acquisitions and dispositions. We believe that the presentation of FFO attributable to common stockholders provides useful information to investors regarding our operating performance because it is a measure of our operations without regard to specified noncash items such as real estate depreciation and amortization, any real estate impairment loss and any gain or loss on sale of real estate assets, all of which are based on historical cost accounting and may be of lesser significance in evaluating our current performance. Our presentation of FFO attributable to common stockholders conforms to Nareit's definition of "FFO applicable to common shares." Our presentation may not be comparable to FFO reported by other REITs that do not define the terms in accordance with the current Nareit definition, or that interpret the current Nareit definition differently than we do. We also present Adjusted FFO attributable to common stockholders when evaluating our operating performance because we believe that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance and may facilitate comparisons of operating performance between periods and our peer companies. We adjust EBITDAre and FFO attributable to common stockholders for the following items, which may occur in any period, and refer to these measures as either Adjusted EBITDAre or Adjusted FFO attributable to common stockholders: Amortization of deferred stock compensation: we exclude the noncash expense incurred with the amortization of deferred stock compensation as this expense is based on historical stock prices at the date of grant to our corporate employees and does not reflect the underlying performance of our hotels. Amortization of contract intangibles: we exclude the noncash amortization of any favorable or unfavorable contract intangibles recorded in conjunction with our hotel acquisitions. We exclude the noncash amortization of contract intangibles because it is based on historical cost accounting and is of lesser significance in evaluating our actual performance for the current period. Gains or losses from debt transactions: we exclude the effect of finance charges and premiums associated with the extinguishment of debt, including the acceleration of deferred financing costs from the original issuance of the debt being redeemed or retired because, like interest expense, their removal helps investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure. Cumulative effect of a change in accounting principle: from time to time, the FASB promulgates new accounting standards that require the consolidated statement of operations to reflect the cumulative effect of a change in accounting principle. We exclude these one-time adjustments, which include the accounting impact from prior periods, because they do not reflect our actual performance for that period. Other adjustments: we exclude other adjustments that we believe are outside the ordinary course of business because we do not believe these costs reflect our actual performance for the period and/or the ongoing operations of our hotels. Such items may include: lawsuit settlement costs; the write-off of development costs associated with abandoned projects; property-level restructuring, severance, and management transition costs; pre-opening costs associated with extensive renovation projects; debt resolution costs; lease terminations; property insurance restoration proceeds or uninsured losses; and other nonrecurring identified adjustments. In addition, to derive Adjusted EBITDAre, we exclude the amortization of our right-of-use assets and related lease obligations as these expenses are based on historical cost accounting and do not reflect the actual rent amounts due to the respective lessors or the underlying performance of our hotels. We also exclude the effect of gains and losses on the disposition of undepreciated assets because we believe that including them in Adjusted EBITDAre is not consistent with reflecting the ongoing performance of our assets. To derive Adjusted FFO attributable to common stockholders, we also exclude the noncash interest on our derivatives as we believe that these items are not reflective of our ongoing finance costs. Additionally, we exclude the real estate amortization of our right-of-use assets and related lease obligations (with the exception of our corporate operating lease) as these expenses are based on historical cost accounting and do not reflect the actual rent amounts due to the respective lessors or the underlying performance of our hotels. We also exclude gains or losses on the redemptions or repurchases of preferred stock, changes to deferred tax assets, liabilities or valuation allowances, and income tax benefits or provisions associated with the application of net operating loss carryforwards, uncertain tax positions or with the sale of assets. In presenting hotel Adjusted EBITDAre and hotel Adjusted EBITDAre margins, miscellaneous non-hotel items have been excluded. We believe the calculation of hotel Adjusted EBITDAre results in a more accurate presentation of the hotel Adjusted EBITDAre margins for our hotels, and that these non-GAAP financial measures are useful to investors in evaluating our property-level operating performance. Reconciliations of net income to EBITDAre, Adjusted EBITDAre, FFO attributable to common stockholders, Adjusted FFO attributable to common stockholders, hotel Adjusted EBITDAre and hotel Adjusted EBITDAre margins are set forth in the following pages of this release. For Additional Information:Aaron ReyesSunstone Hotel Investors, Inc.(949) 382-3018 Basic weighted average common shares outstanding 185,333195,791186,839198,087Diluted weighted average common shares outstanding185,550196,304187,097198,859Distributions declared per common share$0.09$0.09$0.18$0.18 View original content:https://www.prnewswire.com/news-releases/sunstone-hotel-investors-reports-results-for-second-quarter-2026-302844336.html

In recent months, Sunstone Hotel Investors reported a run of quarterly results that exceeded analyst expectations on both earnings and revenue. This consistent outperformance, paired with upward revisions to earnings estimates and a top Zacks Rank and Momentum Style Score, has reinforced positive analyst sentiment toward the company. Next, we’ll examine how Sunstone’s pattern of positive earnings surprises is shaping its investment narrative and longer-term appeal to investors. We've uncovered the 8 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. To own Sunstone Hotel Investors today, you need to be comfortable backing a hotel REIT that is finally translating years of incremental operational progress into cleaner profitability, but at a share price that already reflects a lot of good news. The latest run of quarterly beats, higher 2026 net income guidance and a Zacks Rank #1 have clearly fed the recent share price strength, reinforcing earnings momentum as the key short term catalyst. That said, with a high price to earnings multiple relative to both peers and its own estimated fair multiple, the bar for future results has lifted, which makes any stumble on earnings, RevPAR or cash flow more visible. The news itself improves sentiment but also tightens the margin for error, especially given low returns on equity and modest revenue growth expectations. However, investors should also weigh how today’s high valuation amplifies those fundamental risks.Sunstone Hotel Investors' shares have been on the rise but are still potentially undervalued by 13%. Find out what it's worth. Community members on Simply Wall St currently cluster around a single fair value estimate near US$13.37 per share, underscoring how differently others might view Sunstone’s upside after its earnings beats and sharper sensitivity to future results. Explore another fair value estimate on Sunstone Hotel Investors - why the stock might be worth just $13.37! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Sunstone Hotel Investors research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision. Our free Sunstone Hotel Investors research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Sunstone Hotel Investors' overall financial health at a glance. Our daily scans reveal stocks with breakout potential. Don't miss this chance: Uncover the next big thing with 24 elite penny stocks that balance risk and reward. The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 14 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement. AI is about to change healthcare. These 40 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SHO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. Sunstone Hotel Investors (SHO) raised its full-year 2026 outlook after a strong first quarter, as adjusted EBITDAre and FFO surpassed expectations. Recent property renovations and share repurchases also supported investor confidence in the stock. See our latest analysis for Sunstone Hotel Investors. The recent guidance lift and renovation progress sit alongside firm price momentum, with a 30 day share price return of 11.12% and year to date share price return of 20.37%, while the 1 year total shareholder return of 28.76% contrasts with a 5 year total shareholder return that is slightly lower. If strong hotel and travel trends have your attention, it can be a good moment to broaden your watchlist with a screener focused on 33 elite gold producer stocks With Sunstone Hotel Investors trading at US$10.99 against an analyst price target of US$10.42, but with an estimated 18.49% intrinsic discount, you have to ask: is there still a buying opportunity here, or is the market already pricing in future growth? Sunstone Hotel Investors is flagged as trading at a P/E of 89.7x, while the last close sits at $10.99 and the stock screens as undervalued on a discounted cash flow basis. The P/E multiple tells you how much investors are paying for each dollar of current earnings. This is especially important for a lodging REIT, where profits can be sensitive to occupancy and room rates. A high P/E often reflects strong expectations around future earnings growth or relatively low current earnings compared to what is anticipated. In this case, Sunstone Hotel Investors is described as expensive versus an estimated fair P/E of 48.3x. This suggests the current multiple is materially higher than the level indicated by the regression based fair ratio. At the same time, earnings are forecast to grow about 25% per year, faster than the wider US market, which may be one reason investors are willing to pay a richer multiple even though reported Return on Equity of 2% is currently low. Against peers, the contrast is even sharper. The P/E of 89.7x sits well above the peer average of 24x and the Global Hotel and Resort REITs industry average of 14.5x. This means the market is assigning Sunstone Hotel Investors a premium that other similar companies do not have right now. Explore the SWS fair ratio for Sunstone Hotel Investors Result: Price-to-Earnings of 89.7x (OVERVALUED) However, you still need to weigh risks such as earnings sensitivity to travel demand and the current premium P/E multiple if sentiment around hotel REITs cools. Find out about the key risks to this Sunstone Hotel Investors narrative. While the P/E ratio presents Sunstone Hotel Investors as expensive, the SWS DCF model points the other way, with an estimated future cash flow value of $13.48 compared with the current $10.99 share price, implying the stock trades at an 18.5% discount. Which signal would you put more weight on? Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Sunstone Hotel Investors for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 47 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. With both concerns and optimism running through this story, it helps to review the numbers yourself and move quickly to shape your own view using 3 key rewards and 2 important warning signs If you stop here, you could miss stocks that better match your risk, income, or growth goals, so keep building your watchlist with focused screeners. Target potential mispricings by scanning companies that combine quality fundamentals with attractive valuations using the 47 high quality undervalued stocks. Build a steadier income stream by zeroing in on resilient payers through the 10 dividend fortresses. Sleep a little easier by filtering for companies with stronger financial footing via the 62 resilient stocks with low risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SHO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. Sunstone Hotel Investors (SHO) is back in focus after reporting first quarter results that show higher sales, higher net income and raised full year guidance on both net income and diluted earnings per share. See our latest analysis for Sunstone Hotel Investors. At a share price of $10.24, Sunstone Hotel Investors has a 30 day share price return of 7.23% and a year to date share price return of 12.16%, while the 1 year total shareholder return of 17.59% contrasts with a 5 year total shareholder return that is down 8.23%. This indicates that recent momentum has been stronger than the longer term record as investors weigh higher earnings guidance, ongoing dividends and recent executive reshaping. If this kind of rebound in sentiment has your attention, it could be a good moment to broaden your search using our screener for 20 top founder-led companies With Sunstone Hotel Investors trading close to analyst targets but sitting on a reported 24% intrinsic discount, the key question is simple: is there still mispricing here, or are markets already baking in stronger future growth? At a last close of $10.24 against a narrative fair value of $9.02, the most followed storyline on Sunstone Hotel Investors sees the stock pricing in more than its modeled worth, using a discount rate of 7.97% and stretching earnings expectations several years out. Read the complete narrative. There is a lot packed into that single earnings path. Revenue growth, margin lift and a rich future P/E all have to line up together. It may be useful to consider which assumption does the most work in getting from today’s profit level to that modeled fair value. Result: Fair Value of $9.02 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, continued portfolio upgrades such as Andaz Miami Beach and ongoing share buybacks could support earnings resilience and challenge the more cautious valuation story. Find out about the key risks to this Sunstone Hotel Investors narrative. While the bearish narrative pegs fair value at $9.02 and labels Sunstone Hotel Investors as overvalued, the SWS DCF model points the other way, with an estimate of $13.51 per share. That 24.2% discount suggests a very different risk reward trade off, so which story do you trust? Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Sunstone Hotel Investors for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 44 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. With sentiment clearly split between risk and reward, now is a good time to review the numbers yourself and decide where you stand. To weigh both sides of the story in one place, start with these 3 key rewards and 2 important warning signs If Sunstone Hotel Investors is on your radar, do not stop there. Expand your watchlist with focused stock ideas that match the way you like to invest. Target proven strength by reviewing companies in the solid balance sheet and fundamentals stocks screener (46 results) to see which businesses pair resilience with fundamental support. Hunt for potential mispricing by checking the 44 high quality undervalued stocks and compare stocks that combine quality, cash flows and room for a rerating. Prioritize income by scanning the 13 dividend fortresses and spot stocks offering substantial yields alongside an emphasis on stability. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SHO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

First quarter RevPAR growth of 14.6% was driven by broad-based strength, particularly in the resort portfolio which saw 18% comparable RevPAR growth. The Andaz Miami Beach transition is a multi-year growth story; while Q1 results exceeded expectations, management sees significant room to grow rates toward the $1,000+ peer set average. Urban portfolio RevPAR declined 9.3% due to difficult year-over-year comparisons, specifically the 2025 Super Bowl in New Orleans and the 2025 Presidential Inauguration in D.C. Operational efficiency was a key highlight, with rooms department expense growth limited to 1% on a per occupied room basis through improved productivity. The company is shifting toward a capital recycling phase, intending to take advantage of strong private market values for luxury assets to fund accretive share repurchases or new acquisitions. Wailea Beach Resort demonstrated resilience with 14% revenue growth despite significant cancellations and physical damage caused by two major weather events in March. Full-year RevPAR guidance was revised upward to 5.75%–7.5% to reflect Q1 outperformance, though management maintains a 'measured' stance for the remainder of the year. Total RevPAR is expected to outpace rooms RevPAR, reflecting higher expectations for ancillary and out-of-room spend from both group and transient guests. The second half of 2026 is expected to see a significant pickup in group pace, particularly in Orlando, where second-half pace is up over 40%. The opening of the 'Bazaar' restaurant in Miami this fall is viewed as a critical catalyst for driving high-season room rates and establishing the property as a luxury destination. Management anticipates sequential RevPAR improvement in the urban portfolio through the balance of the year as tough year-over-year comparisons ease. Severe storms in Hawaii caused wind and water damage at Wailea Beach Resort; while operational, repair work will push 2026 CapEx toward the upper end of the guidance range. The company repurchased $35 million of common stock and $14 million of preferred stock at a 21% discount to liquidation value during the first quarter. Heightened volatility in fuel prices and broader macroeconomic uncertainty are cited as potential headwinds that could impact travel demand and costs if they persist through the balance of the year. The Westin D.C. Downtown rebranding is successfully capturing higher-rated corporate and retail accounts, helping to offset a sluggish group backdrop in the D.C. market. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management identified Andaz Miami Beach rate expansion, the continued recovery of Maui occupancy, and the San Francisco market rebound as the primary multi-year growth pillars. Andaz rates currently sit in the mid-$500s, leaving a massive gap compared to the $1,000+ rates achieved by its direct luxury competitors. Sunstone is looking for larger assets with a strong group component and rebranding potential, similar to the Westin D.C. or Marriott Long Beach models. The company will prioritize recycling capital from low-yielding assets into share repurchases as long as the stock trades at a meaningful discount to NAV. Ancillary spend is exceeding expectations as groups 'buy up' for premium AV, food, and beverage options beyond their contractual minimums. Resort transient guests are also showing higher discretionary spend at bars, restaurants, and spas, particularly as occupancy stabilizes in markets like Maui. Management is taking a 'measured' approach to World Cup benefits, noting that while it will provide compression, it is not yet fully baked into guidance due to short-term booking windows. The event is expected to be particularly beneficial for Miami, as it coincides with the traditionally slower summer season. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

Completes Additional Accretive Common and Preferred Stock Repurchases ALISO VIEJO, Calif., May 5, 2026 /PRNewswire/ -- Sunstone Hotel Investors, Inc. (the "Company" or "Sunstone") (NYSE: SHO) today announced results for the first quarter ended March 31, 2026. First Quarter 2026 Operational Results (as compared to First Quarter 2025): Net Income: Net income attributable to common stockholders was $16.0 million, or $0.08 per diluted share, as compared to $1.3 million, or $0.01 per diluted share. RevPAR: RevPAR for all hotels in the portfolio increased 14.6% to $255.04. The average daily rate was $344.19 and occupancy was 74.1%. RevPAR excluding Andaz Miami Beach increased 5.7%. Total RevPAR: Total RevPAR for all hotels in the portfolio increased 13.4% to $411.28. Total RevPAR excluding Andaz Miami Beach increased 5.3%. Adjusted EBITDAre: Adjusted EBITDAre increased 18.3% to $67.7 million. Adjusted FFO: Adjusted FFO attributable to common stockholders per diluted share increased 28.6% to $0.27. Information regarding the non-GAAP financial measures disclosed in this release is provided below in "Non-GAAP Financial Measures." Reconciliations of non-GAAP financial measures to the most comparable GAAP measure for each of the periods presented are included later in this release. Bryan A. Giglia, Chief Executive Officer, stated, "We are pleased with our performance in the first quarter which came in ahead of our expectations despite weather-related headwinds at several hotels throughout the quarter. While the strength was broad based, we were particularly encouraged by our resort portfolio, including solid first quarter performance at Andaz Miami Beach. Our first quarter results demonstrate the embedded growth potential of our portfolio as we benefit from our prior investments and some of our larger markets continue to normalize. We are revising our full year outlook higher to reflect the outperformance in the first quarter, and while trends in the initial months of 2026 give us reasons to be optimistic about the remainder of the year, we retain a level of caution given the uncertain backdrop." Mr. Giglia continued, "We remain committed to addressing the valuation discount at which we trade and realizing the embedded value of our portfolio for our shareholders. While the transaction market has been quiet in recent years, we are beginning to see incremental activity, which may provide a more constructive backdrop in which to execute our capital recycling strategy. In the interim, we continue to deliver value through accretive buyback activity and have repurchased $49.2 million of common and preferred stock since the start of the year at attractive implied yields." Unaudited Selected Statistical and Financial Data ($ in millions, except RevPAR, ADR and per share amounts). Recent Developments Stock Repurchase Program. During the first quarter of 2026, the Company repurchased an aggregate amount of $36.4 million, before expenses, of its common and preferred stock. From the start of this year through May 1, 2026, the Company has allocated a total of $49.2 million, before expenses, into repurchases of its common and preferred stock. The Company believes this repurchase activity has been completed at a discount and generated significant value for its stockholders. As of May 1, 2026, the Company has $458.3 million remaining under its existing stock repurchase program authorization. Common stock: During the first quarter of 2026, the Company repurchased 3,184,768 shares at an average purchase price per share of $9.13 for a total repurchase amount before expenses of $29.1 million. From the start of this year through May 1, 2026, the Company has repurchased 3,860,813 shares at an average purchase price per share of $9.11 for a total repurchase amount before expenses of $35.2 million. The average purchase price per share represents a substantial discount to consensus estimates of net asset value and implies a highly attractive valuation multiple on the Company's stabilized cash flow. Series H Cumulative Redeemable Preferred Stock: During the first quarter of 2026, the Company repurchased 242,762 shares at an average purchase price per share of $20.77 for a total repurchase amount before expenses of $5.0 million. From the start of this year through May 1, 2026, the Company has repurchased 345,493 shares at an average purchase price per share of $20.76 for a total repurchase amount before expenses of $7.2 million. The average repurchase price per share reflects a 17.0% discount to the preferred stock liquidation value. Series I Cumulative Redeemable Preferred Stock: During the first quarter of 2026, the Company repurchased 122,333 shares at an average purchase price per share of $18.58 for a total repurchase amount before expenses of $2.3 million. From the start of this year through May 1, 2026, the Company has repurchased 363,082 shares at an average purchase price per share of $18.96 for a total repurchase amount before expenses of $6.9 million. The average repurchase price per share reflects a 24.1% discount to the preferred stock liquidation value. Balance Sheet and Liquidity Update As of March 31, 2026, the Company had $166.7 million of cash and cash equivalents, including restricted cash of $75.5 million, total assets of $3.0 billion, including $2.8 billion of net investments in hotel properties, total debt of $955.0 million and stockholders' equity of $1.9 billion. Capital Investments Update The Company invested $31.0 million into its portfolio during the first quarter of 2026. The Company currently expects to invest approximately $95 million to $115 million into its portfolio in 2026, with a majority of the investment related to the completion of the meeting space at Hilton San Diego Bayfront, renovation work at Oceans Edge Resort & Marina, storm-related restoration work at Wailea Beach Resort, and various other projects across the remaining hotels in the portfolio. 2026 Outlook The Company is updating its 2026 outlook based on Management's expectations and information available as of the date of this release. Geopolitical developments, changes in economic policies, changes in the health of the economy, or changes in business and consumer sentiment, among other factors, could lead to further revisions to the Company's outlook or cause the Company to withdraw its outlook altogether. For the full year 2026, the Company now expects: Full year 2026 guidance is based in part on the following full year assumptions: Full year interest and other income of approximately $3 million to $4 million. Full year corporate overhead expense (excluding deferred stock amortization) of approximately $20 million to $21 million. Full year interest expense of approximately $51 million to $54 million, including approximately $4 million in amortization of deferred financing costs and $2 million of noncash reduction to interest expense on derivatives. Excluding the noncash interest on derivatives, this range is unchanged from the Company's prior estimate. Full year preferred stock dividends of approximately $16 million to $17 million, which includes the Series G, H, and I cumulative redeemable preferred stock. Dividend Update On May 4, 2026, the Company's Board of Directors authorized a cash dividend of $0.09 per share of its common stock. The Company's Board of Directors also authorized cash dividends of $0.812500 per share payable to its Series G cumulative redeemable preferred stockholder, $0.382813 per share payable to its Series H cumulative redeemable preferred stockholders, and $0.356250 per share payable to its Series I cumulative redeemable preferred stockholders. The common and preferred dividends will be paid on July 15, 2026 to stockholders of record as of June 30, 2026. The Company currently expects to continue to pay a quarterly cash common dividend throughout 2026. The level of any future quarterly dividends will be determined by the Company's Board of Directors after considering long-term operating projections, expected capital requirements, and risks affecting the Company's business. Supplemental Disclosures Contemporaneous with this release, the Company has furnished a Form 8-K with unaudited financial information. This additional information is being provided as a supplement to the information in this release and other filings with the SEC. The Company has no obligation to update any of the information provided to conform to actual results or changes in the Company's portfolio, capital structure or future expectations. Earnings Call The Company will host a conference call to discuss first quarter results on May 5, 2026, at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time). A live webcast of the call will be available via the Investor Relations section of the Company's website at www.sunstonehotels.com. Alternatively, interested parties may dial 1-800-715-9871 and reference conference ID 1026321 to listen to the live call. A transcript of the webcast will also be archived on the website. About Sunstone Hotel Investors, Inc. Sunstone Hotel Investors, Inc. is a lodging real estate investment trust ("REIT") that as of the date of this release owns 14 hotels comprised of approximately 7,000 rooms, the majority of which are operated under nationally recognized brands. Sunstone's strategy is to create long-term stakeholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate. For further information, please visit Sunstone's website at www.sunstonehotels.com. The Company's website is provided as a reference only and any information on the website is not incorporated by reference in this release. Forward-Looking Statements This press release 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 results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks, uncertainties, and other factors include, but are not limited to, those described in the sections entitled "Special Note Regarding Forward-Looking Statements," "Risk Factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 2025 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 27, 2026, and other risks and uncertainties associated with the Company's business described in its filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All forward-looking information provided herein is as of the date of this release, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations. This release should be read together with the consolidated financial statements and notes thereto included in our most recent reports on Form 10-K and Form 10-Q. Copies of these reports are available on our website at www.sunstonehotels.com and through the SEC's Electronic Data Gathering Analysis and Retrieval System ("EDGAR") at www.sec.gov. Non-GAAP Financial Measures We present the following non-GAAP financial measures that we believe are useful to investors as key supplemental measures of our operating performance: earnings before interest expense, taxes, depreciation and amortization for real estate, or EBITDAre; Adjusted EBITDAre (as defined below); funds from operations attributable to common stockholders, or FFO attributable to common stockholders; Adjusted FFO attributable to common stockholders (as defined below); hotel Adjusted EBITDAre; and hotel Adjusted EBITDAre margins. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. In addition, our calculation of these measures may not be comparable to other companies that do not define such terms exactly the same as us. These non-GAAP measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to net income (loss), cash flow from operations, or any other operating performance measure prescribed by GAAP. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure. We present EBITDAre in accordance with guidelines established by the National Association of Real Estate Investment Trusts ("Nareit"), as defined in its September 2017 white paper "Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate." We believe EBITDAre is a useful performance measure to help investors evaluate and compare the results of our operations from period to period in comparison to our peers. Nareit defines EBITDAre as net income (calculated in accordance with GAAP) plus interest expense, income tax expense, depreciation and amortization, gains or losses on the disposition of depreciated property (including gains or losses on change in control), impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in the value of depreciated property in the affiliate, and adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates. We make additional adjustments to EBITDAre when evaluating our performance because we believe that the exclusion of certain additional items described below provides useful information to investors regarding our operating performance, and that the presentation of Adjusted EBITDAre, when combined with the primary GAAP presentation of net income, is beneficial to an investor's complete understanding of our operating performance. In addition, we use both EBITDAre and Adjusted EBITDAre as measures in determining the value of hotel acquisitions and dispositions. We believe that the presentation of FFO attributable to common stockholders provides useful information to investors regarding our operating performance because it is a measure of our operations without regard to specified noncash items such as real estate depreciation and amortization, any real estate impairment loss and any gain or loss on sale of real estate assets, all of which are based on historical cost accounting and may be of lesser significance in evaluating our current performance. Our presentation of FFO attributable to common stockholders conforms to Nareit's definition of "FFO applicable to common shares." Our presentation may not be comparable to FFO reported by other REITs that do not define the terms in accordance with the current Nareit definition, or that interpret the current Nareit definition differently than we do. We also present Adjusted FFO attributable to common stockholders when evaluating our operating performance because we believe that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance and may facilitate comparisons of operating performance between periods and our peer companies. We adjust EBITDAre and FFO attributable to common stockholders for the following items, which may occur in any period, and refer to these measures as either Adjusted EBITDAre or Adjusted FFO attributable to common stockholders: Amortization of deferred stock compensation: we exclude the noncash expense incurred with the amortization of deferred stock compensation as this expense is based on historical stock prices at the date of grant to our corporate employees and does not reflect the underlying performance of our hotels. Amortization of contract intangibles: we exclude the noncash amortization of any favorable or unfavorable contract intangibles recorded in conjunction with our hotel acquisitions. We exclude the noncash amortization of contract intangibles because it is based on historical cost accounting and is of lesser significance in evaluating our actual performance for the current period. Gains or losses from debt transactions: we exclude the effect of finance charges and premiums associated with the extinguishment of debt, including the acceleration of deferred financing costs from the original issuance of the debt being redeemed or retired because, like interest expense, their removal helps investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure. Cumulative effect of a change in accounting principle: from time to time, the FASB promulgates new accounting standards that require the consolidated statement of operations to reflect the cumulative effect of a change in accounting principle. We exclude these one-time adjustments, which include the accounting impact from prior periods, because they do not reflect our actual performance for that period. Other adjustments: we exclude other adjustments that we believe are outside the ordinary course of business because we do not believe these costs reflect our actual performance for the period and/or the ongoing operations of our hotels. Such items may include: lawsuit settlement costs; the write-off of development costs associated with abandoned projects; property-level restructuring, severance, and management transition costs; pre-opening costs associated with extensive renovation projects; debt resolution costs; lease terminations; property insurance restoration proceeds or uninsured losses; and other nonrecurring identified adjustments. In addition, to derive Adjusted EBITDAre, we exclude the amortization of our right-of-use assets and related lease obligations as these expenses are based on historical cost accounting and do not reflect the actual rent amounts due to the respective lessors or the underlying performance of our hotels. We also exclude the effect of gains and losses on the disposition of undepreciated assets because we believe that including them in Adjusted EBITDAre is not consistent with reflecting the ongoing performance of our assets. To derive Adjusted FFO attributable to common stockholders, we also exclude the noncash interest on our derivatives as we believe that these items are not reflective of our ongoing finance costs. Additionally, we exclude the real estate amortization of our right-of-use assets and related lease obligations (with the exception of our corporate operating lease) as these expenses are based on historical cost accounting and do not reflect the actual rent amounts due to the respective lessors or the underlying performance of our hotels. We also exclude gains or losses on the redemptions or repurchases of preferred stock, changes to deferred tax assets, liabilities or valuation allowances, and income tax benefits or provisions associated with the application of net operating loss carryforwards, uncertain tax positions or with the sale of assets. In presenting hotel Adjusted EBITDAre and hotel Adjusted EBITDAre margins, miscellaneous non-hotel items have been excluded. We believe the calculation of hotel Adjusted EBITDAre results in a more accurate presentation of the hotel Adjusted EBITDAre margins for our hotels, and that these non-GAAP financial measures are useful to investors in evaluating our property-level operating performance. Reconciliations of net income to EBITDAre, Adjusted EBITDAre, FFO attributable to common stockholders, Adjusted FFO attributable to common stockholders, hotel Adjusted EBITDAre and hotel Adjusted EBITDAre margins are set forth in the following pages of this release. For Additional Information: Aaron Reyes Sunstone Hotel Investors, Inc. (949) 382-3018 View original content:https://www.prnewswire.com/news-releases/sunstone-hotel-investors-reports-results-for-first-quarter-2026-302762094.html