Open the filing on EDGARFor Additional Information:
Aaron Reyes
SUNSTONE HOTEL INVESTORS REPORTS RESULTS FOR THIRD QUARTER 2026
Completes Additional Accretive Common and Preferred Stock Repurchases
Further Increases Full Year Outlook
ALISO VIEJO, CA - November 6, 2026 - Sunstone Hotel Investors, Inc. (the “Company” or “Sunstone”) (NYSE: SHO) today announced results for the third quarter ended September 30, 2026.
Third Quarter 2026 Operational Results (as compared to Third Quarter 2025):
Net Income (Loss): Net income attributable to common stockholders was $38.7 million, or $0.21 per diluted share, as compared to a net loss attributable to common stockholders of $2.9 million, or $(0.02) per diluted share.
RevPAR: RevPAR for all hotels in the portfolio increased 11.4% to $235.22. The average daily rate was $323.55 and occupancy was 72.7%. RevPAR excluding Andaz Miami Beach increased 10.3%.
Total RevPAR: Total RevPAR for all hotels in the portfolio increased 10.5% to $394.97. Total RevPAR excluding Andaz Miami Beach increased 9.6%.
Hotel Adjusted EBITDAre Margin: Hotel Adjusted EBITDAre Margin, excluding Andaz Miami Beach, increased 50 basis points to 26.7%. Excluding Hilton Key West Resort & Marina, which was under renovation during the quarter, and the impact of one-time items in the current and prior year, margins would have increased approximately 200 basis points.
Adjusted EBITDAre: Adjusted EBITDAre increased 8.8% to $54.5 million.
Adjusted FFO: Adjusted FFO attributable to common stockholders per diluted share increased 17.6% to $0.20.
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, “Our portfolio performed very well in the third quarter and generated revenue and earnings that meaningfully exceeded our expectations. Our well-located portfolio grew Total RevPAR by over 10% and Adjusted FFO per diluted share by nearly 18%, driven by broad-based strength across demand segments and from the contribution of our recent investments. Given our strong performance in the quarter and our revised expectations for near-term trends, we are once again increasing our full year outlook. While current year fundamentals have been better than expected, we are also encouraged by the trends we are seeing for next year, with robust group pace, further recovery in certain of our markets, and additional contribution from our investment activity.”
Mr. Giglia continued, “Our capital allocation activity this year demonstrates the value creation potential of our strategy. By realizing private market values through opportunistic asset sales and redeploying proceeds into the repurchase of nearly $200 million of our common and preferred stock at meaningful discounts, we have increased Adjusted FFO and NAV per share while preserving our leverage profile. Our strong balance sheet and dynamic approach to capital allocation allow us to remain nimble and deploy capital toward the opportunities we believe will offer the most compelling risk-adjusted returns, whether through investments in our portfolio, acquisitions, or the repurchase of our securities.”
Unaudited Selected Statistical and Financial Data ($ in millions, except RevPAR, ADR and per share amounts).
| Three Months Ended September 30, | Nine Months Ended September 30, |
|---|
| 2026 | 2025 | Change | 2026 | 2025 | Change |
|---|
| Net Income | $40.9 | $1.3 | 2,993.0% | $85.5 | $17.4 | 392.6% |
| Net Income (Loss) Attributable to Common Stockholders | $38.7 | $(2.9) | 1,416.1% | $80.6 | $5.2 | 1,442.8% |
| Net Income (Loss) Attributable to Common Stockholders per Diluted Share | $0.21 | $(0.02) | 1,150.0% | $0.43 | $0.03 | 1,333.3% |
| Total Portfolio Operating Statistics (1) | | | | | | |
| RevPAR | $235.22 | $211.15 | 11.4% | $249.34 | $225.00 | 10.8% |
| Occupancy | 72.7% | 68.1% | 460bps | 74.4% | 70.5% | 390bps |
| Average Daily Rate | $323.55 | $310.06 | 4.4% | $335.13 | $319.15 | 5.0% |
| Total RevPAR | $394.97 | $357.35 | 10.5% | $416.18 | $378.54 | 9.9% |
| Operating Statistics, excluding Andaz Miami Beach (2) | | | | | | |
| RevPAR | $238.48 | $216.20 | 10.3% | $245.25 | $233.37 | 5.1% |
| Occupancy | 73.8% | 69.7% | 410bps | 74.6% | 73.1% | 150bps |
| Average Daily Rate | $323.15 | $310.18 | 4.2% | $328.75 | $319.25 | 3.0% |
| Total RevPAR | $399.89 | $364.94 | 9.6% | $411.07 | $392.11 | 4.8% |
| Hotel Adjusted EBITDAre Margin, excluding Andaz Miami Beach (2) | 26.7% | 26.2% | 50bps | 28.7% | 28.9% | (20)bps |
| Adjusted EBITDAre | $54.5 | $50.1 | 8.8% | $198.9 | $180.0 | 10.5% |
| Adjusted FFO Attributable to Common Stockholders | $37.2 | $31.7 | 17.1% | $146.3 | $129.0 | 13.5% |
| Adjusted FFO Attributable to Common Stockholders per Diluted Share | $0.20 | $0.17 | 17.6% | $0.79 | $0.66 | 19.7% |
(1) Includes the 13 hotels owned by the Company as of September 30, 2026.
(2) Includes the 13 hotels owned by the Company as of September 30, 2026 except Andaz Miami Beach due to its renovation activity during 2025.
Recent Developments
Stock Repurchase Program. During the third quarter of 2026, the Company repurchased an aggregate amount of $117.8 million, before expenses, of its common and preferred stock. From the start of this year through November 5, 2026, the Company has allocated a total of $196.9 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 November 5, 2026, the Company has $310.6 million remaining under its existing stock repurchase program authorization.
Common stock: During the third quarter of 2026, the Company repurchased 9,368,434 shares at an average purchase price per share of $10.99 for a total repurchase amount before expenses of $103.0 million. From the start of this year through November 5, 2026, the Company has repurchased 13,748,527 shares at an average purchase price per share of $10.43 for a total repurchase amount before expenses of $143.4 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 third quarter of 2026, the Company repurchased 330,119 shares at an average purchase price per share of $22.30 for a total repurchase amount before expenses of $7.4 million. From the start of this year through November 5, 2026, the Company has repurchased 1,234,583 shares at an average purchase price per share of $21.52 for a total repurchase amount before expenses of $26.6 million. The average repurchase price per share reflects a 13.9% discount to the preferred stock liquidation value.
Series I Cumulative Redeemable Preferred Stock: During the third quarter of 2026, the Company repurchased 344,439 shares at an average purchase price per share of $21.69 for a total repurchase amount before expenses of $7.5 million. From the start of this year through November 5, 2026, the Company has repurchased 1,308,051 shares at an average purchase price per share of $20.56 for a total repurchase amount before expenses of $26.9 million. The average repurchase price per share reflects a 17.7% discount to the preferred stock liquidation value.
Balance Sheet and Liquidity Update
As of September 30, 2026, the Company had $317.9 million of cash and cash equivalents, including restricted cash of $81.4 million. The Company ended the third quarter with $817.9 million of liquidity, including available cash and full availability under its $500.0 million revolving credit facility. The Company had total debt of $955.0 million with a weighted average interest rate of 5.22%, including the effect of the Company’s interest rate derivative swaps entered into in October 2026, and no debt maturities until January 2028.
Capital Investments Update
The Company invested $76.6 million into its portfolio during the first nine months of 2026. The Company currently expects to invest approximately $105 million to $115 million into its portfolio in 2026, with a majority of the investment related to the previously completed renovation of the meeting space at Hilton San Diego Bayfront, renovation work at Hilton Key West Resort & Marina, storm-related restoration work at Wailea Beach Resort, and various other projects across the remaining hotels in the portfolio.
2026 Outlook
The Company is updating its 2026 outlook based on Management’s expectations and information available as of the date of this release. Geopolitical developments, changes in economic policies, changes in the health of the economy, or changes in business and consumer sentiment, among other factors, could lead to further revisions to the Company’s outlook or cause the Company to withdraw its outlook altogether.
For the full year 2026, the Company now expects:
| Metric ($ in millions, except per share data) | Prior Full Year 2026 Guidance (1) | Current Full Year 2026 Guidance (2) | Change in Full Year 2026 Guidance Midpoint |
| Net Income | $79 to $89 | $92 to $97 | +$10.5 |
| Net Income Attributable to Common Stockholders per Diluted Share | $0.37 to $0.42 | $0.46 to $0.49 | +$0.08 |
| RevPAR Growth (3) | 7.0% to 9.0% | 9.5% to 10.5% | +200 bps |
| Total RevPAR Growth (3) | 7.0% to 9.0% | 8.5% to 9.5% | +100 bps |
| Adjusted EBITDAre | $245 to $255 | $254 to $259 | +$6.5 |
| Adjusted FFO Attributable to Common Stockholders | $174 to $184 | $184 to $189 | +$7.5 |
| Adjusted FFO Attributable to Common Stockholders per Diluted Share | $0.93 to $0.98 | $1.00 to $1.03 | +$0.06 |
| Diluted Weighted Average Shares Outstanding | 187,000,000 | 183,500,000 | -3,500,000 |
(1) Reflects guidance presented on August 6, 2026.
(2) Detailed reconciliations of Net Income to non-GAAP financial measures are provided later in this release.
(3) RevPAR and Total RevPAR Growth reflect comparisons to full year 2025 and include all 13 hotels owned by the Company as of the date of this release. Andaz Miami Beach is expected to contribute approximately 450 basis points of RevPAR and Total RevPAR growth.
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 unchanged from the Company’s prior estimate.
Full year corporate overhead expense (excluding deferred stock amortization and management transition costs) of approximately $19 million. This estimate is $0.5 million lower than the midpoint of the Company’s prior range.
Full year interest expense of approximately $46 million to $49 million, including approximately $4 million in amortization of deferred financing costs and $7 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, which includes the Series G, H, and I cumulative redeemable preferred stock. This estimate is $0.5 million lower than the midpoint of the Company’s prior range.
Dividend Update
On November 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 $0.937500 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 January 15, 2027 to stockholders of record as of December 31, 2026.
The amount 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 third quarter results on November 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 981 061 229 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 approximately 6,200 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
Forward-looking statements notice
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 we do. 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; non-real estate-related impairment losses; 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.
Consolidated Balance Sheets
(In thousands, except share and per share data)
| September 30, | December 31, |
|---|
| 2026 | 2025 |
|---|
| (unaudited) | |
|---|
| ASSETS | | |
| Investment in hotel properties, net | $2,491,537 | $2,771,180 |
| Operating lease right-of-use assets, net | 3,704 | 4,418 |
| Cash and cash equivalents | 236,521 | 109,189 |
| Restricted cash | 81,365 | 76,531 |
| Accounts receivable, net | 39,817 | 33,662 |
| Prepaid expenses and other assets, net | 42,091 | 34,025 |
| Total assets | $2,895,035 | $3,029,005 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | |
| LIABILITIES | | |
| Debt, net of unamortized deferred financing costs | $944,032 | $918,086 |
| Operating lease obligations | 5,959 | 7,348 |
| Accounts payable and accrued expenses | 52,928 | 63,146 |
| Dividends and distributions payable | 19,547 | 22,975 |
| Other liabilities | 85,968 | 72,832 |
| Total liabilities | 1,108,434 | 1,084,387 |
| Commitments and contingencies | | |
| STOCKHOLDERS’ EQUITY | | |
| Preferred stock, $0.01 par value, 100,000,000 shares authorized: | | |
| Series G Cumulative Redeemable Preferred Stock, 2,650,000 shares issued and outstanding at both September 30, 2026 and December 31, 2025, stated at liquidation preference of $25.00 per share | 66,250 | 66,250 |
| 6.125% Series H Cumulative Redeemable Preferred Stock, 3,644,584 shares issued and outstanding at September 30, 2026 and 4,545,903 shares issued and outstanding at December 31, 2025, stated at liquidation preference of $25.00 per share | 91,115 | 113,648 |
| 5.70% Series I Cumulative Redeemable Preferred Stock, 2,836,743 shares issued and outstanding at September 30, 2026 and 3,990,973 shares issued and outstanding at December 31, 2025, stated at liquidation preference of $25.00 per share | 70,919 | 99,774 |
| Common stock, $0.01 par value, 500,000,000 shares authorized, 176,575,057 shares issued and outstanding at September 30, 2026 and 189,709,516 shares issued and outstanding at December 31, 2025 | 1,766 | 1,897 |
| Additional paid in capital | 2,160,464 | 2,298,398 |
| Distributions in excess of retained earnings | (603,913) | (635,349) |
| Total stockholders’ equity | 1,786,601 | 1,944,618 |
| Total liabilities and stockholders’ equity | $2,895,035 | $3,029,005 |
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, |
|---|
| 2026 | 2025 | 2026 | 2025 |
|---|
| Revenues | | | | |
| Room | $140,053 | $139,523 | $469,368 | $440,492 |
| Food and beverage | 68,601 | 64,419 | 221,792 | 209,573 |
| Other operating | 25,064 | 25,381 | 79,376 | 73,095 |
| Total revenues | 233,718 | 229,323 | 770,536 | 723,160 |
| Operating expenses | | | | |
| Room | 37,818 | 39,303 | 122,958 | 119,272 |
| Food and beverage | 50,424 | 48,717 | 155,793 | 150,566 |
| Other operating | 7,123 | 6,337 | 21,763 | 18,707 |
| Advertising and promotion | 13,083 | 13,420 | 41,336 | 40,758 |
| Repairs and maintenance | 10,671 | 9,954 | 32,592 | 29,514 |
| Utilities | 7,648 | 7,832 | 22,049 | 21,624 |
| Franchise costs | 4,417 | 4,471 | 13,962 | 13,773 |
| Property tax, ground lease and insurance | 20,179 | 19,574 | 61,734 | 57,425 |
| Other property-level expenses | 27,853 | 26,926 | 95,550 | 88,184 |
| Corporate overhead | 6,410 | 6,970 | 22,005 | 24,221 |
| Depreciation and amortization | 30,287 | 33,928 | 98,724 | 100,328 |
| Impairment and other losses | - | - | 1,639 | - |
| Total operating expenses | 215,913 | 217,432 | 690,105 | 664,372 |
| Interest and other income | 2,620 | 3,160 | 7,944 | 7,024 |
| Interest expense | (10,729) | (13,412) | (33,788) | (39,258) |
| Gain (loss) on sale of assets | 31,489 | - | 31,489 | (8,751) |
| Loss on extinguishment of debt | - | (180) | - | (180) |
| Income before income taxes | 41,185 | 1,459 | 86,076 | 17,623 |
| Income tax provision, net | (296) | (137) | (605) | (272) |
| Net income | 40,889 | 1,322 | 85,471 | 17,351 |
| Preferred stock dividends, net of gain on repurchases | (2,196) | (4,262) | (4,844) | (12,125) |
| Net income (loss) attributable to common stockholders | $38,693 | $(2,940) | $80,627 | $5,226 |
| Basic and diluted income (loss) per share | | | | |
| Basic and diluted net income (loss) attributable to common stockholders per common share | $0.21 | $(0.02) | $0.43 | $0.03 |
| Basic weighted average common shares outstanding | 181,502 | 189,253 | 185,040 | 195,110 |
| Diluted weighted average common shares outstanding | 181,502 | 189,253 | 185,212 | 195,866 |
| Distributions declared per common share | $0.09 | $0.09 | $0.27 | $0.27 |
Reconciliation of Net Income to Non-GAAP Financial Measures
(Unaudited and in thousands)
Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre
| Three Months Ended September 30, | Nine Months Ended September 30, |
|---|
| 2026 | 2025 | 2026 | 2025 |
|---|
| Net income | $40,889 | $1,322 | $85,471 | $17,351 |
| Depreciation and amortization | 30,287 | 33,928 | 98,724 | 100,328 |
| Interest expense | 10,729 | 13,412 | 33,788 | 39,258 |
| Income tax provision, net | 296 | 137 | 605 | 272 |
| (Gain) loss on sale of assets | (31,489) | - | (31,489) | 8,751 |
| Impairment and other losses | - | - | 1,639 | - |
| EBITDAre | 50,712 | 48,799 | 188,738 | 165,960 |
| Amortization of deferred stock compensation | 2,015 | 1,905 | 7,461 | 6,741 |
| Amortization of right-of-use assets and obligations | (233) | (158) | (675) | (458) |
| Loss on extinguishment of debt | - | 180 | - | 180 |
| (Gain) loss on property damage, net | 1,144 | (674) | 601 | (773) |
| Property-level pre-opening and management transition costs | 841 | - | 959 | 6,471 |
| Property-level legal settlement costs | - | - | 935 | - |
| Management transition costs | - | - | 907 | 1,869 |
| Adjustments to EBITDAre, net | 3,767 | 1,253 | 10,188 | 14,030 |
| Adjusted EBITDAre | $54,479 | $50,052 | $198,926 | $179,990 |
Reconciliation of Net Income to Non-GAAP Financial Measures
(Unaudited and in thousands, except per share data)
Reconciliation of Net Income to FFO Attributable to Common Stockholders and
Adjusted FFO Attributable to Common Stockholders
| Three Months Ended September 30, | Nine Months Ended September 30, |
|---|
| 2026 | 2025 | 2026 | 2025 |
|---|
| Net income | $40,889 | $1,322 | $85,471 | $17,351 |
| Preferred stock dividends, net of gain on repurchases | (2,196) | (4,262) | (4,844) | (12,125) |
| Real estate depreciation and amortization | 29,946 | 33,581 | 97,696 | 99,278 |
| (Gain) loss on sale of assets | (31,489) | - | (31,489) | 8,751 |
| Impairment and other losses | - | - | 1,639 | - |
| FFO attributable to common stockholders | 37,150 | 30,641 | 148,473 | 113,255 |
| Amortization of deferred stock compensation | 2,015 | 1,905 | 7,461 | 6,741 |
| Real estate amortization of right-of-use assets and obligations | (200) | (130) | (586) | (390) |
| Amortization of contract intangibles, net | 312 | 315 | 941 | 944 |
| Noncash interest on derivatives, net | (2,995) | (495) | (7,080) | 668 |
| Loss on extinguishment of debt | - | 180 | - | 180 |
| (Gain) loss on property damage, net | 1,144 | (674) | 601 | (773) |
| Property-level pre-opening and management transition costs | 841 | - | 959 | 6,471 |
| Property-level legal settlement costs | - | - | 935 | - |
| Management transition costs | - | - | 907 | 1,869 |
| Gain on preferred stock repurchases, net | (1,452) | - | (6,637) | - |
| Income tax related to hotel disposition | 361 | - | 361 | - |
| Adjustments to FFO attributable to common stockholders, net | 26 | 1,101 | (2,138) | 15,710 |
| Adjusted FFO attributable to common stockholders | $37,176 | $31,742 | $146,335 | $128,965 |
| FFO attributable to common stockholders per diluted share | $0.20 | $0.16 | $0.80 | $0.58 |
| Adjusted FFO attributable to common stockholders per diluted share | $0.20 | $0.17 | $0.79 | $0.66 |
| Basic weighted average shares outstanding | 181,502 | 189,253 | 185,040 | 195,110 |
| Shares associated with unvested restricted stock awards | 320 | 859 | 405 | 863 |
| Diluted weighted average shares outstanding | 181,822 | 190,112 | 185,445 | 195,973 |
Reconciliation of Net Income to Non-GAAP Financial Measures
Guidance for Full Year 2026
(Unaudited and in thousands, except for per share amounts)
Reconciliation of Net Income to Adjusted EBITDAre
| Year Ended |
|---|
| December 31, 2026 |
|---|
| Low | High |
|---|
| Net income | $92,000 | $97,000 |
| Depreciation and amortization | 128,000 | 128,000 |
| Interest expense | 47,500 | 47,500 |
| Income tax provision, net | 1,000 | 1,000 |
| Gain on sale of assets | (31,500) | (31,500) |
| Impairment and other losses | 2,000 | 2,000 |
| Amortization of deferred stock compensation | 9,500 | 9,500 |
| Property-level pre-opening and management transition costs | 2,500 | 2,500 |
| Property-level legal settlement costs | 1,000 | 1,000 |
| Management transition costs | 1,000 | 1,000 |
| Loss on property damage, net | 1,000 | 1,000 |
| Adjusted EBITDAre | $254,000 | $259,000 |
Reconciliation of Net Income to Adjusted FFO Attributable to Common Stockholders
| Year Ended |
|---|
| December 31, 2026 |
|---|
| Low | High |
|---|
| Net income | $92,000 | $97,000 |
| Preferred stock dividends, net of gain on repurchases | (7,000) | (7,000) |
| Net income attributable to common stockholders | 85,000 | 90,000 |
| Real estate depreciation and amortization | 127,000 | 127,000 |
| Gain on sale of assets | (31,500) | (31,500) |
| Impairment and other losses | 2,000 | 2,000 |
| Amortization of deferred stock compensation | 9,500 | 9,500 |
| Property-level pre-opening and management transition costs | 2,500 | 2,500 |
| Property-level legal settlement costs | 1,000 | 1,000 |
| Management transition costs | 1,000 | 1,000 |
| Loss on property damage, net | 1,000 | 1,000 |
| Amortization of intangibles, net | 1,000 | 1,000 |
| Noncash interest on derivatives, net | (7,000) | (7,000) |
| Gain on preferred stock repurchases, net | (8,000) | (8,000) |
| Income tax related to hotel disposition | 500 | 500 |
| Adjusted FFO attributable to common stockholders | $184,000 | $189,000 |
| Net income attributable to common stockholders per diluted share | $0.46 | $0.49 |
| Adjusted FFO attributable to common stockholders per diluted share | $1.00 | $1.03 |
| Diluted weighted average shares outstanding | 183,500 | 183,500 |
Non-GAAP Financial Measures
Hotel Adjusted EBITDAre and Margins
(Unaudited and in thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, |
|---|
| 2026 | 2025 | 2026 | 2025 |
|---|
| Total Portfolio Hotel Adjusted EBITDAre Margin | 25.1% | 24.3% | 28.1% | 27.7% |
| Hotel Adjusted EBITDAre Margin, excluding Andaz Miami Beach | 26.7% | 26.2% | 28.7% | 28.9% |
| Actual revenues | $233,718 | $229,323 | $770,536 | $723,160 |
| Sold hotel revenues (1) | (8,556) | (25,600) | (66,589) | (82,793) |
| Total Portfolio Hotel Revenues | 225,162 | 203,723 | 703,947 | 640,367 |
| Andaz Miami Beach revenues (2) | (7,754) | (5,312) | (40,851) | (7,773) |
| Hotel Revenues, excluding Andaz Miami Beach | $217,408 | $198,411 | $663,096 | $632,594 |
| Net income | $40,889 | $1,322 | $85,471 | $17,351 |
| Non-hotel operating expenses, net (3) | 10 | (280) | 22 | (971) |
| Property-level adjustments (4) | 2,244 | 189 | 5,909 | 7,012 |
| Corporate overhead | 6,410 | 6,970 | 22,005 | 24,221 |
| Depreciation and amortization | 30,287 | 33,928 | 98,724 | 100,328 |
| Impairment and other losses | - | - | 1,639 | - |
| Interest and other income | (2,620) | (3,160) | (7,944) | (7,024) |
| Interest expense | 10,729 | 13,412 | 33,788 | 39,258 |
| Gain (loss) on sale of assets | (31,489) | - | (31,489) | 8,751 |
| Loss on extinguishment of debt | - | 180 | - | 180 |
| Income tax provision, net | 296 | 137 | 605 | 272 |
| Actual Hotel Adjusted EBITDAre | 56,756 | 52,698 | 208,730 | 189,378 |
| Sold hotel Adjusted EBITDAre (1) | (325) | (3,139) | (11,031) | (11,843) |
| Total Portfolio Hotel Adjusted EBITDAre | 56,431 | 49,559 | 197,699 | 177,535 |
| Andaz Miami Beach Adjusted EBITDAre (2) | 1,637 | 2,494 | (7,652) | 5,298 |
| Hotel Adjusted EBITDAre, excluding Andaz Miami Beach | $58,068 | $52,053 | $190,047 | $182,833 |
(1) Sold hotel revenues and Adjusted EBITDAre include results for Hyatt Regency San Francisco, which the Company sold in July 2026, and Hilton New Orleans St. Charles, which the Company sold in June 2025.
(2) Andaz Miami Beach underwent a transformational renovation during 2025, and as a result, our results for the third quarter and first nine months of 2026 are not comparable to those for the same periods in 2025.
(3) Non-hotel operating expenses, net include the amortization of hotel real estate-related right-of-use assets and obligations, corporate-level current year property taxes and insurance, as well as any prior year property taxes assessed on sold hotels, net of any refunds received.
(4) Property-level adjustments include non-operational and nonrecurring items. For the three months ended September 30, 2026, adjustments primarily consisted of severe weather-related restoration expenses. For the nine months ended September 30, 2026, adjustments primarily consisted of severe weather-related restoration expenses and legal settlement costs. For the nine months ended September 30, 2025, adjustments primarily consisted of pre-opening costs related to Andaz Miami Beach.
Contacts
(949) 382-3018