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Sunstone Hotel Investors Announces Q3 2025 Financial Results

On November 7, 2025, Sunstone Hotel Investors, Inc. (NYSE: SHO) released its financial results for the third quarter ending September 30, 2025. Despite facing various challenges in its larger markets, the company reported operational metrics that generally aligned with its expectations.

Key Financial Highlights

• - Net Income: Sunstone reported a net income of $1.3 million, down significantly from $3.2 million for the same quarter in 2024, indicating a 59.3% decline.
• - RevPAR (Revenue Per Available Room): The total portfolio RevPAR increased by 2.0%, reaching $216.12. This was attributed to an average daily rate of $307.43 and an occupancy rate of 70.3%.
• - Adjusted EBITDAre: This metric saw a decrease of 6.6%, totaling $50.1 million.
• - Adjusted FFO (Funds From Operations): The adjusted FFO attributable to common shareholders decreased by 5.6%, resulting in a $0.17 per diluted share.

CEO's Remarks

Bryan A. Giglia, the Chief Executive Officer of Sunstone, commented on the results, stating that the portfolio performed in line with expectations despite ongoing market pressures. He noted that the company's operational success in San Francisco helped counterbalance lower demand from government-related bookings and the struggle with a more price-sensitive leisure travel segment elsewhere.

The CEO also informed investors about the successful revision of their credit facilities, enhancing the company's financial flexibility. This included addressing debt maturities through 2028, reducing borrowing costs, and implementing a strategy focused on delivering shareholder value.

Recent Developments

1. Amended and Restated Credit Agreement: Sunstone completed its credit agreement, which establishes an aggregate borrowing capacity of $1.35 billion. This agreement covers all near-term maturities and provides room for enhancement of the company’s balance sheet.
2. Stock Repurchase Activity: In Q3 2025, Sunstone repurchased 258,870 shares of common stock at an average price of $8.70 per share. Year-to-date, the total repurchase amounts to 11,392,876 shares, valuing about $100.6 million.
3. Investment in Portfolio: The company invested $73.7 million into their portfolio in the first nine months of 2025. Plans for further investments from $80 million to $100 million are underway, primarily focusing on renovations and the ongoing transformation of the Andaz Miami Beach.

Future Outlook

Looking ahead, Sunstone is maintaining its guidance for 2025, anticipating continued effects from recent government shutdowns on travel demand. The company’s expectations for RevPAR growth remain steady, positioned between 3.0% to 5.0% for the year, with adjusted EBITDAra projections also mirroring previous estimates. However, the economic landscape's unpredictability could lead to adjustments in their forecasts.

The Board of Directors has approved cash dividends for shareholders, which are set to continue throughout 2025, subject to the company's future projections and capital requirements. The upcoming earnings call on November 7, 2025, will provide further insights into these results and future strategies.

In conclusion, Sunstone Hotel Investors is navigating through mixed economic conditions while strategically positioning its portfolio for future growth and profitability. The initiatives undertaken in Q3 2025 reflect the company’s commitment to enhancing stakeholder value and managing financial risks effectively.