Sunstone Hotel Investors, Inc. is a publicly traded U.S. lodging real estate investment trust, or REIT, headquartered in Aliso Viejo, California. Its common stock trades on the New York Stock Exchange under the symbol SHO. The company’s stated mission is to be a premier steward of capital in the lodging ...Sunstone Hotel Investors, Inc. is a publicly traded U.S. lodging real estate investment trust, or REIT, headquartered in Aliso Viejo, California. Its common stock trades on the New York Stock Exchange under the symbol SHO. The company’s stated mission is to be a premier steward of capital in the lodging industry and to provide attractive returns to shareholders through hotel ownership and investment. Sunstone focuses primarily on upper-upscale and luxury hotels located in major urban, gateway, convention, and resort markets where demand can be supported by business travel, group events, tourism, and premium leisure activity.
The company’s business model centers on acquiring, owning, and strategically managing hotel real estate rather than manufacturing physical products. Its properties are commonly operated under nationally recognized hospitality brands, including Marriott, Hilton, and Hyatt, while Sunstone retains ownership of the underlying real estate and works with operators and brand partners to improve performance. The supplied financial profile describes a portfolio of 19 hotel properties with approximately 9,997 guest rooms, although company materials and search results may show different portfolio totals at different reporting dates because properties can be acquired, sold, or reclassified.
Sunstone’s main services are asset management, hotel investment, property renovation, repositioning, and capital planning. Renovation spending is a significant component of the company’s cost structure. For a hotel REIT, the closest equivalent to a bill of materials, or BOM, includes building systems, guest-room furnishings, fixtures, technology infrastructure, food-and-beverage equipment, meeting-space improvements, and other property-level capital expenditures. The supplied trailing-twelve-month data shows capital expenditure of approximately 11.3% of revenue and capital expenditure equal to about 46.6% of operating cash flow, reflecting the capital-intensive nature of lodging real estate.
Financially, the supplied data indicates approximately $2.06 billion in market capitalization and $1.98 billion in enterprise value. The company reports a trailing revenue multiple near 2.1 times, an enterprise-value-to-EBITDA multiple near 8.2 times, and a price-to-book ratio near 1.1 times. Trailing net profit margin is approximately 5.3%, while EBITDA margin is approximately 24.0%. Reported free cash flow is approximately $292.5 million, and the indicated annual dividend is $0.36 per share, equivalent to a dividend yield of roughly 3.2% based on the supplied market data. Dividend coverage should be interpreted carefully because REIT distributions are influenced by property-level cash flow, recurring maintenance capital expenditures, financing activity, and taxable-income requirements.
Bryan Albert Giglia serves as chief executive officer and is a member of the board of directors. He previously served as Sunstone’s chief financial officer and held other finance roles after joining the company in 2004. Sunstone had 37 full-time employees in the supplied data, with much of its property operations conducted through hotel managers, operating partners, and brand relationships. Key risks include hotel demand cycles, economic downturns, labor and operating-cost inflation, interest rates, refinancing conditions, property renovation requirements, competition, and changes in travel patterns. Its strategic objective is to own durable, well-located lodging assets and improve their long-term relevance, cash-flow generation, and value through selective investment and disciplined portfolio management.
YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength.
QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes.
RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three).
$960.1M
+6.0%
+6.7%
Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day.
$24.6M
-43.2%
+40.2%
Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials.
+4.7%
-89.8%
+111.1%
Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on).
+7.8%
-10.2%
+12.8%
Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales.
+2.6%
-46.4%
+31.4%
Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock.
$78.7M
-53.8%
+174.7%
FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine.
+8.2%
-56.4%
+157.5%
Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe.
47.6%
+17.4%
+4.0%
Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking.
2.30x
-7.5%
+751.7%
Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground.
Operator: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Sunstone Hotel Investors, Inc. First Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session; instructions will be given at that time. I would like to remind everyone that this conference is being recorded today, 05/05/2026, 11:00 AM Eastern Time. I will now turn the presentation over to Mr. Aaron R. Reyes, Chief Financial Officer. Please go ahead, sir.
Aaron R. Reyes: Thank you, Operator. Before we begin, I would like to remind everyone that this call contains forward-looking statements that are subject to risks and uncertainties, including those described in our filings with the SEC, which could cause actual results to differ materially from those projected. We caution you to consider these factors in evaluating our forward-looking statements. We also note that the commentary on this call will contain non-GAAP financial information including adjusted EBITDAre, adjusted FFO, and hotel adjusted EBITDAre. We are providing this information as a supplement to information prepared in accordance with generally accepted accounting principles. Additional details on our quarterly results have been provided in our earnings release and supplemental which are available in the Investor Relations section of our website. With us on the call today are Bryan Albert Giglia, Chief Executive Officer, and Robert C. Springer, President and Chief Investment Officer. After our remarks, the team will be available to answer your questions. With that, I would like to turn the call over to Bryan. Please go ahead.
Bryan Albert Giglia: Thank you, Aaron, and good morning, everyone. We were pleased with our performance in the first quarter which came in ahead of our expectations even with some weather-related headwinds across a handful of our markets. The strength was broad-based, with continued solid group results and transient performance that was better than anticipated. Overall, RevPAR in the quarter grew an impressive 14.6%. Excluding Andaz Miami Beach, which continues to ramp nicely, RevPAR grew 5.7%. This strong revenue performance, combined with continued focus on cost controls at the hotels and at the corporate level, allowed us to generate meaningful growth in earnings. The added benefit of our accretive repurchase activity drove even greater growth in earnings per share with first quarter adjusted FFO nearly 29% higher than last year. Our resorts once again led the portfolio with combined comparable RevPAR growth of over 18%. While the rebound at Wailea Beach Resort was expected, it has been impressive, where revenue grew 14% in the quarter even with significant cancellations from the two weather events that impacted the Hawaiian Islands in March. While we will need to navigate some repair work and disruption following the storms, the outperformance in January and February, and the trends that we …