Sunstone Raises 2026 Outlook a Third Time

The Tip Desk · November 6, 2026 · 4 min read

Third-quarter RevPAR rose 11.4% to $235.22 as the company lifted full-year Adjusted FFO to $1.00–$1.03 a share.

Sunstone Hotel Investors (SHO), a lodging REIT that owns 13 hotels of about 6,200 rooms, reported net income attributable to common stockholders of $38.7 million, or $0.21 a diluted share, for the three months ended September 30, 2026, versus a net loss of $2.9 million, or $(0.02) a share, a year earlier.

The lodging REIT said the portfolio generated revenue and earnings that meaningfully exceeded expectations, and it raised its full-year 2026 outlook for a third consecutive quarter.

RevPAR for all hotels increased 11.4% to $235.22, with occupancy up 460 basis points to 72.7% and average daily rate up 4.4% to $323.55. Excluding Andaz Miami Beach, RevPAR rose 10.3% to $238.48. Total RevPAR increased 10.5% to $394.97, and 9.6% excluding Andaz Miami Beach.

Year-over-year RevPAR growth for all hotels slowed from 14.6% in the first quarter and 9.3% in the second. Growth excluding Andaz Miami Beach accelerated to 10.3% from 5.7% and 4.3%. Total RevPAR growth excluding Andaz Miami Beach rose to 9.6% from 5.3% and 3.0%.

Adjusted EBITDAre increased 8.8% to $54.5 million. Adjusted FFO attributable to common stockholders rose 17.1% to $37.2 million, or $0.20 a diluted share, up 17.6%. 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, and one-time items, the company said margins would have increased approximately 200 basis points.

Total revenues were $233.7 million, including room revenue of $140.1 million, food and beverage of $68.6 million, and other operating of $25.1 million. A $31.5 million gain on sale of assets was recorded in the quarter.

Chief Executive Officer Bryan A. Giglia said the 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 recent investments. He said the company is once again increasing its full-year outlook given strong performance and revised expectations for near-term trends, and that it is encouraged by next-year trends including robust group pace, further recovery in certain markets, and additional contribution from investment activity.

For full-year 2026, the company now expects net income of $92 million to $97 million, versus prior guidance of $79 million to $89 million, a midpoint increase of $10.5 million. Net income attributable to common stockholders per diluted share is now $0.46 to $0.49, versus $0.37 to $0.42. RevPAR growth is now 9.5% to 10.5%, versus 7.0% to 9.0%. Total RevPAR growth is now 8.5% to 9.5%. Adjusted EBITDAre is now $254 million to $259 million. Adjusted FFO attributable to common stockholders is now $184 million to $189 million, or $1.00 to $1.03 a share. Diluted weighted average shares outstanding are now 183.5 million, down 3.5 million. Andaz Miami Beach is expected to contribute approximately 450 basis points of RevPAR and Total RevPAR growth.

Full-year assumptions include interest and other income, excluding insurance-program reimbursements for property-damage restoration, of about $7 million to $8 million, unchanged, and interest expense of about $46 million to $49 million, unchanged excluding noncash derivative interest. Corporate overhead, excluding deferred stock amortization and management transition costs, is now about $19 million, $0.5 million lower than the prior midpoint, and preferred stock dividends about $15 million, also $0.5 million lower.

During the third quarter the company repurchased $117.8 million of common and preferred stock, including 9,368,434 common shares at an average $10.99 for $103.0 million, 330,119 Series H preferred shares at $22.30 for $7.4 million, and 344,439 Series I preferred shares at $21.69 for $7.5 million. From the start of 2026 through November 5, 2026, it allocated $196.9 million to repurchases, including 13,748,527 common shares at an average $10.43 for $143.4 million, 1,234,583 Series H shares at $21.52 for $26.6 million, a 13.9% discount to liquidation value, and 1,308,051 Series I shares at $20.56 for $26.9 million, a 17.7% discount. As of November 5, $310.6 million remained under the existing authorization.

As of September 30, 2026, cash and cash equivalents were $317.9 million, including $81.4 million of restricted cash. Liquidity was $817.9 million, including full availability under a $500.0 million revolving credit facility. Total debt was $955.0 million with a weighted average interest rate of 5.22%, including October 2026 swaps, and no maturities until January 2028.

The company invested $76.6 million into its portfolio in the first nine months of 2026 and currently expects to invest approximately $105 million to $115 million in 2026. On November 5, 2026, the board authorized a $0.09 a share common cash dividend, payable January 15, 2027 to holders of record December 31, 2026.