Q3 FY2026
Filed Nov 6, 2026Sunstone reports Q3 2026 net income of $38.7 million, RevPAR up 11.4%, and raises full-year 2026 outlook for the second time
Q3 RevPAR, Adjusted EBITDA re and Adjusted FFO per diluted share all grew double digits year over year, GAAP net income to common stockholders turned positive, and the full-year guidance midpoints for net income, RevPAR, Adjusted EBITDA re and Adjusted FFO were raised. Part of Q3 net income reflects a $31,489 thousand gain on sale of assets, and the filing reports Andaz Miami Beach separately because it is not comparable to 2025.
Actuals vs. the company’s prior outlook
from its previous release| Metric | Guided | Reported | Verdict |
|---|---|---|---|
| Net income, full year 2026 | $79 to $89 million | Full-year actual not yet reported | n/a |
| Net income attributable to common stockholders per diluted share, full year 2026 | $0.37 to $0.42 | Full-year actual not yet reported; nine-month figure is $0.43 | n/a |
| RevPAR growth, full year 2026 | 7.0% to 9.0% | Full-year actual not yet reported; nine-month RevPAR growth is 10.8% | n/a |
| Total RevPAR growth, full year 2026 | 7.0% to 9.0% | Full-year actual not yet reported; nine-month Total RevPAR growth is 9.9% | n/a |
| Adjusted EBITDA re, full year 2026 | $245 to $255 million | Full-year actual not yet reported; nine-month figure is $198.9 million | n/a |
| Adjusted FFO attributable to common stockholders, full year 2026 | $174 to $184 million | Full-year actual not yet reported; nine-month figure is $146.3 million | n/a |
| Adjusted FFO attributable to common stockholders per diluted share, full year 2026 | $0.93 to $0.98 | Full-year actual not yet reported; nine-month figure is $0.79 | n/a |
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net income, three months ended September 30, 2026GAAP | $40.9M | – | 2,993.0% |
| Net income attributable to common stockholders, three monthsGAAP | $38.7M | – | 1,416.1% |
| Net income attributable to common stockholders per diluted share, three monthsGAAP | $0.21 | – | 1,150.0% |
| Total revenues, three months (thousands)GAAP | $233.7M | – | – |
| Room revenues, three months (thousands)GAAP | $140.1M | – | – |
| Food and beverage revenues, three months (thousands)GAAP | $68.60M | – | – |
| Other operating revenues, three months (thousands)GAAP | $25.06M | – | – |
| Total operating expenses, three months (thousands)GAAP | $215.9M | – | – |
| Room operating expenses, three months (thousands)GAAP | $37.82M | – | – |
| Food and beverage operating expenses, three months (thousands)GAAP | $50.42M | – | – |
| Advertising and promotion expenses, three months (thousands)GAAP | $13.08M | – | – |
| Repairs and maintenance expenses, three months (thousands)GAAP | $10.67M | – | – |
| Property tax, ground lease and insurance expenses, three months (thousands)GAAP | $20.18M | – | – |
| Other property-level expenses, three months (thousands)GAAP | $27.85M | – | – |
| Corporate overhead, three months (thousands)GAAP | $6.41M | – | – |
| Depreciation and amortization, three months (thousands)GAAP | $30.29M | – | – |
| Gain on sale of assets, three months (thousands)GAAP | $31.49M | – | – |
| Interest and other income, three months (thousands)GAAP | $2.62M | – | – |
| Interest expense, three months (thousands)GAAP | −$10.73M | – | – |
| Income before income taxes, three months (thousands)GAAP | $41.19M | – | – |
| Income tax provision, net, three months (thousands)GAAP | −$296K | – | – |
| RevPAR, all hotels, three monthsother | $235.22 | – | 11.4% |
| Occupancy, all hotels, three monthsother | 72.7% | – | 460 bps |
| Average daily rate, all hotels, three monthsother | $323.55 | – | 4.4% |
| Total RevPAR, all hotels, three monthsother | $394.97 | – | 10.5% |
| RevPAR excluding Andaz Miami Beach, three monthsother | $238.48 | – | 10.3% |
| Occupancy excluding Andaz Miami Beach, three monthsother | 73.8% | – | 410 bps |
| Average daily rate excluding Andaz Miami Beach, three monthsother | $323.15 | – | 4.2% |
| Total RevPAR excluding Andaz Miami Beach, three monthsother | $399.89 | – | 9.6% |
| Total Portfolio Hotel Adjusted EBITDA re Margin, three monthsnon-GAAP | 25.1% | – | – |
| Hotel Adjusted EBITDA re Margin excluding Andaz Miami Beach, three monthsnon-GAAP | 26.7% | – | 50 bps |
| Adjusted EBITDA re, three monthsnon-GAAP | $54.5M | – | 8.8% |
| Adjusted FFO attributable to common stockholders, three monthsnon-GAAP | $37.2M | – | 17.1% |
| FFO attributable to common stockholders per diluted share, three monthsnon-GAAP | $0.20 | – | – |
| Adjusted FFO attributable to common stockholders per diluted share, three monthsnon-GAAP | $0.20 | – | 17.6% |
| Net income, nine months ended September 30, 2026GAAP | $85.5M | – | 392.6% |
| Net income attributable to common stockholders, nine monthsGAAP | $80.6M | – | 1,442.8% |
| Net income attributable to common stockholders per diluted share, nine monthsGAAP | $0.43 | – | 1,333.3% |
| Total revenues, nine months (thousands)GAAP | $770.5M | – | – |
| Room revenues, nine months (thousands)GAAP | $469.4M | – | – |
| Food and beverage revenues, nine months (thousands)GAAP | $221.8M | – | – |
| Other operating revenues, nine months (thousands)GAAP | $79.38M | – | – |
| Total operating expenses, nine months (thousands)GAAP | $690.1M | – | – |
| Impairment and other losses, nine months (thousands)GAAP | $1.64M | – | – |
| Corporate overhead, nine months (thousands)GAAP | $22.00M | – | – |
| Interest expense, nine months (thousands)GAAP | −$33.79M | – | – |
| Gain (loss) on sale of assets, nine months (thousands)GAAP | $31.49M | – | – |
| RevPAR, all hotels, nine monthsother | $249.34 | – | 10.8% |
| Occupancy, all hotels, nine monthsother | 74.4% | – | 390 bps |
| Average daily rate, all hotels, nine monthsother | $335.13 | – | 5.0% |
| Total RevPAR, all hotels, nine monthsother | $416.18 | – | 9.9% |
| RevPAR excluding Andaz Miami Beach, nine monthsother | $245.25 | – | 5.1% |
| Occupancy excluding Andaz Miami Beach, nine monthsother | 74.6% | – | 150 bps |
| Average daily rate excluding Andaz Miami Beach, nine monthsother | $328.75 | – | 3.0% |
| Total RevPAR excluding Andaz Miami Beach, nine monthsother | $411.07 | – | 4.8% |
| Total Portfolio Hotel Adjusted EBITDA re Margin, nine monthsnon-GAAP | 28.1% | – | – |
| Hotel Adjusted EBITDA re Margin excluding Andaz Miami Beach, nine monthsnon-GAAP | 28.7% | – | (20) bps |
| Adjusted EBITDA re, nine monthsnon-GAAP | $198.9M | – | 10.5% |
| Adjusted FFO attributable to common stockholders, nine monthsnon-GAAP | $146.3M | – | 13.5% |
| FFO attributable to common stockholders per diluted share, nine monthsnon-GAAP | $0.80 | – | – |
| Adjusted FFO attributable to common stockholders per diluted share, nine monthsnon-GAAP | $0.79 | – | 19.7% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Room revenuesReported as a revenue line in the Statements of Operations. The filing prints no year-over-year change for this line, and the release attributes RevPAR growth to broad-based demand strength and recent investments. | $140,053 thousand, three months ended September 30, 2026 | – | – |
| Food and beverage revenuesReported as a revenue line in the Statements of Operations. The filing prints no year-over-year change for this line. | $68,601 thousand, three months ended September 30, 2026 | – | – |
| Other operating revenuesReported as a revenue line in the Statements of Operations. The filing prints no year-over-year change for this line. | $25,064 thousand, three months ended September 30, 2026 | – | – |
Full year 2026 (current, as updated November 6, 2026) outlook
- NoteNet income: $92 to $97 million (prior $79 to $89 million), midpoint change +$10.5 million
- NoteNet income attributable to common stockholders per diluted share: $0.46 to $0.49 (prior $0.37 to $0.42), midpoint change +$0.08
- NoteRevPAR growth: 9.5% to 10.5% (prior 7.0% to 9.0%), +200 bps at midpoint; compares to full year 2025 and includes all 13 hotels
- NoteTotal RevPAR growth: 8.5% to 9.5% (prior 7.0% to 9.0%), +100 bps at midpoint
- NoteAdjusted EBITDA re: $254 to $259 million (prior $245 to $255 million), midpoint change +$6.5 million
- NoteAdjusted FFO attributable to common stockholders: $184 to $189 million (prior $174 to $184 million), midpoint change +$7.5 million
- NoteAdjusted FFO attributable to common stockholders per diluted share: $1.00 to $1.03 (prior $0.93 to $0.98), midpoint change +$0.06
- NoteDiluted weighted average shares outstanding: 183,500,000 (prior 187,000,000), change -3,500,000
- NoteAndaz Miami Beach expected to contribute approximately 450 basis points of RevPAR and Total RevPAR growth
- NoteInterest and other income (excluding insurance reimbursements): approximately $7 million to $8 million, unchanged
- NoteCorporate overhead (excluding deferred stock amortization and management transition costs): approximately $19 million, $0.5 million lower than prior midpoint
- NoteInterest expense: approximately $46 million to $49 million, including about $4 million amortization of deferred financing costs and $7 million noncash reduction from derivatives; excluding noncash interest on derivatives, unchanged
- NotePreferred stock dividends: approximately $15 million, $0.5 million lower than prior midpoint
- NoteCapital investments in 2026: approximately $105 million to $115 million
Capital returns
- During Q3 2026 the company repurchased common and preferred stock for an aggregate $117.8 million before expenses.
- Common stock repurchased in Q3 2026: 9,368,434 shares at an average $10.99 for $103.0 million before expenses.
- Series H preferred repurchased in Q3 2026: 330,119 shares at an average $22.30 for $7.4 million before expenses, described as a 13.9% discount to liquidation value.
- Series I preferred repurchased in Q3 2026: 344,439 shares at an average $21.69 for $7.5 million before expenses, described as a 17.7% discount to liquidation value.
- From January 1, 2026 through November 5, 2026, total repurchases were $196.9 million before expenses; common stock 13,748,527 shares for $143.4 million at an average $10.43; Series H 1,234,583 shares for $26.6 million at an average $21.52; Series I 1,308,051 shares for $26.9 million at an average $20.56.
- $310.6 million remained under the existing repurchase authorization as of November 5, 2026.
- On November 5, 2026 the Board authorized a common dividend of $0.09 per share; distributions declared per common share were $0.09 for Q3 2026 and $0.27 for the nine months.
- Preferred dividends authorized: Series G $0.937500 per share, Series H $0.382813 per share, Series I $0.356250 per share. All payable January 15, 2027 to holders of record as of December 31, 2026.
What drove it
- Hyatt Regency San Francisco was sold in July 2026 and is included in sold hotel results; the Statements of Operations show a $31,489 thousand gain on sale of assets in Q3 2026 and no such gain in Q3 2025.
- Andaz Miami Beach underwent a transformational renovation during 2025, and the filing states that Q3 and nine-month 2026 results are not comparable to the same 2025 periods. The company reports RevPAR and margin both with and without this hotel.
- The CEO attributes the Total RevPAR growth above 10% and the Adjusted FFO per diluted share growth of nearly 18% to broad-based strength across demand segments and to the contribution of recent investments.
- The company states that Q3 margins excluding Hilton Key West Resort & Marina, which was under renovation, and excluding one-time items in the current and prior year would have increased approximately 200 basis points, compared with the reported 50 basis point increase excluding Andaz Miami Beach.
- Adjusted EBITDA re adjustments in Q3 2026 primarily consisted of severe weather-related restoration expenses, according to the filing.
- The company reports that its Q3 gain on preferred stock repurchases, net, was $(1,452) thousand adjustment in the FFO reconciliation; the nine-month figure in the same reconciliation is $(6,637) thousand.
- Interest expense in Q3 2026 was $10,729 thousand versus $13,412 thousand in Q3 2025; the filing includes a noncash reduction to interest expense on derivatives in its full-year assumptions.
Concerns
- Q3 net income of $40.9 million includes a $31,489 thousand gain on sale of assets, which the company reports separately from operating results.
- Total operating expenses rose in the nine months to $690,105 thousand from $664,372 thousand, and the filing shows a $1,639 thousand impairment and other loss in 2026 with no comparable 2025 line.
- Adjusted EBITDA re margin excluding Andaz Miami Beach declined 20 basis points for the nine months, to 28.7% from 28.9%.
- The company's full-year 2026 outlook depends on assumptions the filing describes as subject to geopolitical, economic and sentiment changes that could lead to further revisions or withdrawal.
- Full-year 2026 guidance still implies a material step-up from the nine-month results for Adjusted EBITDA re and Adjusted FFO, and the filing does not provide a Q4 breakdown.
What to watch
- Full-year 2026 actuals against the raised guidance: RevPAR growth of 9.5% to 10.5%, Adjusted EBITDA re of $254 to $259 million, and Adjusted FFO of $184 to $189 million.
- Hilton Key West Resort & Marina renovation completion and the Andaz Miami Beach contribution of approximately 450 basis points to RevPAR growth.
- Remaining $105 million to $115 million 2026 capital investment program, including the Wailea Beach Resort restoration work.
- Pace of further repurchases against the $310.6 million remaining authorization and the discounts to liquidation value the company cites for preferred repurchases.
- The company's stated expectation for 2027, which the CEO describes as robust group pace, further recovery in certain markets and additional contribution from investment activity.
Balance sheet and cash flow
- Cash and cash equivalents: $236,521 thousand at September 30, 2026 versus $109,189 thousand at December 31, 2025 (balance sheet, GAAP).
- Restricted cash: $81,365 thousand at September 30, 2026 versus $76,531 thousand at December 31, 2025.
- Total cash and cash equivalents including restricted cash: $317.9 million as of September 30, 2026.
- Liquidity: $817.9 million at September 30, 2026, including available cash and full availability under the $500.0 million revolving credit facility.
- Total debt: $955.0 million with a weighted average interest rate of 5.22%, including the effect of interest rate derivative swaps entered into in October 2026; no debt maturities until January 2028.
- Debt, net of unamortized deferred financing costs, on the balance sheet: $944,032 thousand at September 30, 2026 versus $918,086 thousand at December 31, 2025.
- Total assets: $2,895,035 thousand at September 30, 2026 versus $3,029,005 thousand at December 31, 2025.
- Total stockholders' equity: $1,786,601 thousand at September 30, 2026 versus $1,944,618 thousand at December 31, 2025.
- Investment in hotel properties, net: $2,491,537 thousand at September 30, 2026 versus $2,771,180 thousand at December 31, 2025.
- Capital invested in the portfolio: $76.6 million in the first nine months of 2026.
- Common shares issued and outstanding: 176,575,057 at September 30, 2026 versus 189,709,516 at December 31, 2025.
- The filing does not present a cash flow statement in this release.
Analysis
Sunstone reported third-quarter 2026 net income of $40.9 million, or $38.7 million attributable to common stockholders ($0.21 per diluted share), compared with a net loss attributable to common stockholders of $2.9 million ($(0.02) per diluted share) a year earlier. The Statements of Operations show a $31,489 thousand gain on sale of assets in Q3 2026, against no such gain in Q3 2025, and the filing states that Hyatt Regency San Francisco was sold in July 2026. Total revenues rose to $233,718 thousand from $229,323 thousand, and total operating expenses fell to $215,913 thousand from $217,432 thousand. The release does not print year-over-year percentage changes for these GAAP lines, so the reader should rely on the reported dollar figures.
Operating statistics show the clearest improvement. Total portfolio RevPAR rose 11.4% to $235.22, driven by occupancy of 72.7% (up 460 bps) and an average daily rate of $323.55 (up 4.4%). Excluding Andaz Miami Beach, RevPAR increased 10.3% to $238.48. The release reports that Andaz Miami Beach is not comparable to 2025 because of its renovation. Hotel Adjusted EBITDA re margin excluding Andaz Miami Beach rose 50 basis points to 26.7%. For the nine months, the same margin declined 20 basis points to 28.7%, which is a narrower picture than the quarter and worth monitoring.
Non-GAAP earnings measures grew faster than revenue. Adjusted EBITDA re increased 8.8% to $54.5 million and Adjusted FFO attributable to common stockholders rose 17.1% to $37.2 million, or $0.20 per diluted share compared with $0.17 a year earlier. Nine-month Adjusted FFO per diluted share was $0.79 against $0.66, up 19.7%. The company also reports that its Q3 Adjusted EBITDA re adjustments primarily consisted of severe weather-related restoration expenses. Capital returns were material: the company repurchased $117.8 million of common and preferred stock in Q3, and $196.9 million year to date through November 5, 2026, with $310.6 million remaining under authorization. Total debt is reported at $955.0 million at a weighted average rate of 5.22%, and liquidity was $817.9 million.
The full-year 2026 outlook was raised for the second time, as the filing states. Net income guidance moved to $92 to $97 million from $79 to $89 million, Adjusted EBITDA re to $254 to $259 million from $245 to $255 million, and Adjusted FFO to $184 to $189 million from $174 to $184 million. Adjusted FFO per diluted share guidance is $1.00 to $1.03 against the prior $0.93 to $0.98. RevPAR growth guidance is 9.5% to 10.5% against the prior 7.0% to 9.0%. Because full-year actuals are not yet reported, none of these guided figures can be compared with a reported result in this filing.
The company's capital allocation discussion centres on repurchases at prices it describes as discounts to net asset value and liquidation value, with capital investment of $76.6 million in the first nine months and a 2026 plan of $105 million to $115 million. The filing gives no quantified 2027 outlook, and the CEO's comments on 2027 are qualitative only. The main items for the reader are the gap between the strong Q3 operating statistics and the more modest nine-month margin trend, the one-time gain included in net income, and the full-year guidance that is only partly supported by the nine-month results.
Management, verbatim
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.
Bryan A. Giglia, Chief Executive Officer
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.
Bryan A. Giglia, Chief Executive Officer
Not in the filing
stated, not guessed- Year-over-year percentage changes for total revenues, room, food and beverage, and other operating revenues (Q3 and nine-month) are not printed in the release.
- Year-over-year percentage changes for total operating expenses, individual operating expense lines, interest expense, interest and other income, and depreciation and amortization are not printed.
- Prior-year value for the Q3 2026 gain on sale of assets is shown as a dash in the source and is not printed as a number.
- Prior-year and year-over-year change for impairment and other losses are not printed (the Q3 2025 column is shown as a dash).
- Year-over-year percentage change for Total Portfolio Hotel Adjusted EBITDA re Margin is not printed.
- Year-over-year percentage change for FFO attributable to common stockholders per diluted share is not printed.
- Prior-quarter (Q2 2026) figures are not printed in the release.
- Full-year 2026 actual results are not yet reported, so guidance cannot be compared to actuals.
- A consolidated cash flow statement and operating or free cash flow figures are not included in the release.
- Total assets and equity figures are balance sheet items and are not in the key metrics table; they appear in balance_sheet_cash_flow with their comparison dates.
- Current-quarter revenue and expense details for individual hotels, including Andaz Miami Beach and Hilton Key West Resort & Marina, are not separately reported in the statements.
- Segment reporting: the filing reports one lodging segment; the room, food and beverage, and other operating revenue lines are shown as revenue sub-lines without year-over-year changes.
- Consensus estimates and share price reaction are not provided in the filing.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.