Sunstone Hotel Investors, Inc.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Sunstone Hotel investors third quarter earnings call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time. I would like to remind everyone that this conference is being recorded today, November 7th, 2025 at 11 a.m. Eastern time. I will now turn the presentation over to Mr. Aaron Reyes, Chief Financial Officer. Please go ahead, sir.

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 EBITDA RE, adjusted FFO, and hotel adjusted EBITDA RE. 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 Brian Giglia, Chief Executive Officer, and Robert 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 Brian. Please go ahead.

Thank you, Aaron, and good morning, everyone. Operating results in the third quarter reflected many of the same trends we saw earlier in the year with continued strength in San Francisco, helping to offset a more price-sensitive leisure traveler and subdued government related demand across other parts of the portfolio. Despite these cross currents and disruption from the fire near our Four Seasons Resort in Napa Valley, our earnings for the quarter were in line with our expectations as stronger ancillary spend and better cost controls offset softer room revenue growth. At our urban hotels, RevPAR growth was generally flat during the quarter, with our Marriott Long Beach downtown continuing to deliver outsized growth following our brand conversion last year, which helped to balance a tougher comparison at our JW Marriott New Orleans. As we have noted previously, the New Orleans market was expected to experience some very tough comps after the first quarter, And so while third quarter rev par at our hotel declined from last year, the performance was better than expected as the hotel continued to gain market share. Despite effectively flat rev par at our urban hotels, we managed to deliver 140 basis points of margin growth as our operators were able to effectively control costs. In fact, Marriott Boston Long Wharf delivered a 47% EBITDA margin in the quarter, an increase of over 100 basis points relative to the prior year, a very solid performance for an urban, full-service hotel, especially considering recent cost pressures. Our convention hotels turned in better-than-expected performance with REVPAR growth of 3.5% on generally healthy trends in group business. San Francisco was once again a standout performer with more than 15% RevPar growth, and we continue to be encouraged by how the market and our hotel are setting up for additional growth into next year. In Washington, D.C., performance across the market continued to be hampered by weaker government and government-related demand Although results at our recently converted Westin were consistent with our most recent expectations. In San Antonio, we were renovating our meeting space during the quarter, which caused some disruption, but that work is now complete and should position us for growth in 2026. Across the portfolio, we had solid production in the third quarter, looking 6% more rooms than the prior year, and posting our strongest third quarter booking volume since prior to the pandemic. We have positive group pace as we head into 2026 with particular strength in Orlando, Boston, Miami, San Francisco, and wine country. Performance across our resort portfolio was softer than expected as a weaker demand environment in South Florida and the Keys added to what has been a more challenging market this year in Maui. I think we are beginning to round the corner in Maui as September marked the first month of positive red part growth for our resort this year and October is also positive and slightly better than expected. In wine country, we continue to be encouraged by a better demand backdrop this year. Although Q3 was expected to be our toughest comp quarter of the year, and we also experienced headwinds at the four seasons from the Pickett fire in Napa County in late August and early September. While the fire was not close enough to cause any physical damage to the resort, we did experience cancellations and overall lower business volumes in the weeks after. At Ondas Miami Beach, overall profitability in the third quarter was consistent with the range we shared with you last quarter. We continue to see an acceleration in our booking patterns and are pacing well to deliver strong growth next year. Occupancy continues to build and we are well positioned with meaningful group bookings in the first quarter of 2026, the most important quarter for profitability. Robert will share some additional details on our progress at the resort shortly. While the operating environment remains choppy and additional uncertainty has been introduced from the government shutdown, based on what we see today, we are maintaining our outlook for the year and are continuing to work with our operators to drive incremental revenue and control costs. We are working through our budgeting for 2026 and while that process is just beginning, we see reasons to be optimistic that we will benefit from our recent investments and be able to deliver above market growth next year. We will have more details to share with you on our next call. And with that, I'd like to turn the call over to Robert to give some additional details on our progress in Miami and our capital investment activity. Thanks, Brian. It's been a productive few months for us on the operations and investment front. We continue to make headway at Ondas Miami Beach. Guest response and lead volume at the renovated resort continues to be positive. The resort is currently number eight on TripAdvisor for Miami Beach hotels, a significant improvement over where we were 90 days ago. As we shared with you last quarter, we need to book approximately 1,000 transient room nights per week in order to achieve our desired occupancy goals. I'm happy to report that we have recently been pacing ahead of that number as we continue to build momentum post-opening. We are pleased with our business on the books for early 2026, which should support a solid first quarter of next year. Additionally, a constructive event calendar next year, including the College Football National Championship in January and the World Cup in the middle part of the year, should help add further compression. While we got off to a choppy start this year, we look forward to meaningful earnings growth next year and into 2027. On the capital front, we completed a renovation of the meeting space in San Antonio on schedule and on budget. This investment should allow the hotel to better sell group business and we will begin to see the benefits of that next year. In San Diego, we are just about to begin a renovation of the meeting space at our Hilton Bayfront. This hotel is consistently ranked as the top performing large group hotel in the market and a refresh of the meeting space will ensure it is able to maintain its competitive positioning. We will complete this work in phases to minimize disruption. Separate from these projects, we are continuing to work through the planning and budgeting process for our capital investments for next year, and we'll have more to share with you next quarter. The transaction market continues to be quiet, although we are seeing some incremental signs of life. While the debt financing markets remain open and conducive to transaction activity, a more tepid buy side has left some would-be sellers opting to refinance. Despite this more subdued backdrop, we continue to seek out opportunities where we can drive growth and create value through a creative transaction activity. With that, I'll turn it over to Aaron.