Sunstone Hotel Investors, Inc.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Sunstone Hotel Investors Fourth 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, February 27, 2026, at 12 p.m. Eastern Time. I will now turn the call 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. Despite the various headwinds that impacted our industry in 2025, our portfolio finished the year on a high note with fourth quarter operating results that exceeded our expectations, driven by broad-based strength across the portfolio. The fourth quarter capped off a productive year at Sunstone, where we made further progress on our three strategic objectives. which include recycling capital, investing in our portfolio, and returning capital to our shareholders. Earlier in the year, we completed the sale of the Hilton New Orleans at a mid 6% cap rate inclusive of required near-term capital and fully recycled the proceeds into the repurchase of our stock at a compelling discount and a higher implied yield. In addition, We completed several capital projects, including the debut of the Ondas Miami Beach, which, despite its later opening, had a solid festive period and good momentum heading into this year. Lastly, we returned more than $170 million of capital to our shareholders through a well-covered dividend and accretive share repurchases. These strategic accomplishments will drive growth in per share earnings and NAV in the years to come. We will share additional details on our outlook and our expectations for 2026 shortly, but I'll start with a quick recap on the fourth quarter results. As I noted at the top of the call, our results came in better than expected with total REVPAR growth of 7.4% in the quarter, or 12.5%, including the contribution from Mondas. Our resorts led the portfolio driven by solid performance at the Waialea Beach Resort. As we shared with you on our recent calls, our results in Maui were hampered through much of last year as market demand normalized. We were pleased to see the green shoots we witnessed at the resort in the fall continue into year end, leading to 19% Red Park growth in the quarter. On the opposite side of the country, Onda's Miami Beach delivered year-end results that were ahead of expectations, and the outperformance has carried into the early parts of this year, positioning the resort well to deliver on our expectations for 2026. We are pleased with the demand our renovated resort is attracting, including high-profile business around some key events in the market that should help the resort further build awareness. Performance at our wine country resorts was also stronger than expected, with Montage Healdsburg capping off a better year with 15% total rev par growth in the quarter and just over 9% for the year. Overall, our resorts were our strongest performing segment in Q4, and we expect that to continue into 2026. But now with the added benefit of a full year contribution from Andaz Miami Beach. At our urban hotels, we were pleased with our quarterly performance at Marriott Long Beach downtown, which continued to benefit from its brand conversion in 2024 and generate a total red part growth of 12%. Similarly, the Portland market continues to recover with the Bidwell Marriott turning in nearly 13% growth. This strength was partially offset by a softer market and tougher comps in Boston and New Orleans. While top line growth was less robust at our urban hotels, we continue to work with our operators to control costs and manage to grow margins during the quarter. Our convention hotels turned in better than expected performance with rev par growth of 2.8%, even with some headwinds from the meeting space renovations that we had underway in San Antonio and San Diego. Excluding these two hotels, our convention hotel rev par growth was 5.3% during the quarter. San Francisco was once again a standout performer which added to solid top-line results in the first three quarters of the year to generate more than 12% total rev par growth for the year. We continue to be encouraged by how the market and our hotel are setting up for additional growth this year, with group pace up in the low double-digit range and a strong start with good group activity in January and the Super Bowl in February. The Renaissance Orlando at SeaWorld also had a solid quarter with total rev part growth of more than 10% on a better mix of business. Group revenue production for the current and future periods in Orlando increased over 10% last year, and the hotel is pacing for better performance in 2026. Operating results in San Antonio were softer in 2025, on a lighter group event calendar and some displacement from our completed meeting space renovation. But 2026 should benefit from increased production and the renovation. As we shared with you on prior calls, performance last year in Washington, D.C. was less robust than initially anticipated and was impacted by government spending cuts, changes in policies, and the government shutdown. Similarly, our results in San Diego were hampered by softer transient demand and a less constructive backdrop for international travel. On the expense side, we were pleased with our operators' ability to drive efficiencies in response to continued cost pressures. We knew coming into the year that 2025 would be particularly tough on margins as contractual cost escalations at certain of our larger hotels were adding to general inflationary pressures across the portfolio. I am pleased to report that we made significant progress in managing costs and delivered comparable portfolio margin growth of 40 basis points during the year on total REVPAR growth of 3.5%. This was a much better cost management outcome than we expected at the start of the year. While some of the efficiency measures that were additive in 2025 will be harder to sustain as we move into this year, we will continue to work with our hotel teams to manage costs, increase productivity, and defend margins. As we look into 2026, we see some reasons to be optimistic about the year ahead. Ondaw's Miami Beach is starting off well with impressive year-to-date occupancy above 80% at a mid-$500 rate. In addition, the resort has nearly 8,000 group room nights already on the books, representing more than half of our budgeted room nights for the year, which is very strong for a market with a shorter-term booking window. The property is building momentum, which will continue this year with the opening of Bazaar Meat and our membership beach club. We are seeing additional positive signs as market recovery continues in Northern California. Fundamentals in Biola are more constructive, and there is the potential for industry-wide lift from special events such as F1 in Miami, which we missed last year, America 250 celebrations, and the World Cup. At the same time, our focused portfolio will experience headwinds from softer transient demand in San Diego and continued uncertainty in DC, two of our larger markets, which will offset some growth. That said, both hotels had better than anticipated transient demand in January and February, which, if current trends continue, could result in a better than anticipated year. While there are many encouraging signs, the industry and Sunstone have been disappointed by various headwinds over the past two years, making us more cautious. That said, we are excited about our prospects this year, and if costs remain controlled and some of these events produce more than our modest expectations, we could be positioned to see performance accelerate as the year progresses. The guidance that Aaron will share with you later attempts to balance these factors and reflect an outlook that we believe is reasonable and achievable based on how we see things today. As we move through 2026, we will continue to execute on the three components of our strategy, recycling capital, investing in our portfolio, and returning capital to shareholders. While the transaction market has been quiet the last couple of years, we are clearly seeing some incremental activity and we are looking for ways to thoughtfully demonstrate the value of our portfolio. In the meantime, we are focused on delivering profitability growth from operations and realizing the benefits of our investment projects. We expect these actions will support our capital return objectives in the coming year. And with that, I'll turn the call over to Robert to give some additional details on recent capital investment activity and our plans for 2026.