Sunstone Hotel Investors, Inc.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Sunstone Hotel Investors First 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, May 5, 2026, 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 EVA.RE, adjusted FFO, and hotel adjusted EVA.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 Giulia, 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. 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, rev par in the quarter grew an impressive 14.6%, excluding Ondaw's 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 rev part growth of over 18%. While the rebound at Waialea 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 are seeing for the remainder of the year continue to point to a sustained recovery in Maui. We were also quite pleased with performance at our wine country resorts, which turned in a combined 34% growth in RevPar, driven by better contributions from both group and transient business. As we shared with you on our last call, we were encouraged with how Onda's Miami Beach performed over the festive period and into the early weeks of this year. That trend has continued. with results exceeding expectations in the first quarter. We are seeing further strength into April with second quarter benefiting from strong transient and group business with major events like the F1 race last weekend and the World Cup coming this summer. During the first quarter, the ONDAs ran 86% occupancy at a $564 rate and produced $6.5 million of EBITDA. The Comp Set ran a similar occupancy, but at a rate over $900 per night. Q1 was an absolute success for the ONDAs. And we are encouraged with how much opportunity we have to continue to grow rate closer to its peers and build on our multi year growth story. We've had a solid start to the year and we are well positioned to deliver on our earnings expectations in 2026 and we look forward to the resort's next phase of growth into 2027 and beyond. Our urban hotels had a noisier quarter as we navigated a challenging Super Bowl comp in New Orleans and weather-related headwinds across the East Coast. RevPAR declined 9.3% in the first quarter across our urban portfolio, but out-of-room spend performed better and limited the decline in total RevPAR to only 2.9%. At JW New Orleans, Revenue was lower given the benefit of the Super Bowl in the prior year, but despite the challenging comp, our hotel continued to gain share. After picking up nearly 15 points of REVPAR index in 2025, the JW again outperformed the comp set in the first quarter and now sits at over 150% relative to the group, demonstrating the strength of the hotel's location, superior room product, and recently upgraded meeting space. In addition, our New Orleans hotel had one of its best first quarter production results in years, with group bookings growing over 50% relative to the prior year. In Boston, the quarterly performance was hampered by the severe winter weather that disrupted travel earlier in the year. Overall, we expect the first quarter to be the toughest quarter for our urban portfolio with sequential growth in rev par through the balance of the year. Our convention hotels turned in better than expected performance with rev par growth of 5.2%. Performance varied widely, however, as we experienced the push and pull of a few large events. In Washington DC, we had a very challenging comp given the inauguration last year. After increasing over 24% in the first quarter of 2025, rev par at our Weston DC downtown was 9.8% lower this year due to the tough comp and higher group attrition from the severe winter storms that occurred in the quarter. Despite this decline, our performance was better than expected as stronger transient demand helped to partially offset the sluggish group backdrop in the market. Additionally, the Westin had a solid booking quarter with transient pace for the next six months up 11% relative to last year, pointing to a continuation of the current transient trend. On the flip side, REVPAR increased over 27% in San Francisco, where the Super Bowl added compression to a market that was already on a positive trajectory. In fact, if you look only at January and March, REVPAR was still higher by 14% as the city benefited from an active event calendar and an increased level of commercial activity in the downtown area. Performance at the Renaissance Orlando at SeaWorld was impacted by isolated group cancellations earlier in the quarter and a shift in the mix of business, which led to a decline in rooms rev par, but generally flat total rev par given the benefit of strong contribution from out of room spend. We expect the balance of the year to be more conducive to growth in Orlando, with particular strength in Q3 and Q4, where second half group paces up over 40% relative to last year. Lastly, in San Diego, we were pleased to see better transient performance in the market, which has given us a more optimistic outlook for the year. We are in the final stages of our meeting space renovation at the hotel, And we expect that our second quarter will be the toughest comp of the year with sequential improvement through the third and fourth quarters as we benefit from better group patterns and our new meeting space. On the expense side, we were particularly pleased to see better productivity in the rooms department which allowed us to keep comparable departmental expense growth on a per occupied room basis to only 1%. This better cost performance was partially offset by higher utility expenses, property G&A, and sales costs. Overall, our comparable portfolio, excluding ONDAS, saw expense growth for all costs increase 3.4% on an absolute basis during the quarter or 2.4% per occupied room. This was generally consistent with our expectations and allowed us to grow margins by 140 basis points. Given the cadence of our quarterly revenue growth, we expect that the first quarter will be our strongest margin growth performance of the year but we are continuing to work with our operators to focus on cost controls and drive efficiencies wherever possible. As part of our last earnings call in February, we noted that we were encouraged by the trends we were seeing in recent operations, but that broader uncertainty gave us reasons to be cautious. This remains the case today, with recent events only reinforcing this view. We continue to monitor events that could impact costs and the demand for travel. While we did not see any measurable impact on our first quarter operations, an elongated period of heightened volatility or sustained increases in fuel prices could present headwinds. That said, performance in the first quarter was meaningfully ahead of our expectations and based on what we see today, we are comfortable revising our full year outlook higher to reflect these results. Given the elevated uncertainty, we will continue to be measured in our expectations for the rest of the year. If more of the momentum from the first quarter carries into the balance of the year, or if some of the special events slated for later this year outperform our modest expectations, then we could be positioned to deliver stronger performance. We are encouraged by the increase in hotel transaction activity and believe the environment may be becoming more conducive to executing our capital recycling strategy and demonstrating the value of our portfolio. In the interim, we continue to deliver value to shareholders through an additional $50 million of accretive common and preferred stock repurchase activity so far this year. We expect to continue opportunistic repurchase activity as pricing allows, while we focus on generating profitability growth from our operations and realizing the benefits of our investment projects. And with that, I'll turn the call over to Robert to give some additional details on our capital investment activity.