Sunstone Hotel Investors: A Lodging REIT Poised for Growth
Monday, Jan 13, 2025 4:30 pm ET
2min read Sunstone Hotel Investors, Inc. (NYSE: SHO), a lodging real estate investment trust (REIT), has announced the release of its fourth quarter and full year 2024 earnings on Friday, February 21, 2025, before market opening. The company will also host a conference call on the same day at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time). Investors can access the live webcast through the Investor Relations section of the Company's website at
Sunstone Hotel Investors, Inc. is a lodging real estate investment trust ("REIT") that as of the date of this release owns 15 hotels comprised of 7,255 rooms, the majority of which are operated under nationally recognized brands. Sunstone's strategy is to create long-term stakeholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate.
In the third quarter of 2024, Sunstone reported a net income of $3.2 million, compared to $15.6 million in the same period last year. Comparable RevPAR decreased 1.3% to $207.56, with the average daily rate at $301.69 and occupancy at 68.8%. Excluding The Confidante Miami Beach, RevPAR decreased 0.1%, and excluding both The Confidante Miami Beach and the Hilton San Diego Bayfront, RevPAR increased 2.4%. Adjusted EBITDAre decreased 15.9% to $53.6 million, and adjusted FFO attributable to common stockholders per diluted share decreased 21.7% to $0.18.
Sunstone's recent acquisition of the Hyatt Regency San Antonio Riverwalk is expected to contribute to earnings growth in 2024 and beyond. The acquisition was funded from available cash and reflects the accretive redeployment of a portion of the proceeds from the sale of Boston Park Plaza. The hotel, which is situated directly between San Antonio's famous Riverwalk and the Alamo, has a net purchase price that implies a value of $352,000 per key and represents an 11.1x multiple and an 8.0% capitalization rate based on the midpoint of the Company's projected full year 2024 earnings for the hotel.
Sunstone has also been actively engaged in a stock repurchase program, which is a strategic move that can significantly impact shareholder value. Since the beginning of the third quarter of 2024, the Company has repurchased 2,329,574 shares of its common stock at an average purchase price of $9.79 per share for a total repurchase amount before expenses of $22.8 million. Year to date through November 11, 2024, the Company has repurchased a total of 2,688,582 shares of its common stock at an average purchase price of $9.83 per share for a total repurchase amount before expenses of $26.4 million. The average purchase price per share represents a substantial discount to consensus estimates of net asset value and implies a highly attractive valuation multiple on the Company's stabilized cash flow. The Company currently has $428.3 million remaining under its existing stock repurchase program authorization.
Sunstone's strategy of acquiring, actively owning, and disposing of well-located hotel and resort real estate contributes to its long-term success by diversifying its portfolio, creating value through active ownership, recycling and deploying capital effectively, and ultimately enhancing shareholder value. The company's recent acquisition of the Hyatt Regency San Antonio Riverwalk, along with its active stock repurchase program, demonstrates its commitment to creating value for shareholders and positioning itself for future growth. Investors should closely monitor Sunstone's earnings release and conference call to gain insights into the company's performance and outlook for the coming year.
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