Sunstone Hotel Investors Q1 Profit Jumps to $16M as RevPAR Rises 14.6%
Sunstone Hotel Investors reports Q1 2026 net income of $16M. RevPAR rose 14.6% driven by portfolio performance and strategic stock buybacks.
Punita Thakur 
Sunstone Hotel Investors, Inc. reported a sharp increase in first-quarter earnings for 2026, with net income attributable to common stockholders reaching $16.0 million for the period ended March 31, up from $1.3 million a year earlier, as portfolio-wide revenue growth and operational gains supported performance.
The lodging real estate investment trust, which owns 14 hotels comprising approximately 7,000 rooms, posted diluted earnings per share of $0.08, compared to $0.01 in the first quarter of 2025. The company also recorded higher key operating metrics, including a double-digit increase in revenue per available room (RevPAR), reflecting improved demand and pricing across its portfolio.
Sunstone Hotel Investors Reports Strong RevPAR and Operating Growth
RevPAR across Sunstone’s portfolio rose 14.6% year-on-year to $255.04, supported by an average daily rate (ADR) of $344.19 and occupancy of 74.1%, representing a 420 basis point increase compared to the same period last year. Total RevPAR increased 13.4% to $411.28.
Excluding the Andaz Miami Beach property, which underwent renovation activity in 2025, RevPAR growth was more moderate but still positive, rising 5.7% to $245.21. Total RevPAR excluding the asset increased 5.3% to $397.94, indicating underlying strength across the broader portfolio.
Adjusted EBITDAre increased 18.3% to $67.7 million, while adjusted funds from operations (FFO) attributable to common stockholders rose 20.8% to $50.1 million. On a per-share basis, adjusted FFO climbed 28.6% to $0.27, reflecting both operational gains and share repurchase activity.
Portfolio Expansion Drives Sunstone Hotel Investors' Revenue
Total revenue for the quarter reached $259.7 million, compared with $234.1 million in the same period last year. Room revenue accounted for $161.0 million, followed by $74.3 million from food and beverage operations and $24.4 million from other income streams.
Operating expenses rose to $231.3 million from $217.6 million, driven by increases across property-level costs including maintenance, utilities, and insurance. Despite higher expenses, operating income improved significantly, with net income rising to $18.6 million from $5.3 million in the prior year period.
The company attributed performance to broad-based strength across its portfolio, with particular contribution from resort properties and improving conditions in key markets. Management also noted weather-related disruptions during the quarter, which did not materially impact overall results.
Share Repurchases and Capital Deployment Continue
During the first quarter, Sunstone allocated $36.4 million toward repurchasing common and preferred stock. Between the start of the year and May 1, 2026, total repurchases reached $49.2 million.
This included 3.18 million shares of common stock acquired at an average price of $9.13 per share, representing $29.1 million in buybacks during the quarter. The company also repurchased preferred stock across its Series H and Series I offerings at prices below liquidation value, reflecting discounts of 17.0% and 24.1%, respectively.
As of May 1, the company had $458.3 million remaining under its existing stock repurchase authorization, indicating continued focus on capital allocation through buybacks.
Balance Sheet and Investment Activity
Sunstone reported total assets of $3.0 billion as of March 31, 2026, including $2.8 billion in net hotel investments. Cash and cash equivalents stood at $166.7 million, including $75.5 million in restricted cash, while total debt was reported at $955.0 million. Stockholders’ equity was $1.9 billion.
The company invested $31.0 million into its portfolio during the quarter and expects full-year capital expenditures to range between $95 million and $115 million. Planned investments include meeting space development at Hilton San Diego Bayfront, renovations at Oceans Edge Resort & Marina, and restoration work at Wailea Beach Resort, along with additional projects across its portfolio.
Outlook Raised Following Strong Quarter
Based on first-quarter performance, Sunstone revised its full-year 2026 outlook upward. The company now expects net income to range between $34 million and $48 million, compared to prior guidance of $21 million to $46 million.
RevPAR growth is projected between 5.0% and 7.5% for the full year, while adjusted EBITDAre is expected to range from $238 million to $252 million. Adjusted FFO attributable to common stockholders is forecast between $166 million and $180 million, with per-share estimates revised to $0.88 to $0.96.
The company also declared a quarterly cash dividend of $0.09 per share for common stockholders, payable on July 15, 2026.
The updated 2026 guidance reflects a positive trend in hotel financial results across the sector, positioning Sunstone as a leader in hotel REIT earnings for 2026.
Management indicated that while early-year trends support a positive outlook, uncertainties related to macroeconomic conditions and broader market factors remain. The company continues to monitor these conditions while focusing on portfolio performance and capital allocation strategies.
