Sunstone Hotel Investors, Inc.
For the period ended Dec 31, 2025. Filed Feb 27, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 27, 2026
SHO$12.52+1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-21.
0001558370-25-001297
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-27.
0001104659-26-021440
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 93 previous paragraphs and 95 current paragraphs.
32 unchanged; 45 reworded; 16 added; 15 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 92 previous and 104 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
During 2025, we saw continued strength in group demand, primarily at Hyatt Regency San Francisco, Wailea Beach Resort, The Bidwell Marriott Portland, Montage Healdsburg, and Hilton San Diego Bayfront. In addition, we saw strong corporate demand at The Bidwell Marriott Portland, The Westin Washington, DC Downtown, Marriott Boston Long Wharf, and Hyatt Regency San Francisco driven in part by airline crew contracts. These positive impacts were partially offset by the slower recovery of leisure demand in Maui and by displacement associated with the completion of a rooms renovation at the Wailea Beach Resort, both of which negatively affected transient demand, as well as by lower leisure demand at Oceans Edge Resort & Marina. In addition, Hilton San Diego Bayfront, Marriott Boston Long Wharf, and The Westin Washington, DC Downtown were negatively impacted by a reduction in government-related travel, including organizations whose conferences are partially funded by the government and the effect of the government shut down in the fourth quarter of 2025.
Current report
Disposition. In June 2025, we sold the Hilton New Orleans St. Charles, located in Louisiana for a gross sale price of $47.0 million and recorded a loss of $8.8 million.
Current report
Significant Renovations.* *During 2025, our significant renovations primarily consisted of the completion of the Andaz Miami Beach transformation, resulting in the resort reopening in May 2025, a rooms renovation at Wailea Beach Resort, and renovations of the meeting spaces at Hyatt Regency San Antonio Riverwalk and Hilton San Diego Bayfront.
Current report
Debt Transactions. In April 2025, we exercised our option to extend the maturity date of the previous Term Loan 3 from May 2025 to May 2026.
Current report
In September 2025, we entered into the Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”), which expanded our unsecured debt borrowing capacity and extended the maturity of our term loans. The Amended Credit Agreement continues to provide for a $500.0 million revolving credit facility and increases the aggregate amount of our term loan facilities from $675.0 million (on four existing term loans) to $850.0 million (on three new term loans). Inclusive of extension options, the revolving credit facility and new term loan facilities under the Amended Credit Agreement mature at various points in 2030 and 2031, respectively, but are freely prepayable at any time. The revolving credit facility and the new term loan facilities bear interest pursuant to a leverage-based pricing grid ranging from 1.40% to 2.25% and 1.35% to 2.20%, respectively, over the applicable term SOFR. In connection with the new term loan facilities, we entered into a series of interest rate swaps to lower our borrowing cost and better manage interest rate risk.
Current report
Interest expense increased $2.8 million, or 5.7%, in 2025 as compared to 2024 as follows:
Current report
In 2025, we invested $103.0 million for renovations and additions to our portfolio and other assets, and we purchased land adjacent to the Oceans Edge Resort & Marina for $1.3 million. These cash outflows were partially offset by $46.3 million of proceeds received from the sale of the Hilton New Orleans St. Charles, $8.0 million in key money received from the manager of two of our hotels pursuant to the hotels’ management agreements, and $1.2 million in property insurance proceeds received related to claims at Hyatt Regency San Francisco, The Westin Washington, DC Downtown, and Hilton San Diego Bayfront.
Current report
During 2025, we paid $102.6 million to repurchase 11,589,722 shares of our common stock and $1.3 million to repurchase 54,097 shares and 9,027 shares of our Series H preferred stock and Series I preferred stock, respectively. We also paid $4.3 million to repurchase common stock to satisfy the tax obligations in connection with the vesting of restricted common stock issued to employees, and $86.4 million in dividends and distributions to our preferred and common stockholders. In September 2025, we entered into the Amended Credit Agreement and received $149.6 million from additional borrowing on our term loans and repaid $64.6 million to lenders as a result of modifications to their commitment levels under the Amended Credit Agreement. We used a portion of the proceeds received to repay the $50.0 million we drew down on our revolving credit facility in April 2025 and July 2025. During 2025, we also paid $18.0 million in deferred financing costs related to the extension of the maturity of our previous Term Loan 3 and the execution of the Amended Credit Agreement.
Current report
While inflation began to decrease in 2024 and remained relatively stable through 2025, the uncertainty surrounding certain international economic and political relationships, including political disputes and unfavorable perceptions of travel to the U.S., volatility in transportation fuel costs, increases in air and ground travel costs, decreases in airline capacity, government shutdowns,
Current report
In April 2025, we exercised our option to extend the maturity date of the previous Term Loan 3 from May 2025 to May 2026. In addition, in April 2025, we drew down $27.0 million on our credit facility and used the proceeds for general corporate purposes.
Current report
In July 2025, we drew down $23.0 million on our credit facility and used the proceeds for general corporate purposes.
Current report
In September 2025, we entered into the Amended Credit Agreement, which expanded our unsecured debt borrowing capacity and extended the maturity of our term loans. The Amended Credit Agreement continues to provide for a $500.0 million revolving credit facility and increases the aggregate amount of our term loan facilities from $675.0 million (on four existing term loans) to $850.0 million (on three new term loans). The following includes the details of the Amended Credit Agreement:
Current report
In August 2025, we entered into an interest rate swap with a notional amount of $65.0 million and an effective date of January 10, 2026, which we will use to fix a portion of the interest rate on the New Term Loan 1 delayed draw. The swap agreement expires January 10, 2028 and fixes the SOFR rate at 3.206%. In addition, in September 2025, we entered into an interest rate swap with a notional amount of $210.0 million and an effective date of September 9, 2025, which fixes the SOFR rate at 3.226% on the current $185.0 million balance of New Term Loan 1 and $25.0 million of New Term Loan 3. The swap agreement expires on September 9, 2028.
Current report
In January 2026, we drew down the $90.0 million available under the New Term Loan 1 delayed draw and used the proceeds to repay the $65.0 million Series A Senior Notes at their scheduled maturity in January 2026 and for general corporate purposes.
Current report
Our floating rate debt as of December 31, 2025 included $275.0 million of our unsecured corporate-level New Term Loan 3.
Current report
including the future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
Removed paragraphs (15)
Previous report
During 2024, we saw improved group and leisure demand at Marriott Boston Long Wharf, as the hotel took advantage of strong corporate demand and a solid base of group business, The Westin Washington, DC Downtown, as the hotel is attracting higher quality groups post-rebranding from a Renaissance to a Westin, and at our Northern California wine country hotels, Four Seasons Resort Napa Valley and Montage Healdsburg, as the hotels are attracting more leisure customers and higher-quality group events. In addition, leisure and business transient demand improved at Hilton San Diego Bayfront, Hyatt Regency San Francisco, and The Bidwell Marriott Portland. These improvements were partially offset by labor activity at the Hilton San Diego Bayfront during the third and fourth quarters of 2024, which led to the cancellation of certain group events and overall lower business volume at the hotel, severe weather at Renaissance Orlando at SeaWorld® during the third and fourth quarters of 2024, and continued market-wide weakness at Wailea Beach Resort.
Previous report
Acquisition. In April 2024, we acquired the fee-simple interest in the 630-room Hyatt Regency San Antonio Riverwalk, located in San Antonio, Texas, for a contractual purchase price of $230.0 million, excluding closing costs.
Previous report
Significant Renovations.* *During 2024, our significant renovations primarily occurred at the Two Renovation Hotels. In March 2024, we temporarily suspended operations at The Confidante Miami Beach to allow the extensive renovation work to be performed more efficiently. We expect the resort to resume operations as Andaz Miami Beach in the first quarter of 2025. The Renaissance Long Beach converted to Marriott Long Beach Downtown in March 2024. Renovation work at the hotel continued through the end of the second quarter of 2024, and the hotel began to ramp-up operations in the third quarter of 2024. In addition, during 2024 we began a soft goods renovation at Wailea Beach Resort.
Previous report
Debt Transactions. In November 2024, we entered into a delayed draw term loan agreement (“Term Loan 4”) and drew a total of $100.0 million in December 2024. Term Loan 4’s variable interest rate is based on a pricing grid with a range of 1.35% to 2.20%, depending on our leverage ratios, plus SOFR and a 0.10% adjustment. Term Loan 4 matures in November 2025, with two six-month extension options at the Company’s election, resulting in an extended maturity of November 2026.
Previous report
In December 2024, we repaid the $72.1 million mortgage secured by the JW Marriott New Orleans, using proceeds received from Term Loan 4.
Previous report
We expect our interest income will decrease in 2025 in accordance with our lower cash balances following our acquisition of the Hyatt Regency San Antonio Riverwalk in April 2024 and expected lower interest rates on our cash deposits relative to 2024.
Previous report
During 2023, we recognized a gain of $9.9 million, comprised of $9.8 million from the relief of the majority of the potential obligations, with the funds released to us from escrow, and $0.1 million due to reassessments of the remaining potential obligations held in escrow.
Previous report
In 2023, we recognized a net current income tax provision of $4.6 million resulting from current state and federal income tax expenses, of which $3.7 million related to the gain we recognized on the sale of the Boston Park Plaza.
Previous report
Adjusted EBITDAre decreased $33.8 million, or 12.8%, in 2024 as compared to 2023 primarily due to the following:
Previous report
In 2023, we received proceeds of $364.5 million from the sale of the Boston Park Plaza and insurance proceeds of $3.7 million for hurricane-related property damage at the Hilton New Orleans St. Charles. These cash inflows were partially offset by $110.1 million invested for renovations and additions to our portfolio and other assets.
Previous report
During 2023, we paid an additional $0.3 million to true-up the total acquisition cost of the outside 25.0% equity interest in the entity that owns the Hilton San Diego Bayfront and $0.4 million in common stock offering costs related to our shelf registration statement. In addition, we paid $56.4 million to acquire 5,971,192 shares of our outstanding common stock, $3.3 million to repurchase common stock to satisfy the tax obligations in connection with the vesting of restricted common stock issued to employees, and $59.8 million in dividends and distributions to our preferred and common stockholders. We also entered into Term Loan 3, receiving $225.0 million in proceeds and paying $2.3 million in related deferred financing costs. We utilized the proceeds received from Term Loan 3 to repay the $220.0 million loan secured by the Hilton San Diego Bayfront. We also paid $2.1 million in scheduled principal payments on our notes payable.
Previous report
In December 2024, we repaid the $72.1 million mortgage secured by the JW Marriott New Orleans, using proceeds received from Term Loan 4.
Previous report
The Company’s floating rate debt as of December 31, 2024 included the $175.0 million, $225.0 million, and $100.0 million unsecured corporate-level Term Loan 2, Term Loan 3, and Term Loan 4, respectively.
Previous report
and $110.1 million in 2023. As of December 31, 2024, we have contractual construction commitments totaling $58.1 million for ongoing renovations. During the first quarter of 2025, we will continue to incur significant capital expenditures as we complete the substantial renovation and rebranding of The Confidante Miami Beach to Andaz Miami Beach. If we renovate additional hotels in the future, our capital expenditures will likely increase.
Previous report
Accounting for the acquisition of a hotel property or other entity requires either allocating the purchase price to the assets acquired and the liabilities assumed in the transaction at their respective relative fair values for an asset acquisition or recording the assets and liabilities at their estimated fair values with any excess consideration above net assets going to goodwill for a business combination. The most difficult estimations of individual fair values are those involving long-lived assets, such as property, equipment, and intangible assets, together with any finance or operating lease right-of-use assets and their related obligations. When we acquire a hotel property or other entity, we use all available information to make these fair value determinations, including discounted cash flow analyses, market comparable data, and replacement cost data. In addition, we make significant estimations regarding capitalization rates, discount rates, average daily rates, revenue growth rates, and occupancy. We also engage independent valuation specialists to assist in the fair value determinations of the long-lived assets acquired and the liabilities assumed. The determination of fair value is subjective and is based in part on assumptions and estimates that could differ materially from actual results in future periods.
Reworded paragraphs (45)
Previous wording
We own hotels in convention, urban, and resort destinations that benefit from significant barriers to entry by competitors and diverse economic drivers. As of December 31, 2024, we owned 15 hotels (the “15 Hotels”). All of our hotels are operated under nationally recognized brands, except the Oceans Edge Resort & Marina, which has established itself in a resort destination market.
Current wording
We own hotels in convention, urban, and resort destinations that benefit from significant barriers to entry by competitors and diverse economic drivers. As of December 31, 2025, we owned 14 hotels. All of our hotels are operated under nationally recognized brands, except the Oceans Edge Resort & Marina, which operates independently.
Previous wording
Demand. Excluding The Confidante Miami Beach and the Renaissance Long Beach (the “Two Renovation Hotels”) due to their significant renovations as they transitioned to Andaz Miami Beach and the Marriott Long Beach Downtown, respectively, occupancy at the 12 hotels we owned during the entirety of 2023 and 2024 (the “Comparable Portfolio”) improved as follows:
Current wording
Demand. Excluding The Confidante Miami Beach and Renaissance Long Beach (the “Two Renovation Hotels”) due to their significant renovations as they transitioned to Andaz Miami Beach and Marriott Long Beach Downtown, respectively, occupancy at the 11 hotels we owned during the entirety of 2024 and 2025 (the “Comparable Portfolio”) improved as follows:
Previous wording
For more details on our 2024 debt transactions, see “Liquidity and Capital Resources” below.
Current wording
For more details on our debt transactions, see disclosures under the Debt caption included in “Liquidity and Capital Resources” below.
Previous wording
Capital Transactions. During 2024, we repurchased 2,764,837 shares of our common stock under our stock repurchase program at an average purchase price of $9.83 per share. As of December 31, 2024, approximately $427.5 million of authorized capacity remained under our stock repurchase program.
Current wording
Capital Transactions. During 2025, we repurchased the following shares under our stock repurchase program:
Previous wording
Room Revenue*.* Room revenue decreased $60.2 million, or 9.7%, in 2024 as compared to 2023 as follows:
Current wording
Room Revenue*.* Room revenue increased $23.6 million, or 4.2%, in 2025 as compared to 2024 as follows:
Previous wording
Food and Beverage Revenue*.* Food and beverage revenue decreased $21.3 million, or 7.7%, in 2024 as compared to 2023 as follows:
Current wording
Food and Beverage Revenue*.* Food and beverage revenue increased $22.5 million, or 8.8%, in 2025 as compared to 2024 as follows:
Previous wording
Other Operating Revenue*.* Other operating revenue increased $0.8 million, or 0.9%, in 2024 as compared to 2023 as follows:
Current wording
Other Operating Revenue*.* Other operating revenue increased $8.3 million, or 9.1%, in 2025 as compared to 2024 as follows:
Previous wording
Hotel Operating Expenses*.* Hotel operating expenses, which are comprised of room, food and beverage, advertising and promotion, repairs and maintenance, utilities, franchise costs, property tax, ground lease and insurance, and other operating expenses decreased $26.3 million, or 4.5%, in 2024 as compared to 2023 as follows:
Current wording
Hotel Operating Expenses*.* Hotel operating expenses, which are comprised of room, food and beverage, advertising and promotion, repairs and maintenance, utilities, franchise costs, property tax, ground lease and insurance, and other hotel operating expenses increased $38.1 million, or 6.8%, in 2025 as compared to 2024 as follows:
Previous wording
Other Property-Level Expenses*.* Other property-level expenses decreased $9.4 million, or 7.8%, in 2024 as compared to 2023 as follows:
Current wording
Other Property-Level Expenses*.* Other property-level expenses increased $6.5 million, or 5.9%, in 2025 as compared to 2024 as follows:
Previous wording
Corporate Overhead Expense*.*Corporate overhead expense decreased $2.4 million, or 7.5%, in 2024 as compared to 2023, primarily due to decreased payroll and related expenses, entity-level state franchise and minimum taxes, deferred stock amortization expense, and due diligence expenses. These decreased expenses were partially offset by increased professional fees.
Current wording
Corporate Overhead Expense*.*Corporate overhead expense increased $2.5 million, or 8.7%, in 2025 as compared to 2024, primarily due to increased payroll and related expenses and deferred stock amortization expense in the first quarter of 2025 in connection with the restructuring of our executive team. The increase in corporate overhead expense was also due to increased professional fees, due diligence fees, board of director expenses, and entity-level state franchise and minimum taxes. These increased expenses were partially offset by decreased deferred stock amortization expense.
Previous wording
Depreciation and Amortization Expense*.*Depreciation and amortization expense decreased $2.6 million, or 2.0%, in 2024 as compared to 2023 as follows:
Current wording
Depreciation and Amortization Expense*.*Depreciation and amortization expense increased $10.0 million, or 8.0%, in 2025 as compared to 2024 as follows:
Previous wording
Interest and Other Income*.*Interest and other income totaled $13.2 million and $10.5 million in 2024 and 2023, respectively. During 2024 and 2023, we recognized interest income of $12.6 million and $6.8 million, respectively. Interest income increased in 2024 as compared to 2023 due to increases in our cash balances as well as increased interest rates. In addition, we recognized property insurance recoveries of $0.4 million in 2024 related to fire damage at the Hilton San Diego Bayfront and wind-driven rain damage at Wailea Beach Resort and $3.7 million in 2023 related to property damage caused by Hurricane Ida at the Hilton New Orleans St. Charles. During 2024, we also recognized other miscellaneous income of $0.1 million.
Current wording
Interest and Other Income*.*Interest and other income totaled $11.0 million and $13.2 million in 2025 and 2024, respectively. During 2025 and 2024, we recognized interest income of $5.8 million and $12.6 million, respectively. Interest income decreased in 2025 as compared to 2024 due to decreases in our cash balances following our acquisition of Hyatt Regency San Antonio Riverwalk in April 2024, as well as decreased interest rates. In addition, during 2025, we recognized settlement proceeds of $3.9 million for certain construction-related claims at Oceans Edge Resort & Marina, net property insurance recoveries of $1.1 million related to 2023 fire damage at Hilton San Diego Bayfront and 2025 water damage at The Westin Washington, DC Downtown, and other miscellaneous income of $0.2 million. During 2024, we recognized $0.4 million in property insurance recoveries related to 2023 fire damage at Hilton San Diego Bayfront and wind-driven rain damage at Wailea Beach Resort and $0.1 million in other miscellaneous income.
Previous wording
The decrease in interest expense in 2024 as compared to 2023 was primarily due to $1.4 million of interest capitalized in 2024 related to the extensive renovation work at The Confidante Miami Beach as it transitions to Andaz Miami Beach, with no corresponding credit to interest expense in 2023. In addition, interest expense decreased due to a $0.8 million noncash change in the fair market value of our derivatives. These decreases were partially offset by a $0.3 million increase in interest expense incurred on our debt primarily due to increased interest on our variable rate debt and our draws of the $100.0 million available under Term Loan 4 in December 2024 and the $225.0 million available under our third term loan (“Term Loan 3”) in May 2023, partially offset by decreased interest due to our repayments of the $72.1 million loan secured by the JW Marriott New Orleans in December 2024 and the $220.0 million loan secured by the Hilton San Diego Bayfront in May 2023. The amortization of deferred financing costs caused interest expense to increase $0.3 million in 2024 as compared to 2023 due to costs incurred on Term Loan 4 and Term Loan 3.
Current wording
The increase in interest expense in 2025 as compared to 2024 was primarily due to a noncash change of $1.4 million in the fair market value of our derivatives. In addition, interest expense increased $0.8 million in 2025 as compared to 2024 due to increased amortization of deferred financing costs related to costs associated with the execution of the Amended Credit Agreement in September 2025, the extension of the maturity of Term Loan 3 in April 2025, and the issuance of Term Loan 4 in December 2024. Interest expense also increased in 2025 as compared to 2024 due to a $0.7 million increase in interest on our debt primarily due to higher average debt balances, partially offset by lower average interest rates on our term loans. Our debt balances increased due to the net effect of the Amended Credit Agreement, the $50.0 million in total draws on our credit facility in April 2025 and July 2025, and our draw of the $100.0 million available under Term Loan 4 in December 2024. These increases of our debt balances were partially offset by our December 2024 repayment of the $72.1 million loan secured by the JW Marriott New Orleans.
Previous wording
Our weighted average interest rate per annum, including our variable rate debt obligations and excluding capitalized interest, was approximately 5.6% and 5.8% at December 31, 2024 and 2023, respectively. Approximately 40.8% and 51.2% of our outstanding notes payable had fixed interest rates or had been swapped to fixed interest rates at December 31, 2024 and 2023, respectively. Following our purchase of an interest rate swap for Term Loan 4 in January 2025, 52.7% of our outstanding debt will have fixed interest rates or will have been swapped to fixed interest rates.
Current wording
Our weighted average interest rate per annum, including our variable rate debt obligations and excluding capitalized interest, was approximately 5.0% and 5.6% at December 31, 2025 and 2024, respectively. Approximately 70.4% and 40.8% of our outstanding notes payable had fixed interest rates or had been swapped to fixed interest rates at December 31, 2025 and 2024, respectively.
Previous wording
Gain on Sale of Assets, net. Gain on sale of assets, net totaled $0.5 million and $123.8 million in 2024 and 2023, respectively, both of which related to the Boston Park Plaza. In 2024, we recognized an additional $0.5 million net gain related to a contingency resolution at the hotel, and in 2023, we recognized a $123.8 million gain on the sale of the hotel.
Current wording
(Loss) Gain on Sale of Assets, Net. (Loss) gain on sale of assets, net totaled a loss of $8.8 million and a net gain of $0.5 million in 2025 and 2024, respectively. In 2025, we recognized an $8.8 million loss on our sale of the Hilton New Orleans St. Charles. In 2024, we recognized an additional $0.5 million net gain related to a contingency resolution at a hotel sold in a prior year.
Previous wording
Gain on Extinguishment of Debt. Gain on extinguishment of debt totaled $0.1 million and $9.9 million in 2024 and 2023, respectively, both of which were related to the remaining potential employee obligations held in escrow associated with our assignment of a hotel to the hotel’s mortgage holder in 2020. During 2024, we recognized $21,000 due to reassessments of the remaining potential obligations and $38,000 due to the release of the remaining potential obligations in conjunction with the termination of the escrow agreement during the second quarter of 2024.
Current wording
(Loss) Gain on Extinguishment of Debt. (Loss) gain on extinguishment of debt totaled a loss of $0.2 million and a gain of $0.1 million in 2025 and 2024, respectively. In 2025, we recorded a loss of $0.2 million related to the write-off of unamortized deferred financing costs in connection with the recast of our credit facilities. In 2024, we recorded a $0.1 million gain associated with reassessments of the remaining potential employee-related obligations held in escrow associated with our assignment of a hotel to the hotel’s mortgage holder in 2020.
Previous wording
Income Tax Benefit (Provision), Net*.* We lease our hotels to the TRS Lessee and its subsidiaries, which are subject to federal and state income taxes. In addition, we and the Operating Partnership may also be subject to various state and local income taxes.
Current wording
Income Tax (Provision) Benefit, Net*.* We lease our hotels to the TRS Lessee and its subsidiaries, which are subject to federal and state income taxes. In addition, we and the Operating Partnership may also be subject to various state and local income taxes.
Previous wording
In 2024, we recognized a net current income tax benefit of $1.1 million resulting from current state and federal income tax expenses, net of any refunds.
Current wording
We recognized a net current income tax provision of $0.2 million in 2025 and a net current income tax benefit of $1.1 million in 2024, resulting from current state and federal income tax expenses, net of any refunds.
Previous wording
Preferred Stock Dividends*.*Preferred stock dividends were incurred as follows (in thousands):
Current wording
Preferred Stock Dividends, Net of Gain on Repurchases*.*Preferred stock dividends, net of gain on repurchases were incurred as follows (in thousands):
Previous wording
The Series G preferred stock initially accrued dividends at a rate equal to the Montage Healdsburg’s annual net operating income yield on our total investment in the resort. In the first and third quarters of 2024, the annual dividend rate increased to the greater of 3.0% and 4.5%, respectively, or the rate equal to the Montage Healdsburg’s annual net operating income yield on our total investment in the resort. In the third quarter of 2025, the dividend rate will increase to the greater of 6.5% or the rate equal to the Montage Healdsburg's annual net operating income yield on the Company's total investment in the resort.
Current wording
The dividend rate on the Series G preferred stock increased to the greater of the rate equal to the Montage Healdsburg’s annual net operating income yield on our total investment in the resort or 3.0%, 4.5%, and 6.5% in January 2024, July 2024, and July 2025, respectively, resulting in annual dividend rates of 5.5% and 3.75% for 2025 and 2024, respectively. Beginning in the third quarter of 2026, the annual dividend rate will increase to the greater of 7.5% or the rate equal to the Montage Healdsburg’s annual net operating income yield on our total investment in the resort.
Previous wording
Non-GAAP Financial Measures. We use the following “non-GAAP financial measures” that we believe are useful to investors as key supplemental measures of our operating performance: EBITDAre; Adjusted EBITDAre; FFO attributable to common stockholders; and Adjusted FFO attributable to common stockholders. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with accounting principles generally accepted in the United States (“GAAP”). In addition, our calculation of these measures may not be comparable to other companies that do not define such terms exactly the same as the Company. These non-GAAP measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to net income (loss), cash flow from operations, or any other operating performance measure prescribed by GAAP. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure.
Current wording
Non-GAAP Financial Measures. We use the following “non-GAAP financial measures” that we believe are useful to investors as key supplemental measures of our operating performance: EBITDAre; Adjusted EBITDAre; FFO attributable to common stockholders; and Adjusted FFO attributable to common stockholders. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with accounting principles generally accepted in the United States (“GAAP”). In addition, our calculation of these measures may not be comparable to other companies that do not define such terms exactly the same as us. These non-GAAP measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to net income (loss), cash flow from operations, or any other operating performance measure prescribed by GAAP. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure.
Previous wording
Interest expense decreased $1.6 million, or 3.0%, in 2024 as compared to 2023 as follows:
Current wording
Adjusted EBITDAre increased $6.9 million, or 3.0%, in 2025 as compared to 2024 primarily due to the following:
Previous wording
Adjusted FFO attributable to common stockholders decreased $33.5 million, or 17.0%, in 2024 as compared to 2023 primarily due to the same reasons noted in the discussion above regarding Adjusted EBITDAre.
Current wording
Adjusted FFO attributable to common stockholders increased $4.8 million, or 3.0%, in 2025 as compared to 2024 primarily due to the same reasons noted in the discussion above regarding Adjusted EBITDAre.
Previous wording
During the periods presented, our sources of cash included our operating activities and working capital, as well as proceeds from a hotel disposition, our term loans, and property insurance. Our primary uses of cash were for capital expenditures for hotels and other assets, an acquisition of a hotel, operating expenses, repurchases of our common stock, repayments of notes payable, and dividends and distributions on our preferred and common stock. We cannot be certain that the sources of funds we have relied on in the past will be available in the future.
Current wording
During the periods presented, our sources of cash included our operating activities and working capital, as well as proceeds from a hotel disposition, our credit facility and term loans, key money, and property insurance. Our primary uses of cash were for capital expenditures for hotels and other assets, the acquisition of a hotel and land adjacent to one of our hotels, operating expenses, repurchases of our preferred and common stock, repayments of our credit facility and notes payable, payments of deferred financing costs, and dividends and distributions on our preferred and common stock. We cannot be certain that the sources of funds we have relied on in the past will be available in the future.
Previous wording
Operating activities. Our net cash provided by or used in operating activities fluctuates primarily as a result of changes in the net cash generated by our hotels, offset by the cash paid for corporate expenses. Our net cash provided by or used in operating activities may also be affected by changes in our portfolio resulting from hotel acquisitions, dispositions or renovations. Net cash provided by operating activities was $170.4 million in 2024 as compared to $198.1 million in 2023. The net decrease in cash provided by operating activities in 2024 as compared to 2023 was primarily due to decreases in operating cash at the Two Renovation Hotels, as well as decreases caused by our sale of the Boston Park Plaza, and higher interest payments on our variable rate debt. These decreases were partially offset by additional operating cash provided by the newly-acquired Hyatt Regency San Antonio Riverwalk, as well additional operating cash provided by the increase in travel demand benefiting our hotels.
Current wording
Operating activities. Our net cash provided by or used in operating activities fluctuates primarily as a result of changes in the net cash generated by our hotels, offset by the cash paid for corporate expenses. Our net cash provided by or used in operating activities may also be affected by changes in our portfolio resulting from hotel acquisitions, dispositions or renovations. Net cash provided by operating activities was $181.8 million in 2025 as compared to $170.4 million in 2024. The net increase in cash provided by operating activities in 2025 as compared to 2024 was primarily due to additional operating cash provided by the increase in travel demand benefiting our hotels, the acquisition of the Hyatt Regency San Antonio Riverwalk, and the post-renovation ramp-ups of Marriott Long Beach Downtown and Andaz Miami Beach. These increases were partially offset by decreases in interest income resulting from our lower cash balances and lower interest rates, along with increases in corporate-level expenses.
Previous wording
Investing activities**.**Our net cash provided by or used in investing activities fluctuates primarily as a result of acquisitions, dispositions, and renovations of hotels and other assets. Net cash (used in) provided by investing activities in 2024 and 2023 was as follows (in thousands):
Current wording
Investing activities**.**Our net cash provided by or used in investing activities fluctuates primarily as a result of acquisitions, dispositions, and renovations of hotels and other assets. Net cash used in investing activities in 2025 and 2024 was as follows (in thousands):
Previous wording
In 2024, we paid $229.3 million to acquire the Hyatt Regency San Antonio Riverwalk, including closing costs and prorations, and we invested $157.4 million for renovations and additions to our portfolio and other assets. These cash outflows were slightly offset by $0.4 million in property insurance proceeds received related to fire damage at the Hilton San Diego Bayfront and wind-driven rain damage at Wailea Beach Resort.
Current wording
In 2024, we paid $229.3 million to acquire the Hyatt Regency San Antonio Riverwalk, including closing costs and prorations, and we invested $157.4 million for renovations and additions to our portfolio and other assets. These cash outflows were slightly offset by $0.4 million in property insurance proceeds received related to claims at the Hilton San Diego Bayfront and at Wailea Beach Resort.
Previous wording
Financing activities**.**Our net cash provided by or used in financing activities fluctuates primarily as a result of our dividends and distributions paid, issuance and repurchase of common stock, issuance and repayment of notes payable, including draws on our term loans, and issuance and redemption of other forms of capital, including preferred equity. Net cash used in financing activities in 2024 and 2023 was as follows (in thousands):
Current wording
Financing activities**.**Our net cash provided by or used in financing activities fluctuates primarily as a result of our dividends and distributions paid, the issuance and repurchase of common and restricted stock, the issuance and repayment of debt, including draws on our credit facility and term loans, and the issuance, repurchase, and redemption of other forms of capital, including preferred equity. Net cash used in financing activities in 2025 and 2024 was as follows (in thousands):
Previous wording
During 2024, we paid $27.2 million to repurchase 2,764,837 shares of our outstanding common stock, $4.2 million to repurchase common stock to satisfy the tax obligations in connection with the vesting of restricted common stock issued to employees, $74.1 million in principal payments on our loan secured by the JW Marriott New Orleans, including $2.0 million in scheduled principal payments and $72.1 million to repay the loan, and $91.0 million in dividends and distributions to our common and preferred stockholders. We also entered into Term Loan 4, receiving $100.0 million in proceeds and paying $1.1 million in related deferred financing costs. We utilized the proceeds received from Term Loan 4 to repay the loan secured by the JW Marriott New Orleans.
Current wording
During 2024, we paid $27.2 million to repurchase 2,764,837 shares of our common stock, $4.2 million to repurchase common stock to satisfy the tax obligations in connection with the vesting of restricted common stock issued to employees, $74.1 million in principal payments on our loan secured by the JW Marriott New Orleans, including $2.0 million in scheduled principal payments and $72.1 million to repay the loan, and $91.0 million in dividends and distributions to our preferred and common stockholders. We also entered into Term Loan 4, receiving $100.0 million in proceeds and paying $1.1 million in related deferred financing costs. We utilized the proceeds received from Term Loan 4 to repay the loan secured by the JW Marriott New Orleans.
Previous wording
Future. We expect our primary sources of cash will continue to be our operating activities, working capital, borrowing under our credit facility, additional issuances of notes payable, dispositions of hotel properties and proceeds from offerings of common and preferred stock. However, there can be no assurance that our future asset sales, debt issuances or equity offerings will be successfully completed. As a result of potential increases in inflation rates and interest rates, as well as possible recessionary periods in the future, certain sources of capital may not be as readily available to us as they have in the past or may only be available at higher costs.
Current wording
Future. We expect our primary sources of cash will continue to be our operating activities, working capital, borrowing under our credit facility, additional issuances of debt, dispositions of hotel properties, and proceeds from offerings of common and preferred stock. However, there can be no assurance that our future asset sales, debt issuances or equity offerings will be successfully completed. As a result of potential increases in inflation rates and interest rates, as well as possible recessionary periods in the future, certain sources of capital may not be as readily available to us as they have in the past or may only be available at higher costs.
Previous wording
We expect our primary uses of cash to be for operating expenses, capital investments in our hotels, repayment of principal on our debt and credit facility, interest expense, repurchases of our common stock, distributions on our common stock, dividends on our preferred stock and acquisitions of hotels or interests in hotels.
Current wording
We expect our primary uses of cash to be for operating expenses, capital investments in our hotels, repayment of principal on our debt and credit facility, interest expense, repurchases of our common and preferred stock, distributions on our common stock, dividends on our preferred stock, and acquisitions of hotels or interests in hotels.
Previous wording
While both inflation and interest rates began to decrease in the third quarter of 2024, the recent increases in inflation and interest rates have had a negative effect on our operations. We have experienced increases in wages, employee-related benefits, food costs, commodity costs, including those used to renovate or reposition our hotels, property taxes, property and liability insurance, utilities and borrowing costs. The ability of our hotel operators to adjust rates has mitigated the impact of increased operating costs on our financial position and results of operations. However, the increases in interest rates negatively affected our variable rate debt, resulting in increased interest payments.
Current wording
and the imposition of tariffs affecting commodity costs, has had a negative effect on our operations. Prior to the tariffs announced in 2025, we experienced increases in wages, employee-related benefits, food costs, commodity costs, including those used to renovate or reposition our hotels, property taxes, liability insurance, utilities, and borrowing costs. The imposition of tariffs could exacerbate existing cost pressures and create additional inflationary pressures that could further impact our results of operations. The ability of our hotel operators to adjust rates has historically mitigated the impact of increased operating costs on our financial position and results of operations.
Previous wording
Cash Balance. As of December 31, 2024, our unrestricted cash balance was $107.2 million. We believe that our current unrestricted cash balance and our ability to draw the $500.0 million capacity available for borrowing under the unsecured revolving credit facility will enable us to successfully manage our Company.
Current wording
Cash Balance. As of December 31, 2025, our unrestricted cash balance was $109.2 million. We believe that our current unrestricted cash balance and our ability to draw the $500.0 million capacity available for borrowing under the unsecured revolving credit facility will enable us to successfully manage our Company.
Previous wording
Debt. As of December 31, 2024, we had $845.0 million of debt, $180.3 million of cash and cash equivalents, including restricted cash, and total assets of $3.1 billion. We believe that by maintaining appropriate debt levels, staggering maturity dates and maintaining a highly flexible structure, we will have lower capital costs than more highly leveraged companies, or companies with limited flexibility due to restrictive covenants.
Current wording
Debt. As of December 31, 2025, we had $930.0 million of debt, $185.7 million of cash and cash equivalents, including restricted cash, and total assets of $3.0 billion. We believe that by maintaining appropriate debt levels, staggering maturity dates, and maintaining a highly flexible structure, we will have lower capital costs than more highly leveraged companies, or companies with limited flexibility due to restrictive covenants.
Previous wording
In November 2024, we entered into delayed-draw Term Loan 4 and drew a total of $100.0 million in December 2024. Term Loan 4’s variable interest rate is based on a pricing grid with a range of 1.35% to 2.20%, depending on our leverage ratios, plus SOFR and a 0.10% adjustment. In January 2025, we entered into an interest rate swap on Term Loan 4, which is effective January 31, 2025, expires November 7, 2026, and fixes the SOFR rate at 4.02%. Term Loan 4 has an initial term of one year with two six-month extension options at the Company’s election, resulting in an extended maturity of November 2026, upon the payment of applicable fees and the satisfaction of certain customary conditions.
Current wording
In January 2025, we entered into an interest rate swap on Term Loan 4, which was effective January 31, 2025, expires November 7, 2026, and fixes the SOFR rate at 4.02%.
Previous wording
As of December 31, 2024, 40.8% of our outstanding debt had fixed interest rates or had been swapped to fixed interest rates, including our $175.0 million unsecured corporate-level Term Loan 1 and two unsecured corporate-level senior notes, which total $170.0 million. Following our purchase of an interest rate swap for Term Loan 4 in January 2025, 52.7% of our outstanding debt will have fixed interest rates or will have been swapped to fixed interest rates.
Current wording
As of December 31, 2025, 70.4% of our outstanding debt had fixed interest rates or had been swapped to fixed interest rates, including our unsecured corporate-level New Term Loan 1, New Term Loan 2, and $25.0 million of New Term Loan 3, which totaled $485.0 million, and our two unsecured corporate-level senior notes, which total $170.0 million.
Previous wording
We may in the future seek to obtain mortgages on one or more of our 15 unencumbered hotels (subject to certain stipulations under our unsecured term loans and senior notes), all of which were held by subsidiaries whose interests were pledged to our credit facilities as of December 31, 2024. Should we obtain secured financing on any or all of our unencumbered hotels, the amount of capital available through our credit facilities or future unsecured borrowings may be reduced.
Current wording
We may in the future seek to obtain mortgages on one or more of our 14 unencumbered hotels (subject to certain stipulations under our unsecured term loans and senior notes), all of which were held by subsidiaries whose interests were pledged to our credit facilities as of December 31, 2025. Should we obtain secured financing on any or all of our unencumbered hotels, the amount of capital available through our credit facilities or future unsecured borrowings may be reduced.
Previous wording
The following table summarizes our payment obligations and commitments as of December 31, 2024 (in thousands):
Current wording
The following table summarizes our payment obligations and commitments (in thousands):
Previous wording
We believe we maintain all of our hotels in good repair and condition and in general conformity with applicable franchise and management agreements, ground lease, laws, and regulations. Our capital expenditures primarily relate to the ongoing maintenance of our hotels and are budgeted in the reserve accounts described in the following paragraph. We also incur capital expenditures for cyclical renovations, hotel repositionings, and development. We invested $157.4 million in our portfolio and other assets during 2024
Current wording
We believe we maintain each of our hotels in good repair and condition and in general conformity with applicable franchise and management agreements, ground lease, laws, and regulations. Our capital expenditures primarily relate to the ongoing maintenance of our hotels and are budgeted in the reserve accounts described in the following paragraph. We also incur capital expenditures for cyclical renovations, hotel repositionings, and development. We invested $103.0 million in our portfolio and other assets during 2025 and $157.4 million in 2024. As of December 31, 2025, we have contractual construction commitments totaling $38.9 million for ongoing renovations. If we renovate additional hotels in the future, our capital expenditures will likely increase.
Previous wording
With respect to our hotels that are operated under management or franchise agreements with major national hotel brands, we are obligated to maintain an FF&E reserve account for future planned and emergency-related capital expenditures at these hotels. The amount funded into each of these reserve accounts is determined pursuant to the management and franchise agreements for each of the respective hotels, ranging between 2.0% and 5.5% of the respective hotel’s applicable annual revenue. As of December 31, 2024, our balance sheet includes restricted cash of $72.9 million, which was held in FF&E reserve accounts for future capital expenditures at the majority of our hotels. According to certain management agreements, reserve funds are to be held by the managers in restricted cash accounts, and we are not required to spend the entire amount in such reserve accounts each year.
Current wording
With respect to our hotels that are operated under management or franchise agreements with certain hotel brands, we are obligated to maintain an FF&E reserve account for future planned and emergency-related capital expenditures at these hotels. The amount funded into each of these reserve accounts is determined pursuant to the management and franchise agreements for each of the respective hotels, ranging between 3.0% and 5.5% of the respective hotel’s applicable annual revenue. As of December 31, 2025, our balance sheet includes restricted cash of $76.4 million, which was held in FF&E reserve accounts for future capital expenditures at the majority of our hotels. According to certain management agreements, reserve funds are to be held by the managers in restricted cash accounts, and we are not required to spend the entire amount in such reserve accounts each year.
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
As of December 31, 2025, approximately $323.9 million of authorized capacity remained under our stock repurchase program.
Current report — wording carried from elsewhere
inflation. However, previously contracted rates, competitive pressures or other factors may limit the ability of our operators to respond to inflation. As a result, our expenses may increase at higher rates than our revenue and our expenses may not decrease if revenue decreases.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
terminal capitalization rate, the estimated growth of revenues and expenses, revenue per available room and margins, as well as specific market and economic conditions.