Sunstone Hotel Investors, Inc.
For the period ended Sep 30, 2026. Filed Nov 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 6, 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-Q
Period ended 2026-06-30; filed 2026-08-06.
0001104659-26-091907
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-06.
0001295810-26-000007
Item 2. 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 96 previous paragraphs and 183 current paragraphs.
35 unchanged; 54 reworded; 93 added; 4 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 100 previous and 11 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 (93)
Current report
Room revenue, which is comprised of revenue realized from the sale of rooms at our hotels;
Current report
Food and beverage revenue, which is comprised of revenue realized in the hotel food and beverage outlets as well as banquet and catering events; and
Current report
Other operating revenue, which includes ancillary hotel revenue and other items primarily driven by occupancy such as telephone/internet, parking, spa, destination and resort fees, entertainment, and other guest services. Additionally, this category includes, among other things, attrition and cancellation revenue, tenant revenue derived from hotel space and marina slips leased by third parties, winery revenue, any business interruption proceeds and any performance guarantee.
Current report
Room expense, which is primarily driven by occupancy and, therefore, has a significant correlation with room revenue;
Current report
Food and beverage expense, which is primarily driven by hotel food and beverage sales and banquet and catering bookings and, therefore, has a significant correlation with food and beverage revenue;
Current report
Other operating expense, which includes the corresponding expense of other operating revenue, advertising and promotion, repairs and maintenance, utilities, and franchise costs;
Current report
Property tax, ground lease and insurance expense, which includes the expenses associated with property tax, ground lease and insurance payments, each of which is primarily a fixed expense; however, property tax is subject to regular revaluations based on the specific tax regulations and practices of each municipality, along with our cash and noncash operating lease expenses, general excise tax assessed by Hawaii and taxes assessed on commercial rents by San Francisco and Texas;
Current report
Other property-level expenses, which includes our property-level general and administrative expenses, such as payroll, benefits, and other employee-related expenses, contract and professional fees, credit and collection expenses, employee recruitment, relocation and training expenses, labor dispute expenses, consulting fees, management fees, and other expenses;
Current report
Corporate overhead expense, which includes our corporate-level expenses, such as payroll, benefits, and other employee-related expenses, amortization of deferred stock compensation, business acquisition and due diligence expenses, legal expenses, contract and professional fees, board of director expenses, entity-level state franchise and minimum taxes, travel expenses, office rent, and other customary expenses;
Current report
Depreciation and amortization expense, which includes depreciation on our hotel buildings, improvements, furniture, fixtures and equipment (“FF&E”), along with amortization on our franchise fees and certain intangibles. Additionally, this category includes depreciation and amortization related to FF&E for our corporate office; and
Current report
Impairment and other losses, which includes the charges we have recognized to reduce the carrying values of certain hotels on our balance sheet to their fair values in association with our impairment evaluations, along with the write-off of any development costs associated with abandoned projects or any physical property damage due to unforeseen events such as natural disasters.
Current report
Interest and other income, which includes interest we have earned on our restricted and unrestricted cash accounts, as well as any energy or other rebates, net property insurance proceeds we have received, miscellaneous income, and any gains or losses we have recognized on sales or redemptions of assets other than real estate investments;
Current report
Interest expense, which includes interest expense incurred on our outstanding fixed and variable rate debt, gains or losses on interest rate derivatives, amortization of deferred financing costs, and any loan fees incurred on our debt, net of any capitalized interest;
Current report
Gain (loss) on sale of assets, which includes the gains or losses we recognized on our hotel sales, including any gains or losses related to the resolution of contingencies, that do not qualify as discontinued operations;
Current report
Loss on extinguishment of debt, which includes losses recognized on amendments or early repayments of mortgages or other debt obligations from the accelerated amortization of deferred financing costs, along with any other costs;
Current report
Income tax provision, net, which includes federal and state income taxes charged to us net of any refundable credits or refunds received, any adjustments to deferred tax assets, liabilities or valuation allowances, and any adjustments to unrecognized tax positions, along with any related interest and penalties incurred; and
Current report
Preferred stock dividends, net of gain on repurchases, which includes dividends accrued on our Series G Cumulative Redeemable Preferred Stock (“Series G preferred stock”), Series H Cumulative Redeemable Preferred Stock (“Series H preferred stock”) and Series I Cumulative Redeemable Preferred Stock (“Series I preferred stock”), net of any preferred stock repurchased at a discount to its carrying value, along with the related write-off of any original issuance costs previously included in additional paid in capital.
Current report
Occupancy, which is the quotient of total rooms sold divided by total rooms available;
Current report
Average daily room rate, or ADR, which is the quotient of room revenue divided by total rooms sold;
Current report
Revenue per available room, or RevPAR, which is the product of occupancy and ADR, and does not include food and beverage revenue, or other operating revenue;
Current report
RevPAR index, which is the quotient of a hotel’s RevPAR divided by the average RevPAR of its competitors, multiplied by 100. A RevPAR index in excess of 100 indicates a hotel is achieving higher RevPAR than the average of its competitors. In addition to absolute RevPAR index, we monitor changes in RevPAR index;
Current report
EBITDAre, which is net income excluding: interest expense; benefit or provision for income taxes, including any changes to deferred tax assets, liabilities or valuation allowances and income taxes applicable to the sale of assets; depreciation and amortization; gains or losses on disposition of depreciated property (including gains or losses on change in control); and any impairment write-downs of depreciated property;
Current report
Adjusted EBITDAre, which is EBITDAre adjusted to exclude: amortization of deferred stock compensation; amortization of contract intangibles; amortization of right-of-use assets and obligations; the impact of any gain or loss from undepreciated asset sales or property damage from natural disasters; any lawsuit settlement costs; the write-off of development costs associated with abandoned projects; property-level restructuring, severance, and management transition costs; pre-opening costs associated with extensive renovation projects; debt resolution costs; and any other nonrecurring identified adjustments;
Current report
Funds from operations (“FFO”) attributable to common stockholders, which is net income and preferred stock dividends, including any gains or losses on the redemptions or repurchases of preferred stock, excluding: gains and losses from sales of property; real estate-related depreciation and amortization (excluding amortization of deferred financing costs and right-of-use assets and obligations); and any real estate-related impairment losses; and
Current report
Adjusted FFO attributable to common stockholders, which is FFO attributable to common stockholders adjusted to exclude: amortization of deferred stock compensation; amortization of contract intangibles; real estate-related amortization of right-of-use assets and obligations; noncash interest on our derivatives; income tax benefits or provisions associated with any changes to deferred tax assets, liabilities or valuation allowances, the application of net operating loss carryforwards, uncertain tax positions or with the sale of assets; gains or losses due to property damage from natural disasters; any lawsuit settlement costs; the write-off of development costs associated with abandoned projects; non-real estate-related impairment losses; property-level restructuring, severance, and management transition costs; pre-opening costs associated with extensive renovation projects; debt resolution costs; gains or losses on the redemptions or repurchases of preferred stock; and any other nonrecurring identified adjustments.
Current report
Demand. The demand for lodging has traditionally been closely linked with the performance of the general economy. Our hotels are classified as either upper upscale or luxury hotels. In periods of economic difficulties, including those caused by inflation or recession, these types of hotels may be more susceptible to a decrease in revenue, as compared to hotels in other categories that have lower room rates in part because upper upscale and luxury hotels generally target business and leisure travelers at higher price points, and these groups may seek to curtail spending in periods of economic decline. In addition, changes in the value of the U.S. dollar relative to other currencies may impact the demand for our hotels by making international travel more or less affordable. Also, operating results at our hotels may be negatively affected by uncertainty surrounding certain international economic and political relationships, including political disputes and unfavorable perceptions of travel to the U.S., which could further reduce international travel demand. The economic impacts arising from geopolitical instability in key energy producing regions, including volatility in transportation fuel costs and increases in air and ground travel costs, along with decreases in airline capacity, government shutdowns, the imposition of tariffs, and prolonged periods of inclement weather in our markets may reduce the demand for our hotels.
Current report
Revenues and expenses. We believe that marginal improvements in RevPAR index, even in the face of declining revenues, are an indicator of the relative quality and appeal of our hotels, and our operators’ effectiveness in maximizing revenues. Similarly, we also evaluate our operators’ effectiveness in minimizing incremental operating expenses in the context of increasing revenues or, conversely, in reducing operating expenses in the context of declining revenues. Inflationary pressures could increase operating costs, which could limit our operators’ effectiveness in minimizing expenses.
Current report
Hotel Renovation: In March 2024, we closed The Confidante Miami Beach to perform extensive renovation work. The resort reopened as Andaz Miami Beach in May 2025. As a result of the renovation, our revenues and operating expenses in the third quarter and first nine months of 2026 are not comparable to the same periods in 2025.
Current report
Hotel Dispositions: In June 2025, we sold Hilton New Orleans St. Charles, and in July 2026, we sold Hyatt Regency San Francisco. As a result of these two hotel dispositions (the “Two Disposed Hotels”), our revenues, operating expenses, and depreciation expense for the third quarter and first nine months of 2026 are not comparable to the same periods in 2025.
Current report
Occupancy at all 13 hotels owned during the entirety of the third quarters of both 2026 and 2025 increased by 460 basis points, and ADR increased by 4.4%, resulting in an 11.4% increase in RevPAR.
Current report
Room revenue at the 12 hotels we owned during the entirety of the third quarters of both 2026 and 2025, excluding Andaz Miami Beach (the “Comparable Portfolio”), increased $12.2 million. Occupancy increased 410 basis points and the ADR increased 4.2%, resulting in a 10.3% increase in RevPAR. The Comparable Portfolio’s room revenue was positively impacted by strong leisure, group and contract demand at Wailea Beach Resort, increased leisure and group demand at Four Seasons Resort Napa Valley, and stronger transient and group performance at Hyatt Regency San Antonio Riverwalk. Additional growth was driven by increased transient and group demand at Montage Healdsburg, higher occupancy from group and contract business at Marriott Boston Long Wharf, and stronger transient demand at The Westin Washington, DC Downtown and Marriott Long Beach Downtown. These positive impacts were partially offset by lower room revenue at Hilton San Diego Bayfront due to lower group and contract demand and at Hilton Key West Resort & Marina as ongoing guest room renovations reduced available inventory and occupancy.
Current report
Andaz Miami Beach caused room revenue to increase by $1.4 million. For the third quarter of 2026, occupancy was 49.0% and the ADR was $336.10, resulting in RevPAR of $164.69. Andaz Miami Beach was undergoing renovation and reopened in May 2025.
Current report
The sale of Hyatt Regency San Francisco caused room revenue to decrease by $13.1 million.
Current report
Occupancy at all 13 hotels owned during the entirety of the first nine months of both 2026 and 2025 increased by 390 basis points, and ADR increased by 5.0%, resulting in a 10.8% increase in RevPAR.
Current report
Andaz Miami Beach caused room revenue to increase by $21.6 million. For the first nine months of 2026, occupancy was 69.0% and the ADR was $477.06, resulting in RevPAR of $329.17. Andaz Miami Beach was undergoing renovation and reopened in May 2025.
Current report
Room revenue at the Comparable Portfolio increased $19.4 million. Occupancy increased 150 basis points and the ADR increased 3.0%, resulting in a 5.1% increase in RevPAR. The Comparable Portfolio’s room revenue was positively impacted by increased leisure, group and contract demand at Wailea Beach Resort, reflecting strong growth and the continued recovery of the Wailea market. In addition, strong leisure demand, together with increased group demand, contributed to higher room revenue at Four Seasons Resort Napa Valley and Montage Healdsburg. Increased transient and group demand at Hyatt Regency San Antonio Riverwalk and increased group and contract demand at Marriott Boston Long Wharf also contributed to the increase. These positive impacts were partially offset by lower room revenue at Renaissance Orlando at SeaWorld®, driven by decreased transient and group demand, and at Hilton San Diego Bayfront, driven by decreased group and contract demand, as well as meeting space renovations.
Current report
The Two Disposed Hotels caused room revenue to decrease by $12.1 million.
Current report
Food and beverage revenue at the Comparable Portfolio increased $6.0 million due to increases in both outlet and banquet revenue. Outlet revenue increased primarily at Wailea Beach Resort, Hilton San Diego Bayfront, Marriott Boston Long Wharf and The Westin Washington, DC Downtown, supported by higher transient occupancy and increased guest spending. Banquet revenue increased primarily at Wailea Beach Resort, Hyatt Regency San Antonio Riverwalk, Renaissance Orlando at SeaWorld®, and Marriott Boston Long Wharf due to stronger group demand and higher banquet spending. These increases were partially offset by lower banquet revenue at Hilton San Diego Bayfront and The Westin Washington, DC Downtown driven by lower group demand.
Current report
Andaz Miami Beach caused food and beverage revenue to increase by $0.7 million.
Current report
The sale of Hyatt Regency San Francisco caused a $2.5 million decrease in food and beverage revenue.
Showing the first 40 of 93 passages. Open the source sections for the rest.
Removed paragraphs (4)
Previous report
to declines in group occupancy at Wailea Beach Resort and Hyatt Regency San Francisco. These decreases were partially offset by increased banquet revenue at JW Marriott New Orleans, The Westin Washington, DC Downtown, and Montage Healdsburg.
Previous report
claims at Wailea Beach Resort, and during the second quarter of 2025, we recognized a $0.9 million settlement for certain property-related claims at Oceans Edge Resort & Marina.
Previous report
During the six months ended June 30, 2026, we invested $53.4 million for renovations and additions to our portfolio and other assets. This cash outflow was partially offset by a $25.0 million deposit received from the potential buyer of Hyatt Regency San
Previous report
In July 2026, we repaid the $25.0 million that was outstanding on our $500.0 million credit facility utilizing proceeds from the sale of Hyatt Regency San Francisco. Following the repayment, we have the full capacity available for future borrowing.
Reworded paragraphs (54)
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 June 30, 2026, we owned 14 hotels, one of which, Hyatt Regency San Francisco, was classified as held for sale because it was under contract for sale and met all held-for-sale criteria. The hotel sale subsequently closed in July 2026. All of our hotels are operated under nationally recognized brands, including Oceans Edge Resort & Marina, which was rebranded as Hilton Key West Resort & Marina on July 1, 2026. Excluding Hyatt Regency San Francisco, our hotels average 475 rooms in size.
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 September 30, 2026, we owned 13 hotels, which average 475 rooms in size. Following the July 1, 2026, rebranding of Oceans Edge Resort & Marina as Hilton Key West Resort & Marina, all of our hotels are operated under nationally recognized brands.
Previous wording
During the first quarter of 2026, the Hawaiian Islands experienced multiple severe storms that impacted our Wailea Beach Resort. The resort remained open during and following the storms that occurred in March but sustained wind and water damage in some of the guestrooms, public areas, and portions of the resort’s roofs. We maintain customary property, casualty, environmental, flood, and business interruption insurance at all of our hotels; however, such coverage is subject to certain limitations, conditions, and deductibles.
Current wording
During the first quarter of 2026, the Hawaiian Islands experienced multiple severe storms that impacted our Wailea Beach Resort, causing wind and water damage to certain guestrooms, public areas, and portions of the resort’s roofs. We maintain customary property, casualty, environmental, flood, and business interruption insurance at all of our hotels; however, such coverage is subject to certain limitations, conditions, and deductibles.
Previous wording
We incurred storm-related repair and restoration costs, net of insurance proceeds, of $0.6 million, which were recorded in repairs and maintenance expense in the consolidated statements of operations for the three and six months ended June 30, 2026. In the second quarter of 2026, we recognized a $1.6 million loss at Wailea Beach Resort related to the write-off of storm-damaged assets, which was recorded in impairment and other losses in the consolidated statements of operations. During the second quarter of 2026, we also recognized $2.4 million in property insurance claim recoveries at Wailea Beach Resort, which were recorded in interest and other income in the consolidated statements of operations. Additionally, we recognized $1.2 million in business interruption insurance proceeds due to storm-related lost profits at the resort which were recorded in other operating revenue in the consolidated statements of operations.
Current wording
During the third quarter of 2026, we recognized a $0.6 million net benefit related to storm-related repair and restoration activity. For the nine months ended September 30, 2026, storm-related repair and restoration costs were fully offset by insurance proceeds. We also recognized a $1.6 million loss related to the write-off of storm-damaged assets, $2.4 million of property insurance claim recoveries, and $1.2 million of business interruption insurance proceeds related to storm-related lost profits, all of which were recognized during the second quarter of 2026. These amounts were recorded in impairment and other losses, interest and other income, and other operating revenue, respectively, in the consolidated statements of operations. No additional storm-related write-offs or business interruption insurance proceeds were recorded during the third quarter of 2026.
Previous wording
that both new hotel construction and new hotel openings were delayed or even cancelled over the past several years due to construction supply constraints, the cost and availability of financing, and inflationary pressures on the cost of building materials, which made new hotel development less financially feasible. We believe that many of these same factors combined with the imposition of tariffs will continue to discourage new hotel supply in many markets, although some markets may experience new hotel openings at or greater than historical levels. Separate from the development of new hotels, an increase in the supply of vacation rental or sharing services such as Airbnb may negatively affect the ability of existing hotels to generate growth in RevPAR and profits.
Current wording
Supply. The addition of new competitive hotels affects the ability of existing hotels to attract demand for lodging and, therefore, impacts the ability to generate growth in RevPAR and profits. The development of new hotels is largely driven by construction costs, the cost and availability of financing, and the expected performance of existing hotels. We believe that both new hotel construction and new hotel openings were delayed or even cancelled over the past several years due to construction supply constraints, the cost and availability of financing, and inflationary pressures on the cost of building materials, which made new hotel development less financially feasible. We believe that many of these same factors combined with the imposition of tariffs will continue to discourage new hotel supply in many markets, although some markets may experience new hotel openings at or greater than historical levels. Separate from the development of new hotels, an increase in the supply of vacation rental or sharing services such as Airbnb may negatively affect the ability of existing hotels to generate growth in RevPAR and profits.
Previous wording
The following table presents our unaudited operating results for the six months ended June 30, 2026 and 2025, including the amount and percentage change in the results between the two periods.
Current wording
The following table presents our unaudited operating results for the nine months ended September 30, 2026 and 2025, including the amount and percentage change in the results between the two periods.
Previous wording
Room revenue. Room revenue increased $12.2 million, or 7.8%, in the second quarter of 2026 as compared to the second quarter of 2025 as follows:
Current wording
Room revenue. Room revenue increased $0.5 million, or 0.4%, in the third quarter of 2026 as compared to the third quarter of 2025 as follows:
Previous wording
For the six months ended June 30, 2026, room revenue increased $28.3 million, or 9.4%, as compared to the six months ended June 30, 2025 as follows:
Current wording
For the nine months ended September 30, 2026, room revenue increased $28.9 million, or 6.6%, as compared to the nine months ended September 30, 2025 as follows:
Previous wording
Food and beverage revenue*.* Food and beverage revenue increased $0.9 million, or 1.1%, in the second quarter of 2026 as compared to the second quarter of 2025, as follows:
Current wording
Food and beverage revenue. Food and beverage revenue increased $4.2 million, or 6.5%, in the third quarter of 2026 as compared to the third quarter of 2025, as follows:
Previous wording
For the six months ended June 30, 2026, food and beverage revenue increased $8.0 million, or 5.5%, as compared to the six months ended June 30, 2025 as follows:
Current wording
For the nine months ended September 30, 2026, food and beverage revenue increased $12.2 million, or 5.8%, as compared to the nine months ended September 30, 2025 as follows:
Previous wording
Other operating revenue. Other operating revenue increased $4.2 million, or 16.5%, in the second quarter of 2026 as compared to the second quarter of 2025 as follows:
Current wording
Other operating revenue. Other operating revenue decreased $0.3 million, or 1.2%, in the third quarter of 2026 as compared to the third quarter of 2025 as follows:
Previous wording
For the six months ended June 30, 2026, other operating revenue increased $6.6 million, or 13.8%, as compared to the six months ended June 30, 2025 as follows:
Current wording
For the nine months ended September 30, 2026, other operating revenue increased $6.3 million, or 8.6%, as compared to the nine months ended September 30, 2025 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 hotel operating expenses increased $8.0 million, or 5.1%, in the second quarter of 2026 as compared to the second quarter of 2025 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 $1.8 million, or 1.2%, in the third quarter of 2026 as compared to the third quarter of 2025 as follows:
Previous wording
For the six months ended June 30, 2026, hotel operating expenses increased $18.8 million, or 6.2%, as compared to the six months ended June 30, 2025 as follows:
Current wording
For the nine months ended September 30, 2026, hotel operating expenses increased $20.5 million, or 4.5%, as compared to the nine months ended September 30, 2025 as follows:
Previous wording
Other property-level expenses*.*Other property-level expenses increased $3.4 million, or 10.8%, in the second quarter of 2026 as compared to the second quarter of 2025 as follows:
Current wording
Other property-level expenses. Other property-level expenses increased $0.9 million, or 3.4%, in the third quarter of 2026 as compared to the third quarter of 2025 as follows:
Previous wording
For the six months ended June 30, 2026, other property-level expenses increased $6.4 million, or 10.5%, as compared to the six months ended June 30, 2025 as follows:
Current wording
For the nine months ended September 30, 2026, other property-level expenses increased $7.4 million, or 8.4%, as compared to the nine months ended September 30, 2025 as follows:
Previous wording
Corporate overhead expense*.*Corporate overhead expense increased $0.4 million, or 5.0%, in the second quarter of 2026 as compared to the second quarter of 2025, due to increased payroll and related expenses and deferred stock amortization expense due to the restructuring of our executive team which included one-time costs incurred in connection with the elimination of the general counsel position in the second quarter of 2026. These increased expenses were partially offset by decreased professional fees.
Current wording
Corporate overhead expense. Corporate overhead expense decreased $0.6 million, or 8.0%, in the third quarter of 2026 as compared to the third quarter of 2025, due to decreased payroll and related expenses resulting from the restructuring of our executive team in the second quarter of 2026, as well as lower professional and due diligence fees.
Previous wording
For the six months ended June 30, 2026, corporate overhead decreased $1.7 million, or 9.6%, as compared to the six months ended June 30, 2025, primarily due to lower payroll and related expenses and deferred stock amortization expense due to the restructuring of our executive team in the first quarter of 2025, as well as lower professional fees. These lower expenses were partially offset by increased payroll and related expenses and deferred stock amortization expense due to the restructuring of our executive team in the second quarter of 2026.
Current wording
For the nine months ended September 30, 2026, corporate overhead expense decreased $2.2 million, or 9.1%, as compared to the nine months ended September 30, 2025, primarily due to lower payroll and related expenses resulting from the restructuring of our executive team in the first quarter of 2025, as well as lower professional and due diligence fees. These lower expenses were partially offset by higher payroll and related expenses resulting from the restructuring of our executive team in the second quarter of 2026, as well as higher corporate governance expenses.
Previous wording
Depreciation and amortization expense*.*Depreciation and amortization expense increased $0.1 million, or 0.4%, in the second quarter of 2026 as compared to the second quarter of 2025 as follows:
Current wording
Depreciation and amortization expense. Depreciation and amortization expense decreased $3.6 million, or 10.7%, in the third quarter of 2026 as compared to the third quarter of 2025 as follows:
Previous wording
For the six months ended June 30, 2026, depreciation and amortization expense increased $2.0 million, or 3.1%, as compared to the six months ended June 30, 2025 as follows:
Current wording
For the nine months ended September 30, 2026, depreciation and amortization expense decreased $1.6 million, or 1.6%, as compared to the nine months ended September 30, 2025 as follows:
Previous wording
Impairment and other losses*.*Impairment and other losses were $1.6 million for both the three and six months ended June 30, 2026, and zero for both the three and six months ended June 30, 2025. In June 2026, we recorded a $1.6 million loss at Wailea Beach Resort related to the write-off of storm-damaged assets.
Current wording
Impairment and other losses. Impairment and other losses were zero and $1.6 million for the three and nine months ended September 30, 2026, respectively, and zero for both the three and nine months ended September 30, 2025. In June 2026, we recorded a $1.6 million loss at Wailea Beach Resort related to the write-off of storm-damaged assets.
Previous wording
Interest and other income*.*Interest and other income totaled $3.8 million and $2.3 million in the second quarters of 2026 and 2025, respectively, and $5.3 million and $3.9 million in the six months ended June 30, 2026 and 2025, respectively.
Current wording
Interest and other income. Interest and other income totaled $2.6 million and $3.2 million in the third quarters of 2026 and 2025, respectively, and $7.9 million and $7.0 million in the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
During the second quarters of 2026 and 2025, we recognized interest income of $1.3 million and $1.4 million, respectively. Interest income decreased in the second quarter of 2026 as compared to the second quarter of 2025 due to lower interest rates. In addition, during the second quarter of 2026, we recognized property insurance recoveries of $2.4 million for storm-related damage
Current wording
During the third quarters of 2026 and 2025, we recognized interest income of $2.5 million and $1.4 million, respectively. Interest income increased in the third quarter of 2026 as compared to the third quarter of 2025 due to increases in our cash balances following our disposition of Hyatt Regency San Francisco in July 2026. In addition, during the third quarter of 2026, we recognized property insurance recoveries of $0.1 million. During the third quarter of 2025, we recognized a $1.0 million settlement for certain construction-related claims at Hilton Key West Resort & Marina, $0.7 million in net property insurance recoveries related to 2025 water damage at The Westin Washington, DC Downtown, and other miscellaneous income of $0.1 million.
Previous wording
During the six months ended June 30, 2026 and 2025, we recognized interest income of $2.6 million and $2.8 million, respectively. Interest income decreased in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 due to lower interest rates. During the six months ended June 30, 2026, we recognized property insurance recoveries of $2.6 million, primarily related to storm-related damage claims at Wailea Beach Resort, and other miscellaneous income of $0.1 million. During the six months ended June 30, 2025, we recognized a $0.9 million settlement for certain property-related claims at Oceans Edge Resort & Marina, property insurance recoveries of $0.1 million, and other miscellaneous income of $0.1 million.
Current wording
During the nine months ended September 30, 2026 and 2025, we recognized interest income of $5.1 million and $4.2 million, respectively. Interest income increased in the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 due to increases in our cash balances following our disposition of Hyatt Regency San Francisco in July 2026. During the nine months ended September 30, 2026, we recognized property insurance recoveries of $2.7 million, primarily related to storm-related damage claims at Wailea Beach Resort, and other miscellaneous income of $0.1 million. During the nine months ended September 30, 2025, we recognized a $1.9 million settlement for certain construction-related claims at Hilton Key West Resort & Marina, $0.8 million in net property insurance recoveries 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 $0.1 million.
Previous wording
Interest expense decreased $1.4 million, or 10.5%, in the second quarter of 2026 as compared to the same period in 2025, and decreased $2.8 million, or 10.8%, in the six months ended June 30, 2026 as compared to the same period in 2025.
Current wording
Interest expense decreased $2.7 million, or 20.0%, in the third quarter of 2026 as compared to the same period in 2025, and decreased $5.5 million, or 13.9%, in the nine months ended September 30, 2026 as compared to the same period in 2025.
Previous wording
The decreases in interest expense during the second quarter of 2026 and the six months ended June 30, 2026 as compared to the same periods in 2025 were primarily due to a noncash change of $2.1 million and $5.2 million, respectively, in the fair market value of our derivatives. These decreases in interest expense were partially offset by reductions in capitalized interest of $0.4 million and $1.4 million in the second quarter and the six months ended June 30, 2026, respectively, as compared to the same periods in 2025. Capitalized interest in 2025 was related to the extensive renovation work at Andaz Miami Beach, and there was no corresponding capitalization of interest in the second quarter and the six months ended June 30, 2026.
Current wording
The decreases in interest expense during the third quarter of 2026 and the nine months ended September 30, 2026 as compared to the same periods in 2025 were primarily due to noncash changes of $2.5 million and $7.7 million, respectively, in the fair market value of our derivatives. Additionally, interest expense during the third quarter of 2026 decreased by $0.2 million, as compared to the same period in 2025, primarily due to lower average interest rates on our term loans. These decreases in interest expense were partially offset by a reduction in capitalized interest of $1.4 million during the nine months ended September 30, 2026, as compared to the same period in 2025. Capitalized interest in the first half of 2025 was related to the extensive renovation work at Andaz Miami Beach, and there was no corresponding capitalization of interest during the nine months ended September 30, 2026.
Previous wording
The decreases in total interest expense during the second quarter of 2026 and the six months ended June 30, 2026 as compared to the same periods in 2025 were partially offset by increases of $0.3 million and $0.8 million, respectively, in interest expense on our debt primarily due to higher average debt balances, partially offset by lower average interest rates on our term loans. In addition, interest expense during the second quarter and the six months ended June 30, 2026 increased by $0.1 million and $0.3 million, respectively, as compared to the same periods in 2025, due to higher amortization of deferred financing costs related to costs associated with the execution of the Third Amended and Restated Credit Agreement entered into in September 2025.
Current wording
The decreases in total interest expense during the third quarter of 2026 and the nine months ended September 30, 2026 as compared to the same periods in 2025 were partially offset by a $0.5 million increase in interest expense on our debt during the nine months ended September 30, 2026, primarily due to higher average debt balances, partially offset by lower average interest rates on our term loans. In addition, interest expense during the third quarter and the nine months ended September 30, 2026 increased by $0.1 million and $0.3 million, respectively, as compared to the same periods in 2025, due to higher amortization of deferred financing costs related to costs associated with the execution of the Third Amended and Restated Credit Agreement entered into in September 2025.
Previous wording
Our weighted average interest rate per annum, including our variable rate debt obligations and excluding capitalized interest, was approximately 5.0% and 5.5% at June 30, 2026 and 2025, respectively. Approximately 59.2% and 51.0% of our outstanding debt had fixed interest rates or had been swapped to fixed interest rates at June 30, 2026 and 2025, respectively.
Current wording
Our weighted average interest rate per annum, including our variable rate debt obligations and excluding capitalized interest, was approximately 5.1% and 5.2% at September 30, 2026 and 2025, respectively. Approximately 50.3% and 70.4% of our outstanding debt had fixed interest rates or had been swapped to fixed interest rates at September 30, 2026 and 2025, respectively. Including the effect of our interest rate derivative swaps entered into in October 2026 on Term Loan 2, 68.6% of our outstanding debt has fixed interest rates or has been swapped to fixed interest rates.
Previous wording
Loss on sale of assets. Loss on sale of assets totaled zero for both the second quarter and the six months ended June 30, 2026 and a loss of $8.8 million for both the second quarter and the six months ended June 30, 2025. In the second quarter and the six months ended June 30, 2025, we recognized an $8.8 million loss on our sale of the Hilton New Orleans St. Charles.
Current wording
Gain (loss) on sale of assets. Gain on sale of assets totaled $31.5 million for both the third quarter and the nine months ended September 30, 2026, zero for the third quarter of 2025 and a loss of $8.8 million for the nine months ended September 30, 2025. In the third quarter and nine months ended September 30, 2026, we recognized a $31.5 million gain on our sale of Hyatt Regency San Francisco. In the nine months ended September 30, 2025, we recognized an $8.8 million loss on our sale of Hilton New Orleans St. Charles.
Previous wording
For the second quarter and the six months ended June 30, 2026, we recognized net current income tax provisions of $0.2 million and $0.3 million, respectively, resulting from current state and federal income tax expenses.
Current wording
For the third quarter and the nine months ended September 30, 2026, we recognized net current income tax provisions of $0.3 million and $0.6 million, respectively, resulting from current state and federal income tax expenses, net of any refunds.
Previous wording
In the second quarter and the six months ended June 30, 2025, we recognized net current income tax provisions of $37,000 and $0.1 million, respectively, resulting from current state and federal income tax expenses, net of any refunds.
Current wording
In the third quarter and the nine months ended September 30, 2025, we recognized net current income tax provisions of $0.1 million and $0.3 million, respectively, resulting from current state and federal income tax expenses, net of any refunds.
Previous wording
The dividend rate on the Series G preferred stock increased to the greater of the rate equal to Montage Healdsburg’s annual net operating income yield on our total investment in the resort or 4.5%, and 6.5% in July 2024, and July 2025, respectively, resulting in dividend rates of 6.5% and 4.5% for both the second quarters and the six months ended June 30, 2026 and 2025, 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 Montage Healdsburg’s annual net operating income yield on our 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 Montage Healdsburg’s annual net operating income yield on our total investment in the resort or 4.5%, 6.5%, and 7.5% beginning in July 2024, July 2025, and July 2026, respectively. Accordingly, the dividend rate was 4.5% for the first and second quarters of 2025, 6.5% for the third and fourth quarters of 2025 and the first and second quarters of 2026, and 7.5% for the third quarter of 2026. Beginning in the third quarter of 2027, the annual dividend rate will increase to the greater of 8.5% or the rate equal to 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 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.
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 we do. 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
The following table reconciles our unaudited net income to EBITDAre and Adjusted EBITDAre for the three and six months ended June 30, 2026 and 2025 (in thousands):
Current wording
The following table reconciles our unaudited net income to EBITDAre and Adjusted EBITDAre for the three and nine months ended September 30, 2026 and 2025 (in thousands):
Previous wording
Adjusted EBITDAre increased $4.0 million, or 5.5%, in the second quarter of 2026 as compared to the second quarter of 2025, and increased $14.5 million, or 11.2%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, primarily due to the following:
Current wording
Adjusted EBITDAre increased $4.4 million, or 8.8%, in the third quarter of 2026 as compared to the third quarter of 2025, and increased $18.9 million, or 10.5%, in the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to the following:
Previous wording
The following table reconciles our unaudited net income to FFO attributable to common stockholders and Adjusted FFO attributable to common stockholders for the three and six months ended June 30, 2026 and 2025 (in thousands):
Current wording
The following table reconciles our unaudited net income to FFO attributable to common stockholders and Adjusted FFO attributable to common stockholders for the three and nine months ended September 30, 2026 and 2025 (in thousands):
Previous wording
Adjusted FFO attributable to common stockholders increased $3.3 million, or 6.0%, and increased $11.9 million, or 12.3%, in the second quarter and the six months ended June 30, 2026, respectively, as compared to the same periods in 2025 primarily due to the same reasons noted in the discussion above regarding Adjusted EBITDAre.
Current wording
Adjusted FFO attributable to common stockholders increased $5.4 million, or 17.1%, and increased $17.4 million, or 13.5%, in the third quarter and the nine months ended September 30, 2026, respectively, as compared to the same periods in 2025 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, our credit facility, key money, and property insurance. Our primary uses of cash were for capital expenditures for hotels and other assets, operating expenses, repurchases of our preferred and common stock, repayments of our senior notes, 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 hotel dispositions, our term loans, our credit facility, key money, and property insurance. Our primary uses of cash were for capital expenditures for hotels and other assets, the acquisition of land adjacent to one of our hotels, operating expenses, repurchases of our preferred and common stock, repayments of our credit facility, term loans, and senior notes, 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 $107.4 million in the six months ended June 30, 2026, as compared to $90.8 million in the six months ended June 30, 2025. The net increase in cash provided by operating activities during the six months ended June 30, 2026, as compared to the same period in 2025 was primarily due to additional operating cash provided by the increase in travel demand benefiting our hotels, decreased corporate-level expenses, and the continued post-renovation ramp-up of Andaz Miami Beach. These increases were partially offset by our sale of Hilton New Orleans St. Charles.
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 $161.2 million in the nine months ended September 30, 2026, as compared to $145.1 million in the nine months ended September 30, 2025. The net increase in cash provided by operating activities during the nine months ended September 30, 2026, as compared to the same period in 2025 was primarily due to additional operating cash provided by the increase in travel demand benefiting our hotels, decreased corporate-level expenses, and the continued post-renovation ramp-up of Andaz Miami Beach. These increases were partially offset by our sale of Hyatt Regency San Francisco and Hilton New Orleans St. Charles.
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 investing activities during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, 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 provided by or used in investing activities during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, was as follows (in thousands):
Previous wording
During the six months ended June 30, 2025, we invested $56.0 million for renovations and additions to our portfolio and other assets. This cash outflow was partially offset by $46.3 million of proceeds received from the sale of Hilton New Orleans St. Charles, $4.0 million in key money received from the manager of one of our hotels pursuant to the hotel’s management agreement, and $0.1 million in property insurance proceeds received.
Current wording
During the nine months ended September 30, 2025, we invested $73.7 million for renovations and additions to our portfolio and other assets, and we purchased land adjacent to the Hilton Key West Resort & Marina for $1.3 million. These cash outflows were partially offset by $46.3 million of proceeds received from the sale of Hilton New Orleans St. Charles, $4.0 million in key money received from the manager of one of our hotels pursuant to the hotel’s management agreement, and $0.9 million in property insurance proceeds received.
Showing the first 40 of 54 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
During the nine months ended September 30, 2026, we received $270.8 million of proceeds from the sale of Hyatt Regency San Francisco, $4.0 million in key money received from the manager of one of our hotels pursuant to the hotel’s management agreement, and $2.6 million in property insurance proceeds received. These cash inflows were partially offset by our investment of $76.6 million for renovations and additions to our portfolio and other assets.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Francisco, $4.0 million in key money received from the manager of one of our hotels pursuant to the hotel’s management agreement, and $0.2 million in property insurance proceeds received.
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
Recoverability of assets that will continue to be used is measured by comparing the carrying amount of the asset to the related total future undiscounted net cash flows. If an asset’s carrying value is not recoverable through those cash flows,