Sunstone Hotel Investors, Inc. · NYSE:SHO
Sunstone Hotel Investors — Investor Presentation (September 2023)
31 slides from Sunstone Hotel Investors's investor presentation, Sep 12, 2023
Slide 1: Company Presentation September 2023
COMPANY PRESENTATION SEPTEMBER 2023
Slide 2: Forward-Looking Statements
2 FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms and phrases such as and other similar terms and phrases, including opinions, referen
Slide 3: Recent Operating Highlights
3 RECENT OPERATING HIGHLIGHTS Marriott Boston Long Wharf • Q2 Earnings Above Guidance: Generated Q2 Adjusted EBITDAre and FFO per share above the high-end of guidance ranges despite softer than expected RevPAR growth. • Raised Dividend: Increased quarterly base dividend by 40% from $0.05 per share t
Slide 4: Investment Highlights
4 INVESTMENT HIGHLIGHTS High-Quality Portfolio Well-located real estate with a balance of convention, resort and urban assets Focused Strategy Investing in our portfolio, capital recycling, and returning capital to shareholders Balanced Investment Allocating capital to achieve both near-term and lon
Slide 5: High Quality Portfolio
HIGH QUALITY PORTFOLIO Geographically Diversified Across Major Convention, Destination Resort and Gateway Urban Markets Note: Percentages reflect estimated run rate EBITDA contribution and are shown pro forma for acquisitions at projected stabilized levels. 5 15 HOTELS SAN FRANCISCO & WINE COUNTRY 1
Slide 6: Value Creation Through Capital Allocation
VALUE CREATION THROUGH CAPITAL ALLOCATION Focused Corporate Strategy 6 INVESTING IN OUR PORTFOLIO CAPITAL RECYCLING RETURNING CAPITAL TO SHAREHOLDERS We focus on three priorities which we believe will lead to value creation and superior shareholder returns: Montage Healdsburg Montage Healdsburg
Slide 7: Investing in the Portfolio: Value Creation Through Brand Conversions
INVESTING IN THE PORTFOLIO Value Creation Through Brand Conversions 7 • Full renovation of the Renaissance Washington DC and repositioning as a flagship Westin to garner higher rates and attract additional occupancy. • Renovation will be substantially complete in Q4 2023, and the repositioned hotel
Slide 8: Value Creation Through Repositioning
ANDAZ MIAMI BEACH RENOVATION Value Creation Through Repositioning 8 • Transformation of The Confidante Miami Beach to Andaz Miami Beach begins in Q4 2023. • Partnering with José Andrés Group to debut Bazaar Meat Miami Beach, an on-property signature dining destination. • Renovation will touch all as
Slide 9: Investment Overview
ANDAZ MIAMI BEACH RENOVATION 9 Investment Overview ($ in millions) Purchase Price $232 Repositioning Scope Net Investment $70 Additional ROI Projects $10 Total Renovation Net Investment $312 Stabilized NOI Yield on Total Renovation Net Investment 8% to 9% Post Renovation Key Count with Higher Suite
Slide 10: Recent Market Performance and Rational Underwriting
100 400 700 1,000 Luxury Comp Set 2019 Luxury Comp Set 2022 The Confidante Pre-Renovation 2022 Andaz Stabilized Underwriting ANDAZ MIAMI BEACH RENOVATION Note: Comp set ADR data per STR. Stabilized ADR range reflects discounted future projections. 10 Recent Market Performance and Rational Underwriti
Slide 11: Partnering with José Andrés Group to Debut Bazaar Meat Miami Beach
ANDAZ MIAMI BEACH RENOVATION Partnering with José Andrés Group to Debut Bazaar Meat Miami Beach, an On-Property Signature Dining Destination 11 Bazaar Meat Las Vegas Bazaar Meat Los Angeles The Bazaar New York
Slide 12: King Guestroom
ANDAZ MIAMI BEACH RENOVATION King Guestroom 12
Slide 13: Double Queen Guestroom
ANDAZ MIAMI BEACH RENOVATION Double Queen Guestroom 13
Slide 14: Double Queen Guestroom
ANDAZ MIAMI BEACH RENOVATION Double Queen Guestroom 14
Slide 15: Guest Suite
ANDAZ MIAMI BEACH RENOVATION Guest Suite 15
Slide 16: Guest Suite
ANDAZ MIAMI BEACH RENOVATION Guest Suite 16
Slide 17: Guest Suite
ANDAZ MIAMI BEACH RENOVATION Guest Suite 17
Slide 18: Resort Lobby
ANDAZ MIAMI BEACH RENOVATION Resort Lobby 18
Slide 19: Membership Beach Club and Lobby Deck
ANDAZ MIAMI BEACH RENOVATION Membership Beach Club and Lobby Deck 19
Slide 20: Lobby Deck and Upper Pool
ANDAZ MIAMI BEACH RENOVATION Lobby Deck and Upper Pool 20
Slide 21: Upper Pool (shown with movable floor system partially raised)
ANDAZ MIAMI BEACH RENOVATION Upper Pool (shown with movable floor system partially raised) 21
Slide 22: Upper Pool and Bar
ANDAZ MIAMI BEACH RENOVATION Upper Pool and Bar 22
Slide 23: Lower Pool
ANDAZ MIAMI BEACH RENOVATION Lower Pool 23
Slide 24: Capital Recycling
24 CAPITAL RECYCLING A balanced approach to recycling capital. Harvesting successful investments and redeploying proceeds into superior return opportunities. New Investment Opportunities Value Add Superior Growth Investment Lifecycle Asset Management ROI Investments Harvest Investment End of Lifecyc
Slide 25: Returning Capital to Shareholders
1.0x 3.0x 5.0x 7.0x 9.0x 0.0% 3.0% 6.0% 9.0% 12.0% P K SHO RLJ XHR PEB HST DRH RETURNING CAPITAL TO SHAREHOLDERS Meaningful Capital Returned through Dividends and Share Repurchases Note: Per company filings. Reflects total share repurchases and dividends paid since the beginning of 2022 as a percent
Slide 26: Prudent Balance Sheet Management
1.0x 3.0x 5.0x 7.0x 9.0x HST SHO DRH XHR RLJ P K PEB Fixed Floating PRUDENT BALANCE SHEET MANAGEMENT Leverage Profile Provides Flexibility and Capacity for Future Growth Note: Data per company filings. Consensus estimates per FactSet. 26 We maintain a lowly levered balance sheet which allows for sig
Slide 27: Multiple Drivers of EBITDA Growth
MULTIPLE DRIVERS OF EBITDA GROWTH Demand Recovery, Recent Acquisitions and Other Portfolio Investments Will All Contribute to Growth 27 Our portfolio has significant embedded EBITDA growth potential as travel demand continues to normalize and as we recognize the benefit of our recent acquisitions an
Slide 28: Longer-Term Growth Opportunities
LONGER-TERM GROWTH OPPORTUNITIES Mining Value Across the Portfolio 28 Four Seasons Resort Napa Valley • Villa conversion and addition of a new rooms tower at the Wailea Beach Resort. • Upbranding and rebranding opportunities at certain assets within the portfolio. • Excess land and water park additi
Slide 29: Wailea Beach Resort Update
WAILEA BEACH RESORT UPDATE Welcoming Guests and Caring for the Community 29 • The Wailea Beach Resort did not sustain any physical damage from the fires on Maui in August 2023. • The resort has remained fully operational serving both first responders, members of the community and leisure guests. • J
Slide 30: Commitment to Corporate Responsibility
COMMITMENT TO CORPORATE RESPONSIBILITY Sunstone Conducts Business According to the Highest Moral and Ethical Standards Note: Intensity reduction statistics represent progress through 2019 as compared to a 2015 baseline. 30 We take a holistic approach to our business and balance the interests of all
Slide 31: Sunstone Hotel Investors
SUNSTONE HOTEL INVESTORS
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