Sunstone Hotel Investors, Inc. · NYSE:SHO
Sunstone Hotel Investors — Investor Presentation (January 2014)
19 slides from Sunstone Hotel Investors's investor presentation, January 2014
Slide 1: Company Presentation January 2014
SUNSTONE HOTEL INVESTORS, INC Company Presentation January 2014
Slide 2: Forward-Looking Statements
SUNSTONE HOTEL INVESTORS, INC Forward‐Looking Statements This presentation contains forward‐looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some
Slide 3: Company Profile
SUNSTONE HOTEL INVESTORS, INC Company Profile Sunstone is a leading hotel investment company with an enterprise value approaching $4 billion. Capital Structure / Valuation Metrics Sunstone Portfolio Metrics 1 Recent Stock Price $13.26 Hotels 3 29 2 3 Pro Forma Shares (MM) 182.87 Rooms 13,744 3 Equit
Slide 4: Recent highlights
SUNSTONE HOTEL INVESTORS, INC Sunstone Hotel Investors, Inc. Recent highlights. Acquisitions • Hyatt Chicago Magnificent Mile (June 2012) and Hilton Garden Inn Chicago Downtown (July 2012) • Hilton St. Charles New Orleans (May 2013) • Boston Park Plaza (July 2013) • Hyatt Regency San Francisco (De
Slide 5: Sunstone Investment Thesis
SUNSTONE HOTEL INVESTORS, INC Sunstone Investment Thesis High‐quality portfolio. Strong balance sheet. Near‐term upside. High Quality Urban Portfolio – Positioned to Outperform 29 institutional‐quality, upper‐upscale hotels comprising of 13,744 rooms Approximately 82% of hotel EBITDA generated
Slide 6: High-Quality Urban Portfolio
SUNSTONE HOTEL INVESTORS, INC High‐Quality Urban Portfolio Geographically diverse portfolio located primarily in coastal urban markets. 2013 Pro Forma Total EBITDA by Region Northeast (10) (number of hotels in parenthesis) 44.1% Mid‐West (3) • Boston 15% (3) 7.5% • NYC 13% (3) • Chicago 7% (3) • DC/
Slide 7: High-Quality Urban Portfolio
SUNSTONE HOTEL INVESTORS, INC High‐Quality Urban Portfolio Since 2011, we have significantly improved the quality and scale of our portfolio by selectively acquiring high‐quality hotels and disposing of non‐core legacy assets. Hotel EBITDA ($mm) 1 Average RevPAR 1 $150 $140 San Diego $130 $140 $120
Slide 8: High-Quality Urban Portfolio
SUNSTONE HOTEL INVESTORS, INC High‐Quality Urban Portfolio With significant exposure to key growth markets, our portfolio is positioned to outperform the industry over the next three years. The Top 25 markets have outperformed industry RevPAR growth by at least 100 bps each year over the previous fo
Slide 9: Balance Sheet Strength – Significant Leverage Reduction
SUNSTONE HOTEL INVESTORS, INC Balance Sheet Strength – Significant Leverage Reduction Since 2011, we have significantly improved our balance sheet through dispositions of highly‐ levered assets, equity funded acquisitions and debt repayments. Relative Leverage: Net Debt + Pref to EBITDA 9.0x 8.0x Si
Slide 10: Balance Sheet Strength – Total Shareholder Return
SUNSTONE HOTEL INVESTORS, INC Balance Sheet Strength – Significant Leverage Reduction With disciplined management and a solid plan, a lodging REIT can simultaneously deleverage while delivering above‐average shareholder returns Total Shareholder Return (Dec. 2011 ‐ Dec. 2013) Sunstone S&P 500 Host D
Slide 11: Cycle-Appropriate Strategy
SUNSTONE HOTEL INVESTORS, INC Cycle‐Appropriate Strategy We will continue to carefully improve the quality and scale of our portfolio while gradually deleveraging our balance sheet during the remainder of the growth phase. Minimize leverage at the peak Capitalize on distress Build portfolio quality
Slide 12: Meaningful Near-Term Upside - Renovations
SUNSTONE HOTEL INVESTORS, INC Meaningful Near‐Term Upside ‐ Renovations We completed four major renovations in 2013 resulting in approximately $10 million of revenue disruption, largely in H1 2013. Hilton Times Square Hyatt Chicago Hyatt Newport Beach Renaissance Westchester Completed: Q2 2013 Compl
Slide 13: Meaningful Near-Term Upside - Recent Acquisitions
SUNSTONE HOTEL INVESTORS, INC Meaningful Near‐Term Upside ‐ Recent Acquisitions During 2013, we acquired over $600 million in institutional, city‐center hotels improving the overall quality‐level and growth profile of the Company. Boston Park Plaza Hilton New Orleans Hyatt Regency San Hotel Francisc
Slide 14: Meaningful Near-Term Upside - Constructive Fundamentals
SUNSTONE HOTEL INVESTORS, INC Meaningful Near‐Term Upside ‐ Constructive Fundamentals Solid demand growth, moderate supply growth. Demand‐to‐Supply: The current U.S. demand‐to‐supply growth rate spread is 170 bps in favor of demand, well above historical norms. We expect our industry's positive de
Slide 15: Meaningful Near-Term Upside – Asset Management
SUNSTONE HOTEL INVESTORS, INC Meaningful Near‐Term Upside – Asset Management Implementing new operating efficiencies. F&B Consolidation: Combining bars, restaurants and lobbies to create highly functional and profitable space. In the nine hotels completed during 2010 through 2012, we’ve seen an in
Slide 16: Meaningful Near-Term Upside – Dividend Growth
SUNSTONE HOTEL INVESTORS, INC Meaningful Near‐Term Upside – Dividend Growth On a pro forma basis, including our 2013 acquisitions and excluding NOLs applied in 2013, our dividend yield would be approximately 3.8%. Relative Dividend Yields 8% 7% 6% 5% 4% 3.8% = Pro‐Forma SHO Dividend 7.3% 1.0% 3% 4.7
Slide 17: Meaningful Near-Term Upside – Stock Return Potential
SUNSTONE HOTEL INVESTORS, INC Meaningful Near‐Term Upside – Stock Return Potential The lodging stock returns achieved during recent cycles imply substantial near‐term upside as the current recovery continues. We are here COMPANY PRESENTATION • PAGE 17 Source: MVL & Co. November 4, 2013.
Slide 18: Sunstone Investment Thesis
SUNSTONE HOTEL INVESTORS, INC Sunstone Investment Thesis High‐quality portfolio. Strong balance sheet. Near‐term upside. High Quality Urban Portfolio – Positioned to Outperform 29 institutional‐quality, upper‐upscale hotels comprising of 13,744 rooms Approximately 82% of hotel EBITDA generated
Slide 19: Sunstone Hotel Investors, Inc. contact details
SUNSTONE HOTEL INVESTORS, INC Sunstone Hotel Investors, Inc. 120 Vantis, Suite 350 Aliso Viejo, California 92656 www.sunstonehotels.com COMPANY PRESENTATION • PAGE 19
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