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Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Sunstone Hotel Investors Fourth Quarter Earnings Call. [Operator Instructions] I would like to remind everyone that this conference is being recorded today, February 27, 2026, at 12:00 p.m. Eastern Time. I will now turn the call over to Mr. Aaron Reyes, Chief Financial Officer. Please go ahead, sir.

Thank you, operator. Before we begin, I would like to remind everyone that this call contains forward-looking statements that are subject to risks and uncertainties, including those described in our filings with the SEC, which could cause actual results to differ materially from those projected. We caution you to consider these factors in evaluating our forward-looking statements. We also note that the commentary on this call will contain non-GAAP financial information, including adjusted EBITDAre, adjusted FFO and hotel adjusted EBITDAre. We are providing this information as a supplement to information prepared in accordance with generally accepted accounting principles. Additional details on our quarterly results have been provided in our earnings release and supplemental, which are available in the Investor Relations section of our website. With us on the call today are Bryan Giglia, Chief Executive Officer; and Robert Springer, President and Chief Investment Officer. After our remarks, the team will be available to answer your questions. With that, I would like to turn the call over to Bryan. Please go ahead.

Thank you, Aaron, and good morning, everyone. Despite the various headwinds that impacted our industry in 2025, our portfolio finished the year on a high note with fourth quarter operating results that exceeded our expectations, driven by broad-based strength across the portfolio. The fourth quarter capped off a productive year at Sunstone, where we made further progress on our 3 strategic objectives, which include recycling capital, investing in our portfolio and returning capital to our shareholders. Earlier in the year, we completed the sale of the Hilton New Orleans at a mid-6% cap rate inclusive of required near-term capital and fully recycled the proceeds into the repurchase of our stock at a compelling discount and a higher implied yield. In addition, we completed several capital projects, including the debut of the Andaz Miami Beach, which despite its later opening, had a solid festive period and good momentum heading into this year. Lastly, we returned more than $170 million of capital to our shareholders through a well-covered dividend and accretive share repurchases. These strategic accomplishments will drive growth in per share earnings and NAV in the years to come. We will share additional details on our outlook and our expectations for 2026 shortly, but I'll start with a quick recap on the fourth quarter results. As I noted at the top of the call, our results came in better than expected with total RevPAR growth of 7.4% in the quarter or 12.5%, including the contribution from Andaz. Our resorts led the portfolio driven by solid performance at the Wailea Beach Resort. As we shared with you on our recent calls, our results in Maui were hampered through much of last year as market demand normalized. We were pleased to see the green shoots we witnessed at the resort in the fall continue into year-end, leading to 19% RevPAR growth in the quarter. On the opposite side of the country, Andaz Miami Beach delivered year-end results that were ahead of expectations, and the outperformance has carried into the early parts of this year, positioning the resort well to deliver on our expectations for 2026. We are pleased with the demand our renovated resort is attracting, including high-profile business around some key events in the market that should help the resort further build awareness. Performance at our Wine Country resorts was also stronger than expected with Montage Healdsburg capping off a better year with 15% total RevPAR growth in the quarter and just over 9% for the year. Overall, our resorts were our strongest performing segment in Q4, and we expect that to continue into 2026, but now with the added benefit of a full year contribution from Andaz Miami Beach. At our urban hotels, we were pleased with our quarterly performance at Marriott Long Beach Downtown, which continued to benefit from its brand conversion in 2024 and generated total RevPAR growth of 12%. Similarly, the Portland market continues to recover with the Bidwell Marriott turning in nearly 13% growth. This strength was partially offset by a softer market and tougher comps in Boston and New Orleans. While top line growth was less robust at our urban hotels, we continue to work with our operators to control costs and managed to grow margins during the quarter. Our convention hotels turned in better-than-expected performance with RevPAR growth of 2.8%, even with some headwinds from the meeting space renovations that we had underway in San Antonio and San Diego. Excluding these 2 hotels, our convention hotel RevPAR growth was 5.3% during the quarter. San Francisco was once again a standout performer, which added to solid top line results in the first 3 quarters of the year to generate more than 12% total RevPAR growth for the year. We continue to be encouraged by how the market and our hotel are setting up for additional growth this year with group pace up in the low double-digit range and a strong start with good group activity in January and the Super Bowl in February. The Renaissance Orlando at SeaWorld also had a solid quarter with total RevPAR growth of more than 10% on a better mix of business. Group revenue production for the current and future periods in Orlando increased over 10% last year, and the hotel is pacing for better performance in 2026. Operating results in San Antonio were softer in 2025 on a lighter group event calendar and some displacement from our completed meeting space renovation, but 2026 should benefit from increased production and the renovation. As we shared with you on prior calls, performance last year in Washington, D.C. was less robust than initially anticipated and was impacted by government spending cuts, changes in policies and the government shutdown. Similarly, our results in San Diego were hampered by softer transient demand and a less constructive backdrop for international travel. On the expense side, we were pleased with our operators' ability to drive efficiencies in response to continued cost pressures. We knew coming into the year that 2025 would be particularly tough on margins as contractual cost escalations at certain of our larger hotels were adding to general inflationary pressures across the portfolio. I am pleased to report that we made significant progress in managing costs and delivered comparable portfolio margin growth of 40 basis points during the year on total RevPAR growth of 3.5%. This was a much better cost management outcome than we expected at the start of the year. While some of the efficiency measures that were additive in 2025 will be harder to sustain as we move into this year, we will continue to work with our hotel teams to manage costs, increase productivity and defend margins. As we look into 2026, we see some reasons to be optimistic about the year ahead. Andaz Miami Beach is starting off well with impressive year-to-date occupancy above 80% at a mid-$500 rate. In addition, the resort has nearly 8,000 group room nights already on the books, representing more than half of our budgeted room nights for the year, which is very strong for a market with a shorter-term booking window. The property is building momentum, which will continue this year with the opening of Bazaar Meat and our membership Beach Club. We are seeing additional positive signs as market recovery continues in Northern California, fundamentals in Biolea are more constructive, and there is the potential for industry-wide lift from special events such as F1 in Miami, which we missed last year, America 250 celebrations and the World Cup. At the same time, our focused portfolio will experience headwinds from softer transient demand in San Diego and continued uncertainty in D.C., 2 of our larger markets, which will offset some growth. That said, both hotels had better-than-anticipated transient demand in January and February, which, if current trends continue, could result in a better-than-anticipated year. While there are many encouraging signs, the industry and Sunstone have been disappointed by various headwinds over the past 2 years, making us more cautious. That said, we are excited about our prospects this year. And if costs remain controlled and some of these events produce more than our modest expectations, we could be positioned to see performance accelerate as the year progresses. The guidance that Aaron will share with you later attempts to balance these factors and reflect an outlook that we believe is reasonable and achievable based on how we see things today. As we move through 2026, we will continue to execute on the 3 components of our strategy: recycling capital, investing in our portfolio and returning capital to shareholders. While the transaction market has been quiet the last couple of years, we are clearly seeing some incremental activity, and we are looking for ways to thoughtfully demonstrate the value of our portfolio. In the meantime, we are focused on delivering profitability growth from operations and realizing the benefits of our investment projects. We expect these actions will support our capital return objectives in the coming year. And with that, I'll turn the call over to Robert to give some additional details on recent capital investment activity and our plans for 2026.

Thanks, Bryan. 2025 was a busy year for us on the operations and investment front. We debuted Andaz Miami Beach in the second quarter and the fully renovated resort looks great and is gaining traction. We have been pleased with recent transient booking velocity and the progress we have made attracting high-quality group business. We will round out the resort this year with the addition of the Beach Club and the introduction of Bazaar Meat, the resort's signature dining destination. Performance in the initial weeks of 2026 has been encouraging with year-to-date RevPAR of nearly $475 and the resort is well positioned to deliver earnings growth this year and into 2027. Earlier in 2025, we completed a rooms renovation at Wailea Beach Resort and are happy to see the demand backdrop turning a corner on the island. We have the opportunity for meaningful growth at the property as occupancy rebounds and we benefit from our recent investment. We are seeing good progress with RevPAR index increasing 17 points sequentially into the fourth quarter as the market normalizes and the resort reestablishes its competitive positioning. In the fourth quarter, we completed a renovation of the meeting space in San Antonio, which complements the room renovation done just prior to our acquisition, and the hotel now looks great from top to bottom. In San Diego, we are putting the finishing touches on a renovation of the meeting space there as well, which should allow the hotel to maintain its leading position in this premier group event destination. We are completing this work in phases to minimize disruption, but will have a modest amount of earnings headwinds in the first quarter. The project remains on schedule and on budget. This year, we will also be performing some maintenance projects at our Renaissance Orlando, facade work and a rooms refresh at Oceans Edge, Resort and Marina as well as some smaller routine projects across the rest of the portfolio. As Bryan alluded to earlier, we are seeing some incremental signs of life in the transaction market. While we are hopeful this will provide a more constructive backdrop to execute on our capital recycling strategy, we expect to remain disciplined in our approach and mindful of other capital allocation opportunities available to us. With that, I'll turn it over to Aaron. Please go ahead.

Thanks, Robert. As we noted at the top of the call, our earnings results for the fourth quarter came in ahead of expectations as stronger leisure performance at our resorts added to modestly better performance across most other hotels in the portfolio. Rooms RevPAR grew an impressive 9.6% in the quarter, including a 540 basis point benefit from Andaz Miami Beach. In a continuation of the trends we saw earlier this year, growth in ancillary spend outpaced rooms and contributed to total RevPAR growth of 12.5%, including a 510 basis point benefit from Andaz. This stronger top line performance and ongoing cost controls contributed to full year earnings that were ahead of the midpoint of our guidance range, including adjusted EBITDAre in the fourth quarter of $57 million and adjusted FFO of $0.20 per diluted share. We continue to benefit from a strong balance sheet with net leverage of only 3.5x trailing earnings or 4.7x, including our preferred equity. In early January, we drew the remaining $90 million balance from a previously arranged term loan and used the majority of the proceeds to repay our Series A notes at their scheduled maturity. Following this repayment, we have addressed all debt maturities through 2028. As of the end of the quarter and pro forma for the January payoff, we had over $200 million of total cash and cash equivalents, including our restricted cash. Together with full capacity available on our credit facility, this equates to over $700 million of total liquidity. Included in our press release this morning are the details of our outlook for 2026. As Bryan noted earlier, while we see reasons to be optimistic about the year ahead, we remain cautious, while still in these initial months. Based on what we see today, we expect that rooms RevPAR for all hotels in the portfolio will increase between 4% and 7% to a range of $234 to $241. This reflects the full year benefit of Andaz Miami Beach, which is expected to contribute approximately 400 basis points of growth at the midpoint. For 2026, we are also introducing guidance for total RevPAR, which is expected to increase between 3.5% to 6.5% and which would imply a range of $385 to $396 with a similar 400 basis point benefit from Andaz. We anticipate that our first quarter will be our strongest growth quarter of the year as the contribution from Onda and better performance in Maui will more than offset the challenging comp in D.C. from the inauguration and in New Orleans from the Super Bowl last year. This should result in first quarter RevPAR and total RevPAR growth being above the high end of the full year ranges just discussed and then the subsequent quarters being between the lower end and the midpoint. This revenue growth is expected to translate into adjusted EBITDAre in the range of $225 million to $250 million. Excluding onetime items and an asset sale, which together contributed approximately $10 million to our 2025 results, the midpoint of our 2026 EBITDA range reflects 5% growth in earnings over last year. Based on where we sit today, we expect our FFO per diluted share to range from $0.81 to $0.94. Adjusting for the same onetime items in the prior year, the midpoint of our FFO range reflects growth of 8% relative to 2025 as the benefit of our share repurchase activity adds to the growth in hotel earnings. In terms of the distribution of our earnings by quarter, we anticipate that the first quarter will represent approximately 25% of our full year projections at the midpoint. This is a bit higher than our historical run rate, but reflects the added contribution from Andaz Miami Beach. As is typical for our portfolio, the second quarter is expected to be our largest contributor at approximately 30%, with the balance split more or less evenly across the third and fourth quarters. Moving to our return of capital. Since the start of 2025 up to the middle of this week, we have repurchased approximately $108 million of common stock at a blended price of $8.83 per share. In addition, we have also purchased $3.1 million of our preferred stock at a blended price of $20.46 per share or an 18% discount to its liquidation value. This common and preferred stock repurchase activity has been accretive to both NAV and earnings per share. As we noted in our press release this morning, our Board of Directors has reauthorized our repurchase program back up to $500 million. And while we retain capacity and appetite for additional share repurchases, our 2026 outlook does not assume the benefit of additional common stock buyback activity. In addition to our share repurchases, our Board of Directors has also authorized a $0.09 per share common dividend for the first quarter and has also declared the routine distributions for our Series HNI preferred securities. Before we conclude our prepared remarks, I'll turn it back over to Bryan for some additional thoughts.

Before we open the call to questions, I want to highlight our 2026 objectives. The management team and Board are focused on realizing the value of our portfolio. Over the past few years, we have actively sold hotels at what have proven to be attractive valuations and redeployed proceeds into the most accretive option available at the time. While most of the proceeds went to repurchase common or preferred stock at a discount, we also acquired assets when our cost of capital became more competitive. We will continue this practice in 2026 while evaluating other potential transactions to realize and return the value of this portfolio to our shareholders. As I mentioned last quarter, the Board and management remain committed to maximizing value for shareholders and are open to any alternative that would reasonably be expected to result in value creation. With that, we can now open the call to questions. Operator, please go ahead.

And your first question comes from the line of Cooper Clark with Wells Fargo.

Curious if you could walk through some of the puts and takes as we think about the 1.5% midpoint of '26 RevPAR growth ex-Andaz within the context of 2.1% growth last year and what should be a continued recovery in markets like Hawaii?

Sure. Cooper, when you look at the remainder of the portfolio ex Andaz, you're absolutely right. Maui is a market where we are seeing growth. We talked about it last year where we mentioned that for the hotel to get back to where it needs to be, the Kaanapali market needed to stabilize, which is something that we saw happening in kind of the late third quarter, fourth quarter of last year. And that continues to happen going forward. We went from the high -- mid- to high 90s occupancy index to at the end of the year, over 100%. We should stabilize around 110%. So that is absolutely moving in the right direction. As I said earlier, we're seeing continued transient demand as we recapture that index. And so far, the first 2 months of the year have been a pleasant surprise to see that continue. The group business in Maui is -- the pace is down a little bit this year. We do have this one piece of business that is on for a couple of years and then off and it's off island this year. But we are seeing a transient pace is up about 53%, and that will help cover that shortfall. When we look at the rest of the portfolio, continued strength in San Francisco in wine country, other markets and one that we highlighted on the call, D.C. is a market that we faced a lot of headwinds last year, not only with government shutdown at the end of the year, but then also cutbacks and impacted a lot of the group business there. Our -- the amount, the percentage where groups would actually actualize as compared to their blocks was down to historic averages. And so while we anniversary that coming up shortly, and so the year-over-year comp will get easier, we do -- we are cautious. And then we are also seeing in D.C. a pickup in transient business that we were not seeing in the middle part of last year. And so some of the government transient, we're starting to see that come back. Again, with what the impacts and the headwinds that we saw last year, we're approaching the D.C. market with as cautious. And if we continue to see these trends, we would expect that we could be in a position where that midpoint would move up a little bit. But D.C. is one of the markets right now that we're keeping an eye on and is pulling that average back.

Okay. Great. That's helpful. And then could you talk through the expense growth implied in guide, both including and excluding the Andaz and what are some of the key drivers there?

Sure. I mean I think roughly, we're on expenses, we're right around 3% total. Labor over the last couple of years has been sort of in that 4-ish range. It's coming down a little bit this year into the 3s. Energy prices are up a bit this year. And then there are a couple of the larger fixed expenses that will unfold as the year goes on. Our insurance renews in June, and that's something that we had good renewals with last year. There were not any major cat hits in our portfolio. So that should be helpful. But we go into the year, and we expect there to be some growth in those rates. And so if that -- if we get a year like last year, that could be a benefit. And then property taxes have been down over the last few years, we're kind of assuming that those are going to normalize. And then on the Andaz side, overall, I don't think it's going to make a material difference in that overall percentage.

Cooper, it's Aaron. And just maybe to add to what Bryan was saying. So as we move through last year, as we noted in the prepared remarks, we were much more successful in managing costs relative to where we thought that they would be at the beginning of the year. And so we ended up with margin expansion to the tune of about 40 basis points on RevPAR growth of about 3.5%. From a cost growth perspective for the comparable portfolio, so the 13 hotels ex Andaz, expense growth is in that kind of that 3-ish percent or so area. What we'll feel a bit differently this year is just that, as you noted, the blended RevPAR growth rate for that comp set is -- for that set of hotels is a bit lower. So we'll expect some margin headwind for the comp portfolio in '26. If we add in Andaz, things obviously do get a little bit noisier given that it was only open part of the year last year will be open all of the year this year. We'd look at probably a total overall expense growth rate of around 5% or so, which starts then align with where the midpoint of the RevPAR range is for the total portfolio. So a good chance of margin being able to defend margins as we move from '25 to '26 for the total portfolio, and then we'll be hopeful that we have an outcome like we had last year, whereas the year went on, we were a bit more successful on the cost side.

Your next question comes from the line of Duane Pfennigwerth with Evercore ISI.

A call earlier today talked about the expectation for being a net seller of assets. I wonder if that's your expectation as well. And if you have any update on the marketing process around the Wine Country assets.

Sure. In the fourth quarter, we started to see a pickup in transactions, either closed transactions or announced transactions. And I think as we have more clarity into this year and debt markets continue to be strong. I think that we'll continue to see an uptick in transactions. I think thematically, it will be similar. I think that there is a lot of demand for luxury assets. I think there's a lot of demand for cash flowing assets. And so those obviously can support the highest debt balance. And we're still seeing for midsized transactions, enough equity out there as you start to get to a larger assets, the bidder pool is still thinner. I do think we're seeing that improve. And so our view is really no different than what we were doing last year and when we sold New Orleans at a very attractive cap rate and then redeployed those proceeds into our common stock. We're going to look to realize private market values for where we can for those -- for hotels and resorts that we have, where we see the biggest gap between the public and private market values. And basically, we'll continue to try to unlock value where we can and then go and deploy that in the most accretive manner. We don't comment on transactions prior to announcement. But we have been clear and I think our actions have been very clear is that our major pillar of our strategy is recycling assets. So there's always going to be a point in time where we'll have one or more assets that in some form of marketing or discussion with potential buyers. And we don't think that this year will be any different. The question then comes is what is that most accretive allocation of that redeployment of that capital. And that depends on a lot of factors. It depends on where the stock is, where our cost of capital is, where our stock is trading, what -- and on a risk-adjusted basis, what is make more sense to repurchase stock or preferred? Does it make more sense to acquire an asset? And over the last few years, I think we've demonstrated that we've been able to pivot between those sometimes in shorter time periods, but we've been able to effectively deploy that capital, whether it be through the acquisitions of [indiscernible] or buying back stock.

Your next question comes from the line of Smedes Rose with Citi.

I just had another question about your guidance, just in terms of total RevPAR being a little bit lower than your RevPAR outlook. Usually, they're sort of at least in line or maybe total RevPAR would be a little bit higher. So I was just wondering if you could just speak to that for a moment.

Sure, Smedes. Having a focused portfolio with some larger assets, D.C. being one of them I spoke about and then San Diego also that had a -- we finished up a pretty substantial meeting space renovation or we finished a portion of it, and we'll finish the rest of it in the quarter that's impacted on those 2 big hotels. On the group side, that's going to impact some of our ancillary spend, getting some of that back in Andaz. And quite honestly, I would expect an increase in our total RevPAR, if we continue to see the transient trends in D.C. somewhat, but more importantly, the transient trends we're seeing in Wailea with the additional spend that comes from the transient rooms, that will help buoy our total RevPAR. But right now, it's more a function of some of the limited displacement in the first quarter in San Diego and then a slower group pace in D.C. it's more that.

Okay. And then I was just wondering if you could talk a little bit more. You mentioned in your opening remarks some transient weakness in San Diego. Is that specifically to your hotel? Are you seeing that kind of market-wide? And maybe just if you could just speak to kind of just the broader market in San Diego, what you're seeing just maybe on the group side, what's happening with the convention calendar there, et cetera?

Yes. In San Diego, we saw some ups and downs last year. Some of it government related. There's a lot of defense contractors. So we saw it slow down last year. We've seen that pick up. Towards the end of the year, the leisure time period, whether it's some international travel not coming in, some Canadian markets come to that area. What we're seeing now, the first 2 months have been pretty promising in San Diego, DC2, we mentioned. And so I think we're starting to see government transient come back. And part of that might just be certain segments and what San Diego pulls from is the defense contractors. And so that can be a positive for the market. And so we'll see over the next few months, but we are seeing positive signs as the year goes on right now in San Diego on the transient side.

Your next question comes from the line of Michael Bellisario with Baird.

First one for Aaron. Just on this Ohana preferred, can you just remind us like what are the mechanisms there for you to take that out? When and by how much is that coupon ratchet? And then just on capital allocation, is this a potential use of capital if you were successful with dispositions?

Yes, Mike, thanks for the question. So the Ohana is referring to is our Series G preferred, which is issued in connection with our acquisition of Montage. That one does have a mechanism where the yield there is tied to a greater of the hotel yields or a fixed rate, which is currently now 6.5%. So overall, it came in at $66 million in size, so it's a manageable amount of capital. We kind of view our preferred, I would say, as a total bucket. So all in the $280 million at a pretty attractive blended price of just around 5% or so. But as you saw in our results for our fourth quarter, we did take the opportunity to look at some buyback on the preferred side, and we'll continue to do that as a way to kind of just manage the overall preferred dividend exposure and ensure that we're mindful of that -- of the mechanism on the Series C, which does step up. So I think as we think about this year, I wouldn't expect that our preferred dividend would increase in '26 relative to where it was in '25, even with the escalation on the Series C, just given that we'll manage the overall outstanding balance. So we'll take another look at it as we move through the year. I mean, certainly, as we noted, we have $200 million of cash that we could readily put to use to address that Series G. And the function there is it's callable solely in our discretion.

And it doesn't have to be in the total amount either. So we can take out pieces of it at a time.

That's helpful. And then just 2 little modeling follow-ups, maybe I missed them. What's your EBITDA expectation for Miami this year? And then what are some of those onetime items that you mentioned that's impacting the year-over-year growth rate? I think it's like $7 million net of the New Orleans sale, if my math is right?

Okay. I'll start with -- so in Miami, our expectation is consistent with where we were before. We think it's low to mid-teens EBITDA this year. And our what we've seen starting in kind of really in December and December, we hit close to 70% occupancy. The comp set was right around 70%. Our rate granted was lower than the -- than our luxury set. We were in the 500s. They were in the 900 plus. So we have plenty of room to grow. We're building a very good base. Our group room nights have doubled quarter-over-quarter. We've got a lot of good momentum going into F1 and FIFA later in the summer, which is a great time for that piece of business to be there. So our expectations are consistent with where we were last quarter with Miami. And if we have a strong summer, my expectation is that we are at the upper end of that.

And then, Mike, just on the second part of your question as it relates to the onetime items that we called out for '25. It's a total of around $10 million or so, and the components would be about $3 million contribution from the Hilton New Orleans, which we sold last year, so won't repeat this year, a cost recovery that we had in connection with one of a settlement at one of our properties and then just some incremental interest income that we generated last year given where deposit rates were and where our cash balance was at the time that we wouldn't expect to repeat in '26.

Your next question comes from the line of Chris Woronka with Deutsche Bank.

So I understood everything you said, Bryan, about any potential transactions in Wine Country. My question on it is kind of do you think any sale process is having any kind of impact on operations right now? It looks like in '25, you had pretty good results at the Montage, both big Four Seasons, maybe a little bit less so. So is there anything to draw from that? And what's kind of embedded in your guidance as to how those perform this year?

Yes. I mean both resorts were on pace to have very good years. As you probably remember, there was a fire close to Four Seasons that impacted the third quarter last year and a little bit trickled into the fourth quarter. So adjusting for that, that was probably about $1 million of EBITDA. So adjusting for that, one, your question, not commenting on a sale process, but typically for a managed hotel. The management contracts are long term and stay in place, so that doesn't really impact the day-to-day operations of the hotel. Four Seasons has fantastic group pace for this year. I think group pace is up about 22%. And so we have really great expectations for that. Again, the San Francisco market has been doing better, which then leads to more weekend trips or extensions of convention trips out to Wine Country. The high-end luxury traveler continues to be very strong and spend quite a bit. And then on the other side of the valley, we -- we've had great success with group at Montage. Group is not as strong as Four Seasons this year, but they're moving from a much larger base. And our transient demand over at Montage has been phenomenal. So I think transient pace is up 25% year-over-year. So just like San Francisco, a lot to look forward to in the Bay Area and Wine Country. And so there, again, with the impact of the fire last year was sort of a unique impact to Four Seasons, both hotels should have very good years.

Okay. Appreciate all that color, Bryan. Maybe to kind of keep it in the San Francisco area at the Hyatt. I know there was probably a Super Bowl benefit back in January. This hotel is running single-digit margin in '24 and '25. Is there any expectation this year that whether it's, again, outside of Super Bowl, but with AI and back to office and other group things that are happening in San Francisco, is there a hope or an expectation on your part that, that hotel starts meaningfully improving margins?

Yes. I mean our location in that market has become the primary location. And so our basic -- with the office that surrounds it, the inflows of new tenants, AI-based, but really, the center of San Francisco has moved into the Embarcadero financial area. And so we have -- we're benefiting from a recently renovated hotel that while it still has quite a ways to go to get back to where we were, we finished '25 at 78% occupancy, which is 10 points of occupancy down from where we were. We have a $300 rate. There's still quite a bit of room in the rate. And so we have great pace this year. Transient pace continues to grow. The market had a great Super Bowl. World Cup is -- we're just starting to see bookings for that, and that's something that will help compress the summer as we get into it. So look, I think that given the continuing increase in health of the San Francisco market, our location, our product, our meeting space, we still have a very good run ahead of us and are very -- are looking forward to the next several years in this market.

Your next question comes from the line of Daniel Politzer with JPMorgan.

This is [ Michael Harris ] on for Dan today. Congrats on a nice quarter. For my question, you noted in the press release that the operating environment could be impacted both positively or negatively by events outside of your control. Could you speak to some of those events or macro environment that you contemplated for this year, when putting together your guidance?

Yes. Look, I mean, if you look over the last few years, starting each of the years, expectations were higher and then there were various headwinds that popped up and went away and came back throughout that time frame. I think D.C. is a good example of what is our -- what are our expectations in D.C. Like I said, they're cautious this year. There was -- we did not expect the impact to government business, government shutdown, those things for a large 800-room hotel in our portfolio. Those were things that were not fully -- we weren't expecting last year and impacted operations. Could elements of that happen again? Sure. If we look at '26 in D.C., it's just starting off. It's a tough comp. You had inauguration the year before. We had storms in January and you have midterms later in the year, which means Congress won't be in session a lot as much. So those are things that keep us cautious, especially from the framework of the prior year's experience. But then on the other side, you look at the positives there. You've got the America 250 celebrations. You have an Indie race that was just scheduled for August that's happening. Our transient pickup for January and February has been stronger than we thought. The negotiated transient demand for the next 6 months is up 11%. Part of that is still the benefit we're seeing from the conversion to Westin. Some of it is business that's coming back to the market. When you look at our transient demand for January and February and you put it against the backdrop of we had weather issues this January. We didn't have an inauguration this year, but yet our transient demand is greater than what we had last year. That points to strength. And so that makes us very optimistic. The question is we probably need to see a few more months of this before our -- before we can have our outlook reflect that for the rest of the year.

And then for my follow-up, more modeling related. On your CapEx guidance for $95 million to $115 million, could you speak to the timing and allocation of those dollars between the different projects?

Yes. Let me start with that, and then Aaron can go through some more specifics. We are working through and finishing the meeting space in San Diego. Keep in mind that it's a 1,200-room hotel. It's a lot of meeting space. So there's $25 million of that number right there. A portion of that does come from the FF&E reserve. And so that's a big piece of it. There's some additional bills that are being paid and finish up work from Andaz. And then throughout the portfolio, we have various other projects, some HVAC projects, some roofing projects, some elevator modernizations. Those are spread out more throughout the year. The biggest chunk -- single chunk will come from the San Diego piece, which will be in the first and second quarter as it gets paid out in. Aaron?

Yes. Bryan basically got the punchline there. The largest projects will be front-loaded. So I'd expect about 1/3 of it happens in Q1, but -- and then Q2 will be the second largest contributor and the rest will trickle into the back half. But work largely performed in Q1 and then the payments in Q1 and Q2.

There are no further questions at this time. I will now turn the call over to Bryan Giglia for closing remarks.

Thank you, everyone, for your time and interest in the company. We look forward to seeing many of you in -- at upcoming conferences and property tours that we have in our portfolio. Thank you.