As of June 30, 2011, the company had approximately $205.9 million of cash and cash equivalents, including restricted cash of $61.1 million. The company intends to use a material portion of its unrestricted cash to reduce the principal balance on the Doubletree Guest Suites Times Square mortgage, which matures in January 2012. John Arabia, Chief Financial Officer, stated on the call that “We have received strong lender interest in refinancing the Doubletree Guest Suites Times Square given the superior quality and location of the hotel. Following this refinancing, Sunstone will have less than $100 million of debt maturing through year-end 2014. We remain committed to gradually and methodically reducing our financial leverage while maximizing shareholder value and growing the company.” As of June 30, 2011, total assets were $3.2 billion, including $2.8 billion of net investments in hotel properties, total debt was $1.7 billion and stockholders’ equity was $1.3 billion.

According to the call, during the second quarter of 2011, the company invested $32.1 million in capital improvements to its portfolio. Year-to-date through the end of the second quarter of 2011, the company completed several value enhancing renovations, including major rooms and/or public area renovations at the Courtyard Los Angeles Airport, Doubletree Guest Suites Minneapolis, Kahler Inn and Suites, Marriott Houston, Marriott Rochester, Embassy Suites Chicago, Marriott Quincy, Marriott Tysons Corner, Sheraton Cerritos, Marriott Troy, Marriott Philadelphia and Hyatt Regency Newport Beach. The Company expects to complete the renovation of the public space and meeting space expansion at the Marriott Boston Long Wharf during the third quarter of 2011.

Cruse tells GlobeSt.com that “While demand continues to show resilience, given the typically high correlation between hotel demand and the broader economy, we believe caution is warranted in projecting business trends for the remainder of this year.”

Looking ahead, he says, “Despite the recent turbulence in the stock market and well founded macro-economic concerns, industry fundamentals remain constructive and we generally believe that the long-term hotel recovery will continue, albeit at a moderate pace. We believe an environment in which demand continues to grow at a moderate pace, interest rates remain very low and supply trends remain muted would be very favorable for our business model.”

According to the earnings call, during the fourth quarter of 2011, Sunstons plans to start the up-branding of the 460-room Doubletree Guest Suites Times Square to the Hilton Suites Times Square. The public space renovation will begin during the fourth quarter followed by a complete room renovation during the first quarter of 2012. Sunstone will provide updated timing and project scope, including anticipated displacement, during the third quarter call.

According to Arabia, “With the introduction of an enhanced quarterly financial supplemental, including robust disclosure relating to property-level operating fundamentals and earnings, we have meaningfully increased the quality of our disclosure and the transparency of our operational performance and capital structure. Combined with last quarter’s reinstatement of earnings guidance, this additional step demonstrates management’s commitment to providing investors with the appropriate tools to analyze Sunstone’s portfolio and corporate performance.”

The second earnings showed comparable hotel RevPAR Increases at 7.2% to $131.89. It also revealed comparable hotel EBITDA increased 16.7% to $68.1 million, and comparable hotel EBITDA margins increased by 280 basis points to 31.3%.

Other key findings include: Income available to common stockholders was $31.1 million (vs. a loss of $4.9 million in the second quarter 2010); Income available to common stockholders per diluted share was $0.26 (vs. a loss of $0.05 in the second quarter 2010); Adjusted EBITDA increased by 46% to $63 million; Adjusted FFO available to common stockholders increased by 94.6% to $34.6 million; and Adjusted FFO available to common stockholders per diluted share increased by 66.7% to $0.30.

When a Q2 earnings call attendee asked why the REIT wasn’t looking to sell off some of its suburban properties, Cruse agreed with the called that “it does make some sense to look into it,” but he didn’t have anything to report on that front as of yet.

The locally based REIT owns 34 hotels with an aggregate of 14,000 rooms primarily in the upscale segment operated under nationally recognized brands such as Marriott, Hyatt, Hilton, Starwood and Fairmont. In a recent deal, Sunstone acquired a 75% stake in the Hilton San Diego Bayfront. The REIT has paid $475 million to purchase the stake from ING Clarion Partners, a major realty investment management company.