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The executive chairman and founder of Aliso Viejo-based hotel owner Sunstone Hotel Investors Inc. announced his retirement Monday.

Bob Alter will keep a seat on the board until the company’s annual meeting in May, and retain the title of chairman emeritus afterward.

The company named board member Keith Locker chairman.

Sunstone owns 32 hotels nationally, including the Fairmont Newport Beach and the Hyatt Regency Newport Beach.

Alter started Sunstone with a 28-room Colorado hotel and property management company. He most recently held the post of executive chairman, and spent much of this year leading the company along with President Ken Cruse.

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Cruse was promoted to chief executive in August.

Sunstone also announced other changes to its board.

Former board co-chair Lew Wolff is now a director.

Keith Russell was named chair of the audit committee.

Jamie Behar is now chair of the nominating and corporate governance committee.

Sunstone named two new board members.

One is Douglas Pasquale of Chicago-based healthcare real estate investor Ventas Inc. and former chief executive of Nationwide Health Properties Inc. Ventas acquired Nationwide Health in July. Also new to the board is Andrew Batinovich, chief executive of commercial real estate investor Glenborough LLC in San Mateo.

The board changes came the same day Sunstone reported third-quarter results, beating Wall Street analyst expectations on funds from operations and revenue.

Sunstone saw funds from operations—a profitability measure for hotel owners and other real estate investors—up 33.3% to $23.5 million.

Analysts on average expected $22.3 million.

Sunstone’s revenue for the recently ended quarter was up $39.2% to $212.3 million.

That beat the Wall Street consensus of $204.1 million.

Revenue per available room—a hotel industry measurement of sales from available guest rooms—was up 8.6% from a year earlier to $129.07 during the recently ended quarter.

Sunstone said it expects funds from operations for the full year to be $92.6 million to $98.5 million.

Wall Street analysts expect funds from operations of $97.3 million.

Sunstone’s shares were up as much as 8% in New York midday trading on a recent market value of $890 million.