Sean Mahoney: That percentage and those numbers are after everything, including an assumption on dividends as well as CapEx.
Austin Wurschmidt: That’s helpful. And then on the renovation side, I guess, how soon could you commence the renovation at the Boston Wyndham? Do you have a sense today of the capital spend necessary to achieve that 40% upside to hotel EBITDA that you highlighted?
Sean Mahoney: Yes, I mean, we’re still negotiating with the brands, Austin. That number is sort of a range that we’re working through. I would say in terms of timing, our objective is to have the ESK completed before World Cup, which was mid 2026.
Operator: Our next question comes from line of Floris van Dijkum with Compass Point. Please proceed with your question.
Floris van Dijkum: Let me flip it on its head. I know there are a couple questions here on Northern California, but I still see a, you know, $46 million delta relative to 19 levels. Can you maybe comment on the markets that are the highest in terms of exceeding 2019 levels of EBITDA and how much more can you push, you think your urban markets in ‘24. Is that growth going to that you’re expecting, is that coming from other markets besides Northern California? Or do you see a steady progress in all of your markets in ‘24?
Leslie Hale: Of course, as I mentioned before, our performance this year is being driven broad base. We talked about in our prepared remarks that Boston’s strong, given its citywide base and self-contained. It also has a strong base of BT New York. We talked about leisure being remaining strong and ramping as well as limited new supply. Atlanta’s going to benefit from the backlog in the writers’ strike. Southern California is going to benefit from San Diego citywide. As long as well as it’s just a strong economic base. And given the industries that it caters to Louisville, we talked about being strong as well, Denver, which has got a good corporate base, Pittsburgh as well. Orlando, the diversification in our portfolio is more than enough to offset the slower ramp in that we’re seeing in San Francisco.
Sean Mahoney: And what I’ll add to that ours is we put out an EBITDA bridge as part of our materials in Santa Monica and Boston, right that that EBITDA bridge was for the next several years and got us to north of $500 million of EBITDA relative to the museum round numbers but roughly $450 million in 2019. And so, we wouldn’t have put that data point out. Had we not had confidence in the ability of the portfolio to get ahead of that. And what’s driving that is obviously Urban has been driving it to date. We believe the conversions and the incremental EBITDA associated with those ROI initiatives are driving that but you have a portfolio for reason to Leslie’s point. I mean, there’s going to be some markets that outperformance on markets that underperform. But in total, we have confidence that we will go through 2019 over the next several years.
Floris Van Dijkum: Maybe a follow-up question on San Diego, presumably, you will not be able to buy the freehold in San Diego. It’s just an extension of the lease. So, can we assume some sort of similar type of cost going forward on that? Or is there going to be greater profit share that you’re going to have to give away to the city or the — I guess whatever local municipality that owns the freehold on that property?
Leslie Hale: Florence, I appreciate the question, but we’re in confidential negotiation, so I can’t comment on your question.
Floris Van Dijkum: Maybe one additional follow-up then the — for Sean, your weighted average term of your debt is relatively short at 2.9 years today. Are you waiting for rates to come down and will you be looking to extend the maturity on your debts? When that does occur? Or how are you thinking about the balance sheet and the term of your debt going forward?
Sean Mahoney: Listen, as a general role, we always want to get ahead of our debt maturities, and we have a little under $400 million of maturities in the next quarter. We are in the process of extending 181 of that, which is represented by two loans. And so we have extension rights under those loan agreements just for purposes. The combined debt yield of those of those two loans is 14.5x, right? So, these are low levered, well covered loans. We have the contractual right. And so we’re just working with the lender right now to extend that. We will get that done shortly. And then the other is a$200 million loan that we are in the process of refinancing it. We’ve got multiple options on that loan, which will add tenor as well. We’ve got great lender relationships. We’ve shown the ability to extend the debt, but those will then when we take care of that in very short order. And obviously we’ll have an impact of roughly a half a year on the weighted average maturity.
Operator: Our next question comes from line of Bill Crow with Raymond James. Please proceed with your question.
Bill Crow: I’m just curious, Leslie, at ALIS, one of the main discussion points was all the deferred CapEx out there, and it’s not really a big issue for the res except for the fact that it kind of damages brand reputation. I wanted to get your perspective on whether the brands are doing enough have enough discipline on the owners, non-REIT owners or whether we should really be concerned about the destruction of brand value?
Leslie Hale: Bill thanks for the question. I think the brands have been good partners for owners through COVID creating opportunities for people to manage through that. And they have been consistently stair stepping back into capital programs and adjusting those in waves. And they now have pushed back to more traditional levels of requiring PIPs to be executed in addition to putting programs in place, I hesitate to say penalties, but programs in place to ensure that those get executed. But I would also say is that owning hotels is the ecosystem. And to the extent that an owner has pressured from that will have, create a catalyst for trading the asset and that capital will get put in. So the brands are, as transactions occur, being very rigid around ensuring that those that the capital plans get executed.
So, I would say that, yes, there’s somewhat of a backlog. I don’t believe it’s damaging the brand. And I believe that what the brands are doing to ensure that the plans get done will cleanse the entire ecosystem.
Operator: Thank you, Ms. Hale. We have no further questions at this time. I would now like to turn the floor back over to you for closing comments.
Leslie Hale: Thank you everybody for joining us. The strong results that we’ve shown and we expect to continue are the direct results of what we’ve been executing around curating a portfolio that benefits from seven day a week demand in key urban markets. We look forward to providing you additional updates as we progress throughout the year. Thank you again for joining us.
Operator: Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.
