Floris Van Dijkum: Thanks, guys, for taking my question. Obviously, it’s always good to deploy excess capital. As you guys look at basically the $240 million of cash that you have on the balance sheet today, how do you think about which segment would you like to target most? Is it group, is it resort, or is it urban hotels and maybe if you give your thoughts on those bits, that would be helpful.
Bryan Giglia: Great. Good morning, Flores. The answer is kind of a mix of a little bit of everything you said. When we look at what we recently purchased, our focus for San Antonio was on a more — a hotel that provides a good immediate growth, IMMEDIATE earnings to the portfolio to help balance the diversification of the portfolio after the Boston sale without having any of the needs of immediate capital going into it. So I think we achieved that and provided the balance and the balance to the portfolio that we were looking for. As we go forward. When you look at the types of hotels that we tend to do very well with is that they have a group, a significant group component and then another component, whether it be leisure or whether it be business transient, or whether, if you’re something like Long Wharf, you’ve got all of that.
So, I think that that is the group based piece of it. Whether it’s 25% of the business, like some of our hotels, or in the sixties, like in Orlando or DC or San Diego that that’s something that we feel is important to add a good base of business, a piece of business that we know how to asset manage very well, and then allows you to then compress the other segment, whether it be business, transient or leisure. When you look at the portfolio and you look at what we’ve done over the last couple of years, we’ve really been focused on providing layered growth and it’s not always — it’s not always painless to do that, but we’re just at the stage now where some of these big repositionings, rebrandings are starting to really pay off, as we saw with DC in Q1, which we’ll help the portfolio for the remainder of the year and into next year.
We have Long beach now coming online now. Yes. Was there a little addition? Yes. But that’s in the rearview mirror now and we can focus on the growth. And we’re very excited with Long beach because what we’ve seen with DC is that in DC, the Westin flag really resonates with the transient customer, as we know that the Marriott flag does, too and we believe that, like we’re seeing in DC will give us additional lift. We then added San Antonio by recycling proceeds from Boston Park Plaza, providing a much better yield and less capital needed and less displacement that Boston would have had to go through in the future. Now, that’s on top of DC and Long Beach and then at the end of this year, the next leg of that growth will be Andaz, will be Andaz.
And so we have — we’ve built a great foundation. Our internal investments are delivering. Our external investments are now adding. And so, when we look forward, do we need something as like San Antonio that has — that doesn’t need any capital that is more plug and play. Once we get Andaz done, could we do some more value add? I think that’s where we add the most value. I think that’s where we create, and so it opens that door, but right now the focus is ramping San Antonio up and getting that to where we need it to be and it’s doing great so far. We’ve added it. Asset managers are all over it and they see a lot of opportunities. So we’re very excited about that and then watching DC perform, watching Long Beach perform, and then at the end of this year, being able to turn Andaz on and seeing how that can contribute to the portfolio.
Operator: Our next question comes from the line of Chris Darling from Green Street. Please go ahead.
Chris Darling: Thanks. Good morning, everybody. Bryan, I’d like to go back to the Hyatt Regency transaction for a minute. Can you help me understand how you thought about recycling capital in that fashion relative to more meaningful shares repurchases? And I asked, just from my perspective anyway, your stock’s been trading really at or below the multiple at what you bought the Hyatt and presumably your existing portfolio also benefits from a stronger growth profile for the next couple of years. I suppose to be fair, though, you mentioned on the call earlier where you expect the Hyatt to stabilize that. So some fairly meaningful growth, but would be curious, your perspective, putting all that together.
Bryan Giglia: Yeah. And while San Antonio was a great yield going into it, there are factors in that market and hotel specific factors that we think that there’s quite a bit of growth that we’ll be able to mine out of that. When the Alamo redevelopment is done, we have a good amount of retail that leads right into it that will be able to be upgraded to match what they’ve done with the Alamo and that should result in significantly more rents. Our asset management team is very good at working with Hyatt, as we’ve seen in San Francisco, to be able to really get the performance and optimize the hotel. So we’re pretty excited about not only is it immediate, attractive yield, but there’s near term upside, medium term upside, without having to go in and do full rooms renovation, full bathroom renovation, because that work’s already done and we get a benefit from that.
To your bigger question on thought process of deploying capital, I’ll give maybe it’s a bit boring. It’s the answer we normally give, but it’s a balanced approach, Chris and so we took an asset in Boston that had done really well for us and was coming up to its next cyclical renovation, which will require significant guest room and bathroom work, which would result in a hotel that runs in the high 80s, low 90s occupancy, a lot of displacement, and a lot of capital in a 100-year old building. And so it’s our job to find and comb through our portfolio, find instances where we can get a very attractive price and redeploy it into an opportunity that’s going to have a better return on our invested capital than that. And that’s exactly what I think we’ve done here with San Antonio and you always have the opportunity to buy back shares and quite frankly, I think that we have been very aggressive over the years with redeploying capital.
