Bryan Giglia: Good morning, Duane. I’ll start with that and then Aaron can get into some of the specifics. We’re targeting to distribute a 100% of our taxable income. That’s in the payout ratio sometimes is easier for other asset classes. I think for lodging it and feedback we’ve received from shareholders is that pay out your taxable income. In last quarter, we up our base dividend to $0.07 a share to reflect on a run rate basis close to where our taxable income would be in a multiyear basis, knowing that it’s almost impossible, but doing lodging to set that, because of the cash flow will move. And so, if you look at that on a run rate basis. You’ve got two quarters of the $0.07, you have two quarters in the $0.05, so there’s $0.04 of embedded catch up there. And then, whatever our taxable income is for the rest, we would then pay out that balance. Aaron do you have?
Aaron Reyes: Yes. So just to add some extra color to what Brian was saying. So, ultimately, the final determination of the amount of the dividend will be something that the board decisions. But, well, the board will decide, but I can kind of share with you some of the data points that might go into that decision-making process. So, as Brian noted, we did increase our kind of our regular run rate dividend by about 40% from $0.05 to $0.07 a share. And then as we have done in the past. We have seized the catch up or the top-up dividend, as you noted, to effectively approximate our remaining undistributed taxable income. And so that’s a number that’s going to kind of continue to move around as we move towards the end of the year.
But I think kind of a realistic run rate for that right now might be an incremental call it $0.05 to $0.07 per share, in addition to the base quarterly a $0.07 amount so that we’d be looking at something kind of in the neighborhood of $0.12 to $0.14 per share. And then as Brian had alluded to, the increased $0.07 run rate would effectively have picked up and distributed the bulk of that income had we assumed it been in place for Q1 to Q4. In addition to the dividend, we’ve also have done the share repurchase activity that Brian mentioned. So, we’ll be back, around in December consistent with past practice to declare that final dividend. And so, once the board has made that decision, we’ll make that note.
Duane Pfennigwerth: And then just on the wine country assets, can you speak to what drove the improvement? I know you talked about some revenue management changes and tweaks in the past. Was it more cost savings? Anything you could highlight that you felt drove that improvement? Thanks for taking the questions.
Aaron Reyes: Absolutely. It was a bit of everything. It was, we’ve talked about the strategy of adding the right amount of group into these hotels, which we were able to realize in the quarter, still working again, say, difficult leisure backdrop, especially a luxury leisure backdrop. So, when you look at the two hotels, the Four Seasons had much more group on the books than Montage did. But when you look at this type of hotel, when you look at a Wailea, even a San Diego, it helps to not only focus it at RevPAR, but also to look at total RevPAR. And while RevPAR was down, at Montage and up at Four Seasons, total RevPAR was close to flat at Montage and up significantly at Four Seasons. And the reason for that is, is that to get the group business in there, you want to rationalize the rate and to make sure that the rate is the appropriate rate because each of the hotels that you’re getting somewhere between $800 and $1,000 a night per group room of ancillary spend.
That combined with some of the efficiency initiatives that we started to undertake, beginning at the Montage and then rolling some of those over to the Four Seasons. The Montage is farther ahead, at that point, and you can see that in the profitability. So, it really is bringing in the right group, bringing in the right group at the right price, and then making the operation as efficient as possible. And in Q3, we just we start to see what these resorts can produce. And once that leisure component starts to come in, we’ll then be able to really realize what these resorts can do.
Operator: Your next question comes from the line of Michael Bellisario with Baird. Please go ahead.
Michael Bellisario: Thanks, good morning, everyone. Just one more clarification, on the tax. If you don’t do a 1031, you’ll have less or maybe presumably no NOLs left for ’24 and beyond. So, then you’d have more upward pressure on the dividend in the out years. Is that correct? If there’s no 1031, is that the right way to think about the bucketing?
Bryan Giglia: If there is, so first of all, with the NOLs we’re sitting at… Yes, Mike. So, the gain that’s anticipated for the sale of Boston is approximately $150 million or so. That is within our, the amount of NOLs that we have in totality, which is kind of around $350 million or so. So, we would have incremental capacity on top of the Boston sale, if indeed, we did not 1031 that transaction. So, we would still have several $100 million of NOLs to shield future gains. And then just from a technical standpoint then if you look at, if we were to do a 1031, Mike, you go back far enough, and for those that do. The Boston basis was a continuation of the Rochester basis. And so that depreciation shield of that hotel is not as large as you would expect it to be given the size of the hotel.
And so, if we were to do a 1031, then that lower basis would go into the new acquisition. If for whatever reason we did not find something appropriate within the 1031 timeframe and we were to use our NOLs to shield that, we would actually, and then actually acquire something, we would have a higher depreciation basis, which would put less pressure on dividends going forward because then our basis would step up to the actual value of whatever asset you’re buying.
