Summit Hotel Properties, Inc. (INN) Q1 2013 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the First Quarter 2013 Summit Hotel Properties Inc. Earnings Conference Call. My name is Tuhisha, and I will be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today Mr. Dan Boyum, Vice President of Investor Relations. Please proceed.

Thank you, Tuhisha, and good morning. I’m joined today by Summit Hotel Properties’ President and Chief Executive Officer, Dan Hansen; and Executive Vice President and Chief Financial Officer, Stuart Becker. Dan and Stuart have prepared comments related to our first quarter 2013 release and filing. Following these comments, you will have the opportunity to address any related questions you may have. I’ll remind everyone that many of our comments today are considered forward-looking statements as defined by federal securities laws. These statements are subject to numerous risks and uncertainties both known and unknown as described in our 10-K for 2012 and our other SEC filings. These risks and uncertainties could cause results to differ materially from those expressed or implied by our comment. Forward-looking statements that we may make today are effective only as of today, May 7, 2013. We undertake no duty to update them later. Our earnings release contains reconciliations to non-GAAP financial measures that are referenced during this call. If you do not have a copy of our release, you may view and print it from our website www.shpreit.com. Please welcome Summit Hotel Properties’ President and Chief Executive Officer, Dan Hansen.

Thanks, Dan. We had another solid quarter and set the stage for another strong year. We achieved 7.7% pro forma RevPAR growth, adjusted FFO of $0.18 per share and adjusted EBITDA of $18.9 million, which makes five consecutive quarters that we have exceeded consensus estimate. As we look back at the first quarter, there are some similarities to the fourth quarter. They are both seasonally softer quarters than the second and third and we have a lot of activity. In both quarters we bought hotels, sold hotels, renovated hotels, and raised capital. Through these seasonally soft quarters and all of that activity, we still beat our consensus estimate. This should give investors confidence in our ability to execute our strategy and our ability to absorb acquisitions without missing a beat. We closed on five assets in the New Orleans market in the first quarter and look for this dynamic market to be a great performer for our portfolio. 2013 is a softer year in the New Orleans market as compared to the banner year in 2012. The group and convention market there is anchored around first and fourth quarters, which is actually a benefit for our portfolio. We knew of the weakness in the second and third quarters when we bought the assets and expect to use this year’s softness to complete the room renovations at the Courtyard near the Convention Center and the Courtyard in Metairie. The 2014 calendar is shaping up nicely and we expect terrific performance with the Convention Center hotels, the Courtyard in the French Quarter and our more business transient properties in suburb of Metairie. We also closed on the 120 room Hilton Garden Inn in Greenville, South Carolina recently. It’s approximately three years old, requires minimal capital expenditures, has multiple demand generators and a…

Thanks, Dan. Good morning, everybody. As Dan has described, we were very active during the quarter. Our activity is reflected in our revenue growth. Our Q1 2013 revenue was approximately $63 million, an increase of 69% as compared to the same quarter in 2012. Our revenue growth was driven by both solid same-store performance and continued growth through acquisitions. Our adjusted FFO of $11.8 million for the quarter amounted to an $0.18 per share, which exceeded consensus estimates. For the quarter, pro forma RevPAR growth was 7.7%. Nominal RevPAR for the quarter was $77.44. Our pro forma RevPAR consisted of 70.7% occupancy, which was up 175 points over Q1 2012 and $109.57 ADR, which amounts to a 5% increase quarter-over-quarter. We were particularly pleased with the 5% ADR growth. As we have discussed in the past with relatively muted hotel supply in most of our markets, we are excited about the possibilities for future rate growth. As we discussed in our outlook for first quarter, we had renovation work at 10 of our hotels during the quarter. Adjusting pro forma RevPAR for displaced rooms, we had a very solid 9% pro forma RevPAR growth for the quarter as compared to the same period in 2012. We continue to be pleased with the improvements made with the renovation capital deployed. We believe that our solid RevPAR growth over the last quarters or several quarters is driven in part by the renovations we have completed. On a same-store basis, Q1 RevPAR growth was 6.6% as compared to same period in 2012. Nominal RevPAR was $66.67, which consisted of 67.7% occupancy, which was an increase of 155 basis points over Q1 2012; $98.45 ADR, which was an increase of 4.1% when compared to Q1 2012. A large portion of the renovation disruption previously…

Thanks, Stu. Premium brands portfolio composition and execution of strategy together create value. Summit is uniquely positioned to grow shareholder value and we are extremely proud of our track record. With that, let’s open the lines for questions.

Thank you. (Operator Instructions). Your first question comes from the line of David Loeb from Baird. Please proceed. David Loeb – Robert W. Baird: In dispositions, on the acquisition front, I wondered if you could just talk a little bit about competition that you’re seeing. Are you seeing private equity significantly these days and can you talk a little bit more about the White Lodging transaction and that relationship, the management contracts things like that?

Dave, this is Dan. Can you repeat the first part of your question? You broke in a little bit late. David Loeb – Robert W. Baird: Well, I said good morning. And then I asked about the competition for assets, are you seeing private equity players active or at least back a bit, and can you talk a little bit about White Lodging that transaction the relationships, the kind of management contract you are taking with those?

Sure. Good morning, David. Private equity we talked about on the last call is being more visible in many of the markets that we’re looking at. Since that call we’ve really haven’t seen them as much, I don’t think they’ve gone away. I think they’re still viable buyers for portfolio. We would more likely see them in the larger portfolio transactions or maybe some of the deeper trend value creating opportunities, but we really haven’t seen that much over the last quarter. White Lodging is a company that’s, obviously, very well respected. They built terrific assets; they’ve got a strong management company. We’ve known them for a lot of years. We spend a lot of time with them more recently understanding their philosophy, their management, revenue management processes, and we feel very strong that they’ll perform in the clustered markets they manage - potentially manage for us. They do have a strong history of managing for multiple owners in markets and have done so with integrity and professionalism. The length of their management contract is essentially – length of the term of the franchise, I believe, it’s 20 year with a couple of extensions. That’s not as much of a concern for us and CBD markets, institutional quality assets like these, I think the buyer or potential buyer in the future of an asset like that is less likely to be an owner-operator, so longer-term management contract with a company like that, we think is actually a positive in those kind of markets. Outside of those markets, most of our contracts are three-year renewable type contracts in more of the suburban markets that we have. Does that answer your question? David Loeb – Robert W. Baird: Yeah. And the fee structure; is that similar to your other management contracts?

Very similar, yes. David Loeb – Robert W. Baird: Okay. And on the acquisition pipeline, is your focus more on those kinds of CBD locations, and therefore more like eight caps or do you see a lot of a mix of smaller markets, suburban, higher cap rate in that pipeline?

It’s still a pretty mixed pipeline. We haven’t changed our philosophy on what we look at or how we underwrite. We still have one-off transactions in more of the suburban beltway locations around the top 50 markets, but when we find great opportunities that are CBD higher barrier to entry in that 8 to 10 cap range, those are certainly right in our sweet spot as well. So, I think in the grand scheme of things, the larger, more institutional CBD assets are probably 8 to 8.5 caps and outside of the CBD, you’re probably 8.5 to 9 cap. But our pipeline is really a blend of all of those. David Loeb – Robert W. Baird: Great. And finally on the dispositions, you’ve been very active, that’s great to see the capital recycling. Can you talk a little bit about the characteristics of the buyers of those assets? What are they looking for and how do your assets fit in with what they’re looking to buy?

I think they’re similar to the structure of our company maybe 10 years ago. They’ve got a base of hotels, operational expertise, most of the time, they are local, understand the market very well. They may have one or two properties in the market or region already, so they look at it as synergistic. Many of these hotels need renovations and some of them are in the process of getting short in the franchise term and may need to be reflagged. So, they look at is as more of a turnaround value creating opportunity, and for us, it is a good partnership to have. There can be much more efficient in some of the smaller tertiary markets than we could be. David Loeb – Robert W. Baird: Great, thanks. It’s exactly what I was looking for.

Thanks, David.

Your next question comes from the line of Jordan Sadler from KeyBanc Capital Markets. Please proceed. Austin Wurschmidt – KeyBanc Capital Markets: Hey, good morning, guys. It’s Austin Wurschmidt here with Jordan. Just wanted to touch on guidance for a second. So are you seeing anything different than you did at the outset of the year that’s making you a bit more cautious than you were either on the demand side or the supply side? It appears there could be some conservatism baked in given 1Q RevPAR came in above the high end of the range that you had set or is there – can you just talk a little bit about that?

Sure. Stu and I’ll share the question. This is Dan. I think as we look out for the second quarter and the balance of the year, we have better clarity and conviction than we had in the first quarter. We are just starting to see some of the effects of the sequester. We don’t have a lot of government business, but that slowdown in government travels just not good or supportive for anybody. We’re very well diversified. We also have a fair number of hotels that are just coming online. That we feel very confident. We’ve underwritten the downside into – but probably have been conservative on measuring the upside. And with the renovations that we’ve done to-date, we’ve seen great performance post-renovation. But as noted in our comments, we had 10 hotels in having some form of renovation work. So when you take all that, those factors in, being conservative just seems to be prudent for us, we’re not any less positive on the outlook. But it is still a little bit early in the year and we’re – we want to make sure that we give accurate and prudent guidance.

I’d be hard-pressed, that’s a well summary by Dan. I would just note that first quarter is one of our soft quarters. And so we’re always a little cautious coming out of the first quarter, but we feel very positive about the balance of the year. Austin Wurschmidt – KeyBanc Capital Markets: And then, thank you, that’s helpful. And then could you just remind us what you’re assuming in terms of hotel EBITDA margin growth for the year?

So we’ve provided for margin growth. We really provided at the start of the year on the hotels that were in place at that place. If you recall, there were 84 hotels that we had at the end of the year, and we have provided a footnote in our guidance in the – at the start of the year that we anticipated a 100 to 175 basis points of margin expansion for those hotels and obviously the mix changes since then. We’ve sold some hotels and bought some more hotels, but I think that’s a good base line to start from. Austin Wurschmidt – KeyBanc Capital Markets: Thank you. That’s definitely helpful and that’s all I have.

Your next question comes from the line of Ryan Meliker from MLV & Company. Please proceed. Ryan Meliker – MLV & Company: Hey, good morning, guys.

Good morning, Ryan.

Good morning, Ryan. Ryan Meliker – MLV & Company: So I just have – I’m hoping you can forgive me if I – if I’m not clear in this question. But I’m trying to I guess reconcile your guidance this quarter versus your guidance last quarter and your sources and uses table that you provided. It looks like you’ve got and correct if I’m wrong, you’ve added an incremental seven hotels in the footnote for the guidance this year, pulled out six, but you don’t have proceeds from all six hotels planned for sale in the sources and uses. Can you tell me – are they going to be any proceeds from those sales? Is there a reason why included them in guidance, but didn’t include them in the sources and uses table. Any color on that I think will be helpful?

Yeah, I think on the sources and uses, we’ve provided sort of a look out for the next couple of years and a couple of those disposition hotels, two of those would close in fourth quarter. So they don’t make that source and uses table only because that does not included in that two quarter window that we provided in the sources and uses. Ryan Meliker – MLV & Company: Okay.

I have your, for dollar amount probably, probably $9 million of additional source would be available in the fourth quarter and beyond? Ryan Meliker – MLV & Company: But your guidance doesn’t assume that those hotels – you own those hotels throughout the remainder of the year, correct?

Correct. Ryan Meliker – MLV & Company: Okay. So if those properties don’t close until 4Q as you expect in the source amuses, then you’d be likely to exceed your absolute FFO level, correct?

Say it again, if we didn’t close in the fourth quarter? Ryan Meliker – MLV & Company: If you didn’t close on those hotels until the fourth quarter, if the guidance assumes that those hotels are being pulled out of FFO today, and then they don’t close until the fourth quarter, then you’d beat the FFO or the FFO range would probably be slightly higher, correct?

Well, the guidance is built in the assumption that we do sell them sometime in the fourth quarter, but the FFO that’s built in is to prove them. Ryan Meliker – MLV & Company: Okay. So in the fourth quarter...

Correct. Ryan Meliker – MLV & Company: That is what your guidance assumes?

That’s – that is correct. Ryan Meliker – MLV & Company: Okay. That’s one – that was one of the things I was wondering. So then the next question I have is, it looks like you guys have the 92 current hotels in your current guidance and a quarter ago it was 93, you’ve – it looks like you’re recycling a lot of capital. And of those 92 hotels, you’ve got those three that – you’re expecting to have up until the fourth quarter. Yet your FFO range has only actually widened. The low end was lowered. I’m not talking about EFO, I’m talking about absolute FFO; I think it was $57.5 million at the low end before you announced $57.3 million. And at the high end, you went from $61 million to $61.4 million. Can you give us color on why the range is widening as we’re a quarter later especially given that it seems like you don’t own more hotels throughout the majority of the year than you were a quarter ago?

Yeah, I would say that from an absolute or for those mid range, we really look at – it’s just unchanged. We still remain confident in those numbers on a – we didn’t really give the adjustment for the absolute dollars. The other things is, remember, Ryan, in the second – as we finished up the first quarter and the second quarter, we did the preferred transaction. You’ve raised a comment obviously in January, you’ve also raised preferred in March. And there is, so we did that capital to deploy there is somewhat of a drag to performance on that drag on preferred. So as we get that capital put back online end of second or end of the second quarter, we’ll pick back up on that. But so to have our guidance for full-year unchanged considering the drag that happened a quarter, we are really offsetting that drive with additional hotels coming online later. So I think the net-net is unchanged, but it really is a period of time in which we had a drag on earnings as we were not fully deploying that preferred. Ryan Meliker – MLV & Company: Okay, that’s helpful. And then can you give us any color on cap rates or EBITDA multiples for the acquisitions and dispositions that you’ve announced or and maybe that finalized yet or not with both?

Ryan, this is Dan. Cap rates for acquisitions are still in that eight to 10 cap rate range, that as you would expect in the Indianapolis and Lewisville, those potential acquisitions would be at the lower end of the range. An asset like the Hilton Garden in Greenville is probably more of the midpoint of that range. That’s really consistent of what we’re seeing out there. On the disposition of assets, it’s a little bit more difficult to compare apples-to-apples, some of the acquisitions are losing franchise or some of the dispositions rather are losing franchises, they need capital invested in them. What we do see is a very high-level of confidence that the proceeds from the sale of those dispositions, we’re redeploying into more accretive uses. So I would say on balance, a push at worst, but we see it is very positive if that helps. Ryan Meliker – MLV & Company: Yeah, it does help. And then can you guys give any color on expected proceeds from those sales that are expected to close in 4Q that you’ve identified?

Dollar amount you’re asking for, Ryan? Ryan Meliker – MLV & Company: Yeah

This is Stu, yeah, we think it’s probably in that $9 million range? Ryan Meliker – MLV & Company: $9 million, great, okay. And then just one last one and then I’ll hand it over to anybody else. How does the pipeline look? Obviously, you guys have been really aggressive in making a lot of that acquisitions recently and growing your portfolio and I certainly think a lot of them have been very attractive and accretive to stock price, but any color on whether that can continue and for how long?

You know we’re still seeing a lot of opportunities, hadn’t slow down at all for us, but we do source them from a variety of sources. So at some level, it kind of feeds on itself to more successfully or the more deals that are brought to you. So I can’t say that how long it will go on. We still see very little new supply in the markets. If you just look at the most recent Smith Travel research that we looked at, there’s about 30,000 rooms that opened in the previous 12 months on kind of a rolling 12-month rate. Choice and Wyndham combined had conversions into their brands at twice that amount, nearly 60,000 rooms in the last 12 months. So it’s kind of tough to compare those two metrics apples-to-apples. But it does validate our thesis of minimum net new supply and upscale and for midscale, and really shows that we think the opportunity will be longer than shorter. Ryan Meliker – MLV & Company: All right. Thanks a lot. I appreciate all the color guys.

Thanks, Ryan.

Thanks, Ryan.

Your next question comes from the line of Wes Golladay from RBC Capital Markets. Please proceed. Wes Golladay – RBC Capital Markets: A quick question for you Dan, is your pipeline actually bigger today than it was at the beginning of the year and how many deals you see in underwrite a quarter?

I would say it’s pretty much the same size. I think on a nominal dollar amount maybe it’s a little larger. Again, related to last comment, it kind of feeds on itself and they come in a bit chunky from time to time, but unbalanced. So we think it’s continuing to be strong and meaningful. And what’s the second part of your question? Again... Wes Golladay – RBC Capital Markets: Yeah, I just want to see how many deals you guys underwrite, it’s seems like you guys have seen a lot of deal flow. And I don’t know if you guys have a rough estimate of a dollar amount you guys underwrite a quarter.

We do various debts of underwriting. We can do a more of a desktop valuation analysis to see if it meets any of our criteria. I would say there is maybe 20 of those a month that we look at. We look at a lot of deals. We underwrite and do basic underwriting on deals that are really outside of our sweet spot just to keep strong intelligence on the market and what we’re likely to see. But I’d say, we do pretty deep underwriting on six to 12 a month. Wes Golladay – RBC Capital Markets: Okay. And do you have an estimated timeline for the Louisville and Indianapolis portfolio for closing, if you were to pursue that?

Yeah, we’re – we’re still completing some of the due diligence items, but we’d say in the next 60 days. Wes Golladay – RBC Capital Markets: Okay. And would that likely go as CMBS financing? I think you guys alluded to a $100 million of potential financing for that?

Yes, this is Stu. The CMBS market has stayed very solid and we like where the pricing is at. So I would anticipate that over the next two quarters that we’d end up putting probably CMBS debt at that place. We may have some bridge financing ahead of time that complete the close, if the close comes sooner, but that is definitely what we’re probably ahead with that. Wes Golladay – RBC Capital Markets: Okay. So probably a low-to-mid 4% is what we can sort of model at this point?

I think it’s a fair number. Wes Golladay – RBC Capital Markets: Okay. And lastly, on the disposition, you guys have been really active on selling the non-core assets. Do you guys have a dollar amount identified for what you like to sell maybe in the next two years?

No, it’s real – really opportunistic. We – again, we look at every asset for disposition as we do for an acquisition. We do full underwriting and see if it’s accretive or dilutive and whether a strategic long-term. So we’ve got a number of assets that we would consider for sale, but nothing that we’ve drawn a hard line on or a goal or a target. Wes Golladay – RBC Capital Markets: Okay. Thanks for taking the questions, and nice quarter, guys.

Thanks, Wes.

Thanks, Wes.

Your next question comes from the line of Bob LaFleur from Cantor. Please proceed. Bob LaFleur – Cantor Fitzgerald: Hi, good morning. A couple of sort of random once here. One, can you talk a little bit about progress of the Minneapolis renovation and related to that, where does that sit on the balance sheet? And is it contributing any interest income to you?

This is Stu, regarding interesting income, we’re capitalizing on those balance sheet so it doesn’t hits your P&L during the year. And then progress on it, it’s going well. We think we’re running on time and on budget at this point. We would anticipate that would close end of third quarter, early in fourth quarter. Bob LaFleur – Cantor Fitzgerald: Okay. And the investment hotel properties under development at 10.38, is that where it sits on the balance sheet, is that...

Yes Bob LaFleur – Cantor Fitzgerald: Okay

That’s is correct Bob LaFleur – Cantor Fitzgerald: All right. And then just a follow-up on Ryan’s question, the – there is an FFO contribution from the assets held for sale that’s incorporated into the guidance, is that correct?

That is correct. Bob LaFleur – Cantor Fitzgerald: Okay. And then the last question is, you did just under 3.1 in SG&A in the quarter, can you talk about how that plays out over the course of the year. Is that a good run rate or you expect to see that accelerate a little bit. How should we think about that going forward?

Yeah, I think that’s a decent run rate, there should be a little bit acceleration we talked about it on our comments here. We are going to bring a little bit more of our development work that we can even sort of outsourcing that often times gets capitalized into project, we are going to bring that in-house. So it has a little impacted to G&A, but we think that – long-term has served great benefits for us to pay more control there. So I think that’s the way to look at it is a slight uptick, but not far off of that current run rate. Bob LaFleur – Cantor Fitzgerald: Okay. Thank you.

Your next question is a follow-up question from the line David Loeb from Baird. Please proceed. David Loeb – Baird W. Baird: I was wondering if you could just give a little more color on financing strategy going forward. Do you plan to leave a bid out on the line or you kind of look to expand that? And then kind of in summary, what do you think your remaining debt capacity is at this point?

Yeah. David, this is Stu. Regarding debt capacity, as we lay out that Page 15 sources and uses, if we ramp through that whole process, we think we have probably another $70 million plus available on our line of credit, and if you assumed, using this mortgage debt at 50% that provides $140 million of capacity for additional acquisitions. Regarding just our strategy, we have quite a few unencumbered hotels and we always have the ability to quoting that up to $200 million if we chose to go that route. I think we’ll also look at over the next several quarters, maybe with so many unencumbered hotels, look into maybe more of an unsecured structure to our revolver. And then lastly, I did make the comment, obviously the debt markets are really solid and we do believe it’s a good time to use the balance sheet a little bit and lock in some really, what we consider nearly all-time sort of low rates. And if you look at where we look at our run rate, our run rate for the next couple of three years and possibility of raising ADRs and get some expansion in our portfolio, having some good solid term debt and get a nice margin expansion is a real positive aspect as we think of the possibilities for the future. David Loeb – Baird W. Baird: And then finally, maybe this is as much for Dan, as you look forward, you obviously have a very active pipeline. You’ve got the White Lodging transactions going as well. What’s your thought about the next slice of capital? Is it likely to be common or preferred and how do you look at that trade-off today?

And I guess Stu and I can probably share the question. We’ve got no immediate need to come to the equity market. We have got a clear run rate using our balance sheet. We’ve got capacity to do one or two to time for the next several quarters. We do have – as we’ve talked about, we have some asset sales. We do still have some land parcels for sale. We’ve got added flexibility in our facility. So we do have options between a common equity preferred of the ATM, but nothing that is eminent.

David, this is Stuart, I agree Dan’s comments. Our goal is always to leave ourselves in a position where we have a solid balance sheet, we have liquidity and we have options. So we can continue just to grow on our one-off strategy. But obviously the capital markets, if it makes some sense, and we can find really use of the proceeds in which capital would make some sense, we wouldn’t give first rates of capital at that point. David Loeb – Baird W. Baird: Okay. Thank you.

(Operator Instructions). Your next question comes from the line of Matthew Dodson from JWEST LLC. Please proceed. Matthew Dodson – JWEST LLC: Can you just talk a little bit about your dividend strategy and kind of how you think about potentially raising the dividend over time? And then the other question, you alluded to this earlier, but you talked about in your remodels, you’ve seen better than expected after through that process yet you currently have 10. Is there a lot of risk you believe at all to numbers that you’ve embedded with the remodel or renovation?

Yeah, this is Stu, I’ll take your dividend question first. Regarding dividends, I think there is always a balance in our organization, the balance being that we’re finding really acquisitions that can be accretive to FFO and earnings for our investors, so the balance being trying to deploy capital where you can grow your earnings per share is a compelling argument. At the same time dividends and wanting to make sure that our dividend is solid and is meaningful, and our investor is always a balance too. If you look at us in the hotel public space, we always preform in the upper quartile as far as our dividend yield. So we feel it’s a compelling yield and at the same time, we’re finding accretive acquisitions. So an opportunity to invest with a solid dividend yield and potential for growth; we think that’s pretty compelling.

This is Dan. On the renovation question hopefully, I have your question correct. But you’re asking about the risk which we see that it is a real positive outcome. Freshly renovated hotels generally perform better. And through this last cycle of lodging, many hotels weren’t renovated during the downturn, the capital was hard to come by. Performance suffered in 2009 and 2010. So our ability to renovate hotels in advance of many of our peers in the markets that we’re in is actually giving us upside and really positive returns. So we don’t see it as a risk. We really see it as an opportunity. And in markets, we want to be real careful how we use that capital and make sure that we invest it in hotels that have that upside. Did that answer your question? Matthew Dodson – JWEST LLC: Yes, it does. Thank you.

Thank you.

All right, ladies and gentlemen, we have no more questions in the queue. I would now like to turn the conference back over to Mr. Dan Hansen for any closing remarks.

Well, thank you everyone for dialing in today. I’d like to just close with a reminder that, we’ve been doing this a long time, first as a private company and now as a public company. We have the skill set and equally is important the bandwidth to manage the pace of acquisitions, dispositions and renovations. We have a commitment to creating shareholder value, and it’s shown by consistently doing what we say alongside thoughtful capital raises, which are in the best interest of our shareholders. We’ve established a solid core portfolio providing long-term growth, we’ve got a massive pipeline of acquisition opportunities to drive additional upside and we are laser focused on becoming a dominant lodging company with a nationwide platform of premium select service assets. We appreciate your time, and look forward to the next call. Thank you, everybody.

Ladies and gentlemen that concludes today’s conference. Thank you for your participation. You may now disconnect. Have a great day.