Good morning, ladies and gentlemen. Welcome to the Sunstone Hotel Investors Third Quarter Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded today, Friday, November 2, 2012. I would now like to turn the conference over to Bryan Giglia, Senior Vice President of Corporate Finance of Sunstone Hotel Investors. Please go ahead, sir.

Thank you, Alex. Good morning, everyone, and thank you for joining us today. By now, you should have all received a copy of our third quarter's earnings release and our supplemental, which we released yesterday. If you do not yet have a copy, you can access them on our website at www.sunstonehotels.com. Before we begin this call, I would like to remind everyone that this call contains forward-looking statements that are subject to risks and uncertainties, including those described in our prospectuses, 10-Qs, 10-Ks and other filings with the SEC, which could cause actual results to differ materially from those projected. We caution you to consider those factors in evaluating our forward-looking statements. We also note that this call may contain non-GAAP financial information, including EBITDA, adjusted EBITDA, FFO, adjusted FFO and hotel EBITDA margins. We are providing that information as a supplement to information prepared in accordance with Generally Accepted Accounting Principles. With us today on the call are Ken Cruse, President and Chief Executive Officer; Marc Hoffman, Chief Operating Officer; and John Arabia, Chief Financial Officer. After our prepared remarks, the team will be available to answer your questions. I'd like to now turn the call over to Ken. Ken, please go ahead.

Thanks, Bryan, and thank you all for joining us today. First and foremost, our thoughts and concerns are with those who have been impacted by the extreme weather on the East Coast this week. We want to thank all of our team members at our hotels for their selfless work ensuring the safety and welfare of our guests and assets during the storm. While we were impacted by a fair number of cancellations during the week, which we'll discuss in more detail during this call, our hotel did not sustain any notable damage from the storm, and all of our hotels have remained fully operational. While travel in and out of select East Coast cities remains challenging, we expect things to get back to normal fairly quickly. Shifting the focus for today's call, I'll start by reviewing some of the high points from our third quarter operational results, and I'll then provide a status report on our business plan execution. And finally, I'll give some thoughts on our near-term focus items and industry fundamentals. Mark will then cover operations in detail, and John will discuss our balance sheet and finance transactions, as well as our updated guidance before I conclude our prepared remarks and open up the call to questions. With respect to operations, our third quarter revenue and earnings met or exceeded the high end of our prior guidance. Our comparable RevPAR improved by 5.1% to $138.01. I should note that our comparable RevPAR growth was negatively impacted during the quarter by renovation-related displacement at our 807-room Renaissance Washington D.C. Our portfolio RevPAR, excluding the Renaissance Washington D.C., was up a solid 6.9% in the third quarter. Our portfolio RevPAR growth was driven by a $3.47 increase in rate, which grew to $171.02 for the quarter and by a…

Thank you, Ken, and good morning, everyone. Thank you for joining us today. I will review our portfolio's third quarter operating performance in greater detail and provide an update on our major 2012 CapEx projects. All hotel information discussed today, unless otherwise noted, is for our 30-hotel portfolio, which includes on a pro forma basis all 2012 acquisitions, including the Hyatt Chicago Magnificent Mile and Hilton Garden Inn Chicago Downtown/Magnificent Mile. For the third quarter, our pro forma comparable portfolio RevPAR was up 5.1% to $138 driven by a 2.9% increase in occupancy and a 2.1% increase in ADR. As Ken mentioned, the renovation at our Renaissance Washington D.C. significantly impacted the quarter. To help understand the short-term impact of this renovation, excluding this hotel, portfolio RevPAR for the third quarter would have been up 6.9% to $140 driven by a 4.1% increase in occupancy and a 2.7% increase in ADR. During the third quarter, 9 of our hotels generated double-digit RevPAR growth, including our Renaissance Orlando, Marriott Long Wharf, Hilton Garden Inn Chicago and the Hilton Houston North, to name a few. From a total room segmentation standpoint in Q3, group revenues were up 10.5% driven significantly by an increase in occupancy, primarily by the Hilton San Diego Bayfront, Renaissance Orlando, Marriott Long Wharf, Marriott Houston North, Hilton Houston North and the JW Marriott New Orleans. Our ADR per group for the third quarter was impacted by the Renaissance Washington D.C. and Renaissance Baltimore. Q3 transient-only room revenue increased 3.7% to last year with a 4.4% increase in ADR. Q3 transient room revenue benefited from the strength of our Marriott Portland, Hyatt Chicago Magnificent Mile, Courtyard LAX, which was offset by weaknesses in our Renaissance Washington D.C., Hilton Houston North and the Kahler Grand. During the third quarter, our…

Thank you, Marc. Good morning, everyone. Today, I'll give you an overview of several topics including, first, our liquidity and access to capital; second, our leverage profile and recently completed finance transactions; and third, details regarding our earnings guidance. With respect to liquidity, Sunstone ended the third quarter with approximately $241 million of cash, including $164 million of unrestricted cash. In addition to our strong cash position, we have an undrawn $150 million line of credit and 15 unencumbered assets, including the recently acquired Hyatt Chicago and the Hilton Garden Inn Chicago. On a trailing 12-month basis, these unencumbered assets collectively generated approximately $62 million of EBITDA. At the end of the quarter, Sunstone had $1.0 billion -- excuse me, $1.40 billion of consolidated debt, which includes 100% of the $236 million mortgage secured by the Hilton San Diego Bayfront. Adjusting for the debt attributed to our more minority partner in this asset, our pro rata debt balance is currently $1.34 billion. Our debt has a weighted average term to maturity of 5.3 years and the average interest rate on all of our debt, including the effects of our interest rate derivative agreements, is just under 5%. Our variable rate debt as a percentage of total debt stands at 30%. We have limited near-term debt maturities as only $58 million of debt matures through early 2015. This figure represents roughly 2% of our current enterprise value and equates to only 35% of our current unrestricted cash balance. Over the past quarter, we continued to make considerable progress towards our goal of reducing leverage in a methodical and shareholder-friendly manner. During the third quarter, we issued roughly $127 million of equity to fund the acquisition of the Hilton Garden Inn, Magnificent Mile and sold 4 highly levered assets to collectively have…

Thank you very much, John. I have just a few closing remarks before opening up the call to questions. As I noted in my opening comments, in spite of recent turbulence, our views on lodging fundamentals and the future growth prospects for our industry remain very positive. While as John noted, isolated factors warrant a moderation of our growth estimates for the third quarter, our industry's leading indicators clearly point toward prolonged growth over the quarters and years ahead. Lodging supply trends are in historic lows as our interest rates, while business transient and group demand continue to improve. And across our industry, occupancy, rates and profit levels are approaching prior peak levels. In spite of these compelling factors, most public lodging companies now trade, not only at significant discount to replacement cost, but also at steep discounts to private market values of their portfolios. Sunstone's recently renovated is well positioned to capitalize on continued lodging industry growth. And while we will continue to deleverage in a measured and deliberate way such as by funding acquisitions using equity priced at attractive relative valuations and by using excess cash flow to repay debt rather than funding material cash dividends, we believe our balance sheet is attractively geared for the current phase of this cycle, especially when considering our significant liquidity position, our low cost, well-staggered, single-asset mortgage structure and the fact that 14 of our 30 hotels are completely unencumbered by indebtedness. Looking ahead, we couldn't be more competent in our plan or our ability to unlock Sunstone's considerable potential in terms of earnings growth, value appreciation and shareholder returns. We will achieve this by adhering to our disciplined strategy for improving the quality and scale of our portfolio while gradually deleveraging our balance sheet and by building a positive track record one smart step at a time. Thank you for your time today. We greatly appreciate you interest in Sunstone, and we look forward to meeting with many of you at NAREIT later this month. With that, let's open up the call to questions. Alex, please go ahead.

The first question comes from Ian Weissman from ISI Group.

2 questions. You talked about group pace being up 8%, maybe you can just give a little bit more color on how that trend relates across the portfolio? Are you seeing similar paces in all your markets?

Sure, Ian. You said you had 2 questions. One was pace? So I'll start with that.

Well, I guess -- yes, well, and then I have a second follow-up question.

Okay, sure. Well, first of all, on the pace trend, we are -- the 8.1% improvement in pace is primarily in occupancy. We're about 7.1% up in rooms and about 1% growth in rate. Marriott brand pace is up considerably for '13. It's up about 17.5% and that's primarily in rooms. there's a little bit of benefit in rate. Our pace trends are offset a little bit by San Diego, for example, and this is a major group hotel. You'll see years where pace is strong and pace when -- years when pace is off a little bit. Next year is a slower year for the San Diego property. So nice offsetting factors there with the Marriott portfolio.

I guess my question is, are you seeing similar trends across all your markets? Or if you look across -- is that 8% driven by 1 or 2 markets in particular?

Yes, I'd say, off -- Baltimore and D.C. are very strong whereas San Diego, as I was mentioning, is weaker next year. So it's certainly not a smooth trend across the portfolio.

Okay. And then my next question is given the position of the balance sheet today, you have a lot of cash on the balance sheet, the stock trades at 20-plus percent discount NAV, it sounds like transactions are off the docket for now. What is your view of potentially buying back stock there?

Good question. We'll continue to monitor valuations and as I noted in my comments and John did as well, deleveraging the portfolio in a gradual measured way is a priority for the company. That said, the #1 priority is maximizing shareholder value. So should values continue to erode significantly from the current levels, that would certainly be a tactic that we would consider.

The next question comes from David Loeb from Baird. David Loeb - Robert W. Baird & Co. Incorporated, Research Division: I think this is probably more for John but can you give us a little more color about how you got to the Sandy disruption numbers? They were, by far, more detailed than we heard from pretty much all other companies that had hotels with significant presence in the markets that were impacted. So how did you come up with that?

Sure, and appreciate the question. I'll start with this and maybe Marc and John can jump in with additional color. But we're very, very deeply in tune with what's happening at the property levels throughout our portfolio and we've got a full property-by-property buildup of direct impacts we've seen from the hurricane last week. In particular, we saw some significant cancellations in some major hotels. D.C., for example, lost close to $1 million of business last week. Specific cancellations and that businesses likely are, hopefully, going to rebook at some point during the quarter. But at this point, we're not fully confident that, that will take place. Baltimore had a similar impact and believe it or not, Hilton Bayfront in San Diego had fairly significant cancellation that was really attributable to the weather as people couldn't travel to the meeting and the meeting group concluded that canceling that session was appropriate. So we've done a fairly detailed buildup. I will tell you that our hope is that we've been conservative in what we provided to the Street as an estimate for the impacts. But it is based on a fairly detailed buildup property-by-property throughout our portfolio. David Loeb - Robert W. Baird & Co. Incorporated, Research Division: That's actually very helpful. One of my associates wondered if you were Sandy-banking.

Sandy-banking. Our hope is that you look back in the quarter and say, "Those Sunstone guys, they stand-back." We think it's prudent, though, at this point given everything we've seen and our buildup to provide the guidance that we have. And again, we're going to endeavor, be very slated trying to build back that business throughout our portfolio. David Loeb - Robert W. Baird & Co. Incorporated, Research Division: And that helps. Can you just talk about those cancellations if there's an offset in terms of cancellation fees or if there's any insurance that will help you with that kind of cancellation?

I would not count on that. A couple of things, it's a policy typically that are weather-related events, cancellation, attrition is often not pursued. More likely, the hotels are going to work to rebook the business, and we've already seen that in several of our properties that had major meetings canceled this week. They're already looking to set those meetings back in later on, either this year or in quarters to come. David Loeb - Robert W. Baird & Co. Incorporated, Research Division: Okay. And one more different topic if you don't mind. I appreciated information about common dividend in the release. Can you give us some insight on how long those losses that you can carry forward will last? Do you expect that you're burning off most of that with 2012 and are you starting in 2013 with kind of normal taxable income with little to shelter it?

Well, the NOLs have a shelf life that extends out to 2030, I believe so. So in terms of the expiry of the and NOLs, that's not an issue. For us, it's more of when do they burn off, I think that's your question. David Loeb - Robert W. Baird & Co. Incorporated, Research Division: Yes, when do you use them up?

We will use a portion of them this year. We will certainly carry forward some of the NOLs into next year but our expectation is taxable income next year will likely exceed the level of NOLs that we have available to us to offset that income. David Loeb - Robert W. Baird & Co. Incorporated, Research Division: And so it will likely exceed preferred as well? So are you likely to be in a position where you have to make a decision about common dividend, how to pay, things like that?

Correct. David Loeb - Robert W. Baird & Co. Incorporated, Research Division: And when is that likely -- decision likely to be made?

Well, the dividend requirement is an annual one so that decision is likely to occur later in the course of 2013.

The next question comes from Eli Hackel from Goldman Sachs.

I've got 2 questions. First, you saw a large concentration in several big-box hotels and I know you said you -- and you have been very disciplined in terms of selling equity, but if another large-box hotel came on the market that was in the target market of yours, I would be curious if you take a look at it even where your stock is trading at now just given it couldn't make strategic sense. And then the second question is, it sounds like you're looking for a better '13 and fourth quarter. Specifically in New York and D.C., why would you think it accelerates, especially in New York, just given there's going to be a little bit more supply coming aligned in that market?

Sure. So taking your first question first, on the big-box question. We've been pretty well served as a team to-date being very disciplined around acquisitions and the deals that we've done this year that were equity funded were, frankly, projects that we timed, I think, appropriately and in retrospect, we firmly believe that. And at the same time, we walked from a number of deals that we didn't feel -- what we thought that those assets were quality and hotels would have been nice assets to have in our portfolio. We clearly made the decision that deploying equity at a value well below NAV was not going to be additive to our investors and so we've walked from them. As we sit here today, the question is given the spot value of our equity, I think we'd be hard-pressed to pursue an acquisition of a big-box hotel or, frankly, a smaller hotel in any market using our equity. Is there a hypothetical scenario that we can construct where our valuation is just so compelling in the strategic importance of the acquisition is so compelling that we would be inclined to issue equity to do it possibly? I would just say it's not on the top of our list in terms of what we're doing. And John, go ahead.

Yes, and I would add on to that, in that hypothetical which we were able to pull off, for example, with the Hyatt Chicago, it's just getting a lot more difficult to find those bargains as private equity comes back more into the fold in the transaction market and as the debt market heats up. I think for maybe the past couple of years, you've seen REITs being the dominant buyer and given the health or given what's happening with the trends, the debt markets, you're really seeing more private equity coming into the fold.

Thanks, John. And then with respect to your question on New York and D.C. trends, let me shift it over to Marc. He'll give you some specific information about our performance relative to the broader D.C. market, as well as what we're seeing in the New York market.

Sure. Thanks, Ken. Typically and generally speaking, when you have a year following a major election in Washington, D.C., it's usually a pretty solid year. Obviously, we expect to perform very well in Washington given our current pace. As it relates to New York, I believe BKF forecasts are currently running around 3.6%. Obviously, our Hilton Times Square will fall below that because of our renovation in the first quarter, and that will have displacement. DTS or Doubletree should fall in line generically with the New York City market, but maybe slightly below our portfolio's overall RevPAR growth in line and due to what your comment with the extra supply coming into the market.

Okay. So it sounds like New York is likely -- will trail your overall portfolio in 2013?

That is correct.

The next question comes from Jeffrey Donnelly from Wells Fargo.

I'm curious, you said as far as the New York City market goes. Do you think New York could see some sort of lingering impact either to the positive or negative, I guess, depending on whether or not you think travelers who just stay away because there's some disrupted transportation, or just maybe displaced residents occupying hotel rooms, longer than just, say, this past week?

Yes, I think our general take is that the storm is a negative for New York. We also feel that it's going to be fairly short-lived in terms of its impact, but our view is glass is half-empty as it relates to New York.

But nothing that mean that we'll be talking about its impact 3 weeks from now?

We shouldn't be.

Right. And I mean -- and I'm curious, Ken, because you kind of touched on your remarks, why is it with so many cities at or above historical peak occupancy in their CBD, do you feel that we're just not seeing the ADR and ADR growth that's consistent with prior recoveries? I guess, what do you think is restraining ADR? And do you think that as you set your own expectations for 2013 and 2014, does that maybe give you some pause and cause you think that maybe results could be a little lower than otherwise people might think?

A couple of comments on that one. I want to shift over to Marc as well, he's very in tuned with this. As far as the ADR growth goes, a lot of what you're seeing in our business is this recovery was fueled during the early phases with the business transient recovery and group just wasn't there. So our hotels didn't have the group based on the books to have the confidence to drive rate and compress people into these higher-rated segments. We're seeing a lot more of that as we go forward. And as you saw in the third quarter, our RevPAR growth was pretty balanced between occupancy and rate. But still, you've got group rooms on the books that were largely put in place 1 year ago, 18 months ago or longer. And so the rate turn on the group side has not kept pace with the occupancy trend. We think as group based continues to build and we have a bigger and bigger base of group business in the hotels, you'll see better and better compression into the higher-rated segments. We're already seeing really good compression, not only in the higher-rated segments but also within the lower-rated segments, where we're pushing the discount channels to much higher rates. So the rate strategy is working, it's just taking a much longer time to unfold this cycle than we've seen in past. And again that's largely a product of the dynamic that was at play where group business just wasn't there for us early in the cycle. Marc?

Yes. I think, Ken, you're very much right there. And what I would tell you is that as we take a look at our preliminary roll-ups for 2013, you are going to see a significant move towards the higher percentage of all the growth coming from ADR versus coming from occupancy. So you are starting to see that occur, albeit a little slower.

And then just maybe a last question is, it might be a little obtuse, but the large conventional hotels tend to compete more regionally than, I guess, in the city. For instance, I think on a property -- or when you want to stay ahead of the competitors, a convention hotel in San Diego, the GM once told us that one of his top, direct competitors is actually the Gaylord Texan in Dallas, 1,500 miles east, not necessarily a hotel down the street. So I know it might be atypical but do you think that Marriott taking over the Gaylord brand could present some impact at the margin for your convention-focus product in San Diego, New York, Orleans, particularly a Marriott-managed product?

No. I don't think that's going to happen. I mean if you actually -- and having had a lot of experience with those products and having some chance to look deeply inside of them, if you look at the group customers that are currently on that Gaylord property list, what you would find is 85% of those customers -- or already 90% of those customers are already Marriott customers. So I don't think there's going be any major shifting around. If you look at the success in the occupancies, given the public information of Gaylord's nature, you'd find that they already run very high occupancies for group hotels of that size. So we're not overly concerned about it at all and just think that it's part of those large ships in the sea and they're all moving around the sea at different places and the businesses just keeps moving around.

Actually, Marc, can you just repeat the answer to an earlier question? I think in response to Ian you were talking about just which convention markets you can see being stronger or weaker in 2013 versus '12, I just missed that.

Yes, I mean, we certainly expect D.C. to be stronger. We expect our Baltimore areas to be stronger, Orlando to be stronger. We think the West Coast for group hotels will be stronger as well. San Diego will be down slightly that kind of thing, Boston is neutral to down slightly.

The next question comes from Ryan Meliker from MLV & Co. Ryan Meliker - McNicoll, Lewis & Vlak LLC, Research Division: Just a quick question with regards to the guidance and kind of how trends are looking and correct me if I'm wrong, but if I recall from back in August, you guys reported earnings, the implied guidance for 4Q was somewhere around 4% to 10% with the midpoint around 7%. RevPAR growth and the pre-Sandy numbers here looked like it's closer to 2% to 4%. That's -- it's a 3% midpoint, that seems to be just a massive shift over 3 months since you guys last talked about how trends are looking. Can you just give us some color in terms of what changed during that 3-month time period that's making you so much more cautious around in 4Q?

Yes. Ryan, I think what I would -- the way I would characterize it as our -- we never gave fourth quarter guidance up until now. We've always been fairly conservative on the fourth quarter end and as such, we gave a very wide range leading into the quarter. The factors that have come to play and have impacted business trends in the fourth quarter that we talked about a little bit on the call today I include uncertainty around the election. A lot of -- and I think that, unfortunately, the driver and a factor in business sentiment, confidence trends and so on and our expectation is once the election takes place, irrespective of the outcome, we'll likely to see that obviously we'll see the uncertainty go away and we're likely to see the negative impacts on confidence go way as well. But that was something that I don't think we anticipated as clearly as it's been felt in the later periods of the third quarter and going into the fourth quarter. So election uncertainty, and I think the continued prominence of the fiscal cliff and sequestration and the implications of all that are kind of tied up in that concept. Beyond that, we're seeing positive trends as we noted on today's call in terms of the leading indicators for our industry, group booking's pace is looking good, negotiated accounts are looking good for 2013. So fourth quarter, I think we were well advised not to provide guidance for the fourth quarter earlier in the year and we did provide a very broad range for the fourth quarter earlier in the year and now we're -- we've brought a little bit more fine detail in the fourth quarter at this point. But the factors, with the economy, the storm, the election, et cetera, have all, I think, impacted the fourth quarter a little bit. Ryan Meliker - McNicoll, Lewis & Vlak LLC, Research Division: Okay, that's helpful. And then as you talk about the uncertainty around election, I apologize if I missed it earlier in the call, your group pace is up pretty strong for next year. Where have you seen that impact your trending? Is it in transient? Or is it just that groups are holding off booking and you'd actually have a higher group pace setting into 2013? That would be helpful.

So, Ryan, I apologize. I'm not sure I heard the question. Ryan Meliker - McNicoll, Lewis & Vlak LLC, Research Division: Okay, great. So -- and I apologize if I missed it earlier in the call. But with regards to uncertainties surrounding the election and some of the things that are going on that it caused you to take a more conservative outlook towards 4Q, where is that having the biggest impact, is it group or transient? I mean, group is obviously up pretty strong for 2013. so are you seeing that more in transient than groups delaying their bookings?

Got it. No, it's clearly a transient impact. And could we see some better trends on the group side? Certainly. I think it factors all layers of our demand but the near term impact, especially affecting the fourth quarter, are much going to transient side. Ryan Meliker - McNicoll, Lewis & Vlak LLC, Research Division: So you're not really seeing groups taking a more measured approach to booking out into 2013 even though you're seeing transient do that?

What I would tell you is that if you look back to last quarter, our pace in '13 was up 13%. Our pace is now up 8%, still a very healthy level. But you have seen a bit of a slowdown in group activity going into 2013. And once again, once the uncertainties are resolved, we expect that, that productivity in pace will pick back up.

The next question comes from Smedes Rose from KBW. Smedes Rose - Keefe, Bruyette, & Woods, Inc., Research Division: Just another question on group, I'm afraid. But what percent of your group bookings are now on the books for 2013 and specifically for D.C. because it seems like it'll be a big swing property for you next year. What percent of your group bookings are on for next year?

So for -- so one way to think of this and then we have some more specifics as to where we are for next year for the big-box hotels, in terms of pace trends, we're at about -- well, obviously we're ahead at 8.1% in pace for next year. For 2012, we've got 98% of our group trends on the books for this year. The smaller-box hotels tend to not cross over the year with more than 50% of their group trends on the books and then the larger hotels come across the year at about 80%. Marc, do you want to give some specifics as to some of the larger hotels where they are now versus where we need them to be or want them to be at the end of the year?

Sure, no problem. Thanks, Ken. Our D.C. hotel has a very high number. I mean, they're going to cross over the year at approximately 85%-plus of the rooms on the books that they need to get the number. We're thinking about our Baltimore hotel will be at approximately 65%. Our Orlando hotel will be approximately 75% to 80%, and our Hilton San Diego Bayfront hotel will be almost at 92%, 93%. So total portfolio, we will cross the year very close to 70-plus percent on the books. Smedes Rose - Keefe, Bruyette, & Woods, Inc., Research Division: Okay. And so with the pace of bookings moderating from the second quarter because I think you said it was up 13%, so that is normal just because you have -- you're essentially filling in, I guess, on the group that you want to have on the books at this point?

That's right, Smedes. Essentially, what we're doing, our operators are endeavoring to do is to book in higher-rated business which is a shorter window bookings because they had such a healthy pace on the books already. Smedes Rose - Keefe, Bruyette, & Woods, Inc., Research Division: Okay. And then I just wanted to ask you when you do these room renovations, like you talked about the one on the Hilton Times Square, is that because you need to adhere to sort of raise demands from the brands? Is there anything going on, on that side? Or is it just that they've -- they're just due for renovations?

Good question, Smedes. The reality is what we've seen with our renovation work over the last couple of years, I mean, a brief note to it is that smart, well-timed capital investments into our portfolio tends to generate significant returns on our invested dollars. With the Times Square property, for example, you do give up some offset in terms of short-term displacement but what we expect will be significant growth post renovation. If you've been to that hotel recently, the rooms are dated. They're what I would call vintage. We still fill the hotel up at a very, very attractive rate. Our view though is once we've completed this renovation and we'll do it in a surgical and as quick a manner as possible, we'll end up being able to charge an even better rate, especially for those high-rate business transient travelers midweek. So in each case, the renovation work is kind of on-cycle renovation. It's primarily motivated by our desires as an owner to maximize the returns in our real estate investments less motivated by brand standards. Smedes Rose - Keefe, Bruyette, & Woods, Inc., Research Division: Okay. And am I right in thinking that the Hilton Times Square -- do you have the right to change the brand coming up? Or is that something that's -- am I not remembering that correctly?

We do currently have some flexibility there. Smedes Rose - Keefe, Bruyette, & Woods, Inc., Research Division: And is that something you would consider? Or are you happy with the Hilton family?

We would -- we always consider our options. There might be -- there are several different angles we're pursuing on that hotel right now. It may ultimately be the best course to keep it as a Hilton-branded hotel and we will let you know when we would conclude that process.

The next question comes from Nikhil Bhalla from FBR. Nikhil Bhalla - FBR Capital Markets & Co., Research Division: When you look in the third quarter results, it doesn't seem like you had any major impact from the shift in holidays in September. If you can just explain that a little bit.

Well, we -- I think everybody was affected a little bit by a shift in the holidays. We didn't isolate out the various factors that were unique in the third quarter that impacted operations. I think, in general, as we stated, our numbers came in at the high end or above our guidance and so we knew in the holidays we are going to take place when we gave our guidance and so that was already factored for in our guidance, but I wouldn't say that there was no impact by that on a year-over-year basis. Nikhil Bhalla - FBR Capital Markets & Co., Research Division: Got it. And when you look towards the next year, are there any specific quarters that are tracking a little bit stronger than the others and especially when it comes to group demand?

So we haven't given guidance for next year and we can certainly give a little bit of color on the group trends for next year because we have some insights into quarter-by-quarter numbers. We're going be very careful what kind of range you hear for this call. Marc, why don't you give the...

Yes. At this point obviously, we have -- everyone knows the Super Bowl is in New Orleans and that will help our first quarter, as well as some strength in D.C. and our third quarter, in general, also looks to be very solid.

The next question comes from Bill Crow from Raymond James and Associates. William A. Crow - Raymond James & Associates, Inc., Research Division: Have you seen any change in the pace of group bookings related to government defense, anybody that's sitting there looking at the fiscal cliff and not sure it's going on?

Sure. I think the same factors that have slowed down the booking pace a little bit across our portfolio on nongovernment businesses also affected government business. And once the uncertainty of the election is resolved and the sequestration issue sorts itself out a little bit more, you'll; probably see better trends there. Marc, would you say we've seen a more profound impact on the government side than any other aspects of group business?

There's probably been a little bit more moderating, would be the word I would use of bookings and it's probably been more of a moderating in the rate than necessarily in the occupancy. Obviously, as everyone knows, they have frozen government rate for next year so that obviously is a piece and then there has been some moderation of the types and the amounts of groups we're seeing go up into '13 for government at this point. We'll just have to wait and see, hopefully, that will change. William A. Crow - Raymond James & Associates, Inc., Research Division: And any attempt on those groups parts to negotiate a way of cancellation fees just given that there is some certainty out there?

Not that we're aware of, no.

Bill, I think the way we would characterize it is that any curtailments of bookings from the government side has taken place to-date, and our view is again, once the political picture sorts itself out a little bit and some of the fiscal reform sort themselves out as well, you'll start to see some improved trends, not a degradation in trends as it relates to government bookings.

The next question comes from Josh Attie from Citigroup.

I got a few questions. First, can you tell us what RevPAR growth has been quarter to-date in the portfolio?

Sure, we'll provide you quarter-to-date RevPAR. Excluding D.C., our RevPAR quarter-to-date is up 7.4% and then for the entire portfolio, our RevPAR is up a little over 4.5%.

Okay. And for disruption that you mentioned in group meetings business this week, had any of those groups rescheduled for later in the quarter? And have you collected any cancellation fees?

So we covered that a little earlier but just to reiterate, in D.C., we probably had the biggest -- we didn't probably, we did have the biggest impact on group cancellations in D.C. Our policy, our operator's policy is typically when it's a major weather-related catastrophe that attrition isn't directly collected but rather a rebooking of that business takes place. And so in D.C., in particular, they are working to rebook some of the business that was lost this week into either later this quarter or into subsequent quarters.

Okay. And separately, I think you have a -- I know it's a small number but I think you have a small debt investment in Atlanta that matures in November. Can you tell us the status of that? And if that's an asset that would be strategic and you'd be happy owning in the portfolio.

Oh, yes. We have a very small B note investment in -- a property known as Twelve Atlantic Station. It's in a 99-room hotel in Atlanta. The B note sits behind $17 million of senior debt. The note is -- we're working with the borrower at this point to kind of accomplish an amicable resolution, if you will, to the maturity of that loan which occurred on November 1. And in the end, no, that's not an asset that we would necessarily want to own. we certainly believed that there's value in there well into our note, which we have an economic basis of 0 in. I think our book basis is something like 200,000, so fairly small investments. We think it will be resolved favorably and we'll give you some more color on that over the next months and quarters to come as it works itself out.

Okay. And you mentioned earlier in your prepared remarks that you thought the balance sheet attractively geared and I think in the Q&A you said that you'd consider buying back stock if the value erodes, and I know you're also committed to delevering the balance sheet, my question is, how should we think about deleveraging? Should we think about it as being a straight line where each quarter is a little lower than the last? Or are you willing to lever up temporarily to do things like buy back stock if the value is at a level that's attractive to you?

Sure. And I probably could've been even more direct in my comments about share repurchases. Never say never I think is the guiding principle there. But I think it would be close to never in today's world that we would look to buy back shares at the current level. So we're certainly trading below NAV but we believe our other balance sheet objectives take precedence over buying back shares certainly at today's level. If it were to drop down precipitously from here, we have significant excess liquidity and we would consider that. But I want to make sure that my comments aren't characterized as, though, not something that we're currently considering doing, just like we're not currently considering deploying equity to acquire hotels. That could change in a week or month but at today's levels, that is not what we would consider an option. As far as the deleveraging plan, our goal is slow and steady, I think is maybe a good way to characterize it. One smart step at a time as I mentioned in my comments. We've got a long-term financial plan that John and Bryan developed, which is very detailed, very specific in terms of annual milestones on deleveraging. I'm proud to say that John and the team have done a great job of achieving those milestones to-date and we'll continue to take a measured approach to achieving our deleveraging objectives over the next 3, 4 years. It's important that we don't go too quickly on some of these things and take steps that would be shareholder-dilutive and would hurt shareholder value in order to more rapidly achieve some of our leverage objectives. And that said, if we find opportunities to, "rip the bandaid off," that are shareholder-friendly, we'll do so. John, you want to provide more color on that?

Yes, absolutely. Josh, thanks for the question. Look, never say never is right, as Ken said, but as we're standing here today with all the facts presented to us today, share repurchase is not on the table. We'll continue to delever the company very methodically. As we have, we've been very patient, take a look at the Hilton Garden Inn Chicago. We sat around that asset for the better portion of the year and waited till the equity got to the right price to make sure that there wasn't any dilution and I think it was a great execution on that front. We need to remain patient. As Ken said, we'll continue to look particularly with given where the share price is now, continue to look at highly levered dispositions when the timing is right. As I said in my prepared remarks, we made considerable progress towards our deleveraging goal in a shareholder friendly manner. Well, we have more room to go there. And also, just a follow-up to your first question, Josh, I just wanted to emphasize that the quarter-to-date numbers were through October 26.

There are no further questions at this time.

Well, great. We want to thank everybody for joining us for our call today. And as I mentioned, we look forward to seeing many of you at NAREIT. We are hosting a reception on Monday evening, and we hope to see you all there. Thank you very much.

Thank you. This concludes Sunstone Hotel Investors' Third Quarter Earnings Investor Call. Thank you for participating. You may now disconnect.