Good morning, ladies and gentlemen, and thank you for standing-by. Welcome to the Sunstone Hotel Investors First Quarter Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session; instructions will be given at that time. I would like to remind everyone that this conference is being recorded today, Tuesday, May 5, 2015 at 9:00 a.m. Pacific Daylight Time. I’ll now turn the presentation over to Bryan Giglia, Chief Financial Officer. Please go ahead.

Thank you, Tim, and good morning, everyone. By now you should have all received a copy of our first quarter earnings release and supplemental, which we released yesterday. If you do not yet have a copy, you can access it on our website. Before we begin this call, I’d 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 adjusted EBITDA, adjusted FFO and hotel EBITDA margins. We are providing that information as a supplement to information prepared in accordance with Generally Accepted Accounting Principles. In addition, hotel information presented includes our adjusted comparable 30-hotel portfolio with prior ownership results for the Marriott Wailea which we acquired in July 2014. The 2014 hotel information has also been adjusted to conform to the industries, uniform system of accounts, 11th revised edition, which became effective in January of 2015. With us today on the call are John Arabia, President and Chief Executive Officer; Marc Hoffman, Chief Operating Officer and Robert Springer, Chief Investment Officer. After our remarks, we will be available to answer your questions. With that, I’d like to turn the call over to John. John, please go ahead.

Thanks Bryan, good morning, everyone. On today’s call, I will provide a few highlights of our hotel performance and the current operating environment, as well as an update of our two value add repositioning projects in Boston and Wailea. Next, Marc will review our first quarter operations in detail, followed by Bryan, who will then walk through our updated earnings guidance, in addition to our recent capital transactions which have increased our financial flexibility. To begin with, our portfolio outperformed our previous expectations for the first quarter. RevPAR growth of 7% exceeded the high-end of our initial guidance of 5% to 6.5%. Adjusting for the hotels under renovation in the first quarter of both 2014 and 2015, including the Hyatt San Francisco; the Hilton Garden Inn Chicago; the Renaissance Long Beach under renovation in ‘14; and the Boston Park Plaza under renovation in ‘15, our non-renovation impacted RevPAR growth would have been 6.8%. This generally indicates that the benefits of renovations completed last year modestly exceeded the renovation disruption this year. We are very pleased with the continued operational improvement and our recently renovated hotels, including four of our hotels that generated over 30% RevPAR gains in the first quarter. While room revenue growth was strong, food and beverage and other income were really the stars of the quarter. During the first quarter, food and beverage revenues increased 6.7%, driven by 10.6% increase in banquet revenues and a 14.1% increase in audiovisual sales per occupied group room. Food and beverage revenues continued to strengthen, as groups add more events to their programs, as well as up-scaling of functions in quality and size. Similarly, other revenues increased 12.1% during the quarter for a variety of reasons, including the implementation in restructuring of resort fee programs at certain of our properties, and…

Thank you, John and good morning, everyone and thank you for joining us today. I will review our portfolio’s first quarter operating performance in greater detail. For the first quarter, we saw our comparable RevPAR grow 7% to $150.12 through a 5.3% growth in ADR and the 130 basis-point improvement in occupancy. Overall, nine of our hotels generated double-digit RevPAR growth during the first quarter, including our Hyatt Chicago Magnificent Mile; our Chicago Embassy Suites; our Chicago Hilton Garden Inn; Marriott Wailea; Portland; San Francisco and our LAX Ren. Hotels witnessing flat to negative RevPAR included our two New York hotels and the Boston Park Plaza, which was under heavy renovation. With occupancy continuing to be at record levels and with demand trends continuing to improve, our operators have focused on increasing transient rates through a proactive revenue mix management and just purely bringing up the rates. This strategy has helped to increase our premium business portfolio-wide. Specifically in the first quarter, we continue to focus on decreasing our reliance on discount channels. During Q1, all our discount segments declined by 12.9% in room nights, while increasing a strong 8% in rate. In Q1, we saw a 3.1% room night decline in special corporate but a 4% increase in the special corporate rate. Our hotels have limited availability midweek and are starting to closeout or limit the number of lower rated special corporate rooms as well as lower rated groups. During Q1, we continued to see strong, cyclical trends in food and beverage improving throughout our portfolio. Our food and beverage revenue as John said, grew 6.7% year-over-year with a 420 basis points improvement in F&B margin. Our margin strength came from both control and recreation of menus. Our revenue growth is coming heavily from groups increasing their number of…

Thank you, Marc. At the end of the quarter, we had $244.2 million of cash on hand including $87.3 million of restricted cash. Last week, we repaid the remaining $99.1 million of mortgage debt that was due in 2015. As a result, our pro forma unrestricted cash balance adjusting for these debt repayments would have been approximately $58 million. The $99.1 million in loans were secured by the Marriott Huston, Marriott Park City, Marriott Philadelphia and the Marriott Tysons Corner. We have now addressed all 2015 debt maturities. We now have 18 unencumbered hotels that collectively generated $132.5 million of EBITDA in 2014. In addition to our cash position, we recently announced that we entered into a new $400 million senior unsecured credit facility. The additional capacity on the line provides additional financial flexibility that we will use to execute on our business plan over the coming years. The additional capacity does not mean we are going to use the credit facility to lever up or to go out and aggressively acquire assets, rather it provides increased flexibility that we expect to be available during all stages of the cycle. We now have $1.4 billion of consolidated debt in preferred securities which include 100% of the $228 million mortgage secured by the Hilton San Diego Bayfront. Our leverage consists entirely of well-staggered, non-cross mortgage debt and preferred securities. Our debt has a weighted average term-to-maturity of approximately four years at an average interest rate of 4.3%. Our variable rate debt as a percentage of total debt stands at 30.5%. We are exceedingly comfortable with our current leverage profile and our ability to continue to achieve our long-term credit milestones. Consistent with our track record we’ve built over the past several years, we expect to further improve our balance sheet and increase our financial flexibility in a gradual and shareholder-friendly manner, yet we retain considerable flexibility to take advantage of opportunities as they present themselves. Now to update the 2015 guidance, for the second quarter, we expect RevPAR to grow between 6% and 7.5%. We expect second quarter adjusted EBITDA to come in between $103 million and $107 million. And we expect second quarter adjusted FFO per diluted share to be between $0.40 and $0.42. For both second quarter and full year outlook, we anticipate approximately $500,000 to $1 million of revenue disruption due to the lingering impact of last week’s civil unrest in Baltimore, Maryland. Our full year 2015 adjusted EBITDA guidance ranges from $344 million to $356 million and our full year FFO guidance ranges from $1.26 to $1.32 per share. At the midpoint, this implies a 10.3 increase in FFO per diluted share compared to 2014. With that we’d like to now open the call to questions. Tim, please go ahead.

[Operator Instructions] And we’ll take our first question from Ian Weissman with Credit Suisse.

Just a quick question John, about your comments about the strong bid for real estate today and then if you kind of counter balance that to the challenges that New York City is currently facing, would you make the same comment about Manhattan for the strong bid?

We continue to see -- first of all good afternoon, Ian. We continue to see strong bids, largely from international capital in New York City. That is a market that as you know, we have not been active in. We have two hotels that are incredibly well located in or just off the bowtie Times Square that as you can see in our first quarter results did not fare well and we expect that they will continue to have headwinds. Having that said, I believe strongly and we believe strongly that those asset values have continued to increase, so yes.

Can you maybe then provide a little more color or clarity on when you said you would consider being a net seller in ‘15, maybe if you could just provide a little bit more details about markets or strategy and what would that include, would New York be on the table for sell in ‘15?

As an asset allocator Ian, everything is on the table. We have a policy of not disclosing specific information until transactions are hard or completed. But any area in which we can find dislocations between what we believe to be the market value and what we believe the long-term cash flow support is obviously something that we would try and either invest in or dispose-off depending on what side of that arbitrage we could find. So, there are still as we’ve been talking about few years, there are also a couple of legacy hotels that long-term just really we don’t fit the portfolio. I can see those in addition to opportunistic sell or I can see those being assets that probably are not long for portfolio.

And just another question. Your comments about occupancy being up over the next two years, most markets are way beyond peak occupancy; I think 500 basis points on average across the top 25 MSAs. So, we’ve seen very strong occupancy uplift. What’s the frictional vacancy rate if you call it where we could start to see sort of rate move materially higher from here. Just seems to be that there is a cap on rate, about 4% growth; what gives you confident that we could start to push rate higher here?

I would have thought we had already hit that inflection point. And if you take a look at historic data, you would suggest occupancy levels are lower than we are now. It is a point where operators have pricing power. It’s been a little disappointing in this recovery that we have not yet seen more pricing power. But we, particularly Marc and his asset management team are really working with our -- running out of key group times with occupancy being so high, we feel comfortable that if this continues, which we think it will that pricing pressure should to continue to intensify rather than moderate.

And finally, just last question for Bryan, maybe a little bit too early to ask this question. But as far as your prefers that expire next year, I think it is 115 million of 8% preferred going out I think April of ‘16; any thoughts on your plans there?

Yes, they do come due or callable in April of next year. That’s something we’ll continue to watch the markets. It is a very fluid market. So right now, there is really nothing that we can do with those. As we get closer to April, if the market remains where it is, there looks like there would be an opportunity to exchange those out for a lower coupon; we will have to get closer to that time to get a better idea of what that delta will be.

And can you share any thoughts on where you think coupon would be?

The current market is -- the spot market today is roughly 100 basis points, maybe a little bit more.

We’ll take our next question from Thomas Allen with Morgan Stanley.

So, your first quarter RevPAR came in around 7%; I assume you’re pretty good visible in second quarter again the 6% to 7.5%. But you maintained your full year RevPAR to 5 to 7, implies things are kind of -- are going to slow down in the second half. Can you just help us think that through?

As we’ve alluded to and this is not Sunstone topic really; it’s an industry topic. The third quarter is going to be a challenge I think for everybody largely because of shifted Jewish holidays, both falling during the week as opposed to weekends last year and Labor Day falling a week later this year. So, we’ve always known and talked about the third quarter will be a little bit softer in terms of just year-over-year growth. And for us specifically in the fourth quarter, that’s when you’ll see the lion share of our renovation disruption. That should be in the fourth quarter; we’re totally talking about just a little over 100 basis points. So, there is a bit of a moderation going in the third and fourth quarter.

And then on New York, can you bifurcate; is there any way to bifurcate the impact of lower international demand versus higher supply versus maybe some of the non-traditional lodging supply that’s coming in and think through how it’s impacting the market overall?

While we believe strongly that both are having an impact, it’s really difficult Thomas to bifurcate the impact of both of those. But we do believe that both are having an impact.

And sorry, if I missed this earlier but did you give you any data point? Some of your peers have given data points on like their international rooms sold this first quarter versus last or any other data points around the international event?

When you take a look at New York and I’ll let Marc take over here in a second if he has anything to add. But roughly speaking, our two Manhattan properties are call at 25% from international market. So, if we’ve seen a downturn of what say I think Expedia has suggested that number of room nights might be down as 10% to 12%. That will help you triangulate it.

We’ll take our next question from Rich Hightower with Evercore ISI.

A couple of questions; so on the topic of the upsized credit facility and I think Bryan actually preempted one of my questions in his prepared remarks, got it possibly pre-staging additional investment activity. It doesn’t sound like that’s necessarily in the cards. But just walk us through how you balance out the fees you pay on the additional capacity versus the old $150 million facility? And then also in light of what sounds to be a reasonable likelihood of additional asset sales later this year that would also generate liquidity?

The old facility, the $150 million credit facility was too small for our $5 billion asset value company. We have not updated that facility in number of years and we’ve seen several of our peers to have updated their facilities two to three times since then. So this was a long view overhaul of the facility. The 400 -- when we look at the $400 million, when you look at the sizing of the facility, we looked out over the next five years and with our credit profile and our leverage where it is, this is one form of capital that we can be fairly confident that whatever may happen and whatever downturn may come that with our leverage where it is that this will be capital that will be available to us. And that was more of a -- it was more of a longer-term view than any sort of short-term view as to where we’ll be using the big portion of the facility in the short-term, the answer probably not. But as we looked out over the next couple of years the form of capital that we feel very comfortable will be available to us.

And then John, I appreciate your candor in the prepared remarks regarding the current investment landscape and kind of where Sunstone is shaking out relative to some competitors nowadays. By your estimation, just to help us, where in your underwriting do you think you are being a little more conservative than the competition right now; is in terms of cyclical downturn you referenced; is in terms of the IRR; is it in terms of leverage availability? Just walk us through that process as it relates to Sunstone right now, if you don’t mind.

We really have not changed the methodology in which we underwrite assets and I can turn this also over to Robert Springer for any color, but we have over the past several years, underwritten cyclical downturns. Now we will most likely be wrong in terms of the timing of that downturn, the magnitude of that downturn but we believe strongly that assuming downturns in your underwriting reflects more accurately the earnings power of that asset. In addition to that, you need to be careful we believe with your residual cap rates and the context of what is a very low interest rate look. And so, I think between the two of those even though we don’t see other peoples underwriting, I think it would be -- we have prepared ourselves and I think it would be logical that the farther we go into a cycle, those disciplines might keep us on the sidelines, at this point in the cycle versus some of our peers. And if that is the case, we’re comfortable with that; we don’t need to transact to be relevant. I think we are going to transact smartly rather than just focusing on volume.

We’ll take our next question from Anthony Powell with Barclays.

On the asset sales, what do you envision the use of proceeds to be, if you were to sell one or more assets this year, you do have the $100 million share repurchase authorization, would you use that as use of proceeds?

It really depends -- it really depends on where we are in terms of asset values; it will depend on where our share price is; it will depend on any data preferred that we have the ability to bring in. So, it largely depends. And then obviously, if we cannot find interesting acquisition opportunities or we’re not comfortable with the presence of acquisition opportunities, returning capital to shareholders through some form is always on the table. So I’m not trying to dodge the question, but at the end of the day, it really just depends on what is best for the company, our long-term goals and total shareholder returns.

And then I just have a longer term question on New York City. Given where the difference is between private market valuations and public market valuations and some of the EBITDA generated in New York City hotels, what’s kind of the long-term rational being in the New York City market as a public REIT, do you still like the market long-term, would you invest in a further at the commensurate expenses [ph] and what’s your view on that?

Very long-term, New York has proven to be the one market that is most resilient to suppliers that have been able to absorb supply. It has really positive long-term, if you’re talking about long-term -- I am talking about the next 10, 20, 30, 40 years. On a very long-term basis, we believe the operating fundamentals in New York are attractive. So, let’s turn it over to Rob.

I think long-term -- if you look back over the last several years, one thing that we have to acknowledge is the incredible amount of supply that has been effectively absorbed into New York. Now, none of us are terribly happy with the growth that we’re -- locked there up that we’re currently seeing in New York. But if you look at the total supply hotel rooms in New York and the amount that’s been absorbed in the occupancy that the market is still able to achieve, I think it’s a testament to the strength of the market long-term as a both domestic and international travel destination.

On the after side, we’ve seen the strong results in Chicago and Boston this year. Number one, were there any kind of one-time or short-term boost to those markets in the first quarter and two, have you seen the supply growth environment and the commission [ph] calendars for those two cities this year net?

We’re very excited about Chicago and Boston. There were some good citywides in Chicago in the first quarter but in general, we believe Chicago is going to have a very strong 2015. And I could not be more positive about Boston A, having been there; B, being a patriot and such; and C, the strength of that market again, given the number of city-wide, the strength of the market et cetera. We see Boston; again it’s going to be at their peak, citywides next year ‘16 and ‘17 you are going to do somewhere between 28 and 30 citywides. We have basically zero to minimal growth in Boston. So, we are very positive about both of those markets as well as San Francisco and Orlando next year.

We’ll take our next question from Chris Woronka with Deutsche Bank.

I wanted to revisit Park Plaza in the context of Starwood now adding another soft brand and just your updated thoughts. If you get closer to having I think completely or you want it -- I’m guessing there is probably key money available from them and others and just any updated thoughts on potentially soft branding there?

We’ve been approached and we’ve analyzed several rent strategies there. Right now, particularly as we are going through the repositioning, the redevelopment of the Boston Park Plaza, I think you will most likely see us continue to implement an independent strategy there. It is a very high occupancy market, high gainer operating partner there does a very good job in hotel like that. And that gives us a lot of flexibility to improve the asset, largely as we see fit while at the same time holding on to a considerable amount of brand optionality longer term. So, more likely than not that it will remain an independent hotel, particularly as what that means to without having that financial encumbrance what that means to the longer term value, particularly on sale; I’m not suggesting we’re not selling it. But we’re pretty happy with the position we are in right now.

And then I just want to go back something you mentioned at the beginning in terms of the cancellation and attrition fees and you mentioned some I think added resort fee as well. And we heard from Marriott last week that they had recently changed their cancelation policy. Where do you think we are in terms of that as a revenue opportunity; are there still more things you think are to come from the operators as we get -- as the environment remains so strong?

Yes, we believe and I think you’re starting to hear a lot of the brands talk about this movement to strengthening fee program, similar if you look at the results and the success of the airlines, clearly the first move by all of the brands to move beyond 24-hour cancelation to 48 and in some cases 72 in strong months. And I think you’re going to see more of that as we move into this extreme high occupancy cycle and continued compression.

We’ll take our next question from Bill Crow with Raymond James and Associates.

John, a couple of questions for you; I think your predecessor certainly or maybe you shared the philosophy. But you kind of had a minimalist philosophy towards the dividend. And I’m just wondering whether the changing acquisition landscape has made you rethink the dividend and kind of its priority from a cash perspective?

It’s really interesting question, Bill. It really comes down to at the end of the day, and this is obviously something that the board will debate and finally make a determination on. If we have purpose, if we have reasoned rational to take that incremental capital and to invest it wisely, then I think that would of preference, rather than deploying that capital to a dividend and then having to turn right back around and raise that capital which generally has a cost associated with it. To the extent that we do not have interesting investment opportunities which I’m hoping that is not the case long-term, then we’d have to have a discussion about at what point do we start returning that incremental capital to shareholders via one of several different methods and on that table would obviously be potentially cash dividend.

John, if you were to go back to your prior employer today and I don’t get to see -- I didn’t get to see what you’re writing back in the day, but would you be calling for industry consolidation at this point? I think we’ve got a couple of more lodging REITs set to list in the next month or two. What’s your history of thought there?

I have been saying consolidation to make a lot of sense for almost 20 years have been in this business. And I think the shortest book ever read was -- the shortest book ever written was the REIT to REIT [ph] consolidation in hotel space. And what we’ve found is what they used to call host in the seven to dwarfs; we now have host in seven dwarfs and a bunch of micro midgets. And the market is accepting that. I don’t really understand why we have 18 or 20 hotel REITS but that’s not for me to decide; it’s not for me to force an issue on. But it strikes me when you take a look at the other major sectors. You have much larger companies. I think that there is some benefit of that incremental scale. At the end of the day it is shareholders returns that matter not just scale. But I do think it’s an interesting phenomenon that we continue to have hotel REITS coming to market and many of them just don’t really have differentiated strategies. So, what to do about it, nothing from my chair really, but I do find it interesting.

And we’ll take our next question from Jeff Donnelly with Wells Fargo.

So is this better to be a dwarf from micro midgets, John?

I won’t touch that one Jeff.

Actually I’m sorry if this is repetitive, but I missed unfortunately some of your responses to the question about the robustness of the transaction market. Just curious, did you talk about whether you see that pricing as debt fueled or driven by maybe foreign buyers with the greater focus on U.S investments? And I guess I’m curious are these folks that you are used to seeing in the hotel transaction market?

Really, all the above; I think we’ve seen a stronger private equity bid because of the cost and availability of debt. Particularly on the Coast Southern California, New York City, we have seen new bids coming from either sovereigns or coming from Asian buyers that we had not seen before. Now to be frank, weighing through some of those bids or weighing through some of those overtures I should say, takes time to see people are real or not. But it does seem that there has been substantially more interest from foreign buyers. And at the same time we’re also seeing heavy competition coming from several of our REIT brothers. So it will be interesting to see now that there has been a positive a share pricing, how that trickles through repricing or rebids. But quite honestly Jeff, we’ve seen bids from really across the boards suggesting that hotel values just continue to increase.

And how you think about them relative to replacement cost? Because obviously when we look at other property types even in California, I think who is easier to build in California, you might see more construction. But point being is valuations on some cases have actually begun to approach replacement cost, just surpassed given the developments kicking in. But you haven’t quite seen that in hotels yet. I guess I’m wondering I got to the metric that you’re looking at the sort of measure the robustness of the bidding.

I don’t think we’re at replacement cost in most markets, potentially in some. But remember development costs are not static; you’re competing with land, you’re competing for land with other types of developers and construction costs as we’ve seen with our own value add repositionings continue to increase. And then there are certain markets quite honestly where getting the right trades, is becoming more and more difficult. We’ve seen that quite honestly in Boston.

And just one last question I guess to EBIT. At Park Plaza, one of your competitors bought a hotel across the street there the review [ph] that came of the parking garage. I was just curious is that facility used for Park Plaza’s guests and valet services, I guess wasn’t share if the change in ownership there might change your economics for providing parking for guest?

I’ll turn this over Robert Springer.

We don’t actually currently park our cars at that garage; there is a parking garage more proximate to our hotel that we currently park in. But the dynamic in Boston for parking is one that overnight parking availability is actually pretty good because especially in this particular market where you have a transient population that comes in for work and then leaves. So, I know we’ve revaluated our parking contracts in Boston during our period of ownership and we have switched garages but to the best of my knowledge, I don’t believe we’re parking in that garage at this time.

And we’ll take our next question from Shaun Kelly with Bank of America/Merrill Lynch.

I was just curious on we continue to see independent hotels remain a big theme for a lot of your reappears in terms of acquisitions. And I am curious outside of the Park Plaza; the profile of Sunstone is still heavily mixed towards the brand. So I guess at strategic level, I mean how do you kind of think about that today and where you want to take your mix over time?

I think what you’ll see from us and if you look across the spectrum of assets that we’ve looked at in the last 12 months, it’s been a mix of branded hotels, as well as independent hotels. In super high barrier to entry markets, very high compression markets, we are still a believer in both branded hotels as well as independent hotels. Looking at our portfolio, it’s obviously very heavily branded; our brand weighted versus independents, but don’t take as an indication that we don’t have an appetite or we’re less interested. Our acquisition focus is very much on very high compression super urban, so to speak; and in those markets, we do feel that there is a very viable place for independents, especially when you look at the true cost of a brand. John was speaking before about some of the evaluation we’ve done on the Boston Park Plaza as it relates to potentially adding a brand. And definitely one of the factors that has played into that is when you really truly fully load the P&L with all the brand costs, you have to really have confidence that the brand is going to deliver an incremental -- a meaningful amount of incremental money to pay for itself.

And my follow-up would just be, we’ve heard some people talk about San Francisco and the renovation in the Moscone Center, particularly the impact on some larger group hotels. You guys obviously have a big group hotel, but you’re also in the midst of ramping that asset. So, could you just tell us how you see to outplay that particularly in the second half of ‘15 when I think the convention centers on their kind of peak renovation?

As far as our hotel goes, we’re currently ahead of pace for full year by 23.6% with 18% of that coming in rooms and almost 4.8% in rate. Given where we typically play in the citywides, the lack of citywide compression due to some of the openings of construction on the convention center, Doug put some pressure on the transient rate. That being said, we are comfortable where we are, the number of group rooms do softened a little bit in the back half of the year, but it’s also the strongest transient demand between June through November. Given the transient demand, given the increase in both mid-week business and weekend travel, we think that our hotel will work its way through the market very well. And as I said, we think San Francisco is a strong double-digit environment for us this year and probably a double-digit or close to a double-digit environment next year.

And we’ll take our next question from Lukas Hartwich with Green Street Advisors.

John, you mentioned that your turnaround assets are materially outperforming your underwriting, can you quantify that a bit?

Sure, I am going to hand this over to Robert. But if you take a look at for example our 2015 multiple on our total investment thus far in San Francisco, ‘15 would be 11.8 times EBITDA that includes renovation disruption in it, Wailea were down to 14 times. So, we’re seeing pretty significant growth out of these hotels that have materially outperformed underwriting. But I probably just took all of Robert Springer but I’ll pass it along for any color.

I mean generally speaking looking at the recent three larger acquisitions, Boston Park Plaza from a top-line perspective is generally in line, a little bit small amount of outperformance on the top-line in Boston Park Plaza. Looking at Hyatt San Francisco, the differential is a little bit more actually -- sorry, I am just comparing a couple of numbers, give or take about $10 in RevPAR in ‘15, more than we expected. And then when you go to Marriott Wailea that’s where the real outperformance has been, a lot stronger, frankly there was more low hanging fruit on the revenue and sales side than we expected. I’d love to say that it’s something more scientific in that. But really as we went through and looked at how the hotel was addressing, both its sales strategy, its approach to group and revenue management, we were able to move the needle there a lot more obviously helped by dropping oil prices, which dropped airline fares, which has helped inbound traffic in Maui. But there the outperformance underwriting is really closer to $25 in RevPAR.

Robert, one follow-up on that. The Hyatt in San Francisco, the margins in that property are in the low 20% range. I am just curious what the -- what sort of upside do you see in those margins?

In San Francisco, we’re in -- as everyone understands, we are in a very union environment and with that comes a heavy cost structure. So to achieve our business plan there, we would compare to current margins, we really see it getting kind of to the mid 20s versus the low 20s where it is now.

And then, I’ve got one for Marc. Marc, can you remind us why margin growth is at this point at least is below 100 basis points even the RevPAR growth feels like it’s coming in pretty strong?

The same store portfolio for 2015 margins are 0 to 30 basis points up from the prior peak of 30.6. We’re expecting to achieve prior peak margins in 2015. There are some additional costs that really end up in real estate taxes more than anything and in New York City, the drag on GLP. So if you really carve out the real estate taxes and in New York City, the rest of the portfolio looks to be very strong.

We’ll take our next question from Nikhil Bhalla with FBR.

Just want to get a sense of what you think the length of cycle is or at least what you’re assuming as you think about your asset sales and some of the programs that you kind of talked about, would love to get some sense of that.

Nikhil, that’s obviously a very, very important question and one that nobody really knows the answer to. I think there are a significant number of potential outcomes. I think the more -- this is just me talking, but I think the most likely outcome that we’ve been saying this for years, is we see softer growth in this recovery that this recovery is longer as supply is muted and GDP has not been as strong, it kind of feels like a sort of a white hot growth, it feels like it’s just continuing to slowly build steam. I think that type of environment which would result in relatively low interest rates for longer periods of time, I think bodes well for our business. So putting all of that together, I would expect that while we might not see some of that white hot growth in the middle part of the recovery, I do believe that this recovery is longer than is typical. I think this is pretty healthy. And really the most important question, one of the more important questions I should say is what does the next downturn look like? And while nobody knows, I think it’s more likely than not that the next downturn is far less severe than what we just experienced last two downturns and what does that mean to real estate pricing, or hotel pricing.

Sure. So, I got it from what you’re saying, you think that we’re still in that cycle at this point in time?

I think that’s fair. Remember that pricing can continue to increase; we’re seeing parts of the cycle before where pricing can continue to increase even in declining occupancy because we’re over some natural occupancy level where there continues to be enough tension in the pricing market or in the ability to move rates. So, I think there are some people to take immediate reaction that as soon as occupancy starts declining ADR will as well and we just don’t show that view.

You mentioned about seven dwarfs out there; my question to you is why not look to sell the company to off your other peers?

Why not look to sell the company to a peer? That’s obviously a board decision but anyway to maximize shareholder value, we will look at.

And one final question for Bryan here. Bryan, the restricted cash balance, $87 million, can you just give us some color on what’s included in that?

The majority of that would be the FF&E reserves which are -- we will draw down on and then replenish on a monthly basis. I believe that’s somewhere around $50 million of that balance. There are some seasonality reserves and other things that are dictated by the individual mortgages and then the other amount would be then the amount that’s filing the interest payment for the next months, also included in that would be real estate taxes that are reserved on a monthly basis to prepay upcoming real estate taxes.

We’ll take our next question from Smith Rose. [Ph]

This is Archana [ph] for Smith [Ph]. Quick question on Wailea. So, is it fairly reasonable to think of there being significant disruption in 2015, if you also -- I know you guys talked about competing majority of the renovation of the resorts public spaces. But it sounds like that’s kind of key to hotel. So, if you could provide some context around that that maybe helpful.

We really aren’t providing ‘16 guidance at this point. I think what we talked about in the past really is just some disruption around the pool renovations in Wailea. If we can accelerate some of that, we might take some of that on in fourth quarter of this year, just depending on when we have the best opportunity to get that done. In addition to that, we’ll continue to have some renovation disruption at the Boston Park Plaza when we’re finalizing those rooms. And other than that, I really don’t see anything else in our portfolio and at that point our portfolio in really good shape. So, we’ll provide -- as the year goes, on we’ll provide more disclosure on what we anticipate that number to be. But keep in the context that we’re talking about this year $3 million to $5 million of revenue displacement that’s maybe 30 basis points or 40 basis points of RevPAR on a company that this year will do roughly $1.25 billion in total revenues. So really take a look at that in the historic context or on an absolute context, it’s really not all that much.

And given that like these heavy lifting projects are now like performing better than the underwriting and given your earlier comments on the strength of the bids, can you talk to the potential of probably doing like another heavy lifting or transformative deal in 2016?

Potentially, again it really comes down to pricing, it comes down to our human capital, it comes down to whether or not the markets in our investor base has gotten comfortable with our ability to execute on these plans which we feel comfortable, we feel very confident will be the case. We look forward to highlight those capabilities when we all get together as many people as possible coming up at our investor meeting at Boston Park Plaza which will also be highlighting our plans for Maui. While Boston is a good portion of that renovation is done and we are while it’s performing well, we’re most excited about where that asset can go, particularly after the rooms are done. We feel very, very good about Wailea and if we can prove and get -- if we can prove that we have that ability and the investment community buys into that, then I think incremental value add will be on the table, too tough to make that call right now.

And that does conclude our Q&A session. I’ll turn it back to our presenters for any closing remarks.

Well, we really appreciate everybody’s time and interest in the company. And please give any one of us a call, if we can add any further details. Have a great day.