Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. I would like to remind everyone that this conference is being recorded today, Friday, October 30, at 9:00 a.m. Pacific Daylight Time. I would now turn the presentation over to Bryan Giglia, Chief Financial Officer. Please go ahead.

Thank you, Kyle, and good morning, everyone. By now you should have all received a copy of our third 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 adjusted 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 which may include prior ownership information. The 2014 hotel information has also been adjusted to conform with the industry's uniform system of accounts for the lodging industry, 11th revised edition, which became effective in January of 2015. With us on the call today 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.

Good morning, everyone, and thank you for joining us. Today, I will provide an update on the performance of our business as well as an update on our most recent investments. Marc, will then provide an overview of our operating results and trends and Bryan, will go into more detail about our earnings, guidance, and dividends. Overall, we are pleased with our third quarter operating results and remain bullish on the strength of our near-term operating fundamentals. Like any quarter there were both positive and negative events that transpired. Yet in the end, we met or exceeded our operating and earnings expectations. Let me share a few of the details of the quarter, including a few items that did not break our way. First, as you are all aware by now, the shift in the Jewish Holidays and the reopening of many schools prior to Labor Day resulted in a few slow travel weeks in late August and early September. While these events produced challenging year-over-year comparisons, they were fully anticipated in our quarterly guidance and our operating results came in at the high-end of our expectations. Second, property taxes at our three Chicago Hotels and our one Orlando Hotel unexpectedly increased an average of 45% resulting in a $2.9 million and $900,000 higher than anticipated hit to earnings for the third and fourth quarters respectively. We had to expense three quarters of the tax increase during the third quarter which negatively impacted our quarterly margins. We are in the process of appealing these excessive tax increases, and based on past experiences, we are hopeful, that we will be able to recoup a good portion of the incremental assessment. Nevertheless, we are able to absorb the significant increase in property taxes in our quarterly earnings, as revenue growth and expense…

Thank you, John, and good morning everyone. Thank you for joining us today. To begin with, our portfolio achieved the high-end of our expectations for the third quarter. Our RevPAR growth of 3.9% was made up of a 4.4% increase in ADR and an anticipated 50 basis point decline in occupancy and exceeded the midpoint of our guidance of 3% to 4%. Total occupancy for the quarter remained a very strong 86% with over half the portfolio exceeding 88%. Six of our hotel generated double-digit RevPAR growth during the third quarter, including our recently and totally renovated Hilton, New Orleans, our Hyatt San Francisco, our Renaissance in Courtyard Los Angeles Airport, our Houston Marriott, as well as our Sheraton Cerritos. The performance of our Renaissance Baltimore Hotel continued to be softer than expected in the third quarter. However, very recent trends suggested Baltimore had stabilized and we expect the hotel to produce 4% to 6% RevPAR growth in Q4 and a substantial increase in RevPAR in 2016. Shifting to our revenue management review for the quarter. We continue to take advantage of a historically high occupancy levels across our portfolio and shift our business mix out of lower rated channels into higher rated segments. During the third quarter, our operators continued to close out or limit the number of special corporate room rates, as well as lower priced wholesale rates in favor of higher paying premium rates also known as bar rates. During the third quarter our portfolio witnessed a 4% decline in both special corporate room nights and wholesale room nights. Meanwhile, the number of premium bar room nights increased a strong 15%, as our hotel operators closed out lower rated corporate and wholesale channels during high occupancy period. On the Group side for the third quarter, we saw…

Thank you, Marc. At the end of the quarter we had $267.7 million of cash on hand including $91.5 million of restricted cash. We have $1.4 billion of consolidated debt and preferred securities, which includes a 100% of the $226 million mortgage secured by the Hilton San Diego Bayfront. Today, we repaid the $85.9 million loan on the Renaissance Baltimore with proceeds from a seven year $85 million unsecured term loan. The term loan matures in 2022 and based on our leverage, we'll have a fixed interest rate of 3.39% to 4.14%. As of today if there is an interest rate of 3.39%. Following this refinance, our debt has a weighted average term to maturity of approximately four years and an average interest rate of 4.3%. Our variable rate debt as a percentage of total debt stands at 30.6%. We now have 19 unencumbered hotels that collectively generated $144.6 million of EBITDA in 2014 and an undrawn $400 million credit facility. Our balance sheet is strong and we retain considerable flexibility to take advantage of opportunities as they present themselves. Additionally, we expect to repay the $30 million loan secured by the Hilton, Houston, with cash on hand in December of this year when its prepayment window opens. This will increase our number of unencumbered hotels to 20. Before I can move on to the fourth quarter and full year guidance, let me provide some additional information on the increase to property tax expense. At the end of the third quarter, we received notice from the City of Chicago increasing the values on our three Chicago Hotels between 20% and 60%. These increased valuations resulted in a full year 2015 property tax increase of $3.4 million which includes a third quarter year-to-date true-up of $2.9 million. As we are required…

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

Good morning.

Hi, Ian.

How are you guys? If I just think about one key theme this earning season and not just for hotels it's certainly I think across all property types, it's been the continued improvement of secondary markets or suburban, outperforming urban and the strong bid for real estate by private equity players in those markets. And I'm sure everyone is going to think of equity residential in that context. You guys have been very successful sellers of assets in the past. Can you just comment on the demand for hotels in the private market today and more importantly may be you can address comments or just kind of direct the comment to support demand for portfolio deals by private equity firms today?

Sure, Ian. The markets for hotel sales I would say remains robust. However the players have changed modestly as you can imagine hotel reads by and large are out of the acquisitions game not everybody but I think most of us, we clearly are given disconnect between public and private pricing and the questions about which way that person will break. There are still private equity players that are in the market, they remain active, some of those private equity players been very large household names, some of them being smaller regional players that may be own a hotel or two may be have a small management company, may be have 1031 Exchange money. So really -- it really depends on the size of the asset, the location. And as we have talked about in the past we will endeavor to try and find areas where we can sell assets not just at market pricing but those areas where we believe at – our view of the current economics and the long-term economics do not justify the price that somebody will pay us. And we have explored a couple of those areas as we do in the regular course of our business. We continue to explore those opportunities, but really nothing to look forward as of yet. In terms of portfolios, Ian, I don’t know if we have a great lens on that, those are obviously fewer to typically transpire. So I don't know if I have a great view on that, it doesn’t strike me that the debt markets are so robust for hotels that a significant portfolio size could be accomplished but we'll see.

It’s helpful and just changing gears a little bit. Can you provide just some broad comments about next week both on Proposition F in San Francisco, how meaningful is that to that City and obviously the pressures felt by Airbnb just your thoughts on how that could spill over into other cities, if they are successful in passing that that proposition?

Sure, Ian, great question. This is something what we have been engaged with, with several of our operating partners, several of the other hotel REITs and including the Hotel Unions that we've worked alongside the Hotel Unions on this topic. For those of you on the line that aren't familiar with Proposition F. Proposition F is trying to bring some level of regulation and we believe thoughtful regulation in terms of certain limits on the number of room nights one could rent out their house, their apartment, their couch whatever on Airbnb and other shared sites. We would reduce it to limited to 75 room nights a year and then would also be several requirements, paying taxes and getting certain licenses what have you. This is not just happening in San Francisco, Ian, as you all know we are seeing this dialogue and this debate happening in numerous municipalities to various degrees. I think that this is something that continue to occur. I don’t think any of us have a problem with what's -- in general with shared economy. However I would tell you that completely unregulated shared economy I don’t believe it is good for any of us and we will see how this -- we will see how this goes. Obviously, we’re going up against a constituency that is incredibly well funded, more funded, better funded than we are, but we’ll see how it goes and win, lose or draw in San Francisco I believe that this is going to be a far more significant dialogue going forward. Because as you know Airbnb and others are having an impact in certain hotel markets and we’re just trying to level the playing field.

We will take our next question from Smedes Rose with Citi.

Hi, Smedes.

Hi how are you?

Good. How are you doing?

Good, thanks. I wanted to talk about with Marc you mentioned some strength next year in Group bookings in several markets, was that related to positive trends in the convention calendar, is that more driven just by the hotels themselves generating incremental Group business and may be you could just talk a little bit more about what you are seeing for the convention calendar overall for next year?

Sure. From a standpoint of the Cities and I will do that first. Washington DC is currently expecting to be up very strong, the City itself it's up 31.8%, Baltimore is up 21.4%, Boston is up 6.2%, New Orleans is up 9.9%, San Diego is up 23.6%, San Francisco is up 5.4%, Orlando is up 11.6%, and luckily we have hotels in all of those locations and Chicago we saw at minus 17. Along with that we have very good pace numbers internally outside of the citywide numbers at the majority of our Group hotels which I sort of refer to anything over 30,000 group rooms. And so we’ve done a very good job working with the Managers of getting them to be a little more aggressive in filling in Group, as we get longer in the cycle and we just seem to be solid.

Okay, that's helpful. Thank you. John I just ask you to if you’re accelerating the work in Wailea will that property be finished than sooner and come online sooner or?

No, Smedes, we still have the same general timeline. But as you can imagine in anyone of these renovations there are numerous pieces, numerous elements, we accelerated one of the elements, we’re able to get into the big family pool which for those of you who don’t know the resort, it sits smacked our – in the middle of the resort and while we had anticipated getting to that part of the project this year, we accelerated it a little bit, we also took down the family restaurant, we also as we needed to get access points to those areas, we’re also accelerating some of the systems work around the disrupted area. So what it ended up happening was we ended up taking just a little bit more disruption this year, we still feel very confident with our overall disruption numbers presented at the Boston Park Plaza when we all met there several months ago.

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

Just want to follow-up on that tax question. I know it’s an issue that is difficult for you guys to predict. But is there any going forward and I know Chicago is probably out of the way but is there anything kind of on the horizon that's concerning you at least in terms of the initial assessments?

Hi Chris, it's Bryan. This is something that we continue to see as municipalities have budget deficits and they go after funds. Property taxes as historically always been one of the areas they go after. We saw -- we mentioned that we saw the increase in New Orleans earlier this year. It was a very efficient process where they increased the amounts we had the hearings, we had our appeal, and we received a reduction. I would say that after once we pass through the entire appeal process, the end result seems to be reasonable. It just takes a long time to get there in certain markets and it leads to choppiness when the expense is incurred and when the credit is taken. Now if you saw in the third quarter we had from 2013 we took a -- we had a credit from an appeal in Chicago that we just received this quarter. So there can be a pretty significant time lag.

Okay, that’s helpful. And then just on the Park Plaza, as you're kind of continuing to build the future book of business there, is there any shifts or change in kind of the mix you're expecting there? I know there's a little bit of new supply coming next year and overall it's a solid, good market. Has anything changed there on your business mix?

No, not in particular. I think we've got what we found to be a good model in the hotel and we manage between group and transient. Where we are seeing significant changes is the hotel; we'll end up doing more corporate group both from a group standpoint and corporate from business travel, but the mix that we think that we are at is right given the complexity of the building and the type of customer in Back Bay that we sit in and we could not be more pleased with the total pace numbers of the next three years.

We'll take our next question comes from Brill Grow with Raymond James & Associates.

Marc, you mentioned the Renaissance Baltimore was going to have a restaurant next year. If you went back and looked at 2015 at the original budget for that hotel and then you looked at the growth for next year how good would that growth be?

Well, we're not at a point to give you specifics for next year. What I would tell you is that we feel good that where we will be by the time where all said and done is that we will most likely be ahead of the '15 budget in '16 with some growth.

Okay, just trying to see how much is organic versus just recovery from the interruption that happened there?

There will be recovery and there will be some organic because the city has a very good group calendar.

All right. Hey, John, there are published reports the Doubletree Time Square is on the market. I don’t know if you -- I can't remember if you'd addressed that publicly or not, do you have any comments on that?

Unfortunately, Bill, we have a very stated rule that we can't comment on rumors and generally we'll not comment on transactions prior to closing those transactions or having a great deal of confidence that they will close. It did come to our attention though that there was some kind of offering, memorandum or some kind of teaser trying to raise capital, trying to put together a significant investment in the hotel, the feeder, the signs and numerous other pieces of real estate that we don’t own, we don’t control. I will tell you that we have had no communication with that group that was putting that together. And so that's really all I can say on that issue.

John, in your press release you mentioned being opportunistic if you could sell assets for more than what you thought the value was that you'd do that. How do you think about using those proceeds if you were in fact to sell some hotels?

Sure. Incremental investment rate right now it's very clear that given a disconnect between public and private pricing that buying our own shares represents a far greater investment opportunity than going out and competing is what is still a fairly competition market for transactions. Yes, most REITs are probably on the sidelines but it doesn’t strike us that to-date cap rates have really moved, the valuations have really moved. So in the past month or two we've traded as high as call it an 8% cap rate on our portfolio which we're proud of and that includes renovation disruption and it does not what we believe is the true earnings power of assets such as Boston Park Plaza and Hawaii. And so clearly, first and foremost, considering our balance sheet is in great shape and while on the margin we'll pay down some all loan coming due and Bryan and the team will continue to extend opportunities that’s generally covered. We do have a fairly significant dividend coming up here which will have a pretty significant cash component to it and that’s going to take a little bit of cash as well. But clearly our stock, rather than acquisitions, makes the most sense at this point.

We will take our next question comes from Lukas Hartwich from Green Street Advisors.

Marc, can you talk a bit about recent trends in group production?

Sure. In general, as John stated earlier, our year-to-date group production numbers for the quarter, from that quarter standpoint, was the best we’ve -- second best we’ve had in eight or nine years. We continue to see very strong production throughout our portfolio spread throughout our management companies. In many cases now, you are starting to see somewhat of a elongating slightly of the booking window because there is less and less available space. What’s nice to see is that we all know that at the beginning of this cycle 2010, 2011, 2012, 2013 and even 2014 rate was not moving and we are now starting to see rate move as you would expect at this point in the cycle, and we will see it particularly in those high demand markets this year and next year and which will help us into even the out years of 2018 and 2019 as some groups get bought.

That’s helpful. And then some of your peers have talked about recent increase in cancellation activity. I’m curious if you’re seeing that as well?

Hey, Lukas, it's John. We actually have seen an increase in cancellation and attrition and we have had considerable discussions going through the details. I will tell you there is -- there are both positives and negative place to look at that. One would be, in a negative way, if all the sudden we saw spike in last minute cancellations, if attrition was higher than anticipated and those fees increased. A more bullish way a trend that could transpire is that if the operators get more bullish about how compact their hotel is and get more bold in terms of charging those cancellation and attritions because remember at the end of the day it is not as easy as just saying, fine, send us the check, many times it’s negotiation. And what we’ve seen with several of our operators and why we believe this is actually has while there is not one size fits all, we believe that a lot of our increase in cancellation and attrition is actually our operators becoming stronger and charging those fees. In addition I think the hotel operators and we as a hotel community are getting smarter in terms of not giving a one way option on our product. If you look at our brethren in the casino space or the airline space, it is not an option, it’s an obligation when you buy that room. You pay for a time of reservation. In hotel space we’ve been elongating that option. Not so long ago it was 6:00 p.m. day of arrival and now are going to 24 hours, I think it’s very soon will be going to 48 hours, we continue to work with our operating partners to get them to elongate that and we have actually seen because of the elongating that cancellation time, we’ve actually seen increase in cancellation not from group but from transient travelers. And that I look at is a very bullish signal because I think it will -- we can structurally change part of this industry. So again, we have spent a lot of time on this topic but I don’t think it has gotten a lot of attention but we actually feel more comfortable with this increase than I think others have come to a conclusion on.

It’s really interesting. My last question pertains to the Chicago property tax increases. Are those results of the leasing budgeting plan that was passed or is that something different? Asked a different way, does that mean we should expect corporate taxes in Chicago to go again when if this is different?

I think it is related, I think it was part of a way that they are filling their budget, it’s something that was talked about at couple of years ago and then they the increases were much less. What we tend to see in these Cities is if they want to get a 5%, 10% increase. They come after the property owners with a multiple of that. So that as it goes through the appeal process it seems like not a bad conclusion to come back with a 5% to 10% increase at the end of the day. And this was done in -- we’ve seen in a couple of markets, we see in Chicago across the board, to all property owners. So I think what you see is that in different cities do it different times. We have seen an uptick of this probably over the last two or three years. And so I think that that probably most of it has come through but as the economy gets better, as the property types do better, it is always a target for the taxes to increase.

Great, that is it from me. Thank you.

Thanks Lukas.

We’ll take our next question from Shaun Kelley with Bank of America-Merrill Lynch.

Hey, good morning, guys. John, I just want to kind of revisit that cancellation point because I thought it was an interesting perspective. So could you just help me understand that a little bit better? I’m a little confused as to once you put into place or once the brand put into place these kind of longer periods before you’re allowed to cancel, like why would that increased cancellations? Shouldn't that have the impact of reducing churn and reducing cancellations?

Well no question. So let’s say somebody makes reservation and they have up until 6:00 p.m. on day arrival to cancel. Well, 5’o clock that night they can cancel we might have difficulties rebooking that room whereas if we had had two weeks of runway we could have rebooked that room. But now take for example, if you go out 48 hours, if somebody decides last night if they don’t want that room, we will charge them or our operating partners would charge them for that room. Therefore, we are witnessing an increase in cancellation as a result of that.

I’m still totally lost as to why like -- just getting more -- you’re just getting more fee that is what you see in the cancellation, is that what you’re saying, not the difference in a number?

Let me just help you with it. So the big move in the last year has been the move from 6:00 p.m. to 24 hour cancel for Hilton and Marriott and Starwood. And so simply put if you -- in prior if you decided not to show up, if you decided to basically not show up many people, many people would either not show up and cancel early in which case the hotels can rebook their rooms. What is happening now is because people are but the elongation is 24 hours allows the manager to charge you that number for that cancellation and in many of our urban environment in a day within that 24 hour we can refill that room. So the cancellation money is building up and you’re able to continue to refill the room.

So in terms of you measuring cancellations like are you just saying you’re getting more cancellation fees because in your policies or you saying the number of cancellation nights is increasing because I feel like they shouldn’t really be related, the cancellation nights should be based on kind of the activity of the consumer and those should go down as people are stickier as you get closer, but the cancellation fee that I could totally understand that is going up because that would makes sense as a policy and now that's stricter, does that make sense?

Yes, the cancellation fees are growing up because now we’re actually getting fees for it whereas in the past we weren’t. It’s not indicative of there are more rooms cancelling.

Got it. So your cancellation nights would be stable or do you - do not exactly know what those are?

We haven’t looked at it so specifically but it strikes us more generally in -- they’ve generally been stable.

Okay, got it. That’s helpful. Sorry to be obtuse on all of that. The other just a really different section of kind of thought but couple of the your competitors have talked a little bit about weight average supply growth in their markets, and I was curious if you could give us just a general sense if you had it; now this is usually be a some sort of a bottoms up calc that they doing, but do you guys have any perspective on your markets and sort of how that plays out for 2016?

Yes, let me turn that over to Robert Springer, our Chief Investment Officer.

Yes, good morning. It is something that as you would expect we monitor very closely, as I’m sure competitors do, looking at specific markets in it. It’s clearly going to be a different impact based on submarkets and locations. A good example would be a market like Philadelphia where our hotel is actually not located in the heart of downtown where some of the new supply is coming in and our hotel is in a more of a protected location and separate submarket. But I would say if you look at the markets that we’re cognizant to concern with new supply, I don’t think it’s going to be any real big surprise, the number one is New York City, it has been very well talked about a lot of the supply is, I mean there's supply opening all over the place in New York. A lot of it is in the Times Square submarket where both of our hotels are located. The other market would probably be Washington D.C. There is a good amount of supply in D.C. We currently are tracking it at about 5.5% for next year and that our concern there is a lot of that supply is actually, from a submarket perspective, located proximate to our hotel over by the convention center where there is a lot of redevelopment that is happening on land and around the convention center and on land that used to house the former convention center. Other markets that I would say we’re not concerned, but we’re definitely cognizant of, would be markets like Portland, Chicago, Los Angeles. Again, LA is a great example, there is a lot of supply going in downtown. Our LA assets are located really in the LAX submarkets or in other submarkets that should see less impact from that. But markets like Portland we were tracking about a 3.5%, 3.2% to be technically correct, percent increase in supply but that is market that is very, runs a very high occupancy and in very high compression. So there is a good amount of supply but we are hopeful that it can be absorbed effectively.

Really helpful. And just directionally, would have just a weighted average number across the Sunstone portfolio?

I don’t have it calculated -- I don’t have it calculated that way but the numbers range low single digits, 1%, 2% and the higher numbers like in New York City that is 7%, 7.4% but I don’t have it calculated across the board. What I would say is that the percentage in our minds it’s not just a percentage. If you look at the market like Boston that is a relatively small market, it just in total number of rooms, it supply next year is actually on the surfaces it’s 4.5% -- well, I think it’s 4.8% sorry, which in itself you would say that is a decent sized supply increase. But Boston overall as a market is very compressed and we do feel that the Boston submarket will effectively absorb that supply and are less concerned than we would be in other markets.

Really appreciate it, thank you Robert, thank you John.

Yes.

Sure. Thank you.

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

Hi, good morning. One of the interesting dynamics this starting season has just been the labor environment. I think some of your peers have talked about greater turnover, others have run into union issues. Can you just talk about how you’re operating today and your feelings on this subject? Thank you.

Yes, this is Marc. I mean in general, in our portfolio, we have not run into unionized labor issues. I mean I think at this point in the cycle it is quite normal as and the economy grows and we’re an industry that is heavily filled with the younger people who are working through their careers, so, a turnover does occur. No more no less than what we’re used to per se. We haven’t seen anything more than a typical amount of turnover. It’s tougher to find talented individuals to replace those that do turnover at this point of cycle. With hotel performance is improving it makes it a little bit more difficult to get talent at the right price, and the only area that is struggling to maintain positions in general throughout our portfolio is really housekeeping.

Okay. And just a follow-up on this, what are -- which jobs are the most like are the biggest tickets in your expense base? And then just my final question, you mentioned Houston as one of the markets you saw double-digit RevPAR growth in the market. That obviously I thought was interesting. Can you just give us some more color on that? Thank you.

Sure. Your first question as it relates to labor, really is a market by market basis. I mean those cities where you have more expensive labor positions will be depending upon how hotel is made up. So obviously, it’s typically if a cook is more expensive than certain people the tipped positions make less. As far as Houston goes we had a very nice piece of training business that we worked very hard to find, our operator worked very hard to find, and that has helped to offset the decline in group and corporate business. The training contract year-to-date has exceeded their original block but we are unable to determine whether that trend will continue long-term. But it continues to be in the business and the training block is not energy related.

Helpful, helpful. Thank you.

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

Hi, good morning. A number of your REIT peers and also your managers have mentioned that they saw or are seeing less transient business than they thought they would see in October, could you comment on that? That would be great.

I will quickly turn it over to Marc Hoffman, but as I said in my prepared remarks, we really have not seen any change in our fundamentals, and I think that that shined through in our third quarter, third quarter results. And with exception of property taxes and incremental disruption, our expectations for the fourth quarter really remained unchanged. Now, there’s certain hotels that, as is very typical going quarter-to-quarter do a little bit better, do a little bit worse but in general we haven’t seen any material changes in the trends that we currently mentioned. I will turn it over to Marc for little more detail.

Sure. Our preliminary October results are currently performing in line with our guidance. Our 30 hotel RevPAR portfolio, RevPAR has increase between 7% to 8% and excluding Wailea our 29 Hotel RevPAR portfolio for October is expected to increase between 8% and 9%.

Got it, thanks. And going to San Francisco, there has been a pretty wide divergence of performance amongst some of the hotels there and you’re on the better end of that. Aside from your renovation that was completed last year, what else you think that is driving some of this dispersion in performance and how will it trend next year?

Yes, sure, this is Robert. I think the couple of factors at play for our hotel specifically are really two, one is location. Our hotel is located farther away from Moscone Center and thus is less dependent on citywide group rooms. And so its location within the financial district has actually been a big positive. Separate from that it was really a very conscious decision made by us in cooperation with our operator there to really drive in-house group in anticipation of the renovation of Moscone Center. So as an asset management team we sat down with the operating team soon after buying the hotel and really moved with the strategy of being very aggressive of getting group rooms on the books in anticipation of the renovation of Moscone and that change has really benefited the hotel because they’ve been more reliant on in-house group than they have been on city business.

All right. Thank you.

Thanks Anthony.

We’ll take our next question from Ryan Meliker with Canaccord Genuity.

Hey, guys. Good afternoon, I guess good morning out there for you. Most of my questions have been answered but one thing I was hoping to get just a little bit of clarity on, it sounded like in prepared remarks, John, you mentioned that you weren’t expecting renovation disruption to change from your expectations for 2016, and then in the response to one of my earlier questions you said overall that wasn’t expected to change. I guess overall would imply that the $1.5 million to $2 million for 4Q would come out somewhere else. Can you just clarify that for me?

Remember Ryan, we have a pretty big range for revenue displacement in next year for Wailea. So the overall project we still feel comfortable with the overall numbers. So some of that shifted, a little bit of that shifted from 2016 into 2015, but we still feel fine with the overall number which is a pretty wide range and assumes pretty meaningful RevPAR displacement next year in Wailea. But just as we’ve seen with San Francisco to a lesser extent and really Boston while there might be some noise and some things moving back quarter-to-quarter, we are really excited about our prospects in Wailea, the market continues to be strong, I think it’s just a forever piece of real estate. And just as we’re doing in Boston in transforming that asset to one where people want to stay and it now can compete at much higher level. Remember, we’re talking about not getting all the way to let’s say the Fairmont Kea Lani, the Grand Wailea or even further away would be the Four Seasons but financial success is just snuggling up to them a bit because if we move our rate 50 to 60 bucks at this hotel which we believe is very realistic, our financial successor will be robust once the asset is transformed

Okay. That's helpful. And can you just remind us what had you built in to your 4Q guidance prior for renovation -- for renovation disruption in the fourth quarter? I'm just wondering how big this change is on what you are originally expecting?

Yes. It's a fairly sizeable increase albeit it was a small portion of the total disruption. So I think we are at -- just about $1 million in the fourth quarter in terms of disruption. And we increased that by $1.5 million to $2 million. That sounds like a very large increase because you're more than doubling it, but keep in mind, we talked upwards of $20 million in renovation disruption in this asset. So moving it a little bit quarter-to-quarter, I don't view as a significant topic.

Now that makes sense. And then just one other comment, I wanted to hear from you is, can you just give us some color on how the Super Bowl is looking for your property in San Francisco, obviously, you're right at the prime and prime and location in downtown San Francisco. Are you starting to see a substantial rate lift or are you seeing B&B having a meaningful impact in your ability to push rates? Just any color there will be helpful.

Other than being a Patriots fan that they won again last night.

Yes. I got Dion Lewis for my fantasy team, I was happy.

You're a smart guy. Look, let me just put it this way. Our team here has now done prior with my experience and our experience here, we've done seven or eight Super Bowls and so we are tracking things every week. We talked to the hotel in very detail. We have very detail strategy. We are very pleased if you're aware the NFL basically controls the city via blocks, large percentage of our hotel because we're at the NFL experience is taken by that block. The remaining rooms and suites are in a very tight control. If you were to go on most websites, you would find that most of the major management companies are not releasing those hotel rooms yet and are working through the book even higher rated premium, small corporate businesses which we are doing. But we feel very good and expect that we will hit the numbers that we believe should be hit.

So this isn't going to -- so, I guess, if for comparison purposes, I know there are a lot of people that tend to think about -- think about relative to the New York Super Bowl a couple of years ago, do you think it's going to have a similar impact to much stronger et cetera without being able to quantify? Just any color would be helpful.

Yes. It's really hard for me to -- it's really hard to quantify. I'm -- New York was a very different situation because the city has more rooms than spread out rather the stadium is further away. Everybody is going to want to be in San Francisco. So we feel very good about the Super Bowl being there and we feel good about our model.

Yes. May be said slightly differently is, we would -- New York was an atypical Super Bowl reaction where the -- it was not a huge positive for the City. We would think that with San Francisco we would be a more typical event like we have seen previously in New Orleans and other markets where it's an -- it is a positive for the city.

Great. That's what I wanted to hear. Thanks a lot guys.

Thanks Ryan. End of Q&:

We have no further questions in queue at this time. I would now like to turn the call back over to management for any additional or closing remarks.

Thank you everybody for your interest. Have a really wonderful Halloween. And we look forward to seeing many of you at the upcoming NAIREIT or other conferences. Take care.

And this does conclude today's conference call. Thank you all for your participation. You may now disconnect.