Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Braemar Hotels and Resorts, Inc. third quarter 2025 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. To withdraw your question, press star 1 again. I'd now like to turn the conference over to Allison Beach, Director of Public Relations. Please go ahead.

Good morning and welcome to today's call to review results for Braemar Hotels and Resorts for the third quarter of 2025 and to update you on recent developments. On the call today will be Richard Stockton, President and Chief Executive Officer, Derek Eubanks, Chief Financial Officer, and Chris Nixon, Executive Vice President and Head of Asset Management. The results, as well as notice of accessibility of this conference call on a listen-only basis over the Internet, were distributed yesterday in a press release. At this time, let me remind you that certain statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the safe harbor provisions of the Federal Securities Regulation. Such forward-looking statements are subject to numerous assumptions, uncertainties, and known or unknown risks, which could cause actual results to differ materially from those anticipated. These factors are more fully discussed in the company's filings with the Securities and Exchange Commission. The forward-looking statements included in this conference call are only made as of the date of this call, and the company is not obligated to publicly update or revise them. Statements made during this call do not constitute an offer to sell or a solicitation of an offer to buy any securities. Securities will be offered only by means of a registration statement and prospectus which can be found at www.sec.gov. In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in the company's earnings release and accompanying tables or schedules which have been filed on the Form 8k with the SEC on November 4th, 2025 and may also be accessed through the company's website at www.bhrreit.com. Each listener is encouraged to review these reconciliations provided in the earnings release together with all the other information provided in the release. Also, unless otherwise stated, all reported results discussed in this call compare the third quarter ended September 30th, 2025 with the third quarter ended September 30th, 2024. I will now turn the call over to Richard Stockton. Please go ahead, Richard.

Morning. Welcome to our third quarter earnings conference call. Before I begin, I'd like to remind you that back in August, we announced the initiation of a sale process for Braemart. The company has engaged Robert W. Baird & Co. as its financial advisor, and the sale process has been initiated. On today's call, we will not be providing any update on that process or be able to address any questions about that process. As we highlighted in the press release, there is no deadline or definitive timetable set for completion of the sale process, and there can be no assurance that this process will result in the sale of the company. Additionally, we do not expect to disclose or provide any update concerning developments related to this process unless and until the Board of Directors has approved a specific transaction or other course of action requiring disclosure. With that said, let me begin today's call by providing an overview of our recent results and our strategic priorities for the remainder of 2025, then Derek will provide a review of our financial results and Chris will provide an update on our asset management activity. Afterwards we will open the call for Q&A. We have a few key themes for today's call. First, I'm excited to report that our portfolio achieved 1.4% growth in comparable rev part in the third quarter and total comparables with Tel Aviv growth of 15.1%. Importantly, our resorts continue to show strong growth with comparable rev part growth of 5.5% for the quarter. Second, we had significant renovations in process at three hotels, which significantly impacted our portfolio results. If you exclude hotels under renovation during the quarter, our Red Park growth was 3.4%. Third, from a liquidity perspective, we remain very well positioned, having addressed our final 2025 debt maturity earlier this year, completing the sale of the Merritt-Seattle waterfront in august and announcing the planned sale of the clancy which we expect to close shortly turning to our third quarter results our portfolio delivered solid results with comparable rev par of 257 reflecting an increase of 1.4 over the prior year quarter this marks our fourth consecutive quarter of repart growth which i believe reflects an important inflection point in our performance additionally comparable total hotel revenue increased by 3.9 percent over the prior year period and comparable hotel eva da was 21.4 million dollars which reflected a 15.1 percent increase over the prior year quarter nine of our 14 hotels are considered resort destinations and our luxury resort portfolio continues to return to a more normalized growth trajectory, delivering a strong third quarter performance. Our resort portfolio reported comparable REVPAR of $361, a 5.5% increase over the prior year period, and combined comparable hotel event of $13.1 million, a 58% increase over the prior year period. The brightest spots within our resort portfolio this quarter included the Four Seasons Resort Scottsdale True North, which delivered an impressive comparable REVPAR growth for approximately 25%. The Ritz-Carlton Lake Tahoe also performed exceptionally well, with total revenue up roughly 32% year-over-year, reflecting strong group demand and the benefits from the recently completed renovation. And our Ritz-Carlton Reserve Dorado Beach continued to be a standout, achieving approximately 20% growth in comparable REVPAR. This impressive performance was slightly offset by some near-term softness in our urban hotels, we saw Comparable Rev Park decrease 3.9% during the quarter. This reflects the extensive renovation at the Cammie of Beverly Hills, as well as citywide occupancy declines in Philadelphia, which created headwinds this quarter for the Notary Hotel. Looking ahead, our booking pace continues to be strong, and we believe our portfolio is well-positioned and out-performed. As a reminder, on the capital markets front, in March of this year, we closed on a refinancing across five hotels at a very competitive spread. Importantly, this financing addressed our only remaining final debt maturity for 2025. In August, we capitalized on the strong credit market for lodging assets by refinancing the mortgage loan secure by the Four Seasons Resort Scottsdale at True North. During the quarter, we sold the 369-room Marietta Seattle waterfront for $145 million, or $393,000 per key. The transaction aligns nicely with our strategic objectives to deleverage the portfolio while sharpening our focus on the luxury hotel sector. Additionally, subsequent to quarter end, we entered into a definitive agreement to sell the 410 room Clancy in San Francisco for $115 million or approximately $280,000 per key. The transaction is expected to close this month. Of note, we received a $3.5 million non-refundable earnest money deposit and the buyer has the right to extend the closing for 30 days with an incremental $1 million non-refundable deposit. The sale price represents a 5.2 percent capitalization rate on net operating income for the trailing 12 months ended september 2025. we are strategically refining our portfolio with one clear objective to maximize its value for our shareholders and this divestiture will help us to ensure that our future sale of the company results in the best possible outcome for our investors next i'm pleased to report that to date we have redeemed approximately 125 million dollars of our non-traded preferred stock, which represents approximately 27% of the original capital raise. We expect to continue to redeem these shares as we seek to deleverage our platform and improve our cash flow per share. We are pleased with the performance of our portfolio and believe the renovations we are completing will drive strong performance going forward. I will now turn the call over to Derek to take you through our financials in more detail.

Thanks, Richard. It's important to remember that the third quarter is the weakest quarter for our portfolio from a seasonality perspective. For the quarter, we reported a net loss attributable to common stockholders of $8.2 million, or 12 cents per diluted share, and AFFO per diluted share of negative 19 cents. Adjusted EBITDA RE for the quarter was $16.4 million. At quarter end, we had total assets of $2 billion. We had $1.2 billion of loans, of which $27.7 million related to our joint venture partner's share of the loan on the capital Hilton. Our total combined loans at a blended average interest rate of 6.9%, taking into account in-the-money interest rate caps. Based on the current level of SOFR and our corresponding interest rate caps, approximately 13% of our debt is effectively fixed, and approximately 87% is effectively floating. As of the end of the third quarter, we had approximately 43.2% net debt to gross assets. We ended the quarter with cash and cash equivalents of 116.3 million dollars plus restricted cash of 47.7 million dollars. The vast majority of that restricted cash is comprised of lender and manager held reserve accounts. At the end of the quarter we also had 23.1 million dollars in due from third-party hotel managers. This primarily represents cash held by one of our brand managers which is also available to fund hotel operating costs. With regard to dividends, we again announced a quarterly common stock dividend of 5 cents per share or 20 cents per diluted share on an annualized basis. This equates to an annual yield of approximately 8% based on yesterday's stock price. As of September 30, 2025, our portfolio consisted of 14 hotels with 3,298 net rooms. Our share count currently stands at 73.6 million fully diluted shares outstanding, which is comprised of 68.2 million shares of common stock and 5.4 million OP units. This concludes our financial review. I'd now like to turn it over to Chris to discuss our asset management activities for the quarter. Thank you, Derek.

Despite temporary headwinds from ongoing renovations at several properties, our portfolio continued to demonstrate resilience during the third quarter. Comparable hotel REVPAR increased 1.4%, driven by a 4.7% improvement in ADR compared to the same period last year. During the third quarter, our portfolio GOP margin expanded by 160 basis points compared to the prior year period. During the third quarter, our resort properties were a key driver of performance, delivering a 5.5% increase in comparable REVPAR and a 57.7% increase in comparable hotel EBITDA. The Four Seasons Resort in Scottsdale was a standout, with third quarter REVPAR up 24.9% and GOP growing 231.6% compared to the prior year period. The portfolio delivered strong third quarter results despite temporary disruption from ongoing renovations at Cameo Beverly Hills, Park High Beaver Creek, and Hotel Yonville. Excluding these properties, REVPAR increased 3.4% for the third quarter compared to the prior year period. We remain confident in our ability to sustain operating momentum and deliver strong results in the periods ahead. I would now like to highlight a few of the key accomplishments achieved during the quarter. Group room revenue remains strong across the portfolio despite softening trends industry-wide. Group room revenue pace for the full year 2025 is up 9.1% compared to the prior year. For the third quarter, group room revenue finished 1.3% above the prior year period. The Ritz-Carlton Lake Tahoe was a standout during the third quarter, delivering exceptional group room revenue growth of 80.2 percent compared to the prior year period, driven by a sharp increase in group demand following its extensive 2024 renovation. The property realized more than 2,400 additional room nights during the period and achieved a $30 improvement in ADR compared to the prior year period. This momentum supported not only growth in rooms revenue, but also strong food and beverage performance as catering revenue increased 80.7% during the third quarter compared to the prior year period, further enhancing overall profitability. Recent property enhancements such as cabanas, fire pits, swing suites, and new food and beverage outlets have further contributed to food and beverage revenue growth during the third quarter, which increased 43.3% compared to the prior year period. Portfolio-wide catering revenue finished ahead by 31% in the third quarter compared to the prior year period and we are becoming increasingly selective with group business to further capitalize on food and beverage opportunities associated with higher spend events. The remainder of the year reflects continued strength in the group segment with fourth quarter group room revenue currently pacing ahead 1.7 percent compared to the prior year period. Our ability to sustain momentum in capturing group demand within a competitive environment underscores the effectiveness of our targeted sales strategies and the advantages of our geographically diverse portfolio. As I mentioned earlier, our resort properties continue to be significant contributors to portfolio performance. A highlight this quarter was the Ritz-Carlton Dorado Beach, which continues to deliver impressive results with a 20.4% increase in REVPAR during the third quarter compared to the prior year period, reflecting strong demand and sustained rate growth at this premier Caribbean destination. During the third quarter, the property capitalized on two back-to-back buyouts which helped drive group room revenue growth of 353 compared to the prior year period in an effort to expand revenue streams for the property our team continues to focus on optimizing and expanding the residential rental program which currently includes 16 residences during the third quarter residence revenue increased 11.8 compared to the prior year period the average daily rate for residences within the rental program exceeded $7,900 during the quarter. Recent operational enhancements, including streamlined onboarding for owners and integration with the Marriott Homes and Villa platform have contributed to steady growth and improved rental performance. Additionally, the Ritz-Carlton, Sarasota deliver strong performance, with total revenue increasing 5.2% compared to the prior year period, driven by a 15.5% increase in other revenue. The property has expanded access to its amenities for local and outside gas, resulting in a 38% year-to-date increase in related revenue compared to the prior year period. The previously underutilized kids space was converted into a commission-based arcade, which is outperforming expectation, and plans are underway to further expand this offering to capture additional demand and enhance ancillary revenue. Moving on to capital expenditures, in the third quarter of 2025, we completed the conversion of underutilized space at Four Seasons Scottsdale and to a new gelato shop and cafe and an epicurean market, enhancing the guest experience and creating new revenue streams. We also added five new luxury beachside cabanas to the Ritz-Carlton St. Thomas, further elevating the resort's beachfront offering and driving incremental revenue. We made substantial progress with guest room renovations at both Hotel Yonville and the Park Eye of Beaver Creek. These projects are designed to capitalize on the luxury positioning within their respective markets with completion of both expected later this year additionally we began the renovation of cameo beverly hills to support its strategic conversion to helton's lxr luxury portfolio with completion planned for later this year we also initiated multiple enhancements at the ritz-carlton reserve dorado beach including beachside cabanas and creation of a new event lawn to attract incremental group business later this year we plan to commence the renovation of the pool deck and fitness center at Bartasoma Hotel and Spa, a project designed to further elevate the resort's wellness and leisure offerings and reinforce its positioning as one of Napa Valley's premier luxury destinations. These initiatives reflect our disciplined capital deployment strategy and continued focus on long-term value creation through portfolio quality and brand alignment. For 2025, we continue to anticipate spending between $75 million and $85 million on capital expenditures. In summary, we are pleased with our solid year-to-date performance and continue to see the benefits of operating initiatives focused on productivity and cost efficiencies. We are particularly encouraged by the return of normalized growth within our resort segment. Our momentum reflects the strength and resilience of our diversified portfolio and the strategic positioning we've built over time. In addition, we are actively advancing several initiatives aimed at further enhancing our well-diversified platform. We remain optimistic about the opportunities ahead and look forward to sharing continued progress in the quarters to come. I will now turn the call back over to Richard for final remarks. Thank you, Chris.

In summary, I'd like to reiterate that we continue to be pleased with the performance of our hotels, in particular the return to normalized growth for our resort assets. We also remain well positioned with a solid balance sheet and promising outlook. We look forward to updating you on our progress in the quarters ahead. This concludes our prepared remarks, and we will now open the call for Q&A.

We will now begin the question and answer session. To ask a question, simply press star, followed by the number one on your telephone keypad. Our first question will come from the line of Tyler Batori with Oppenheimer. Please go ahead.

Hey, good morning, everyone. Thanks for taking my questions. A portfolio question for you first in terms of CapEx, just a multi-part question. What do you think is a good maintenance run rate CapEx number to think about for your portfolio, whether that's a dollar number or a percentage of revenue? And given some of the CapEx projects you've completed over the past few years, just talk about the overall quality of the portfolio as it stands today, if there's anything deferred or any sort of catch-up CapEx that might potentially be contemplated in the next couple of years.

Yeah, Tyler, I'll take that. So in terms of maintenance CapEx, you know, we typically target a percentage of revenue. I would say it's low single digits in terms of maintenance and mechanical. You know, in addition to that, we've got ROI CapEx and, you know, some of these larger renovations and repositionings. From a deferred standpoint, you know, we've got a process by which the properties put in capital requests, And we've got an engineering team within our Ashford CapEx team that works with our property engineers to make sure that any mechanical or, you know, maintenance projects are being addressed appropriately. So we review those, we prioritize them, you know, we'll then deploy capital against the ones that we think are high priority. But there's nothing, you know, I would say significant or out of the ordinary that's been deferred.

Okay, great. And then my other question on RevPAR and portfolio performance, obviously you initiated the sales process at the end of the summer and that was made public. Is that something that you think has weighed on results at all or maybe it's not that much of a distraction in the hotel level employees perhaps aren't really thinking about that?

Yeah, I don't think it's affected anything at the property level or in terms of how our asset management team is working with the hotels. We were actually quite pleased with results given, you know, some of the headwinds that we mentioned in our prepared remarks. We've got three, you know, significant hotels that are under major renovations. We've got a major repositioning. You know, we've got some impact from government and some other, you know, segments. And despite all that, the portfolio grew red par. We grew EBITDA. We grew EBITDA margin. We're still finding efficiencies. We're still finding, you know, controlling labor, controlling expenses. House profit margin expanded, you know, within the quarter to last year. And so I think, you know, from a property level, you know, as it rolls up to the portfolio, I think performance was quite strong in the quarter. And I don't think the sales process has impacted our approach at all.

Moving on, just a couple of strategic questions quickly here. You know, obviously, the company is externally advised. I mean, was there plans or have there ever been plans, discussions in terms of an internalization process and just kind of wondering if you could unpack behind the scenes if you did look at that and just kind of what you thought about it?

Yeah. Hey, Teller, it's Richard Stockton. So, yeah, no, this is something that the board has considered. You know, when we announced that we were looking at various strategic alternatives, that was one of them. And so that was something that was thoroughly vetted by the board. Ultimately, the conclusion was to opt for a company sale instead. And so that's the route that was chosen for various reasons.

And then more broadly, Richard, I'll try to keep this question general here. but just any commentary or perspective you could provide on the acquisition backdrop for hotels, the appetite out there, availability of capital, things like that. I'm just interested to some of the larger entities, perhaps what their view is on portfolio transactions and just kind of the overall environment out there and the desire to own hotels.

Yeah, that's a good question. You know, I'd say it continues to improve. You know, we saw the debt capital markets become much more favorable earlier this year. You know, there is widespread debt availability. You know, a lot of that is being provided through either the CMBS market or through private credit markets. So that's a good thing. But also, you know, the big private equity funds and a lot of the private players are getting more interested in deploying equity capital into the sector, and that's something that we're seeing in some of our discussions, and we're seeing that interest in size. So it does feel that whereas a lot of buyers have been on the sidelines, they're coming off the sidelines. Now, I also think that our portfolio is pretty unique. you know dare I say it's the most attractive hotel portfolio on the market for sure and it just doesn't the opportunity to acquire and own this kind of portfolio doesn't come around that long so I think for that reason I think people are certainly more interested than than otherwise but the general trend is is very positive in terms of private capital looking at hotel assets and so uh more to come on that um appreciate the detail i'll leave it there thank you our next question will come from the line of michael belisario with baird please go ahead

thanks good morning everyone two questions probably uh both for chris here but just first on dc can you just give us an overview of what you're seeing on the ground how the government pullback affected the third quarter results and then what the shutdown might do to near-term performance at the property.

Yeah, I'd be happy to speak to that. So, you know, the government will primarily impact our asset in B.C., which is Cap Hilton. Luckily for that asset, because of its location and the ADRs and demand we're able to command, it doesn't have a lot of exposure to the government transient. It does. Single digits is a percentage of its mix in government transient business. And so we haven't seen a significant impact there. We are seeing some group cancellations, some negative rebounds where group sizes are shrinking, and some catering impact from some programs in D.C. Besides that hotel, the impact of, you know, that we've kind of seen to government is fairly muted. You know, we're seeing a little bit in Philly and some other markets. But in those other markets outside of D.C., the corporate business has been strong, and it's been able to offset that. So, again, in D.C., it's cap health, and it's been primarily in the group segment. You know, I cited for the portfolio, group pace is up significantly for 2025, Q3 and Q4 are up. And so, on the whole, we've been able to mitigate that impact in government that's primarily come through group at cap.

Got it. That's helpful. And then just on leisure trends more broadly, what did you see in the third quarter relative to your expectations? Any change in consumer spending, out-of-room spend, booking channels? Are you having a discount more or less, offer more promotions? Any commentary there would be helpful. And that's all for me.

Yeah, Michael. Leisure overall, revenue was up in the third quarter. So we're seeing leisure strength. Occupancy was down slightly, and ADR was very strong. And so what we're seeing from that luxury consumer is less price sensitivity. So they still want to travel. They're willing to pay a premium for the experience when they travel. We saw increased ancillary spend when they're on property, both in F&B and other departments. And so when they're there, they're willing to spend more. So overall, it was kind of, you know, it was what we expected. I think we've been pleasantly surprised with just the lack of price sensitivity to that customer and how resilient they are in wanting to travel and wanting to pay for experiences. So on the whole, the leisure segment has been a standout for us.

And that will conclude our question and answer session. I'll send the call back to management for any closing comments.

Thank you for joining us on our third quarter earnings call, and we look forward to speaking with you again next quarter.

This concludes our call today. Thank you all for joining. You may now disconnect.