Good morning, ladies and gentlemen and thank you for standing by. Welcome to the Sunstone Hotel Investors Second Quarter 2024 Earnings 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, August 07, 2024, at 12:00 p.m., Eastern Time. I will now turn the presentation over to Mr. Aaron Reyes, Chief Financial Officer. Please go ahead, sir.

Thank you, operator. Before we begin, I would like to remind everyone that this call contains forward-looking statements that are subject to risks and uncertainties, including those described in our filings with the SEC, which could cause actual results to differ materially from those projected. We caution you to consider these factors in evaluating our forward-looking statements. We also note that the commentary on this call will contain non-GAAP financial information, including adjusted EBITDAre, adjusted FFO, and property level adjusted EBITDAre. We are providing this information as a supplement to information prepared in accordance with generally accepted accounting principles. Additional details on our quarterly results have been provided in our earnings release and supplemental, which are available in the Investor Relations section of our website. With us on the call today are Bryan Giglia, Chief Executive Officer; Robert Springer, President and Chief Investment Officer; and Chris Ostapovicz, Chief Operating Officer. Bryan will start us off with some highlights from our second quarter, including commentary on operations and recent trends. Afterward, Robert will discuss our capital investment activity and finally, I will provide a summary of our second quarter earnings results and share the details of our updated outlook for 2024. After our remarks, the team will be available to answer your questions. With that, I would like to turn the call over to Bryan. Please go ahead.

Thank you, Aaron, and good morning, everyone. Overall, it was a productive quarter at Sunstone as we executed on all aspects of our strategy, recycling capital and closing on the previously announced acquisition of the Hyatt Regency San Antonio Riverwalk. Further investing in our portfolio, completing work on one value-creating brand conversion and making further progress on the next, and returning capital to our shareholders through increased dividends and share repurchases. Our second quarter earnings were in line with expectations as stronger ancillary revenues and successful cost controls offset softer leisure room revenue growth. While the near-term outlook for industry revenue growth has moderated, we believe that many of the primary drivers of the lowered expectations are isolated or short-term in nature and that the Sunstone growth story remains intact. We continue to be optimistic about our earnings potential as we move into 2025, which is largely driven by the contribution of our recently completed and in-progress investment activity, and less dependent on moving solely with market RevPAR trends. Later in the call, we will share some additional commentary on the various growth drivers we have across the portfolio. But before that, let's review some of the additional details on our second quarter performance. During the quarter, we saw continued strength in Group activity and further recovery in business transient demand. While the backdrop for leisure travel was more mixed, there have been some encouraging signs at our wine-country resorts. These are the result of our work to redefine the cost model while providing a world-class luxury experience and our efforts to increase the Group mix to drive incremental business at both resorts. Our convention hotels once again led the portfolio this quarter, driven by the continued benefit from our newly converted Westin Washington, D.C. Downtown, which grew RevPAR by 33% and total RevPAR by 42%. The post-conversion performance of this new flagship property continues to exceed our expectations as it is attracting higher quality Groups and appealing to a broader range of transient customers. The Westin Washington, D.C. increased total transient room nights by 28% year-over-year and at an average daily rate that was 34% higher than what was achieved as a renaissance in 2019. Our convention portfolio also benefited from the addition of the Hyatt Regency San Antonio Riverwalk, which exceeded our underwriting in the initial months of our ownership and grew total RevPAR by 20% in the quarter as a result of robust Group and local food and beverage contribution. The strong performance at these two hotels more than offset the challenged performance in the San Francisco and Orlando markets, which were expected to have tougher comps given their lighter convention calendars. In total, second quarter convention hotel RevPAR was nearly 7% higher compared to the second quarter of last year. As we look into the third quarter, we expect our convention hotels to once again lead in RevPAR growth with further outsized increases in Washington, D.C. combined with more favorable booking patterns in Orlando, San Francisco, and San Diego. Our Group pace for the second half of the year is up 17% and while it remains early, we are encouraged by our Group booking activity for 2025, which is trending up high single digits. We continue to monitor trends in business travel and are encouraged by what we saw in the second quarter. The Marriott Boston Long Wharf exceeded our expectations, growing RevPAR by 8% from increases in both rate and occupancy. San Francisco also performed better, driven by higher midweek transient demand as the market benefits from growing commercial activity in the Downtown area driven not only by AI and other tech-related businesses but also from increased bookings from legal and financial accounts. As has been widely discussed, leisure demand continued to moderate in the second quarter, although the trends varied across our markets. We have experienced some ongoing normalization in pricing, particularly in Key West where rates grew to very robust levels following the pandemic. During the quarter, Oceans Edge grew occupancy by nearly four points, but at a lower rate than the prior year. To be clear, pricing at our resorts remains very robust with comparable ADR up nearly 45% in the second quarter relative to the same period in 2019. The demand environment on Maui has been softer than expected with both rates and occupancy lighter than projected in the second quarter resulting from more subdued vacation travel to the island. While we expect some of these softer trends in Wailea to extend into the third quarter, which is reflected in our updated outlook, bookings for the festive period remain healthy and above last year. There are incremental efforts underway or soon to be underway by local tourism authorities and other stakeholders, including the brands, to spur incremental travel to the area, which we anticipate will help bolster demand in the coming months. The island of Maui and Wailea in particular, is an unmatched and spectacular destination. We fully expect demand will rebound as we mark the first anniversary of the tragic fires last year and the island welcomes visitors to enjoy and celebrate all that the island and Wailea have to offer. Looking forward, Wailea's Group pace is up 18% next year, and we are currently renovating guest rooms in the lobby to provide an enhanced guest experience. In other parts of our portfolio, the second quarter provided some more encouraging data points. In Wine Country, the Four Seasons Resort Napa Valley grew total RevPAR by over 22% as our operator was able to leverage Group business and drive out-of-room spend. The Four Seasons Residences are also outperforming 2023, with revenue pace up 93%. At Montage Healdsburg, we saw the benefit of productivity measures we have been implementing, which drove 470 basis points of margin expansion in the quarter. These two resorts remain a key focus area for us, and based on what we see today, we expect both properties to grow total revenue and earnings in 2024 relative to the prior year, which should continue into 2025 given the encouraging pace data we are seeing. Four Seasons has 2025 Group room nights pacing up 11%, which will add additional out-of-room spend and help to compress transient rates. Our second quarter results were impacted by the remaining renovation work at the recently converted Marriott Long Beach Downtown. As we noted on our last call, the project encountered some permitting delays that were out of our control and which lingered throughout the second quarter and into July. This extended our completion date and led to some incremental displacement. While this resulted in lower expectations for the current year, the finished product looks great, and the hotel is well-positioned to grow earnings from this point forward. Consistent with the success we have seen at our D.C. conversion, the Marriott Long Beach Downtown is already gaining transient share with fourth quarter transient pace at 96% relative to its performance as a renaissance in the same period of 2019. Group pace for Q3 and Q4 are up over 100% from last year and 2025 pace is trending strong with rate and occupancy growth. In Miami, the transformation of the Onda's Miami Beach remains on schedule to debut by the end of the year. We were recently on site and it's exciting to see the reimagined property starting to come together. The first phases of the construction will begin to wrap up in early fall, and we are looking forward to the resort's earnings contribution that is now just a couple of quarters away. While our outlook for 2024 has moderated, it is being impacted by some short-term factors and we remain encouraged about the growth potential we have embedded in our portfolio. The guidance that Aaron will discuss shortly assumes that RevPAR growth will be 300 basis points lower and adjusted EBITDA will be 5.5 million lower at the midpoint than our prior estimates. What is important to note here is that nearly half of the RevPAR decline and nearly all of the EBITDA decline is associated with the permitting delays in Long Beach and the slower-to-recover Maui market. This means that apart from these two hotels, the profitability outlook for the balance of the portfolio remains solid as our operators are able to drive incremental Group and business transient demand while effectively managing costs. As we look forward, we continue to believe that our setup for 2025 is among the most attractive in the sector. Our Group production was healthy during the second quarter and up 2% from 2023. Layering on top of this are markets with better city-wide calendars. The Super Bowl in New Orleans, strong Group pace in Wine Country, and growth at Ondas and Long Beach should all lead to an impressive 2025. In the meantime, we continue to thoughtfully execute on our three strategic objectives: recycling capital, investing in our portfolio, and returning capital to shareholders. We expect the combined impact of these to drive incremental earnings and value over the next several years. And with that, I'll turn the call over to Robert to give some additional thoughts on our recent acquisition activity and renovation progress. Robert, please go ahead.

Thanks, Bryan. Early in the quarter, we closed on our previously announced acquisition of the Hyatt Regency San Antonio Riverwalk and we are very pleased with the hotel's initial performance. The market is healthy and we are already seeing the results of our asset management initiatives at the property. In fact, we now expect the first-year yield on our net purchase price will be closer to 9%, which is incredibly attractive for an asset of this quality. This higher projection is 100 basis points ahead of our underwriting and represents meaningful accretion on the recycling of capital from the disposition of Boston Park Plaza. We retain the remaining proceeds from the sale that we can use to create further shareholder value either through additional hotel acquisitions or the repurchase of our stock. During the quarter, we also made additional progress on several other investments across the portfolio. As Bryan noted already, the renovation is in full swing at the soon-to-debut Andaz Miami Beach. As the first phases of the construction are nearing completion, we are now also working with the hotel team to prepare for the opening. We are pleased with the 2025 Group booking activity we have completed to date and will soon be opening up transient reservation channels for stays beginning in December. We continue to be pleased with the progress being made on what is a very comprehensive reimagining of the resort. While the recent softer demand environment in Wailea has been disappointing, we are using the opportunity to move more efficiently through the soft goods rooms renovation we have underway at the resort. As you can see from the property level data that we make available, our upper upscale property achieves robust rates and competes very effectively with its nearby luxury piers, and a refreshed room product will allow it to continue to do so. We will be performing the remaining work around peak periods and do not anticipate any meaningful disruption at the hotel. Elsewhere across the portfolio, we will be completing a few other projects, including a meeting space renovation at our JW Marriott New Orleans, which is underway now and will be completed in October in order to take advantage of robust Group business during the fourth quarter. At Montage Healdsburg, we added a small event facility at the resort's showcase vineyard venue that will allow us to generate incremental sales while also driving staffing efficiencies and contributing to higher margins. While these are smaller projects, they will add to the earnings potential and value of our portfolio. As we have shared with you before, capital recycling is a primary component of our strategy, and while we are actively evaluating additional acquisition opportunities, we remain mindful of all capital allocation opportunities available to us and the relative returns offered from each at various points in time. We will be disciplined and balanced in our approach.

Thanks, Robert. Our earnings results for the second quarter came in generally in line with expectations as higher ancillary revenue and contribution from certain corporate-level items offset lower RevPAR performance. Adjusted EBITDAre for the second quarter was approximately $74 million, and adjusted FFO was $0.28 per diluted share. Our quarterly results reflect the impact of the extended completion of the renovation work at our hotel in Long Beach, which resulted in $3 million of estimated EBITDA displacement in the quarter, approximately $1.5 million higher than anticipated. Together with approximately $9.5 million of year-over-year decrease in earnings at the Confidante as it undergoes its transformation to Andaz Miami Beach, we now estimate that we will incur $15 million to $16 million of total earnings disruption this year. Now that the work is completed in Long Beach and as we get closer to the debut of Andaz, we look forward to recouping all of this displacement, plus additional earnings at these hotels next year. Included in our earnings release this morning with our revised outlook for the year. As Bryan noted earlier, we have lowered our full-year expectations for RevPAR growth and earnings. The change is primarily related to the extended timing of completion of the renovation in Long Beach and softer leisure trends we have seen in Wailea, which together are impacting growth and full-year RevPAR by over 200 basis points. Based on what we see today, we expect that our total portfolio full-year RevPAR growth, which includes all hotels in the portfolio, will range from a decline of 25 basis points to an increase of 1.75% as compared to 2023. If we exclude the Confidante Miami Beach, RevPAR growth is projected to range from 2.25% to 4.25%. As a reference point for our updated guidance range, the full-year 2023 RevPAR metric for the total portfolio, including the Hyatt Regency San Antonio Riverwalk prior to our ownership, was $219 and for the total portfolio, excluding the Confidante Miami Beach, prior-year RevPAR was $222. Including our revised outlook for the balance of the year, we now estimate the full-year adjusted EBITDA will range from $242 million to $252 million and our adjusted FFO per diluted share will range from $0.85 to $0.90. While there is not as much of a seasonal variation between the quarterly earnings in the second half of the year as there is in the first, historically, the third quarter has contributed more to full-year earnings than the fourth. At the midpoint of our revised range, our EBITDA in the first half of the year would equate to 52% of our total projected full-year earnings, and we currently expect that an additional 24% to 25% will be generated in the third quarter with the remaining coming in Q4. Our balance sheet continues to be one of the strongest in the sector. As of the end of the quarter, we had over $230 million of total cash and cash equivalents, including our restricted cash. We retained full capacity on our credit facility, which together with cash on hand equates to nearly $730 million of total liquidity. We have one piece of secure debt coming due at the end of the year. We are finalizing our refinancing strategy for that loan now and will provide an update as part of our next earnings call. Our conservatively levered balance sheet and significant liquidity position continue to provide flexibility and be a source of strength for the company. Now shifting to our return of capital, our Board of Directors has authorized a base quarterly common dividend at our recently increased rate of $0.09 per share. In addition to the dividend, we have also repurchased approximately $7 million of shares since the start of the second quarter. We retain ample authorization and liquidity for additional share repurchase activity. Separate from the return of capital to our common shareholders, the Board has also authorized the routine distributions for our Series H and I preferred securities. And with that, we can now open the call to questions so that we are able to speak with as many participants as possible. We ask that you please limit yourself to one question. Operator, please go ahead.

Your first question comes from Michael Bellisario with Baird. Please go ahead.

Thanks. Good morning, everyone.

Good morning, Mike.

Good morning, Michael.

Bryan, kind of big picture question for you. Just, can you remind us, review your view of value, what the Board's view is, how they think about it, the path to get to that number, and then maybe how you're thinking both about the things you can and cannot control in order to help close that valuation gap. Thanks.

Yes. Well, we look at value and it's something that we spend a lot of time with the Board at every board meeting on, and like any other hotel investor, we look at it from multiple ways. We look at it on a cash flow basis. We look at it on a relative multiple. We look at it on a replacement cost. So we use all those. We triangulate on our view of value. And the way that that plays into our capital allocation strategy is at times when we see that deficit, we can do things such as what we did at Boston Park Plaza where we monetize and then we can use those to get the private market values and then go and either reinvest that into new growth opportunities or into our stock. And if you look over the last couple of years, I think our approach has been very balanced in that and that as we look forward, we have a great portfolio. We have great hotels and great markets. We have great internal growth that we've been able to build up on over the last couple of years and they are now at a point where we have a cadence of hotels coming off of renovation and providing earnings like with D.C. and going to Long Beach and Andaz next year. We have ramping hotels, San Antonio, one where we deployed that capital has done really well for us and is a market that we're very excited about for several years to come and we're very happy with this as Robert said, almost a 9% yield on that investment in that first year. And then, of course, it is also what we have done consistently over the last couple of years is when the stock gets to a meaningful gap is that we've been able to repurchase shares and that's something that we did again in the quarter recently and have that balance sheet capacity and that flexibility to be able to pull on any of these levers at any time, and they change depending on where our valuation is and where that gap is.

Your next question comes from the line of Dori Kesten with Wells Fargo. Please go ahead.

Thanks. Good morning. During your preparatory remarks, you described some leisure pricing as normalizing, but are there any hotels in your portfolio where you're seeing true price sensitivity at the margin?

I'm sorry, Dori, I didn't catch the last part of that.

I'm sorry, Dori, the last part of that.

Where you're seeing true price sensitivity at the margin?

One market we've talked about, Key West has been one where there has been more price sensitivity. We have been able to capture some more occupancy there, but that's one where maybe it's a little bit more sensitive and whether that's competing options for the traveler, whether it be cruises or other items plays into that a little bit more. Other markets, I don't think that we've seen that as much. One market where not on the leisure side but on the Group side, we've rationalized our pricing has been in Napa, which has been very successful where we're bringing in additional Group, and you'll see, when you go through the supplemental, you'll see the rates are lower, and that's because we're adding occupancy. We're taking the Group at a more rational rate, which obviously fluctuates over the different demand periods but then we're getting that ancillary spend where at Montage it's $700, $800, at Four Seasons it's $900 to $1,000 a day per Group room and that is between that and our productivity measures that we put in place, you're seeing the cash flow for both of those assets increase dramatically.

Your next question comes from the line of Duane Pfennigwerth with Evercore ISI. Please go ahead.

Hi, thanks. I appreciate it. Just on Maui, given the asset level disclosure that you give us, the market doesn't really look that off or it's at least hard to tell in the disclosure that you've given. Can you talk specifically about how your assumptions have changed in the back half of the year, maybe 3Q versus 4Q? And if there's specific Groups or seasonal periods that really impacted the forecast. Thanks for taking the question.

Thank you, Duane. Good afternoon. Regarding Maui, you make a valid point. While the supplemental data shows a slight decline, it's not significant. Ultimately, this hotel is expected to operate at about 70% occupancy with high average rates of over $600. It’s a key property in our portfolio, which is concentrated, and it's essential to ensure we have excellent real estate and good market exposure to generate value from these assets. Maui is indeed an outstanding piece of real estate. In the context of the Wailea market, it ranks among the premier luxury resort markets globally, and we provide an advantageous value proposition there. Our property spans 22 acres and includes multiple pools, with some of the closest rooms to the water, allowing us to compete with other high-end luxury offerings in that area. In the second quarter, which typically sees stronger leisure demand compared to group demand, we noticed some moderation in leisure travelers. As we look forward to the third quarter, group business begins in September and extends into the festive season. Group demand remains strong, and our pace is encouraging; however, it only begins to impact in September. During the summer, leisure travel, including trips abroad to places like Mexico or Europe, did not have the group demand to balance any weakness. Consequently, our revised guidance reflects the anticipated impact in the third quarter. Although tourism authorities and various stakeholders are promoting Maui's appeal, the booking window remains extended, suggesting that increased interest may not materialize until September or later into the fourth quarter. By September, our group bookings are solid, with limited rooms available for additional sales. The critical period for us will be the festive time in December, where we note that rates have decreased slightly while occupancy has increased by over 10%. Therefore, analyzing a resort like Maui indicates we should focus on total RevPAR. Given the significant rise in occupancy, this trend looks promising for the end of the year.

Your next question comes from the line of Smedes Rose with Citi. Please go ahead.

Hi, thank you. I wanted to ask you about, I guess, as the Andaz comes close to being back online and should be a pretty big contributor into next year. Could you just talk about, I guess, how you're thinking about the mix of business there for Group versus leisure? And just with that is, I know you mentioned that it's on time. Does it remain on budget relative to what you've shared previously?

Good afternoon, Smedes. The Andaz is currently undergoing a full renovation, and as we've mentioned before, the hotel was closed to accelerate this process. We expect the final business mix to be around 25% for Group bookings. Miami Beach is primarily a transient leisure market. During the renovation, we added more suites to accommodate Groups, and there is also some non-food and beverage Group business that the hotel can handle. Our plan is to complete the renovation mostly by the fourth quarter, and although the reservation line isn't open yet, we aim to start booking rooms in December, taking advantage of that strong demand period to fine-tune operations. As we approach the beginning of next year, we anticipate that most investors are counting on earnings from the hotel to contribute to our 2025 growth, which aligns with a time of increased leisure activities, allowing transient bookings to fill the hotel. Our sales team is actively engaged and currently booking business, with that business expected to come in around mid to late January or into February. We are seeing a great reception as the pools and backyard are taking shape, and the vision is becoming clearer for Groups, which is exciting. The timing remains set for the fourth quarter, and as for the budget, our latest update shows we are still on track with those numbers. There are many moving parts, but we feel confident that the renovation will be completed and ready to contribute to EBITDA next year.

Your next question comes from the line of David Katz with Jeffries. Please go ahead.

Hi, thank you. Can you discuss Napa and what you're observing there? Also, are those observations related to the leisure trends you mentioned earlier, and how are you managing those two assets? Thank you.

Good afternoon, David. In the second quarter, starting with Montage, the results from a Group perspective can be a bit variable due to buyouts and other significant business fluctuations. Montage Group experienced some buyouts, including a wedding last year. While the Group was slightly down, we saw a strong transient increase of about 14% for the quarter. The Group was down by a couple of percent, and as a result, our total RevPAR decreased by about a point. Despite this decline, we had a solid Group base, and we were able to drive ancillary revenues. Additionally, Montage has made significant progress in our productivity measures. The resort generated $800,000 more in EBITDA compared to the previous year, even though RevPAR was down. This indicates our collaboration with the operator has led to the expected efficiencies while maintaining the service levels of a luxury hotel. As we look ahead to the remainder of the year, the Group pace is strong in Q3, and we anticipate reaching our projected Group number of approximately 13,000 to 14,000 room nights. Looking into next year, we are excited about Montage, as we are seeing a $3 million increase in room revenue pace, up about 70%. The cost model is favorable, and we are beginning to see positive results on the transient side, along with Group business and ancillary spending, which is positively impacting total RevPAR. For Four Seasons, we had a strong Group performance in Q2, and we are implementing our productivity measures there, although they are not fully realized yet. The Michelin Star Restaurant has increased both its nights and revenue, contributing to the resort's notoriety, with profits up about half a million dollars year-over-year. As we look ahead to next year, the pace of Group room nights is up about 11%. Although rates are slightly down, this is intentional to capture more ancillary spending, which is considerable on a per room basis. While it’s taking some time, both hotels are clearly moving in the right direction, generating the expected cash flow, and setting up well for next year.

Your next question comes from the line of Chris Darling with Green Street. Please go ahead.

Thanks, good morning. Brian, can you talk through your expectations for total RevPAR growth this year relative to RevPAR and how that might have changed versus prior guidance? And then, as you mentioned in your prepared remarks, out-of-room spend and cost reduction supporting results this quarter? Can you help me understand how each of those aspects plays into the updated full-year outlook?

Okay. Let me start. On total RevPAR, it's probably about 40 basis points higher versus where rooms are.

Yes, I think if you look at how we've done through the first part of the year, total RevPAR growth exceeded rooms RevPAR growth in the second quarter. We saw that also in the first quarter. I think the magnitude of the disparity between rooms and total for this year, I think will moderate a bit versus what we saw last year. But as Bryan noted, I think you'll expect that the total RevPAR growth should outpace rooms by about 40 to 50 basis points.

And you'll be able to see some of that in our supplemental and remember too that a big piece of that will be the Group side of things and unlike last year where our Group pace was heavy in the first half of the year, this year it's the second half of the year. And so there will be, from a quarter-to-quarter basis, there will be some lumpiness to that.

Your next question comes from the line of Chris Woronka with Deutsche Bank. Please go ahead.

Hi, good morning, guys. Thanks for taking the question. I was hoping we could talk a little bit about Orlando. And I know historically, been a pretty good asset for you guys. And this year, pretty familiar with all the issues impacting the Orlando market. But for your asset there specifically, the renaissance, do you think it's totally a market kind of specific issue or what's your outlook for that asset next year relative to the market? Is there anything you think you need to do? Is it still considered core on a longer-term basis? Thanks.

Yes. Good morning, Chris. In the long term, we have a significant amount of land available, which presents opportunities to enhance the assets and increase their value, especially regarding leisure offerings similar to our previous renaissance hotels that have performed well in the Group segment. However, they haven't performed as strongly on an index basis for transient visitors. If we examine what has occurred in D.C., our transient index this year is in the 130s, compared to the high 90s prior to the repositioning, highlighting the substantial impact of branding. From a leisure perspective, the hotel’s location, which is situated between both major parks and next to SeaWorld, has not positioned it as the top leisure destination. However, with the new Universal Gate opening much closer to the hotel, we expect that to positively affect demand going forward. We will monitor the situation after this new gate opens to see if there is an increase in demand for our area, as we certainly have the capacity to improve the leisure amenities at the hotel. Regarding the Group segment, this hotel has always excelled in that area. Our spacious layout, including the atrium, serves us well and remains attractive to Group visitors. We can offer them more space per guest compared to many competitors, and they can have more control during their events, unlike in larger resorts where they may be competing for space with other groups.

Your next question comes from the line of Floris Van Dijkum with Compass Point. Please go ahead.

Hi, thanks for taking my question. Bryan, could you discuss the transaction markets and whether it's true that larger hotels are more challenging to transact in the current environment? Would you consider financing one of your larger assets, like the Hilton San Diego, with mortgage debt and using that capital to purchase another hotel or increase share repurchases?

Good afternoon, Floris. From a capital perspective, I'm not sure we would need to mortgage a hotel. We have a fully available $500 million line of credit, cash on hand, and a low-leverage balance sheet. Regarding access to capital for acquisitions, whether assets or stock, we have the flexibility and resources to proceed. After selling Boston last year, we anticipated improvements in the transaction market this year, particularly with enhancements in the CMBS market that would facilitate a quicker pace of transactions. The CMBS market has improved, primarily aiding refinancings rather than purchases. As interest rates drop and borrowing costs decrease, we may see more private buyers become active. However, we are somewhat disappointed with the pace of transactions, as we expected better opportunities to utilize the proceeds from the Boston Park Plaza sale. We have invested a significant portion in San Antonio and are pleased with that purchase. Ideally, we would like to find another opportunity similar to San Antonio, but such options are scarce currently. We're seeing interest in smaller assets. When it comes to investing, we always evaluate the balance of deploying proceeds into an asset against the expected returns compared to our stock performance to determine the more attractive opportunity. Historically, we have alternated between these strategies effectively, maintaining balance. We have initiated some share repurchases as announced earlier, and as our stock price decreases, the larger the discrepancy between our valuation and market price makes acquisitions more challenging, as we need to account for that difference. All these factors are interconnected. The positive aspect is that we have the portfolio, balance sheet, and flexibility to make nimble and well-informed capital allocation choices.

And that concludes our question-and-answer session. I will now turn the conference over to Bryan Giglia for closing remarks.

Thank you, everyone, for your time and your interest. We look forward to seeing many of you in the coming months and we'll look forward to the grand opening of the Andaz in Miami Beach later this year. Thank you.

This concludes today's conference call. Thank you for your participation and you may now disconnect.