Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Sunstone Hotel Investor's First Quarter 2025 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, May 6, 2025, at 10.30 a.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 EBITDA RE, Adjusted FFO, and Hotel Adjusted EBITDA RE. We are providing this information as a supplement to information prepared in accordance with generally accepted 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 brian julia chief executive officer and robert springer president and chief investment officer brian will start us off by providing some commentary on recent developments in our first quarter afterwards robert will discuss our capital investment activity and finally i will review our first quarter earnings results and provide the details of our updated outlook for 2025. Here are remarks. The team will be available to answer your questions. With that, I would like to turn the call over to Brian.

Thank you, Aaron, and good morning, everyone. It was an eventful quarter that began with stronger-than-expected performance in January and February, driven by the Super Bowl in New Orleans and the inauguration in D.C., and then One was partially offset by a pullback in government and leisure demand in select markets in March as the macroeconomic outlook became more mixed. Our first quarter EBITDA and FFO came in just above our expectations as better out-of-room spend, solid cost controls by our operators, and savings at the corporate office offset softer room revenue growth. I'll provide some additional details on our first quarter operation shortly, but first I am happy to announce the next chapter of the Sunstone Growth Story with the debut of the Onda's Miami Beach, which began welcoming guests on May 3rd. While the road to opening was met with numerous permitting and approval delays, the doors are now open and guests can experience an exceptional Miami Beach resort. I was on property last week and the finished product looks great and is well positioned to deliver on our underwriting and provide earnings growth for the next several years. This is a significant component of our layered approach to growth which will add to the success we have experienced with the conversions of the Westin DC downtown and the Marriott Long Beach downtown, the acquisition of the Hyatt Regency San Antonio Riverwalk, and the capital we have deployed into the purchase of our common stock. We expect to continue our balanced and nimble approach to capital allocation and to utilize our strong balance sheet and future asset recycling to drive growth in FFO and NAV per share. Now, shifting back to our quarterly results. We were pleased with how the portfolio performed relative to our expectations, despite the incremental volatility we began to see later in the quarter. The inauguration drove outsized growth in Washington, D.C., with our recently renovated hotel, generating a 24% increase in RevPAR during the quarter. Additionally, in New Orleans, our two hotels grew RevPAR by a combined 25% on strong performance from the Super Bowl, even with the cancellation headwinds from a rare snowstorm that hit the area in January and negatively impacted what was slated to be a high-demand period in the city. Outside of this event-driven business, we saw sustained strength in group demand and continued growth in business travel. In San Francisco, we generated RevPar growth of 9% as the result of a better citywide calendar and increased levels of commercial activity in the downtown area. Our performance in San Francisco is encouraging as we have meaningful opportunity for additional earnings recovery there as growth in the city has lagged other major markets but has an increasingly positive outlook for the coming years after having a great 2024 trends in boston remained strong into the first quarter with solid performance at our well-located marriott long wharf the better than expected performance in most of our urban and convention markets was partially offset by more subdued market-wide transient demand in San Diego. While first quarter results in San Diego were less robust, the outlook for the remainder of the year is more encouraging, with solid growth expected in the second quarter, followed by the recapture of lost business from the labor activity that occurred in the third and fourth quarters of last year. Overall, group and business transient demand was strong in the first quarter. Despite some pockets of softness primarily related to government business, good first quarter production and positive group pace across the portfolio would point to stability in these trends for the remainder of the year. On the transient side, we were encouraged by growth in midweek demand. This is an indicator that corporate America continues to travel, a trend that is supported by increased return to office and the greater levels of activity we are seeing in the business districts of our urban markets. Within our resort portfolio, we saw softer than expected performance in Wailea as all inventory comes back online on the west side and the island continues to recover from the fires. Our Waialaea Beach Resort's premier location as the closest property to the water on what is arguably the best strip of beachfront land in the country gives us confidence that we will navigate through this short-term choppiness and return to growth in the coming quarters. This period of transition as the Kaanapali sub-market reopens will be a long-term positive for the island as it will ultimately bring the return of more guests and drive additional airlift into Maui. Our updated outlook assumes that we face a softer demand environment in Waialea for the next couple of orders as Kaunapali returns to normalized operating levels. Group production at Waialea for all future periods was up nearly 20% in the first quarter relative to the prior year and gives us reason to be optimistic that sunnier days lay ahead for our resort. As we have shared with you before, investing in our portfolio remains a key component of the Sunstone story. We saw the benefits of this in the first quarter with our recently renovated and converted Marriott Long Beach downtown, which posted a solid 145% increase in Rev Park. While we expect to continue to benefit from outsized growth in Long Beach for the coming quarters, we will now also see the contribution from the Andaz Miami Beach in the second half of the year, which will deliver our next layer of growth that will extend into 2026 and beyond. The growth generated from these conversions is not limited to the immediate year following completion. Inauguration aside, we continue to see the Westin, D.C. downtown establish itself as a premier group and business transient hotel, driving incremental cash flow as it approaches its third year following renovation, despite a near-term slowdown in government demand. While we were encouraged by many of the trends we saw in the early months of the year, operating fundamentals moderated as the quarter progressed, driven primarily by increasing macroeconomic uncertainty and declining business and consumer confidence. While this has led to lowered expectations in a few markets for the middle part of the year, we are seeing more stable trends in other areas and steady booking volumes across most of the portfolio for the latter part of the year. Given the increased volatility, the uncertainty regarding economic policy changes, and the greater variability in the range of possible economic outcomes for the year, our forward visibility has become more limited. As a result of these factors, we are adjusting our full-year outlook to better align with current trends. The updated outlook that Erin will discuss shortly is based on information available to us today, but is subject to change, both negatively or positively, based on how future macroeconomic developments impact lodging demand. Our current outlook reflects the revised opening date for the ONDAWS and assumes continued weakness in government-related business, no meaningful change to the imbalance of international travel, and a more subdued demand environment in Wailea for the coming quarters before resuming growth later this year. Given the lack of visibility and overall economic volatility, we are extrapolating these trends forward, which could prove to be a conservative approach if the environment stabilizes sooner than expected. That said, our capital recycling and investment efforts are still delivering sector-leading growth. This is a direct result of our layered approach to recycling capital, investing in our portfolio, and returning capital to our shareholders. As you saw in our earnings release this morning, we repurchased $21 million of stock at a blended repurchase price of $8.90 per share. Repurchasing our shares at these levels equates to a highly compelling multiple on our earnings and results in significant value creation. Given our strong balance sheet and the earnings contribution we anticipate from our recent investments, we are well positioned to generate incremental shareholder value by opportunistically repurchasing our shares. Given the current discount to NAV, we will look to recycle additional capital into share repurchase, potentially through additional asset sales. To sum things up, despite a more volatile operating environment than we expected at the start of the year, we continue to execute on our strategic objectives in the first quarter. We are advancing the page in the Sunstone growth story with the opening of the Onda's Miami Beach and the continued growth from our other recent investments in Long Beach and Washington, D.C. We will further advance our capital recycling strategy by utilizing our available balance sheet capacity and future asset sales to thoughtfully grow our FFO and NAV per share as we move further into the year. And with that, I'd like to turn the call over to Robert to give some additional thoughts on our capital investments. Robert, please go ahead.

Thanks, Brian. We are very pleased to have the ONDAS Miami Beach open and expect the resort will be a fitting addition to Mid Beach, which is defining itself as the more elevated and sought-after destination of Miami Beach. In addition to the amenities that are available today, over the coming months we will introduce Olazul, a members-only beach club which will operate from a historic home in the resort's backyard. Later, the resort will also debut The Bazaar by Jose Andres, which we expect will further increase the appeal of the property and serve as a dining destination for local residents and guests from nearby hotels. Elsewhere across the portfolio, we have recently completed a rooms renovation and lobby refresh at the Wailea Beach Resort and are in the process of creating two additional residential style oceanfront villa units following the positive reception we received from those that came online at the end of last year. In San Antonio we will begin renovating the meeting space in the third quarter. We expect to move efficiently through this project and be complete by the end of the year. Part of what appealed to us in acquiring this hotel is the opportunity to reprogram the lower lobby level to take advantage of the new development activity happening next door at the alamo visitor center and museum we are still in the planning stages of this effort but look forward to updating you as we progress in san diego we are in the final planning stages for a renovation of the meeting space at our hilton bayfront and expect to be in a position to begin work late in the year we will complete the meeting space update in phases resulting in minimal disruption which is included in our outlook corporate meetings are the core business of this very productive hotel and by upgrading the space we will enhance its ability to attract the best groups in the market as we shared with you last quarter we expect our capital investment activity for this year will be in the range of 80 to 100 million dollars while there is still too much uncertainty to accurately assess the impact of the recent tariff announcements on our future capital projects, the largest components of our spend for this year relate to projects that were already underway at the start of the year and for which materials had largely been procured. While this certainly does not mean we are not at risk for cost inflation in certain areas, based on what we know today, we expect to be able to complete our planned activities for this year within our prior estimated range now turning to the transaction market as we moved into 2025 we had higher hopes that the setup for the year would support a more robust transaction market however the uncertainty that has permeated the environment since that time makes finding and getting deals done much more challenging as brian noted recycling capital is a primary component of our strategy. And so, despite the recent volatility, we continue to seek out opportunities to drive growth and create value through accretive transaction activity. We hope to have more to share with you on this front as the year progresses. With that, I'll turn it over to Aaron. Please go ahead.

Thanks, Robert. As we noted at the top of the curve, we came in ahead of expectations, and savings at the corporate level offset lower rooms revenue growth, which was driven primarily by a more challenging top-line performance in March. Comparable Rooms REVPAR increased 3.8% in the first quarter, and total REVPAR grew 4.3%, contributing to an 80 basis point expansion in hotel margins. Adjusted EBITDA in the first quarter was $57 million, and adjusted FFO was $0.21 per diluted share, which reflects a 17% increase from the prior year, given the contribution from our recent investments in the portfolio with the added benefit of our accretive share repurchase. Balance sheet remains strong with net leverage, including our preferred equity, of only 4.5 times trailing EBITDA. While our outlook has moderated, we still expect our leverage and balance sheet capacity to improve as we move through the year and benefit from the embedded growth in the portfolio. Subsequent to the end of the quarter, we exercised the extension option on our $225 million term loan. together with the extension options we have in place on other debt, we don't have any maturities for the remainder of the year. As at the end of the quarter, we had nearly $150 million of total cash and cash equivalents, including our restricted cash. Together with capacity on our credit facility, this equates to nearly $650 million of total liquidity. Included in our earnings released this morning are the details of our updated outlook for 2025. As Brian noted earlier, this revised projection is based on expectations and the information we have available today, but could be impacted, either positively or negatively, based on how the macroeconomic environment and business and consumer sentiment evolve from here. Based on what we see today, we expect that our total portfolio REVPAR growth will range from 4% to 7% as compared to 2024. This range reflects the early May opening of ONDOS Miami Beach, which is a few weeks later than what was assumed in our prior outlook. For the balance of the portfolio excluding ONDOS, we now anticipate that REVPAR will increase between 1% and 4%. With these revised top-line growth projections, we now estimate that full-year adjusted EBITDA RE will range from $235 million to $260 million, and our adjusted FFO per diluted share will range from $0.82 to $0.94. Despite the headwinds from the more volatile operating environment, the midpoints of our updated outlook for EBITDA and FFO would still equate to healthy annual annual growth rates of 8% and 10%, respectively, and as a direct result of our recent portfolio investments. As it relates to some of the quarterly assumptions that comprise our updated full-year outlook, we would expect our total portfolio REVPAR growth to remain in the low single-digit range for the second quarter before increasing more meaningfully in the third and fourth quarters, driven by increased contribution from Ondaat Miami Beach, continued growth in Long Beach, and the easier comparison from the impact of the strike in San Diego. In terms of the distribution of our EBITDA by quarter, based on the midpoint of our revised outlook, the first quarter contributed 23 percent of our expected full-year total. We expect the second quarter to be the largest contributor of the year at approximately 28 percent, and the third quarter to comprise nearly 23%. This would leave the balance for approximately 26% in the fourth quarter, which is a bit higher for us than usual, but is when we expect to generate the bulk of the current year earnings from ONDOS. As we noted in the 2025 outlook section of our press release, the remaining components of our full year projections remain unchanged from the prior quarter. Now shifting to our return of capital, in addition to the accretive share repurchase activity we have completed so far this year, our Board of Directors has authorized a $0.09 per share common dividend for the second quarter, and has also declared the routine distributions for our Series G, H, and I Preferred Securities. While we retain ample capacity for additional capital return, the full-year outlook that was discussed earlier does not assume the benefit of any additional share repurchase 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.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 in your telephone keypad to raise your hand and join the queue. If you would like to withdraw your questions, simply press star 1 again. As a reminder, please limit yourself to one question only. Your first question comes from the line of David Katz from Jefferies. Your line is open.

Thanks for taking my questions. I wanted to just go back to the confidant. It has, you know, obviously the world has maybe changed just a little bit since, you know, it was conceived and executed and now open. You know, I wonder if you could just talk about what your, you know, underwriting trajectory looks like today versus where, you know, may have been 12 or 18 months ago or 24 months ago and, you know, what we can sort of reasonably, you know, expect in terms of returns, let's say, you know, next year and what's realistic.

I'm happy to do that, David. First of all, I'm not familiar with the Confidant, but I'd be happy to speak about the Onda's.

I apologize.

We're very excited that the hotel, the resort, is now open. It was a long road to get there. And again, with the Miami Beach approval process, you know, closing a hotel in Miami and in Miami Beach and doing a major renovation is probably something that we would think twice about doing right now. But we are very happy to be where we are. And so when you look at the hotel and you look at the market, when we underwrote our projections, our expectations for the market, the mid-beach market, and the luxury set that we will draft under and compete with was lower than what actually happened in going back to 2023. you saw a pullback in 2024 that 2024 set was still running at a at a rate that was much higher than where we initially thought in some you know kind of the 800 plus range again as we've said our our success here is being able to to provide a product that is comparable to those hotels and And having just been to the resort, it absolutely is. We have a luxury resort with luxury amenities, luxury food and beverage, and, you know, the appropriate suite count. As you recall, we lowered the number of rooms to increase the suite count. And so we were targeting somewhere in the, you know, mid-fives to $600 rate for us to be successful there. That still completely holds. The market is still well above that. And so we feel very confident that while the opening date was later than anticipated, the end result will be what we expected. And with the hotel open now and site visits and groups coming in, Remember, we are just getting into, and maybe a little bit before, but coming up quickly into the booking window for the fourth quarter and the first quarter, and this is a hotel that will do 60% to 70% of its EBITDA in the fourth quarter and the first quarter of the year. So we are ready and open right in time to book that business, and the resort with its food and beverage, with the Jose Andres group concepts in there, we are very excited and very confident that we will be able to hit those, our marks for the end of the year and into 2026. You know, with the delayed open, we're looking at, you know, call it six to seven million of EBITDA for the resort this year, the majority of that coming in the fourth quarter, and then as we get to next year, there's no reason why we would not revert back to the cadence of EBITDA growth that we were thinking earlier this year, where that would be, you know, in the the high teens to 20ish even their range and then growing from there into the third year thinking that it would be about a three-year ramp up here understood good luck with the on does thank you your next question comes from a line of danny assad from bank of america your

line is open hi good good morning everybody um aaron i just want to go back to your updated outlook that you kind of walked us through maybe can you just uh give us some buckets brian just touched on beyond does now going to 67 million dollars but can you just maybe walk us through the what is changing and you know uh from a more moderated view on why leia and then the change in on does and then kind of what what is left with the core of the portfolio sure jana thanks for the question happy to do that um so certainly i think when you look across the portfolio and you translate that back to the EBITDA and FFO revisions that we did in the quarter.

They kind of discreetly fall into, I'd say, three buckets in total. So the range that Brian alluded to for the revised expectation for ondots of six to seven million dollars, that's about two million dollars less than what we thought when we were thinking of the original opening date when we spoke in February. So that's the first two of it. And then the other relates to, you know, we've seen a more challenging operating environment in Maui as Kanapali reopens and the island kind of transitions and normalizes back to what it was before the fire. So that's about $4 million of forecast revision there. And then the last piece is about $2 million of headwinds from San Diego, and really that's just more of what we saw in Q1 and into the middle part of this year, was just a lower, a less strong transient.

And so, Danny, what we did is where we saw some of these, like in San Diego, we saw some transient weakness in the first quarter, some other government weakness in other markets. We took what the hotels were giving us for their forecasts and then extrapolated out a little bit further into the year until until these you know until they would come back and normalize so that's something where we felt it was you know based on the information we had it was a appropriate decision and and to update the the forecast that way again there are so many you know unknowns at this point if we start to see you know those change then that could have that could prove to be more conservative and as we get into the summer as you see the weaker dollar we're not anticipating any sort of international travel increases that's something that that we could benefit from from a weaker dollar um and so again i think we tried to take a conservative realistic approach um that said in in a quarter or two you know there could be there could be several changes both to either the negative or the positive understood thank you and uh congrats on beyond those opening okay thank you your next question comes from a line of duane fenugworth from evercore isi your line is open Hey, thanks.

Just to follow up there, maybe two markets. Hawaii, what do you think held back the asset in the first quarter? And why do you think your, at least, near-term or 1Q commentary differs from one of the main peers with exposure to Maui? And then on San Francisco, obviously a strong first quarter. How do you see that playing out over the balance of the year? Thank you.

Morning, Duane. So in Maui, when you look at R1 Hotel in Waialea, and Waialea compared to Kanapali is the luxury market, we've often said we have a phenomenal value proposition to guests there to have a luxury resort experience that, you know, drafts under the luxury rate a bit. And then the other competition to us would be the west side in Kaanapali, which is more of a – is a discount to Waialea. It's still a fantastic market, as all of Maui is, but just a different experience and less luxury of an experience. So as Kaanapali gets back to more normalized business And we've seen good occupancy increases there. We've actually seen airlift increases. We were down, you know, last year 20% to 19%. Now the market's down about 13%. So airlift is coming back. Conapoli is filling. Conapoli is filling and sometimes discounting their rate a little bit. When that gap to our hotel in Wailea starts to get wide, we will see some trade down to the kind of poly market this is all part of just the natural growth as the market recovers from the fire this is actually a very encouraging thing when we look into you know we look into later in the year our expectation is this growing pain will continue for a quarter or so um you know and we have we start to get you know better you know we have good group pace in the fourth quarter uh our rooms renovation which added a little bit of displacement during the beginning of the first quarter is done um we continue to do things to elevate our luxury experience our olatino pool is the you know by far the best luxury pool experience in Maui in Wailea and you know the government is the state is doing a good job of putting money in to promote Maui as a full market and when we look into 2026 or you know we have we have double-digit pace growth there so everything is lining up for you know as the year progresses we are going to see our hotel get back to normal and be able to be able to drive that occupancy up you know, probably about 10 points is what we need there. When comparing to others, you know, everyone always has their gives and takes. You know, other competitors have large hotels in Canapali, so that's obviously going to benefit. And then hotels coming off a renovation will always show a distorted view in that coming quarter or two following the renovation. So that's the only difference, I think, from a market. The good news is the luxury demand there is strong. And so as CONAPOLI fills, we will then, as we've seen before, will disproportionately benefit compared to the YLASA. When looking at San Francisco, look, San Francisco is, you know, again, it's one of those markets where it's taken a bit, but it's been a great story for the last year or so, and we continue to see additional demand coming you know we have you know good pace in the hotel for the the remainder of the year business transient has been very strong in our sub market you know if you went back a decade ago Union Square was where everyone wanted to be and now Embarcadero financial district is is where especially you know Monday through thursday is where where business travelers want to be we're able to to drive our in-house meeting space and be able to drive our own compression that way and as we look forward that the sentiment for the city is improving the office demand in the areas where we are are improving and we have very strong pace growth for next year so our expectation is that san francisco is a is a positive story for us for the coming um you know several quarters into 26 and most likely in the 27th thanks for the detailed thoughts thanks join your next question comes

from a line of michael belisario from baird your line is open thanks good morning everyone uh brian just sort of big picture question for you on on strategy and value creation And it sounds like you're inclined to shrink the portfolio a bit more with at least one asset sale, at least sort of based on how you guys framed it in the prepared remarks. But sort of two parts here for, I guess, one, how many more non-core hotels do you have or have you identified? And then two, maybe when do you consider a more opportunistic or larger sale like Miami to just more meaningfully move the needle to repurchase even more stock?

Thanks, Michael. So when looking at, to your first question, how many more non-core assets do we have? We have a pristine portfolio. We're very happy with our portfolio, and we've had several years of recycling and culling the portfolio down to really fantastic assets. So your question is, are there hotels that have to be sold? Absolutely, no. We're more focused on where can we recycle capital? What is the right time to divest of an asset and redeploy those proceeds? When do our returns start to taper off with future capital needs or just the growth isn't there for us? So that's how we identify what we want to recycle. I think at all times we're going to be looking to recycle assets and that could be our smallest asset or our largest asset we look at where spot market value is compared to our internal NAB and if we can if we can arbitrage that in the in the private markets then that's something that we will do and we have done and with those proceeds you know one of the benefits of being a company our size is we can remain nimble and you know we will repurchase shares as we've done in the past and we have you know it it's ranged from a small amount to a quarter to a larger amount a quarter in the given range right now as you saw we've been active this year so far we think that it's a very compelling value and we'll put our money where our mouth this and continue to take advantage of that. And then, you know, when you look at, you go into last year and when there's an opportunity to, you know, the stock rebounds and there's opportunity to acquire assets, I still, you know, we go back to San Antonio and that was a point in time where it was you know very good acquisition and and it was the right deployment of capital at that moment in time but we and then a quarter later we went back and we were repurchasing shares so we will continue to recycle assets and we will you know look in the market and see what the best allocation of that capital is right now i don't think it's any mystery that our stock is that best allocation, but we'll continue to do that. And the expectation is that given the current market dynamics, yes, we would expect to be a net seller. Now the transaction market is a little choppy right now, but I think we're seeing the debt markets sort of bounce back and that should lead to additional future transactions. But, you know, we would guess, you know, I would think right now we would be a net seller and everything else equal where we are now that that capital would go back into the purchase of our stock.

Your next question comes from the line of Smedes Rose from Citi. Your line is open.

Hi, thanks. I wanted to maybe just follow up on that a little bit and kind of circle in on your NAPA assets. It looks like the losses accelerated year over year, just something that you put that up to maybe the calendar shift that went on during the quarter, and maybe you could just talk to your overall expectations this year for those assets. And then certainly kind of, Brian, water cooler talk would suggest that those two properties would be on the short list potentially for recycling capital. And I'm just wondering, without addressing maybe potentially those, what are the conversations like for high-end luxury assets? I mean, are there buyers? Is there just big pricing discrepancy or buyers more on the sidelines at this point? Just any kind of discussion around that would be of interest.

Morning speed. So first quarter in one country, like any other, you know, kind of seasonal resort market is going to, it will always be the weakest quarter. You know, our goal is at some point to probably, you know, get as close to break even as we can in that quarter, but that's not where the money is made. And so, you know, shifts by a couple hundred thousand dollars from here to, you know, year to year is just, you know, that could be the difference of one group. And so when we look at where we are with those two resorts, together they put off a couple million dollars more of EBITDA last year. They're going to put off a couple million dollars more of EBITDA this year. And so we continue to fine-tune, get them to the right group mix. I think we've made tremendous progress there. We have worked with the brands and some third-party consultants to get costs down while keeping guest satisfaction at the same level. So all those things are working in the right direction. When it comes to the disposition of those assets or any assets in our portfolio, luxury assets tend to be a smaller, more focused group investors. They tend to own that type of asset, understand the scarcity value of that asset, and have a little bit of a longer horizon when it comes to their hold periods and asset performance. So that's, you know, those are conversations that we have, we continue to have, we always have. I mean, I think at any given time, we're probably, you know, having some form of conversation or another on a good portion of our portfolio. That's what, you know, that's what happens when you have assets that are great performers and high demand. So, you know, the luxury buyer is not immune from debt markets, is not, you know, immune from, you know, the cost of debt and that. and so while it might not be a driving factor it is another factor when it comes to valuation so when you have slower transaction volumes across all asset types it tends to slow this down too but as I said on you know the question before I think we're focused you know we are focused on recycling capital and so So that includes our highest end luxury assets that, you know, ranges to every asset in our portfolio. So it's something we're focused on. It's something that when we have the ability to take advantage of the private market values, we will, especially when our stock is trading where it is. It's a pretty compelling trade. Thank you.

And your next question comes from a line of Chris Waronka from Deutsche Bank. Your line is open.

Hey, good morning, guys.

Good morning.

Morning. This would be kind of a follow-up on the Andaz Miami. So I assume kind of your revised outlook with EBITDA includes any kind of, I don't know, you know, I know there were some customers that had to be, I think, rebooked, and I don't know how that may work with Hyatt. But the question really relates more toward the rest of the year, especially Q4, given your expectation is there any what kind of visibility do you think you have or maybe give us a little bit of a sense on what you expect at that asset in terms of booking window is it going to be you know if we think about it compared to other luxury resorts which you know typically book a little longer out just how you expect that to kind of unfold over this year and then beyond thanks yeah um thanks chris to answer the first part of your question yes there were or when we had to walk and move some customers, that's absolutely incorporated in all of our costs

that you'll see in our future EBITDA FFO reconciliation. So that's all included in there. The booking window is actually not, at the end of the day, this is a 287 room resort. And so the booking window, even for group is, you know it's not like san diego um and so we are opening right now and being able to do site visits and you know for for corporate events and again this is going after financials and automotive and luxury apparel that you know pharmaceutical that type of business um a lot of social business the hotel is already booking weddings for the end of the year and so for the fourth quarter that booking window is just opening now and so while our opening date is not impacting our ability to have a successful fourth quarter and first quarter into next year so you know when we look at the cadence of, like, you know, just occupancy and rate, you know, we'll obviously run, you know, in May and June and probably in the 30s and 40s percent. And then when we get to November and December, we're probably up in the 70 percent. And the rate, you know, the summertime rate in the market is $300 or $400 a night. And in the fourth quarter, it's $600, $700, $800 a night. And so I think we're in the prime spot to be able to book that business and to be able to you know really yield the hotel for the fourth quarter and most of the site visits and everything the people that are going through the resort right now they're looking for third and fourth quarter right now and a little bit in this first quarter okay very good thanks Brian and that concludes our question and answer session I will now turn the call back over to Brian Gillia for closing remarks thank you everyone we look forward to meeting with many of you at upcoming conferences and for those that were able to see the on-daws uh during construction we uh we look forward to having everyone back and being able to tour the resort and see the finished product thank you this concludes today's conference call thank you for your participation you may now disconnect