Welcome to today's Hersha Hospitality Trust third quarter 2022 earnings conference call and webcast. My name is Jordan, and I'll be coordinating your call today. If you'd like to register an audio question, you may do so by pressing star followed by one on your telephone keypad. I'm now gonna hand over to Andrew Tamaccio to begin. Andrew, please go ahead. Thank you, Jordan, and good morning to everyone joining us today. Welcome to the Hersha Hospitality Trust third quarter 2022 conference call. Today's call will be based on the third quarter 2022 earnings release, which was distributed yesterday evening. Before proceeding, I'd like to remind everyone that today's conference call may contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and other factors that may cause the company's actual results, performance, or financial positions to be considerably different from any future results, performance, or financial positions. These factors are detailed within the company's press release, as well as within the company's filings with the SEC. With that, it's now my pleasure to turn the call over to Mr. Neil H. Shah, Hersha Hospitality Trust President and Chief Operating Officer. Neil, you may begin. Thank you, Andrew, and good morning to everyone. Joining me this morning are Jay H. Shah, our Chief Executive Officer, and Ashish Parikh, our Chief Financial Officer. As you've seen or read, we have had an extremely active and productive third quarter on the operations, transactions, and refinancing fronts. We've been looking forward to update you on our meaningful progress and provide our outlook for the remainder of the year for our refined portfolio. We are clearly experiencing a robust recovery and demand in our urban portfolio as midweek occupancy builds month-over-month in each of our gateway markets. Pricing power remains impressive in our resort and leisure-oriented markets. For the quarter, our hotels were 72% occupied at a rate of $289.75. Our comparable portfolio RevPAR growth of 3.7% in September surpassed the comparable month of 2019, driven by a 16.5% ADR growth to 2019. We are seeing this trend accelerate into October with increased business transient demand, as we are on pace to record RevPAR growth of approximately 8% compared to 2019, driven by 20% ADR growth to 2019. In October, we're trending towards a $326 ADR. We recently announced the closing of both the Hotel Milo Santa Barbara and the Pan Pacific Seattle. These sales, coupled with our previously announced Urban Select Service disposition and the pending sale of our leasehold interest in The Gate Hotel JFK, will generate approximately $650 million in gross proceeds, allowing us to reduce our cumulative debt load by approximately $500 million and contribute nearly $120 million in unrestricted cash, leaving us a forecasted cash balance approaching $225 million by year-end. Ash will cover this in more detail, but in this uncertain environment, we are very pleased to have refinanced our credit facilities, reduced our weighted average cost of financing, and to have no meaningful maturities through 2024. The result of our strategic disposition strategy is a streamlined portfolio comprised of differentiated luxury and lifestyle offerings located on premium real estate in gateway, urban, and resort markets, and a purpose-built New York City cluster. Our portfolio is already generating higher profitability than pre-pandemic levels and will not require major capital infusion or disruption in the near term. Looking ahead, our comparable portfolio is positioned to generate significant cash flow growth in the coming year as our unique portfolio composition allows us to disproportionately benefit from the long runways in the recovery of business transient, small group, and international travel, and the continuation of strong leisure demand. With that, I'll turn to performance in the quarter. Once again, pricing power was strong across the portfolio in the third quarter. The comparable portfolio recorded ADR growth of 16%, with virtually all of our markets experiencing double-digit ADR expansion compared to 2019. Our view on rate integrity remains unchanged from prior calls as we are currently experiencing robust ADR growth for October, both to 2019 and to the prior month. Demand in our non-resort portfolio accelerated throughout the quarter as non-resort portfolio EBITDA contribution rose from just under 54% in July to 77% in September, ending at 64% for the third quarter. This trend bodes well for the portfolio as roughly 60% of our pro forma room count is located in urban gateway markets. Another promising trend was the increase in weekday demand as the quarter progressed. Non-resort weekday RevPAR increased 33% from July to September, including gains of 38% in Washington, D.C., and Philadelphia, respectively, and just under 12% in Boston. From August to September, the weekend to weekday RevPAR premium decreased in each of those markets, with Boston's weekday and weekend RevPAR achieving parity for the month of September. Strength in our non-resort urban portfolio has carried forward into October, which is on pace to post ADR growth and generate 5% greater EBITDA than October of 2019 on a same-store basis. As expected for the fourth quarter, we're experiencing a seasonal change in EBITDA production away from leisure travel. In the more leisure-heavy third quarter, our resort portfolio continued to outperform, generating 24% RevPAR growth through the third quarter of 2019, driven by ADR growth of 29.5%. In what is typically a seasonally slower quarter, our South Florida portfolio posted nearly 35% RevPAR growth to 2019, driven by 25% ADR growth. Total property-level cash flow of $33.4 million in the third quarter marked the second-highest EBITDA production since the onset of the pandemic, and we achieved this level of cash flow despite closing on the sale of six of our seven Urban Select Service assets in early August. The comparable portfolio generated just under $31 million in EBITDA for the quarter, an increase of over 8% from 2019. EBITDA margin for the comparable portfolio of 32% represented a 249 basis point increase to 2019, with margins at our resorts increasing by 704 basis points. Despite a seasonal shift to more leisure-oriented travel in the third quarter, our non-resort business transient-focused hotels realized EBITDA margin growth of 71 basis points compared to the third quarter of 2019. We are confident in our ability to generate improved levels of profitability in the fourth quarter, as it is typically the best quarter for New York City and much stronger in South Florida than Q3. As I transition to our market performance, I will begin with our urban portfolio. In the third quarter, three of our top five EBITDA-producing assets were located in our Northeast urban markets. The Boston Envoy led the way for the portfolio for the second straight quarter with $4.1 million in EBITDA, a 4.7% increase to 2019, and a nearly 54% gain to 2021. EBITDA margin for the Envoy was 50% in the third quarter, 327 basis points ahead of 2019. In Philadelphia, The Westin Philadelphia generated nearly $2.2 million in EBITDA with a 35% EBITDA margin. In New York City, the Hyatt Union Square New York produced over $2 million in EBITDA, a 4% increase to the third quarter of 2019, with an EBITDA margin of 34.9%, representing an increase of 495 basis points to 2019. In total, our New York urban portfolio produced just under $10 million in EBITDA for the quarter, the highest contribution of any market, and achieved an EBITDA margin of 38.1%, with an increase of 180 basis points to 2019. In September, our New York portfolio exceeded 2019 RevPAR by 1.8% despite reduced occupancies, resulting in an 11% increase in EBITDA from September of 2019. Excluding our Holiday Inn Express NYC Chelsea, which will have a subset of rooms offline for renovation throughout the year's end, we project RevPAR and EBITDA growth to 2019 in each month of the fourth quarter for this New York urban portfolio. Now shifting our focus to our resort portfolio, the Annapolis Waterfront Hotel led the way with 85.8% occupancy at an ADR of $356.13, resulting in a RevPAR of $305.68, 32.4% greater than 2019. The hotel generated $2.6 million in EBITDA for the quarter, second highest contribution in the entire portfolio, nearly 55% greater than 2019 and 5% above the record-setting 2021. EBITDA margin of 53.6% was 641 basis points greater than 2019. On the West Coast, the Sanctuary Beach Resort in Monterey continued to demonstrate its pricing power as the resort's third quarter ADR of $709.97 drove RevPAR of $490, a nearly 23% increase to 2019. Generated $1.8 million of EBITDA for the quarter, a 36.5% increase to 2019, and an EBITDA margin for the quarter of 42.2%. Fortunately, our South Florida portfolio sustained no material damage from Hurricane Ian. As expected from a major hurricane, we did see cancellations during the last week of September and into early October. In total, we estimate approximately $500,000 of revenue was lost due to travel disruption caused by the storm in September. In Miami Beach, occupancy and ADR growth at the Cadillac Hotel and Beach Club led to 12.1% RevPAR growth for the third quarter, and this is compared to the record-setting 2021 performance. The property's third quarter EBITDA of $1 million was up 425% compared to 2019, as the hotel was still ramping from the impact of Hurricane Irma in that earlier period. The Parrot Key Hotel and Resort ended the quarter with 68% ADR growth compared to 2019. The hotel generated over $1 million of EBITDA for the quarter, an increase of 100% to 2019. As we mentioned, 2019 figures at Parrot Key are also hampered by the recovery from Hurricane Irma. Before I transition to Ash, a few thoughts on capital allocation. Since the beginning of the pandemic, we have been laser-focused on increasing our financial flexibility without diluting shareholders or encumbering our portfolio with long-term debt. The quality of our hotels, the exceptional capability of our teams, and frankly, tremendously hard work from inside our offices to the folks at our hotels, allowed us to manage through this pandemic while increasing liquidity, reducing debt, and meaningfully improving our portfolio during this most challenging period. As our team has communicated consistently throughout the pandemic, our most efficient cost of capital has been realized via asset sales at or near NAV. As Ash will cover in detail, we are now in a strong financial position with an attractive leverage profile and the runway to create substantial value. The assets we sold and the timing of our dispositions has been strategic and aligned with our vision of minimizing the public-to-private market value disparity within our portfolio while maximizing shareholder value. The initial round of dispositions in 2021, which totaled approximately $215 million, reduced our exposure in each of our markets, consisted of some of our older, slower growth assets with capital needs in the near to medium term that did not meet our return requirements. Our decision to hold the next tranche of dispositions into 2022 allowed us to benefit from the increased hotel cash flows in the first half of the year as market valuations approached our internal NAV. We sold our seven-hotel Urban Select Service portfolio to a single buyer in the first half of the year, and then transacted on the Pan Pacific Seattle and the Hotel Milo with two different investors through the summer and early fall. In each case, the high quality of our hotels and the improving cash flow profile allowed us to transact at or near our internal NAV for the assets. Sales proceeds from this year, coupled with the continued operational ramp-up and cash flow generated by our portfolio, gave our board of trustees confidence to reinstate our common dividend to begin returning capital to our shareholders. As noted last quarter, our board continues to monitor and evaluate market conditions, and if in the best interest of the company, intends to declare a special cash dividend to holders of common shares and limited partnership units in the fourth quarter of 2022. In closing, I would like to reiterate the substantial impact of our corporate initiatives. The board and management team has remained committed to maximizing shareholder value, and we remain flexible and opportunistic in our approach. Our strategies have allowed us to significantly improve our leverage profile, reduce the weighted average cost of debt in a period of rising interest rates, reinstate our dividend, and build up substantial cash reserves without diluting shareholders and while refining our portfolio. Exceptional locations in the most valuable markets in the nation, Hersha's coastal luxury and lifestyle portfolio, and our purpose-built New York City cluster are extremely well positioned to continue driving significant cash flow. With few capital expenditures on the horizon, we can continue to focus on hotel operations to drive high absolute RevPAR on industry-leading margins, generating significant EBITDA and free cash flow growth in the coming years. As we have previously noted, the valuations at which we have transacted this year highlight the significant disparity between the public and private valuations of our portfolio. We believe the significant cash flow generation and low leverage profile will drive the closure of this valuation gap while we continue to return capital to our investors via dividends. With that, let me turn it over to Ash to discuss in more detail our financial performance and outlook, including a deeper dive into our credit facility and portfolio profitability. Great. Thanks, Neil. Good morning, everyone. My comments will focus on the impact of our strategic initiatives on our balance sheet metrics, interest expense savings, and our debt maturities, as well as the performance across the portfolio as the third quarter progressed and its impact on our margins and cash flow before closing with an update on our outlook for the fourth quarter and October results. As Neil mentioned, the sales of Hotel Milo Santa Barbara and Pan Pacific Seattle closed earlier this month. Yesterday, we completed the sale of the Courtyard Sunnyvale, the last of the Urban Select Service assets. These closed sales and the pending disposition of The Gate Hotel JFK have materially improved our balance sheet financial flexibility as we close out 2022. Concurrent with the close of the first tranche of the Urban Select Service disposition, the company entered into a new $500 million credit facility on August 4. The facility consists of a $400 million term loan, of which approximately $23 million has been paid down from the sale of the Pan Pacific and an undrawn $100 million revolving line of credit. The facility bears interest at 2.5% over the applicable adjusted term SOFR, and the $500 million credit facility matures in August 2024 and has one 12-month extension option, which will result in an extended maturity to August 2025. The company exercised an existing swap to hedge $300 million of this new term loan at a fixed rate of 3.93%. As of the close of the third quarter, approximately 72% of the company's outstanding debt is either fixed or hedged through various derivative instruments. Despite the rising interest rate environment, the company's third quarter weighted average interest rate of approximately 4.38% across all of our borrowings was down from nearly 4.7% prior to the refinancing, with a weighted average life to maturity of approximately 2.5 years. We've utilized our loan extension on the only mortgage maturing this year on the Hilton Garden Inn New York/Midtown East, and we have no significant maturities due until 2024, at which time a handful of our individual property-level mortgages come due. Based on the improving cash flow and profitability at all of these properties, we envision no issue extending these loans in a favorable fashion. As we move into the fourth quarter, we maintain a significant amount of financial and operational flexibility with a projected cash balance exceeding $225 million and a $100 million undrawn line of credit. With this level of cash on hand, we may also consider paying down or paying off some of our floating rate debt, either from the term loan or property-level mortgages in 2023. With a reduced debt load and significant cash flow from the portfolio, we are on track to bring our net debt to EBITDA to 4x or below, as was our prior stated goal, and project this to stabilize lower into 2023. With that, I'll transition to our performance in the quarter. The company's 26 comparable hotel portfolio achieved RevPAR that was slightly above 2019 levels, the first quarter to surpass 2019 performance since the beginning of the pandemic. As we progressed through the quarter, we saw increased midweek demand driven by business travel. This demand accelerated in September as non-resort weekday ADR increased nearly 27% from August to September to approximately $325, exceeding our non-resort weekend ADRs for the month. As Neil mentioned, each of the portfolios demonstrated significant pricing power in the third quarter as all but one market experienced double-digit ADR growth from 2019. These robust pricing conditions, in tandem with our continued focus on efficient operations and strategic asset management initiatives, resulted in another quarter of very strong profitability as the comparable hotel portfolio generated just under $31 million in EBITDA, an increase of 8.4% to third quarter 2019. This was reflected in our margins as our comparable hotel EBITDA margin of 32% was 249 basis points higher than third quarter 2019. Despite ongoing recovery still taking place in the business transient, small group, and international travel segments, our non-resort portfolio was able to achieve 71 basis points of EBITDA margin growth in the third quarter. In Boston, The Envoy and The Boxer grew EBITDA margin by 327 and 153 basis points respectively, while The Boxer's EBITDA of just under $750,000 was 6.2% greater than the third quarter of 2019. In Washington, D.C., our Ritz-Carlton Georgetown generated 848 basis points of EBITDA margin growth for the quarter as the urban luxury segment continues to show resilience into the fourth quarter. Our New York portfolio generated nearly $10 million in EBITDA and 180 basis points of EBITDA margin growth in the third quarter. Multiple assets in the portfolio were more profitable than pre-pandemic levels this past quarter. Hyatt Union Square generated over $2 million in EBITDA, 4% greater than 2019, with 495 basis points of margin growth to nearly 35%. NU Hotel Brooklyn recorded just below $1 million of EBITDA for the quarter, a gain of over 10% to 2019. EBITDA margin of nearly 51% was up 558 basis points to 2019. In White Plains, our Hyatt House generated EBITDA of approximately $1.5 million, a 25% increase to 2019, with EBITDA margins of 44.7%, an increase of 346 basis points. We were encouraged with the strong performance and continued profitability of our resort markets in the third quarter. In total, our resort portfolio generated over $11 million of EBITDA for the quarter, with EBITDA margins just under 31%, an increase of 704 basis points to 2019. The strong performance has accelerated into October, with our resorts expected to generate over $5 million of EBITDA in the month alone, with EBITDA margins above 35%, over 1,000 basis points higher than 2019. In total, the fourth quarter, our entire resort portfolio is on pace to exceed EBITDA production from the fourth quarter of the record-setting 2021. We are encouraged by our month-to-date figures in October. Our comparable portfolio ADR and RevPAR is currently trending approximately 20% and 8% respectively above October 2019, with the majority of the outperformance in our urban non-resort properties. Looking ahead to the fourth quarter, almost all of our non-resort markets will outproduce the fourth quarter 2019 in RevPAR and profitability. As you may have seen in our recent earnings release, with the closure of the majority of our dispositions and refinancings, along with a more stable outlook, we've reinstated financial guidance for the fourth quarter. We estimate our fourth quarter RevPAR to be between $217 and $227, and adjusted EBITDA to be between $28.2 million and $31.2 million. On a comparable base portfolio basis, we are forecasting EBITDA margins to grow by 200-300 basis points to be between 33% and 34%. We are also forecasting that our fourth quarter adjusted FFO will be between $14.9 million and $17.9 million or $0.32-$0.39 per share. Executing our strategic dispositions has allowed us to rightsize our balance sheet. With ample amount of cash on hand and with no meaningful maturities or capital projects required in the near term, we remain focused on operational performance. Our streamlined portfolio is already outpacing pre-pandemic profitability, and we project further cash flow growth as we pivot to a more near-normal operating environment than we have witnessed over the past three years and with a significant reduction in our interest expense going forward. This should continue to drive our leverage profile lower, allowing us to be more strategic and entrepreneurial as we continue to unlock the value of our portfolio and maximize shareholder value. This concludes my portion of the call. Operator, we're happy to address any additional questions that the participants may have. As a reminder, if you'd like to register an audio question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two, and please ensure you're unmuted when speaking. Our first question comes from Michael Bellisario of Baird. Michael, please go ahead. Thanks. Good morning, everyone. Good morning. Morning, Mike. Just wanna go back to the fourth quarter guidance. Thanks for the commentary on October. Can you maybe help us understand and I guess maybe what's embedded in the 4Q outlook for November and December, particularly on the top line relative to 2019 levels, and then where you're seeing particular pockets of strength around the holidays in those two months? Sure, Mike. Let me start. So, you know, as I mentioned for October, we are seeing rates that are a little over 20% above 2019. Overall RevPAR, that is, you know, right around 8% above 2019. Occupancies for the comparable portfolio are just a little around 1,000 basis points lower than 2019. With that mix shift, we are seeing very, very healthy EBITDA trends in October. As we look into November and December, I think as we would expect, you know, you start seeing that the results aren't going to be as strong from a top line in November and December. October is the best month of the quarter. We're still seeing very healthy growth both in our urban markets as well as we see continued strong growth and forward bookings at our resort properties. I would expect that, you know, based on our forward guidance, our top lines will be in the mid-single digit growth rates for both November and December for the comparable portfolio, probably slightly below October, but still, you know, somewhere in that 5%-7% range. Got it. That's helpful. Maybe a clarification there. On the comparable 2019 metrics, you talk about a $194 RevPAR in 4Q 2019. I assume that's not comparable to the guidance you gave because the guidance is for 2023 hotels where the 194 is for 2026, correct? Yes, that is correct. Our guidance is for the comparable portfolio of 23 hotels. Got it. That's helpful. Last one for me, just maybe for Neil on corporate negotiated rates, what you're hearing from HHM and kind of what expectations are for your properties as you look out to 2023 on the business transient side. You know, I think we're still in the middle of kind of operating plans and budgets and the finalization of RFPs. Like, the kind of regularity of that calendar has been disrupted through the pandemic and is starting to find its kind of normal footing and normal ground, but it's still a little bit early to comment on next year's pricing. What we have seen across the last several months has been a significant, meaningful pickup in large corporate demand in each of our urban gateway markets. It's been. I think we started talking about it probably in the second quarter that we were starting to see the return of pharma and consulting and technology en masse in New York and Boston. It was a little slower to return to Seattle, Washington, Philadelphia. By October, we're now seeing that really hitting on all cylinders, where we're getting very strong locally negotiated rate. Utilization is still a question for next year at what level, but rates have been at higher than 19 levels for the fourth quarter in New York and most of our urban markets. We are expecting more LNR contribution, locally negotiated rate corporate contribution than we did in the fourth quarter of 2019. It is very robust. The trend is strong, but still just a little bit early to comment on 2023. Fair enough. Thank you. Our next question comes from Dori Kesten of Wells Fargo. Dori, please go ahead. Thanks. Good morning. Given that this is the first quarter you've provided some guidance in a few years, can you just tell us what the relationship between your monthly budgets versus actual results have been of late? Are you seeing it tighten? Dori, absolutely. I think that, you know, after the first quarter of this year, the first quarter, as you remember, was just so affected by Omicron and continued shutdowns from COVID and other issues. We have been tracking very close to our internal budget on a portfolio-wide basis for the second quarter and for the third quarter. As you noted, lots of activity in the portfolio, very difficult to provide guidance when we have, you know, almost our entire debt stack being refinanced, as well as all of the disposition activity. With the closing of almost all of these assets now, we only have The Gate Hotel JFK remaining. That's sort of we're looking at closing in the next few days, on that asset, along with just continuing to track very close to our internal financial forecast. We thought it was an appropriate time to reinstate guidance. Okay. Your more leisure-heavy markets, how have rate books trended over the last few months when you look out to the Thanksgiving to New Year's period? You know, for Thanksgiving and New Year's, in South Florida, very strong. Miami Beach, Coconut Grove, Parrot Key, all are pacing well ahead for the fourth quarter versus 2021 as well as versus 2019 by a huge margin. Miami Beach and Coconut Grove are clearly the big outperformers there as we look on a day-by-day basis. I think we're probably a little more vulnerable to a deceleration in kind of RevPAR growth in Parrot Key in Key West. Just it's a little bit more of a dedicated resort destination versus Miami Beach, which has events and emerging kind of commercial base, convention calendars, and just a multiplicity and diversity of demand that is allowing for continued rate and occupancy growth. As we look around at the rest of our resort portfolio, which includes the Annapolis Waterfront Hotel. I mentioned some things in our prepared remarks, but pace is very strong going into fourth quarter and into the new year. Those are seasonally low periods for the hotel, but we're looking to perform better than we have for the last several years. In other parts of our resort portfolio on the West Coast, we're continuing to see very strong at The Sanctuary Beach Resort, very strong ADR pace for our outlook for the next several months. On occupancy, it's probably, you know, we're at kind of a very even level of pace to pre-pandemic levels. The resorts are generally holding up very well, and particularly Miami Beach and Miami. The big story is really the urban recovery, and that's where we're seeing the leaps and bounds kind of growth. Okay. Thank you. Our next question comes from Aryeh Klein of BMO Capital Markets. Ari, the line is yours. Thanks. You mentioned the flexibility, the financial flexibility that you have. How are you thinking about the potential to maybe be acquisitive and balancing that with potentially paying down some debt? What are you seeing from a hotel pricing standpoint, given the recent market rate? Yeah. You know, Aryeh, I can get us started. I think the transactions market has clearly been significantly impacted by the credit market. You know, despite hotels performing better week-over-week, month-over-month, the trailing twelve improving every day, there has been a nearly kind of, you know, like a really major stop to transactions across this summer. That said, there are still transactions happening. As we've demonstrated, we were able to transact on these two assets without any kind of discount or any other kind of acknowledgment of where the world is at. I think there is a view among investors that for special, unique opportunities, it's worth, you know, kind of over-equitizing deals. It's the few and far between. Across the next few months, we will hear about several other luxury resorts trading at very attractive kind of $1 million+ a key, in some cases $2 million+ a key. They are exceptional, very unique assets that are getting done. The more kind of en masse transactions market, more commodity-oriented assets or assets that have cash, you know, kind of disrupted value add kinds of opportunities. Those are all kind of stopped right now. The financing market, you know, we'll see when it improves, and I think that will be the kind of big next catalyst for the transactions market to improve. There are. It's been slow, is the main point. As we look at acquisition opportunities, to your question, we're still not seeing a major change in sellers' expectations on prices. I think owing to just how I started, that performance continues to get better month-over-month. Unless there is a forced seller for some reason, a debt maturity, a swap or cap extinguishment, a major renovation required, we're not seeing a lot of sellers reduce their pricing expectations. In that environment, without a major change in pricing, we are not seeing anything attractive enough to really lean in on the acquisitions front. We do have the financial flexibility to pay down debt, to pay down preferreds, if that made economic sense. We have the ability to increase our dividends, and we have the ability to keep just more cash on hand for a very uncertain environment. We feel very good. In this highly uncertain environment, it's good to have flexibility, and to not be in a, you know, rush to do anything. I think we've delivered on a lot of asset sales. We've reduced debt to a level that our leverage profile is very attractive. At this stage, for the next quarter or two, we're just going to focus on the internal portfolio and driving cash flow. Thanks. Then just there's been lots of progress on the margin front. You're about 250 basis points higher in the quarter. How are you thinking about that next year, where the results will presumably be driven more by occupancy rather than rate? You know, the worry, when we look out into 2023, Aryeh, one thing we have to remember is just how much of this portfolio was impacted in the first half of the year. I mean, like, our New York portfolio was running 40% for the first quarter at, you know, much lower rates. Most of our business markets really didn't start turning the corner until May or June of this year, and we're still somewhat disrupted. You know, we think that what we're seeing in the third quarter, fourth quarter is just, you know, very strong pricing power. Our staffing levels are around 75%-80%, which, you know, could probably go a little bit higher as occupancy grows. With that kind of pricing, we still don't think that we will be pushing to pre-pandemic occupancies in 2023 or 2024. We like the mix shift the way it is. We see a lot of room for margin growth going into 2023. Got it. Thanks for the color. Our next question comes from Tyler Batory of Oppenheimer. Tyler, the line is yours. Good morning. This is Jonathan on for Tyler Batory. Thanks for taking our questions. First one from me, somewhat of a follow-up to the last question, but understanding you guys haven't given guidance for 2023, can you help us walk through your thinking on your big picture, high level, what could accelerate further or potentially decelerate from the trend lines that we've seen in the third quarter and so far in the early fourth quarter? Just overall, how you see things moving through the year, again, at a high level. Why don't you get started, Ash? Yeah. Good morning, Jonathan. I think as we look into 2023, I mean, we will be providing guidance in, you know, February when we do our fourth quarter call. I think as we sit here today, we see that the first half of the year, and especially the first quarter, we're going to see significant outsized growth to 2022. We were very affected in our urban markets with Omicron and, you know, just travel disruption. Like Shah said, it's gonna be occupancy rate kind of across the board in all of our markets. I would envision that, you know, we get a little bit more normalized comparable outlook for the third and fourth quarters of next year. You know, but at the same time, we are probably expecting, you know, still expecting significant growth in our urban portfolio, in our luxury portfolio. In our resort markets, I think it's going to be, you know, still healthier trends from an ADR perspective than 2022, but we wouldn't see the type of growth that we would envision at our urban non-resort properties. Thank you for all the color. Switching gears, multi-part question on the common dividends. Any additional details you can share there in terms of what factors were contributing to that decision, why you think that level is appropriate? I'm also interested in your perspective on potential payout ratios going forward as well. You know, how do you think about the right payout ratio or the right level of quarterly payment today versus pre-COVID, you know, given all the movement in the portfolio over the last year? Sure. You know, the decision to reinstate the dividend, it was partly due to, as you've seen in our quarterly release, we generated about $170 million of taxable gains from the sales that would go up, somewhat from the sales of Hotel Milo and the others, for the fourth quarter. In order to be in compliance with our REIT tests, you know, we will be We did have to pay a dividend for this year. We thought that starting a quarterly made sense as we are seeing significant cash flow growth from all of our refinancing efforts as well. As Neil had mentioned, we do plan to pay a special dividend this year. The range that we had quoted before of between $0.25 and $0.50 a quarter still holds until the board makes any other decisions in the fourth quarter. We do think it'll be closer to the high end of that range at this time. You know, that would be a decision that the board makes based on our fourth quarter outlook at the time as well as our 2023 outlook in mid-December. I think that going forward, our payout ratios will adjust them, but it will probably, you know, if you think about our EBITDA forecast and our FFO forecast for this year, you know, and our payout ratios, they would be very low, kind of a, you know, I think they would come in around 20% or so. I think they would be higher going forward, but we just need to see a little bit more stable operating environment to really start talking about raising the quarterly dividend. Okay. Got it. Understood. Thank you for all the details. That's all for now. Our next question comes from Bryan Maher of B. Riley Securities. Brian, please go ahead. Good morning. Maybe picking up a little bit off of Aryeh's questioning on the transaction market and, you know, some big picture stuff. Clearly, you guys have made some great progress in selling assets and delevering. What is too small of a REIT? I mean, you're getting smaller now. It doesn't seem like you're gonna be able to go on offense, you know, anytime real soon. You know, what are you thinking about the portfolio size over the next couple of years? Maybe any thoughts on divesting the West Coast and just focusing on Miami through Boston. Can you give us some big picture thoughts on where this portfolio is going? Sure, Bryan. You know, Bryan, I think across the pandemic, you know, our strategic plan, if you will, or our goals and our strategy was very much aligned on creating liquidity, increasing financial flexibility, and doing so in a way that wouldn't impair long-term value for this portfolio. We've leaned in a highly disrupted environment where we're trading at different times across this last couple of years. We've traded at 70%, 80% discounts to NAV. We're maybe back to 30%, 40% discounts now. But really meaningful discounts. In that environment, it seemed clear as day that the lowest cost of capital is to sell your most stabilized hotels, the hotels that you have concerns about growing at the same rate as the best hotels in your portfolio. Hotels that have capital requirements that will not only disrupt cash flows, but create some uncertainty about their long-term value creation opportunity. We were able to, in 2021 and 2022, sell hotels that we felt were effectively non-core to our portfolio. We've been able to do that. We're now at a point where we have a healthy leverage profile. We have cash on hand, and we have the ability to be opportunistic, both on the buy side as well as on the sell side. We are today in perhaps, you know, another level of kind of peak uncertainty in the world again. I think we all hope that that will normalize across the next couple of quarters and help us all kind of decide on strategic direction moving forward at that point. Right now, we're still in a period of great uncertainty, so we're not ready to have a strict plan on what our portfolio is going to look like. I think, you know, what you've seen us sell has been hotels that required capital requirements or weren't truly differentiated. Where we are today in our portfolio, if you see our positions in each of our markets, they are our luxury and lifestyle hotels that are kind of best in class and have been able to drive significant ADR growth because they are on trend for where today's market is. We've mentioned that New York City remains a market that we have an outsized exposure to. Now, that's going to serve us very well in the third. As it did in the third quarter, it will in the fourth quarter. I think its performance versus Q1 and Q2, just the comps for those markets are going to be so significant or so easy. I think we have a really good tailwind in New York. I think that's a market that we will be open-minded and opportunistic in selling assets as the market pricing returns there. I think that's the only place I would say, Bryan, that we're, you know, still listening to inbound offers, you know, actively. But we think it's still a couple of quarters away, for that recovery. And we feel comfortable with where the company's at right now. You said how small is small? I think, you know, you can't make that call in the middle of an environment like this. I think we've across the last two to three years, we've reduced our SG&A by nearly, I think, 20%-25% versus pre-pandemic levels. We've right-sized that side of the house as we've sold about 30%-35% of our pre-pandemic EBITDA. We're, you know, you can't make it in lockstep all the time, but I think we've done a good job of aligning the organization with the scale of the company. I'll leave it at that, Brian. Thanks. Appreciate those comments. Our next question comes from Bill Crow of Raymond James. Bill, please go ahead. Hey, good morning, guys. Congratulations on all the hard work to achieve over the last quarter or two. Question, if you were just simply to bucket your portfolio into two, which is effectively what you've done and the Street is doing, and you think about the South Florida portfolio, do you think it's possible that ADR could be flat or negative next year given the difficult comps that we have from this year and last year? You know, Bill, if you divide it like you're suggesting right now, kind of like South Florida versus the Northeast. Yep We don't think so. Because in South Florida, like our South Florida portfolio includes Miami Beach and Coconut Grove, which we believe have positive pricing power and occupancy growth ahead in 2023, based on convention calendars, based on pace, based on group interest, as well as this emerging commercial sector in the marketplace. Where we feel a little bit more sensitive is more of a pure resort market like Key West. Yeah. Even in Key West, as we go into fourth, first, and second quarter, which is kind of peak periods for this marketplace, right now, we are pacing very well on, particularly on ADR well ahead, but on occupancy as well. Right now, I think, you know, where that vulnerability, I think, lies for kind of pure resorts, which we don't have that many of really, 'cause if you think of Annapolis Waterfront, you know, it has a mix of demand generators. The Mystic Marriott Hotel & Spa in Connecticut has a mix of demand generators. If you take like Key West and Sanctuary on Monterey, I think the vulnerability there is in seasonally slow periods. That's where maybe we benefited from the work from home dynamic, and people were occupying these hotels at times that their bosses hoped they were elsewhere. Understood For us, if you divide it that way, it's really South Florida is still a market that we're expecting strong performance in the coming year. Yeah, that's helpful. I just Bill, how we generally think of it as. Oh, no, I'm sorry. Go ahead. No, I was just gonna say, how we often divide the portfolio is kinda urban resort, you know. That would just broaden it beyond Miami and Key West. As Ash mentioned, you know, we do expect resorts to moderate. 60%-70% of our portfolio is urban, and Q1 and Q2 was highly disrupted by Omicron. We're gonna have 1,000, 1,500, maybe even 2,000 basis points of occupancy growth across those quarters. That's what gives us some good confidence going into next year. It's because of what our portfolio looks like. Yeah. I think one of the questions that Brian threw in there that I'm not sure got answered, but I had the same question, which I think you're down to what, one asset or two assets on the West Coast now, with the sales. Is there a reason to keep one asset that, you know, given your focus on G&A reduction and things like that, does it make sense to have one asset on the West Coast? We have two assets. We have The Ambrose Hotel, and we have The Sanctuary Beach Resort. Yep The Sanctuary Beach Resort in Monterey. I don't think, like, we're not in a, you know, a particular rush because it's so hard to kind of operate them or oversee them. It'll really be like our other assets in our portfolio, like, can we achieve NAV by selling it today? That would be more of the driver than the State of California, or the distance of it. We are, you know, we're always opportunistic, but it's really based on pricing more than based on geography right now. Great. All right. Appreciate it. Thanks. Our next question comes from Chris Woronka of Deutsche Bank. Chris, please go ahead. Hey, good morning, guys. Thanks for all the details so far. I guess I wanted to ask about the hurricane impact, insofar as, you know, you mentioned, I think Q4 impact in both Key West and Miami. I guess we thought maybe some of that Key West just shifts over to Miami. Is that not what you guys are expecting? Like, you mean from like the Hurricane Ian impact or? Yeah. Thinking that people with reservations in Key West might just move over to Miami, which, you know, doesn't have much impact there. Yeah, no, unfortunately, like when the hurricane was coming, you know, no one knew what was gonna happen. There was fear that it was gonna hit Miami and Key West. We had a major group cancel, like, not cancellation, but like in the middle of their experience at the Coconut Grove, they spent two days, but then they left midway through. Folks in Key West that had bookings in Key West canceled. You know, if they had them for late September or early October, they were just pushing off travel. You know, we thought maybe we'll get a little bit of benefit from after the hurricane happened or once it was clear it's not coming to Miami, Key West, it's going to the West Coast of Florida, that we would get some demand that was planning to go to the West Coast would come to the East Coast. We did get, like, little bits and bobs there, but it wasn't that significant. At the Ritz-Carlton Coconut Grove, I think we're still getting that, like, because the Ritz-Carlton, Naples is closed right now, and there's so much impact on the West Coast. We're getting a lot of group, but it's not that significant. So I think it was just first couple of weeks, we lost $500,000-$700,000 from hurricane impact. Did we get anything back the rest of the month? Probably a little bit here and there, but not much. We're grateful that we weren't impacted by the hurricane physically, and disruption, kind of customers being very fearful of the market and things. We feel good about it, but it did have an impact, Chris. Okay, fair enough. Second question is, you know, you talk a lot about recovery, really starting to ramp up more in the urban markets, which kinda makes sense. If we look at urban rates versus resort rates, both comparable to 2019, and realizing you guys have more, a little bit more select service urban than maybe some of your peers. There doesn't seem to be an expectation that urban gets up 40% in rate, right? Is that an affordability issue for some? Is it a mix issue? Just trying to maybe put some boundaries around how good urban rates can get when they peak out, whether that's next year or some other time. Yeah, I think that's fair, Chris. You know, we're looking at rate growth in the fourth quarter. As I mentioned, you know, October is up 20% ADR for the month, but that is still, you know, it's still double digits in the urban markets, but it's like over 25% in the resort markets. We don't have a view that our urban properties will be up in ADR 30%, 40% in the next year. I think that's what we've been seeing in the resort properties since the beginning of this pandemic. We do think that there's going to be healthy ADR growth into next year, but no, you know, we're not forecasting 30%, 40% type of growth. Right. We do see, you know, you'll have months easily up 10%, 20%, 25% even sometimes. I think it's, yeah, it's lower double-digit kind of growth, like 10%-15% kind of ADR growth. And for our portfolio, it is. You brought up a good point. It's our New York City portfolio is still primarily select service. The exceptions there are the Hyatt Union Square and the NU Hotel Brooklyn. The experience in these major cities is very different in urban markets. Like, the luxury and lifestyle is able to drive very meaningful ADR growth. Kind of over 20%. If you look at a Ritz-Carlton, Georgetown or The Envoy Hotel, Boston or the Hyatt Union Square, those hotels can drive very meaningful ADR growth because they are capturing this leisure trend, that is out there. And so it is. It's different market by market for us. You're right, it's not the same level of growth, but still very meaningful. Yeah. Yeah, for sure. Okay. Very helpful. Thanks, guys. Our next question comes from Anthony Powell of Barclays. Anthony, please go ahead. Hi, good morning. Maybe a follow-up on the urban rate question. What role do compression nights play in this? I mean, I think you've seen the rate growth this year without, I guess, any compression night that's kind of typically defined. Do you really need compression nights to come back next year or the year after to really get urban rates up to those kind of like levels we're seeing on the resort side? You know, Anthony, I think that it's just a different dynamic, right? Like, we are still running high-$70s, low-$80s type of rates in a lot of these markets in September, October. We're getting healthy rate growth. To envision, like, New York for us traditionally ran between 94%-95% occupancy, you know, once you get past January or February, and then we still couldn't get rate growth in a market like New York because of just new supply, different rate strategies. You know, people kind of employing this heads in beds metric. I think the entire industry has just moved away from that and looked at it as, I would rather take a little bit lower occupancy. I don't need to run 95%. I don't need to run 100%. My costs have increased through the pandemic and, you know, I'm just gonna be more vigilant on keeping rates high. I don't know if we could look at that and say, "But they're gonna be 40% higher or 30% higher," the way resorts were. I still think we'll see healthy trends. I just think the mix shift is going to be a lot different going forward, which is going to drive, you know, kind of 2x type of flow throughs on RevPAR growth. Because you're just going to have less occupancy, higher rates, much better margins. It's gonna lead to significant cash flow without seeing 30% rate growth. All right. Thanks. Maybe one more. I mean, you just talked about, I guess, lifestyle luxury doing a bit better in urban markets. Another one of your peers said the same thing. Are you starting to see that maybe reflected in the transaction environment or do you expect to see that? Do brands play a role here? Are brands more or less effective in driving this trend or is it really just all about location and hotel reputation? I do think it's more about hotel and reputation and location. Size and experience levels is also a very big driver of it. I think it's a benefit of kind of leisure demand or maybe bleisure demand, like this kind of new environment for folks that have the flexibility of where to work. They also have the ability to choose well. They choose where they want to stay and where they're going to have their small group meeting or their retreat. That has been a key driver in our portfolio, and it's something that we've been working on, frankly, you know, for even well before the pandemic in moving our portfolio to more of an experience-oriented, more luxury driven and selling our more commoditized hotels. It is coming true. In the transactions environment, we're still not seeing that many urban transactions. I think what we started seeing first was urban transactions like with cash flow was the kind of beginning part of 2022, late 2021, you started to see deals like that, you know, our urban select portfolio, it had cash flow. It could provide positive leverage. That was something that kind of got major investors motivated to do something in an urban market when there was still so much uncertainty around work from home and around safety and conditions in cities. I would expect that in the coming year, we'll start to see more transactions in the luxury and lifestyle space. I think their cash flow comes a little bit later, but then when it comes, it can really come fast, and that's what we're experiencing right now. The transactions I kind of implied in one of the other questions, there, you know, that I think there are a few trades that'll be announced that are more resort-oriented, but there are some that are a little bit closer to some cities, and they are luxury hotels trading at very big values. So I think we're getting closer to that. I think you also need the international buyer to come back for some of those kinds of transactions, and we are hearing more and more European, Asian, and Middle Eastern investors shopping or talking about shopping for U.S. hotel real estate. So not yet, Anthony, but we expect next year that's where we may see some big transactions. Thank you. We have no further questions on the phone line, so I'll hand back for any closing remarks. No. With no more questions, we'll just take a moment to thank all of you for your time this morning. All of us are gonna be here in the office and available to answer any other questions that you might have, but thank you for your time today. This concludes today's call. Thank you for joining. You may now disconnect your lines.