Greetings, and welcome to the Pebblebrook Hotel Trust Q3 Earnings Conference Call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. If you would like to ask a question, please press star one on your telephone keypad. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Raymond Martz, Chief Financial Officer. Thank you, sir. Please go ahead. Well, thank you, Donna, and good morning, everyone. Welcome to our Q3 2021 Earnings Call and webcast. Joining me today is Jon Bortz, our Chairman and Chief Executive Officer. Before we start, a quick reminder that many of our comments today are considered forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties as described in our SEC filings. Future results could differ materially from those implied by our comments. The forward-looking statements that we make are effective only for today, October 29th, 2021, and we undertake no duty to update them later. We'll discuss non-GAAP financial measures during today's call. We provide reconciliations of these non-GAAP financial measures on our website at pebblebrookhotels.com. Okay, on to the highlights of the Q3. The Q3 marked another important milestone in our recovery from the pandemic. We generated $21.4 million of adjusted funds from operations, which was the Q1 since the pandemic that we produced a positive FFO and represents considerable progress from Q2, when we had negative FFO of $15.6 million and Q1 with negative $55.7 million. Q3 hotel and adjusted EBITDA climbed robustly from the Q2 as well and were driven by significant increases in same-property RevPAR and same-property total revenues, while at the same time, costs were well controlled. Same-property hotel EBITDA rose by 136% to $66.6 million from Q2's $28.3 million. This sequential growth was driven by robust leisure travel, improving group and transient business travel, and an ability to push pricing higher, particularly at our resort properties. Same-property room revenues rose a substantial 51% from the Q2, and same-property ADR rose 10% from Q2, and for the first time exceeded the comparable quarter in 2019, in this case by 3.8%. Same-property total revenues also rose an impressive 47.2% from the Q2, with healthy food and beverage and other ancillary spend growing faster than occupancy. Total group room nights, ADR, and revenues also grew from Q2 to Q3, with room nights and revenues more than doubling, which is a very favorable sign for the return of corporate group demand. The Q3 started strong. July RevPAR improved to down just 31% compared with July 2019, clearly better than June's minus 51.6% comparison to 2019. Leisure demand throughout our portfolio at our resorts and urban hotels increased significantly from June. It was robust and generally not price sensitive. This strengthened demand continued through mid-August until a surge in COVID cases from the Delta variant caused a pause in the recovery. From mid-August through mid-September, we experienced a rise in cancellations in near-term business travel, primarily group for August, September, and October, and softer near-term booking demand as well as higher attrition with many corporate groups who did hold their meetings over this period. As a result of the seasonal slowdown in leisure travel and business demand that did not pick up the slack, same-property RevPAR weakened compared to 2019 for August, which was down 39.4%, and also then September, which was also down 43.4%. September was also negatively impacted by the Jewish holidays, which both fell in the first half of September. Fortunately, as the trend of new COVID cases began declining in mid-September and have been falling for six weeks now, booking trends began to reaccelerate in mid-September, and this improving trend has continued into October. Both transient and group business demand have picked up, with volumes exceeding levels earlier in the year before the Delta variant and associated restrictions were imposed. Corporate transient is returning, led by small and medium-sized businesses, as well as larger companies, including those in banking, consulting, life sciences, medical, entertainment, and music segments, among others. Big tech has also begun to travel but remains slower in its recovery. For us, the most significant improvements in business demand have been in Boston, Los Angeles, Philadelphia, and San Diego. Slower-to-recover markets continue to be San Francisco, Washington, DC, and Chicago, which seems to be 3 to 4 months behind the faster-recovering cities. Leisure demand remains healthy heading into the fall and upcoming holiday season, which should be very good, and our positive expectations are consistent with the strong advanced holiday demand the airlines are reporting. However, we do expect a normal seasonal slowdown in business travel levels in late November and December. Because of these improving trends in business travel demand, in particular October, is performing better than September. We're now forecasting RevPAR to be down between 37% to 38% to October 2019, and October occupancy for our portfolio should hit or come very close to the occupancy level achieved in July. This is not something we would have expected a month ago, which really demonstrates how quickly demand trends can reaccelerate and improve when health concerns related to the pandemic decline or moderate. Considering how strong October is traditionally for business travel, we find this performance a strong indicator of the reacceleration in the travel recovery, especially for business travel. For the Q4, we expect same-property RevPAR and total revenue to be down between 38% and 42% compared with the comparable period in 2019. Now back to our Q3 performance. Same-property revenues of $239.2 million were off 36.3% versus the same period in 2019. This is a significant improvement from the Q2, when same property revenues were down 57.8% versus 2019 and continued the progress from the Q1, which was 74.7% below Q1 2019. Our strongest performance came from our resorts. For our original 8 resorts and Jekyll Island Club Resort for August and September, revenues exceeded Q3 2019 by 9.8%, driven by a whopping 57.1% ADR premium to Q3 2019, which more than offset occupancy that was down just 22.5%. Our resort occupancies would have been higher but for the rooms renovation at Southernmost Resort and the exterior work on the Gulf Tower building at LaPlaya. At our urban hotels, same property revenues were off 50.1% to Q3 2019, driven by same property revenue declines of 50.4%. This illustrates convincing improvement at our urban hotels in the quarter compared with the Q2, when same property revenues were down 68.6% from Q2 2019 and same property RevPAR was down 69.7%. ADR at our urban hotels also improved quarter to quarter from last quarter's -26.1% compared to Q3 2019 to down just 10.8% in the Q3 to 2019. Drill down further on our hotel operating results. Our same property resorts generated $34.6 million of EBITDA, up 45.4% versus 2019. Our hotel EBITDA margins were 41.5% compared with 31.4% in Q3 2019, over 1,000 basis points better. While some of this is a result of some continuing unfilled positions, much of it is due to the significant benefit of a 57.1% or $156 rate premium in ADR to 2019, as well as higher prices for non-room revenues and our new operating models at all of our properties, including our resorts. Our urban hotels generated $29.9 million of EBITDA in Q3 2019, down 70.2% versus Q3 2019. This is substantially better than Q2, when our same property EBITDA was just $2.7 million. Operating expenses at the hotel level were well controlled, and in addition to the room rate improvements versus last year, we took price increases throughout all non-room revenue items. Same property hotel expenses were down in Q3 by 29.5%, representing 81% of the 36% rate of total same property revenue declines. Excluding fixed costs, hotel expenses were down by 32.7% or 90% of the rate of decline of same property revenues. While we continue to have many unfilled positions at our hotels, we made very significant progress in the quarter filling open positions and the cost savings to 2019 represent a superb effort by our property and asset management teams working together to follow up on our new property operating models that are delivering significant efficiencies and productivity gains. At the corporate level, after corporate G&A, we generated $55.3 million of adjusted EBITDA in the Q3. This is a significant increase from the $17.1 million of adjusted EBITDA in Q2, and a negative $25 million of adjusted EBITDA for Q1. Shifting to our capital improvement program, earlier this week, we completed a $15 million comprehensive guest room renovation of our Southernmost Beach Resort in Key West, the last of our resorts to be fully renovated or to re-redeveloped or repositioned. We continue to make progress with our $25 million transformation of Hotel Vitale to 1 Hotel San Francisco. We've experienced some delays due to constraints with the supply chain in receiving FF&E items, so we now expect this renovation to be completed in the Q1 compared to last quarter's expectation at the end of 2021. For all of 2021, we anticipate reinvesting a total of $80 to 90 million in the portfolio, which is in line with our prior annual estimate. Moving to our investment activities, we continue to be active reallocating capital in the portfolio. On September 9th, we sold Villa Florence San Francisco on Union Square for $87.5 million. Since Q1 2020, we have sold seven assets, generating $664 million in proceeds. On September 23rd, we completed the acquisition of the 369-room Margaritaville Beach Resort for $270 million. Just last week, we purchased the 19-room Avalon Bed and Breakfast and the 12-room Duval Gardens in Key West for a combined $20 million. We will be incorporating these two properties into the overall operations of our Southernmost Beach Resort, and we expect significant operating synergies as a result. By providing guests of these two guest houses with access to the higher service levels and amenities of the existing B&Bs at Southernmost and our overall resort, we expect to be able to drive rates dramatically higher than the prior owner. As a result, we anticipate generating an 8% to 12% cash on cash return on this investment after a 4% capital reserve on a forward 12-month basis. We'll obviously narrow this range down as we get deeper into the operations of these properties as part of Southernmost. As a reminder, year to date, we have acquired 2 resorts as well as 2 bed and breakfast guest houses for a combined $384 million of proceeds. Turning to our balance sheet and liquidity, we have approximately $807 million of liquidity after completing our recent property transactions, including roughly $163 million of cash on hand and $644 million available on our unsecured credit facility. We also currently have approximately $210 million of reinvestment proceeds available under our current bank arrangements. We're proud of the tremendous progress we've made fortifying our balance sheet, reducing near-term debt maturities, and lowering our cost of capital through our various preferred refinancings and convertible notes offerings, while also increasing our liquidity. This positions us to take advantage of additional new investment opportunities as they become available. With that, I would now like to turn the call over to Jon. Jon? Hey. Thanks, Ray, and good morning, everyone. I thought I'd focus on what we're currently seeing in our business, how we think the rest of this year is likely to play out, our current expectations for 2022. We'll delve a little deeper into the performance of some of our existing properties and markets, as well as discuss the capital reallocation decisions we've made in the last 18 months. As Ray said, we're certainly very encouraged by the re-acceleration of the recovery we've seen in the last six weeks, particularly as it relates to business travel and group demand. While leisure demand's recovery started early and has grown to robust levels, we all know that getting back to 2019 levels for us requires further recovery in business travel. As we stated last quarter, we believe we should get back to 2019 EBITDA levels before we get to 2019 RevPAR, and we expect to consistently hit or exceed 2019 ADR levels before we get back to 2019 RevPAR. We're very encouraged by the performance of rates in both the industry and our portfolio. We, of course, are aided by our concentration in drive-to resorts, and as Ray said, we're achieving ADRs at our resorts that are dramatically higher than 2019 levels. Some of this is due to a lack of competitive alternatives, like cruises or traveling abroad, or even vacationing in cities. Some of this premium has to do with repositioning resort ADRs to higher levels and a willingness on the part of the consumer to buy up to suites and view rooms and the like. About a third of the premium is due to the transformational redevelopment projects we undertook in the last few years at our resorts, where we substantially reposition them higher in quality, and as a result, higher ADRs are being achieved, generating attractive returns on our redevelopment investments. We believe that a substantial portion of these higher rates at our resorts will be permanent. Most of these higher rates will last at least for the next two or three years, and some portion may turn out to be transitory. In the Q3, we estimate we gained over $50 alone, just in ADR share versus the competitive market properties, with that number accelerating substantially from the Q2. Some of the rate premium at our resorts that historically accommodated a significant group will likely be reduced as that group returns. However, that group will come with significant F&B and other profitable revenues that should more than offset any reduction in our rate premiums. In the Q3, our resorts achieved 9.8% higher total revenues than Q3 2019, even without that group. Room revenues were up 21.9%, and EBITDA was higher by 45.4% or $10.8 million. With rate up so substantially, 57.1%, and occupancy down by 22.5%, EBITDA margin hit 41.5% for our original eight resorts and Jekyll Island Club Resort, which was included in August and September. This is an increase of 1,018 basis points from Q3 2019. EBITDA per key for our resorts for the Q3 alone grew to $17,000. On a run rate basis, including Jekyll and Margaritaville Hollywood Beach Resort for the entire quarter, same property EBITDA for the 10 resorts of $40.5 million was $13.9 million higher than Q3 2019. For all of 2021, we're now forecasting our 8 original resorts to achieve $2.5 million more EBITDA than they earned in 2019, despite being $8 million lower in the Q1 of this year. Including Jekyll Island and Margaritaville Hollywood, which are both now forecasted to end 2021 above 2019 levels, we're forecasting our run rate resort EBITDA to be $6 to 7 million higher than 2019, at $115 to 116 million in total, or roughly $46,700 per key. That's despite the 10-resort portfolio being $10.8 million lower in Q1 versus 2019. That compares to $86.7 million in 2019 for the original 8 resorts. These numbers do not include the 2 B&Bs we just acquired in Key West. Both Jekyll and Margaritaville are also running well above our initial underwriting when we priced those properties for purchase, with Jekyll ahead by over $2 million and Margaritaville ahead by over $5 million. At these forecasts, Jekyll would be a 7.4% cap rate on 2021 NOI, and Margaritaville would be a 6.4% cap rate on 2021 NOI. Both properties look to be up substantially in Q1 2022 based upon business and rates already on the books. We also saw significant improvement in performance in the Q3 at our urban hotels, with occupancies, rates, and RevPAR all rising substantially as compared to the Q2. While some of this improvement can be attributed to meaningful growth in leisure travel, particularly in our urban markets that are drawing significant leisure travel, such as San Diego, Los Angeles, and Boston, much of the improvement is clearly related to the slow but continuing recovery in business travel, both group and transient. In the Q2 this year, group room nights achieved amounted to just 13% of comparable 2019 levels in our portfolio. That improved substantially to 34% in the Q3, and based on business on the books and current cancellation and attrition trends, we expect it to exceed 40% in the Q4. In the Q1 of 2022, group room nights on the books are currently at 62% of Q1 2019 rooms on the books at the same time in 2018, and ADR is currently ahead by 14%. For the year, group revenue pace on the books for 2022 is at 69% of the same time in 2018 for 2019, with ADR ahead by 6%. Of course, what shows up versus what gets canceled will all depend upon what is happening with the virus. We're very encouraged about where we are for 2022, especially the significant rate lift that is on the books. While I mentioned the performances of both Jekyll Island and Margaritaville, I thought I'd provide a little bit more detail. Both resorts had terrific Q3s. We were able to influence the performance of Jekyll Island in the quarter due to our acquisition on July 22, but we can't take any credit for Margaritaville's performance in Q3 due to our late September acquisition. In Q3, Jekyll Island grew RevPAR by 35% over Q3 2019, with ADR increasing by 23% or $58. At Margaritaville, RevPAR climbed 47% in Q3 versus 2019, with ADR increasing a robust 60% or $136. Margaritaville's EBITDA in Q3 increased 131% over Q3 2019, up from $2.1 million to $4.8 million, with EBITDA margin up 1,300 basis points. Jekyll Island's Q3 EBITDA was up 125% over Q3 2019, or $2.5 million versus $1.1 million, with EBITDA margin also up 1,300 basis points. In both cases, these are extraordinary numbers, but ones we expect to substantially exceed as we implement all of our operational changes over the course of the next year, even before any of the capital improvements that we're planning. We're confident that both of these acquisitions will turn out to be fantastic long-term investments. In addition to them being a huge positive uplift to our EBITDA and cash flow in the short to intermediate term as we swapped properties in slower recovery markets for properties in faster recovery markets that also have significant upside from both operational improvements and capital investments. With the Q3 sale of Villa Florence in San Francisco, since the pandemic began, we've sold two older properties in San Francisco and one in New York City, along with some rooftop antennas and the historic Union Station Nashville for a total of $333 million. We've acquired two resorts in the Southeast and two small B&Bs in Key West for a total of $384 million. We're very excited about these swaps and the upside from the new acquisitions. Not only did these transactions reduce our urban concentration and increase our resort concentration, but these trades of San Francisco, New York, and Nashville for Hollywood, Florida, Key West, and the Golden Isles of Georgia increase our leisure mix and reduce our business customer mix. While it might look like we're focused on increasing our resort exposure, as discussed many times in the past, we remain opportunistic investors overall, utilizing risk-adjusted return forecasts and underwriting to determine both sales and acquisitions. How others value properties and what others are willing to pay definitely impacts where and what we ultimately acquire since value is a key component of our risk-adjusted return investing approach. In that vein, over the last few months, we spent significant time evaluating the current values of our existing hotels and total portfolio. As a reminder, the value ranges we determine for each hotel are based upon the transaction market for similar properties in similar condition with similar opportunities and similar locations in the same markets. They're also based upon whether management and flag are available or if the property is encumbered by those contractual arrangements. With the more active transaction market in the last 3 to 4 months, we feel there's enough real market transaction information to now establish true tradable market values. While these values will potentially move significantly and quickly in the next couple of years, we feel comfortable again publishing our overall gross and net asset values for our portfolio. These numbers are included in the updated investment presentation we filed yesterday. We believe that our current net asset value is in the range of $30 per share at the low end, to $35 per share at the high end, and $32.50 at the midpoint. We're happy to discuss this in more detail in the Q&A or in separate conversations over the next few weeks. I thought I'd also touch on the current labor situation and update you on our current assessment of the ongoing margin opportunity in our portfolio as a result of the implementation of new operating models at all of our properties. In the last 6 to 8 weeks, we believe this, the labor situation throughout our portfolio has improved significantly. As expected, as kids went back to school, more people got vaccinated, childcare became more available and enhanced federal unemployment benefits expired. We've seen more of our prior hotel associates coming back to work. With lots of hard work, our property teams have also found more qualified candidates interested and willing to fill open positions. As a result, our properties have made significant progress in filling critical open positions, and many of our properties are in good shape now with a more active pipeline for further hiring. In addition, it seems the H-2B visa program is back up and running, and we expect significant numbers of H-2B qualified workers to aid our seasonal properties like LaPlaya that have historically utilized this program, and Jekyll Island, where we'll be using the program for the first time beginning later this year or early next year. We also believe those current labor pressures we're still experiencing will lessen over time as more workers come back to the labor force as the spread of the virus and cases decrease over time. In general, we've not had to increase wages, but we have made some adjustments here and there. This has been mostly at our resorts that are in markets where either we're no longer where we wanted or needed to be in the market competitively, or where we've repositioned our properties higher through renovations and redevelopments. We want to attract the best of the talent in the market to provide the highest level of service to match our higher rates. Fortunately, our properties are generally at the higher end of their markets and are in a position to not only pay more as necessary, but attract high-quality talent more easily because of the quality of our properties and the ability for associates to earn more money through not just wages and benefits, but higher tips and other gratuities. As you well know, we've all been experiencing increasing levels of supply chain disruptions, including higher costs for many commodities like food and beverages, but also operating supplies and some of our services. We've been able to successfully implement some very significant price increases throughout our portfolio for items such as food and beverage offerings, both in our outlets and through banquets and catering, as well as charges for parking, event venues, audio-visual equipment and services, resort and urban amenity fees, spa treatments, club dues, and for other recreational activities. These increases have ranged from 5% at the low end to as high as 25% at the high end, and 15% is about average throughout the portfolio. We've experienced little to no pushback on pricing increases so far. It seems both the leisure customer and the business customer are in great financial shape, with plenty of discretionary income or high profits. With prices increasing for all sorts of goods and services, our customers have been accepting of the increases. This pricing flexibility and customer acceptance should allow us to continue to be able to grow our pre-pandemic margins by 100 to 200 basis points based upon the restructured operating models developed during the pandemic, which utilize more cross-training, more efficient labor scheduling tools, and more technology among many efforts to continue our never-ending effort to increase productivity and become a more efficient and profitable business. In addition, Curator has now completed over 60 preferred vendor arrangements with a preferred group of individual product and service providers in our industry. As we continue to implement these arrangements throughout our portfolio, we're further reducing our overall cost of operations as we take advantage of the economies of scale being achieved by Curator. We expect this number of arrangements to increase to over 80 before the end of the year with further opportunities for savings as a result. As we get much closer to 2022, we're focused strategically on the year being a very strong recovery year overall. Groups should be very healthy as we believe there's a great deal of pent-up demand. We also think leisure will continue to be robust with pent-up demand for vacations and getaways, while outbound international travel probably remains more limited. We're very encouraged by the decision to reopen our country in the next couple of weeks to international travelers and visitors. We believe there is significant pent-up inbound demand that will aid both our resorts and our urban markets. Certainly, the reports from the airlines about ticket sales to international inbound customers are very encouraging. Taken together, this means we don't expect rate discounting in 2022. Again, this is with the obvious caveat that we get to relatively normal behavior by the end of this year, and it remains relatively normal next year. As it relates to the few remaining redevelopment projects we deferred due to the pandemic, we're continuing to complete plans and permitting, and we'll likely pull the trigger on these few remaining projects as soon as the approvals are complete and it's the right time of year to commence them. All of our redevelopments and transformations, including the large number in the last few years, and all of the current and upcoming projects, will provide very significant upside for our portfolio over the next few years as the recovery rolls forward. We're already achieving these returns at our repositioned resorts, where demand is, in many cases, already recovered. Importantly, the vast majority of the dollars for these projects has already been invested, but the benefits have, for the most part, not yet been achieved but should be as demand recovers. Finally, as demonstrated by our acquisitions to date, we believe we have significant competitive advantages in pursuing new investment opportunities as they arise. These include our ability to operate our properties more efficiently than the vast majority of buyers, the additional cost savings from the economies of scale generated by Curator, our unique strength in redevelopments, transformations, and independent or small brand lifestyle hotels, our vast number of operator relationships, and our high profile and very positive reputation in the industry. We look forward to many more opportunities to come. With that, we'd now like to move to the Q&A portion of our call. Hey, Donna, you may now proceed. Thank you. The floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. Confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. In the interest of time, we do ask that you please limit yourself to one question and one follow-up. Again, that is star one to register a question at this time. Our first question is coming from Dori Kesten of Wells Fargo. Please go ahead. Thanks. Good morning, everyone. I appreciate the top-line guide for Q4, but I'm just trying to think through how incremental labor will hit the bottom line. Can you put the margin shift from July to September that you saw into some historic context? I believe in 2019, margins contracted about 600 basis points, Q3 to Q4. Sure. Well, it's a lot of difficult assumptions here, Dori, because we also have a pretty good handle, obviously, in October here. We're month three here. November and December, we're going to see how that looks like with demand. You know, historically, as you know, as we get into the late holiday season after mid-November, business travel tends to slow down and shut down through the end of the year this year, but we think it will be very similar. We expect a little bit stronger resort side. But you should expect, you know, margins overall. First of all, the portfolio is a little different than prior years. We have a larger resort component. That's one. It's ultimately what will come down to overall the demand. We're not focused, you know, just on margins. We're focused on how do we get the profit per key. You should expect that October should be, you know, better than September. November is probably on a kind of profit side closer to the kind of September area range. In December, we'll see, but likely December is usually always softer than November, even with our current portfolio. Dori, I guess you know the way. Look, we don't. If we had a good feel for both margins and the bottom line operating result, we would have provided that guidance, but we don't really have a great view on that at this point. We don't know how many more people will get hired in the next couple of months as we continue to fill open positions. But one of the things you could use is take a look at the total revenue decline from month-to-month. You know, on the way up, I think we were probably averaging about 50% of additional revenue flowing to the bottom line. In the seasonal slowdown, particularly as we continue to add staffing, it's probably more like 75% of the decline in revenue will help hit bottom line margins. You know, I think that's a reasonable guess. It could be off by as much as a third. I you know, I'm just letting you know and provide a contingency that it's hard to forecast at this point in time. Gotcha. Can you walk through what you're seeing being marketed for sale or off market? We've heard more city center hotels are coming to market in the near term versus a prior weighting towards more resorts. I guess it's all relative. The activity on the resort side has brought out a lot more resorts. Lots of resort areas that, you know, we weren't familiar with, just like Jekyll Island in Georgia. There are additional properties in the cities now coming to market. It's, I think, a slower set of offerings, and there's probably a more limited number out there. As you know, we've sold a few properties in urban markets over the course of the last six months. I think part of the benefit of our offerings were that there was limited product in those markets and certainly our properties were viewed pretty favorably. Okay, thanks. Thanks, Dori. Thank you. Our next question is coming from Smedes Rose of Citi. Please go ahead. Hi, good morning. I wanted to ask you sort of two quick questions. First of all, are you seeing any difference between your branded hotel performance versus the non-branded? I know branded is a small, smaller piece, but maybe just some thoughts around that. Could you also just maybe give a little more detail about how you're seeing the recovery in San Francisco and how you think that market could kind of perform over the next, you know, several quarters? Sure. So, you know, over the course of the recovery, our recovery's been led by our independent lifestyle properties and some of our branded lifestyle properties. Not surprisingly, some of the larger branded properties like our Westin were a little slower to recover. The independent properties have a lot more appeal to the leisure guest, which has been, as we all know, the driving force behind the major part of the recovery so far. It shouldn't be surprising at all that that's occurred. I think as it relates to San Francisco, it's just slower to recover. The big tech companies have been slower to return to office. We all see the microdata that's put out by some of the companies that provide the security and check-in services at office buildings. It's definitely been slower to recover in that market. The good news is it has been recovering. The caseloads in San Francisco are the lowest in the country, frankly. We do expect, particularly with international travel opening up again to see both some leisure and business travel recovery pick up. San Francisco, like Chicago and DC, have struggled without major conventions in the market and without the major part of the corporate recovery in the case of San Francisco and Chicago, and in DC, the federal government, which hasn't come back to their offices yet. Thank you. Thank you. Our next question is coming from Rich Hightower of Evercore. Please go ahead. Hey, good morning, guys. Thanks for all the detail and the prepared comments. I wanna drill down on the NAV analysis for a minute here. Maybe just give us a sense of, you know, look, obviously EBITDA at the resorts is surpassing 2019 levels. It looks like the NAV here is geared towards 2019 actuals across the board. What's the chance, what's the probability, let's say, that some of your urban markets or sort of non-resort hotels don't get back to that level of performance for the foreseeable future? And then, you know, secondly, does it even matter? You know, are buyers underwriting that either way, whether we believe it or not? On the cap rate side, you know, with depressed income levels, obviously cap rates don't mean a whole lot going in, but is there sort of an IRR target that these would suggest, buyers are underwriting to over a longer period of time? Thanks. Yeah. I'm glad you asked this question because it sort of gets to the heart of how we underwrite these values. These are not theoretical values. We didn't use cap rates to come up with these values. We used market transactions that are occurring. What it tells you is, you know, how. You know, we don't know all the variables other buyers are using. You know, when we look at buying, we're looking at, you know, forward cash flows. You know, unlike properties that have long-term leases and, you know, where cap rates are sort of the methodology or the dominant methodology, it's not the case in the kind of assets that we own and buy and sell. It really is based upon the buyer's view of future cash flows, their required IRRs. You know, when we buy, we look at five-year cash on cash, we look at fifth-year cash on cash, we look at discount to replacement costs, which, you know, has an impact on risk in the market. We look at other risks in the market, whether it be legislative, whether it be union, whether it be brand, or encumbrance, that impacts control and value. We suspect other buyers are looking at similar items. These are numbers not driven by cap rates, but driven by how folks are underwriting in the market. I mean, it's not just 19, as you pointed out and we've said. Our resorts are performing well above 2019 levels. We've done our best at kind of estimating the value improvements in those assets, but it's a hard thing to do. I mean, I'll give you an example, Rich. I mean, LaPlaya in Naples is gonna do 50% more EBITDA in 2021 than in 2019. Now, we've put significant money into that asset, repositioning it up. So how somebody would underwrite how much of the improvement is permanent, maybe all of it is, maybe only a portion is. It'll vary by buyer and sort of their view on what the cyclical and secular trends are for the business there. But that property is doing it without the substantial group business that it normally has, and the profitability generated by that. We've sold, I don't know, $6 million of non-refundable memberships at the beach club there, and we've averaged about $2 to 2.5 million of net revenue from the beach club that's not in these numbers. So again, how does somebody value that? We take our best shot. We try to factor all these things in. It's not just looking at 2019, it's looking at how it's recovering. It's looking at how buyers are expecting these markets and these properties to recover. And they're all going to be wrong. We're all going to be wrong in one direction or the other, right? Yeah. It's a much more complicated process, and the cap rates are just a result of all of those factors. Right. I guess it's- We put them against 19 numbers just because those are the only stable numbers. We could have put them against 2021 resort numbers, as an example, to show you some of the differences. It was just simpler to do the whole portfolio that way. I get it. Either way, the 30 to 35 doesn't necessarily represent a liquidation value that Pebblebrook would be comfortable with in reality, you know, spot and time today. I mean, it's just kind of a helpful guidepost, I think, more than anything. Is that accurate? It's definitely a spot in time. These numbers have gone up substantially in the last six months, not surprisingly, in our own internal calculations. We didn't feel like we had enough transactions, actual transactions in the market, to feel comfortable putting these numbers out publicly. They're gonna continue to move, based upon performance and how the recoveries play out, and how buyer perspectives change, and on the market, and how much product becomes available on the market. There's just a lot of variables, obviously, that can impact values. All right. Thanks, Jon. I'll hop back in the queue. Sure. Thank you. Our next question is coming from Shaun Kelley of Bank of America. Please go ahead. Hey, good morning, everyone. Jon or Raymond, you know, you did give some color throughout. We're hoping you could just drill a little deeper on the midweek occupancy improvement that you're seeing throughout the portfolio so far in October. Yeah, I think you said the occupancy is already back to July-type levels. Sounds encouraging, but could you just give a little bit more color on markets and industries that might be driving that and a little bit of the behavior you're seeing there? Sure. I mean, we've all seen the improvement in a lot of the microdata, and I know, you know, BofA publishes a lot of it. In some cases actually accumulates some of it as well. If we look at October as an example for weekdays through October 24, the portfolio for weekdays is running at 50.7% and a rate of $249. You know, that would compare to September weekdays as an example, that ran 43.3% for the full month at a rate of $244. Again, continuing improvement in both rate and occupancy. If you go back to July, which was the peak so far in the recovery, we ran weekdays just under 53% and at a $261 rate, which obviously was dramatically impacted by the much higher resort rate. Resort rate for weekdays ran $424 for our resorts, and for our urban properties ran $218 for weekdays in July. You know, for urban weekdays in October month to date, we're running at $235. You can see that's up from the $218 in July and represents continuing progress we've made on rates and as business travel come back. I would say, you know, from an industry perspective, Shaun, I mean, it's fairly comprehensive across the board. We get reports weekly with a lot of comments from our teams. We ask them to provide comments about which of their corporate accounts are returning, even if it's one or two or three rooms, and then track that over the course of months. We've just seen a lot more of the typical corporate names in each of our markets, a lot more of our major accounts, albeit at much lower volumes, but definitely traveling. A lot of volume from consulting, which has come back, you know, project business around the country, medical, pharmaceutical, biomedical and life sciences. L.A. is benefiting from entertainment, production, music, concerts starting back up. You know, music groups come to L.A. and practice before they go out on tour, as an example. They come and their teams stay for weeks at a time before they go out on tour. Fashion is returning, commercials being made. I mean, where we haven't seen it is just volume out of a lot of the larger accounts, which would include financial services, albeit a lot of those are on the road, again. All of our banks in our line, 18 of them, are all traveling again, even though they're not back at the office yet. That divergence is a positive, you know. While we do think back to the office will influence it because we think if you're in your office, you're likely to have guests come visit you and invite people to come visit you. It's definitely they've definitely been disconnected, so in a positive way. Great. Maybe just as my follow-up. You know, there's been some increasing delineation in the industry between small corporate and big corporate, where we started to see, you know, I think small and medium-sized enterprises getting back to normal a little bit faster than maybe those Fortune 500, you know, largest kind of corporate account clients. You know, any way you could either break that down, you know, size-wise for your portfolio? Like, do you know your exposure to the maybe, like, larger scale corporates versus a more mixed bag? Or for the industry, if you've ever seen anything interesting there? Just sort of a high level question because we're getting this one increasingly. Yeah, I mean, I would direct you to the brands who might have better information. I mean, frankly, again, since when you think about it, I would guess of our business travel demand, our transient business travel demand, I would guess 60% or 70% of it, at least, comes through non-corporate account channels. Those are being made through the GDS system, through OTAs, and other channels, direct on our websites. They may or may not provide a corporate name. They may or may not be there for business. You know, it's what we've always said. We just don't have the best tracking data. We know it comes through our corporate accounts, but our corporate accounts are a small percentage of our overall business travel. Frankly, you know, when you have citywides and conventions, it gets even more blurred because a lot of people don't stay in the convention blocks. They just book directly with hotels. That comes through as transient for us, but the demand driver is group. It's a convention, it's a big conference. I wish I could provide you more, better information on that. I'd say anecdotally, you know, 80% of our business right now is probably small and medium business travelers, whereas the larger corporations have been slower to recover their volume from pre-pandemic times. That's great. Thank you very much. Thank you. Our next question is coming from Gregory Miller of Truist Securities. Please go ahead. Good morning. My first question is on hourly staffing trends at your hotels. I appreciate labor models may be quite varied across the portfolio, and there may be structural reasons why you're not seeing as much wage growth. One high-level figure from the Bureau of Labor Statistics noted about a 13% year-to-date increase in hourly earnings for non-supervisory roles in hospitality. If I understood your commentary this morning, you're not seeing these hourly wage increases in general, perhaps excluding the resorts. Taking a narrow view, for a housekeeper, for example, roughly how much higher is an average wage today versus earlier this year, in your resorts versus your corporate-focused hotels, if you're willing to share? I mean, I would share it if I had that information, but I don't have that information specifically. I would say this, Gregory, to think about it in a broader context, if you don't mind, it's probably the best I can do. You know, in urban markets, what we've done is we followed what we typically do, which is we follow either our union contracts, where we're union. Those have specific increases each year, already negotiated. In many cases, those are obviously, you know, a multiyear intermediate term contracts. You know, those have generally been anywhere from 3% to 4% a year in terms of the wage side. The cities, the rest of the properties that are non-union in those markets typically follow. We would have had those increases for the most part last year. It's possible there were properties that ended up being closed last year, and they didn't take those increases. When we came back this year, maybe we went up 6% earlier in the year because it was a two-year process, or we went up the 3% the market moved last year, and then we caught up in July with another increase. We're really just following the markets. Keep in mind, the urban markets for the vast majority of the cities that we're in are way above where either a minimum wage legislation is or, you know, we hear about Amazon and Costco and Walmart or Starbucks taking substantial increases, but they're generally way below where our housekeepers are in our properties. The cities just aren't getting impacted by that Bureau of Labor Statistics data, which I don't think breaks it down between a city and a suburban or secondary or tertiary market. Yeah, and Greg, just to add on that, the wage pressures that we're seeing and the wage challenges are more in the suburban markets and the resort markets than urban. Urban have been, you know, less of a challenge with the hourlies. Clearly the demand is at a different level there than the resorts. It's resorts that have been and suburban markets, more pressure. That's also where folks like Amazon and Walmart are also hitting more too, because that's a good job in a suburban or resort market. Well, it's where the wages are lower. Mm-hmm. It's really the secondary markets. Some of the resort markets and, you know, Key West has always been a challenging market and we've had some increases there. I'd guess they've probably been anywhere from 5%-10%. We've had some of the third-party contractors we use for housekeeping in the Keys go out of business and perhaps they weren't paying their taxes to the federal government, so they got put out of business. We've had retention bonuses in place for new hires. You know, six months out, we might pay $250 or $500. We've had referral bonuses. Frankly, that's fairly common practice, but some have increased to from $250 to 500 because the best channel for hiring are people's friends and family, frankly, in these hourly positions. I think the other thing to think about is at our properties that have successful outlets, food and beverage and banquet and catering, we're able to pull people from other properties that don't have the same volumes or the same pricing because those people make more money at our properties and in our outlets than they do at another property. I do think there's going to be some bifurcation in the ability to hire and the ability to pay and people to earn higher wages and benefits versus in some of these markets between higher quality properties and lower rated properties. Thanks for all of the insights there. I also struggle with getting to a market level perspective. I don't think BLS does it. It's all very helpful. My follow-up is related to what you were just discussing. It's a bit of a consumer behavior and customer service question. While not specific to your hotels, across the service industry, one emerging theme as of late is that consumers are paying the same or more for services, but the service quality is getting worse. NPR had a piece on this recently calling the concept skimpflation. Yeah, I could see ramifications for PEB in several ways. The one that comes to mind is consumers paying up for hotels where there is superior service, where that bifurcation that you were just talking about may be applicable. maybe that applies to PEB, where consumers pay up for your hotels. For other hotels where their consumers are expecting less service, maybe they are more likely to just pay less. I'm curious if you have any opinions about this topic or I'm totally off base here. No, I think you're on base, but I would and we've talked about this in the past. I don't think it's just service. I think it's the quality of the product as well as we've talked about in the past, in the recovering part of the cycles, our assets tend to gain share, which they are doing now, particularly on the rate side. You can always hold occupancy. You just have to lower your rates to attract people who are price sensitive. As we've said, we're seeing our rate gains being substantial, particularly at the properties that we've repositioned, but really throughout the portfolio. Part of that is. I mean, it's just one measure, but we track our Tripadvisor rankings, traveler rankings, and what we've been gaining over the course of the entire year within our portfolio. We're up from pre-pandemic levels, and we're up from the beginning of the year. We do think that translates into better performance. Properties that are unable to either hire quality talent or enough talent or maintain their properties tend to get into a vicious circle of losing share, not generating enough cash flow to improve their properties or pay their people or have enough people. I do think there's a lot to it, and it's why we're, you know, highly sensitive to the kind of service we provide. We've opened restaurants in facilities where we may be losing money on the restaurant right now, but it's important to gaining the visitor and the rates that we're charging on the room side. Great. Thanks, Jon. We appreciate all the insights. If we could hold questions to just one so we can finish before the weekend. I mean, we're happy to stay, but we're just concerned that some of our listeners may depart quickly, so. Just ask us no questions. No. Our next question is coming from Michael Bellisario of Baird. Please go ahead. Hey, guys. Good morning. Good morning, Mike. Two-part question, but kind of goes hand in hand. Maybe there's one answer. Could go back to risks. Just first, kind of fundamentally, what are the bigger picture risks that you're focused on as you look out over the next 12 plus months, virus aside? Kind of part B to that is, what about on the real estate side and on the transaction side and markets, as you think about reallocating capital, where are the risks there? There's plenty of risks out there other than just the virus. There always have been in our industry. I think the sort of bigger macro risk we think about. We're not too concerned about today, but you know, it potentially could go down that road, is if inflation is not transitory, whatever transitory means, meaning I guess my view would be if it gets built into permanent expectations of increases and you get into that cycle of response, increased response, you know, then the Fed has to jam the brakes on and we have a recession or we have a significant slowdown, and not the length of recovery that would be more typical to prior cycles. That's probably the bigger risk we worry about. We don't generally worry about inflation. We actually think it helps our space. As we've indicated in our comments, right now the customer is extremely well off and pretty insensitive to price increases right now. We're taking those where it's appropriate. I think on the micro side, it's dealing with the more typical risks that we had pre-pandemic, whether that's quality of life in cities, the homeless issue, safety, which has become a bigger issue in many cities, including cities that didn't have a pre-pandemic issue, or at least to the same extent, because when people aren't around in cities, they tend to become a little bit more active in negative ways. There's just more opportunity for crime. With the combination of that with the sensitivity to policing and the manner of policing, the two of those have not interacted well in some places. That's a risk we're trying to understand as we move forward. How long does it take? I mean, we went through this in some other cities like New York, where they got to a point where the electorate rose up, elected people who were focused on those key issues. We're beginning to see that in some cities, but we think some of the recoveries may take a little longer, because a lot of travel, including conventions, is discretionary. That's a risk that we look at. You know, interestingly, there are folks on the buyer side who look at union risk, don't wanna buy union properties, but we kind of look at it the other way. The risk is getting unionized in a market, if a particular property hasn't kept up, which ours do from a wage and benefit perspective. But when we look at buying, we need to understand, is there exposure? Is there significant wage and benefit increases that need to take place to get to union wages in those markets, which are appropriate. So to us, the risk is greater. Either it's financial, which you need to build in, or if you don't build it in, then that's a risk you're gonna carry forward in that market. You know, we don't have a problem with union properties, the union, paying people fair wages and providing full benefits, which we do in the industry. We have to understand when we buy properties, what others have been doing. That is helpful. Thank you. Thank you. Our next question is coming from Bill Crow of Raymond James. Please go ahead with your question. Hey, good morning. Jon Bortz, your scripted remarks have been, I think, 35 minutes, so it's not fair to blame all the questions here. I will ask you one on San Francisco. Well, Bill, we would expect that to lead to fewer questions, so you know. Okay. Well That's evidently a wrong premise, and that's okay. We've done 90 calls, and it's always been the same, so. Bill, was that your question? Yeah. Was that? Thanks, Bill. That was a statement. Jon, we find ourselves kind of where we were pre-pandemic. If you look at Vegas, it seems to be really thriving here, and you look at San Francisco, and it's what arguably the worst market in the country or one of the worst. I'm just you know, wondering whether we just have kind of gone back to where we were and this decline in San Francisco from a you know, convention and meeting perspective and you know, continues. You know, in the interim, we've lost a number of companies to other markets and Texas in particular. Just your thoughts on the future there and maybe how much you're willing to continue to allocate from a percentage of portfolio basis to San Francisco. Yeah. I mean, I think betting against San Francisco in the long term would be a mistake. We think, you know, the underlying fundamentals that have made that city great still exist. You know, it's not just the weather and the geography and the attractiveness of the city and the surrounding area. It's the attractiveness of the economic base that generates so many new businesses, so much economic growth, so many new jobs, so much more office demand, and provides so many reasons for travel. I don't think that's gonna change. A lot of that base, you know, comes from the universities. It comes from the clusters that are already there. It comes from huge amounts of venture capital that flow into that area. I mean, you look at biomedical and bioscience that are exploding in the San Francisco Bay Area. While there are other markets where that's happening, it's a fairly limited number, and San Francisco would be in the top four for sure, in the US We don't think that changes. We're pleased with some of the near-term changes adopted by the government. There's another $1 billion a year for two years going for homeless. There's more dollars for the police force, for maintaining the count in the police force. Bringing on people for those who've retired or left the force, not all markets are doing that. There's another $300 million a year for the next two years for mental health and dealing with those issues. We think the government's coming around to addressing the issues. Frankly, we think San Francisco is a great long-term market. It's just gonna struggle in the short term until we get past this virus and businesses all come back to work. People, which has already been happening, move back to San Francisco from their parents' houses. You can see the continuing growth. I mean, if you look at the numbers for the companies that have gone public or been bought by a SPAC in the Bay Area, and it's not even close. It's like 70% of it, of what's happened in the entire country in the last year. I wouldn't bet against San Francisco, and we're not gonna bet against San Francisco. We do look at relative risk and return. you know, we've sold a couple of assets in San Francisco. We'll likely sell a few more, and we'll reallocate that capital to markets that we think have more attractive risk-return opportunity. All right. Thanks, guys. Thanks, Bill. Thank you. Our next question is coming from Ari Klein of BMO Capital Markets. Please go ahead. Thanks. You know, maybe just following up on the NAV update, with resort NOI higher in 2021, I imagine the underlying cap rates probably haven't changed that much from where they were in 2019. I guess first, is that a fair way to think about it? Then if that is the case, what, if anything, does that imply about the expected durability of the strength you're seeing there, at least in the eyes of investors? Do you think there's room for further cap rate compression? Yeah. All good questions and all I wish I had, you know, a great answers to because it's complicated and some of it is a bit unknown. I would say there's no doubt that resorts would, all things being equal, I think would trade at lower cap rates today than they did pre-pandemic because I think there's a view that there's less risk in resorts and more risk in urban, at the very least in the near term. I mean, you're buying an asset that's delivering cash yield versus some urban properties that if they are delivering cash yield are smaller. Even that gets factored into valuations. I think the part about... Frankly, the investment brokerage community has a premise for the hotel industry overall, which probably would be amplified in resorts, which is yields have come down in all other product categories, you know, industrials, you know, down to 4% cap rates or less. Certainly residential down to sub-4% cap rates. Healthcare down as well. Other product categories also coming down. Their argument would be, you know, if you will, cap rates and really cap rates are a result. You don't have stabilized income in many cases. Again, we're back to forecasting forward numbers. Cap rates seem to be more relevant in other categories where the changes from year to year are much smaller, and are driven by existing contracts or leases, which is very, very different. You have a wider view of valuation assumptions, and that's what makes a market so interesting. When we get bids on properties, it can be a fairly wide range, which is probably a little bit different than what you might see in other categories. There's no doubt resorts would trade at lower cap rates, but on what numbers? What do people believe in terms of the stability of the existing numbers. I mean, we think our resorts are gonna do significantly better next year as an example, and we already see that in the first half numbers that are on the books, and we already see that with group coming back at our properties that also cater to group. We're gonna run much higher revenue numbers and in many cases much higher ADRs than we did in this year where the rate growth really didn't get humming until late in the Q2 into the Q3. Sorry, it's again a longer answer, but I don't know that there's a right answer to it, Ari, but it's the way we would think about it. Ari, I'll also add that we've also renovated, redeveloped several of our resorts recently. If you're looking at where the values were in 2019 in cap rates there and comparing it there's a change. You have to take into consideration, for example, at L'Auberge Del Mar, the renovation we completed here in this recent May. Southernmost in La Playa, we've invested capital there. Mission Bay in San Diego, you know, we de-flagged it from Hilton and made it an independent, invested capital there. And at Escondido we added some more tree houses and other amenities. There's a lot of other factors going on in there which should continue to grow the value of those properties. We've really redone all the resorts, and Southernmost was the last one. So they've all been fully renovated and redeveloped and repositioned in many cases in the last three or four years. Got it. Appreciate all the color. Thanks, Ari. Thank you. Our next question is coming from Anthony Powell of Barclays. Please go ahead. Hi, good morning. Just a question on the recovery of business transient. You mentioned you needed to get that back to get back to 2019 EBITDA levels. Has the exact percentage of recovery needed changed given all the strength you've seen in leisure, both in the resorts and urban properties? Instead of getting back to maybe 95% or 90%, do you need to get back to a lower number if you hold on to some of these resort and, you know, urban leisure gains you've gotten this year and expect to get next year? Yeah. I mean, it's a good question, Anthony. I hope our comment wasn't misinterpreted. We don't need to get back to the same exact levels we were at from a volume perspective, for some of those reasons that you provided. One is the strength of the resorts. Two, I think ADRs are likely to run above 2019 very quickly, and in many cases blow past 2019 levels in even a transitory inflationary environment. Three, we've changed our models in how we operate these properties and so we expect to get back, as we said, to bottom line EBITDA numbers before even we get back to the same revenue levels, let alone the same volume numbers. No doubt the segment that'll be slowest to recovery is gonna be the business travel side and more likely probably a little bit more on the group side than the transient side in terms of timing. We do think there's a lot of pent-up demand there, and it may happen a lot quicker than what people think, again, with the proviso being what happens with the virus and do people begin to behave normally and with you know the vast majority of the population vaccinated. Got it. Thank you. Thanks, Anthony. Thank you. Our next question is coming from Floris van Dijkum of Compass Point. Please go ahead. Hey, thanks guys for taking my question. Hi. My question is, you know, sort of related to the NAV, but maybe if you could touch upon, you know, 16% of your assets still have Marriott management. How are you incorporating that in your NAV? What is the upside potential? What's the timing of that, of those contracts when they can become independent or non-Marriott managed? Maybe and also if you could talk about the, you know, how are you capturing things like Paradise Point potentially, you know, switching to a Margaritaville, is that captured in your NAV or not? Curator and the Z Collection. Are those presumably not part of your NAV calculation as well? If you can maybe just touch upon some of those things. I know it's a multifaceted question, but just curious to get your thoughts. Yeah, Floris, the specific ones you mentioned, expiring Marriott contracts, we have a couple of them. The Westin Michigan Avenue at the end of 2026. The Westin Copley Place in Boston at the end of 2028. Both of those are old contracts and have management fees that are dramatically above the market. We've not factored that in at all in our valuations. We've not factored in Curator into our valuation. You note no line for Curator in our NAV as well, corporate NAV. We've not factored in any of the future conversions or opportunities within the portfolio like Paradise Point to Margaritaville in the portfolio. None of that is taken into account. I do think, you know, we tend to be pretty conservative with our NAV. The market historically still doesn't believe us, even when we sell billions of dollars within the value ranges that we've provided. It perhaps it's again, if the company's getting valued on cash flow, and NAV doesn't matter, that's understandable in how a business is valued. If the management team's willing to sell and reap those values, then you would think it might be taken into account to a greater extent. Not for me to comment on the stock price, but more. Sorry, just trying to answer your question about the valuation of the company. Thanks, Jon. Thank you. Our last question today is coming from Chris Darling of Green Street. Please go ahead. Hi. Good morning. Jon, you touched on it in that last answer, but you know, going back to that NAV estimate and the obvious, you know, discount there between your share price and your internal estimate of value, it does beg the question, why not look to sell assets more aggressively and try to take advantage of that disconnect? You know, just curious to maybe better understand how you're thinking about that. Sure. When we look at valuations and we look at whether we sell or buy, you know, there's a lot of things we have to take into account. The long-term strategy of the company, some of the opportunities that, you know, Floris even asked about, in terms of how much opportunity is there in the individual assets to drive growth and cash flow and value. You need to have a place to put those investment dollars. Many of our old properties we've owned for a while or that we acquired from LaSalle, which were owned for a significant period, also have tax issues that we have to take into account within those decisions. We also are in a business where some of these properties you might never see again in the market in terms of availability. It's not like trading in and out of stocks, and I know that's not what you're suggesting at all. It is harder to trade these assets versus looking at them on a long-term basis. We have sold significantly in the past and when that disconnect has lasted, and that may very well be the case as we move forward. Fair enough. Thanks for the thoughts. Thanks, Chris. At this time, I'd like to turn the floor back over to Mr. Bortz for closing comments. Well, thanks very much, Donna, and thanks, everybody, for participating. We as much as we joke about it, we appreciate your questions and the thoughtfulness of them. We look forward to updating you again next year. We will continue to provide our monthly updates in the meantime. I hope everybody has a nice holiday. Thank you. Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines at this time and enjoy the rest of your day.