Brian Giglio: Sure. I mean, I think roughly we're on expenses. We're right around 3% total. You know, labor over the last couple years has been, you know, sort of that four-ish range. It's coming down a little bit this year into the threes. Energy prices are up a bit this year. And then there are a couple of the larger fixed expenses that, you know, will unfold as the year goes on our, our insurance renews in June. And that's something that we had a, we had good renewals with last year. There were not, um, you know, any major cat hits in our, in our portfolio. Um, so that should be helpful, but we go into the year and we, we expect there to be some growth in those rates. And so if that, if we get a year, like last year, that could be a benefit. And then property taxes have been down, you know, over the last few years. We're kind of assuming that those are going to normalize. And then on the ONDAW side, you know, overall, I don't think it's going to make, you know, a material difference in that overall percentage.
Aaron: Yeah, hey, Cooper. It's Aaron. I'm just maybe to add to what Brian was saying. You know, as we, as we moved through last year, as we noted in the prepared remarks, you know, we were, um, you know, much more successful in, in managing costs relative to where we thought that they would be at the beginning of the year. And so we ended up with, um, you know, margin expansion to the tune of about 40 basis points on rep part growth of about three and a half percent. Um, you know, from a cost growth perspective for the comparable portfolio, so that 13 hotels, um, X on us, um, you know, expense growth is in that kind of that three ish percent or so area. What will feel a bit differently this year is just that, as you noted, the blended REVPAR growth rate for that comp set is, for that set of hotels, is a bit lower. So we'll expect some margin headwinds for the comp portfolio in 26. If we add in ONDOZ, things obviously do get a little bit noisier given that it was only open part of the year last year will be open all of the year this year. TAB, Mark McIntyre, would look at probably a total overall expense growth rate of around 5% or so, which starts to then align with with where the midpoint of the of the REV part ranges for the total portfolio, so a good chance of you know margin being able to defend margins. TAB, Mark McIntyre, And as we move from 25 to 26 for the total portfolio and we'll hope will be hopeful that we have an outcome like we had last year, whereas the year went on, we were a bit more successful on the cost side.
Chris Woronka: TAB, Mark McIntyre, Great Thank you appreciate the color.
Operator: Your next question comes from the line of Dwayne Fenegworth with Evercore ISI. Please go ahead.
Dwayne Fenegworth: Hey, thank you. Good morning. You know, a call earlier today talked about the expectation for being a net seller of assets. I wonder if that's your expectation as well, and if you have any update on the marketing process around the wine country assets.
Brian Giglio: Sure. Good morning, Dwayne. In the fourth quarter, we started to see a pickup in transactions, either closed transactions or announced transactions. And I think as we have more clarity into this year, debt markets continue to be strong. I think that we'll continue to see an uptick in transactions. thematically it will be similar. I think that there is a lot of demand for luxury assets. I think there's a lot of demand for cash flowing out. And so those obviously can support the highest debt balance and we're still seeing you know, for mid-size transactions, enough equity out there as you start to get to a larger assets, the bidder pool is still, you know, thinner. I do think we're seeing that improve. And so, you know, our view is really no different than what we were doing last year and when we sold um new orleans at a is a very attractive cap rate and and then redeploy those proceeds into our common stock um you know we're going to look to realize private market values for we can where we can um you know for those you know for hotels and resorts that we have where we see the biggest gap between the public and private market values. And basically, you know, we'll continue to try to unlock value where we can and then go and deploy that in the most creative manner. You know, we don't comment on transactions prior to announcement, but, you know, we have been clear and I think our actions have been very clear is that, you know, Major pillar of our strategy is recycling assets, so there's always going to be a point in time where we'll have one or more assets that in some form of marketing or discussion with potential buyers. And we don't think that this this year will be any different. The question then comes is what is that most secretive allocation of that redeployment of that capital? And that depends on a lot of factors. It depends on where the stock is. you know where our cost of capital is where stocks trading what you know and on a risk-adjusted basis what is you know is it to make more sense to repurchase stock or preferred does it make more sense to acquire an asset and over the last few years I think we've demonstrated that you know we've been able to you know pivot between those, sometimes in shorter time periods, but we've been able to effectively deploy that capital, whether it be through the acquisitions or buying back stock.
Operator: Your next question comes from the line of Smedes Rose with Citi. Please go ahead.
Smedes Rose: Hi, thank you. I just had another question about your guidance just in terms of total rev par being a little bit lower than your rev par outlook. Usually, they're sort of at least in line or maybe total rev par would be a little bit higher. So, I was just wondering if you could just speak to that for a moment.
Brian Giglio: Sure, Smeets. Good morning or good afternoon. a focused portfolio with some some larger assets, D.C. being one of them I spoke about and then San Diego also that had a you know, we finish up a pretty substantial meeting space renovation or we finish a portion of it and we'll finish it the rest of it in the quarter. That's impacted on those two big hotels on the group side. That's going to impact some of our ancillary spend, you know, getting some of that back in in Andaz. And quite honestly, I would expect a increase in our total rev par if we continue to see the, you know, the transient trends in D.C. somewhat. But more importantly, the transient trends we're seeing in in Waialea with the additional spend that comes from the transient rooms, you know that will that will help buoy our our total rev par. But right now it's more a function of some of the, you know, limited displacement in the first quarter in San Diego and then a slower group pace in DC. It's more than anything.
Smedes Rose: Okay. And then I was just wondering if you could talk a little bit more. You mentioned your opening remarks and transient weakness in San Diego. Is that specifically to your hotel? Are you seeing that kind of market-wide? And maybe just if you could just speak to kind of just the broader market in San Diego, what you're seeing just maybe on the group side, what's happening with the convention calendar there?
Brian Giglio: Yeah. In San Diego we saw some. We saw some ups and downs last year, some of the government related. There's a lot of defense contractors, so we saw it slow down last year. We've seen that pick up. Towards the end of the year, the leisure time period, you know whether it's some international travel not coming in some of the you know some. Now Canadian markets you know are you know, come to that area. What we're seeing now, you know, the first two months have been pretty promising in San Diego, D.C. too, we mentioned. And so, you know, I think we're starting to see government transient come back. And part of that might just be certain segments and what San Diego pulls from is the defense contractors. And so that can be a positive for the market. And so we'll see over the next few months, but we are seeing positive signs as the year goes on right now in San Diego on the transient side.
Smedes Rose: Great. Thank you. Thank you.
Operator: Your next question comes from the line of Michael Bellisario with Baird. Please go ahead.
Michael Bellisario: Thanks. Good morning, guys. Good morning. First one for Aaron. Just on this OHANA preferred, can you just remind us, like, what are the mechanisms there for you to take that out? When and by how much does that coupon ratchet? And then just on capital allocation, is this a potential use of capital if you were successful with dispositions?
Aaron: Yeah, Mike, thanks for the question. So the OHANA you're referring to is our series you preferred, which is issued in connection with our acquisition of Montage. That one does have a mechanism where, the yield there is tied to a greater of the hotel yield or a fixed rate, which is currently now six and a half percent. So overall, it's even at 66 million in size. So it's a manageable amount of capital. We kind of view our preferred, I would say, as a total bucket. So it's all in the 280 million at a pretty attractive blended price of just around 5% or so. But as you saw in our results for the quarter, and we did take the opportunity to look at some buyback on the preferred side, and we'll continue to do that as a way to kind of just manage the overall preferred dividend exposure and ensure that we're mindful of the mechanism on the Series C, which does step up. So I think as we think about this year, I wouldn't expect that our preferred dividend would increase in 26 relative to where it was in 25, even with the escalation on the Series G, just given that we'll manage the overall outstanding balance. So, you know, we'll take another look at it as we move through the year. I mean, certainly, as we noted, we have, you know, $200 million of cash that we could readily put to use to address that Series G. And the function there is it's callable solely in our discretion.
Brian Giglio: And it doesn't have to be in the total amount either, so we can take out pieces of it at a time.
Michael Bellisario: And then just two little follow-ups. Maybe I missed them. What's your EBITDA expectation for Miami this year? And then what are some of those one-time items that you mentioned that's impacting the year-over-year growth rate? I think it's like $7 million net of the New Orleans sales, if my math's right.
Brian Giglio: Okay. I'll start with, so in Miami, our expectation is consistent with where we were before. We think it's, you know, low to mid-teens EBITDA this year. and you know our what we've seen you know starting in in kind of really in december and um you know december we hit close to 70 occupancy uh the comp set was right around 70. our rate granted was lower than the comp than our our luxury set um we were in the in the 500s they were in the 900 plus so we have plenty of room to grow we're building a very good base our group room nights have doubled quarter over quarter we've got a lot of good momentum going into f1 and in FIFA later in the summer which is a great time for that piece of business to be there so our expectations are consistent with where we were last quarter with Miami and If we have a strong summer, my expectation is that we are at the upper end of that.
Aaron: And then, Mike, just on the second part of your question as it relates to the one-time items that we called out for 25, it's a total of around $10 million or so, and the components would be about $3 million contribution from the Hilton New Orleans, which we sold last year, so I won't repeat this year, a cost recovery that we had in connection with a settlement at one of our properties, And then just some incremental interest income that we generated last year given where deposit rates were and where our cash balance was at the time that we wouldn't expect to repeat in 26. Got it.
Brian Giglio: Understood. Thank you.
Operator: Your next question comes from the line of Chris Woronka with Deutsche Bank. Please go ahead.
Chris Woronka: Hey, guys. Good morning. Thanks for taking the questions. So understood everything you said, Brian, about any potential transactions in wine country. My question on it is kind of do you think any sale process is having any kind of impact on operations right now? It looks like in 25 you had pretty good results with the montage. It looks like four seasons, maybe a little bit less so. So is there anything to draw from that in terms you know, what's kind of embedded in your guidance as to how those perform this year?
Brian Giglio: Yeah, I mean, both resorts were on pace to have very good years. As you probably remember, there was a fire close to four seasons that impacted the third quarter last year and a little bit trickled into the fourth quarter. So adjusting for that, that was probably about a million dollars of EBITDA. So adjusting for that, one, your question, you know, not commenting on a sale process, but typically for a managed hotel, the management contracts are long-term and stay in place, so that doesn't really impact the day-to-day operations of the hotel. Four Seasons has fantastic group pace for this year. I think group pace is up about 22%. um and so we have really great expectations for that again the um the san francisco market has been doing better which then leads to more weekend trips or extensions of convention trips out to to wine country the high-end luxury traveler continues to to be very strong and spend quite a bit and then on the other side of the valley um you know we have You know we've had great success with group at montage group is is. Not as strong as four seasons this year, but they're moving from a much larger base and our transient demand over at montage has been phenomenal. So I think transient pace is up 25% year over year. So just like San Francisco, a lot to look forward to in in. in the Bay Area and wine country. And so they're, you know, again, with the, you know, with the impact of the fire last year was sort of a, you know, unique impact to Four Seasons. Both hotels should have very good years.
Chris Woronka: Okay. Appreciate all that, caller Brian. Maybe to kind of keep it in the San Francisco area, at the Hyatt, um i know there was probably a super bowl benefit back in january you know this this hotel is running i think single digit margin 24-25 is there um any expectation this year that whether it's you know again outside of super bowl but with um ai and feedback to office and other other group things that are happening in San Francisco, is there a hope or an expectation on your part that that hotel starts meaningfully improving margins?
Brian Giglio: Yeah, I mean, our location in that market has become the primary location. And so our basic, you know, with the office that surrounds it, the inflows of new tenants, AI-based, but really the center of San Francisco has moved into the Embarcadero financial area. And so we're benefiting from a recently renovated hotel that, while it still has quite a ways to go to get back to where we were, We finished 25 at 78% occupancy, which is 10 points of occupancy down from where we were. We have a $300 rate. There's still quite a bit of room in the rate. And so we have great pace this year. Transient pace continues to grow. had a great Super Bowl. World Cup is, you know, we're just starting to see bookings for that, you know, and that's something that will help compress the summer as we get into it. So look, I think that given the continuing increase in health of the San Francisco market, our location, our product, our meeting space, we still have a very good run ahead of us and are very, you know, are looking forward to the next several years in this market.
Chris Woronka: Okay. Very good. Thanks. Thanks, guys. Appreciate it.
Operator: Your next question comes from the line of Daniel Pulitzer with J.P. Morgan. Please go ahead.
Michael Hirsch: Hi. This is Michael Hirsch on for Dan today. Congrats on a nice quarter. For my question, you noted in the press release that the operating environment could be impacted both positively or negatively by events outside of your control. Could you speak to some of those events or macro environment that you contemplated for this year when putting together your guidance?
Brian Giglio: Yeah. Look, I mean, if you look over the last few years, Starting the each of the years expectations were higher and then. There were various headwinds that popped up and went away and came back throughout that time frame. I need to think DC is a is a good example of you know. What is our our? What are our expectations in DC? They're like I said, they're cautious this year. You know there was we did not expect the impact government business, government shutdown, those things for a large 800-room hotel in our portfolio, those were things that we weren't expecting last year and impacted operations. Could elements of that happen again? Sure. If we look at 26 in DC, it's You know, it's just starting off. It's a tough comp. We haven't yet inauguration the year before. We had storms in January's and you have midterms later in the year, which means Congress won't be in session a lot. As much so, those are things that keep us cautious, especially from the framework of the prior years experience. But then on the other side, you look at the positives there. You've got, you know, you've got the America 250 celebrations. Indy race that was just scheduled for August that's happening. Our transient pickup for January and February has been stronger than we thought. The negotiated transient demand for the next six months is up 11%. Part of that is still the benefit we're seeing from the conversion to Westin. Some of it is business that's coming back to the market. You know when you look at our transient demand for January and February and you put it against the backdrop of. You know we had weather issues this January. We didn't have an inauguration this year, but yet our transient demand is greater than what we had last year. That points to strength, and so that makes us very optimistic. The question is, is, you know, we probably need to see a few more months of this before our. you know, before we can, you know, have our outlook reflect that for the rest of the year.
Michael Hirsch: Thank you. And then for my follow-up, more modeling related, on your CapEx guidance for 95 to 115 million, could you speak to the timing and allocation of those dollars between the different projects?
Brian Giglio: Yeah, let me let me start with that and then Aaron can go through some more specifics. We are working through and finishing the meeting space in San Diego. Keep in mind that it's a 1200 room hotel. It's a lot of meeting space, so there's 25 million of that number right there. A portion of that does come from the FF&E Reserve, and so that's That's a big piece of it. There's some, you know, there's some additional, you know, bills that are being paid and finish up work from ONDAWS. And then, you know, throughout the portfolio, we have various other projects, some HVAC projects, some roofing projects, some elevator modernizations. Those are probably those are spread out more throughout the year. The biggest chunk, you know, single chunk will come from the San Diego piece, which will be in the first and second quarter as it gets paid out.
Aaron: Yeah, and Brian basically got the punch line there. The largest projects will be front-loaded, so I'd expect about a third of it happens in Q1, and then Q2 will be the second largest contributor, and then the rest will trickle into the back half. But work largely performed in Q1 and then the payments in Q1 and Q2.
Michael Hirsch: Thank you.
Operator: There are no further questions at this time. I will now turn the call over to Brian Giglio for closing remarks.
Brian Giglio: Thank you, everyone, for your time and interest in the company. We look forward to seeing many of you at upcoming conferences and property tours that we have in our portfolio. Thank you.
Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
