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Greetings, and welcome to the Pebblebrook Hotel Trust First Quarter Earnings Call. [Operator Instructions]. Due to the fact that there is another industry call this morning at 9:00 a.m. Eastern, we'll be keeping today's call to an hour. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Raymond Martz, Co-President and Chief Financial Officer. Thank you. You may begin.

Thank you, Donna, and good morning, everyone. Welcome to our first quarter 2024 earnings call and webcast. Joining me today is Jon Bortz, our Chairman and Chief Executive Officer; and Tom Fisher, our Co-President and Chief Investment Officer. Before we begin, please note that today's comments are effective only for today, April 24, 2024, and our comments may include forward-looking statements as defined under federal securities laws, and actual results could differ materially from those discussed. For a comprehensive analysis of potential risks, please consult our most recent SEC filings and visit our website for detailed reconciliations of any non-GAAP financial measures mentioned today. Now let's move on to our first quarter results. We are pleased to share our solid financial results in Q1 despite the negative impact of some challenging weather conditions on both coasts. Our urban markets, which continue to recover and led the portfolio, coupled with diligent operating cost reduction efforts by our hotel teams, asset managers and the company, we handily exceeded the top end of our financial outlook in key metrics, including same-property hotel EBITDA, adjusted EBITDA and adjusted FFO. Our urban markets were led by Washington, D.C., which has been a standout performer. In Q1, hotel occupancy in D.C. gained an impressive 8 points rising to 61% and RevPAR increased by 7%. San Diego also produced significant gains, benefiting from a strong convention calendar that, in our case, was bolstered by our prior year redevelopment investment program. In Downtown San Diego, occupancy at our properties climbed 8 points to nearly 75% and RevPAR surged by an impressive 21.8%. Our recently redeveloped properties, the Hilton San Diego Gas pent quarter and the Margaritaville Hotel San Diego Gas quarter, have been very well received by the market. RevPAR growth for these properties exceeded Q1 2023 by 88% and 60%, respectively. These downtown San Diego hotels has quickly recovered from last year's redevelopment disruptions, regaining more revenue and EBITDA than was displaced last year. San Francisco and Los Angeles were also solid markets this quarter, but 1 Hotel in San Francisco known for its sustainability and luxury focus grew RevPAR by 16% in Q1, continuing to gain market share following its redevelopment and reflagging. Overall, our urban properties increased RevPAR by almost 5% year-over-year, which helped to offset a 4.4% decline in RevPAR across our resort portfolio. Notably, our same-property resort portfolio, excluding LaPlaya Beach Club and Resort and Newport Harbor Island Resort, maintained stable occupancy levels compared to Q1 2023, though ADR declined 4.7%. The challenging weather conditions in California, the Pacific Northwest and South Florida affected our resorts, hindering traditional short-term leisure bookings and lead to increased cancellations. In contrast, our Key West resorts experienced a robust recovery in Q1 compared with last year, generating positive RevPAR growth, reflecting the area's traditional strength in the first quarter. Despite the varied performance of our resort markets in Q1, they maintained a very significant 36% premium in rates compared to 2019. Overall, our same property portfolio has shown a continued recovery from the pandemic, getting another 2 points in occupancy and a 1.7% increase in RevPAR versus Q1 of last year. Compared with Q1 2023, our weekday occupancies improved 3 points with gains in both our urban and resort markets, demonstrating the continued recovery of business travel. Our weekend occupancies declined roughly 60 basis points, which was largely due to weather issues that discourage leisure travel. However, it is noteworthy that weekend occupancies at our urban properties improved by 50 basis points in March, perhaps an indicator that leisure events and Spring Brink trial will continue to drive travelers into the cities at a greater clip than last year. In terms of our mix, the group segment led the portfolio as group demand increased 5.7% from Q1 2023 with group revenues growing 4.9% and a group segment increasing to roughly 27.4% of our customer mix in Q1. Trains and demand also improved, increasing 4% over last year as transient revenues rose 2.1%. On a monthly basis, RevPAR increased 5.1% in January, 0.1% in February and 0.6% in March, which was negatively impacted by the Easter holiday shift. February room revenues rose 3.8% higher than the 0.1% RevPAR growth due primarily to the extra day from leap year. Our same-property EBITDA reached $59.8 million, surpassing the upper end of our Q1 outlook by $2.8 million. In addition, our recently reopened LaPlaya Beach Resort had a much better-than-expected Q1, exceeding our outlook by $2.3 million. This performance inspired our enthusiastic Vamos A LaPlaya to our hotel LaPlaya team, which you heard from our opening song this morning. The strength in our same-property hotel EBITDA results also have bolstered was posted by the success of our highly focused efficiency and cost reduction efforts across all operating departments, which led to an EBITDA margin of 20.3% in Q1. On a per occupied room basis, total hotel operating expenses declined by 0.7% and before fixed expenses, they declined by 2.1%. This reflects our ongoing progress in combating inflationary pressures through an intense focus on efficiency improvements. These measures include optimizing staffing levels and job sharing, enhancing procurement processes, implementing our own workers' compensation program and leveraging favorable contracts negotiated and arranged by curator. We also reduced our reliance on third-party contract providers by successfully filling positions internally and reducing staff turnover, while also continuing to invest in productivity enhancement in energy statement technologies and equipment. These strategies are part of our broader initiative to offset above inflationary cost increases in wages, benefits, energy and insurance across our portfolio. As a result of the better-than-expected same-property EBITDA and LaPlaya's strong performance, adjusted EBITDA was $5.3 million above the top end of our outlook, and adjusted FFO per share was $0.05 better. Shifting to our strategic reinvestment program. This quarter, we made significant capital investments in progress at several properties. The $49 million transformation of Newport Harbor Island Resort into a premier New England luxury destination is substantially completed and the resort should open soon. Estancia La Jolla Hotel & Spa $26 million multi-phase redevelopment is also substantially complete. And at Skamania Lodge, we introduced 8 new alternative lodging combinations, including completion of 2 bedroom cabins, a 3-bedroom villa. And on May 1, the expected opening of 5 unique luxury glamping units. Over the next year, we will evaluate the performance of these new types of experiential accommodations, which also includes 9 successful luxury treehouses. This analysis will guide our decision to what types of alternative lodging to add to Skamania in the coming years as we have an opportunity to add 200 or more additional units over the long term. With the $33.9 million investments throughout the portfolio in the first quarter, we remain on track to invest $85 million to $90 million in the portfolio for the year. And we are confident about the substantial upside these repositioned properties will generate in both market share and cash flow in the foreseeable future. In terms of our balance sheet, we remain in very good shape with no meaningful debt maturities until October 2025 following the successful refinancing efforts we completed just 3 months ago. The weighted average cost of our debt is an attractive 4.6% with 75% currently at fixed rates and 91% of it unsecured. And with that comprehensive update, I'd like to turn the call over to Jon. Jon?

Thanks, Ray. As Ray indicated, we're very pleased with our overall performance in the first quarter. Our top line operating performance was toward the upper end of our outlook range with our RevPAR growth handily beating the industry. Our bottom line results well exceeded the top end of our outlook. We benefited from our intense focus on creating further efficiencies in the operations of our properties as Ray detail. We also realized reduced energy usage and costs, thanks to targeted sustainability initiatives and milder weather conditions. And although the bad weather negatively impacted leisure demand and revenues, it provided a silver lining in terms of energy savings. When we look at the industry results overall in the first quarter, the industry's 0.2% RevPAR growth turned out a little softer than we were expecting. Year-over-year demand declined every month in the quarter, now representing 10 straight months of year-over-year declines and 12 straight months of year-over-year declines in occupancy. And if you exclude Las Vegas from the industry's results, you get a RevPAR result that is 90 basis points worse at negative 0.7% for the quarter, which doesn't paint a particularly positive view of the rest of the industry's first quarter performance. We believe some of the industry's weaker performance in the quarter was related to bad weather impacting travel and potentially a greater negative impact from the Easter holiday shift. But clearly, the mid-to-lower price scale hotels continue to struggle in a major way. We believe the challenges at the mid-to-lower end are likely related to the economic pressures being experienced by the mid-to-lower socioeconomic class of consumers and businesses. This is consistent with what is being called out by many other industries and businesses in their operating reports. Industry results also mirror our results in segmentation performance. Demand from the leisure customer was flat to slightly weaker, impacted by bad weather as evidenced by softer weekend performance. Encouragingly, business travel continued to improve with group leading the way, but with business transient clearly seeing further recovery. ADR growth was slightly softer than in prior quarters and urban and upper upscale performed the best. Supply growth continues to run well below 1%. We think it will continue to run below 1% through at least 2026 and likely 2027 or even later for our urban and resort markets where it takes longer to build and the project sizes are larger and harder to finance. In the case of the cities, hotel economics are far below those needed to justify these much higher new development costs. For our portfolio, RevPAR growth was led by our urban markets, which grew 4.9% despite Portland and Chicago being substantially negative. Our urban RevPAR performance exceeded the industry's urban category, which delivered 2.6% growth in the quarter. As Ray indicated, we gained 2.4 points of occupancy or 4.2% growth. However, we still have a huge occupancy recovery opportunity as our urban occupancy was almost 16 points or 21% below 2019 levels, and 2019 was not even our prior peak level of occupancy. We've laid out the occupancy recovery opportunity for our urban portfolio in financial terms in our investor presentation, which we posted last night on our website, so you might want to take a look at that. Our best performing RevPAR growth properties in the quarter were led by our properties that were redeveloped in the last few years. All of these redeveloped and repositioned properties are gaining share and have significant opportunities for RevPAR share growth and other revenue growth over the next few years. As Ray indicated, the 2 downtown San Diego properties gained the most in the quarter. They were both under redevelopment last year, so the comparisons were easier, but they grew beyond last year's displacement impact. The next best performers were Hotel

The floor is now open for questions. [Operator Instructions] Today's first question is coming from Dori Kesten of Wells Fargo.

You note that short-term group bookings have slowed. Can you provide a bit more context around that? And have you seen anything else that has given you pause such as media planners pushing for lower F&B minimums or pushing harder on room rates?

Sure. Yes, I mean, our best guess today based upon conversations with clients is that it has more to do with the booking pattern normalizing. So really, what's been happening over the last year is that meeting planners and businesses are booking their meetings further out than they were a year before. And so when we're coming upon in the year for the year or in the quarter, for the quarter, certainly in the month for the month, we're seeing less pickup versus last year because they've already booked a meeting. And so the pace advantage we have, that's part of why we're being a little more cautious with assuming it all converts into the same kind of percentage growth over last year because we think we're going to lose some of that pace advantage due to this normalization of the group booking window. We're not seeing any changes in attrition, in cancellation, we're definitely not seeing any reductions in spend outside of the room or what groups are committing to. So from our perspective, we don't think it's indicating any change in confidence on the part of businesses reacting to a more cautious economic environment. We do think it has -- it's primarily due to the normalization of the booking timing window.

The next question is coming from Floris Gerbrand Van Dijkum of Compass Point. I'll move on to the next question coming from Smedes Rose of Citi.

I was just wondering if you could talk about a little bit more about any kind of visibility you're seeing into summer leisure trends across your resorts?

Yes. I mean I think it's a little premature to have any kind of judgment based upon what we're seeing from the resorts. I mean the comment I would make that we feel good about right now and we indicated in our call, is that the group pace is up significantly in the third quarter and some of that is in the summer months of July and August. So we certainly look like we have a good base on the books. From a transit perspective, it's not quite as clear. And as you know, folks make airline reservations well before typically they make their hotel reservations. So we're encouraged by the commentary that's coming out of the airlines about strong summer bookings. But I think in terms of how we look, I think it's too early to make a judgment as to whether they're going to be up a lot or they're going to be positive or negative.

The next question is coming from Floris Gerbrand of Compass Point.

I wanted to ask you, if I look at your deck, the upside potential on your urban portfolio appears larger than some of the returns that you're penciling in for mostly our -- largely your resort assets that have been renovated. As you think about capital allocation, John, where would you put incremental capital today? Where would you invest it? Would you invest in your resorts? Or would you invest more in urban assets?

Sure. So I think the answer is sort of different than the 2 alternatives that you provided. So any incremental capital we have been and would continue to invest in buying our own stock back. So basically, we'd be buying a greater percentage, if you will, of the assets that we already own. We feel like it's a good mix between urban and resort between business, group and transient and leisure. We've invested hundreds of millions of dollars into the portfolio, repositioning properties to where we think they have their highest and best positioning where there's significant upside in share growth, revenue growth and profitability. And so today, we'd be buying our existing stock back, which trades at somewhere in the range of a 50% discount to where we think the individual assets would sell -- so I think from that perspective, it's an easy answer. I think based upon where we sit in the portfolio and maybe this answers your question in one way, we're still likely if we're selling assets, we're still likely to be selling some urban assets in markets that have been slower to recover, not because their growth rate or the recovery rate isn't great, but the alternative capital usage returns are much higher, meaning buying our stock back and paying down debt along with the EBITDA that we sell. So it wouldn't generally involve selling our resort assets within the portfolio, which, again, we continue to believe have very significant upside in the portfolio.

And Floris, also, just to highlight in our deck, yes, we have over $50 million of upside we have in the early recovery. But that's primarily because the urban markets fell the most significantly more than leisure markets as of pandemic and solar recover. So we ended 23% at 69% occupancy in urban hotels, and the bridge just shows us if we get to 80% with the upside opportunity, which is still below where our prior peaks were. So that, again, shows the tremendous growth from the urban assets that are to be realized in the portfolio, and we expect the next couple of years to achieve that.

The next question is coming from Duane Pfennigwerth of Evercore ISI.

Just on the group pacing and the give back kind of in the quarter. I wonder if there's any trend of predictability to it kind of emerging. So maybe you could just replay the last couple of quarters, how much pace was ahead at the start of the quarter and then ultimately where it ended up just to kind of help put that 20% pacing in context?

Sure. Well, in Q1 for Q1 of this year versus the pickup from the prior Q1, we were short a little less than $1 million in group revenue, which represented about a little under 3,000 group rooms. If we go back to the quarter before that, I think that was relatively flat, but we'll see if we can pull up that data, Florence. I mean Duane sorry.

No worries. Yes. No, that makes sense.

And I think what's been hard -- the reason it's been hard to predict is it's kind of been bouncing all over the place. So Gabby just pulled up the quarter before, and it looks like what am I looking at here? I see. Okay. Yes. So yes, it was about $0.5 million of less pickup in Q4 for Q4. So again, pretty modest pretty minor, but I think it's evidence of the normalization of the booking window.

Makes sense. So that up 20%, I think, which is specific to the third quarter, if you had to guess, like where do we end up in kind of realized revenue and you can punch on that and say, we'll tell you when we get there.

Well, I think the challenge is -- certainly, here's the one thing I know is going to happen. The percentage will be much lower. All right. So I mean as we put more business on the books, obviously, that percentage is going to come down. And I think right now, we have -- you know how much -- what percentage that represents of our target for the quarter, maybe 60%. We'll see if we can pull that up, Duane. But -- the percentage is going to come down -- it comes down naturally just as we book more and the numbers get larger, right? It's just the math from that perspective. In terms of the impact of the booking window, it's just really hard to forecast that at this point in time.

The next question is coming from Bill Crow of Raymond James.

Jon, I'm hoping you can dig into the ADR decline at leisure properties, not just in the fourth quarter, but kind of what you're expecting going forward. How much of that was reactionary to maybe, I don't know, some normalization of consumer spending? How much of that was mix shift. And then you stated in your release that you're kind of bullish on inbound international travel this year, but you're also saying you really don't have much of a window into the summer months. So if you could just kind of square all that up, I'd appreciate it.

Well, I'll take a shot at it, Bill. I don't know if my comments will square it all up. But I think when we look at the resorts, the ADR changes are kind of all over the place. It really depends upon the property, what's been going on at the property, the region, the weather has had an impact as well. There is a mix shift going on at the resorts. So let's talk about the mix shift first because that's the easiest one to look at. As we rebuild group at our resorts, generally speaking, the group rates are substantially lower than the transient rates. It's the base build. It's the midweek, particularly out of season. And so it gets priced lower, and it competes with urban markets as much as other resort markets. So as we rebuild that group, which is a significant part of our resorts, our resort mix, that naturally brings the rate down in terms of the overall average. As we add and continue to recover leisure, which is still below where it was in '19, that business has tended to be a business that's being induced like it was pre-pandemic through promotions or it represents wholesale international business, which comes in at lower rates or it's off-season where you have to stimulate, typically you have to stimulate demand, particularly local demand in markets like Florida that you live in, gets pretty hot in the summer. And so getting people to come to your location, hopefully driven by a cooler beach weather, bringing people in from inland Florida, it comes at a lower rate. So there's a good bit of this that is mix. I think the behavioral normalization has mostly happened, meaning the big premiums we were getting on compressed days, around some holidays for people coming out of their caves after the pandemic and splurging and paying up I think most of that is normalized and gone away. And so it's really why -- where we're losing ADR, we're losing it at a relatively small amount at this point. And as we look into Q2, as an example, our rate decline for our resorts looks to be lower than what it was in the first quarter. And right now, it looks like rates for the second half of our resorts will be better than the first half. So I think we're getting pretty darn close to stabilization. And also, we're benefiting from the ability to charge more at some of the resorts that we've repositioned to a higher level on the portfolio.

And Bill, and then the second part of your question, international inbound. Just a couple of things to note on that. At least year-to-date through March, international inbound is over last year. So that shows it's improving. In fact, March on a percentage basis was closest to 2019 than any month of recovery. So it's heading in the right direction. It's still driven more by the transatlantic versus the Pacific demand. But encouragingly, noted on a couple of airlines calls this recent quarter, they're forecasting record summer travel, especially as it relates to international. A lot of that, of course, is U.S. outbound, and we encourage more Americans to stay here to travel and go to Europe. But it does represent a more increased number coming up. And that fell significantly from the pandemic, but it's heading in a good direction.

The next question is coming from Shaun Kelley of Bank of America.

Ray or Jon, like one thing that's come up on some of the other travel calls this earnings season has been a bit of a rebound on the technology side. I think this would probably be more on BT. I think we've talked a lot about group this morning. But kind of curious on what you're seeing. You have exposure -- a lot of exposure in San Francisco, plenty in the Pac Northwest as well. So just are you seeing signs of life on the sort of large technology accounts? How has that trended? And is there more room here? I mean we've heard -- you've been pretty clear that by segment, group is still the strongest, but I'm kind of curious if you've seen at least maybe some increased lead gen from the -- in the BT side from some of those technology accounts.

Sure. So I think our general comment is business transient travel continues to recover, and it's noticeable. And it's represented in the stronger weekday occupancy numbers. And as we look throughout our portfolio, there's no doubt that we've seen significant increases in the technology firms that represents itself in markets like San Francisco, like Boston, our Santa Cruz property, which doesn't benefit from corporate transient in the technology side, but has seen a very significant change in lead volume and group bookings from the technology firms in the adjacent Silicon Valley. So there's no doubt we're seeing it in technology. We're also seeing increased corporate transient in the consulting businesses on the financial side in your business as well. And these are in a way that sort of -- I don't know if it's the later to recover sectors or the ones that just got maybe in the case of technology, maybe got ahead of itself during the pandemic and went through this period of time over the last 12 or 18 months of job cuts and a little more cautiousness in total spend. And we've definitely seen that turn around so far this year?

The next question is coming from Michael Bellisario of Baird.

Jon, I just want to go back to your expense commentary. Can you maybe help us what's new, what's incremental compared to your prior forecast or prior outlook? And then how much of the savings that you've recognized in 1Q and expect to recognize in 2Q. What's the run rate savings look like? And how much of it is maybe just more onetime savings that you've been able to achieve on the expense side?

Sure. So it's a combination of the 2. I mentioned the real estate taxes. I think we were pretty clear in our call 60 days ago that we did not forecast any real estate tax benefits because we had no idea of timing. And lo and behold 60 days later. We've seen some success in at least one of our major markets within the portfolio. And of those real estate tax benefits, I mean, those -- much of that is onetime, but there is a reduction in the run rate in our taxes that relate to those properties, which are primarily in Southern California. And as it relates to the other expense, I mean, we have -- I mean, our #1 initiative within the company right now is a focus on efficiencies, creating efficiencies within the portfolios, collaborating with our partners to do that, getting back to fundamentals, reimplementing all of our best practices, taking advantage of new learnings. Some of these efforts have -- were put in place years ago. And Ray, you can talk a little bit about our workers' comp program, but that we put in place and what we were doing before. But those are ongoing run rate savings. The bulk -- the vast majority, I mean, maybe almost all of the savings in Q1 related to our efforts to lower expenses that should result in a run rate reduction and give us much more confidence in our ability to be well in the range in terms of our expense growth rate, of course, depending upon whether if we get a material acceleration in revenue in the second half beyond what we're currently contemplating, well, there are going to be expenses that come along with that and increase the growth rate. But obviously, that would dramatically increase the bottom line as well. So we feel really good about where we're going. We have a long way to go on this effort. There's a lot of programs and projects that are in place to reduce costs, and I think we'll be increasingly effective over the course of the year.

And Mike, so maybe just some additional color on some of those programs. So the workers' comp program that Jon mentioned, that was something we -- is unique. It's -- we took it back from our third-party managers because we thought we could do a better job actively managing it and being on top of it. So as a result of that program, we reduced our cost at our -- these are the independent properties. Again, the benefit of the independent hotels. We are more controlled than say it's brand-managed properties, which we can't control. But we've reduced our workers' comp cost by over 60% versus our -- when our managers were operating. So that's millions of dollars a year. we're getting better outcome. We're also -- the other side is Curator. Curator in a way is also our internal R&D group. They've gone out with new technology. We have new housekeeping tools that the housekeepers can be more efficient for how they clean rooms and schedule rooms in those areas. We're also working on a new tool that Curator put in place is an AI chatbot, which will reduce the call center volume and pressure on the staff of the hotels where frees up the staffing there, and ultimately, will result in lower staffing. So there's a lot of those areas that we're actively doing, and we have a lot more flexibility at our independent hotels because we could put those programs in place. And there's 100 of them that are in place. Some of them add more value than others, but something we're excited about, and we should see the results in the coming quarters here.

We've also been making investments in-- in reducing energy usage and sustainability. A couple of examples I'll give you, which, again, it's some of the stuff is not rocket science and it's not new technology, but the installation of filtered water dispensers in our hotels, as we're replacing ice machines, we're replacing them with dual machines that also provide filtered water so that we can eliminate plastic bottled water and all bottled water in our hotels. As we near the end of life on many HVAC systems, we're installing new higher-efficiency systems in those programs in those properties. We've also added solar -- we now have solar 2 properties, Chaminade out in Santa Cruz, but we also have solar on the Monaco DC in the center of the city. So there's a lot of things we've been implementing over time. But this year, a much more intensive focus on, frankly, some of this is just doing things the right way and not getting sloppy. And I think perhaps we've gotten a little bit sloppy in the last 18 months.

The next question is coming from Gregory Miller of Truist Securities.

Given your commentary on a softening macroeconomic environment, I thought to ask specifically on any affluent leisure trade downs. When you review your Star competitive set reports to our resorts, have you seen any evidence of a transient leisure consumer trade down? For example, are you upper upscale resorts gaining share from competitive luxury resorts -- or do you sense you may be losing share to lower price resorts? I'm just curious if you're seeing any impact.

Sure... That's a tough one. I would say -- I mean, the answer is no. We're not seeing competitive trade down. I think I mentioned earlier certainly, when we've seen sort of a trade down from the perspective of trading back to maybe what people can actually afford versus the splurge suites or view rooms that in '22 just coming out of being stuck in their homes during the pandemic. So there's no doubt we saw that. Again, I think we've -- I think that's normalized within the portfolio. We've continued generally to gain share within our resort portfolio. Our occupancy index, as an example in Q1 was for our resorts in total, we're up over -- was up over 200 basis points. So I don't think-- I think that's probably more to do with the dollars we've invested in our properties and the benefits of having higher quality properties with better service versus the properties we've been competing with in the market.

Greg, one other thing. Just one thing I want to respond to because it's sort of a general -- it was a comment in your question. I don't think we're seeing a slowdown in the economy and in travel per se. And I think we're just more cautious trying to be pragmatic about what impact the Fed's higher for longer is going to have on the economy later this year. It may not materialize. To some extent, the fact that it hasn't materialized to any great extent yet. But it's also cautiousness based upon what we saw in Q1, although, again, how much was weather, how much was the holiday shift and how much was softer performance it's hard to differentiate those 3 at this point in time. What we're not hearing we're not hearing comments from clients saying, we're changing our policy, we're slowing down. You have to get 35 approvals to travel. We are not hearing those things from the customer base. We're not seeing a reduction in lead volume for group business other than the normalization of the booking trend that we've been talking about.

The next question is coming from Anthony Powell of Barclays.

I guess what you think on the transaction side? I know rates are higher now. So are you still seeing my interest for urban assets and how is some of the volume out there? Maybe a broad overview would be helpful.

I think at the -- to Jon's earlier point on the in the previous answer to the question, I think the uncertainty, and I think everybody continues to wait for what the Fed is going to do. I would tell you, as we started the year, the investor sentiment was pretty strong. I think there was kind of a spring to action. I think that, that's somewhat been delayed as people wait for the Fed to pivot. I think that there is debt availability, but the debt is expensive and that's impacting pricing. So I still think at this point, there's some pricing discovery out there, but I think that in terms of actual volume of transactions, I think that's going to continue to be somewhat stalled or delayed until we see some real movement in terms of the base rates.

And there's not a lot on the market today.

I mean... What I would say to you is kind of doing my survey of broker interviews, so to speak, or just surveys of the brokers. I would tell you that there seems to be a very, very high level of the brokers doing brokers' opinions of values or BOBs but not necessarily a lot of -- that's not necessarily translating into listings. And I'd also say that the listings that are out there, the conversion rate from listing to closing is probably as small as it's ever been, given the fact that it's very difficult to secure any type of financing.

And then Anthony, we were very successful last year with the 7 transactions that we had. We generated over $330 million of sales proceeds. Certainly, as we look with, as Tom mentioned, with the Fed keeping the rates up, it's likely to reduce the number of transactions that are going to happen this year, including for potentially us. We'll still be active and look at that. But to just think things are maybe take a little bit slower now given everything that's going on with the interest rates and the Fed.

At this time, I'd like to turn the floor back over to Mr. Bortz for closing comments.

Great. Great job, everybody. I didn't think you'd actually follow the rules and limit your questions to one. So thanks for doing that. Clearly, we're here for additional questions that you have. We're happy to chat with you, and we thank you for your interest. Please enjoy the Hilton call that starts at 9 and we appreciate your interest in Pebblebrook, and we look forward to talking with you next quarter.