Good day and welcome, everyone, to the Ashford Hospitality Prime first quarter 2016 conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Stacy Feit. Please go ahead, ma'am..

Thanks. Good day, everyone, and welcome to today's conference call to review results for Ashford Hospitality Prime for the first quarter of 2016 and to update you on recent developments.

On the call today will be Monty Bennett, Chairman and Chief Executive Officer; Douglas Kessler, President; Deric Eubanks, Chief Financial Officer; and Jeremy Welter, Executive Vice President of Asset Management.

The results as well as notice of the accessibility of this conference call on a listen-only basis over the Internet were distributed yesterday afternoon in a press release that has been covered by the financial media.

At this time, let me remind you that certain statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Such forward-looking statements are subject to numerous assumptions, uncertainties and known or unknown risks, which could cause actual results to differ materially from those anticipated. These risk factors are more fully discussed in the company's filings with the Securities and Exchange Commission.

The forward-looking statements included in this conference call are only made as of the date of this call and the company is not obligated to publicly update or revise them.

In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in the company's earnings release and accompanying tables or schedules, which have been filed on Form 8-K with the SEC on May 4, 2016, and may also be accessed through the company's Web site at www.ahpreit.com.

Each listener is encouraged to review those reconciliations provided in the earnings release, together with all other information provided in the release. I will now turn the call over to Monty Bennett. Please go ahead, sir..

Good morning, everyone, and thank you for joining us. For the first quarter Prime's RevPAR growth of 2.1% was in line with the performance of the broader industry. The industry as a whole was impacted by the unfavorable shift of Easter into the first quarter as well as more modest corporate transient demands.

Note that we also faced a relatively tough year-over-year comparison at Prime, yet we generated strong year-over-year adjusted EBITDA and AFFO per share growth of 32% and 46% respectively.

Additionally, the industry outlook for 2016 remains positive as demand growth is expected to continue to outpace the supply growth [indiscernible] forecasts that will continue at least through 2017.

Occupancy is expected to remain strong, which should support continued pricing power and rate growth for the industry, even if at slightly lower growth rates.

Our recently acquired Bardessono Hotel in Napa Valley and the Ritz-Carlton in St Thomas continues to have strong bottom line growth and we're confident that our portfolio is well positioned to generate strong operating performance for the balance of 2016.

I believe we have the most highly aligned, stable and effective management team in the hotel industry. Acting like shareholders has always distinguished us from others in our industry. We consider it one of our main competitive advantages.

We're particularly shareholder-focused as we are also substantial shareholders with 14% insider ownership, which is second only to Ashford Trust on the hotel-REIT space. To put that in context, the peer average insider ownership is around 2%.

Having so much of our personal capital invested in the platform has created a high level of alignment between our management team and our shareholders. Additionally, the structure of our unique advisory agreement with Ashford, Inc.

provides significant incentives to outperform versus our peer group, which was evidenced by Prime's significant total shareholder return performance versus its peer group in 2015. This focus on maximizing shareholder value is what led this management team and our Board to initiate a review of strategic alternatives in August 2015.

As we announced last month, our independent directors concluded the strategic review process. This review, which was conducted with the support of independent financial and legal advisors, was delivered and comprehensive in its evaluation of all potential alternatives, including a sale of the company.

We received indications of interest from a number of financial and strategic buyers. However, they were not at levels that our independent directors and advisors believed would provide adequate value to shareholders.

Thus, taking into account feedback from the investor community and the analysis completed through the strategic review process, we announced a number of immediate changes and longer-term initiatives designed to enhance the value for our shareholders.

We believe the positive stock price performance on the date of the announcement is indicative of the market’s favorable view towards these value-enhancing initiatives, which include, utilizing up to $50 million to initiate a stock repurchase program which we plan to be aggressive with at current levels and may increase depending upon stock price performance and pace of asset sales; amending our 2016 dividend policy commencing with the second quarter to increase the expected quarterly cash dividend on our common stock by 20% from $0.10 per diluted share to $0.12 per diluted share – this equates to an annual rate of $0.48 per diluted share, representing a 4.1% yield – liquidating Prime's hedge fund investment and utilizing the cash to fund the share repurchase plan; immediately unwinding the OP unit enfranchisement preferred equity transaction; and commencing the sales process for up to four assets that do not have the RevPAR level and product quality consistent with the long-term vision of Prime.

The assets include the Courtyard Philadelphia Downtown, Courtyard Seattle Downtown Hotel, Renaissance Tampa and Marriott Legacy Center Hotel.

Before I turn the call over to Deric for the financial review, I want to take a moment to encourage our shareholders to vote on our GOLD card for our Board slate in conjunction with our annual meeting that will be held on June 10. As I discussed, our Board initiated a strategic review in August 2015.

Our independent directors reviewed all possible alternatives to maximize value and we believe our Board is the best choice to execute on our announced initiatives as well as other opportunities to maximize long-term value for Prime shareholders.

We thank you all for your continued support and look forward to updating you on our progress on future calls. I will now turn the call over to Deric to review our first quarter financial performance.

Thanks, Monty. For the first quarter of 2016, Prime reported AFFO per diluted share of $0.38 compared with $0.26 a year ago. This represents 46% growth over the prior year. Adjusted EBITDA totaled $24.4 million, reflecting a 32% growth rate over the prior year. At quarter's end, Prime had total assets of $1.3 billion in continuing operations.

It had $838 million of mortgage debt in continuing operations, of which $49 million related to its joint venture partner share of the debt on the Capital Hilton and Hilton La Jolla Torrey Pines.

Prime's total combined debt had a blended average interest rate of 4.7% and it’s currently 49% fixed rate and 51% floating rate, all of which have interest rate caps in place. Prime ended the quarter with net working capital of $166 million. As of March 31, 2016, the Prime portfolio consisted of 12 hotels with 3,717 net rooms.

Prime's share count currently stands at 33.2 million fully diluted shares outstanding, which is comprised of 28.5 million shares of common stock and 4.8 million OP units. In Prime's financial results, we include approximately 3.4 million shares in our fully diluted share count associated with our Series B convertible preferred stock.

With regard to dividends, the Board of Directors declared a first quarter 2016 cash dividend of $0.10 per share or $0.40 per share on an annualized basis.

And as Monty discussed, commencing with the second quarter of 2016, the expected quarterly cash dividend on our common stock will be increased by 20% from $0.10 per diluted share to $0.12 per diluted share. This equates to $0.48 per diluted share on an annualized basis.

The adoption of a dividend policy does not commit the company to declare future dividends. The Board will continue to review its dividend policy on a quarter-to-quarter basis. This concludes our financial review. I'd now like to turn it over to Jeremy to discuss our asset management activities for the quarter..

Thank you, Deric. RevPAR for the Prime portfolio grew by 2.1% in the first quarter, in line with the industry-wide change scale, with EBITDA flow-through of 77%. Portfolio RevPAR for the quarter was negatively impacted by the shift of the Easter holiday to the first quarter.

Courtyard San Francisco and Renaissance Tampa both grew RevPAR by double-digits, with 12.9% and 10.6% growth respectively. The Capital Hilton grew RevPAR by 8.4%, outperforming the DC market by 530 basis points and is well positioned for the remainder of 2016.

Total portfolio RevPAR grew by 4.4%, excluding the Sofitel Chicago which was negatively impacted in the quarter by new luxury supply in the Chicago central business district and the Ritz-Carlton St. Thomas where results were affected by the impact of the Zika virus, but still outperformed its competitive set.

We expect the Sofitel will show significant improvements in the second half of 2016 when group bookings improve by double-digits and we anniversary the impact of new supply. Since the takeover of the Ritz-Carlton St.

Thomas, the asset management team has identified several opportunities to improve asset performance, both on the revenue and expense side. In just two months, our best-in-class team eliminated over $1.1 million of annualized expenses and allocated a portion of those savings to overhaul marketing practices and revenue management at the property.

The hotel's 129% EBITDA flow-through in the first quarter reflected only half of these expense reductions. In addition, we have identified numerous additional potential value-add opportunities. I look forward to updating you on our initiatives with this hotel as we progress through the year.

Another recent acquisition, the Bardessono Hotel in Yountville, California generated EBITDA flow-through of 198% in the first quarter as a result of cost reductions identified by Ashford and Remington. The Bardessono and Ritz-Carlton St.

Thomas are recent examples of Ashford's best-in-class asset management teams' strong track record of operating performance optimization following acquisitions, particularly with high RevPAR resort properties. These two examples demonstrate our asset management teams' ability to add value to both brand managed and Remington-managed properties.

Before I turn the call over to Douglas, I encourage you to visit our Web site and download a recent presentation on our impressive asset management achievements..

Thank you, Jeremy.

As Monty mentioned, one of the initiatives to enhance shareholder value that came out of the strategic review process was to commence the sale process for up to four assets that do not have the RevPAR level and product quality, consistent with the long-term vision of Prime of investing in luxury hotels and resort in gateway markets.

The assets include the Courtyard Philadelphia Downtown Hotel, Courtyard Seattle Downtown Hotel, Renaissance Tampa Hotel, and the Marriott Legacy Center Hotel in Plano, Texas. With regard to this initiative, we've already engaged brokers to sell these four assets and are actively marketing the properties.

The planned sale of these non-core assets will enhance the quality, increase the RevPAR, and reduce the leverage of our remaining portfolio.

We believe this asset sales strategy, combined with the other return of capital strategies announced, is the best way for us to create near-term value for our shareholders, while we continue to execute on our long-term strategy.

Additionally, the Board of Directors is conscious of the termination fee potentially payable under its advisory agreement with Ashford, Inc. as it relates to selling these assets, and thus has initiated discussions with the Ashford, Inc. Board to seek the necessary waivers of the fee.

We believe that these discussions will result in a favorable outcome, but the discussions are ongoing and we’ll not move forward with these asset sales unless there’s a prior agreement in place that the termination fee will not be triggered. We look forward to updating you on the progress of the sales process when we have further details to share.

That concludes our prepared remarks and we’ll now open it up for your questions..

Thank you. [Operator Instructions] We’ll take our first question from Thomas Allen of Morgan Stanley..

Hey. Good morning, guys. Just in terms of Chicago, that's a relatively new acquisition. That market you called out is suffering from supply, understanding that it’s weak city-wise right now.

But is that an asset you would consider selling down the road?.

We have no plans on selling that asset..

I guess just general thoughts on the Chicago market and long-term viability..

Sure. This is Jeremy. A lot of the supply that has hit the Chicago market is in the track and competes directly with Sofitel. A lot of that supply has come on line and we’re going to anniversary out of that in the third quarter.

What we've done with the property is we have revamped the entire sales team, revenue management, we've put a stringent profit improvement plan at the property. It's about $600,000 of savings. And group outlook for the property looks very strong in Q3 and Q4. And long-term, I think it’s a great asset. It's a great location, and so we plan to hold it..

And the market itself, we’re not in a position of giving up on the Chicago market long-term by any means..

Okay. And then just the Key West market, RevPAR was relatively muted in that market. It’s a market that’s been doing very well for a few years, kind of what’s your outlook for Key West? Thanks..

Longer-term, we’re excited about Key West. It’s almost impossible to build down there. And even during recessions, at least in past recessions, it’s held up very, very well. So it has the great benefit of doing fantastic during the good times and not dropping off, hardly at all, during the bad times.

Jeremy, do you have any more comments on the shorter-term?.

I think, shorter-term, there has been some redevelopment of some of the hotels that just kind of temporarily kind of added some new supply that kind of impacted the market in the first quarter. But, long-term, it’s a great market, virtually no high barriers to entry, no ability to add new supply.

So in the first quarter, it was impacted a little bit by maybe a little bit warmer season in the Northeast, as well as we're seeing a little bit softness across the portfolio and some transient demand..

Helpful, thank you..

And our next question comes from the line of Ryan Meliker of Canaccord Genuity..

Hey, good morning, guys. I wanted to talk a little bit about the conclusions from the strategic review. I guess the first question I had was with regards to the offers or the indication of interest that you received that were not at levels that the Board deemed viable. I understand.

I guess the question I have is, was the Board or the independent director of the Board able to provide those potential suitors with more than just guidance surrounding the termination fee valuation for the external management structure? I only ask that because, obviously, that's a big liability on the company's balance sheet.

And if investors don't know what that real value is, they tend to assume the worst and discount massively for it, and then you would get a valuation that doesn’t tie-up necessarily to what the company is worth. So just help me understand how that process went about..

Sure, Ryan. This is Douglas. How are you? The process was a thorough process in which the independent directors were heavily involved in the analysis, along with the advisor at Deutsche Bank. There were both inbound inquiries from groups that had an interest in the company as well as outbound calls.

And it was a wide array of potential, interested parties. As for the bid process and the interest that was expressed, the direction was to do so on a gross basis. Management had previously provided information in our Investor Day meetings as to the approximate amount that management believed the termination fee could amount to.

Once the bids came in, the Board, along with the advisor, could determine what the net value to the shareholders would be. And based upon the bids that were received, the Board determined that the valuation to the shareholders would be inadequate..

Okay, that’s helpful.

Can you share with us what management's estimate was that you provided to those third-party buyers?.

Again, the number was not provided to a third-party bidder in terms of their bid. Their bid was a gross bid..

Okay, understood. All right. Next question I had was, with regards to share repurchases, over the past year, you guys have highlighted the challenge of repurchasing shares in a stock that doesn’t have a great deal of liquidity.

And then as the outcome of the strategic review, you’ve now said you're going to go forward and buy back $50 million worth of stock, which at today's market cap is about a quarter of the – I’m, a sixth of the overall value of the company, further reducing liquidity.

Just wondering how the thought process changed, whether there was any analysis done that gotten you more comfortable, whether you’re expecting it to be a long, slow process over the next couple of years or something very rapid where you’re going to pull the trigger on a tender offer or something like that now?.

We plan to be in the market and to buy aggressively, and that is our plan. We do think that shrinking the size of a company, our company, can impact its multiple.

However, there is a big difference in the math when you’re buying back shares at $17, which is what we were buying back during the last buyback, versus $11 which is where it would be buyed back today. And that difference in accretion is much, much bigger and thereby offsetting some of these issues that come up because of a smaller flow.

So we plan to be aggressive and we think that will drive stock price performance..

Yeah, I fully understand that, Monty. And I think that makes a lot of sense. I think the one pushback that, I think, you might find in regards to that is that, in August of last year, your stock was closer to these levels and you were on the call saying that you were concerned about buybacks because of the reduction in liquidity.

So we've certainly seen – you make those comments at valuations that are closer to these levels than the $17 where you bought back before..

I am concerned about buybacks at this level. That doesn't mean it's not economic. And it is..

No, that’s understandable. Okay. And then the last question I wanted to touch on was the sale of the four assets. First of all, as you mentioned earlier in the call, you have yet to receive the waiver from Ashford, Inc. to sell those assets. I'm wondering, the strategic review started in September. It’s been nine months.

What’s the holdup and why would we – when should we expect to see resolution to that dynamic?.

Well, we said that the negotiations are underway, that we believe that we will obtain the necessary waivers. We’ve also said that we would not sell the assets if that would trigger the fee because we believe that triggering the fee is detrimental to value. So discussions are ongoing.

We are in the process of selling the assets with broker listings and it’s a fluid process. We first had to get through the strategic review. We've completed that and we move on to the next phase which is selling and negotiating. So that’s where we are..

I don't think, Ryan, that investors have concern about being able to resolve that amicably and in a way that is beneficial to Ashford Prime..

No, I would agree. I think that’s fair. I just questioned how long it's going to take, given where we are in the cycle. We’ve already seen asset values, at best, stabilize and, at worse, kind of go into a little bit of a freefall in the short term, while transaction volumes dry up.

So if it’s going to take another six months after the nine months of the strategic review, next thing you know you market the assets and we’re entering the downturn and you're not going to sell them because it doesn't make sense. So, I guess, the bigger question is how fast can that negotiation get resolved..

The negotiation is not the gating issue. The gating issue is the sales process of the assets themselves and Doug is leading a very aggressive process to get those out in the marketplace..

Okay, that’s helpful. And then just one last question regarding the asset sales. So these are four of the original eight assets in the Ashford Prime's spinoff a little over two years ago.

One of the questions that I've heard from investors since the strategic review commission came out was, if these four assets were non-core, why were they half of the assets in the initial spinoff? That doesn't seem to make a lot of sense.

And highlight some of the concerns that investors have with stock and the company's viability, I guess, overall as a standalone entity.

Any thoughts on that?.

What do you mean company's viability as a standalone entity?.

The size, scale, all those challenges. The big concern when you became public with the spinoff was too small, too illiquid, not geographically diversified enough, those challenges. And now four of the original eight assets are going to be sold, highlighting the challenges associated with. Now, we're back into some of those challenges.

And why were these four assets put into Ashford Prime in the beginning if they’re non-core in just two years?.

I think it’s an ongoing refinement of a strategy. A company, Ryan, has got to be flexible with what’s going on with the market conditions. And as the hospitality market has backed up over this past year-and-a-half or so, it’s important for the company to flex and to be smart and to do what’s the best interest of shareholders.

So for someone to jump out and to stay rigid in their approach is not the right way to do things, won’t you agree?.

I would agree. That’s helpful. All right, that's it for me. Thanks a lot, guys..

And our next question comes from Bryan Maher of FBR & Company..

Good morning, guys.

Kind of following up on Ryan's questions, but maybe not so harshly, how do you feel about Ashford Prime becoming an entity with only eight hotels from a size structure plus with share buybacks? And I get it, with the fee payment to Ashford, Inc., formulaically, that would go down which would help justify a smaller REIT, but you still have public company costs.

So how do you think about that kind of going forward over the next two years?.

Ashford Prime has a unique advantage. And that is, as an externally managed platform, not only does it have alignments much better than internally managed platforms, but it's overhead costs flex accordingly.

If Ashford Prime were not externally managed, the smaller size that it has would be much more of an issue as the overhead would be much more significant as a percentage. But because of its structure, it doesn’t have that concern. So that’s not a problem.

But I think what we have to do is look at the opportunities in the marketplace today, adjust, and then as the marketplace changes, the company changes. And so, we think, right now, here, over the next number of months, this is the best strategy. What happens after that? Depends upon the marketplace, and that could mean anything.

Getting smaller, getting bigger, whatever we think is the best interest of shareholders. And we will continue to do that. So I think that we can answer those questions if we knew what the market looked like six months from now, a year from now. And that is what would drive our decision-making.

But, as you know, we have a lot of money tied up in this ourselves, a significant amount of money. And a sale transaction would pay a lot of money over to Ashford, Inc., which I personally own a lot of and would be a fantastic personal transaction for me as that would enrich me immensely.

However, we just don't think, the independents don't think, and I agree with them, that's not in the best course of action for the shareholders at this point in time. And we will continue to do what we think is in the best interest of Prime shareholders. Period..

Just a couple of small items, has there been initial interest in the four hotels since that was announced since you actually did name the properties?.

Sure, it’s Douglas. Let me recap just a couple of things. I just want to add on to Monty's comments in response to your question and Ryan's question.

You’ll recall that – and I know you're all are familiar with this – the reason why these eight assets were originally contributive is that they were assets that we thought would be suitable for a Prime-type portfolio. Some of the assets were cross encumbered with debt pools.

And, from an efficiency standpoint, it was also the best approach to put them into a separate pool focused on luxury and upper upscale hotels and gateway markets and resorts. The strategy to sell these, as Monty pointed out, is fluid. We’ve always been, as a management team, one of the best at recycling capital.

Throughout our history, even looking at what we did as a management team or have done at Trust, we’ve sold, I think, approximately 20% to 25% of our asset base over time and recycled that capital. And we did that based upon a variety of market situations. In this particular instance, these are hotels that are in very strong markets.

But the fact is that as we have bought assets and actually increased our asset base by 50% through transactions like the Ritz in St. Thomas and the Bardessono. The overall portfolio RevPAR has increased and we are in the $190s range. These assets are in the $110 to $170s range.

And so by default, by removing these assets, we elevate the remaining RevPAR of the Prime portfolio. And we all know that there's a strong correlation between absolute RevPAR and EBITDA multiples. And so. We want to capitalize on that.

We also want to capitalize on the fact that, as a stated part of our strategy, we want to approach our targeted net debt to EBITDA and maybe even do better than that. And so, here's a situation where we can accomplish that goal as well by selling these assets.

And third, the cash that comes in from these potential sales can be used for different purposes. We've always been opportunistic in trying to find the best way to maximize shareholder value with cash on the balance sheet. So, for those three reasons, it makes absolute sense to do what we’re doing.

In terms of where we are in the process, as you can imagine, these are high-quality assets. And the moment we said that we were looking to sell them, buyers will make inbound calls. Meanwhile, we've listed them with different brokers. They're out in the market. The process has commenced.

We’re hopeful that the prices that we've internally suggested that we would receive will be met. The buying market is still active. It’s a little bit more selective today.

You have some groups that are window shopping, some groups that are looking to get bargains, but these are assets that we think there’ll be demand for and that we will hopefully be able to announce, as the process continues, our progress there..

Listening to Doug, I don't know if I heard him right, so I just wanted to add that, yes, we have had inbound calls already, the moment we announced these, which is very encouraging..

And as it relates to your acquisition activity going forward, should we expect more along the lines of kind of Bardessono and the Ritz? And what is that acquisition environment like? Are there sellers of these kind of high-end, niche product that are a little nervous and are starting to shop some of those properties before we eventually get into more of a downturn?.

We think the vision of Ashford Prime is more towards the higher end, so that is going to be our focus when the time comes. But as far as acquiring properties, we’re not actively looking to acquire properties right now. So I don't know if we can really speak to exactly what that market looks like right now as it compares to the market overall.

But we have found that we can maybe have an advantage in these higher end properties of being able to bring all kinds of both cost efficiencies to them, immediately and radically, and also a sophistication on the revenue management side that some of the independent luxury properties just do not have.

So we see it as a great opportunity generally out there in the marketplace..

I think if we take a look at our Web site and open up the presentation that Jeremy mentioned, you’ll will see exactly what we can achieve in terms of operational improvements, top and bottom line. So I think that, really, performance speaks for itself. Look, we're not actively looking to buy hotels. That is clear.

But we do still try to keep our finger on the pulse of transactions that are in the market and I don't see any rush to exit by any means of holders of these high-quality assets. It’s still a very thin pool of assets that become available in the market today.

And while there’s been some slight reduction in buyers, there’s still appetite for these types of assets in the market..

And just lastly, I wanted to clarify something Jeremy said.

On the 4.4% RevPAR growth, was that ex-Sofitel and ex the Ritz-Carlton or just the Sofitel?.

That was both..

Okay, thank you very much..

[Operator Instructions]. And we’ll take our next quick question from Michael Bellisario of Baird..

Good morning, guys. Two questions for you.

First, on the four hotels being marketed for sale, other than Philly, when were the other three last renovated? And if, I guess, we put ourselves in the shoes of a buyer, how should we think about potential CapEx spend that might be needed to be spent there?.

Okay. So on Courtyard Seattle, I believe we did the rooms in 2012, maybe 2013. But I think it was 2012. And we did a full comprehensive lobby renovation. Just recently completed that. So from a CapEx standpoint, there’s very little CapEx that’s going to be required at that asset. Courtyard Philly, we recently renovated.

It’s been a couple of years, I believe. We just won a big award actually for Marriott, a renovation excellence award for that hotel. Specifically, it’s got an incredible design, really unique design. It doesn't feel like a Courtyard. It feels more like an upscale boutique hotel.

And then there’ll be some capital requirements in lobby, probably in – or mainly the restaurant, probably in two to three years. But I don't think it's going to impact the valuation so much from a buyer’s perspective. So that asset is in great shape. Marriott Plano in the Legacy Town Center, we recently completed the rooms renovation.

That was just a soft rooms renovation. That’s been a few years now. But we did not do the suites, so we’re actually scheduled to do the suites here soon, probably in the first quarter of next year at the earliest. And that would be assuming that we couldn’t sell the asset. If not, a new buyer would have to renovate the suites.

There’s about 60 or so suites, I think, in the hotel. And it did not have a great room concept, but the lobby is not really configured really well for a great room. But that would be a potential value add, ROI investment that the new buyer could do if they wanted to reposition the lobby and add a very dramatic bar in the lobby.

And then Tampa, Tampa we just renovated in the third quarter of last year, did a full guest rooms renovation, and the lobby was recently renovated as well. So I think, if you look overall with all four assets, from a capital standpoint, I think it's very low impact to valuation for a new buyer..

Thanks.

And then just staying on that topic, on margins, and given that these are Marriott managed, how should we think about or how might margin growth improve for the remaining portfolio, if and when these properties are sold, specifically thinking about incentive management fees and property taxes?.

I haven’t pro forma-ed out margins for the portfolio. So we could do that and Deric can follow up with you offline. I can tell you that we’re paying incentive fees at Plano, Courtyard Philly and Seattle. It's not really much of an impact in Tampa.

And then a lot of the – we've had a lot of the bad painful increases of property taxes, and so, hopefully, a lot of that could potentially be behind us, but we're still fighting aggressively with the assessments that come out..

Thank you. That's all for me..

And it appears there are no further questions at this time. Mr. Bennett, I’d like to turn the conference back to you for any additional or closing remarks..

Thank you all for your participation today and we look forward to speaking with you again on our next call..

And that does conclude today's conference. We appreciate everyone's participation..