Greetings. Welcome to the Braemar Hotels & Resorts, Inc. Third Quarter 2021 Results Conference Call. At this time all participants are in a listen-only mode. A question and session will follow the formal presentation. Please note that this conference is being recorded.

I will now turn the conference over to your host, Jordan Jennings of Investor Relations. You may begin..

Good morning, and welcome to today’s call to review results for Braemar Hotels & Resorts for the third quarter of 2021 and to update you on recent developments. On the call today will be Richard Stockton, President and Chief Executive Officer; Deric Eubanks, Chief Financial Officer; and Jeremy Welter, Chief Operating Officer.

The results as well as notice of the accessibility of this conference call on a listen-only basis over the Internet were distributed yesterday in a press release.

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 federal securities regulations.

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 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. Statements made during this call do not constitute an offer to sell or a solicitation of an offer to buy any securities.

Securities will be offered only by means of a registration statement and prospectus, which can be found at www.sec.gov. 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 October 27, 2021, and may also be accessed through the company’s website at www.bhrreit.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 Richard Stockton. Please go ahead, Richard..

Good morning. Welcome to our third quarter earnings conference call. I will begin by providing an overview of our business and an update on our portfolio. After that Deric will provide a review of our financial results, and then Jeremy will provide an update on our asset management activity. Afterward we will open the call for Q&A.

We have five themes for today’s call. First, our luxury resort portfolio continues to outperform and help drive comparable hotel EBITDA of $27.8 million for the quarter. Second for the third quarter in a row, we were cash flow positive at the corporate level.

Third, our portfolio is well positioned to continue to outperform with very strong forward bookings. Fourth, our balance sheet is in good shape with no near-term debt maturities. And fifth, we completed the acquisition of the Mr.

C Beverly Hills Hotel in Los Angeles, California, a luxury hotel ideally located in close proximity to high end shopping on Rodeo Drive and business demand from Century City and Culver City.

Our comparable hotel EBITDA of $27.8 million during the quarter was driven by strong occupancy levels at our resort properties and a 16.3% increase in ADR over the prior year quarter. Additionally, RevPAR for all hotels in the portfolio increased approximately 168% for the third quarter of 2021 compared to the third quarter of 2020.

Our portfolio RevPAR decreased approximately 6.1% when compared to third quarter 2019 RevPAR. We are very encouraged to see our portfolio getting so close to our 2019 levels.

As we have said before, we believe our portfolio will get back to 2019 levels before a lot of our peers given our portfolio composition and quality, but also certain factors that made 2019 not a great benchmark year for us. Specifically, we had three of our properties under major renovation, including The Notary, The Clancy and The Ritz-Carlton St.

Thomas. Several of our hotels achieved very strong hotel EBITDA margins during the quarter with Bardessono at 45%, Hotel Yountville at 50% and Pier House Resort at 54%. Our overall portfolio comparable EBITDA margin was 23.5% despite including two hotels with negative hotel EBITDA.

While leisure demand continues to be strong, particularly on weekends, any significant uptick in RevPAR performance is likely to rely on the recovery of corporate transient demand and ultimately group demand.

Overall, our resorts continue to perform well and forward bookings look strong with occupancy for October at approximately 65% at a rate of over $300.

Two of this quarter’s best performing assets were our Napa Valley Properties with comparable RevPAR up 138% at Bardessono and 179% at Hotel Yountville during the third quarter, driven by strong gains in both rate and occupancy. In addition to the strong performance of our Napa Valley assets, The Ritz-Carlton St.

Thomas continues to be a standout performer producing $5.3 million in hotel EBITDA during the quarter. For the full year, we currently forecasted our Ritz-Carlton St.

Thomas should have close to $30 million of hotel EBITDA, which is the phenomenal result when you consider that we have acquired this hotel for $65 million in 2015, and it funded only approximately $30 million in owner-funded capital expenditures over that time.

Many of our hotels are in drive-to leisure markets and have been well positioned to benefit from the resurgence of pent-up leisure demand in recent months. In total, eight of our 14 hotels are considered resort destinations.

These include The Ritz-Carlton Sarasota, Bardessono, Hotel Yountville, Ritz-Carlton Lake Tahoe, Pier House Resort, Park Hyatt Beaver Creek, Hilton La Jolla Torrey Pines, and The Ritz-Carlton St. Thomas. We are pleased report that this segment delivered a combined hotel EBITDA of $26.7 million for the quarter.

I’m also encouraged by the advancing recovery of our urban properties. These properties include the Capital Hilton, Marriott Seattle Waterfront, The Notary Hotel, The Clancy, Mr. C Beverly Hills and Sofitel Chicago. For the third quarter four of these six properties posted positive hotel EBITDA. This is a significant turnaround.

It demonstrates that demand is quickly returning to our cities, both amongst the leisure and to a lesser extent the corporate transient segment. We expect this trend to accelerate as office reopenings continue during the remainder of 2021 and into 2022.

Additionally, we were cash flow positive again at the corporate level for the third consecutive quarter. While our balance sheet was in good shape as we entered 2021, this puts us in a much stronger position financially. We’re also happy to resume our growth strategy with the acquisition of the 138-room Mr.

C Beverly Hills in Los Angeles, California for 77.9 million. An irreplaceable luxury property in premier location in Los Angeles. This acquisition fits perfectly with our strategy of owning high RevPAR luxury hotels and further diversifies our portfolio. It is also an attractive price per key of $474,000 for fee simple owner ship of a luxury hotel.

It’s an impressive property in the middle of over 45 million square feet of office space, supporting substantial corporate demand and a wider array of world-renowned leisure demand generators, including unrivaled shopping with high-end retailers, vibrant restaurants and various art and cultural attractions.

As part of the transaction, we also acquired five luxury condominium residences adjacent to the hotel, which are currently being offered for extended stay rentals. Additionally, Remington assume management at the hotel post acquisition, which we believe will help drive superior operating performance at the property going forward.

We believe this property is a great addition to our portfolio and are very excited about the prospects of this acquisition as the hotel’s performance during the third quarter has exceeded our expectations with RevPAR growth of 143% over the prior year period.

Looking ahead, we continue to see a meaningful uptick on acquisition opportunities in the market. We’ll continue to be extremely disciplined in our investment approach and only focus on transactions that are accretive to total shareholder return.

On the capital markets front, subsequent to quarter end, we finalized one year extensions on our mortgage loans for the Bardessono Resort & Spa and Hotel Yountville. Importantly, our balance sheet is in good shape. We have an attractive maturity schedule with no debt maturities for the balance of this year and only one loan maturing in 2022.

We’ve also been active on the investor relations front. Over the past few months, we’ve attended several investor conferences and participated in numerous investor meetings. We also held well attended Investor Day in New York, a couple of weeks ago.

Looking ahead to 2022, we will continue to get out on the road to meet with investors to communicate our strategy and the attractiveness of an investment in Braemar.

Looking ahead, our unique portfolio focused on the luxury segment with many properties and drive to leisure markets, positions us to perform well in both the near-term and the long-term as business and group travel resumes. We continue to believe that Braemar represents a compelling opportunity in a lodging REIT space.

We are a differentiated story with the majority of our assets in very desirable resort locations, the highest quality portfolio in the public markets and a portfolio that is generating positive cash at the corporate level. And what we believe is a solid liquidity position and balance sheet with attractive debt financing in place.

I will now turn the call over to Deric..

Thanks Richard. For the third quarter of 2021, we reported a net loss attributed to common stockholders of $9.0 million or $0.15 per diluted share. For the quarter we reported AFFO per diluted share of $0.17 compared to AFFO of negative $0.21 per diluted share in the prior year quarter.

Adjusted EBITDAre for the quarter was $21.9 million and we were cash flow positive at the corporate level for the quarter. At quarter end, we had total assets of $1.8 billion. We had $1.2 billion of loans of which $49 million related to our joint venture partner share of the loan on the Capitol Hilton and Hilton La Jolla Torrey Pines.

Our total combined loans had a blended average interest rate of 2.6%. As of the end of the third quarter we had approximately 48% net-debt-to-gross assets. We ended the quarter with cash and cash equivalents of $195.5 million and restricted cash of $44.8 million.

The vast majority of that restricted cash is comprised of lender and managerheld reserve accounts. At the end of the quarter, we all also had $20.4 million in due from third party hotel managers. This primarily represents cash held by one of our brand managers, which is also available to fund hotel operating costs.

As Richard mentioned, our comparable hotel EBITDA during the quarter was $27.8 million after taking into account debt service, G&A costs, advisory fees, and other corporate costs, preferred dividends and capital expenditures year-to-date, we have generated over $30 million in positive corporate cash.

Additionally, subsequent to quarter end, we finalized extensions of our mortgage loans for the Bardessono Resort & Spa to a final maturity in August, 2023 and the Hotel Yountville to a final maturity in May, 2023. Each of the loans have been extended for one year beyond their initial maturity on the same terms of the original loan.

We were very pleased to be able to extend these loans for an additional year and in doing so. We have no debt maturities for the balance of 2021 and only one loan maturing in 2022 with a balance of $67.5 million. During the quarter, we issued approximately $5.8 million common share under our ATM raising approximately $30 million in net proceeds.

This capital raise and our loan extensions have improved our balance sheet, and liquidity by extending maturities, lowering our leverage and increased our cash on hand. I’m also pleased to report that we have raised approximately $9.3 million in net proceeds from our Series E and Series M non-traded perpetual preferred stock.

As for securities, a division of has been established and licensed by FINRA as a broker dealer in order to act as dealer manager on behalf of the company, with respect to these preferred series.

We expect to use any proceeds from the sales of these Series E or Series M non-traded perpetual preferred stock for general corporate purposes and to facilitate the company’s continued growth. This capital raising effort is just getting started and we look forward to reporting our progress in future quarters.

As Richard mentioned, we also acquired a new property during the quarter, the Mr. C hotel IN Beverly Hills. Total consideration was $77.9 million and consisted of $65.4 million for the hotel at an allocated price of $12.5 million for the five adjacent condominium units.

The acquisition was funded with approximately $30 million of cash, 2.5 million OP units, 500,000 warrants at a strike price of $6 and a $30 million mortgage loan. As of September 30, 2021. Our portfolio consisted of 14 hotels with 3,625 net rooms.

Our share count currently stands at 72.6 million fully diluted shares outstanding, which is comprised of 64.5 million shares of common stock and 8.1 million OP units.

In our financial results, we include approximately 4.1 million shares in our fully diluted share count associated with our series B convertible preferred stock and approximately $13.6 million shares in our fully diluted share count associated with our convertible senior notes. 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 comparable RevPAR for our portfolio increased a remarkable 168% during the third quarter. And we were able to generate a strong house profit flow through of 52%. For the third quarter Braemar recorded 94% of its comparable period, 2019 RevPAR compared to 85% and 74% for the U.S. luxury and upper upscale chain scales respectively.

In fact, we have outperformed the market in this metric in every quarter this year. We believe our portfolios consistent market outperformance is due to our asset management team’s drive for outperformance at each and every one of our hotels.

Notably our portfolios the GOP margin of 38% during third quarter is exceeding the comparable period in 2019 by more than a 100 basis points. Over the last 18 months, we have increased our touch points at each of the properties, and we have more data visibility than we have ever had before. Both of which have contributed to this GOP margin premium.

I’d like to high at this commitment to performance by providing some color on a few specific hotels. First, Bardessono Hotel and Spa generated over $2 million more in total revenue during the third quarter of 2021 than the comparable period in 2019 that is a 39% increase. These results were largely driven by newly built luxury bill list.

The bill is generated approximately $640,000 for the quarter, which is a record over any other quarter. They’re on pace to produce nearly 1.9 million for the year.

Additionally, the hotel has increased third quarter SMB revenue by approximately $250,000 relative to third quarter 2019 by capitalizing on the restrictions put in place by many local restaurants.

Next, we have the Park Hyatt Beaver Creek, which had a phenomenal third quarter with hotel EBITDA increasing $1.6 million or 87% over the comparable period in 2019. This achievement is a result of the property team that we put in place shortly after acquiring the hotel. One of our more recent hires was the Director of sales.

She has been fantastic, and the hotel outperformed group room nights in the third quarter by nearly 2,300 room nights relative to the comparable 2019 period specifically, we benefited from hosting more weddings during the third quarter of 2021 than we did during the same period in 2019.

Lastly, The Ritz-Carlton, Sarasota has once again, broken a record with third quarter 2021 being the best third quarter on record improving hotel EBITDA by $1.8 million over the third quarter 2020, which the previous record, amazingly the trailing 12 month EBITDA for the hotel is $21.6 million, which is nearly 60% greater than any other full year we have on record.

These incremental gains are largely in areas of opportunity that we identified when we acquired the hotel. These include selling out the hotel membership program, which represents nearly $6 million annual revenue, long-term labor reductions and rebalancing the hotel’s mix business mix to drive yield.

Moving on to capital investment, we have invested heavily in our portfolio over the last several years to enhance our competitive advantage. These investments, uniquely position, our portfolio to benefit from the pent-up demand that we are currently seeing in our markets.

Through the remainder of 2021, we are looking forward to restarting several value add projects across the portfolio.

These include adding 10 keys and a new cafe at the beach club at The Ritz Carlton Sarasota, construction of luxury retail space at The Ritz-Carlton, Lake Tahoe, a new grab and go market at The Hilton La Jolla Torrey Pines and a full guest room renovation at the Marriott Seattle.

In total, we anticipate capital expenditure of $20 million to $30 million in 2021. I’d like to finish by expressing how optimistic we are about the future of this portfolio.

As mentioned earlier, our GOP margin as a portfolio is already exceeding 2019 during comparable periods, but that performance is being carried by only seven hotels as the other seven hotels continue rebound that premium to 2019 should widen.

In addition, we have strategic initiatives completed that have not fully realized or potential in light of the current marketing conditions, the luxury villas of Bardessono Hotel and Spa, the recent upbringing of The Clancy and the recent upbringing of the notary to name a few. This portfolio is time for growth and we are excited to lead it.

I will now turn the call back over to Richard for final remarks..

Thank you, Jeremy. In summary, we continue to be pleased with the recovery trends. We are seeing at our hotels driven by strong leisure demand at our luxury resort properties. While we are still in the early stages of the recovery, we see a clear path for a steady strength in our future financial results.

We have taken decisive actions to navigate the near term challenges of this crisis, and we are well positioned moving forward, the solid balance sheet and a unique diversified portfolio. I’m proud of our efforts to protect our assets and maintain financial flexibility to position us for future success.

We look forward to updating you on our progress as we move through the remainder of 2021 and into 2022. This concludes our prepared remarks, and we will now open the call up for Q and A..

Thank you. Our first question comes from the line of Bryan Maher with B. Riley Securities. You may proceed with your question..

Good morning guys. A couple of questions for me. Maybe we can start with - outlook for the winter season/ski season at Hyatt Beaver Creek and Ritz-Carlton Lake Tahoe.

Do you guys have any early indications as to the level of strength you might see at those properties in the next quarter or two?.

Yes, we do Bryan. Thanks for that question. Yes, I mean, we’re looking at our bookings for December and I can tell you they’re approximately – the ADR is approximately $550 across the entire portfolio so – and driven by the strength of those ski resorts. So, yes, so things are actually looking really strong..

Yes, Bryan, I would add that as we sit right now, we’re forecasting Q4 to be down less than what it was in this quarter relative to 2019. So we actually – we continue to see improvements in the portfolio in spite of the strong performance we had in this quarter..

Okay. And then as it relates to the share sales in the quarter, I have to admit my email started getting some inbound commentary from investors on the share issuances that were roughly around 5.20 a share, which by our calculation, you know, it’s kind of a little less than 13 times next year’s EBITDA.

Can you talk a little bit about the thought process there, given the fact that you do have decent liquidity, you have access to the non-traded preferred market and you could given your recent trends de lever organically.

Can you talk to us about raising common equity versus other sources of capital and versus your thoughts on deploying that money into new hotel acquisitions?.

Yes, sure. I’ll take that. So no, you’re right and I agree with you. I think we are trading significantly below intrinsic value. I highlighted that at our most recent Investor Day. We did sell shares during the third quarter. We’ve now stopped doing so. So our ATM is off. Yes, I think that’s a reflection of the continued strength of the portfolio.

We continue to book positive corporate cash flow. Our leverage is coming down and that is really the intention. We’re now at 48% net debt to gross assets. We’re going to continue to work that down.

I think that’s something that we’ve committed to do to the market, but you’re right the common equities is not the way to do it at this point, given where we’re trading. So, I concur with that sentiment..

Great. And then just last for me on Mr. C, I believe that you guys said that you plan on spending some money there.

Is that included in the CapEx you talked about for 2021? Is that a 2022 event? And when do you think you might sell those five luxury residences?.

Yes, Bryan, this is Jeremy. We are in process of kind of finalizing our long-term plan internally of what we’re going to do with that property. And it will involve a capitalization CapEx renovation and repositioning. We do not anticipate much spending in 2022 for Mr. Cs.

I mean, we’re going to go through and do a full design and reconcepting of the public space. And as we complete that just given the lead times of renovations, I just don’t see us doing that until 2023..

Yes, in terms of the residential units, we’re actually figuring out that timing in parallel with the capital expenditure plan. So, right now, as a technical matter, they’re considered branded residences. So, once we figure out what we’re going to do with branding and CapEx there, we’ll be able to decide how to handle those units.

But – so there’s certainly nothing imminent whether or not we sell one in 2022 remains to be seen, but in any event of the right sort of disposition strategy would likely involve a drip feed of those units one at a time in any way. So it will take a little time is the answer..

Yes. Thank you very much..

Our next question comes from the line of Tyler Batory with Janney. You may proceed with your question..

Hi, good morning. This is Jonathan on for Tyler. Thanks for taking our questions. First one for me, just raise across the portfolio continue to be quite strong and was wondering if you could talk about your revenue management strategy broadly, what’s continued to drive that ADR and outperformance versus the broader luxury peers.

And going forward I think Richard you said the December, but any color you can provide on that..

This is Jeremy. I’m not going to go in a lot of detail on all our secrets, who guy with our revenue optimization program. I can tell you that we got, I believe, the best team in the industry. Our approach is very unique. It’s very hands on. It’s very data driven.

And everyone, I can’t even talk broadly across the portfolio because every one of our assets has its own story and its own put together and optimize for lack of a better maybe analogy. And so I think that the team has done a great job. It been very impressed with team, but they are heavily involved.

And it is one of the unique deals we have within our – our team. I think we have a separate revenue optimization team that works in conjunction with our asset management team to optimize all revenues, not just gaining RevPAR index or pushing rate, but needless to say, we’re very, very pleased with the results of the team and the portfolio.

It’s been quite an impressive achievement when you look at Braemar’s performance relative to probably any other REIT that reports this quarter..

Okay. I appreciate all that detail. And then follow up on the prepared marks, Richard, you commented the need for business transient and group demand to return.

I’m curious, you can provide any color kind of on what you guys are seeing on that front, if there’s been any noticeable pickup post Labor Day, and any expectations for when that could start meaningfully contributing?.

Yes, sure. Yes, I think, it’s early days still, right? I think there really hasn’t been a significant corporate transient demand that we’ve seen. The urban properties are continuing to improve month-over-month and week-over-week. But that is a lot of leisure demands still. So, we’re just not seeing it yet.

I mean, we’re seeing – we’re seeing early stages of it, but I wouldn’t say it’s meaningful yet..

I think it’s so to be excited about, one of the things I talked about in the prepared remarks is that really have seven assets is carrying the portfolio. And to think of the performance we have collectively across the portfolio.

And relative to 2019, I think is very impressive given where we are in terms of the recovery and knowing that we’ve got a handful of assets or about half the portfolio that’s yet to really rebound is something that we’re very, very excited about.

And I think it reflects a lot of the work that we put in from a capital perspective from a repositioning perspective of these assets.

And I do, I am proud with the asset management team, but also I do want to give Rich a lot of credit, because since he’s been joined us here at Braemar, he’s done a great job covering the portfolio, he’s done a great job acquiring some incredible assets and those assets that that we’ve acquired since he’s come on board are some of the ones that are driving the best performance right now..

Great. Thank you for all the color there. And then in turning to labor, I was wondering if you could provide some color on what you’re seeing on the labor markets? And if there’s any noticeable differences between the resort assets and the urban assets.

I know that might be difficult to parse out, given the resort assets have been running higher occupancy, but anything there?.

Yes. Look labor continues to be one of the biggest challenges that we’re facing here operationally. We do have – I’d say labor issues that just about every property in terms of, if the luxury resorts, there’s a high demand for labor, because we are running higher occupancies.

That said, I don’t think it’s to the point where we’re not able to deliver the service and therefore we are able to achieve rates and, we’re benefiting still from improved margins as a result. But we are having to pay signing bonuses, retention bonuses, hourly wages are on the rise. So that is a function of the market right now.

Fortunately for us ADRs are also on the rise, right? So, if you look at our GOP margin for the third quarter of this year, compared to the third quarter of 2019 it’s bang in line at 40% and with only $1.7 million less GOP this year. So the portfolio’s performing while labor is a challenge, there are other moving parts that are offsetting it.

And we continue to kind of benefit, from having leaner teams, but being able to deliver the right level of service..

Yes, I’d say one other thing is just keep in mind that this is a short term problem. It’s short term headwinds. It’s unfortunate, because we’ve already put the property teams through so much coming out of the pandemic and that we’ve had these labor shortages, but I think the team’s done a really good job to mitigate it.

And the pace of the wage increases is coming down month by month, week by week so that we believe that’s a healthy sign..

Okay, great. Thank you for all the color. That’s all for me..

Our next question comes from Chris Woronka with Deutsche Bank. You may proceed with your question..

Hey good morning guys. Richard, I think mentioned earlier that you’re seeing a pretty meaningful uptick in acquisition opportunities.

Can you maybe just give us a sense for the kind of things you guys would prefer to do in terms of something that’s that has in place yield or something where there’s a little bit of hair on it and you need to bring it back.

I’m just trying to get a sense for, what kind of hotel you would buy at this point in the cycle?.

Yes. We saw our first acquisition was an urban asset with in place yield about 5% unlevered cap rate. And we’d like to do more like that. But we’re also looking at resort opportunities. And I think we’re being very disciplined on in terms of our pricing. So, we are looking for in place yield. We are continuing to a focus on a 10% or greater unlevered IRR.

I see, a number of opportunities that weren’t profitable in 2019 and those are the ones that we quickly pass over. So, we want assets that have proven track records. That’s been our move from the start. We think that serves us best. And we think that helps with our delivery strategy as well.

So that’s, that’s what you’ll see us, doing more of continuing to look in the U.S. and kind of the U.S. denominated Caribbean markets and we’re seeing a decent number of opportunities out there.

And you, as I said in the past, there was kind of a dramatic shift as of June 1 when there were almost no opportunities really we could find, I mean, we’re lucky to be able to source the Mr.

C deal, but since then we’ve got kind of a long list of things that we’re looking at in some cases driven by motivated sellers who are facing, debt maturity coming up.

But in some cases sellers who are not necessarily institutional hotel owners and have decided given their experience over the last year, year and a half, they prefer not to be hotel owners going forward. And so that’s creating opportunity for us as well.

So we’re continued to be active and you’ll see us acquiring things similar to what we’ve done in the past..

Yes. I would add that we’re okay with complicated assets and assets with some – on it. I know that we we’ve in the past look for in place yield, but I think we’ve had a track record of improving that yield pretty significantly post ownership change under the umbrella of, Braemar.

And so one of the things we do focus on is if we have sellers that, that are not traditionally hotel owners, because that just a lot of times creates a lot of opportunities that we can uncover once we buy the asset. And if, we can walk through specifically a good amount of those assets that we’ve been able to do at Braemar..

And I would add to that Jeremy, when we talk about – that’s not necessarily negative thing. Like you look at The RitzCarlton Sarasota, we were aggressive in acquiring that asset, and that had a very complex membership program that I think, kind of scared some people away.

They weren’t sure that at membership program was going to be as resilient as it has been in the face of the downturn we just experienced. And it turned out that was even more resilient than room nights.

And so, we’ve been able to sell out all the memberships at The RitzCarlton Sarasota, we’re generating nearly $6 million in annual revenue and that’s continue to grow through the downturn that we just experienced, which has been a great win for us.

So it’s things like that, we have land out at that property as well that we’re progressing on in terms of further development. So, so you can call it – and call it complexity, or you can call it opportunity. And we like to turn it into opportunity and ultimately value..

Yes. And further, I just want have one more point is that when we bought The Ritz-Carlton in St. Thomas in 2015, a lot of buyers want to stay away from it. Because they wanted to be away from the Caribbean and that was risk.

We understood, we did a lot of analysis on it and we were comfortable with it and had an incredible yield in place when we bought the asset as we’ve walked you through. But then we’ve been able to really benefit under our ownership as well.

And of course, we did get hit by a hurricane and it was pretty devastating what the property team had to go through. But if you look at how we were able to deal with that it ended up being a great final result for us. We’ve got an incredibly rebuilt resort much nicer than what it was pre-Irma.

And we were able to get book a lot of attractive BIs during that time period. And I’m very proud of you know, the results when you look at it relative to the other resorts that are in the Virgin Islands I still isn’t open Frenchman reef, still isn’t open still isn’t open.

But we were able to get ours open in the fourth quarter of 2019 well, before the rest of their ownership groups..

Yes, appreciate all that color guys. And I guess just maybe to kind flip the question a little bit you’ve had a lot of success with, especially with Ritz in Sarasota, in St. Thomas. And is there any thought, we know private market pricing is there’s a huge gap versus public market.

Is there any thought to JV, at least JV in one or two of those assets to kind of prove out the value and, and just add, add liquidity or dry powder that way.

It’s an opportunity for us. And I’ll tell you that the JV we have with our JV partner and Torrey Pines and Capital Hilton has been a great partner for us. And it’s been a great experience. I don’t know that we’d wanted JV any over existing assets, but that actually, is an interesting point.

I know that one of the things that we’re looking at is teaming up with some, a other capital partners on other assets where they don’t have the infrastructure that we have at Ashford. And we potentially might use that for future acquisition.

So we can, further leverage our capital investment to give them a more diversity and hopefully create an acquisition pipeline. So once we continue the value add we would ultimately be the buyer as well..

Yes, that’s right. Jeremy, and pre pandemic, we had a strategy of doing kind of a GPLP or, or JV structure for, for acquisitions. I think that’s even more so applicable today.

I there’s as, you know, enormous amount of capital that’s been raised to capitalize on the lodging recovery but not necessarily by managers that have as deep advantage as we have in hospitality space. So we would certainly consider that as a means of further growth going forward..

Okay, very helpful. Thanks for all details guys..

At this time, we have reached the end of the question-and-answer session, and I would now like to turn the call back over to management for any closing remarks..

Thank you for joining us on our third quarter earnings call. Look forward to speaking with you again on our next call..

This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation. Have a great day..