Chatham Lodging Trust (CLDT) 2013 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Chatham Lodging Trust's second-quarter earnings conference call.

At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question-and-answer session, and instructions will be given at that time. (Operator Instructions).

I would like to remind everyone that this conference call is being recorded today, August 6, 2013 at 11 AM Eastern time.

I will now turn your presentation over to Chris Daly, President of Daily Gray. Please go ahead, sir.

Thank you, John. Good morning, everyone, and welcome to the Chatham Lodging Trust second-quarter 2013 results conference call.

Yesterday after the close of the market, Chatham released results for the second quarter, June 30, 2013, and I hope you had a chance to review the press release. If you did not receive a copy of the release or you would still like one, please call my office at 703-435-6293, and we will be happy to email you a copy, or you may review the release online at Chatham's website www.chathamlodgingtrust.com.

Today's conference call is being transmitted live via telephone by webcast over Chatham's website and at streetevents.com. A recording of the call will be available by telephone until midnight on Tuesday, August 13, 2013, by dialing 1-800-406-7325, reference number 463-0897. A replay of the conference call will be posted on Chatham's website.

As a reminder, this conference call is the property of Chatham Lodging Trust, and any redistribution, retransmission or rebroadcast of this call in any format without the express written consent of Chatham is prohibited.

Before we begin, management has asked me to remind you that in keeping with the SEC's Safe Harbor guidelines, today's conference call may contain forward-looking statements about Chatham Lodging Trust, including statements regarding future operating results and the timing and composition of revenues among others.

Except for historical information, these forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially, including the volatility of the national economy, economic conditions generally and the hotel real estate markets specifically; international geopolitical difficulties or health concerns; governmental actions; legislative and regulatory changes; availability of debt and equity capital; interest rates; competition; weather conditions or natural disasters; supply and demand for lodging facilities in our current proposed market areas; and the Company's abilities to manage integration growth. Additional risks are discussed in the Company's filings with the Securities and Exchange Commission.

All information on this call is as of August 6, 2013, unless otherwise noted, and the Company undertakes no obligation to update any forward-looking statements to conform these statements to actual results or changes in the Company's expectations.

During this call, we may refer to certain non-GAAP financial measures such as EBITDA and Adjusted EBITDA, which we believe to be common in industry and helpful indicators of performance. In keeping with SEC regulations, we have provided and encourage you to refer to the reconciliations of these measures to GAAP results in our earnings release.

Now to provide you with some insight into Chatham's 2013 second-quarter results, allow me to introduce Jeff Fisher, Chairman, President and Chief Executive Officer, and Dennis Craven, Executive Vice President and Chief Financial Officer.

Without further ado, let me turn the sessions over to Jeff. Jeff?

Thanks, Chris. Well, my usual enthusiasm might sound pretty bad compared to yours, but thanks for the intro this morning. And thank you all for joining us here again. Happy to be back for our second-quarter earnings call.

Since our IPO in 2010, as you know, we have set out to build a premier lodging REIT, making high quality hotel investments, generating strong earnings via high operating margins facilitated through our aggressive asset management, and producing significant cash flows to pay meaningful dividends to our REIT investors.

We know to build another successful lodging REIT, and we have to be patient and grow as equity and debt markets allow and where proceeds can be used to purchase value-enhancing hotels. We also know we have to be patient as we analyze growth opportunities to determine the best deals to consummate. We've executed very well on our strategic initiatives to date, and the result is an investment portfolio that produces high FFO per share, high operating margins and allows us to pay one of the best dividends in the lodging space.

I'm real pleased with the hotels that we have acquired to date and particularly the hotels that we've been able to buy in 2013.

I'm going to shed some light on some of the performance of those assets just to highlight I think how well our patience has paid off, insofar as targeting specific assets with specific owners, almost all in direct relationship purchases that really have produced, I think, some great cash flow and dividends for the Company, and will continue to do so going forward.

In pursuit of our continued growth as a premier lodging REIT, during the second quarter, we had a very successful offering in June, raising approximately $80 million at a price of $16.35 per share, 11% higher than the offering price of $14.70 per share in January of this year. We used the offering proceeds to acquire a Great Hyatt Place Hotel in downtown Pittsburgh adjacent to the PNC Park in Heinz Field for $40 million, and we've entered into another agreement to acquire another great hotel in the Northeast for about $15 million.

We also issued two CMBS loans, raising $44 million of cash, excess proceeds from the offering, and the two loans have been used to pay down most of our credit line.

We now have approximately $95 million of capacity and are well-positioned to acquire additional hotels that meet our very strict underwriting criteria.

Switching gears to our second-quarter operating results, adjusted FFO per share came in at $0.48 per share, in line with consensus estimates and up almost 12% from the 2012 second quarter. Adjusted EBITDA was up almost 15% to $13.7 million over the 2012 second quarter. Acquisitions and reduced interest costs continued to fuel the increases.

RevPAR grew 6.1% at our comparable 20 hotels, which I'm real proud of, especially as you look across the comps, which excludes our unbranded DC hotel under renovation.

Also excluding the Pittsburgh Hyatt Place Hotel, which we only owned for 15 days, RevPAR was up 5.3%.

So you can see that the Pittsburgh hotel in the second quarter and as we see it going further forward this year has shown some very strong RevPAR growth also. Either way you look at it, our growth was higher than industry RevPAR growth of 5%.

We continue to see double-digit RevPAR gains in both of our Houston hotels. Our Portland, Maine hotel and our White Plains hotel, our Residence Inn there, was also up very strong, up 18%.

The recently acquired Hyatt Place in Pittsburgh saw RevPAR jump almost 20% in the quarter. We are very happy to see our recent acquisitions doing so well, which is attributable not only to strong markets, as you look at the markets that we've been targeted at acquiring hotels in, we have high single-digit and in some cases like Houston double-digit market growth. And in each case, as I look at our hotel stats for the quarter and for year to date, our RevPAR indexes in those hotels have been improved by the IH management team. So, for example, in Portland at the Hampton Inn that we bought there, we got comp stats market up roughly 6.5% but the hotel up roughly 10%.

That's the kind of value-add that we are looking for here at Chatham from our operators. And if we selectively acquire hotels in markets that have strong demand generators, that are growing strong and that are insulated from new competition and then add to that the value add brought by IH as the operator, we believe we will continue to see the kind of results that we've been able to post here at Chatham as a public company.

So real happy with those acquisitions, and the things that we're looking at going forward, including the one Hampton Inn & Suites that we have under contract, again have similar characteristics in the market or have opportunities for value enhancement to really drive the RevPAR and EBITDA growth out of those hotels.

Continuing a theme from others who previously reported, a little bit of the negative in the world seems to revolve around sequestration impact in our portfolio, and we really see it in Tysons Corner, Virginia. Tysons has always been a fantastic hotel for us, a Residence Inn that we built back in the Innkeepers days. It was one of the five sister hotels that we acquired during the Innkeepers bankruptcy, but the RevPAR declined in the second quarter 12% at the hotel, and that's primarily ADR, which, of course, has a substantial negative impact on our margins as well.

RevPAR at our DC hotel, which is currently being renovated and will be rebranded to a Residence Inn for the September 1 opening, declined almost 40% in the quarter, but most of that was really due to the renovation, and roughly half the floors being out of commission as we go through and get into the room side of that renovation. We do have, and I want to continue to emphasize, because of a more leisure component in the Foggy Bottom location and less reliance on government ADR and per diem business as compared to Tysons, we do have a strong, strong outlook for that hotel when it ramps up and as we ramp it up through the fourth quarter and especially for 2014.

Year over year, second-quarter operating margins were up 10 basis points to a very healthy 46.8%, and when you remove the impact of our DC hotel, operating margins would have been up 30 basis points for the quarter. Increased margin growth was attributable to reduced rooms department expenses.

This is encouraging as first-quarter margins were flat, and as we spoke about last quarter, more and more of our RevPAR growth is being driven by increases in rates for the second quarter. RevPAR growth was entirely attributable to ADR. So, again, this bodes well for us moving forward as our operating model is best at driving incremental revenue to the bottom line, increasing cash flow, reducing leverage and paying dividends.

Hotel EBITDA margins were down 40 basis points in the quarter to 40.1% due to higher property taxes and insurance costs in our recent acquisitions. Of course, we challenge any and all property tax increases which are not reasonable. So we hope we will get some refunds down the road.

On the operating side of our Innkeepers joint venture with Cerberus, RevPAR growth was up 5.8% for the quarter, so almost 6%. As most of you know, we have got a significant presence in Silicon Valley with eight upscale extended-stay hotels, seven Residence Inns and one Hyatt House. RevPAR in the Silicon Valley hotels was up over 11% in the quarter, continuing strong trends in Silicon Valley, and in that portfolio, ADR increases accounted for approximately 2/3 of the increase.

With respect to the performance of the JV, second-quarter EBITDA at the 51 comparable hotels was up 7% to $28.2 million, and year-to-date EBITDA was up 6% to $48.9 million as there were more hotels in the Innkeepers portfolio during 2012. We have sold some non-core assets, as you may recall.

Looking at the condition of our Chatham portfolio, the only renovation remaining in 2013 is the completion of the DC conversion. The conversion of our DC unbranded hotel to the Residence Inn is making great progress. Public space is complete, and we are in the rooms, as I said, anticipating completion by the end of this month.

We added another great hotel in our portfolio in the quarter with the $40 million acquisition of the Hyatt Place in downtown Pittsburgh, and again looking forward to expanding our relationship and our franchise affiliation with Hyatt, of course, we do have five Hyatt House hotels in the Cerberus JV. So we enjoyed that relationship, and we see opportunities perhaps on the Hyatt Place side going forward.

This is a fantastic hotel that opened in 2010. As we told you before, it's in a great location, so again looking for further EBITDA growth and strong returns from that hotel.

Additionally, we noted in the release that we seized on a unique opportunity to expand our joint venture affiliation with Cerberus, and we acquired a 248-suite Residence Inn that's located in Torrance, California, a good market with traditionally higher barriers to entry. We only paid $125,000 per room. We will invest some money there to go on a go forward basis to bring that fully up to Residence Inn standards, but that is a good hotel that we bought at a great going in cap rate.

We have a very active pipeline, as I have said, for acquisitions, which allows us to make the right deal for our shareholders, and we've been able to find targets that have RevPAR growth and internal growth prospects at least as good if not better than the internal growth rate of our current portfolio. The recent acquisitions, as I said, have proven -- have performed very strongly, and our Torrance acquisition is yet another example of the value we bring vis-a-vis our relationships in the industry. We have one of the highest quality select service investment portfolios in the REIT space and will continue to find assets that meet our very strict acquisition criteria and make accretive acquisitions.

I'd like to also note that we've got a great start for the third quarter here. Month of July, RevPAR for the Company was up a healthy 7.8%, excluding the DC asset. So, again, almost 8% RevPAR growth coming out of the box for this quarter feels pretty good to me.

With that, I would like to turn it over to Dennis.

Thanks, Jeff, and good morning, everyone.

For the first quarter, we reported net income of $2.2 million or $0.12 per diluted share compared to net income of $1.2 million or $0.08 per diluted share in the 2012 second quarter. First-quarter RevPAR was up 2.6% to $101 for the 20 hotels we owned for the entire quarter compared to our prior earnings guidance of 2% to 3% growth.

Excluding our unbranded DC hotel, our RevPAR was up 6.1% on an increased rate of almost 6% and a 0.4% increase in occupancy to 83.5%, up 30 basis points.

RevPAR performance for the industry was 5% for the quarter, and so, of course, we are very pleased to put up some good numbers above industry averages in the quarter.

RevPAR in our DC hotels, as Jeff alluded to, was down 38.8% in the quarter as we complete the renovations to the rooms in anticipation of our conversion to a Residence Inn on September 1.

Adjusted EBITDA for the Company rose almost 15% to $13.7 million with a jump attributable to the acquisitions that we made in late 2012 and 2013, as well as improving margins and the outstanding performance within our joint venture. During the quarter, the joint venture contributed approximately $2.9 million of Adjusted EBITDA to Chatham.

Adjusted FFO jumped significantly up 48% to $8.8 million from the 2012 second quarter of $2.9 million of FFO. On a per share basis, FFO per share rose approximately 12% to $0.48 in 2013 compared to $0.43 in 2012. Excluding the impact of the June offerings, as well as the Pittsburgh acquisition, adjusted FFO per share would have been approximately $0.50 per share within the original guidance that we had provided for the quarter of $0.49 to $0.51.

In addition to our strong operating performance, the jump in FFO was aided by $1 million decrease, which is about 25% in interest expense, resulting from a refinancing of our line in late 2012, as well as the various refinancing efforts we made in the first quarter and second quarters of 2013.

The average interest rate on our debt is now 4.7% compared to 5.9% 12 months ago, a nice 120 basis point decrease. And as we look forward into 2014 and beyond, the average interest rate currently on our fixed-rate debt is down 100 basis points from 6% to a now very attractive 5%, and our average maturity date has expanded to mid-2021 on our fixed-rate debt.

Net debt was approximately $188 million at the end of the quarter, comprised of debt of approximately $207 million, offset by $19 million of cash.

You should note that we normally like to operate with about $5 million of cash for our portfolio, but due to the timing of the exercise of our [shoe] in late June and the timing of the due date on a tranche of our line of credit, we didn't pay down a line until after the quarter closed for those proceeds from the shoe. And as we sit here today, we have approximately $19 million outstanding on our line of credit.

As you look at financing, although rates have picked up a little bit in the last 90 days, from a historical perspective, rates are still relatively low, and we will continue to take advantage of these market conditions to fund a portion of our growth moving forward. Using some reasonable leverage enables us to lock in solid long-term returns for our shareholders.

Subsequent to our offering, our leverage ratio calculated as net divided by our hotel investments ratcheted down to 34% and is below our long-term goal of 35%. Having said that, though, as Jeff alluded to, we still have a very active acquisition pipeline, and at this stage of the cycle, we are still comfortable operating at leverage levels higher than our long-term goal, and we do anticipate trying to make another $100 million to $125 million of acquisitions and maintain a leverage ratio somewhere in the mid-40% range down the road.

Our current ratios are very healthy with a debt service service coverage ratio of over 2 times, debt to enterprise value of approximately 32%, and debt to hotel EBITDA of approximately 4.7 times for Chatham on a standalone basis and about 5.4 times, including our share of the joint venture.

We only have about $5 million of debt maturities coming before us in 2015 and only $38 million maturing in 2016. After that, our next maturity is 2021. And when we look at this on a standalone basis, Chatham is well-positioned to deliver naturally over the next several years because we have very little renovation obligations.

After the completion of the conversion of the DC hotel, we will have no further renovations for the remainder of 2013, and in 2014 we will only have two hotels, the Residence Inn in White Plains, which is due for a rooms renovation, and the Homewood Suites in Carlsbad, California that will need a six-year refresh that will need renovation. Certainly with only two hotels on the calendar for 2014, we will be able to manage any displacement to an absolute minimum in 2014.

And then when you look past 2014, we only have one hotel that needs renovation in 2015, and that's our Homewood Suites in San Antonio. So what you get is certainly a Company and a portfolio that is going to generate significant cash flow over the next several years that will allow us to pay down debt and invest in additional acquisitions.

We are in the process of refinancing and switching gears to the joint venture the existing $786 million of debt with a new $950 million loan. We expect that we will close the loan within the next couple of weeks, and after the financing closes, we do estimate that most but not all of our original investment will be returned, but the portfolio will still be well-capitalized with sufficient equity value, substantial capital reserves will have been funded, and we will have very healthy debt coverage metrics within the portfolio.

We will certainly share specific terms of the debt after the loan closes, which, again, like we said, we expect that will occur -- not hopefully -- but we expect it will occur within the next couple of weeks.

You know, this is very exciting news for both us and for Cerberus. It reflects the underlying value that we seized upon in 2011 when we joined with Cerberus to acquire Innkeepers. And obviously no one can predict the future, but we are well-positioned here at Chatham to benefit from our promoted interest down the road.

We did provide guidance for the third quarter and for the full year, and with respect to our guidance, our prior full-year guidance for FFO was $1.58 to $1.64 per share. After the June offering, we did increase our shares outstanding by approximately 28%. So with the guidance that we provided of $1.44 to $1.48, that number is due entirely to the impact from the offering. Since we've only completed so far one acquisition post offering, being the Pittsburgh Hotel, we do have another hotel under contract that we expect to close here in the near future in the Northeast for $15 million, and we estimate that on an annualized basis, once we make another $100 million to $125 million of additional acquisitions, our pro forma 2013 FFO run rate would be in the $1.65 to $1.75 range. So it really sets us up well for a strong 2014.

Our third-quarter RevPAR is projected to grow 4% to 5% from all 21 hotels. RevPAR at our currently unbranded DC hotel is projected to decline over 30% in the quarter, which is bringing down our portfolio of RevPAR by approximately 150 basis points in the third quarter of 2013.

Our Tysons Corner property continues to see weakness, as Jeff alluded to, due to sequestration and is projected to see RevPAR drop approximately 15% in the third quarter. Our projections do not include any other changes to our capital structure or equity offerings or any acquisitions that haven't closed. And from a dispositions perspective, we don't expect any in 2013 for Chatham, and within the joint venture, we do expect to complete the sale of one final noncore asset.

With that, operator, that concludes our remarks, and we will turn it over for questions.

(Operator Instructions). Felicia Hendrix, Barclays.

Hi, guys. This is [Justin] in here for Felicia. We just had a question regarding the promote. Given how well the JV is doing, we are trying to put a potential value on that. We are estimating maybe $1.00 to $2.00 per share. I was wondering if you maybe would tell us if we're in the ballpark there? And then also maybe if you just discuss how you guys are thinking about valuing the promote?

Yes, I mean I think from you know we gave guidance back in February. You may not have been on the call, but we did walk-through just the general financial metrics of the joint venture. And, you know, when we look at hotel EBITDA of about little over $100 million for 2013, you know if you look at selective service, select service REITs are trading at around 13 times 2013 EBITDA, you come with certainly a portfolio value. We currently have a little less than $800 million of debt. So you have got some nice equity value of a little over $500 million.

The form of the promote is intended for us to increase our participation from our current 10% interest to upwards of 20%, assuming certain returns are met. So certainly we believe I think people can infer whatever value they want from that. But it is certainly something that down the road I think we all know that it's a meaningful piece of our equation.

This is Jeff. One thing that we're going to do because this question for some reason seems to be coming more and more popular and you know more interesting I think to a lot of analysts and shareholders and rightfully so because this investment has proven to be, I think, a homerun for us. So there is this refinancing, as Dennis indicated. When the refinance closes, we will put out a release and talk a little bit more in detail about our interest in this investment. You know, we are obviously not going to or can't value this thing for you, but I think what we can do is put some specificity around the promote structure.

The promote structure we've always declined to comment on but, in fact, has been filed as part of a 10-K and was a 2011 10-K, of course. So, therefore, it's out there for the world to see anyway, and we'll talk about that a little more specifically and how that plays on the numbers. But only good news there, thank goodness.

Okay. Great. Thanks, guys.

Nikhil Bhalla, FBR.

You know, you talked about the Hampton Inn purchase. Would you give us some sense of what the going in yield is on that asset and how that asset came about or why this particular asset versus some other asset? Thank you.

Again, this asset, no broker, very similar circumstance and, frankly, came from more or less the same individual that we worked with with our Hilton relationship up in the Northeastern United States, particularly I will tell you a little more the New England region. So hotel is, once again, so I think we are hitting on all cylinders, although it's not our only acquisition criteria. But it's essentially brand new, and it is an opportunity for an owner to recycle some capital to where he needs it somewhere else and for us to get a hotel that opened late -- when did that one open -- 2011 and looking forward to normal ramp-up of the hotel. Obviously no CapEx and in a little bit smaller market, but a market that should continue to provide good growth going forward.

No broker again.

Got it. In terms of overall margins, is that rate comparable to what you're seeing in your portfolio right now?

Yes.

Yes.

Okay. And then just a follow-up on acquisitions. Dennis, I think you gave a very good outline of what you expect in terms of acquisitions going forward. Any sense of, you know, are these more near-term, or is this maybe in the next -- over the next 12 months, just any idea? Maybe even some color on markets? Thank you.

Let me just -- I think markets will continue to be similar markets to what we've been in, but I would look for an underlying characteristic of good market growth, good comp set growth. So that's important to us because there are some markets in the United States obviously that are -- that have lower single-digit growth, and there are some markets with mid-single and upper single-digit growth and perhaps double-digit growth.

So we like to see that together with our value enhancement that I talked a little bit about important acquisition criteria for us, as well as barriers to entry. That money, as we said, should -- from the offering, should be invested, you know, mostly by Labor Day. If not, no later than 30 days after Labor Day. So no significant drag on earnings resulting from the offering with good fourth-quarter hopefully additional accretion coming from these new acquisitions.

Thank you. So, in effect, we should think of more acquisitions coming our way sometime before end of September, maybe October timeframe somewhere?

Yes, sir. At the latest.

Patrick Scholes, SunTrust.

I wonder if you can talk a little bit more about the Pittsburgh market. You know, it's not a market that is covered by in the top 25 for Smith Travel, so we don't get a lot of color on that. I do see that there is going to be some supply coming on next year, but I want to get your thoughts about the sort of demand and supply drivers as you see them for Pittsburgh. Thank you.

Pittsburgh is an interesting market because it's not on everybody's radar screen, which makes it kind of interesting to us and particularly with the benefit of having the IH team being able to do the due diligence and the groundwork to understand what drives the market. It's hard to talk about Pittsburgh as one market. Pittsburgh has, you know, three or four different or more -- almost half a dozen different -- very distinct submarkets in it with a downtown market obviously being as most downtowns are its own market. The Hyatt Place is driven very strongly just by its fantastic location on the riverfront in this newly developed stadium area, entertainment, art museum, etc. location with lots of bars and restaurants, etc. still to come. So good growth coming there with Fortune 500 companies, you know, in the area or directly across the small little bridge that you could walk across.

But there's other markets in Pittsburgh like Southpointe, which is a large office park that many of the national shale oil companies that are obviously doing shale work in Western Pennsylvania have chosen this particular location for their regional headquarters. So they are opening up very large facilities and employing a lot of people with a good amount of travel.

So, again, shale, oil, natural gas is obviously a driver in the entire area. But then you have to look at specific markets, submarkets within there and see where you might be insulated from new construction. Because there is opportunity to build there in certain places. The terrain obviously is a huge disadvantage to developers just because it's so up and down and tough to find or make even a flat hotel site, but in any event, we find it interesting.

Right. I appreciate the color. Thank you.

[Christopher Testa], [Boston Providence].

I was wondering if you guys could give some color on how much of the RevPAR composition in your newly acquired hotels is from ADR and occupancy?

Let's take a peek here. It looks like it's all ADR pretty much. Excuse me, yes. (laughter)

Okay. So all ADR?

Actually, we've got it in one of the hotels some occupancy growth, but it's mostly ADR.

Okay. And generally in the Texas markets, can you give some color on what you're seeing in cap rates in Houston as compared to the rest of Texas?

We're not really looking actively in parts of Texas outside of Houston. So I don't think I can really give you the right answer there.

Okay.

And anybody who owns anything in Houston, to be honest with you, based on what's happening in the market with double-digit market growth, you know, in some cases, I noticed our comp set -- while our comp set around the Houston Medical Center is up very substantially, not even including what we've done hotels to make them better, so most people don't want to sell.

Okay. Thank you.

(Operator Instructions). [Rod Salisbury], D3 Capital.

So I had just a quick numbers question on guidance for you guys. Looking at the Adjusted EBITDA range of $48.6 million to $49.6 million for 2013, I was hoping you guys could help us understand what this range would look like if we removed the renovation disruption and then if we annualized all the acquisitions that have been done to date? I guess what I'm trying to get at is, excluding any perspective acquisitions, what is the appropriate run rate earnings base from which we should grow our models into 2014 and beyond? Thanks.

I mean certainly I can walk through a lot of the details with you after the call, but I think when we provided guidance of a -- not guidance but when we talked about our run rate of $1.65 to $1.75, just on top of what our current model is, I think a couple of the key points is, if you look at our DC hotel, for the year, it's at about a 2 to 2.5 point impact on our top line RevPAR growth. For us, that's another about $1 million of EBITDA to the Company, which is about $0.05 for us.

You know, I think that's certainly it. Most of -- we have got the Hyatt Place. I don't have that annualized number in front of me, but I can certainly take a look at that and give you a call back to see what the impact would be of having that for the first 5.5 months. But I think those are the two main adjustments that you should make that should help with the run rate for 2014. But I can certainly look at the highs after our call.

Okay. That's great. Thank you.

There seems to be no more questions at this time. I will now turn the call back over to management for any closing comments.

We would just like to thank everybody for being on the call and continued following Chatham here. We are looking forward to a strong -- particularly as I look and think about 2014, although maybe it's a little too early to think about 2014. We know that in the fourth quarter we've got some top Sandy comps to deal with as a few other hotel companies do that had hotels in the Northeast. But we've got a few in one particular hotel out in Long Island and, of course, White Plains and New Rochelle that had a great, great fourth quarter in 2012. But be that as it may, with no renovations to deal with as we move forward here and DC particularly ramping up, and I think Tysons at least flattening out if not finding some legs, RevPAR and EBITDA growth ought to be real strong for us going forward. We look forward to talking to you a little bit more about some acquisitions that we see coming online here in the near term, and we wish you a great rest of the summer. Thank you.

Ladies and gentlemen, that does conclude our conference call for today. We thank you for your participation. You may now disconnect your lines.