Braemar Hotels & Resorts Inc.

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Braemar Hotels and Resorts, Inc. Third Quarter 2024 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Derek Eubanks, Chief Financial Officer. Please go ahead.

Good morning and welcome to today's call to review results for Braemar Hotels and Resorts for the third quarter of 2024 and to update you on recent developments. On the call today will also be Richard Stockton, President and Chief Executive Officer, and Chris Nixon, Executive Vice President and Head 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 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 in Form 8K with the SEC on November 6, 2024, and may also be accessed through the company's website at www.bhrreats.com. Each listener is encouraged to review those reconciliations provided in the earnings release together with all other information provided in the release. Also, unless otherwise stated, all reported results discussed in this call compare the third quarter ended September 30, 2024 with the third quarter ended September 30, 2023. 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 today's call by providing an overview of our business, an update on our portfolio, and an update on our recently announced shareholder value creation plan. Then Derek will provide a review of our financial results and Chris will provide an update on our asset management activity. Afterwards, we'll open the call for Q&A. We have several key themes for today's call. First, our urban hotels delivered strong performance again this quarter with impressive comparable red bar growth of 6% over the prior year quarter. Second, we have no remaining final debt maturities in 2024 and are currently working on a refinancing of our sole 2025 maturity And third, we're pleased with the progress we've made on our recently announced shareholder value creation plan with the closing of the sale of Hilton La Jolla Torrey Pines at an attractive value and the redemption of approximately $50 million of our non-traded preferred. As it relates to our financial results for the quarter, we reported comparable rev par of $261 and comparable hotel EBITDA of $24.7 million. It's useful to note that from a seasonality perspective, The third quarter is the weakest quarter in the year for our portfolio. Importantly, we continue to be encouraged by the strong performance of our urban hotels, which, as I said, achieved rev par growth of 6% in the quarter. Regarding our urban assets, rev par for the quarter was $213, and comparable hotel EBITDA was $16.4 million. We're seeing strength across all demand segments at our urban properties. Looking ahead, we remain very encouraged by the continued momentum for this segment, of our portfolio, and we continue to believe our urban hotels will be the primary driver of growth for our portfolio in the coming quarters. Looking at Framework's capital position, we continue to emphasize balance sheet flexibility. With the recent closing of the sale of the Hilton Hawaii Torrey Pines, we have now addressed all of our 2024 debt maturities and are currently talking to lenders about our sole 2025 maturity. Earlier this year, we announced a shareholder value creation plan, which has four components. They are, one, Execute select non-core asset sales, including the recent sale of the Hilton La Jolla Torrey Pines. Two, the repayment of our remaining 2024 debt maturities. Three, a $50 million preferred share redemption program. And four, a $50 million common share buyback authorization. During the quarter, we sold the Hilton La Jolla Torrey Pines for $165 million, or $419,000 per key, including anticipated capitalist expenditures of $40 million. The sale price represented a 7.2% capitalization rate on net operating income for the trailing 12 months ended March 31, 2024. We also continue to evaluate the sale of additional hotel properties. In early August, we closed our refinancing involving five hotels at an attractive rate through a CMBS financing. The new loan of $407 million has a two-year initial term and three one-year extension options subject to the satisfaction of certain conditions. taking the final maturity to 2029. The loan is interest only and provides for a floating rate interest of SOFR plus 3.24%. Notably, this financing resulted in us paying off our corporate term loan and credit facility and resulted in a lower cost of capital for the debt on these assets, as well as improving our maturity schedule and extending our weighted average maturity. Regarding redemptions of our non-traded preferred stock, to date, we have now redeemed approximately $50 million of our non-traded preferred stock. As we continue to monitor both our leverage and our liquidity needs, as of the end of the quarter, we have not bought back any common shares. In terms of our most recent results, we're pleased to report that comparable rev par for our portfolio increased 7.5% in October, with comparable total revenue growth of almost 11%, which sets us up well for fourth quarter performance. Our group pace for the first quarter of 2025 is currently up nearly 40%. We are very encouraged with these data points and believe Braemar is in a good position to perform well in both the near and long term. I will now turn the call over to Derek to take you through our financials in more detail.