Chatham Lodging Trust

Mr. Chris Daly, President of DG Public Relations. Please go ahead.

Thank you, Melissa. Good afternoon, everyone, and welcome to the Chatham Lodging Trust Fourth Quarter 2024 Results Conference Call. Please note that many of our comments today are considered forward-looking statements to define by federal securities laws. These statements are subjects to risks and uncertainties, both known and unknown, as described in our most recent form 10-K and other SEC filings. All information in this call is as of February 26, 2025, unless otherwise noted, and the company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations. You can find copies of our SEC filings and earnings release, which contain reconciliations to non-GAAP financial measures referenced in this call on our website at chathamloggingtrust.com. Now, to provide you with some insight in Chatham's 2024 Fourth Quarter Results, allow me to introduce Jeff Fisher, Chairman, President, and Chief Executive Officer, Dennis Craven, Executive Vice President and Chief Operating Officer, and Jeremy Wagner, Senior Vice President and Chief Financial Officer. Let me turn the session over to Jeff Fisher. Jeff? All right,

thanks, Chris, and I certainly appreciate everyone joining us here for our call today. Before talking about the fourth quarter specifically in our outlook for 2025, I'd like to spend just a few minutes highlighting some noteworthy accomplishments as we look back at the last year. We had rev-par growth of 3%, exceeding industry rev-par performance by 56%. We continue to be aggressive generating profits outside the room division, and we were able to drive other departmental profits 8% higher this year, after growth of 25% last year. We generated GOP margins of 43%, minimizing the -over-year margin decline to 70 basis points, and as rev-par growth expanded, we closed out the year with 150 basis points of margin expansion in the fourth quarter. Sold or under contract to sell six hotels averaging 24 years of age, and with a rev-par of $98, way below our average, for net proceeds of 101 million, at a pro-former capitalization rate of approximately 6% when you include the foregone capital improvements. And in 2024, we repaid 297 million of debt, maturing debt, and reduced our net debt by $29 million in 2024, after reducing net debt by 26 million in 2023. We finally completed our multi-year balance sheet repositioning through the issuance of equity, debt, and asset sales, and reduced our overall leverage ratio to 23% from 25% a year ago, and importantly, down from almost 35% in 2019. I'd say that's quite an accomplishment, particularly during this period of time. And finally, we did participate in the Global Real Estate Sustainability Benchmark, Gresby for the third time, achieving a great score of 83, earning four out of five Gresby stars, and awarded the Green Star. We did return $22 million of dividends to our preferred and common shareholders out of excess cash flow, and we look forward to this year in an environment where, if we can achieve, similar kinds of rev-par growth, we look at our margins really back at what have always been the industry-leading even margins of all the select service hotel REITs. Our rev-par growth has beaten industry performance for three consecutive years, and by far we've got the highest rev-par of all select service lodging REITs, demonstrating the high quality of our portfolio and the markets we're in. As most of you know, our success is more reliant on the health of the business traveler, and business travel demand continues to grow. In 2024, we saw the health of the business traveler really show up in the non-seasonal month rev-par growth numbers. Other than March that was impacted by religious holidays, rev-par growth was over 5% in April and May, 4% in September and almost 7% in October. The November to February months are slower BT and leisure months, but on the average our rev-par growth was about 3% in those months. During the heavy leisure months, interestingly enough, of June through August, our rev-par growth was about 1%, which reflects the softening leisure travel offset by the higher and healthier business travel during those other months and even during those months. Turning our attention to the fourth quarter, which was a great quarter by all metrics, our rev-par growth of 4% again beat industry performance and most peers' performance. Also, we increased our operating margins by a strong 150 basis points, as labor and benefit costs continue to moderate at low single digit levels. Again, this moderation is different than a lot of our full service peers who are facing much more pressure given their presence in larger markets and reliance on union labor. As a result of great operating performance, we were able to comfortably exceed the upper end of our guidance range and consensus estimates. Additionally, if you look at our largest markets, rev-par grew in six of our top eight markets with our New York area hotels flat to last year and only Dallas declining. But Dallas' decline is really due to the fact that our hotel is next door to the convention center, which is mostly closed and undergoing major expansion over the next 24 months. When you exclude Dallas, average rev-par growth was approximately 7% across our top markets. Leading the way were our technology dependent markets and the underlying strength in these markets is encouraging as we move forward into this year. Rev-par growth at our four Silicon Valley hotels was up 14% in the quarter after posting 14% growth in the 2023 fourth quarter. And the Bellevue market rev-par was up 9% in the quarter and I utilized the market here because our Bellevue Residence Inn was under renovation during the quarter. Chatham has the highest exposure to big tech hotel demand, whether that's in Silicon Valley, Bellevue or Austin. And tech investment, particularly around AI, chip processing and next gen technology is rapidly expanding as we've all seen even just this past week. And for example, Apple has announced a massive $500 billion further investment in the US over the next five years with many of the markets that we have hotels in certainly bound to benefit as that manufacturing and other business expansion continues. On the operations front, we're really pleased and encouraged by our ability to drive this revenue growth to the bottom line. As we pushed our operating margins 150 basis points higher to 41%, the highest fourth quarter operating margins in three years. Our expense controls were really locked in, especially regarding staffing levels and wage growth. As we've stated the last few quarters for us and this is an important distinction, we've been the beneficiary of moderating wage pressures on a per-occupied room basis. Growth in labor and benefits was less than 1% year over year in the quarter. And if you just consider only wages on a per-occupied room, they were down year over year. As we close out 2024, we're in great financial position having delivered over the past few years through the opportunistic sale of hotels and now sit at our lowest leverage levels in over a decade. We've got the ability therefore to grow in several ways. Of course, most importantly, through the outperformance of our existing portfolio, especially given that our largest assets have exhibited the strongest top line growth in the portfolio. Second, we do expect to commence our Portland, Maine hotel development later in the year. This looks like a very profitable investment and return for sure. And lastly, we are of course still seeking hotel acquisitions. We've got the financial ability to grow. As I've said, we have successfully or will successfully complete the sale of the five hotels. Our leverage levels are very low. I'm confident in our future to continue to grow this company and our FFO, particularly this year. And we can grow creatively. It doesn't take meaningful investment dollars to move the needle here at Chatham. And long-term fundamentals are favorable as new supply is less than 1% across our portfolio and further increases in new supply are gonna be muted given that most new construction is too expensive and the returns, particularly in the markets that we operate in, certainly don't appear to warrant the risk. We've emerged from a slew of maturing debt in a financially strong position and operationally, I think we should continue to outperform the industry and many of our peers. So our ability to increase incremental free cash flow should enable us to return more money to our shareholders moving forward. And with that, I'd like to turn it over to Dennis.

Thanks, Jeff. Good morning, everyone. Just a quick update on the hotels to be sold. As Jeff talked about, we have two remaining of the five that are expected to close by the end of the first quarter. The five hotels are among the six lowest RevPAR hotels in our portfolio that we have sold and are under contract to sell. We believe the best value creation is to sell these hotels instead of investing incremental dollars without what we believe is much incremental return and reinvest that money into higher yielding, higher margin and higher growth assets. With respect to our fourth quarter results, a few extra tidbits. RevPAR at our seven predominant leisure hotels and our leisure hotels comprise approximately 20% of our fourth quarter EBITDA, increase .4% in the quarter. But when you take out our Spring Hill Suites in Savannah, which was under renovation for most of the quarter, RevPAR was up approximately 6% for our leisure hotels with our Fort Lauderdale Residence Inn, our Hampton Portland and our Hyatt Place Pittsburgh, all producing double digit RevPAR growth in the fourth quarter. Our top five RevPAR hotels for the quarter were the Residence Inn Fort Lauderdale with RevPAR of $208. Second was our Residence Inn White Plains with RevPAR of $196. And then our Hampton Inn Portland and Residence Inn San Diego Gas Lamp, both with RevPAR of $180. And lastly, our Residence Inn New Rochelle, New York at 176. Over a third of our hotels experienced double digit RevPAR growth in the quarter. Excluding the five tech driven hotels, fourth quarter RevPAR was up 3% over last year, further supporting the breadth of our RevPAR performance and trajectory. Breaking down our Silicon Valley hotels, underlying demand growth remains strong. Our Silicon Valley fourth quarter occupancy of 74% marks the highest occupancy levels since 2015. Our two Sunnyvale hotels experienced RevPAR growth of 16% in the quarter. And that includes a 14% increase in occupancy, again proving out the surge in business demand in Sunnyvale. Our San Mateo Residence Inn had a great quarter with RevPAR growth of 19%, with occupancy finishing the quarter at 81%. And lastly, RevPAR grew 5% at our Mountain View Residence Inn. On a portfolio basis, including all hotels owned during the quarter, operating margins were up 150 basis points, and hotel EBITDA margins were up 90 basis points. At our 36 comparable hotels, operating margins were up 110 basis points, with EBITDA margins essentially flat. Our biggest expenses by far are labor wages and related benefits. These expenses account for approximately 40% of all operating expenses. We've been able to maintain our headcount essentially flat the entire year, despite occupancy rising 300 basis points in the quarter and 200 basis points for the full year. Additionally, our fourth quarter average wage was up just about 3% over last year. This increased efficiency has enabled us to actually reduce wages on a per-occupied room basis by 2%. Offsetting a bit of this were increased payroll-related costs such as medical insurance, workers' compensation, and vacation and stuff like that, which were up 19% in the fourth quarter and almost 25% for the entire year. The good news is that 2025 premiums for not only our medical insurance but also our workers' compensation are essentially flat compared to last year. In the quarter, property insurance was up, and for the year it was up approximately 15%. But again, good news is that our 2025 renewal for property insurance is down approximately 13% over 24 levels. Our top five producers of GOP in the quarter were led by our residents in Gaslamp with 2.3 million. The 12th straight quarter, it's led our portfolio. And second was our Sunnyvale II residents in with GOP of almost 2 million. And rounding out our top five producers were our Embassy Suites Springfield and two of our New York residents in White Plains and New Rochelle. And again, I would just add if you look at the geographic production of those top five, you essentially have one in Silicon Valley, one in San Diego, one outside of DC, and two in the greater New York area. So again, kind of broad demand showing up across the country in our portfolio. On the CapEx front, we spent approximately six million in the quarter. We commenced renovations on three hotels that were completed either in the fourth quarter or will be completed early in the 25th, first quarter. And that includes renovations in Savannah, Bellevue, Washington, and Hilton Garden Inn in Portsmouth, New Hampshire. Our CapEx budget for 25 is approximately $26 million, which includes three renovations with a cost of approximately $16 million. The three hotels scheduled for renovation in 25, are the Hilton Garden Inn in Portsmouth during the first quarter, the residents in Austin, Texas, and the residents in Mountain View during the fourth quarter. So with that, I'll turn it over to Jeremy.

Thanks, Dennis. Good afternoon, everyone. Our Q4 2024 Hotel Ibiza was $24.3 million, Adjusted Ibiza was $21.4 million, and Adjusted FFO was $0.20 per share. We were able to generate a GOP margin of .5% and Hotel Ibiza margin of .5% in Q4. GOP margins for the quarter were up 150 basis points from Q4, 2023, which was due to the strong .9% rev par growth for the quarter and outstanding expense control. This improvement in year over year margin trends relative to prior quarters reflects the continuing stabilization of key expenses, especially labor costs. Over the past couple of years, we have taken significant steps to reduce leverage and address debt maturities. With the repayment of the $16 million mortgage loan on the Hampton Houston in January 2025, we have now addressed all of our CMBS maturities. In Q4, we closed on the sales of the Homewood Bloomington and Homewood Maitland for $29.3 million, and in January 2025, we closed on the sale of the Homewood Brentwood for $15 million. The aggregate sale price for these three hotels, including approximately $15 million of required renovation costs, represents a cap rate of approximately .3% on 2024 NOI. As of December 31st, Chatham's net debt to LTMEBITDA was 3.9 times, which is significantly below our historical leverage, which is generally in the five and a half to six times area. Turning to our Q1 and full year 2025 guidance, we expect REVPAR growth of 3 to 4%, adjusted EBITDA of 16.7 million to 18.3 million, and adjusted FFO per share of 12 cents to 15 cents in Q1, and REVPAR growth of 1% to 3.5%, adjusted EBITDA of 92 million to 97 million, and adjusted FFO per share of $1.01 to $1.11 for the full year. This guidance reflects the sales of the Homewood Bloomington, Homewood Maitland, and Homewood Brentwood in December 2024 and January 2025, and assumes two additional asset sales with a combined sale price of $39 million closed at the end of the first quarter. In aggregate, the net impact of these five asset sales on our expected 2025 EBITDA versus actual reported 2024 EBITDA is approximately $6.8 million, and assuming the proceeds from these asset sales are used to repay a bank debt with a cost of 5.9%, the impact on expected 2025 FFO per share versus our actual 2024 FFO per share is approximately five cents per share. While our guidance does not reflect any acquisitions, our plan is certainly to reinvest the sale proceeds and foregone capital requirements from our asset sales into a creative acquisitions, which should fully offset the lost FFO from the asset sales. Our room count reflecting these completed asset sales is expected to be 5,475 in Q1, and is expected to be 5,168 for the remainder of the year, which assumes the close of the two pending asset sales at the end of Q1. Reflecting our recently completed and pending asset sales, our 2024 REVPAR would have been $122 in Q1, $156 in Q2, $155 in Q3, $133 in Q4, and $142 for the full year. This concludes my portion of the call. Operator, please open the line for questions.

Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Garav Mehta with Alliance Global Partners. Please proceed with your question.

Yeah, thanks. I wanted to ask you on some of your comments around asset recycling, and wanted to get some more color on your expectations around redeploying that capital into the acquisition market. I know you mentioned there's no acquisition included in the guidance, but I was hoping to get some more color on what you were seeing in the market, maybe on the volume pricing.

Yeah, Garav,

it's Jeff. How are you today? I guess the way to characterize the acquisition market, at least for what we're seeing, and for what we wanna buy is it's still pretty thin out there. For the really, really good assets in the kind of markets we wanna be in, there's still 100 basis point, let's say, bid-ask kind of gap. But I will tell you that we've kinda redoubled our efforts in terms of really wanting to get replacement assets for these five hotels that we've successfully sold or will have sold shortly. And I feel pretty confident that we'll get that done this year. I don't think we'll get it done in the first quarter of this year, but it's really just sort of ferrying through and talking to prior folks that we've done business with and otherwise to try to find onesie-twosie deals which is probably the way it'll occur as we move forward.

Okay, thanks. My second question on your comments around starting a development in Portland, Maine. I was hoping to get some more color on that asset where you're looking to construct, maybe on your yield expectations for development.

Yeah, I mean, we're certainly looking for 150 to 200 basis points premium over, let's say the eight cap number that you might be able to acquire existing hotels for. And Portland, Maine Hampton Inn and has been our highest RIVPAR hotel for several quarters. We're pretty excited about the continued growth in the market. City of Portland has recently enacted a hotel moratorium. We are grandfathered in because of the application that we have pending for entitlement. So we still have, and we've talked about this for probably what I say is too long for two years, but it is that kind of market in the downtown Waterfront District to build on our parking lot next to our existing Hampton Inn, I think will certainly be very accretive if and when we get there, but we're still working with the city and with our engineers on getting this thing entitled.

Yeah, Gaurav, I think the only thing I would add is that just to add on from Jeff's comments is that that Hampton Inn Portland for us has really been the highest yielding asset for us over the last essentially ownership period since 2012 when we bought it. Great market, moratorium helps, and we

feel pretty good about it. Okay, thank you, that's all I had. Thank

you. Thank you. Our next question comes from the line of Ari Klein with BMO Capital Markets. Please proceed with your question.

Thanks. There was a pretty sizable disparity in occupancy performance versus ADR. In the quarter, I'm curious just what rode that dynamic and then how are you thinking about the ability to push rates with occupancy improving?

Hey Ari, this is Dennis. Yeah, listen, I think the one thing that we've kind of, we highlighted in our comments is that overall just demand from business travel is really the driver of that continued occupancy growth. And in certain markets, whether that's Silicon Valley or other markets, you really need to get into the 70s and into the 80s to be able to have pricing power. So for us, we're really encouraged by the overall trend and just the overall demand growth in some of our major markets. And generally speaking, ADR is a laggard to that. So it really, I think, just positive about where that's heading.

Got it, that's helpful. And then maybe on the red part of guide, fairly widespread for the full year. Curious if you can provide some color just on some of the underlying assumptions at the high and low end of the range. And then is there any reason to think the tech intern business this year will play out differently from last year?

The last bit of that question was tech?

Tech interns. The intern business version of last year.

Yeah, I mean, I think, listen, we're taking a pretty cautious look as far as our overall guidance range of one to three and a half were encouraged by what January did with rep par up 5%. February is doing well as well. I think what Jeff highlighted in his comments, and if you look at kind of our monthly rep par production is that the summer months, especially in 24, as he talked about, kind of showed an offset of leisure losing, BT gaining. I think whether leisure is bottomed out or is bottoming out kind of as an industry, I think it's too early to tell. But I think we're gonna be cautious about those outer months. It feels good at the moment. And then I think with respect to interns, listen, I think as we talked about last year, we lost a lot and a majority of that business in 24 because most of the tech companies went to a program where they were just giving stipends out for any type of intern and they could put as many people as they wanted to in a room, in an apartment or whatever it might be. So we really didn't get much intern business in 24. We don't have, we're kind of have similar levels baked in for 25. And obviously if somehow that changed, that would be great. But I think that stipend program is probably gonna stick.

Got it, and then maybe just one last one just in terms of the transaction that you seem likely to pursue in 25. How much dry powder do you think you have? Or I guess maybe how active do you think you'll be?

Yeah, Jeremy, you wanna talk about the balance sheet? Yeah, I mean, from a dry powder perspective, I think we could easily buy a couple hundred million dollars of hotels or hotels and developments, other investments, and still be within the leverage parameters that we feel comfortable with. I don't know if it'll be possible to, in one-off transactions, be able to buy $200 million of hotels this year, given how selective we are and the strict underwriting criteria that we have. But we definitely have balance sheet capacity to do quite a bit relative to our existing size.

Got it, and is the Portland development in the 26 million of CapEx, or is that separate?

No, it's not. I mean, I think, listen, we're still working through city approvals. I think if we ultimately get those in the next several months, you're probably talking about starting site work later this year. So any actual cash dollars out the door would be pretty minimal in 2025.

Got it, all right, thank you. Thanks, Ari.

Thank you. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. Our next question comes from line of Jonathan Jenkins with Oppenheimer Company. Please proceed with your question.

Good afternoon, thank you for taking my questions. First one for me is a follow-up, or a clarification question on the guidance. Given that previous commentary, it sounds like we should expect the majority of red part of growth this year to be driven by occupancy, and then that rate compression component becomes a greater possibility in out years. Is that a fair read through on that?

I

think in our forecast,

we have our red part growth kind of built about half between occupancy and half between ADR. So we're still expecting some ADR growth, even though Q4 was really, all the growth was driven by occupancy.

And that's because of the nature of the seasonality of the portfolio and the hotels that we're talking about. But we'll get ADR growth in those summer months

and

in those heavy October, for example, business travel months for us. Okay, that's very helpful.

And then switching gears to the capital recycling fund, you guys have obviously done a tremendous job. Are there any additional assets that could be potential targets for dispositions? And conversely, are there any markets that you'd like to enter? Where is your preference to grow in the markets you're already in? And should we expect a continued BT demand driver focus for potential acquisitions?

I think for us, BT and business focused hotels and extended stay hotels is where we live. And we feel very comfortable and bullish about that part of the business. So I think we wanna be opportunistic given the amount of dry powder that we have, as Jeremy indicated. So I think we've kind of got an open view in terms of markets beyond markets that we're already in. So I would expect that we will just take a real hard look at many different opportunities as we try to move forward and redeploy some of the money that we've got here.

Yeah, I think the only thing I would add is with respect to dispositions, yes, we will continue to look at our portfolio and analyze it for any type of opportunities of selling assets. But I think what you will see from Chatham is continued recycling of older assets with higher capex spend requirements into newer higher growth investments over time. So certainly we'll look for that.

That's the goal. Okay, that's excellent. Thank you for all the color everybody, that's all for me.

Thank you. Our next question comes from the line of Manish Modi with Millennium. Please proceed with your question.

Yes, good afternoon. Thank you for your time. I just have a couple of quick questions. One is just to get a sense of any impact on the Los Angeles area with the properties with all the wildfires, that's the first one. And the second one is if as a investment portfolio where you have been looking at the performance of your stock and I'm sure you all do too, which is that there's been literally no upward movement at all at least over the last 12 to 18 months. How do you look at the valuation that the market, of course you don't control it, but how do you visualize the market valuation for your stock?

Hey Manish, this is Dennis. I'll answer the first part of it. Thankfully we had no physical damage to any of our assets related to the fires in southern, in the LA area. We have three hotels in the area. Our home two, our home two suites in Woodland Hills has been the beneficiary of a lot of, whether it's displaced residents or people affiliated with insurance companies there that is benefiting the hotel. The other two hotels are Hilton Garden and Marina Del Rey and our residence in Anaheim. Saw kind of initial pop right after the wildfires but really have kind of settled back into normal, normal, what I would call normal business if you will. So really we had one of the three hotels that benefited.

And then on the stock price here, I'm gonna let Jeremy, our expert on that, opine.

Look, it would always be nice to have your stock valued higher and to appreciate. Obviously there's been headwinds over the last few years in terms of expense increases across the sector and cost of capital across the sector. I think if you look just on a relative valuation basis, on a price to FFO basis, I think we're roughly in line with most of our peers. We may be at a little bit of a discount on an EV to EBITDA basis. And I think a lot of that's probably due to the fact that we've refinanced a lot of our debt. We've reset the pricing on a lot of our debt. So all of our debt is sort of market priced, which is more expensive than people who have legacy fixed rate debt in at 4%. All of our debt's kind of in that six and a half to 7% range right now. So there's higher interest burden. So that's reflected in our FFO. It doesn't impact the EBITDA, which is probably why we're really right in line with peers on an FFO basis. And EBITDA is a little bit of a discount. But again, there's higher interest costs. Hopefully, over time, the EBITDA gap will shrink relative to any peer multiples as they kind of refinance their balance sheets as well.

The other part of it, I would say, is I still think, and we've heard from some investors, that Silicon Valley, we keep coming back to it, but it is a major portion of our portfolio, obviously, is a question mark for the company. And even in our guidance for the year, it's very difficult for us to, and our operators who have lived and breathed in that market, in some cases for over 20 years, to put your finger on what kind of repar increase and what kind of return to our 2019 EBITDA levels and repar levels we're gonna get there. And I think that keeps sort of a lid on our share price until we really have sort of what I would characterize as double-digit repar growth, quarter after quarter, for a couple years in a row here that we feel is pretty consistent as we look forward to be able to get those numbers back to some level as to where they were. So look, we're certainly encouraged by what we see and what we talked about on our call for the fourth quarter. And our January and February numbers out there, particularly given January and February seasonality of being very little real BT travel are pretty darn strong as well. So we'll continue to have our focus and our operating team and our sales teams out there doubling down on the efforts to make those hotels fly. And with our ability and our operators' ability to flow the incremental revenue at levels that are, in some cases, well over 50%, I think we can get the FFO and the EBITDA and therefore the share price moving again.

Now, I appreciate it. I mean, you certainly delevered the balance sheets substantially over the last couple of years. However, it's interesting that when you look at it, that your repar growth in Silicon Valley has been in double digits compared to last year, but your repar growth in Dallas and the Seattle markets, however small they are as contributors, they seem to be more negative. So it's interesting you made that point across.

Well, Dallas, as I mentioned, it has been a great performing hotel for us in that downtown market. That is nothing more, frankly, than the convention center being, and most conventions sort of for the next couple of years being non-existent in that market. I know that in 2024, we substantially exceeded the operator budget for 2024, because starting in, I think it was March or April, we took the numbers way down and we still, because of what's happening generally in Dallas and the quality of that hotel, its location sort of outperformed the budget numbers, but it's still gonna comp on a difficult basis. Bellevue, Dennis, purely renovation there, that should be finished, what, we're going to see it next week, right? In about, so that should be done here. And again, tech heavy and reliant, but you've got those players back to the office, even I think with the declaration being a little bit sooner than some of the Silicon Valley companies. And Bellevue as a sub-market, really strong and benefiting over downtown Seattle when you look at, if you look at the start, Smith travel numbers for the markets anyway.

Yeah, I think the only thing I would add regarding Silicon Valley is yes, we've had a good run here and we're confident and we're optimistic about where we see 25 out there, but you should still take a look at the table in our release that compares it to 2019 levels. Reppar for those four hotels is still over 20% short of 2019 levels. So there's still a good ways to go and I think a lot of our investors who know us well and have known us well, we gotta get a little bit more out of there to really start pushing that number to the bottom line.

Especially

when

it comes to ADR, as we were talking about on a prior question and the incremental flow that comes from high ADR.

I certainly appreciate it. You all certainly invested into the ownership of the Chatham Lodging Trust. It was interesting that, but how it, as I part, I just had made one observation, which is that there were two filings from BlackRock that happened literally two days of each other and the most recent filing showed a reduction of about five or 6% of the ownership, literally within a span of two days. I just didn't know if you were aware of something substantially that happened that would reduce their ownership by

a few million shares. We saw those same filings. I think we don't have any

active dialogue with them, whether that was a mistake or something else, not sure. But they bought a bunch

and then sold a bunch, right? Something like that, yeah. We don't, but we don't know.

Okay.

Thank

you very much for your

time and patience with the questions. Thank you. Thank you.

Thank you. Mr. Fisher, there are no further questions at this time. I'll turn the floor back to you for final comments.

Well, we certainly appreciate the questions and everybody's attendance this morning. So let's continue to sit tight here and have this quarter evolve. And we will continue to, I think, put up some pretty strong numbers and work on growing our free cashflow in 2025. Thank you.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.