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Edited Transcript of SOHO earnings conference call or presentation 26-Feb-19 3:00pm GMT

Q4 2018 Sotherly Hotels Inc Earnings Call

WILLIAMSBURG Mar 1, 2019 (Thomson StreetEvents) -- Edited Transcript of Sotherly Hotels Inc earnings conference call or presentation Tuesday, February 26, 2019 at 3:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Andrew M. Sims

Sotherly Hotels Inc. - Chairman & CEO

* Anthony E. Domalski

Sotherly Hotels Inc. - VP, Secretary & CFO

* David R. Folsom

Sotherly Hotels Inc. - President, COO & Director

* Scott M. Kucinski

Sotherly Hotels Inc. - VP of Operations & IR

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Conference Call Participants

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* Alexander David Goldfarb

Sandler O'Neill + Partners, L.P., Research Division - MD of Equity Research & Senior REIT Analyst

* Mike Davis

* Tyler Anton Batory

Janney Montgomery Scott LLC, Research Division - VP of Travel, Lodging and Leisure

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Presentation

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Operator [1]

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Good morning, everyone, and welcome to the Sotherly Hotels Inc.'s Fourth Quarter Earnings Conference Call. (Operator Instructions) Please also note today's event is being recorded.

At this time, I'd like to turn the conference call over to Mr. Scott Kucinski, Vice President. Sir, please go ahead.

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Scott M. Kucinski, Sotherly Hotels Inc. - VP of Operations & IR [2]

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Thank you, and good morning, everyone. Welcome to Sotherly Hotels Fourth Quarter Earnings Call and Webcast. Dave Folsom, our President and COO, will begin today's call to review the company's quarterly activities and then review of the portfolio performance. Tony Domalski, our CFO, will provide our key financial results for the quarter and issue our 2019 guidance. Drew Sims, our Chairman and CEO, will conclude with an update on our strategic objectives. We'll then take questions.

If you have not received a copy of the earnings release, you may access it on our website at sotherlyhotels.com. In the release, the company has reconciled all non-GAAP financial measures to the most directly comparable GAAP measure in accordance with the Reg G requirements.

Any statements made during this conference call, which are not historical, may constitute forward-looking statements. Although we believe the expectations reflected in these forward-looking statements are based on reasonable assumptions, we can give no assurance that these expectations will be attained. Factors and risks that can cause actual results to differ materially from those expressed or implied by forward-looking statements are detailed in today's press release and from time to time in the company's filings with the SEC. The company does not undertake a duty to update or revise any forward-looking statements.

With that, I'll turn the call over to Dave.

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David R. Folsom, Sotherly Hotels Inc. - President, COO & Director [3]

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Thank you, Scott, and good morning, everyone. I'll start off today's call with a review of our portfolio's key operating metrics in the quarter.

Looking at results for the composite portfolio, which represents the company's wholly-owned properties and the participating condominium hotel rooms from the Hyde Resort & Residences. For the quarter, portfolio RevPAR increased 6% over prior year to $100.10, reflecting a 3.8% increase in occupancy and a 2.2% increase in rate. For the year, portfolio RevPAR increased 7.4% over prior year to $109.20 with a 0.4% increase in occupancy and a 6.9% increase in rate. Hotel EBITDA margins expanded 20 basis points for the year.

Looking at some of the highlights across our portfolio.

The DoubleTree by Hilton in Laurel, Maryland grew RevPAR 14.4% in the quarter driven by a 14.9% increase in occupancy, taking 15.4 percentage points in fair share from its competitive set, which had flat RevPAR in the quarter. The Hyde Resort & Residences continues to stabilize as it completed its first full calendar year of operation. The property grew RevPAR 16.8% in the quarter, fueled by a 12.9% increase in occupancy and a 3.4% increase in rate. Market RevPAR was up 1%.

Hotel Ballast in Wilmington, North Carolina continued its ramp-up since conversion last April, growing RevPAR 15.2% in the quarter, fueled by a 4% increase in occupancy and a 10.8% increase in rate. The property is on its way to stabilization and retaining its place as the market leader.

At our Tampa hotel, we continue the estimated $11.3 million renovation to convert the property to the Hotel Alba in June of this year. Thus far, approximately 90% of the room renovations have been completed, while 75% of the public space renovations are also now complete, including our new lobby and lounge, which has already received rave reviews from our guests.

In Hollywood, Florida, we are nearing the end of the impactful multiyear activities that saw the construction of the new 40-story Hyde Beach House condo hotel building adjacent to our Hilton DoubleTree, marina and seawall construction on the Intracoastal Waterway and major changes to the main roadway in front of our hotel. The Hyde Beach House is expected to open in the fourth quarter of this year, and our interest in the building will provide Sotherly with as many as 700 hotel rooms in the Hollywood market, either through our fee simple interest in the DoubleTree or through rental program operations at both the Hyde Beach House and the Hyde Resort.

Lastly, this past month, we announced our quarterly dividend of $0.125 per share, representing an annualized dividend of $0.50 per share and a yield of approximately 6.9% based on yesterday's close.

With that, I'll turn it over to our CFO, Tony Domalski.

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Anthony E. Domalski, Sotherly Hotels Inc. - VP, Secretary & CFO [4]

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Thank you, Dave. Reviewing performance for the period ended December 31, 2018. Total revenue for the quarter was approximately $43.5 million, representing an increase of 13.9% over the same quarter a year ago. For the year, total revenue was approximately $178.2 million, representing a 15.5% increase over the prior period.

For the quarter, hotel EBITDA was approximately $10.2 million, representing an increase of 2.4% over the same quarter a year ago. And for the year, hotel EBITDA was approximately $47.7 million, representing an increase of 16.3% over the prior period.

For the quarter, adjusted FFO per share was $0.12, representing a decrease of 45.5% over the same quarter a year ago. And for the year, adjusted FFO per share was $1.04, representing a 4% increase over the prior period. Please note that our adjusted FFO excludes charges related to the early extinguishment of debt, gains and losses on derivative instruments, charges related to aborted or abandoned securities offerings, changes to the deferred portion of our income tax provision as well as other items. Hotel EBITDA excludes these charges as well as interest expense, interest income, corporate general and administrative expenses, the current portion of our income tax provision as well as other items. Please refer to our earnings release for additional detail.

On December 12, 2018, the company authorized the extension of the company's stock repurchase program, which was originally announced in December 2016. It authorizes the company to purchase up to $10 million worth of its outstanding common stock at prevailing prices on the open market or in privately negotiated transactions at the discretion of management. As of December 31, the company have repurchased an aggregate amount of approximately $5.9 million of the company's common stock pursuant to the stock repurchase program, leaving a balance of approximately $4.1 million of its common stock that may be repurchased in the future.

Looking at our balance sheet. As of December 31, 2018, the total book value of our assets was approximately $493.3 million, which includes net investment in hotel properties of approximately $435.7 million. The company had total cash of approximately $37.9 million, consisting of unrestricted cash and cash equivalents of approximately $33.8 million as well as approximately $4.1 million, which was reserved through real estate taxes, capital improvements and certain other expenses. As of the end of the quarter, the company had principal balances of approximately $392.6 million in outstanding debt at a weighted average interest rate of 5.13%. Approximately 87% of the company's debt carries a fixed rate of interest.

As of December 31, there were approximately 14.2 million common shares outstanding, of which approximately 0.7 million shares are owned by the ESOP and approximately 1.8 million limited partnership units outstanding. At the end of the fourth quarter, the principal balance on our interest-bearing debt was approximately $124,400 per room. Also, the ratio of debt to total asset value, as defined in the indenture agreement to our unsecured -- senior unsecured notes, was 57.2% based on the total asset value of approximately $686.6 million at the end of the year.

Turning to guidance. We are issuing initial guidance for 2019, which accounts for current and expected performance within our portfolio as well as other factors. For the year, we are projecting total revenue in the range of $184.2 million to $187.1 million. At the midpoint of the range, this represents a 4.2% increase over last year's total revenue. Hotel EBITDA is projected in the range of $49.2 million to $50.2 million. And at the midpoint of the range, this represents a 4.25% increase over the last year's hotel EBITDA. And adjusted FFO is projected in the range of $15.9 million to $16.9 million or $1.02 to $1.08 per share. At the midpoint of the range, this represents a 3.1% increase over last year's adjusted FFO per share. Additional details can be found in the outlook section of our earnings release.

And I'll now turn the call over to Drew.

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [5]

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Thank you, Tony. In review of 2018, while we double the number of challenges, we also experienced significant progress as a company. Weather-related events again posed a considerable challenge for our company during the third quarter. In addition, economic slowdown fears resulted in a volatile business environment and reduced consumer confidence at the end of 2018.

Despite these factors, our portfolio experienced outsized performance compared to its peers. For our combined portfolio, RevPAR increased 7.4%. And we took 100 basis points in share from our competitors, primarily by executing on our strategy of driving rate. We produced earnings growth of 4% over 2017 and achieved AFFO within our initial guidance provided a year ago.

We remain steadfast in our commitment to our key strategic initiatives and goals for the year. We maintain balance sheet discipline by executing a number of capital markets transactions during the year, including refinancing $110.5 million of mortgage debt in order to fix interest rates at historically low levels while extending maturities.

We continued to display a commitment to our shareholders as we once again increased the dividend 3 out of 4 quarters, a trend we have maintained for the past 4 years.

During the year, we also delivered on key hotel repositioning projects, including the brand conversion of our Wilmington asset and the renovation of our Tampa property. We believe that our refreshed portfolio is poised to outperform the market moving forward.

During the first quarter of 2018, we completed the acquisition of the 318-room Hyatt Centric located in the Rosslyn submarket of Arlington, Virginia. Upon closing, we implemented several strategic changes to its operations, in addition to moderate physical improvements to the property. With these changes to the property, the property is well positioned to take advantage of the growing Rosslyn market, which has experienced a seemingly endless string of positive news as capped by the recent Amazon HQ2 announcement.

Looking ahead, we believe that 2019 will be a good but not great year for the hotel industry with industry analysts projecting a slight decline in occupancy and a modest 2% increase in rate.

As a result, expense management and margin control will be the primary focus for the company. Despite these factors, we remain cautiously optimistic due to a strong room booking space and a competitive portfolio that is positioned to outperform the market.

Moving forward, we will maintain a disciplined investment strategy and focus on value-added investment opportunities that present long-term value for our shareholders.

We will now open the call up for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question today comes from Tyler Batory from Janney Capital Markets.

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Tyler Anton Batory, Janney Montgomery Scott LLC, Research Division - VP of Travel, Lodging and Leisure [2]

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I wanted to start on the 2019 guidance, if I could. Can you guys give a little bit more color on markets, maybe which markets you're most positive on and which should be showing the most RevPAR growth in 2019?

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [3]

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Yes. Sure, Tyler. We're very positive on Atlanta as a result of the Super Bowl, obviously. That got us off to an amazing start this year, and that trend has continued. Not only did the hotel experience great results in and around the Super Bowl, but the whole month of January and the entire month of February have been well above expectations. So Atlanta seems to be a market that really is on fire right now. The D.C. market troubles us a little bit. We've seen weakness in that market, although our Arlington and Laurel, Maryland assets continue to outperform the competition. So while the market seem to be struggling a little bit, our hotels are doing pretty well. Philadelphia has experienced kind of negative growth at the beginning of the year, especially in the airport market. So we're a little concerned about that. Dave, you got anything you want to add in that?

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David R. Folsom, Sotherly Hotels Inc. - President, COO & Director [4]

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The South Florida market has sputtered for the last couple of calendar years with weather events, Zika, even the strength of the U.S. dollar drove a lot of international travelers out. And I think we're trying to -- I think what we can see going forward in that market is some degree of turnaround with respect to those factors. And in the absence of those factors, we think that the markets probably perform better.

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [5]

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Yes. And also to that point, Tyler, the -- we've kind of done it to ourselves a little bit. We've been under a construction phase for the last 2.5 years there. We renovated our hotel. We finished that, then we started -- our Related Group started the 40-story tower that's right next to us. And that was very disruptive in the fourth quarter this year -- actually the third and fourth quarters of this year. The worst is behind us now. We're seeing some pretty decent results in our DoubleTree there, and the Hyde is actually doing better than we expected. So we're seeing some positive signs there as well. Tampa is another market that we've seen that's all on the rise. Again, we've done it to ourselves. We had a major renovation going on in Tampa since June, and it's been disruptive. It's very disruptive in the fourth quarter this last year, but we're seeing positive signs. We think we're going to get a significantly more rate once we get the hotel repositioned. And Savannah has seen some positive results as well. Even though there's a lot of new product in that market, our hotels continue to take share as it's ramping up from -- change it from a Hilton-affiliated product to an independent.

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Tyler Anton Batory, Janney Montgomery Scott LLC, Research Division - VP of Travel, Lodging and Leisure [6]

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Okay. I appreciate that level of detail. It's very helpful. And then on the margin side of things, obviously it's a tough expense environment out there. What sorts of things can you guys do to offset some of the wage and expense pressure?

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [7]

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Well, we've not experienced that. I can tell you today. We have been very fortunate, and our managers have been able to maintain our salaries and wages at a -- almost a constant level. We do offer a COLA every year so that obviously adds to our burden, but they've done actually a very strong job of maintaining wages where they should be. And we're not seeing a huge upper pressure on our wages at present.

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Tyler Anton Batory, Janney Montgomery Scott LLC, Research Division - VP of Travel, Lodging and Leisure [8]

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Okay. Got it. And then do you guys have a number for CapEx spending in 2019? And I guess -- and obviously you've got a little bit of finishing up here with the Tampa project, but anything else that's on the horizon for the portfolio?

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [9]

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The only project that we have on the drawing board now is our Raleigh asset, which is one of our smaller assets. And that's not going to be this year, that's next year. So we're actually going to have a really nice quiet year for a change.

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Anthony E. Domalski, Sotherly Hotels Inc. - VP, Secretary & CFO [10]

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In terms of CapEx.

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [11]

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Yes, in terms of CapEx. So we're looking forward to that. We're going to sit back and make some money this year, and we think it's going to be a good year for us.

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Tyler Anton Batory, Janney Montgomery Scott LLC, Research Division - VP of Travel, Lodging and Leisure [12]

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Okay. Great. And then last question for me. Any updated thoughts on your capital recycling tourists, what you're seeing out there, any change in the acquisition market? And then also any thoughts on possible asset sales as well?

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [13]

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Yes. On the acquisition side, we underwrote several projects in the fourth quarter, made -- put out bids on, what, 3 projects around the Southland, and we were not successful. I will tell you that it's still very, very hypercompetitive in terms of trying to buy assets, and I have not seen cap rates increase. Every project we bid on, there were dozens of bidders, and it was a very, very competitive process. So I don't think that things have cooled off at all. And in terms of dispositions, we continue to look at a couple of our assets that we'd like to trade. And we're going to do that on a one-off, soft sell, quiet marketing effort.

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Operator [14]

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Our next question comes from Alexander Goldfarb from Sandler O'Neill.

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Alexander David Goldfarb, Sandler O'Neill + Partners, L.P., Research Division - MD of Equity Research & Senior REIT Analyst [15]

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Just following up on the market questions, if I -- just looking down your hotel occupancies in the 8-K, there are a number of hotels, DeSoto, Georgian Terrace, Louisville, Whitehall, and you mentioned the Hyde Park had some specific issues. But a number of the hotels are sort of in the -- around 60% or below. I'm just sort of curious, just given how strong the overall hotel cycle has been, where you think these hotels -- what do you think is specific that these hotels are below your portfolio average? And then also on the margin standpoint, if these are sort of hotel occupancy rates, does that mean that you need to sort of change how you run it from a full-service basis to try and maybe less full service to try and improve margin? Or maybe just your color on this.

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [16]

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Sure. Dave, feel free to jump in. The -- several of the hotels that you're talking about are projects that we converted from national brands to our independent status. And so we're still building up our business, even it's going to take probably upwards of 3 years to get back to a stable occupancy level. So -- and quite frankly, there's a new normal there for us because if we don't have all the franchise costs that we have under a Hilton or a Marriott franchise, which are upwards of 17% of your top line revenue, we can still run a lower occupancy and maintain a good healthy rate and still make the same dollars we were making before on the bottom line. So it's a different way to look at it, Alex. It's -- and we feel like there's a lot of upside there, so we're still working through that process. In terms of Louisville, that market is just absolutely devastated as a result of several new hotels being built. We've got, I don't know, 1, 2, 3 -- probably about 7 or 8 new full-service hotels in downtown Louisville, which was capped by the new Omni, which is upwards of 600 rooms and was -- wouldn't have been built but for city propers. And certainly, there's no need in the market for another 600 rooms there. But because they got public funding, the project got built. And it's been -- it's a challenge, and it's a long-term challenge. That market is going to be a long time before it gets back to any kind of stabilized levels.

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David R. Folsom, Sotherly Hotels Inc. - President, COO & Director [17]

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Let me add, Alex, this is Dave, just a couple of items with respect to occupancy. So when you look at some of these numbers, they don't appear what you might expect. So the Hyde, that's a condo hotel building. And we have a certain amount of inventory inside that hotel that we manage. We don't manage all the units. We manage some of the units. And then owners from overseas come and occupy their hotel rooms during the owner's stay over a period for a significant amount of time during the year. And during that time, we cannot rent those rooms. And at the same time, we wanted to establish a rate level there and establish a rate integrity and maybe take some lower occupancy, so we could condition the market to understand the value proposition at that property. That's sort of the same thing at The Whitehall in Houston. You see some low numbers there. One thing you need to remember is back in the fourth quarter of 2017, the property was closed. It was shut down by the city because we had a casualty, electrical casualty that we were fully insured on. But then you have to ramp that hotel back up, but the same conditions apply. We have repositioned the hotel, and we want to put the rate equation out there first and build the occupancy later. And this is the same thing as the DeSoto. That was a Hilton hotel for I don't know how many decades, and we took the flag off and we have to sacrifice a little bit of transient occupancy, build the group business and then build the reputation of the hotel from a rate perspective as an independent. And there's been a DeSoto property there for 110 years, so the market knows the hotel as the DeSoto. We just have to make sure that the value proposition is right. So that hopefully answers a little bit of the occupancy question. It is sometimes out of our control like the number of owners at the Hyde who come to visit from Argentina or from Brazil or Ecuador or it's simply something out of our control like the casualty we had in Houston. But those things hopefully can explain a little bit of the occupancy numbers.

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Alexander David Goldfarb, Sandler O'Neill + Partners, L.P., Research Division - MD of Equity Research & Senior REIT Analyst [18]

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Okay. No. That's helpful. And then just going back to the margin point, I mean, your point on franchise fees is really helpful. So what is like -- is there some sort of example that you can give us on like a margin at -- like a hotel, like Philly or Jacksonville, where those are sort of in the upper 70s versus like Georgian Terrace, which is in the sort of mid-60s? Can you give sort of like a margin differential so that we can see the impact of that? Because I assume it's not just straight 17% is better on the boutique brand versus a flagged. So just want to sort of get a sort of real-time comparison.

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [19]

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The issue there is how big a food and beverage component you have. Because in a hotel like the Georgian Terrace where we're doing -- somebody is going to have to help me with this.

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Anthony E. Domalski, Sotherly Hotels Inc. - VP, Secretary & CFO [20]

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Millions in a year.

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [21]

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Millions and millions of dollars in F&B. It's a bigger percentage of our overall revenue. And as a result, your margin is going to decrease, even though you're doing -- your rooms department. So maybe what I need to do is show you -- I don't think if there's a way for us to show you the rooms department versus -- and of course, all the franchise fees go in the marketing section. So it's kind of hard to us to dissect that. But let us see if we can come up with something that can show you why we think what we're doing is a good idea because we know it to be true. And it's just -- the problem is we would have to find an example where F&B makes -- is the exact same percentage of total sales, and I don't know that I have any of those where I can help you with that. But that is other -- another part of our overall plan when we go from a Hilton or a Marriott brand, a national-branded product to the independent, we've seen significant increases in our F&B income. And we've refocused our efforts on our internal food and beverage outlets and rebranded those and completely change them and appeal to the community at large as opposed to just our hotel guests. So we've made a major effort to increase the food and beverage revenues. Obviously, the margin on that is significantly less than the rooms department, but it's still profitable. So it...

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David R. Folsom, Sotherly Hotels Inc. - President, COO & Director [22]

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Alex, it's Dave. One more thing on the margin front. It goes the opposite direction, too. For instance, in Louisville, we've had a branded hotel there since we purchased the asset and renovated it 12, 13 years ago. So this past November was the final switchover date between Starwood and Marriott. The hotel was a Sheraton. It's still a Sheraton, but we went from being 1 of 3 properties in the Starwood system in the market to now being 1 of 30 properties in the Marriott system in the same market. So the brand affiliation has killed the margins at that hotel because now we're sharing the same transient revenue base with 30 other hotels. And I don't know how many hotel rooms that is, but it's thousands. And that just -- in our minds, it's just another example of how margins can be affected in the strategy if you're in the right market with the right hotel and you decide not to affiliate with a major brand. I'm not saying our hotel in Louisville would be suitable for that, but you can see what happens.

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [23]

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The frequent traveler revenue for that hotel, Dave just announced for us, went down like $1.5 million in 1 year as a result of the merger. So it's -- you got all these factors that we can't control and so we think that there's room in our portfolio for some independents that are not subject to some of these factors. There's always going to be room in our portfolio for nationally branded properties as well, and so we're probably going to have a nice mix as we go forward. That's always been what we've focused on.

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Alexander David Goldfarb, Sandler O'Neill + Partners, L.P., Research Division - MD of Equity Research & Senior REIT Analyst [24]

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Okay. And then just an easy one, I appreciate your time. The Tampa $18 million mortgage that matures this summer, obviously coinciding with the rebranding, from a modeling perspective, what should we be thinking about from amount and rate on a refi?

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [25]

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I don't think it's going to be significantly higher than what it is now, and we expect it -- last time we locked in, it was in the low 5s, right?

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Anthony E. Domalski, Sotherly Hotels Inc. - VP, Secretary & CFO [26]

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Yes. And we also have 2 extensions on that loan, so we may be extending that loan and taking advantage of the extensions while we ramp the property up. So for your model...

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [27]

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Yes. We've got 2 years, correct? So we can go out another 2 years, which is all kind of part of the plan there to get the hotel repositioned and then go back and refinance it.

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Operator [28]

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Our next question comes from Mike Davis from Cottage Street Advisors.

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Mike Davis, [29]

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I noticed that you lost about $800,000 from hedging activities. Would you explain what that is?

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Anthony E. Domalski, Sotherly Hotels Inc. - VP, Secretary & CFO [30]

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Sure, Mike. This is Tony Domalski. We have -- 2 of our loans require -- one requires an interest rate cap. The other one requires an interest rate swap. Those derivatives have to be mark-to-market every quarter. And as you probably recall, the credit markets just went into a tailspin there during the month of December, probably hit their lowest point right around the 31st of December, at which time all those products had their lowest pricing over the last 6 months. So we mark them to market at the end of the quarter. It reflected a big unrealized loss. I'm expecting that 2/3 to 90% of that will be reversed in the first or second quarter of this year, so that's just a transitory thing.

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [31]

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And, Mike, it's noncash.

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Anthony E. Domalski, Sotherly Hotels Inc. - VP, Secretary & CFO [32]

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Yes.

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [33]

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It's just a book entry.

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Mike Davis, [34]

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Okay. That's helpful. And the second question is do you have any dividend guidance for us for the coming year?

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [35]

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We don't. We'll tell you that we -- you can look at what our past performance is. We are getting a little more hesitant, I guess, would be the word to get too far out of our skis. We feel like we're in the eighth inning of this cycle, and we need to start thinking about what happens in a recession. We've been spending a lot of time modeling that out. We will have an increase or 2 this year, and we're still working on that and don't have an exact number for you at present.

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Mike Davis, [36]

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Okay. I didn't think you would, but I thought I'd ask anyway. And the third question -- or actually it's a comment. The -- you guys put your financial results up pretty late this morning, and it's hard for us to get through the release before the earnings call. If in the future, you could try to make sure we get that at least a couple of hours before the conference call, that would be helpful for us to push the numbers, ask more intelligent questions.

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [37]

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We will do that. We're sorry for that. When do we -- don't we usually...

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Scott M. Kucinski, Sotherly Hotels Inc. - VP of Operations & IR [38]

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Mike, for the -- our entire 10 years or however many years as a public company, 14 years, we've put it out at 9 a.m. for a 10 a.m. call. We can certainly analyze that and see if that's still industry practice. And if it's not, we can change that.

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Operator [39]

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And ladies and gentlemen, that will conclude today's question-and-answer session.

I'd now like to turn the conference call back over to Drew Sims for closing remarks.

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [40]

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Well, thank you all for joining us today. Look forward to reporting to you in April.

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Anthony E. Domalski, Sotherly Hotels Inc. - VP, Secretary & CFO [41]

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May.

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Andrew M. Sims, Sotherly Hotels Inc. - Chairman & CEO [42]

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May, excuse me, and would like to invite you all to our annual meeting, which is in late April. Thank you.

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Operator [43]

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Ladies and gentlemen, that does conclude today's conference call. We do thank you for attending. You may now disconnect your lines.