Ari Klein

Ari Klein of BMO Capital Markets asked about the current state of the transaction market, what Pebblebrook is observing, its perspective on the portfolio, and the potential for additional asset sales in the current year.

Answer

Thomas Fisher, Co-President and Chief Investment Officer, noted that the market is becoming more constructive with more trades, especially for luxury assets and larger transactions, driven by improving debt markets and available equity capital. Jon Bortz, CEO and Chairman of the Board, added that Pebblebrook will continue its dual approach of selling assets to pay down debt and buying back stock, leveraging the public-private arbitrage opportunity, and urged analysts to update models for recent dispositions.

Ari Klein of BMO Capital Markets asked about the current transaction market, Pebblebrook's portfolio strategy, and the potential for additional asset sales in the year.

Answer

Thomas Fisher, Co-President and Chief Investment Officer, noted a more constructive market with increasing trades, especially for luxury assets and larger transactions, driven by improving debt markets and equity capital seeking growth. Jon Bortz, CEO and Chairman of the Board, added that the strategy involves a dual approach: buying back stock at a discount and selling assets to pay down debt and repurchase shares, leveraging the public-private arbitrage opportunity. He also urged analysts to update models for recent dispositions.

Ari Klein of BMO Capital Markets asked about the factors underpinning the implied guidance improvement in Q4 relative to Q3 and questioned the sustainability of sub-2% expense growth, probing the long-term impact of efficiency initiatives.

Answer

Chairman & CEO Jon Bortz cited several factors for the Q4 improvement, including tougher Q3 comps in markets like Chicago and Boston and easier Q4 comps in Los Angeles. Regarding expenses, Bortz emphasized that the benefits from their productivity and efficiency programs are 'very substantial' and still in the 'early stages,' providing a significant offset to wage inflation. Co-President & CFO Raymond Martz added that moderating union labor cost increases in future years will also help.

Ari Klein from BMO Capital Markets asked about the remaining potential for productivity improvements to control costs, the anticipated impact of the World Cup on demand in key markets, and the cost and timeline for the Portland, Maine hotel development.

Answer

Dennis M. Craven, Executive Vice President and Chief Operating Officer, stated that while headcount was down 13% year-over-year, the focus is now on controlling wages and headcount rather than finding further cuts. Jeffrey H. Fisher, Chairman, President, and Chief Executive Officer, emphasized flowing any RevPAR increases directly to GOP. Mr. Craven also mentioned a conservative outlook for World Cup demand due to uncertainties in specific cities and confirmed that the Portland, Maine development costs are not yet included in CapEx guidance, with more details expected in the next earnings call.

Ari Klein asked about the overall impact of the World Cup on Chatham Lodging Trust's markets and the estimated cost for the Portland, Maine hotel development, confirming if it's included in current CapEx.

Answer

Dennis M. Craven, EVP and COO, confirmed the Portland development cost is not in current CapEx and will be detailed later, while expressing a conservative outlook on World Cup demand due to some uncertainties in specific cities.

Ari Klein asked for more context on Xenia Hotels & Resorts' RevPAR guidance ranges, particularly the low and high ends, and the contribution from special events.

Answer

Atish Shah, EVP and CFO, explained that the RevPAR outlook is bolstered by special events, Grand Hyatt Scottsdale's pace, and strong group revenue pace, particularly in markets like Houston, Northern California, Scottsdale, and Orlando. He noted the range reflects early-year visibility and natural business volatility. Barry Bloom, President and COO, added that large corporate account growth, while still below 2019 levels, showed consistent improvement throughout 2025, especially in Q4, driven by project work and increased demand from Fortune 100 accounts.

Ari Klein with BMO Capital Markets inquired about the detailed context behind Xenia Hotels & Resorts' 2026 RevPAR guidance ranges, specifically seeking clarification on the low and high ends and the impact of special events. He also asked for more insights into recent positive trends and incremental opportunities within large corporate account growth, a segment that has historically lagged in recovery.

Answer

EVP and CFO Atish Shah explained that the RevPAR outlook is bolstered by special events, Grand Hyatt Scottsdale's pace, and strong group revenue pace, particularly in key markets like Houston, Northern California, Scottsdale, and Orlando. He noted the range reflects natural volatility and limited visibility for the second half, especially for transient business. President and COO Barry Bloom elaborated on corporate account growth, stating that while still below 2019 levels, Q4 2025 showed consistent mid-teens growth from the largest accounts, driven by aggressive targeting and increased project work from major firms, setting a positive tone for 2026.

Ari Klein from BMO Capital Markets asked about the sustainability of strong out-of-room spending into the second half and questioned if there were any changes to the full-year EBITDA expectations for the Grand Hyatt Scottsdale.

Answer

Chair & CEO Marcel Verbaas noted that while Q2's out-of-room spend was exceptionally strong, he anticipates a more muted Q3 before a potential rebound in Q4, which has a stronger group base. EVP & CFO Atish Shah confirmed that the EBITDA outlook for Grand Hyatt Scottsdale remains unchanged in the low-twenties million range for the year.

Ari Klein inquired if the high end of the RevPAR outlook incorporates easier comps and event tailwinds, and if 2026 is expected to be characterized by weaker occupancy and stronger ADR growth, similar to 2025. He also asked for an update on the transaction market, specifically regarding the focus on dispositions.

Answer

CFO Liz Perkins stated that the high end of the guidance range anticipates occupancy growth more than rate, with special events potentially offering rate opportunities. CEO Justin Knight highlighted the successful execution of dispositions in 2025 and confirmed no acquisitions are currently contemplated for 2026, with a near-term focus on select dispositions to redeploy proceeds into higher-producing opportunities.

Ari Klein with BMO Capital Markets inquired if the high end of the RevPAR outlook incorporates easier comps and event tailwinds, and if 2026 is expected to be characterized by weaker occupancy over ADR growth, similar to 2025. He also asked CEO Justin Knight about the transaction market, specifically the focus on dispositions.

Answer

CFO Liz Perkins confirmed that the midpoint assumes little impact from special events, with the higher end anticipating occupancy growth more than rate, though events could offer rate opportunities. CEO Justin Knight expressed satisfaction with 2025 dispositions, noting no current acquisitions under contract and an anticipated near-term focus on select dispositions to redeploy capital at attractive spreads.

Ari Klein from BMO Capital Markets asked for more detail on the strong performance in July, current booking trends, the expected RevPAR growth cadence for Q3 and Q4, and the drivers of weakness in Sunbelt markets like Phoenix, Nashville, and Dallas.

Answer

CFO Liz Perkins noted sequential RevPAR improvement through July but highlighted softer bookings for August and September, with an expected recovery in Q4. CEO Justin Knight added that market-specific factors caused the weakness, such as convention center renovations in Dallas and a temporary pullback in semiconductor business in Phoenix. He emphasized the team's success in offsetting these issues by attracting higher-rated group business.

Ari Klein sought color on the total RevPAR guide for 2026, questioning why total RevPAR growth wouldn't outperform RevPAR growth given a higher corporate group mix. He also asked about early trends regarding rotational benefits with JW Desert Ridge and its new market.

Answer

Jennifer Hutcheson, Chief Financial Officer, attributed the similar growth to the law of numbers (a bigger TRevPAR base) and noted that while corporate mix outperforms outside-the-room, premium association and non-corporate groups also perform well. Patrick Chaffin, Chief Operating Officer, reported booking approximately 22,000 multi-year room nights manufactured from the JW relationship (JW Desert Ridge and Hill Country) and Gaylords, indicating successful sales organization alignment for synergy.

Ari Klein asked for more color on the total RevPAR guide for 2026, specifically why total RevPAR growth wouldn't outperform RevPAR growth given the higher corporate group mix, and inquired about early trends regarding rotational benefits with JW Desert Ridge in a new market.

Answer

Jennifer Hutcheson, Chief Financial Officer, attributed the similar growth to the "law of numbers" (a larger TRevPAR base) and the 3-point corporate mix swing, which tends to outperform outside the room. Patrick Chaffin, Chief Operating Officer, reported that new positions focused on multi-year rotational business between JWs and Gaylords have already booked approximately 22,000 multi-year room nights in one quarter, indicating upside potential. Colin Reed, Executive Chairman, and Patrick Chaffin emphasized aligning sales organizations and applying learnings from Gaylord rotational business to JWs.

Ari Klein of BMO Capital Markets inquired about the trend in lead volumes, which were down 16% year-over-year, and the long-term strategy for acquiring more JW Marriott properties to create a rotational network similar to the Gaylord brand.

Answer

EVP & COO Patrick Chaffin clarified that the pressure on lead volumes is primarily for the current year (2025), with a strong outlook for 2026 and beyond. President & CEO Mark Fioravanti and Executive Chairman Colin Reed confirmed that acquiring more JW Marriott hotels in top-tier markets is a core part of their growth strategy, citing the benefits of higher ADR, strong market demand, and the ability to rotate customers between the Gaylord and JW brands.

Ari Klein inquired about the level of interest and speed of movement for non-core asset sales, and whether the company would consider selling core hotels if opportunities arose. He also asked about the Royal Palm Miami's booking timeline before the World Cup and the expected pathway to achieving stabilized EBITDA levels.

Answer

Tom Baltimore, Chairman and CEO, emphasized the company's laser focus on reshaping the portfolio, highlighting the stark performance contrast between core and non-core assets. He noted ample equity and debt capital, with diverse buyer types for non-core assets, and expressed confidence in completing most sales in 2026. For Royal Palm, he stated confidence in reaching $28 million stabilized EBITDA within a couple of years, with bookings commencing as soon as regulatory approvals are secured.

Ari Klein asked about the level of interest and expected speed for non-core asset sales, and whether there's any consideration for selling core hotels. He also inquired about the Royal Palm Miami's booking timeline ahead of its opening and the World Cup, and the projected timeline to reach stabilized EBITDA levels.

Answer

Tom Baltimore, Chairman and CEO, emphasized the company's laser focus on reshaping the portfolio, highlighting the stark contrast in performance between core and non-core assets. He noted the team's extensive experience in dispositions (51 assets sold) and confirmed an adequate buyer pool, with the goal to complete most non-core sales in 2026 to pay down debt and reinvest in core assets. For Royal Palm Miami, Tom Baltimore stated confidence in reaching $28 million stabilized EBITDA from $14 million, expecting a couple of years for stabilization given Miami's robust development. He confirmed the ability to pivot quickly for bookings once regulatory approvals are secured.

Ari Klein from BMO Capital Markets asked about the acquisition market, particularly regarding the $500 million of capital gains from the Four Seasons sale, and the likelihood of a reverse like-kind exchange versus a special dividend.

Answer

Jim Risoleo, President and CEO, Host Hotels & Resorts, noted that the acquisition market is better but not robust. He emphasized that any reverse like-kind exchange would only be for accretive transactions, not just to defer taxes. He indicated that returning $500 million (approximately $0.72 per share) as a special dividend to shareholders is currently more likely than an acquisition.

Ari Klein asked about the acquisition market, particularly concerning the potential use of the $500 million in capital gains from the Four Seasons sale.

Answer

President and CEO Jim Risoleo noted that the acquisition market is improving but is not yet robust. He clarified that any reverse like-kind exchange would only be pursued for accretive transactions, not solely for tax purposes. While the investment team is exploring options, he indicated it is "more likely than not" that the $500 million taxable gain will be returned to shareholders as a special dividend, representing a tangible $0.72 per share.

Ari Klein asked for more color on any near-term group booking softness, its broad-based nature across business verticals, and any changes in cancellation, attrition, or lead volumes from a forward booking standpoint.

Answer

President and CEO Jim Risoleo clarified that there hasn't been meaningful cancellation beyond some D.C. government business, noting a strong Q4 group pace (up almost 8%). He explained that Q3 softness was expected due to the Jewish holiday shift, with some softness attributed to government and government-adjacent businesses. Despite lower group volume in Q3, banquet and catering revenue per group room night was up, indicating continued spending by groups. He concluded there are no specific cracks in driving group volume for Q4 and beyond.

Ari Klein asked for more color on any near-term group booking softness, whether it's broad-based across business verticals, and if there are any changes in cancellation, attrition, or lead volumes from a forward booking standpoint.

Answer

Jim Risoleo, President and CEO, clarified that there hasn't been meaningful cancellation activity, apart from some government business in D.C. He stated that the fourth quarter group pace remains strong, up almost 8%. The softness observed in Q3 was anticipated due to the shift in Jewish holidays, which impacted September and October. He noted that some softness is specifically related to government and government-adjacent businesses. Despite a decrease in group volume in Q3, banquet and catering revenue per group room night was up, indicating continued spending by groups. Risoleo concluded that there are no specific cracks in driving group volume for Q4 and beyond.

Ari Klein of BMO Capital Markets asked about the expected RevPAR growth cadence in the second half of the year, specifically the factors driving Q4 growth, and sought clarification on the $14 million insurance savings.

Answer

EVP & CFO Sourav Ghosh clarified the $14 million insurance savings applies only to the current year. He attributed the anticipated Q4 RevPAR strength to three factors: the favorable timing of the Rosh Hashanah holiday, renovation disruption at the Grand Hyatt San Diego impacting group pace, and easier year-over-year comparisons due to booking softness around the prior year's elections.

Ari Klein of BMO Capital Markets asked about the expected RevPAR growth cadence in the second half, specifically the factors driving Q4 growth over Q3, and clarified if the $14 million in insurance savings was an annualized figure.

Answer

EVP & CFO Sourav Ghosh confirmed the $14 million insurance saving is for the current year only. He explained that Q4 RevPAR growth is expected to be stronger than Q3 due to the holiday shift of Rosh Hashanah into Q3, renovation disruption at a major San Diego hotel in Q3, and an easier year-over-year comparison in Q4 related to prior-year election softness.

Ari Klein asked if the AI-driven deals differ from traditional deals in terms of size or location, and what specific factors have driven the significant acceleration in momentum since the Investor Day in June 2025.

Answer

Adaire Fox-Martin, CEO and President, attributed the accelerated momentum to robust, broad-based demand across all workload types, segments, verticals, and regions, including specific AI opportunities. Internally, accelerated capacity delivery, a 49% pipeline conversion rate in Q4, and firm pricing contributed. She noted AI transactions showed a 33% increase in density compared to non-AI deals, averaging about 10 kVA per cabinet.

Ari Klein asked if the AI-driven deals differ from traditional deals in terms of size or location, and what specific factors have driven the significant acceleration in momentum since the Investor Day in June.

Answer

Adaire Fox-Martin, CEO and President, explained that the accelerated momentum stems from robust, broad-based demand across all workload types, segments, verticals, and regions, including specific AI opportunities. Internally, it was driven by accelerated capacity delivery, a phenomenal 49% pipeline conversion rate in Q4, and firm pricing. Regarding AI deals, she noted they were among the larger transactions and showed a 33% increase in density compared to non-AI deals, averaging about 10 kVA per cabinet.

Ari Klein inquired about the impact of Equinix's updated sales approach, which allows selling capacity further out from delivery, on the recent strength in pre-sales activity. He also asked about the level of pre-leasing for new capacity coming online in key markets.

Answer

Adaire Fox-Martin, President and CEO of Equinix, explained that the pre-sales motion for core retail business is relatively new, with the sales window extended to 12 months ahead of delivery. This provides sales teams with critical capacity and offers customers comfort regarding future deployments. Keith Taylor, CFO of Equinix, added that the shift in supply-demand dynamics, with demand outpacing supply, has driven this new sales motion and accelerated builds. Pre-sales activity is evenly spread, with significant interest in high-demand locations like Frankfurt, London, and New York.

Ari Klein inquired about the drivers behind the strong pre-sales activity, specifically if the recent change allowing sales teams to sell capacity further out contributed to this strength, and the level of pre-leasing for new capacity in key markets.

Answer

Adaire Fox-Martin, President and CEO of Equinix, confirmed that the extended sales window for retail capacity (now 12 months ahead of delivery) is a key factor, providing critical capacity visibility for both sales and customers. She noted an increased velocity of pre-sales throughout 2025, with 40% of the total pre-sold balance signed in Q3 2025, spread across high-demand locations like Frankfurt, London, and New York. Keith Taylor, CFO of Equinix, added that this shift is driven by demand outpacing supply and efforts to accelerate builds. Adaire clarified that 'pre-sale' applies to retail, while 'pre-leasing' refers to the xScale business.

Ari Klein from BMO Capital Markets asked about the significant increase in CapEx guidance and whether Equinix has the flexibility to accelerate investments to deliver capacity more quickly.

Answer

CFO Keith Taylor confirmed the desire to accelerate but noted constraints like supply chain and energy access. He stated that a key reason for the increased CapEx guidance was the strategic pre-purchase of long-lead-time equipment to ensure timely delivery. CEO Adair Fox-Martin reinforced that delivering on 'Ready for Service' (RFS) dates is a primary operational focus.

Ari Klein from BMO Capital Markets questioned the reasons for the significant increase in CapEx guidance and asked about the company's flexibility to accelerate investments to bring capacity online sooner.

Answer

CFO Keith Taylor explained that while the company aims to accelerate delivery where possible, it faces external constraints like supply chain and energy access. He noted a large portion of the increased CapEx is for strategic pre-buys of long-lead equipment to mitigate delays. CEO Adair Fox-Martin reinforced that delivering on Ready-For-Service (RFS) dates is a top operational priority.

Ari Klein inquired about the current stage of Marriott's tech investments, whether spending could accelerate with AI, and what the company is observing regarding international demand for the World Cup.

Answer

CEO Tony Capuano detailed that the replatforming of central reservations, property management, and loyalty systems has moved from development to deployment, with test hotels showing positive results and a meaningful ramp-up expected in 2026, without material changes to the spending pace. For the World Cup, he noted FIFA reported stunning volumes of ticket requests globally. CFO Leeny Oberg added that cross-border travel was up 1% in 2025, and while it's early, they are seeing some increase in international guests booking for the World Cup.

Ari Klein inquired about the progress of Marriott's tech investments, specifically the replatforming process, and whether spending might accelerate with AI. He also asked about early international demand and booking windows for the World Cup.

Answer

CEO Anthony Capuano stated that the replatforming of central reservations, PMS, and loyalty systems has moved from development to deployment, with test hotels showing great results. The rollout will ramp up meaningfully in 2026, starting with select-service hotels, and spending is not expected to be materially different. Regarding the World Cup, he noted that FIFA was 'stunned' by ticket requests, and early returns are positive. CFO Leeny Oberg added that while U.S. inbound guests declined in 2025, cross-border travel was up 1% internationally, and they are seeing some increase in international guests booking for the World Cup, though it's still early days.

Ari Klein asked if the recent premium card program renewals by Chase and Amex for their own offerings are viewed as competition and what implications they might have for Marriott's upcoming credit card renewals.

Answer

Tony Capuano (President and CEO) acknowledged the broad recognition of travel-related spending strength among financial services players. He stated that Marriott believes its cards can coexist and be complementary with other premium offerings, and this dynamic will be incorporated into ongoing discussions.

Ari Klein asked about the potential competitive impact of premium card program renewals by Chase and American Express on Marriott's co-branded credit card renewals, and what this might mean for future negotiations.

Answer

President and CEO Tony Capuano acknowledged a broad recognition among financial services players of the strength and long runway for travel-related spending. He stated that Marriott believes these cards can coexist and be complementary, but it is a factor incorporated into ongoing discussions.

Ari Klein of BMO Capital Markets asked if there was an opportunity for Marriott to be more aggressive with key money, given that it is accretive to growth and the company has a strong cost of capital.

Answer

CEO Tony Capuano reiterated that while key money is a valuable tool for high-value deals, the company is not interested in 'buying growth at any cost.' He stressed that every deal is evaluated through a disciplined lens for value creation, and capital is deployed only when it is expected to generate higher-than-typical fees.

Ari Klein questioned whether the strength in the 0-1 MW business is primarily from market share gain or underlying demand, and how deal sizes are evolving, particularly with enterprise AI adoption or inference.

Answer

Chief Revenue Officer Colin McLean highlighted record Q4 performance in 0-1 MW, driven by strong channel contributions and new logos, confirming that Digital Realty is unquestionably taking market share. He noted the value of delivering high contiguous capacity in mixed-density environments and supporting the full spectrum of capabilities globally. President and CEO Andy Power added that while hyperscale deals are larger, there's also a gradual densification and increasing size of deal bands in enterprise, with customers sometimes seeking north of 1 MW.

Ari Klein asked about the drivers of strength in the 0-1 MW business, specifically distinguishing between market share gains and underlying demand. He also inquired about the evolution of deal sizes, including 0-2 or 0-3 MW segments, and the potential impact of enterprise AI adoption.

Answer

Chief Revenue Officer Colin McLean confirmed Digital Realty is taking market share due to strong execution, channel contributions, and new logos. He highlighted the value proposition of delivering high contiguous capacity in mixed-density environments and supporting a full spectrum of capabilities globally. President and CEO Andy Power added that deal sizes are trending towards larger capacity blocks, even in enterprise, with increasing power density and a gradual densification of deal bands.

Ari Klein of BMO Capital Markets asked about the company's long-term growth outlook, seeking to understand what sustainable Core FFO per share growth could look like beyond the current year's projection of approximately 7%.

Answer

CEO Andy Power stated the goal is to be a 'consistent compounder' in the 7% range or better for as long as possible. He explained that near-term growth (2025-2026) is driven by momentum in the zero-to-one megawatt and interconnection business, while longer-term growth (2027 and beyond) will be fueled by the large hyperscale bookings being signed today.

Ari Klein inquired about the significance of legal costs associated with DISH and if they are included in G&A, and why the composition of share repurchases and debt repayments is different than previously discussed, with less repurchases, to maintain leverage excluding DISH.

Answer

Sunit Patel, CFO, confirmed that legal costs for DISH are factored into the guidance provided. He explained that the revised allocation, with more debt repayment and less share repurchases, is to maintain the target leverage range of 6-6.5 times, given the change in the DISH outlook, ensuring an investment-grade rating and preserving financial flexibility.

Ari Klein from BMO Capital Markets asked about the legal costs associated with DISH, specifically if they are included in G&A and their significance. He also inquired about the reason for the altered composition of share repurchases and debt repayments, noting less repurchases than previously discussed, and whether this change is primarily to maintain leverage given the ex-DISH leasing levels.

Answer

Sunit Patel, CFO, confirmed that legal costs related to DISH have been factored into the guidance provided, though extreme scenarios are always possible. He explained that the change in the composition of share repurchases and debt repayments (more debt repayment) is to maintain the target leverage range of 6-6.5 times, especially with the revised DISH outlook. This strategy preserves financial flexibility and ensures the company remains investment-grade while still providing good risk-adjusted returns for shareholders.

Ari Klein of BMO Capital Markets questioned whether recent capacity additions indicated a shift in the mix of colocation versus amendment activity and asked why the full-year EBITDA guidance wasn't raised further given the strong performance in the first half.

Answer

Interim President and CEO Daniel Schlanger clarified that there has been no significant change in the mix of colocation and amendment activity. CFO Sunit Patel explained that the EBITDA guidance accounts for seasonality in the business, with some expenses expected to be weighted towards the second half of the year.

Ari Klein (BMO Capital Markets) asked if the new Verizon MLA could serve as a template for a future agreement with T-Mobile, given SBA currently lacks a similar deal with them. He also inquired about the sustainability of the services business's recent strong trend and the potential to broaden customer relationships in this segment.

Answer

Brendan Cavanagh, President and CEO of SBA, stated it's too early to determine if the Verizon deal will template a T-Mobile MLA, as each carrier has unique needs. He noted their good relationship with T-Mobile and an expiring agreement in about a year, expecting a positive outcome. On services, Mr. Cavanagh hopes to sustain recent trends, noting 2025 is the second-best year for services revenue. He sees potential to broaden the customer base, especially with Verizon, due to SBA's delivery capabilities and some competitors exiting the market.

Ari Klein asked about the key drivers behind the strong, near-record performance of the U.S. Services business and its future outlook.

Answer

President & CEO Steven Vondran attributed the strong services results to a robust application pipeline driving volume-based work and a larger contribution from construction management services. He noted that while construction management has lower margins, it increases customer value and stickiness, and the overall strength is indicative of a healthy leasing pipeline.