Service Properties Trust Price & Performance (SVC)

Additional information concerning factors that could cause those differences is contained in our filings with the SEC which can be accessed from our website, sbcreit.com, or the SEC's website. Investors are cautioned not to place undue reliance upon any forward looking statements. In addition, this call may contain non GAAP measures, including normalized funds from operations, or normalized FFO and adjusted EBITDAre. A reconciliation of these non GAAP figures to net income available in SEC's earnings release presentation that we issued last night which can be found on our website. And finally, are providing guidance on this call including adjusted hotel EBITDA, which We are not providing a reconciliation of this non GAAP measure as part of our guidance. Because certain information required for such reconciliation is not available without unreasonable efforts or at all.

With that, I will turn the call over to Todd. Thank you, Kevin, and good morning. Last night, we reported solid fourth quarter earnings results, reflect SBC's strongest hotel revenue growth in almost two years well as continued steady performance from our net leased retail properties. I'll begin today's call by providing an overview of the hotel portfolio, including an update on the process of the sales of 114 Sonesta hotels, before turning it over to Jesse to discuss our net lease portfolio and Brian for financial results, Overall, comparable hotel Rev Car grew 4.2% year over year, outpacing the industry by 60 basis points Despite meaningful revenue displacement from renovation activity, excluding 14 hotels under renovation during the quarter, comparable RevPAR increased 6.8% driven by increased transient group occupancy.

The continued effects of hotel renovations and pressures on expenses including labor and real estate taxes, impacted overall hotel profitability with GOP flat year over year and adjusted hotel EBITDA declined 2.4%, Our full service hotels reported an increase in RevPAR of 4.3%. Strength within group and transient was partially offset by a modest decline in contract Excluding the three full service hotels under renovation during the quarter, full service portfolio RevPAR grew by 6.3% year over year. Seven of our top 10 performing hotels in terms of year over improvement were Sonesta full service hotels. More specifically, our three Sonesta hotels in Downtown Chicago benefited from citywide compression and double digit market share gains from improved group corporate and notated performance.

The Royal Sonesta Hotel in New Orleans benefited from improved transient results citywide demand, and an increase in contract business drove strong top line growth at Royal Sonesta San Juan and Chase Park Plaza in St. Louis. Our select service portfolio produced exceptional growth with RevPAR up 9.6% year over year mainly driven by occupancy growth in both our Hyatt Place and Sonesta Select portfolios. Notably RevPAR growth grew to 26% year over year at our recently RevPAR and Sonesta Select grew approximately 4% driven by occupancy and discount and contract segments, specifically in Miami, Philadelphia and Atlanta. In our extended state portfolio, RevPAR grew 1.2% with increased occupancy more than offsetting a decline in ADR. Renovation activity continues to have a more pronounced impact on our ES Suites portfolio performance. As said hotels were under renovation in the fourth quarter compared to one in the prior year period.

To mitigate this disruption, Sonesta remains focused on driving short term stays and additional room nights with transient discounts and targeted marketing at government and wholesale channels. As we announced in October, we are marketing the sale of 114 Focus Service Sonesta hotels with a total of 14,925 keys across the ES Suites, Simply Suites and Select brands, and plan to utilize the proceeds to reduce SVC's leverage. We launched our formal marketing effort in January to sell the properties and have asked interested buyers to submit offers for one or more sub portfolios range from eight to 18 hotels that are group based on chain scale regional geography. Earlier this month, we received first round offers As we expected, the buyer pool is deep and well capitalized, and resulted in more than 50 sub portfolio bids with multiple bids for each portfolio.

Given the strength of the initial bids, we expect SVB to net sales proceeds of at least $1,000,000,000 Most, if not all the hotels will likely remain under the Sonesta brand which we believe will provide a long term benefit to SVC as it is a 34% owner of Sonesta through our share of related royalty fee streams. We have moved to a second round of bidding with the goal of selecting buyers and entering purchasing sale agreements in March and begin closing our sub portfolios during the second quarter. In addition to commencing our marketing of the 114 Sonesta hotels, we further executed on the plan we announced early in 2024 sell 22 non core underperforming hotels. During the fourth quarter, we sold eight of these hotels with 1,004 keys for an aggregate sales price of $49,100,000 and increased the total number of hotels sold for the year to 15. Since quarter end, we have sold one additional hotel with 149 keys for a sales price of $4,000,000 We have also reached agreements to sell five hotels with an aggregate of six twenty three keys for a combined sales price of $28,500,000 Further, we have commenced marketing the sale of our remaining IHG Hotel, a four ninety five key property in the premier submarket of Atlanta.

Assuming the completion of the sales, SVC's portfolio will consist of 83 hotels which during the fourth quarter experienced a RevPAR increase of 6.3% to approximately $101 adjusted hotel EBITDA increase of 10% year over year, which $30,600,000 In comparison for the 123 exit hotels, RevPAR grew 60 basis points to $64 and adjusted hotel EBITDA declined 23% year over year to $12,400,000 As we enter 2025, our focus remains on strengthening our balance sheet through asset sales and reinvesting our hotels with the highest opportunity for upside. We expect 14 hotels will be under renovation this year. Notable completions will include the renovation of our Sonesta Los Angeles Airport, and our Sonesta Hilton Head during the first half of twenty twenty five and our Sonesta in Atlanta and Simply Sweet's in Burlington, Massachusetts during the back half of the year. We remain confident that the current renovation program coupled with our portfolio rationalization efforts will lead to continued meaningful occupancy and rate gains in the year ahead. I will now turn it over to Jesse to discuss the net lease portfolio. Thank you, Todd. Our net lease portfolio continues to generate stable and reliable cash flows for SVC. As of December 31, we own seven forty two service oriented retail net lease properties with annual minimum rents of $381,000,000 Our net lease assets which represent 44.2% of our overall portfolio based on investment, were 97.6% leased with a weighted average lease term [indiscernible] Our diverse tenant base consists of 177 tenants, operating under 136 brands spanning 21 distinct industries.

Thereby mitigating our exposure to any one retail sector and offering opportunities to grow our existing relationships a variety of different operators. Our lease maturities remain well laddered with only 2.2% of our net lease minimum rent scheduled to expire in '25, and approximately 3% in each of the following years through 2029.

The aggregate coverage of our net lease portfolio's minimum rents was 2.1 times on a trailing twelve month basis of December 31, 2024, which was down less than 0.1 a sequential quarter basis.

Excluding our TA travel center properties, which are backed by BP's investment grade credit, essentially unchanged compared to the prior quarter. In light of the strong credit of our TA leases, and healthy coverage for the balance of the portfolio, combined with our diversified tenant base and staggered expiration schedule, we expect our net lease portfolio will continue to serve as a dependable income stream for On the transaction side, we sold three net lease properties during the quarter, containing a combined 10,000 square feet resulting in $2,000,000 in aggregate proceeds. Since the end of the quarter, we have sold or entered into agreements to sell an additional four net lease properties for an aggregate price of $7,100,000 Given the consistent performance of our net leased assets, we are evolving our strategy to focus on growing this portfolio [indiscernible] and strategically located acquisitions, Our investment criteria for externally sourced growth will prioritize properties leased to operators expanding their networks with established brands and that are in retail quarters that exhibit durable land values with appealing demographics. [indiscernible] these acquisitions can enhance our tenant and geographic diversity, increase portfolio weighted average lease term, and offer flexibility in terms of future reuse.

To this end, SBC is under agreement to acquire a net lease retail property with an eighteen year remaining lease term for $5,300,000 we are actively evaluating additional carcass we build out our acquisition pipeline. We are also seeing meaningful growth opportunities within our existing portfolio and are expanding our outreach efforts to identify tenants with whom we can partner for organic growth. With proactive asset management efforts, and opportunistic acquisitions in the coming year, we believe we can drive Walt upward optimize the makeup of the net lease portfolio and ultimately increase the portfolio's economic contributions to the SBC platform. Will now turn the call over to Brian to discuss our financial results.

Thanks, Jesse, and good morning. Starting with our consolidated financial results for the fourth quarter of twenty twenty four, normalized FFO was $28,600,000 or $0.17 per share. Versus $0.3 per share in the prior year quarter. Adjusted EBITDAre declined 7.4% year over year to $130,600,000 Financial results this quarter as compared to the prior year quarter were impacted most by a $9,400,000 increase in interest expense and an $8,400,000 decline in interest income. For our two zero five comparable hotels this quarter, RevPAR increased by 4.2% gross operating profit margin percentage declined by 160 basis points to 25.3% and GOP was flat compared to the prior year period. Below the GOP line costs at our comparable hotels increased $759,000 or 1.7% from the prior year, driven primarily by increased real estate taxes.

Our two zero six hotels generated adjusted hotel EBITDA of $43,100,000 decline of 2.4% from the prior year exceeding our guidance range.

By service level, adjusted hotel EBITDA year over year decreased $900,000 for our 47 full service hotels increased $1,600,000 at our 59 select service hotels and decreased $1,800,000 for our 100 extended stay hotels.

For the 14 hotels that were under renovation during the quarter, adjusted hotel EBITDA declined $8,000,000 In 2025, we plan to sell 123 In the fourth quarter, these 123 hotels generated RevPAR of $64 and adjusted hotel EBITDA of $12,400,000 representing a decline of 23% year over year.

Assuming we sell the 114 Hotel portfolio for at least $1,000,000,000 that pricing would imply a 16.5 times multiple on 2024 hotel EBITDA of $60,500,000 This valuation is well above SVC's multiple of approximately 10 times full year 2024 adjusted EBITDAre.

As it relates to the retained portfolio, the 83 hotels plans to keep generate RevPAR of $101 adjusted hotel EBITDA of $31,000,000 during the quarter or an increase of 9.7% year over year. Turning to our expectations for Q1, we're currently projecting full quarter Q1 RevPAR of $82 to $84 adjusted hotel EBITDA in the $20,000,000 to $24,000,000 range.

We will continue to see softer seasonal results through the remainder of the winter months before activity picks up in the spring our portfolio will also see continued disruption in 2025 at hotels we under renovation and the timing of our dispositions may impact our results. Turning to the balance sheet. At quarter end, we had $5,800,000,000 of debt outstanding with a weighted average interest rate of 6.4%. Our next debt maturity is $350,000,000 of senior unsecured notes maturing in February 2026. We currently have $61,000,000 of cash on hand and $50,000,000 outstanding on our $650,000,000 revolving credit facility. Turning to our investing activity, we made $85,000,000 of total capital improvements at our properties during the fourth quarter bringing our full year spend of $3.00 $3,000,000 which is in line with our previous guidance. We completed renovations at 28 hotels in 2024 with the largest spend for our Hyve Place portfolio full service Anesta hotels at LAX Service, White Plains, New York and Miami Airport.

We currently expect full year 2025 capital expenditures to be approximately $250,000,000 Notable initiatives will include the kickoff of multiyear projects to convert our Royal Sonesta in Washington DC and DuPont Circle as well as projects at Royal Sonesta in New Orleans and Cambridge. Of the 2025 capital spend, we expect $110,000,000 to $130,000,000 of maintenance capital with the rest going towards renovation initiatives.

Beyond this year, we expect our total capital spending to continue to trend lower in 2026 and 2027 as the pace of our hotel renovation program slows. That concludes our prepared remarks. We're ready to open the line for questions.

Thank you, sir.

We will now begin the question and answer session. The first question we have will come from Dori Wells Fargo.

Thanks. Good morning. Now that you won't be spending CapEx for the 115 assets to be sold, how have your return expectations changed for the remaining assets?

Good morning, Tori, and thank you for the question. This is Brian I'll take that one. I think generally speaking, or I expectations are the same. We have that high sort of single digit return versus prior positioning of the property before the renovations. That can fluctuate depending on the property in the market and depending on the scope of the project. For example, the James, the conversion to the James, the Nautilus property in South Beach and our upscale lifestyle brand initiative there in Washington. We expect much higher returns as we reposition the property these projects we're expecting ROI 20% to 30% range. So it'll differ across the portfolio, but on average, still sort of a high single digit target.

Okay. And then you mentioned a new focus on acquiring net leased assets. Can you put some context around what that acquisition volume may be on an annual basis?

Yes. I think for particularly in the first half, this is Jesse, Dori, for the first half of the year, I think the intent here is just to get out get a feel for what's out in the market build out our pipeline. I think initially this will be relatively small volumes, small dollars individual asset acquisitions. And then I think as we get towards the middle and the end of the year, we can kind of reevaluate strategy at that point once we have a better sense of kind of where we're transacting.

Okay. And then just a few balance sheet questions. How much of the $150,000,000 that you borrowed on the line in Q4 has now been paid back, I guess, to date in Q1?

There's 50 outstanding today. We made that draw at the end of the year for liquidity management Service.

Soft December, January and into February. And just from a working capital standpoint, we made that draw. But again, 50% is outstanding for the Okay. And then, the Maybe it was this month you amended the credit facility to reduce the minimum debt service coverage [indiscernible] What are you modeling for that ratio, I guess, throughout this year?

Yes. There's a couple of reasons we did that. [indiscernible] The hotel portfolio that secures credit facility includes a lot of the hotels we are selling It includes properties that we've been renovating so that the results have been declining And we were getting up against it in some of the covenants within the credit agreement. Which are different than how the calculations are done for the public debt. So we wanted to make sure we weren't in breach of anything So we were able to reach an agreement to amend We are swapping out hotel collateral to release all the Senesta hotels that are in collateral package as we are selling a good portion of them We're swapping that out with one of the travel center pools.

Okay. So I mean throughout this year, would you would you are you expecting to get close to that 1.3% or you think it will stay around where it ended the year around 1.5 and change?

Yes, I don't think we'll get we're not going to dip really below that 1.5%. It was more precautionary, but also making sure there's adequate cushion and we'll have much more stability with the way the collateral package works for the revolver covenants.

Okay, great. Thanks so much.

Next, we have Tyler Batory of Oppenheimer.

Hey, good morning. Thank you. So I want to start on the hotel portfolio.

Specifically the guidance for Q1. You've got a lot of moving pieces. The $20,000,000 to $24,000,000 hotel EBITDA number applies a margin that's down a little bit year over year.

Is there a way to isolate or think about the performance of the 83 retained hotels in Q1 and Additionally, when you think about those 83 hotels, and I'm sure if you gave this number, what was the EBITDA contribution or the EBITDA margin for those properties for the full year 2024?

Hi, Tyler. For the For the 83 retained hotels, we were about 15% margin and [indiscernible] $60,000,000 of EBITDA. Brian, do you have the EBITDA for the other two portfolios? [indiscernible] [indiscernible] coming out of renovation. So it was call it 10% on average. As we look to Q1, Remember, the retained hotels is heavily concentrated with full service hotels. So we do expect that year over year decline. We'll continue to see softness in Q1 from our concentrations in Chicago and some other areas where margins are definitely weaker in Q1. So we will see that degradation as you said, the decline year over year. In margins. But again, the typical seasonal patterns plus throw in the weight of some of the renovations at the boxes LAX, for example, that won't be done till the end of Q1. And Hill Pad, we're also doing the public space there. So some other hotels will continue to have meaningful impact to our results early in Q1.

And then if you look at the fourth quarter, the adjusted EBITDA for those 83 retained hotels actually increased 10% relative to the overall portfolio, which declined a couple of percent. Okay. Okay. Thank you. Follow-up on the asset sales and maybe you gave some good commentary on the process, which I appreciate, but I know a lot of investors are really focused on what's going on here. So just talk a little bit more about how the process is going versus your expectations? Maybe the interest is perhaps a little bit higher than you might have thought. I'm not sure. And then the comments in terms selling all of those hotels with the Sonesta brands, Is that a little bit of a change from what you were thinking before and kind of walk through the price dynamics of selling those assets encumbered versus unencumbered please?

Sure. Yes, the process has gone very well so far.

Probably a little better than expected, but we've been in the market with a lot of hotels over the past few years.

So think we have a pretty good sense of who the buyers are, what the interest level is and these hotels in particular the select service and extended stay hotels, there's just not portfolio sales of this scale and this magnitude that have been in the market, that are in the market that are are coming to market and there's a lot of groups that want to grow these service levels in their portfolio. So I'm not surprised of the level of interest that we've gotten from a lot of larger institutional hotel owners. In terms of In terms of price, were already close to what our initial guidance was if you take the top bids from each of the sub portfolios. [indiscernible] not a surprise, but certainly certainly a positive and I think an indication of how strong and deep and competitive the process and buyer pool have been so far So again, we're very pleased with where things are so far and ideally groups will come up even more in the second round. In terms of the encumbrances, Most, if not all these hotels we do expect to be sold with long term Sonesta franchise agreements I would say that's unexpected.

In the past, the hotels that we have sold that were Sonesta for Engine Managed I'd say on average about 80% of the hotels were sold encumbered and the ones that were sold unencumbered. Were from groups that came in and either wanted to redevelop the properties and convert the use to multifamily and move on to pay a significant premium above the encumbered offers to do that. Or they were hotels that were in markets that other brands other competing brands might not have had a presence in. So they were a lot more aggressive in terms of key money or trying to get to get their flag on the hotels. I think these hotels are a little different for the most part. They're They're strong performing hotels. They're in better markets than what we've sold in the past. So a lot of the competing brands are already there. And if we do receive unencumbered The way we look at that we put a value on the royalty fee stream look at SBC's 34% share at of as 34% owner of Sonesta applying appropriate multiple to that, applying expense load to that and then and that's how we would look at any unencumbered offers or encumbered offers to the extent we receive those.

On this portfolio.

Okay, okay. Very good detail. Thank you.

A follow-up on the CapEx [indiscernible] Is any of that spend on hotels that are going to be sold this year. And then the 110 to 130 maintenance portion, is that a good run rate to be thinking about for the 83 retained hotels going forward. Hey, Tyler. There will be some spillage for properties we're exiting for projects that underway or just some maintenance items that we need to do regardless as we get ready for sale. It's not a large percentage, call it $20,000,000 to $25,000,000 for the hotels that are exiting. As far as the maintenance capital, it is oversized, the 110 range, the 130 that I mentioned.

We do expect a more normalized range for the what's going to be left in this hotel portfolio to be closer to $65,000,000 to $75,000,000 going forward. So we are doing some deferred maintenance catch up and some of those stuff that we're doing won't be repeated ongoing.

Okay. And then my last one more open ended perhaps As we sit here at the start of the year, just help us think about your your capital priorities as we go through 2025, you got a lot going on with asset sales, I'm sure focused on leverage. It sounds like maybe going on the offensive side would be net lease, although that's probably going to be pretty small. Just kind of walk through kind of rank order, if you will, just what you're prioritizing as 2025 goes on? Sure, Tyler. I'll start and then others can jump in. But the priority once we start recognizing the sale proceeds will be to address our 2026 debt maturities that is first and foremost You've got the $350,000,000 due in Q1 and then another large bullet in the fall of twenty twenty six. We're looking to address all that with the hotel sales. And then as far as the CapEx investment is next in ranking as far as our priorities to continue to enhance our hotel portfolio and position these properties to succeed. Longer term. And then from there, it's starting to recycle net lease and grow net lease think are the priorities.

Yes. And I'll add on to that. I think that I think we see as Jesse mentioned earlier, we see an opportunity in the net lease space and I think you've seen what we've done through the asset sales and the planned asset sales as well as the the limited acquisitions we've done over the past few years in terms of we want this portfolio overall to look like long term. And you've seen us continue to sell some of the select service and extended stay hotels focus more on the full service assets, shift more of our mix on the hotel side, [indiscernible] from business to leisure oriented where we've been under concentrated is [indiscernible] And on the net lease side, you look at that portfolio and that portfolio has been Ben, an excellent performer for us over the past several years. Backed by the travel center assets with an investment grade entity behind that. And then a very strong performing other net lease portfolio that's strong off the three times 3.7 EBITDA to rent coverage. So We think there's opportunity to add assets to that side of the that side of the portfolio.

We're really going to be focused on strong operators and good sectors with lease term and we think we can get decent yield those assets. So that is again, that's Priority number one is paying down debt, priority number two is CapEx into our hotels. And then the third priority is potentially acquiring some more net lease assets Okay. That's all from me. Thank you. Next, we have Meredith Jensen. Of HSBC.

Yes, good morning. Thanks. Was wondering if you could speak a little bit more about the net lease portfolio, are there portfolio assets that you would also sort of prune as you add more such as the net amount stays stable? And I guess what I'm getting at is sort of the long term mix in investments, that sort of pie of of SVC investments between hotels and net [indiscernible] I think in terms of pruning the net lease portfolio, I think we're we're pretty consistently going through those assets and identifying sectors we see growth in versus sectors we don't and making disposition decisions along those lines as well as I think at this point we're really quick to identify when those assets go dark, whether we think there's release or redevelopment scenario and if not, those will tend to go to [indiscernible] between the hotel and that lease assets. Within the portfolio. But I think historically we've always shopped for some version of a forty-sixty split, fifty-fifty somewhere in that going in either direction, but Sure.

I think you covered it well, Jesse.

And No, I think I'll add to that is as we look to kind of buy assets in that portfolio, you may see us be a little more up optimistic in terms of selling leased assets, whether that's as Jesse pointed out to kind of reduce our exposure certain industries or brands or tenants that we have. Concerned about or not as optimistic on But you'll also see us execute a lease renewal and then sell a property as an example as well. So you could see us doing some more of that and then look to recycle that capital back into back into lease space. And then overall, similar to the answer I gave Tyler, is we see the net lease portfolio as a strength of our portfolio. Strength as well. And I optimizing that portfolio now and if the performance of those hotels this last quarter where you saw adjusted EBITDA grow 10%, is that the indication? We're keeping the better performing hotel keeping the hotels that have the most upside. We're keeping the hotels are going to benefit most from the renovations. So again, we're before these sales, I think we're 54% hotels After the sale, it will be 47%.

And like Service said, I don't envision us going below 40% in the hotels, but Anywhere from kind of that 40% to 60% range long term.

Okay, great. That's super helpful. And I know there's a lot of matrix and a lot of information in the deck. About geography and sort of location urban versus suburban. But if you could just narrow the scope to the hotels that you'll be keeping, sort of some guidance in terms of seasonality and sort of geography and how to think about Basically through the year in 2026 as we start gross what that portfolio RevPAR and quarterly sort of cadence will be? Sure. I guess, Shar.

So and I'll focus more on this Nestle portfolio because that's where we're transacting for the most part. And that all those are all good points and we're all factors as we selected what it we wanted to sell. And what we wanted to keep. But for the most part on the Extended Stay Select Service, we're keeping the the better performers there on average for 24 Those hotels did did over 30% margins, so they're good performers. Selling most of hotels that are in suburban business parks that really rely on that midweek business traveler that's just really it's really been a challenge for that to come back over the past few years.

A lot of the select service and extended stay we have are in good more urban infill markets And then our full service portfolio will have 39 of those hotels in the Sonesta portfolio, all Royal Sonesta and full service Sonesta. We also have a couple of hotels that were we're converting over to the James brand.

This year as well. [indiscernible] right now are more focused urban than they are true destination resort hotels. But over the next few years, I think as we continue to build out the hotel portfolio. I think you'll see us acquire more assets like the Nautilus acquisition that we bought a couple of years ago. So that's really what we're more focused on. Right now our portfolio is more urban, Our full service at least is more urban and more concentrated in the the Northern Part Of The U. S. Yes. And for modeling purposes, Meredith, I think from a a seasonality standpoint, Q1 twenty twenty five, Q4 twenty twenty five, [indiscernible] the goalpost for the bell curve where our portfolio will be strongest in Q2 and Q3. So my guidance of $20,000,000 to $24,000,000 of cash flow, hotel EBITDA represents a high single digit margin. Expect that margin in Q2 to exceed 20%. So you see the ramp into our strong spring and summer periods will affect how those seasonality trends play out for the year. And beyond that, when we sell the hotels, there'll be some more normalization of the the seasonality trends as we exit so many hotels, but generally Q1, Q4 will continue to be the weaker weaker quarters for SVZ's hotel portfolio.

Thanks. That's super helpful. Last question, is it fair, it does seem just hearing that the process is going pretty quickly. But in terms of closing and all of that, you think that sort of debt pay down and full exit could happen all in 2025? Just trying to see when we have a a clean slate for the hotel if it's going to be 27 over '26 or it will bleed further out?

Barry, I think it's I think it's safe to assume that hotels will all be closed during 2025 and we're we should be moving to close. We have a goal maybe an aggressive goal to close these by June 30. Some may go past that, but we should have all these closed by the third quarter.

And Brian, do you want to talk about the debt repayment Yes. I mean, once we have certainty and have the cash in hand and have the proceeds at Mass, we'll look to use that to address leverage as we've talked about with the proceeds.

Great. Thanks so much. That's super helpful.

Thank you. Sharon, thanks for the questions. Well, this concludes our question and answer session. I would now like to turn the conference call back over to Mr. Todd Hargreaves for any closing remarks. Sir?

Thank you, everyone, for joining today's call and for your continued interest in SVC.