Release Date: March 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Looking at guidance, your revenues and EBITDA are projected to be higher, yet FFO looks to decline. Is this due to refinancing activities or interest? What is the trajectory of FFO if operations are improving but FFO is going down? A: This is Tony, Alex. We're seeing improvements in revenue and EBITDA, but we have a number of loans originated 5 to 10 years ago at 4% to 5% interest rates that we're now refinancing. As a result, interest costs are increasing, which affects FFO. This trend will continue until we complete refinancing these legacy mortgages.
Q: Regarding the Nasdaq notice about the stock trading below $1, is a reverse split the easiest solution? How are you addressing this issue? A: That's right, Alex, it's Dave here. We have 180 days upon notice to cure the deficiency, typically by executing a reverse split to get above the dollar threshold. Alternatively, if the stock price rises above $1 during that period, it will resolve itself.
Q: For the hotels undergoing repairs, like Hotel Alba, is there anything in guidance for insurance recoveries? Is any part of FFO enhanced by recovering insurance dollars? A: This is Scott speaking. Our guidance assumes normal operations at the hotel, with business interruption proceeds from insurance carriers making us whole. The guidance assumes we're fully made whole, and any shortfall in expected operations will be covered by business interruption proceeds.
Q: Regarding refinancing this year, given the debt load and every asset encumbered, is there a plan to sell assets to unencumber others and improve leverage? A: Yes, we're always considering options to manage cash and the portfolio. We haven't focused on selling assets for this purpose. As fundamentals improve, we aim for better refinancing outcomes. Our strategy is to manage each mortgage due with legacy loan rates and structures for the best market outcome.
Q: Is the guidance for 2025 a good run rate for the portfolio, or is it enhanced by insurance recoveries? A: The guidance for 2025 reflects a good run rate for the portfolio without enhancement from insurance recoveries. It assumes normal operations and that any shortfall will be covered by business interruption proceeds.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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