Hello, everyone. Thank you for joining us and welcome to Xenia Hotels & Resorts Q3 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Aldo Martinez, Director of Finance. Aldo, please go ahead.

Thank you, Marina, and welcome to Xenia Hotels & Resorts Third Quarter 2026 Earnings Call and Webcast. I'm here with Marcel Verbaas, our Chairman and Chief Executive Officer, Barry Bloom, our President and Chief Operating Officer, and Atish Shah, our Executive Vice President and Chief Financial Officer. Marcel will begin with a discussion on our performance. Barry will follow with more details on operating trends and capital expenditure projects. and Atish will conclude today's remarks on our balance sheet and outlook. We will then open up the call for Q&A. Before we get started, let me remind everyone that certain statements made on this call are not historical facts and are considered forward-looking statements. These statements are subject to numerous risks and uncertainties as described in our annual report on Form 10-K and other SEC filings, which could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued this morning, along with the comments on this call, are made only as of today, November 3, 2026, and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find the reconciliation of non-GAAP financial measures to net income, as well as definitions of certain items referred to in our remarks in our third quarter earnings release, which is available on the investor relations section of our website. The property level information we'll be speaking about today is on a same property basis for all 29 hotels, unless specified otherwise. An archive of this call will be available on our website for 90 days. I will now turn it over to Marcel to get started.

Thanks, Aldo, and good afternoon, everyone. Our portfolio delivered an outstanding third quarter with results that substantially exceeded the expectations we outlined on our second quarter earnings call at the end of July. Group demand was very strong, as anticipated, and grew significantly compared to the softer demand we experienced in the third quarter of last year. Additionally, corporate transient demands continued to strengthen, and demands from the higher-end leisure customer remained resilient. Importantly, The strong top-line performance carried through to the bottom line, with nearly 300 basis points of hotel EBITDA margin expansion compared to the same period last year. On a gap basis, this morning we reported a net loss of $2.7 million for the quarter. Adjusted EBITDA RE was $53.2 million, an increase of 26%, and adjusted FFL per share was $0.36, up almost 57% from the same quarter last year. The significant growth reflects both the strength of our operating results and the benefit of a lower share count following the significant share repurchases we completed last year. Same property REF BAR for our 29 hotel portfolio was $184.75, an increase of 12.5% compared to the third quarter of 2025. After a second quarter in which our REF BAR growth came entirely from rate, This quarter's gains were well balanced between occupancy and average daily rate, which we view as a healthy sign of broadening demands across the portfolio. While certain markets in our portfolio benefited from event-driven demand in July, including the FIFA World Cup at America 250, it is noteworthy that August and September delivered strong Rothbard gains as well, with September's 16.8% Rothbard increase leading the quarter. Diving into our markets, in the third quarter, 21 of our 22 markets experienced RefBar increases, with 13 of those achieving double-digit growth versus the third quarter of 2025. Philadelphia, which benefited from several large events, led the portfolio with RefBar up 34.5%, followed by New Orleans at 29%, and San Diego and Salt Lake City, each also up in excess of 20%. Pittsburgh, Santa Clara, Dallas, and Orlando also had very strong results during the quarter, with each of those markets up between 16% and 18%. As we anticipated when we last reported, the second quarter's gap between same-property REF PAR and total REF PAR growth, which was driven by lower contributions from group demands, did not continue into the third quarter. Same property total REF PAR growth of 12.7% for the third quarter exceeded our 12.5% REF PAR growth, as group demands and banquet and catering revenue increased meaningfully compared to last year. In a number of markets, healthy group business drove even greater growth in total REF PAR, most notably in San Diego, up more than 26%, and in Houston, up nearly 17%, as our Houston hotels lapped a softer period last year. Looking ahead, we do expect that REF PAR growth for the portfolio will now exceed total REF PAR growth for full year 2026, as reflected by our updated guidance for both metrics. This is a result of much stronger REF PAR growth than we previously projected, as well as the mix of our REF PAR growth, rather than any softening and out-of-room spend. Transient demand, which carries less ancillary revenues than group business, has been much stronger than we previously anticipated. and a significant portion of our Rothbard growth has been fueled by increases in ADR. Third quarter same property hotel EBITDA of $60.2 million was 29.3% above the same period in 2025. And same property hotel EBITDA margin was 22.9%, an increase of nearly 300 basis points. The balanced growth in occupancy and rate during the quarter allowed our hotels to leverage their fixed cost. while the rebounding group business drove a significant improvement in out-of-room profitability. Our operators continue to do an excellent job managing costs, and we continue to work closely with them to manage expenses where possible. Barry will provide additional detail on our property level results during his remarks. Turning to our capital expenditure projects, we now expect that we will spend $70 to $75 million on property improvements during the year, with two significant renovations scheduled to begin next month. At Andaz Napa, the first phase of a comprehensive renovation of guestrooms and corridors will commence. And at the Ritz-Carlton Denver, we will be upgrading the guestrooms, corridors, and meeting space. Barry will also provide more color on all of our completed and ongoing capital projects. As we have done throughout the history of the company, we will continue to evaluate additional opportunities to enhance the quality of our portfolio and drive adjusted FFO growth, whether through reinvestment in our existing hotels, acquisitions, or dispositions. The sale of the 85-room Kimpton River Place Hotel in Portland that we discussed on our second quarter earnings call is an example of these disciplined capital allocation decisions. As a reminder, we sold the hotel in July for $11 million, which represented a 19.4 times multiple on trailing 12-month hotel EBITDA, and allowed us to exit an asset that faced substantial near-term capital needs amid an uncertain outlook for earnings growth. Given our strong third quarter and our expectations for the remainder of the year, we are meaningfully raising our full-year 2026 outlook, We now expect same-property REF BAR growth of 7.75% to 8.25%, an increase of 250 basis points at the midpoints, compared to the guidance we provided after the second quarter. And we expect full-year same-property total REF BAR growth of 7 to 7.5%, an increase of 150 basis points at the midpoints, compared to prior guidance. These increases in expected full-year revenues coupled with improved margin performance are driving significant projected increases in adjusted EBIT IRA and adjusted FFO per share as well. Atish will walk through our updated guidance in more detail. 2026 is shaping up to be an exceptional year for Xenia. Our results have exceeded our expectations throughout the year and we have raised our earnings outlook three quarters in a row. The fourth quarter is off to another promising start as we estimate the same property REFBAR during the month of October increased approximately 8% compared to last year. The significant REFBAR increases during the important months of September and October were driven by both group and corporate transient demand, which is encouraging as we look ahead to next year. The recent investments we have made in our portfolio continue to pay off. Highlighted by Grand Hyatt Scottsdale continuing its successful path towards stabilization at a significantly higher hotel EBITDA level than its prior peak. We own a high-quality portfolio of luxury and upper upscale hotels in markets with limited news supply. We continue to maintain a strong and flexible balance sheet, and we have a proven track record of prudent capital allocation leading to value creation for our shareholders. We are proud of what our team and our operating partners have accomplished over the past several years, and we are more confident than ever in the long-term earnings potential of our portfolio. Barry will now provide more detail on our operating results and capital projects.

Thank you, Marcel, and good afternoon, everyone. Our same property portfolio generated third quarter red bar of $184.75, up 12.5% from a year ago. Unlike last quarter, when growth was entirely rate-driven, The third quarter gains were more balanced, with Atkinsy rising 380 basis points to 70%, an average daily rate increase of 6.4% to $264 when compared to the same period in 2025. Strong out-of-room spend lifted total rep par to $325.71, up 12.7% for the quarter, which, as Marcel mentioned, represents a strong rebound after a more subdued second quarter, primarily as a result of our group business mix. We are pleased to report that for the third quarter, 26 of our 29 hotels grew repar when compared to the third quarter of 2025, with 14 of those achieving double-digit percentage increases during the period. Our top-performing hotels in the quarter were Kipton Hotel Palomar, Philadelphia, where repar rose 34.5%, Lowe's New Orleans up 29%, Park Hyatt Aviara up 28.5%, Marriott Woodlands Waterway up 23.9% and Kipton Hotel Monaco Salt Lake City and Hyatt Regency Grand Cypress each up nearly 21% Rev Park Fairmont Pittsburgh, Hyatt Regency Santa Clara, Marriott Dallas Downtown and Kipton Canary Santa Barbara each grew in mid to high teens percentages while Grand Hyatt Scottsdale continued its ramp towards stabilization with Rev Park up 12.5% at the resort Only three of our hotels experienced rep bar weakness compared to the third quarter of 2025, including Andaz Savannah, down 4.5%, Hotel Oriel in Savannah, down 1.3%, and Andaz San Diego Flat versus last year's third quarter. By month for the third quarter, July same property rep bar was $180.40, an 11.7% increase over last year, with 367 basis points of occupancy gain and a 5.8% higher rate. August came in at $167.24, up 8.6%, with rate up 6.3%. September was the standout month, finishing at $207.33, up 16.8%, as occupancy climbed 641 basis points to 73.5%, and rate grew 6.6% to $282.26. Group business was a clear driver of our results in the quarter. Same property group room revenue increased 16.2% compared to the third quarter of 2025, driven primarily by volume, with group room nights up approximately 11%. That represents our strongest quarter of group growth this year. This is despite the relative softness in group experience in our World Cup markets during July, but reflective of the shift of both Jewish holidays to September, with both falling on weekends this year. The increase in group volume also carried through to banquet and catering revenue, which was a primary driver of our 15% growth in food and beverage revenue for the quarter. Atish will provide more color on group pace for the fourth quarter and 2027 in his remarks. Day of week trends were solid in the third quarter, with RevBar growing every night of the week. Across all segments, weekday RevBar, Sunday through Thursday, grew 12.6%, while weekend RevBar, Friday and Saturday, grew nearly 12%. Midweek occupancy was particularly strong, driven by both group and transient, with Tuesday and Wednesday occupancy averaging 76.3%, up 470 basis points from last year. That additional demand created opportunities for meaningful rate compression, with Tuesday and Wednesday ADR up 7.9% and REVPAR up 14.9%. Now turning to expenses and profit. Third quarter, same property total revenue, grew 12.7% year over year, outpacing total operating expense growth of 8.5%. As a result, Hotel EBITDA of $60.2 million was up 29.3% versus 2025. Additionally, Hotel EBITDA margins saw 295 basis points of margin expansion, climbing to 22.9% versus the third quarter of 2025. Within the operating departments, rooms revenue grew 12.5% while rooms expense rose only 6.6%, with rooms expense per occupied room up less than 1% as occupancy increased by 4 points. Food & Beverage was a standout in the quarter, with F&B revenue up 15% against expense growth of 10.3%, driven by increased banquet and catering revenues and strong group demand, and reflecting an uptick in growth compared to both last quarter and the third quarter of last year. Other operating departments, including spa, parking, and golf, grew 15.5% in the quarter, while miscellaneous income declined 5%, primarily due to lower cancellation and attrition revenue. Undistributed departments continue to be well-controlled with expenses rising 7.8% in the third quarter, well below revenue growth. On a same-property basis, A&G expenses increased 10.2%, primarily driven by revenue-related costs, including credit card commissions. Sales and marketing and repairs and maintenance grew a more modest 3.9% and 2.1%, respectively. Utilities, however, increased nearly 14% driven by higher occupancy, several markets with extreme weather conditions, and a used salary reclassification of Gulf water expenses to this line item in 2026. Now turning to CapEx, during the third quarter, we invested $16.4 million in portfolio improvements, which brings our total for the year to $47 million. We now expect full-year capital expenditures of between $70 million and $75 million, with a reduction of $5 million at the high end of our prior range. At Royal Palms Resort and Spa, we completed the renovation of the guest rooms and corridors in the 68-room Monta Vista building and the renovation of T. Cook's Restaurant. Additionally, in the third quarter, we performed work and continued planning minor guest room upgrades at three hotels, which are expected to be completed in 2026 or in the first quarter of 2027 based on hotel occupancy, as well as planning and or execution of mechanical systems and infrastructure upgrades at nine hotels. The two significant renovations this year are still on track to begin next month. At Undox Napa, the first phase of a comprehensive renovation of guest rooms and corridors, covering about half of the hotel's 141 rooms, with completion expected in the first quarter of next year. As a reminder, the second phase will begin in the fourth quarter of 2027. At the Ritz-Carlton Denver, next month we will begin a renovation of guest rooms, corridors, and meeting space, with completion expected in early March. Both projects are timed for lower demand periods to minimize disruption. Turning to our four Marriott Autograph Collection Hotels, our hotels in Orlando and Savannah transitioned to their new names on September 1st, followed by our hotels in Charleston and Mountain Brook on October 1st. The Orlando Hotel is now named Hotel Bowdoin, the Savannah Hotel is now Hotel Oriel, the Charleston Hotel is now Hotel Opris, and Mountain Brook is now Hotel Wildemont. As a reminder, the hotels remain part of Merritt's autographed collection, and the new identities reinforce the collection's emphasis on distinctive properties that capture the character of their local markets. We made minor investments in these properties as part of the renaming, and have also rebranded the primary restaurants and bars in both Orlando and Charleston. As with the management transition to Davidson earlier this year, renamings were completed with no meaningful disruption to hotel operations, and we look forward to the benefits of these repositionings under Davidson's management. With that, I will turn the call over to Atish.

Thanks, Barry. I will provide an update on our balance sheet, walk through our updated guidance, and provide some early thoughts on 2027. First, our balance sheet continues to be a source of strength. At quarter end, we had approximately $1.4 billion in outstanding debt. Our leverage ratio as calculated under our credit facility was approximately 4.4 times, trailing 12-month net debt to EBITDA down from 5.2 times at the end of 2025. Over time, we expect our leverage ratio to achieve our long-term target of sub-4 times net debt to EBITDA. As a reminder, we have no preferred equity or senior capital. Our debt maturities continue to be well-laddered with a weighted average duration of 2.6 years at quarter end. The only debt maturity next year is the Marriott San Francisco Airport mortgage loan, which we intend to pay off with existing liquidity early in the second quarter. At that time, 28 of our 29 hotels will be free of property-level debt. As to liquidity, we ended the third quarter with $161 million in available cash, excluding restricted cash. Our $500 million revolving line of credit continues to remain fully undrawn. Therefore, total liquidity at quarter end was $661 million. As previously reported, our board authorized a third quarter dividend of 14 cents per share. Our dividend continues to reflect the use of NOLs, which while we prioritize the uses of capital that we believe drive the most shareholder value, including investments in our portfolio. We did not repurchase or issue any shares during the quarter. We have $97.5 million remaining on our buyback authorization and $200 million of capacity under our ATM offering program. Now turning to our updated 2026 outlook, beginning with RevPAR. Our RevPAR growth is now expected to be 8% at the midpoint. This represents a 250 basis point increase to prior guidance and 500 basis points above our initial 2026 guidance. Our full year midpoint implies rev part growth of roughly 7% for the fourth quarter, which is supported by our estimated October rev part growth of approximately 8%. On total rev part growth, our midpoint is now 7.25%. That is 150 basis points higher than prior guidance. As to hotel EBITDA margin, we now anticipate full year expansion of approximately 120 basis points. You'll recall that we started the year expecting margin to decline slightly. Cost per occupied room is running up about 2.5% year-to-date versus the roughly 3% we had expected when the year began. As suggested at EBITDA RE, we have both raised and tightened our range. We now expect to earn $281 million at the midpoint, an increase of $8 million from last quarter, and an increase of $21 million from our initial 2026 outlook. and others. Lastly, we now project $26 million of full-year G&A expense, an increase of approximately $1 million due to higher incentive compensation expense. Full-year income tax expense moves the opposite way and is projected to be $1 million, which is down from $2 million per prior guidance. For the full year 2026, at the midpoint of our guidance, we expect adjusted and a number of others. Looking ahead to 2027, we would like to provide some initial thoughts. While it is still early, there are a handful of points we can share. First, on business transient demand, which is the biggest slice of the pie at about 40% of our overall room revenue mix, we are expecting the momentum we experienced this fall to continue into next year. We expect mid-week are still nearly seven points behind 2019 occupancy across Tuesday and Wednesday nights with larger gaps on Mondays and Thursdays. Our operators are conducting corporate rate negotiations now and we are hopeful for healthy revenue increases from this segment. We expect return to office and a healthy overall labor market to continue benefiting corporate transient demand. Second, as to group demand, which reflects about 35% of our room revenue mix. While group is an important part of our mix, we are coming off a couple of very strong years of growth. By way of reminder, in 2025, group room revenue increased about 13%, and year-to-date through September of this year, it increased another 9%. As we look forward, we expect more normalized growth. As of the end of the third quarter, about half of our 2027 group room revenue was definite, which is generally in line with our historical pattern. Group room revenue pace for 2027 was down approximately 4% compared to the same time last year. The decline is all second half related. First half group of pace is roughly flat, which is important given that it is a seasonally stronger half for our portfolio given our sundial orientation. and the rest of the team. We had approximately $2 million of FIFA-related group business that was canceled ahead of the tournament. Adjusting for those FIFA blocks, our group pace for the first half of next year would be slightly positive versus flat. Looking across our group markets, the largest gains in Resorts in the Phoenix-Scottsdale area, the Marriott SFO, and each of our hotels in Houston and Orlando. These gains are being driven primarily by in-house group business rather than big citywide conventions. The largest declines are concentrated in a few markets that are lapping special events, such as the Super Bowl, FIFA World Cup, or America 250, as well as some soft citywide calendars in markets such as Portland. Third, moving ahead to leisure demand, which drives about 25% of our overall room revenue mix. Our assets and key leisure destinations continue to be well-positioned to capture the high-end leisure traveler. A few of our leisure-focused hotels have meaningful gaps to 2019 occupancy levels. We expect our drive-to leisure hotels to continue to fare well from domestic leader markets. Fourth, new hotel supply continues to be muted. Across our markets, we expect weighted supply growth to be less than 80 basis points in 2027, following approximately 1% growth in 2026. Across our 29 hotels, almost 40% are in market tracks with no supply growth expected next year. Fifth, we're expecting Grand Heights, Scottsdale Hotel EBITDA to continue ramping from the low $30 million EBITDA range in 2026. to the high $30 million EBITDA range in 2027. We also expect the F&B improvements at W Nashville and the renaming and relaunching of the four autograph collection hotels to provide incremental year-over-year growth. Lastly, we want to provide some initial thoughts on the year-over-year comparison. Due to this year's special events, we estimate that in 2027, and a $3 million EBITDA headwind compared to 2026. The impact will be spread across the first three quarters of 2027. We believe the continued recovery in transit can more than offset this tough comparison. And as we look ahead to 2027, we do not expect renovations to generate incremental disruption relative to the amount of disruption expected this year. In closing, our high-quality portfolio positions us well for meaningful earnings growth. Over the next few years, we expect demand to further improve and pricing power to increase given the low supply growth backdrop. The operating leverage of our hotels, coupled with the financial leverage of the company, are expected to drive continued growth in earnings and cash flow per share in the years ahead. And with that, we will turn the call back over to Marina to begin our Q&A session.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of David Katz with Jefferies. Your line is open. Please go ahead.

Hi, afternoon, everyone. Thanks for taking my question. You know, all seems to be, you know, frankly, moving along quite well. I mean, with a, you know, a bit of a noisy year, bit of some noise in 2027. I just wonder what your appetite and what the opportunity set looks like for you to maybe start playing offense and acquire your next meaningful asset.

Good afternoon, David. Thanks for the question. Yeah, as you pointed out, we're obviously very pleased with performance this year and and that's been somewhat reflected in the stock price kind of moving up throughout the year too, which does make acquisitions a bit more feasible as a potential capital allocation decision for us. We talked about over the last couple of quarters that it does seem like the opportunity set is probably a little bit Scott Buxton, Arsheena Khan, but nothing imminent at this point. We're obviously staying very disciplined in the way that we're reviewing those various opportunities and we'll continue to look at that in line with any other capital allocation decisions we have coming up, which obviously includes some of the paying down of the debts that Atish talked about and some additional investments into our existing portfolio.

Got it. And thank you for that. And as my follow-up, we spend a decent amount of time talking with investors about relationships with the brands, generally speaking, not naming names. And over the years, it has seemed as though those are conversations that are always a thing. But, you know, they've become a bit more of a topic among us these days. And, you know, I'd love your take on whether, you know, what we're hearing today is normal course conversations that always go on or, you know, are they just a bit more intense with respect to things like, you know, fee structures and loyalty programs, etc. Thanks.

Well, in general, I'd say that, you know, we talked about this before. I mean, from our perspective, speaking just for us, it's hard to speak for everyone in the industry. We have very good relationships with the various brand companies. We believe strongly in the value that brands bring to a portfolio like ours, particularly with the type of assets that we own. And there are always conversations going on with stakeholders to make sure that we improve The outlook and growth for a portfolio like ours. We, from our side, welcome those discussions and appreciate the fact that the brands are clearly focused on making sure that the business model works from an ownership perspective.

Okay, thank you.

Your next question comes from the line of Michael Bellisario with Baird. Your line is open. Please go ahead.

Thanks. Good afternoon, everyone. First question, just to want to dig into the group comments, Atish, that you provided. Any stats that you guys can give just on certain markets that have more normal comparisons and not being affected by special events or one-time impacts, just trying to get a Thanks for the question, Michael.

So, you know, I think if you back out of FIFA, as I mentioned, we're down slightly for the full year. And really, it's more a story of first half versus second half. You know, the first half for us actually looks, you know, flattish, slightly positive if you can back out that FIFA box that canceled. The second half is down, and frankly, we've got some time to fill in that second half, as I had mentioned. We're about half booked in terms of group business for the full year next year, but the second half is about a third booked with two thirds left to book. So still plenty of time there. Some of our bigger assets that have done so well over the last couple of years are hanging in there, particularly again for the first half. And we see some opportunity in some of the markets that I mentioned like Portland, some of the World Cup markets, Santa Clara that had the Super Bowl last year, or sorry, this year, Dallas, Aviara, so some opportunities there for sure, particularly in the second half.

Got it, understood. And then just switching gears on Scottsdale, I guess maybe also related to Group 2, but just any update on the performance trajectory there? I get the numbers you gave for your expectation for 27, but Any incremental color or learnings from meeting planners? And I guess at this point, do you think the stabilized earnings base at the hotel is higher today than it was, say, 12 months ago, given the underlying performance there?

Thank you. Yeah, big picture, Michael. I think we're on track. We continue to be on track with where we thought we would be. You know, getting to the low 30s this year, like we've talked about, it's obviously highly encouraging. We're still seeing good growth going into next year. Booking pace is still very good there. So Atish mentioned current expectation, and this is early because we're still going through the budgeting process, is getting to that high 30s next year. And we still believe we will get to the low 40s on a stabilized level like we've talked about before. And I think part of it is... really that strength that we've seen on the group side that has been very encouraging because we've talked about this a little bit over the last couple quarters. The backdrop on the leisure side was a little bit more subdued than probably what we would have expected 18 months ago, 24 months ago, but it really has been kind of filled in by very robust group contributions. It's all really playing out the way we were hoping it would, so we're very pleased with how it looks like we're tracking towards stabilization.

Your next question comes from the line of Ari Klein with BMO Capital Markets. Your line is open. Please go ahead.

Thanks, and good afternoon. Obviously, a lot of positive trends out there. Just curious, you know, from your perspective, what's really been the biggest delta or upside delta versus your expectations? Is it largely BT related? Is it on the pricing side? Just curious. You know, your thoughts there.

Yeah, I think it's been every segment to some extent. Clearly, we came into the year with very robust group pace. And generally, as the year goes along, you see some of that kind of abating as the year goes on because you don't have a lot of open periods anymore to book, you know, and things of that nature. But it held up very well in the periods that we thought would be very strong. So the third quarter, we knew was always setting up very nicely compared to where we were last year, certainly. And that's all held up very nicely. I think the biggest upside really has come from the transient side, though, the type of business that you can't forecast too far out. So that's where really the positive surprise has come from, and particularly on the corporate transient side. But that's been very robust getting into September and October and driving really a lot of that upside that we're reflecting in the updated guidance.

I think we've seen a meaningful increase already in compression dates, and that's been driven in part by the good group base. But I think when you look at it, as both Atish and I mentioned, kind of that Tuesday-Wednesday pattern has really been very, very strong and has provided for a lot of compression on rate on those nights in many markets, and in particular in the markets where we had not have been seeing that over the last few years, which are some of our biggest commercial demand-driven markets like Santa Clara, San Francisco, Houston, Dallas. I think that's really been probably something that the piece that we had not forecasted at the start of the year, we certainly hoped for it, but are very pleased to see that come through.

Thanks. And then maybe just on Nashville, Reptile Growth outperformed Total Reptiles. I know you made some F&B changes there. Can you just update us on kind of how that's been progressing and how you're thinking about maybe the upside potential there in 27?

Coming out of the renovation, relaunching of the restaurants in early, really by early Q2 of this year, I think we're seeing the kind of cadence and progression and growth in the outlets that we had expected to see. Keep in mind, it's four outlets, all with new names, all with new concepts, and all affiliated with Jose Andres. But we're seeing, I think, continually both week over week and month over month, growth in those outlets in a way that we would have expected the progression to be. What we've always counted on there, I think, was the ability of those restaurants to be a driver of both in all segments of demand. So first, I think we've seen that in leisure demand that leisure guests are more likely to stay there because they have this choice of world-class outlets with a world-class celebrity chef who's designed the menus for those outlets. Scott Buxton, Marcel Verbaas, for great dining experiences. And then I think the piece we have still yet to see, and I think is part of what we view as upside for 2027 is the opportunity to really tie group into that and really using a lot of those outlets as private dining spaces for buyouts, both at lunch and dinner. The hotel is, as you know, is relatively light on meeting space. So I think the ability to provide a really unique Experiences in banquets for lunch and dinner within the confines of those outlets and utilizing those menus is one of the pieces we think we still have a lot of upside to grow into.

From a financial standpoint, Ari, it's obviously early days. We've talked about this as we talked about rolling this out to open up four new venues all at the same time. There's obviously a lot of heavy lifting on the properties part. So there's certainly some growing plans as you go through that. So it's really optimizing each of those operations, also optimizing staffing levels, hours, you know, those kind of things. So this is definitely not a 2026 story as it relates to kind of the cash flow impact. It is really something that over time needs to start building and where we hope to see it really becoming very fruitful as we go through the next several years. Thank you.

Your next question comes from the line of Chris Darling with Green Street. Your line is open. Please go ahead.

Thanks. Good afternoon. You posted some pretty encouraging results in markets like Pittsburgh, Philly, New Orleans. These are also markets where you have a pretty significant amount of operating leverage. And so with that in mind, it'd be helpful if you could elaborate on the positive outcome this quarter, but also how you see performance trending in those markets on a go-forward basis.

Yeah, specifically to the markets you mentioned. New Orleans, to be fair, came off a very weak base in the third quarter of last year. It's obviously an asset that is still operating at a RFR level that is pretty significantly below where you see the rest of our portfolio. So we look at that probably not as much as a driver for us going forward. Markets like Pittsburgh and Philadelphia have been highly encouraging for us. We've definitely seen, we talked about the benefit that we saw in Philadelphia from some of the one-time events. Clearly we did have The All-Star Game, America 250, World Cup, you know, some things that really did help the market and the property. But overall, there seems to be some really good positive momentum in the Philadelphia markets as opposed to what we saw the last several years. And, you know, Pittsburgh has been a really steady performer for us and has continued to benefit from both playing in We continue to see some really good benefits from both the leisure and the corporate transient side in that market.

Understood. Thanks for those thoughts. And then, Atish, in your prepared remarks around the sustainability of BT demand in the next year, I want to say you mentioned a seven-point occupancy gap between pre-COVID levels and sort of a run rate for BT. Could you maybe elaborate on that point, if I had that right, and maybe talk about where the opportunity might be greater, you know, across your market profile?

Yeah, why don't I start on that one very quickly? where we still have 700 basis points or seven occupancy points to make up relative to where we were on those nights, Tuesday, Wednesday in 2019. So pretty big gap there. And really what I'm speaking to there is frankly the potential for continued recovery. And then on Mondays and Thursdays, the gap is even larger. There's a lot more opportunity and we think over time that we'll continue to normalize and VT will return to prior levels. Certainly some of the things we're seeing both in terms of growth in the economy, trends on return to office, some of the trends on the corporate negotiated side, the healthy overall labor market, all those things. I think will contribute to benefiting and there's still a lot of potential just to get back in terms of occupancy to where we were before. So that's really how we think about BT evolving here over the next couple few years. It's certainly a case where there's quite a bit of potential yet remaining.

If you'd like to ask a question, please press star 1 to raise your hand. Your next question comes from the line of Jamie Feldman with Wells Fargo. Your line is open. Please go ahead.

Hi, this is Connor on with Jamie. Thank you for taking my question. Maybe staying on the corporate transient and the strength there. Are more hotels getting to the point of filling midweek enough to push rate? And is this backdrop showing up in the corporate rate negotiations that you're having for 2027?

For sure, it's showing up in current months and a big part, I think, of The rate opportunity that we've been able to achieve has been because occupancy is definitely getting more compressed in midweek and particularly on Tuesdays and Wednesdays. How that translates to our managers being able to get higher pricing out of the largest volume accounts for 2027, it's still a little too early in the RFP season for us to know definitively, but certainly historically they've not had They've not done as well as I think we and other owners would like in terms of pushing rates for the largest negotiated accounts out there. What we're doing, particularly as we look at this fourth quarter of 2026 and look at 2027, is really encouraging our hotels to find opportunities that may be better than the large-scale negotiated corporate accounts. Thank you. The only thing I'll add is compression nights for them.

Cross were up about 10% in the quarter and are running up in the kind of mid to high teens percent early year to date. So that story, which is not just BT oriented, but more broad, but that was a big piece. And one of the reasons why not only are you seeing absolute rate increases, but next shift in striving rate increases as we take more of the retail rack type rates as it

Thank you. Appreciate the color. And maybe with Napa and the Ritz starting later this year, can you walk us through the EBITDA displacement we should think about for 2027 and whether that's mostly a first quarter event or extends further into the year?

Yeah, in terms of EBITDA displacement, we talked about roughly the same level of displacement as this year, so $1 million. And that million dollars will be more in the first quarter and then a little bit related to some other smaller projects later in the year. So really not a big number overall for our size company and size portfolio. So really the point being that beyond really the couple projects we've talked about, we don't have much in the way of major projects that would be overly disruptive.

Thank you.

There are no further questions at this time. I will now turn the call back to Marcel Verbaas for closing remarks.

Thanks, Marina. Thanks, everyone, for joining us today. Obviously, very, very pleased with our performance in the third quarter and the outlook for the remainder of this year. We continue to feel we're very well positioned for growth going forward, and we look forward to seeing many of you at the NAVRE conference in the next several weeks, and This concludes today's call. Thank you for attending. You may now dismiss.