RMR - Earnings call transcript Q4 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the RMR Group Fourth Quarter 2019 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Tim Bonang, Senior Vice President. ahead. go Please

Timothy Bonang

provide good of are and Financial With on take quarter they me Matt performance business Thank the questions. XXXX. for and afternoon, They CEO, call fourth will moment, a President In full Chief about Adam the our Jordan. and year you and just everyone. details fiscal Portnoy; Officer, then and will

consent of of like note company. the that today's retransmission conference to and without call would I prior recording written the prohibited is the

those Also Reform note expectations call and based revise project. conference obligation laws. call. to contains today's November undertakes forward-looking no of the are publicly company or the that statements in we meaning beliefs that today's of XX, XXXX as actual forward-looking securities within of Private Act materially XXXX. And other any to The conference the results statements RMR's the release Securities and results may today, made revision statements forward-looking from Litigation These on of differ

information cause place Investors any filings that the which statements. website website. is or be Exchange not and cautioned accessed differences could upon or can Commission rmrgroup.com, those factors the Securities our from with SEC’s in undue our contained reliance are to Additional concerning forward-looking SEC,

news In of to Accounting this per and found adjusted EBITDA net addition, income, Accepted in we per call, share, we determines calculations EBITDA the Generally this may A earnings can earnings discuss Principles of reconciliation EBITDA non-GAAP with share, be adjusted adjusted the morning. adjusted issued including numbers during in margin. EBITDA and adjusted accordance margin adjusted release U.S.

to to to turn now review, our Portnoy And Adam Adam? begin would the call quarterly like over I

Adam Portnoy

this for Thanks, joining afternoon. and Tim, you thank us

and XXXX public became of million million For quarter reported company EBITDA EBITDA net XXXX. a of since highest $X.XX adjusted XXth, fiscal we margin a income margin reported we of XX.X%, or per $XX.X $X.X adjusted adjusted of which ended share the September on in fourth

we increase addition, ended gross the assets $X.X of with a billion under ago. from quarter management a In year $XX.X billion,

our This continue which vehicles companies of represent XX% from come reinforce contractual our our contracts interest These the REITs, of capital quarter to between with over alignment and RMR. revenues forward XX arrangements. all to equity managed year of permanent continue client

Specifically, be revenues managed the if of be low share our at is based REITs AUM our prices were on revenues they than REITs. causing gross could our these recurring less to

the AUM our gross billion, $XX Said at AUM quarter. paying fee billion our while more end the simply, was $XX.X of stands at

improving for we revenues each future. XXX% revenues have we a generate in which to the on generate of our flows. possibly will incentive focused REITs increasing drive from entities, share share RMR of will prices As managed prices result, through any our Furthermore, the recurring are these turn cash fees flow in and additional additional

of operations term years companies average with leases approximately organization average an and weighted up X.X we lease this client a million of rent with our arranging From perspective our roll X.X%. feet behalf of of quarter, remain on weighted very in a XX.X square busy

during directly million also client our $XX We capital approximately companies the supervised at improvements in quarter.

the ticker its the and tenants up matters. a on In would based and businesses, of same and portfolio a acquisition been from of and changed I up HPT, of under like companies completion the and of of Spirit SMTA net to $X.X has earnings last properties, necessity some billion. its service There portfolio oriented MTA HPT call, bring net properties -- of Trust, more significant our nature trades since captures lease the name composition of the activity Service SVC. for time, in to service broader now our its we lot you hotels bring believe REIT Properties date XXX retail represents client which At or September the retail better to lease announced on NASDAQ its

In of SMTA connection to to $XXX performing assets. transaction, sell million with the properties end, has SMTA comprised million $XXX sold $XXX under quarter in SVC lower from and has acquired the million of in million committed approximately hotels. or already approximately to $XXX Subsequent sell SVC agreement assets in

mortgage than very interest a sense In XX of To financing October its how fixed $XXX give is floating currently a venture ILPT rate. loan ILPT’s XX you XXXX. expect was industrial this loan rate rate mainland a rate a million obtained interest facility. the by properties. was to precursor bank was for of interest occur this attractive ILPT, by loan the ILPT. X.XXX under hopefully as credit rate transaction that year This year current calendar only will interest a attractive financing on end completing joint secured at lower loan The This the

address Since of of Since its leverage average properties entered or the levels. disposition to to an year sold executing X.X%. has OPI January $XXX.X has agreements sell beginning XX a rate the cap X, for program has at on OPI million been

transitioning eliminated capital program $XXX to next focus in portfolio accretively largely of a it, towards as repositioning capital asset OPI successful result grow its recycling than of years more these behind million has With program sales. its five Additionally, the a OPI has XXXX. costs this over begun

renewal leasing consolidated XX.X%. remains to its also quarter. perspective, ratio. its entered OPI’s dividend for momentum XXX leases payout targeted points OPI feet increased continues occupancy new and sequentially comfortably below From square rate OPI CAD an XXX,XXX XX% basis operating and this

of Five January this transaction to net and by portfolio the announcement in commenced best is also program be future. its in the that contracts engaged will disposition The April, final triple completed management tenant conjunction which SNH disposition is with Living. its closing communities early to XXXX. The on Star financial of program converting with the SNH's restructuring in Star Five Senior all includes for largest its X, operated lease use position expected leverage

sale far and SNH of million expectations under assets in agreement Thus and an date. stages. or $XXX round has in approximately offer assets exceeded second the sold has properties has for interest our robust of first The additional million been sale to $XXX marketing and to SNH been

remains page by approximately by anticipated sold of our have of end calendar XXth, as sales sale we total the XXXX. we to property under assets client SNH of companies in million on $X.X Across of September $XXX to agreements close year to billion have XXXX. expect mid-year or

because our actually our While asset result. and sales is paying will may fee AUM these decline increase them to as reduce unlikely a AUM of gross

to to private our on focused Turning efforts expanding to spend and capital the our time RMR management expanding business. continue platform, we growing asset

with account continues as team sources as such identifying opportunities leadership develop of and possible both client of RMR. venture sovereign funds, capital our for wealth possible private large at opportunities managed relationships Our separate companies, part to joint

continue to In our fundraising private capital addition, exploring we accelerate M&A capabilities through opportunities possible activities.

firm private growth remain groups being acquiring private no are that discussions That in continue said, in and a management nature accelerate in estate the with result We engaged may of preliminary our to these agreed. real could us to that help discussions transactions capital asset business. close

for our who call Chief review I'll Financial now Officer will the over Matt Jordan, quarter. the results to financial our turn

Matthew Jordan

Thanks, Adam. afternoon, everyone. Good

$X.XX we reported adjusted $X.X per earlier, net highlighted or Adam share million of this quarter. As income

back investment our transactional payments an on coming to our for of costs, throughout per losses higher per TA than this rates estimated quarter bonus earnings due the adjusted addition related $X.XX share in In to and add accrual unrealized share adjustments year. includes

SNH, construction offset quarter million fees and a partially were increased advisory quarter, management sequential at $X.X business million primarily a and $XXX,XXX fee service revenues revenues represents fees. which to basis, by approximately at related at FCC basis, increased $XX.X year-over-year OPI this acquisition fee due management growth On Total on a and lower management decrease related growth acquisition from ILTC.

XXXX, quarter capital run impact revenues approximately to share regarding and based annual and result $XX total projecting of we spend. revenue basis. This projections acquisition, in will be on we a includes are current of first SMTA the management projection advisory dispositions million which of expect estimated prices, approximately rate fiscal on incremental $XX the portfolio REIT million the For service

are REITs all business paying a capitalization except ended for managed ILPT on quarter the XXXX, fees September market For basis. base XX, equity currently our management

AUM lost resulting gross than As annually. is approximately million $XX Adam almost our earlier, $X a of AUM, our fee opportunity paying highlighted in revenue billion lower

and our As repositioning fee AUM increase efforts, may recover paying strategic to us portions on allow their execute REITs revenue. lost this of

relates October million fees, As to has a as from the period basis year XX, of measurement if the to FCC, periods, incentive in we XXst it $X incentive XXXX. measurement relates on that December the been on approximately it end have earned full fees ends would

compensation adjustment the by merit year-over-year $XX compensation to discussed cash an on increases additions, earlier. Turning a represents quarter, of driven million for the increase quarter increases, and bonus this million headcount expenses year-over-year The basis. $X.X primarily I of

almost over the was $X retirements fiscal overall XX aggregate $XX the million compensation executive and of million In to compared year, prior approximately XXXX, bonus due decline to months. last

Looking ahead, cash It's be XX% Xst, October bonus from approximately continue a compensation associated the $XX.X recovering the as first client the of SMTA XXXX, acquisition we annual took we quarter of these fiscal effect of in increases expect important and will costs approximately staffing result million that that merit to companies. with to inflation. our note

includes and million Equity awards, awards. company to million share to based this $X.X related share quarter related compensation client RMR $X.X

quarter's divest shares the in tranche with grants grant vesting and over expense installments, made unvested RMR In next for employees this years added compensation XXXX. share at first XX, expected regarding earnings four at release, September disclosure we've equity September In date. annual to officers five the equal based RMR

approximately last on grants is a by of $X.X annual $XXX,XXX and basis. million driven a our quarter. of approximately directors to quarter year-over-year a of decrease sequential million represents share sequential $X primarily approximately $XXX,XXX G&A basis, quarter on decrease The

G&A expect closer costs Going to forward, trend quarter. million we per to $X

expectations and expect recurring per per between be $X.XX and cash $XX.X next quarter. on million and adjusted and for EBITDA share between be share, $XX.X our $X.XX to earnings revenues, compensation, million we to Based adjusted

million ended in no We $XXX debt. approximately to cash quarter have the and we with continue

historically cash As to assess September Directors as opportunities sheet represented Board a that bonuses strategic that to future lowest leaves positioned our us well levels, believe are balance Management XX, annual continue our paid and September. our cash reminder, our of balances growth. each for

That questions? formal the you lines would concludes open Operator, to our please remarks.

Operator

question-and-answer now We [Operator the session Instructions]. begin will

from question first ahead. Your Please today go Lau Owen of comes Oppenheimer.

Owen Lau

my Thank you question. taking you. for Thank

modeling you XXXX the then a was mentioned have EPS EBITDA And But pro all, mean, you also think, being is year from guidance synergy please your add Matt, underestimate based equal disclosed that to all SMTA want be just forma about I Could I your Thank should XXXX And math, still you. you I still power EPS $X.XX. think $X.XX. on I the question, does $XXX for sense full color get portfolio, the at XXXX consensus $X.XX my the of that? more better million. of $X.XX for to just I consensus adjusted number. else earnings on a First your XXXX? the

Matthew Jordan

Yes, first, our just on million adjusted is EBITDA guidance me $XX.X let quarter. million next clarify to for well, $XX.X

and run a between rate somewhere on So, we'll $XXX $XXX million. probably basis be million

have say you Just $XXX I might heard we million. thought

be opportunity potential revenue could repositioning hold mind -- that there lost is of in number terms and would projecting highlighted efforts come. any you EPS, In should folks that full the accretion that terms year, M&A that of our the we if exceeded terms believe clearly of we with a you most yeah, remarks should extensively we in year, the this revenue take are in agree see your prepared never

where offset some and those recoverable repositioning being said, clearly that is should XX degree is if and are prices, of we wage unreasonable. not next revenue lost inflation by or today But the $X.XX That the efforts flat stay believe some be headwinds, things current over that all recoverable months. to clearly they REIT

Owen Lau

that then the to SMTA follow REIT your incremental up you’d or portfolio. expands And on service add efficient

make margin staff the incremental And the you you portfolio? current the any EBITDA like now XX% to pull better? margin in kind talk I to -- think lever past. that about But XX% so. progress margin EBITDA were assuming adjusted or of service your you adjusted can EBITDA of adjusted adjusted is any Can if like your RMR

Matthew Jordan

margin we're of, The something XX% while proud basis in question. high we’ll probably a stabilize Good on steady very somewhere state the XXs.

level, Spirit going we're relationships. that my level I next be margins should months, for as XX now in still be both inflation as both are some will also as the historical profitable up staffing than right some our the revenues clearly more those open in at to remarks salary filling facing But of -- future the prepared that over bonus highlighted We keeping wage positions and those mitigate XX% periods. well

Owen Lau

you Matt, think, be I $X me, for is estimated mentioned questions also final the just then And in fee to million incentive XXXX.

turnaround. else is the estimated the the talk a incentive talk stay there about or the into can everything fee what index you and XXXX price think about you is price And was going if magnitude equal, if can same? I substantial the like stock

Matthew Jordan

So to the be go. into long is SVC SVC XXXX. only one heading the of And $X way also companies. a million our client there's probably again, would

fee. an As of today, a have high that incentive probability would of

Looking to already starting think to repositioning some But the out that's impacts way of XXXX, see still very long I the we're of away. at positive OPI.

now right where and SVC year calendar trending. pleased focused see we're So on this is to we're

Owen Lau

it that's Thank you me. much. for very Okay,

Operator

ahead. Securities. The of Germain question today next Please JMP go comes from Mitch

Mitch Germain

already bring complimentary is you're really the or the good management Adam into Well, what afternoon. business in guess, M&A does sector. lines in I business new asset I'm it talked if that curious targeting about And it you're to some you lines?

Adam Portnoy

We looking a the I it you different over at we if a become been call portfolio, year things people I has our assets real of core most core say Mitch. lots that would stable more think question, manage, estate. we've as portfolio would -- than existing -- look focus Great of at now.

I that, do. not what would of on the if be very its real about complimentary type thinking a component to we buy core group large focused complimentary it’d of would be so, components most think And so estate, all we have

a where money I from, be true on where their they is and is money. most money they the LP capital, get LP sovereign comes access think what focused and wealth we'd LPs, how their

that that I think attractive discussions the having groups focus in we're the sort attractive. of the M&A of find most that's we

in in been everyone significant way. have touch all think a portfolio, I has presence of terms presence the talking hole in In we thing some material our of only multifamily classes a say, for obvious asset types we real estate, I'll commercial the or that And to except multifamily.

it of that the complimentary meaning of So would be in sort we that filling invest we out terms assets of would be have a hole, type in.

you of of gives So how sort we're that in a I about on. things thinking think flavor the focused we're

Mitch Germain

of more me, raising, if the one maybe fund, that there? could seems what stalling where And address the a it for obviously, fund the bit, office like kind Great. stands outlook you is just and

Adam Portnoy

Sure.

learned focused marketplace year effort. lot over is So on I the a it our board. amount was through think the learned that Today, first investing They're think tremendous I time loans, in very half. we've And we a a opportunistic commercial value And focused loans. last also investing and fund. on across very the add within --

very talk And then in very is something do a us interested a separate most That's us but overlap in to basis. of ones it say industrial we account the us or also with is are obviously don't within pools And a of then JV that the on we asset what business. presence private the basis types, with much LPs managed with we in an overlap that would I that much multifamily find much is and large lending and have capital favor, favor be there. would about

a have we value turnaround. I that of has on invest of full this LPs, have -- side, top office, office fund or opportunistic -- Office. allocation just of for time. been of asset at if going core allocation and I then in hit focused that most a targeted you say the after the add a feel or to Office wrong or our sort large we is on money that, they would market most think towards was And had by to at not LPs class the product sought lot the On time this the just already

have we for that just so we're times And product right didn't in. the the

areas think pivoted, focus most we are the have We our think those that with successful capital the two better raising pretty Those business. portfolio, much and attractive now lending within I on think conversations industrial smartly areas I the I are and that market. private to the are areas around money. And having sources are are

Mitch Germain

eliminate model any from this you the funds that point. basically, at see upside may from office So

Adam Portnoy

I a think account, different an private separate things ventures in asset joint larger but that's be capital it probably other hopefully that think managed like replaced will even meaning a amount in I true, by class. sources,

Mitch Germain

Adam. Thanks, Great.

Operator

ahead. today Citigroup. Bill The go comes next question from Please of Katz

William Katz

very for Okay, I thank and questions you much taking this the afternoon. everything. appreciate guidance the all

say fair, you a it still be of point may is to is Just little or What us sort last things be three sticking about the that a the what lack of it months to these progress Could are of of preliminary mentioned you as -- what update, relatively more you capability, sense stage. sort coming back looks have it don’t so I static it over of of a seems the M&A be backdrop is not is a to shifted bit, the give is sort in may but think pricing, availability? some opportunities? the

Adam Portnoy

don't great -- of down field. ball same like record little I the agree. can I a are a it's Yes, broken too sound you I a I tell the question. update, last couple the giving that quarters moving we the bit

anything organizations and not towards be couple of it's going I'm who's these field large the something conversations. of forward We private it's social we're not been further necessarily that And of to involved and sure are the be going all are really down last to calls. most who's forward. issues largely. in there with terms talking like going are it's involved And going involved the than we strategic terms are in driving in fit really progressing have a issues cultural pricing,

to I road are that those themselves work you do out. the that And front. blocks, But I things time way, something say get hopeful cannot of over. work we will I'm take those they're are just that their take think M&A on sort the time. wouldn't things

getting I closer. think we're

are or picky spend I either also make money for structure social us, conversation -- I that on point to away they said pricing sense become we've from walked or of maybe make focus buy. issues we've had out had mean, didn't about sense, type invested this we they more type should assets the make to didn't didn't -- sense, a we think it's in, many the that what of willing sense. we have I maybe make that didn't the

in much pretty we trying terms and We're I we're of it it picky M&A, to trying we're this an focused do talking about And focused on being very being on on question, do it about organically. grow transactions. path. through we do And sort organically. M&A doing I shareholders how money careful spend of the simultaneously also I very but dual we're that the to it in can hopefully, areas both. am last We're answered,

the if had on we we discussions M&A, our That down if maybe an last maybe down further time done and do But we we I'm call. we're field than M&A the get hopeful the we'll this on get own. said, don't we don't front. were fall it on these something being organically

William Katz

it look what's at leavers gap look if XX. be opportunity Okay, a gap sort play bit. through happened, I this that's at is -- If may very quarter close in follow November a helpful. more. then it the to this bit versus happened widened advocate that for your looks community? a I help little through what's presentation to to And of I actually think XX think this got one from just investment even at What And versus I moment, date help your And question, just the available, like previous that revenue if September will worse. for from probably us was minds out up my devil's look the June

Adam Portnoy

it's glad to think tried I remarks. great it different a So address question a prepared it you I'm few in and asked our -- We in. times

through Our four SNH, of of case of -- in three our the going the the OPI. strategic going biggest through, -- those massive this strategic three REITs out repositioning most are in REITs going basically case all of through four are repositioning, managed of

it's furthest or the furthest call the probably OPI restructuring, is the along inning because its and repositioning. along the its -- in of And repositioning. seventh it's eighth it that of

along a to stock our rebound it's Basically, we there. announced as As price date disposed leverage, assets selling it in point in able selling we've to been That's properties, successfully nice execute successfully seen repositioning. we of example its that the well as have because one very on performed and stock the furthest price. we to has can reduce the

are The and OPI disposition two, certain pretty to never the right that plan others, down, with execute the is prices that specifically to believe I delever. will a go lower. they ever SNH we them thing will as quarters now. -- but over hopeful can stock extent REITs imagine as going on they it stock I I any I these with recover. happened three low really am well, do won't they our one, SVC where a say mean, prices happen are further hard the next and with them floor. will same it's their And

think we we in thing the over quarters, have and on I get revenue, announcements that this will again, same the it better hopeful optimism as on XXX% that keep That's the rebound. business reason happened coming to and plans flow the think saying the and And our happen more I'm why we through stock there going saw revenues will OPI side. happens. we it's couple And if execute prices for revenue

William Katz

for just a outlook there question. that In taking around the to Matt, other will no commentary and words follow the static And both year revenue thanks improvement is revenue quarter and be full in your opportunity. upcoming opportunity? the up net maybe net Okay. for

Matthew Jordan

That's correct.

share We’re using today’s prices.

impact at prices. today's of perspective, but price deals share the will we a least close, in can as when from dispositions, best We project are baking it's

William Katz

the taking you thank Okay, questions. for

Operator

go today question of Morgan Ronald comes Kamdem Please next The Stanley. from ahead.

Ronald Kamdem

for question. Hey, the Thanks guys. taking

is you classes So provided of really go think the sort back to on of But before the last have was they we thought the can is, last of to like them, asset question some hurdle onto what sort the what would want platform? classes, that Just come of get terms I the asset be somebody the I great what that guess so in factor the conversation you beyond the get to a resonating. that, some capital, sort to platform? really with of hurdle color what, last relationship gating with you them private

the us And is can would what lead we you to think follow of up that time two that years about X have give right? these to a for you should to sense three be, is conversations the Are How happens, months. it before XX that? something

Adam Portnoy

hurdle was diligence get over the well these a fiduciary So that confident been And sponsor, manager. on of as years just last is and these for commercial a really XX XX hurdle we've some comfortable us as been types years, I'm last a have managing very that last in good estate. That's that a they'll for fiduciary about. of you the we've the real talked

that conversations have we're a you well a That to things several all you take been and some these establish how have all I they’re items. now will of long that time we I probably to a over online, fruition. time, conversations for -- and said, that year, to being know say for some time things. this come some close some couple sure doing lead on take come tell they months on can I In relationships, of long for terms fast of and And do have embarked sort

both own, M&A the are is private down I call closer, the have field here, announce we as on last much further raising the both conversations. well in were getting nothing our capital ball while as And with again, to during regards to than we

to in to optimistic fiscal So, either running, through up am business there's size -- it ourselves. some capital to an year going grow we're of be going or XXXX, that and end the private I XXXX, have M&A

to so organization at. happen get personal on can. it it for I initiative, own I new that feel organization. it's a my a fast that I was we're as until I it's as And the focused faster, as initiative of amount tremendous guarantee it it takes new can good too hard time pretty I I the can happening I'm tell you about where to as can because trying a make And wish

Ronald Kamdem

And I seasonal of this usually my follow in up the one think of low Matt, quick think, that cash a on I is the mentioned quarter was, balance sort terms sheet.

heard that right. I I think

Matthew Jordan

Yes, correct.

Ronald Kamdem

sort the cash to do picture. cash my buyback potentially to stock in back through is, as the So buyback equation opportunities. you and building does balance Obviously, when up, did -- the the to question trying you're into you're other about going is want come Thanks. of depressed growth valuations? invest the these looking given able think be But at you how when balance

Adam Portnoy

say and that think strategically about grow focus. our It's and to thank you platform. me. It's level great ways the would for cash to still our to senior Yes. a use That's at foremost Board focus asking question, at management first -- very the the I today, level is primary trying focused on

to -- to whatever or dependent co-investing a well I a think through and is, of get work and we up we more growing, and then stock course, we to where would dividend of on reason we a M&A shareholders that or wholly are capital about either I think quarters get portion think putting of this get form if buyback. cash get business into price either for private in returning stock XXXX the cash if a and in few go unsuccessful large

well can't you certain mean, we we meaning today, strategically. next think a to I into be that can't point, to any have would even table price But think I today, are the cash take which I primarily at we tell think I time stock I for where what price gets off completely that use trying focused the XXXX it. it about

Operator

question next of ahead. Bank from Mike Please go Merrill Lynch. comes The America Carrier of today

Unidentified Analyst

is Dean on this [ph] Mike Hi, Stephen Harrier. for

REIT a growing can REITs that I additional of it but bit, to the from besides moving guys Thanks. the wondering around provide OPI delevering just kind know Just of on if capital you stage their touched the a repositioning, timing again question you portfolios? some detail and

Adam Portnoy

Sure.

I along, recycling putting furthest think, even beginning the part the and and focus of be then XXXX deleveraging early will effort. towards it towards well probably OPI capital is its in that again behind OPI So as way turning properties its acquiring recycling on in

starting think in I early XXXX.

So it's that I behind we're to eighth very far think along it's in start And sort -- in going the again or OPI really inning. XXXX. of seventh

that already The SVC, million is it next our announced under REIT in that contract it's or probably probably sold. ways we've their or $XXX manage have -- one million behind is is already $XXX that some biggest we

before I -- I you think with we're until second way probably completely the XXXX. year don't and to may well there dispositions quarters mark XXXX. our the of end along calendar know of not will be the be first done going to all if going be

But so the selling same that sell. that $XXX million can it's I'm at nature, in time. more from big to sell million of it to or million largely sold the thinking or become prohibits have large so it a because $XXX -- the million it majority $XXX it in assets process it can offensive And of be be will $XXX really not sure, hopes buying and that

the us the is XXXX, there. to of being repositioning right OPI close take take really So SVC and done. of quarter start sort all behind very probably It's it's a -- sort one get longer behind SNH. into to going I’d of year The it. dispositions I to of to little us is sort going we call say calendar until second

think come we're the sort that's real lot of had on sort got that's going contract, big going properties market. great properties out last there It's what's in a going it. making of under of at the REIT of lot to a operationally been going on repositioning Five we Star, the strategically think through there, I what's the We I a of progress. of

really we going I until And probably that mid-calendar take us SNH. think year it's us to of at to behind XXXX sort get

three that's as look at I timeline, as see So where I the it, REITs. the

Unidentified Analyst

you. thank Great,

Operator

from Maher B. ahead. The next FBR. Please Bryan question go of comes Riley today

Bryan Maher

and Matt. afternoon, Adam Yes, good

not in guys remember that populated the so long think I a barely comfort this was you should take analysts. well with is I one. fact too ago, there great call

kudos. So

that deal? equation that's there costs has lower, doing what more surprised are SVC, than necessary. you anything large from and SMTA or that your on Kind higher of Moving that takeaways into is staffing coming

Matthew Jordan

From overall actually step to and absorb expected. with come pleased retail planned a for lighter service class. platform I we're our we've people in term think might to expected have the our up right I into of I can lack going asset finding power and a we originally probably staffing and and dive very think And the cost of burden actually to perspective, say ability that is been than our better

talk So about we publicly. didn't it

perspective. So that's a from cost

Adam Portnoy

Yes.

just I think pretty time. organization, I an as culturally, It's exciting say, think I

are I high think a I and spirits it. been think people and organization around pretty doing the on new asset things different very taking overall. And internally for new like has class exciting

and So that learning more I in and I bolts about some business we've making at are up additional process a assets it. as to about of That's about excited a and nuts I think even of get more from little And, quickly, in bit we're market. acquisitions one getting we to to think space. think of overall, that start the in the acquisitions markets it, going the curve. been into portfolio and the pruning pretty very mean, look learn we it's selling now that trying But

little new to lot sort asset learning spend have because of in that of we again, of a So class we're historically. exciting time that's something all a bit of

So it's positive. all been very

Bryan Maher

the which think asset future, follow SMPTA and portfolio you've from? And my away you're kind towards of you there, SVC that is lease experienced in might think to classes up do that shy within you that and you gravitate the any there going with

index then lastly, benchmark do SEC? in you for a And the anticipate just change

Adam Portnoy

the last first. take one I'll

if And But I then think could if thinking we're where changing become at that. than change to majority we're hotel hotels, more that right have keep else. about it's ever long think today, probably why get we hotels, XX% I If portfolio to But likely to have still it index. a XX%, to think don't obviously if to the throw became the appropriate really it we’d something about we're change. as we're XX-XX, still now That think think really away XX-XX. I doing XX from as I least it's index. going at was stone's about mix

lot similar bought. too other focused about types a In than might little of to coverage asset actual the location. guarantor. not not it's we just think on necessity than it's up who's -- types the it industry say, there we than it's that a ways, a It's buying probably I another of we're the is it's are classes, bit types lot terms of the many tenant about industry, be backing nervous very would more in portfolio about and assets, ratio something more of I of in assets. focused focused we is on say which different credit be assets. and very We're that an based let's might we more, If

long-term in but folks to I'm It this focus has from lease. is very all it's a asset we're a seems and analysis, is net shying and much not around type, little the than absolute guess, the is apparel leases other been really very the than credit way is has analysis. real I the a a what estate, electronics, probably sticks different away space bricks been evolved, but it's and more industry saying acquisitions what much have big around the so credit. And

So But we do if useful maybe want replacement you in not cost be it. around a competitive it's as to space. that analysis

about for Bryan, This it, As we're meandering is answer investing what sort that in you an might you, of let's space. building. that's find learning say, of sort but office

Bryan Maher

Adam. Thanks,

Operator

from of a [Operator Instructions] Katz Citigroup. The follow-up next Bill Please question go is ahead.

William Katz

the sort your reinversible your guide that anything ratio about should both quarter of Matt and Thank for you would within for thoughts two How business the coverage maybe on XXXX. favor? just we you, different in to of first there Okay. Is ratio compensation? that the think indulging qualitative your questions, enhance questions, to for continue

Matthew Jordan

we based and this that the again, at bifurcate cash on equity evolving, And No, cash pretty and on is you our stay workforce year. based between which way for it's compensation critical projections see the XX%. static, the to it’s going

William Katz

platform question, in all? more at then a does a one, either backdrop static way, picture a we're And XXXX, [indiscernible] the if for but Okay. impact of a just rate that how big if

Adam Portnoy

I'm impact. meaningful not sure has it a

as there because changes rate the driving going things unique such specifically, REITs on, low interest my at our rates changes in in are than on but interest may are or have on that in will on. going Obviously, than today. share platform think a companies their interest there's And specific our are a interest prices we I more be that the REITs view rates. static sensitive, share that, rates bigger execute very impact On price I think lot

William Katz

you. thank Okay,

Operator

over there concludes the to are turn would for further our closing remarks. Portnoy any I this no conference As to questions, like back Adam question-and-answer session.

Adam Portnoy

on that forward all and to you you call call. conference first concludes for our to joining updating quarter Thank the February. in look progress our We us. early Operator

Operator

concluded. now you present. attending is Conference Thank for today's

may You disconnect. now

The RMR Group Inc. (RMR) 22 Nov 192019 Q4 Earnings call transcript