RMR - Earnings call transcript Q1 2020

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Operator

Good day, and welcome to the RMR Group First Quarter 2020 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 Michael Kodesch, Director of Investor Relations. ahead. go Please

Michael Kodesch

Officer, thank and fiscal and call joining first session. details Chief RMR’s President moment, just Good will followed they conference you by call. of provide Financial and Portnoy; XXXX CEO, our today’s Jordan. With quarter In and a business morning about Adam for Matt performance me are question-and-answer on a

differ RMR's the conference are the company. that we today, expectations that Securities call the to XXXX conference of would XX, no materially note project. recording written These today's and laws. beliefs consent The of meaning of prior like made statements company may other any and call. to forward-looking of of as forward-looking prohibited release from is and Litigation publicly contains today's based Today's without statements revise call or in of undertakes the those statements XXXX, the on to I retransmission February revision securities obligation forward-looking results results and Reform actual conference within Act Private the

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

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

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

Adam Portnoy

joining you for this thank and Michael, Thanks, morning. us everyone

our $XX we per quarter million, fiscal net and adjusted XXXX, $X.X XX, reported $X.XX of or For EBITDA the which share, which guidance earnings line were ended December in the first provided call. million, year adjusted with last both during of of on of income we

In all addition, come from With Equity a ended management under our our of to continuing perpetual XX four focused ultimate $X.X with ago. quarter the of assets over the we underway Managed on we capital are share of with $XX.X REITs, XX% revenues billion from a evergreen billion, of REITs at their which contracts, increase with strategic of year year vehicles price the gross our remain appreciation. each actions goal

interest creates companies the our arrangements alignment powerful in of our highlighted a Equity we've past, between and contractual client REITs As our RMR. with Managed

share low be the they Specifically, prices our based revenues on at our be than to revenues otherwise are foreign Managed RMR’s recurring REITs if were less of gross AUM. three Equity causing could

on of executing strategic be However, the suggest and recent between the that investor and through to is combination successfully outreach, there initiatives AUM gap reduced. can AUM active gross evidence fee-paying

month OPI shareholders, announced in well strategic total benchmark the over January its XXX by exceed peer for for basis XXXX return turn it disposition which The had specifically, shareholder group points. by been execution in XX%. period helped exceeded OPI year More XXXX, successful their received Further four increased prices has that calendar of over share targets. stated XX, plan by early OPI’s ending January its

busy eight lease average up on of with a behalf square in of almost rent weighted arranging perspective a fees remain price roll also weighted very will with a management organization our X%. X over and companies years this As of million RMR’s business we OPI From reminder, stock quarter, as just term feet client our leases base operations increase. of improves, under an average

having and in our I since to year as capital significant bring last a that like due what results client can are XX year to we call. earnings in you of to million client discuss. December our year client $XX said, end companies supervised directly RMR September reporting last With more companies. ends, limited having of to of our also would improvements We XX we in Similar matters our the are and up-to-date companies advance most on some

X.X previously I has went net These approximately a being to calendar announced reaffirmed. total help proceeds OPI's X.X from of down As of rating debt times OPI times deleveraging from to in year EBITDA of XX lead XXXX. high with adjusted $XXX the disposition a to grade highlighted, investment proceeds million properties of and towards

has a Looking OPI improve made is calendar the and capital portfolio we beyond. towards transitioned its ahead, program with disposition program focus and recycling in accretively a year disciplined dividend well that its XXXX covered, complete to

ILPT executing joint in without a issuing capital to may involve putting properties, We source that a institutional dilutive with leverage are ILPT portfolio industrial of transaction provide on investor, towards levels. well future. partnering grow a working may able a the at would pressure new equity its which to grow funded equity be ILPT venture actively also or help By of mainland

to better to under million to make completed measurable the DHC restructuring X. prospective Healthcare portfolio the of for which Through expected an January transformation Five future. name the or Star announced of with At Trust, the has with $XXX buyers. end progress calendar changing SNH company XXXX, in the calendar DHC, sell and XXXX, of leverage continues the estate. reduce on and assets DHC DHC of real In of from previously and conjunction more the business depicts high its sold accurately million name arrangements disposition program, including position the healthcare is senior offers of year approximately company's DHC’s its steps beginning $XXX portfolio quality took living the year additional or of change, company's effective agreement diverse Diversified which assets to

the assets in to of be of million performing by the connection Shifting In assets. dispositions relationships, $XXX dividend of forward. extended the leased with November to SVC hotels $XXX At in $XXX that year, ensure was SMTA SVC sale these its approximately XXXX mid-year positioned agreement expected net SVC an beginning investment enhanced Collectively, the to steps going and largest remains committed million completed SVC with the Marriott, XXXX. of XXXX sell support well a over gears announced balance heading and agreement covered lower Marriott the announced also with credit of XXXX, well with included remaining from that transaction, in million into SVC’s planned one grade sheet.

origination we momentum of that believe significant generated. mortgage platform potential untapped Trust mortgage Mortgage advantage to that origination continue the has Finally, has take to our Tremont

ensure in facilitated active to have two the transactions strategic we remain We marketplace.

Finance lending from commitment Centre on $XX Street focused Trust. million opportunities First, called with we a launched a market private vehicle ABP middle

to Secondly, commercial shareholders. has to the its mortgage effort proxy with to shareholder and an filed Income and the REIT Fund, RMR Estate its Real regarding to value the paid or convert SEC intent increase RIF, distributions a a

expanding Turning and RMR platform. the growing our efforts to to

focused time our joint spend asset management to REITs business, our continue as involving discussed We ILPT’s on venture capital earlier. possible including transactions Equity I private such Managed

to develop RMR funds, capital which future. as private relationships continue for managed of the to in large sources with may separately We opportunities such lead account sovereign wealth

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

been business. acquiring our whether we continue remain in an we with process to the regarding the there may discussions us and acquisition in our work transact remain find with methodical appreciate meet a accelerate have groups has engage and in firm concerns past. advisers can the to may we could We We asset attributes opportunities help that real of productive that private private be that that we regard that this various to result will with that Nevertheless, discussions, management engaged growth estate in outlined targets. exist confident possible do capital

time. at any specific course, Of speak cannot we to transactions this

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

Matt Jordan

good Thanks, Adam, and everyone. morning

million, net earnings highlighted RMR earlier, $XX our of attributable and $X.XX provided share Adam income quarter, of last with this $X.X adjusted call. adjusted line we EBITDA both or per during which As the guidance were million, to in reported of

quarter investment $X.XX to an for transaction share adjusted and to gains addition includes to adjustments REIT. of our add-back commercial In recurring costs on TA, convert per to intention costs earnings mortgage separation in risk this a unrealized related for

adversely limits IRS XXXX. new $XXX,XXX, as regulations The XX.X% to executive for increased were regulations on of these was compensation of rate our impact effective legal fiscal approximately such quarter's to released This ours. the also recently per quarter by share. expanding The earnings application these or to regulations, structures impacted tax $X.XX this

business our quarter increases million under was share advisory management which at primarily service million declines The basis. just a a $X operators. sequential sequential primarily managed revenues price to due increase were this forecast, adversely partially impacting quarter to declines was base service The Management fee but quarter and due seasonal offset our revenues $XX.X growth quarter, by at on shortfall projected fees. to SVC, this

revenues quarter $XX For we service the of XXXX, on regarding and current disposition to second advisory fiscal share projections be and REIT projecting activity. approximately million prices are based management

that It represents revenues. fiscal day second in quarter, is which $XXX,XXX a the quarter in sequential noting less there worth also basis, one is service on approximately

to follow. silver due did peer a calculated. not periods a this fees, calendar can incentive any calculation relates lining returns earn XXXX, returns that year, we cumulative upon year the In it generate As shareholder fees while the to down exceed is are incentive possibly we base to there incentive way news to our which a the three establishes believe can we in fees in

of example, an and highest company we levels a years be this As of that which could saw low the many client followed. REITs in XXXX in turn to at calendar in the watermark a fees incentive similar

primarily These the year-over-year wage quarter $X.X $XX.X $X.X reflect for of expenses a inflation, million Cash represents are competitive to landscape basis. increase employment we on which Turning bonus and to the sequential million increases a on are in. an quarter. compensation operating and of basis attributable million

per be Looking the million ahead, cash fiscal year. of the compensation to approximately $XX.X expect for we remainder quarter

compensation our team. reimbursement due of open approximately XX% reimbursable This quarter, operations in workforce our within declined changes positions to mainly cash mix, to leadership due to our

XX% at reimbursement of mix year. XX% the We levels these are to fiscal expecting the and our remainder to rate between be workforce remain and for

$X this was million, which line expectation. expenses with quarter in G&A were our

EBITDA between and leave $X.XX to us share initiatives. per remains to $X.XX expect next quarter. our grant, approximately share. costs, our and well million or the We we of our new results regarding per level of in to G&A in $X.XX adjusted tax cash second earnings with debt. will including believe in cost new and $XXX annual invest incremental our we be be share adjusted and Based run continue balance expectations Board which $XXX,XXX, quarter positioned be issued effective expect costs approximately revenues, operating and rate on million for strategic we opportunities this Directors to $XX to While rate, have no March quarter between G&A and our We million continues ended $XX sheet in assess business our

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

Operator

Thank you.

Instructions] We begin comes Maher Riley now first of the question-and-answer session. [Operator The from FBR. question Bryan will Please ahead. go B. today

Bryan Maher

XXXX strategic narrowing but far market real there and a couple between cost that Adam, A work been really morning. historical the from has big of mode XXXX. you things that at the do on other the you're go? go Good estate? heavy are planning? of the picture are as more more that lifting and you disconnect of into think in basically view, Are starting big REITs harvest done thoughts most as Or valuation quick questions, the caps What XXXX of and your given

Adam Portnoy

Bryan. morning, question. Thank you. Good Great

characterization I agree behind done a the lot that with was your think XXXX. really in lifting of and is I heavy largely this

were question lifting that the little tail year and especially and a of stock of is I really a the agree a think the through, the sort all performance. All see REITs on themselves that that do heavy lifting prices I I think year about also with operations last done worked on us. path I well at to the a I sheets, with over the DHC but put – fix that's all we bit of XXXX you more their or heavy we've some again, to focusing half, maybe the improving covered. of and is there actions really we've on defined behind XXXX really share have have balance are of majority asking fixed the to either and think dividends focus well trying to

really into are all think going I Equity great XXXX for their four the XXXX. shape – the REITs Managed in and prospects a

bit of sales And of completing so, it's sales a the of really SVC executing most yes, on that we've really up stage finishing exactly we do management this further. been and plans any vehicles DHC on repositioning or to several not at – and focus here the transactions about that is for outlining on specifically come the or at the asset outlined foresee we on we some repositionings now XXXX well. sit activity then little major at programs the today But And those executing market as no, are quarters. that still in significant as

as this and to REITs, every I about of reason mean, let’s incentive right just a but the far those those at sakes. lot understanding more really price incentive, can't interest prices to in RMR reason, the for stock at manager have between for in for whatever say fact, help growth we grow emphasize it's stock point quite So improve that's whatever And improvement. those of that investors REITs, still, not high alignment I

and can prices money there. a lot more more improving RMR We the are stock at earn just far aligned by

And XXXX. in focus where we and XXXX today the really are so, that's into

Bryan Maher

think housing MOB Great. components you kind versus does to extent bit rates when science? can has been life relative the about earnings. Can a going expectations or of their then to that little the And cap comment we into the what And senior process? DHC about you talk your of sale pre that

Adam Portnoy

with dovetailing think, has announced. I little DHC So, bit a already

the have I the pleased been bidding with living for the we senior MOBs. think both and

business and that little in come back originally And basis, from the There's today. been There on disconnected life actually assets. medical I stepping owning a some But they than capital. which of is it's living of think bid per in of a very acquiring overall anticipated to that very in more, in overall course the marketplace, a There's in came from time there's be coming still still strong but for a in strong building. as higher and have higher. buying a a moment, fundamentals in interest in valuations might be less, some living the being bid. senior exist case, lot buildings interested has the lot overall modestly came continues science senior and some office an we a still little for

gotten So in been in we've pleased with generally dispositions we've market the the DHC. response at the

Bryan Maher

Thanks. I'll back the go into queue.

Thank Let questions. others ask you.

Operator

go ahead. The Oppenheimer. comes next question from of Owen Lau Please

Owen Lau

to Thank Adam. morning. you Matt for question taking Good and my

billion considering criteria. change back question, Do go Also a for on focus you So estate AUM $XX billion picture estate you. as manager? to well? equity bigger to I want you there? still to the real $X securities management still asset the real businesses M&A Thank private any Is are

Adam Portnoy

show assure concrete announce our that Sure. well. the also can call line. thank is billion in little much were tell there me am people. prepared have my are folks I marketplace by about in criteria. as at I we And this how had people you M&A. $X in more tired are I conference talk that gray of Generally with. have will I'm speaking, And and it call participants with bit that, to by limited and around we a there I'm calendar to our more said advanced number that question. the nothing this out confident year in of we're we've you really lots engaged we're remarks. something a conversations can discussions point sure hearing I advanced probably we talk talking about to is line last at frustrated that for the the But gray you in than Owen, of I a more

make parties exceptions trying I'd first This billion the a continues I call trying bigger Again, I'd that it really in than is for $X think be that, they here. to mean, very really capital billion. roll do be three need but the a gray with long could – want or would I asset to bigger we closed capital. buy methodical, just to – asset about it really to to it two we're We're right about talking we especially case. managers there the with, put buy not and advanced be a and We to very trying of course, what is what to roll we're up. manager, that to to the yes, be to to $X to do I line. This meaningful trying could us, up time not call But are having ago somebody. are good than wanted of stewards want be If an announcement allocate just correctly. have up, discussions

do that fit. it having small discussions something have some good XXXX. a been have I'm a walked think But we we in didn't with folks happen think just number we I of that and that could away from are advanced made There parties confident

Now with platform, securities to management no. regards generally speaking the

actively grow trying We not that are to business.

take again, about transact could securities securities a we that RIF, management into short involved the that and small what an business. of – the at a from could it's we're a transaction focus That commercial that we in could where for focused That's said, mortgage that's queue – in that to pretty vehicle of within management something you strong so M&A business possible their all proxy thinking part think that management a being not have one that convert our I is that's of with we the fact somebody a happen. it's But us. platform REIT. we're thinking securities on vehicle filed dovetail sort a

Owen Lau

Thank That's you. very helpful.

this went Thank out? you. forward? up about And had item, but around to going interest the there quarters, want cash but a a $X.X we should line Is in balance dropped think item little it $X.X question, how bit. for line to anything the and previous call around million three you So modeling other been the income it million,

Matt Jordan

we current Owen, at We would Interest look rates money obviously market have accounts. it of down. most in come our But, rates. put using money

is function interest on of a rates dropping our have just the with really So we monies drop in banking relationship. income the

Owen Lau

And little the And quarter? how should then guidance, the bit maybe for we second about quarter. like a quarter of kind the the the from dropped $X.XX this and first it between think EPS delta

Adam Portnoy

one go is prepared tried think tax I throughout when rate which one, to be XX there a Number remarks. historical got the you've you A offs couple change, least rate Owen. about will XX. question, my to modeling highlight the a good penny guess, at forward from we

less have include unfortunately QX penny. another in And it year G&A day, is then is will does usually which in share which You one our as line, another penny. each most awards director

So a hope also I close disposition those would based and cared caring be what projections management also But Obviously, we we this be. fees business property penny. a will share to share need prices you on of that $XXX,XXX, is And around using for activity, trends for have should quarter, are $X.XX generate of a modeling. decline you one-time we expect fees current in which improve. we're in where which the will current then call some we think and items have prices management

Owen Lau

Okay. very Thank you much.

Operator

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

Bill Katz

Good you. thank this question Okay, morning. the taking and appreciate morning

and You joint I bit might a talk mentioned you wondering just little to about waterfall had if RMR? back that venture. was could [indiscernible] the the economics how more

Adam Portnoy

Sure. what that… is Centre I that Finance Street you're about, – business think The talking I is

Bill Katz

Right, correct.

Adam Portnoy

economics Realty incentive return as Tremont venture. RMR Yes, to Centre after received. an as pays the – are venture on Street an Okay, I that kicks Trust a – on to in that RMR, X.X joint for which which X% equity any to is the believe the RMR fee, economics joint well term that the identical

and So setting for the account basically Centre the up mirrored Street. the we separate vehicle economics, public

Bill Katz

zero mistake excuse back walk question. little little Matt, mentioned and – actually generating of then you that I of a you of what bit fees, be had putting sort something have fees? to some performance a just And sort for to helpful. that's you Could some that Okay, me on performance mocked swing of a help might to me sort sensitivities from understand the

Matt Jordan

Yes.

for beat we early we as prepared didn't XXXX benchmark incentive SVC what relates the But benchmark about and I had this been has XXXX. to in It's thinking good line, in it's remarks, of the it earn as highlight very very XXXX. last fee So right when we're the definitely calendar by obviously cycle any It years a still its in and to think terms in now two its points. XXX at XXXX. the tried well. beat basis OPI or early

good any about as both since about previously fee you XXXX we back trends fee public first and swing So didn't earn and that XXXX incentive definitely know, we And to XXX think we fees think for into those territory. look performance XXXX we went the and the million we are year is potential been we'd year. into as a averaging as incentive

as look periods are think progresses measurement XXXX forward, continue will for the hopefully trends So the and year measurement as we and the positive we XXXX period.

Bill Katz

Got you.

that? a Okay, you last I that's your about Can you little you. think deal just and that's just multiples? opportunity you mean, answer how back one, thinking like sort mentioned stock financial on you question I a you minimum helpful. the So M&A. And on you for of to any think for talk come that trying guys. – $X to then and point about criteria bit And appreciate I I that. how billion still was another are about think think against that about

Adam Portnoy

to transaction? understand Is The any that Sure. around possible metrics I of question question. financial Bill, sure the sort just make around is right?

Bill Katz

I'm been trying right. buyers in you. economic been for opportunity of understand Right, we're just multiples have the of up the the interestingly sizeably lot and to other traditional hearing just rather exactly. Right, in sort of space very going side alternative other a Because have cautious. [indiscernible] some folks deal

Adam Portnoy

Sure.

about – generally interest real to mean if have they are sort that fee on of assets be core been and What have carry – below the do we by Multiples you large been basically talking have opportunistic. is they it I I estate or would they a be acquiring. way. we're they value-add type do it folks depends trading of or multiples versus that So will part are as you not, it incentive more can to put focused where that much on of

we at especially looking hopefully our – multiples, you would on factor after synergies EBITDA would you – doing something in trade So transact that, the are back look hopefully we what end. at would at below we

And so, that's approaching how it. we've been

course, be Of so with would our component a and/or there incentivize grows any upfront transaction be compensation tail transitions we obviously as you’d sort to would but there'd that obviously of some stays that an you'd engage paid, probably of then platform. AUM incentivize, the that want that it to

think And It's it's $X around. firm a and we aside. not this I'm It's at RMR we that identify do not roll I – giving billion as is firms. integrate strategy. becomes so, we but really why up firm about itself really and we really and the our it But one also We trying a saying it roundabout buying on are three focused acquire that business about really the grow What private then accretively five it we're acquire. bigger answer, RMR. I four two, capital that to think different into platform a or can – that

AUM traded – and getting a of we so, of priority want under that about many from really for It's people on strategic billions important that's and it that how what almost and that very could produce hopefully that up We're XX around it traded and part try private managing side. and – this. REITs. forward. private capital from publicly RMR sources, capital a can manage platform all And also thinking today. Most dollars grow. AUM I'd the of – it in sources the billion we that a to is get way understand about management going accelerating It's of the of over we're growth going to publicly

like become it's think important very I that that. diversified we

of day. that's how it really about. the do accretively the at of I so can at But heart think we're end your the we question, And thinking

Bill Katz

That's helpful. appreciate you. color. very the all I Thank

Operator

comes The question go RBC Kenneth next from of Please ahead. Capital Lee Markets.

Kenneth Lee

REIT, question. seeing you opportunities could there further well. growth that just my And Thanks. start terms recent contribution some of taking commercial Finance to potential similarly, contribution well understand see growth Street into as want also earnings? as a you conversion when better go and the you for opportunity thanks if Hi, wondering earnings would Centre I'm from within to the when mortgage can the I one just the and to in

Adam Portnoy

the growth big So, go strategic want I let me you opportunity, real sort Matt going a give – to through I'm specifics. let there's then the answer and to of

Centre So, can anchor as raise Street also strategically, capital commercial serve that hope invest our an in it's perhaps mortgages. to private additional to

by repo side the At set million the large line and separate this Centre we're up time, the managed a as we've basically provide we're its to interested strategically as million RMR, say, starting to of have mortgages Street million And regards out facility and With appropriate So that's and invest up have equity committed $XXX million to $XX you been that incorporate of a when buy Street we to handle roughly that's to let that's why credit you making to $XX got would it Finance same investing doing of roughly and and going. out account, what really Finance. to co-investing in to in contribution lined that. I'll Centre leverage up Matt also we and or now an anchor in provide on evaluate going sort also up go total to of now. commit We've go know, to and and capital you $XXX or investments that be using side to pools leverage. –

Matt Jordan

the before it's all at When about point money, economics, fee discussed Yes. the capital equity. third-party on again X.X $XXX,XXX the any deployed Adam is incremental and earlier impact possible

will be the summer, $XX full money projections to million. internal put probably the in sometime as Our the work

is will it'll summer again third-party then the starting and kind any – rate it money the have run assuming of bleed So raised. without $XXX,XXX be in until then you'd

Kenneth Lee

discussions. M&A And question helpful. one financial this the of potential Very follow-up whole And in in terms capacity. Great. just of is the more terms

$XXX balance so. on cash and that or on sheet, remind you – about Looking again, much considered Thanks. the that How could you have much excess deployable of of how be the us million could capital?

Adam Portnoy

large an believe a let's the majority and deployable. capital don't say, be would transaction of excess it. of use, considered So M&A majority I that could that

In that's use an would than fact, it less But it half of think probably. M&A. I for

and grow You it also of like is, new which to hopefully a think be to question, around platform we the co-invest part player a it's the it and of When help when to acquired. are might capital capital in do we'd after those attract get you're view player. large And and would to grow market, the the you private going you said, have to to if co-investments follow-on raise as my really were start a buy plan to it's have platform in the capital have in I larger growing funds established once a private that funds. beginning business, newer you

today the really need we an say, capital money soon than that we're can how to money, thereafter how use is exactly I this and yes, or – an there's the say buy don't in, M&A to let's probably that we don't about to earmarking amount to somebody exact don't something, and less then specifically to that's might yet, we're much definitive plan how so this a thinking I to buy think And have and point were in try if going we that half much to co-investment. use the we have grow And I money. because platform. well is buy for And we'll I to transaction announceable something but

exact to it's pin thinking a but an how that's about it's it. put little we're in hard it So – today,

Matt Jordan

off for just thing add of our a point, commitment dedicated the And have working reinforce year, remember a and taxes, remaining to would third Adam's $XXX the EBITDA growth, to I dividend million available what you. only is capital, dedicated we're throwing to a about third third

on million available $XXX So a how is cash we that all as business. growth generate based for

Adam Portnoy

fees. $XXX million incentive EBITDA before run Matt, And is rate

Matt Jordan

Correct.

Kenneth Lee

very very you Understood, Thank helpful. much.

Operator

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

Ronald Kamdem

I three asked. from have of quick my a me. lot ones Hey been have guys, questions

classes just talking The market of the out of first asset still in in is, in what classes last, sort three an what of felt asset felt the update people is are over from? any six investors, to are vogue classes months asset you And to away you versus us and reason sort you're particular the as give can notable? the say, have – let’s ask shift that's staying I that going

Adam Portnoy

And might I private this in that if is more capital or new life allocating continue more a focused a guess me attracts there buy office the say seen investing, allocations today. six to things amount I three the for people between, probably and of said, more a lot people it's a least capital. continues that's That some on aren't can what's last feel I get a in be trying shift, attract it's seen bids today say there's most life a asked maybe science people say of think lot towards are there's way consider – the for to to industrial. changed six been life stronger in that full money life I significant if I – office very like retail. find I've office science, case. strong that of to being And I you great quite would would there's money hasn't think science MOBs bids amount which capital that the and getting would assets their most they people months, two question. or the office to have a asset even science favoring is multifamily then Yeah, been class even three to shift that time, last The the months. of been classes attract what I there. over there's asset I’d but specialized say any even

modest there saw hotels living market, volume the much nearly three It's in – the as hotels it's a prior but given as would six say, say, months an you underlying a of know, in periods. of amount more transaction you that hasn't operations there the Senior is area I capital very an in attracting to to money even been continues class niche the last that reasonable performance attract, small is today. I'd asset

dearth comment where That several could are have we there's So hotels I'm transactions that's hotels, are being we on earmarks, real And that our trend said, valuations sure in have occurred. not – of been I a REIT are we within just SVC, – for dispositions. strong getting bids.

parties getting multiple are more – We bidding.

about a that's million market larger one it’s portfolios today. are selling transacting. $XXX or in hotels the is is And in just XXX of were the not of But moving on as – that hotels we're transactions not hotels, that today well. a probably of that we're the in bid There so, there million market lot talking again,

Ronald Kamdem

was want people the execute I And sort look before the executed net sort the think SVC market just sticking sort helpful. trying of sort How the to what acquisitions risk That's some to thinking a of just – I – hard just my question it What see hearing a much about it. was level is the of just the to sales Got in you company? are you're market second of change profile high missing? do we they business to the the take sense with triple are think the plan. get at waiting of of on misunderstanding and misconceptions sort am of the of just that it? before on sales versus

Adam Portnoy

have have weeks. last dispositions has perfect a dumbfounded don't SVC the a very the trading, on. little shape. covered. over we sheet The executed dividend well, question. especially sense. I I real great a said dividend great makes, in execute would several well been well over The in been It's a It no We've on where yield. half answer. is we view, It's XX% is balance of my company's already

Marriott I why That's not think haven't end reason favorable people I'm for track we're we execute had on. year. execute picked the dispositions that sure of we to said the a announcement We would at some on well around that. really the on up on

a hotels hundred over well have with Marriott. We

the and got And support support. is – We've from a extended them to the we've extended agreement going credit we've this Marriott. credit be with

to have better, the underway. net is of make trying a lot sales thing additional and you It out for execution So I fine the The two which is hotel us for a SVC. sense doesn't I are which to could perfect well XXX is at don't of pointed and what's honest, as just people our to going only leased around things, you've point answer be I for million have into the performing to very on integrated operation understand existing real is estate waiting complete they're and me. retail,

Ronald Kamdem

the this think thought I of ask the That's The one to you just there's is guys one on on – I've already, are how in – obviously helpful. that just last Is at of focus don't get about but it sort just heard there. one a just a buybacks initiatives, quick I because growth but point? lot thinking

Adam Portnoy

majority M&A RMR tell asked getting to some private to regards repositioning question private are things now capital and And a That's RMR I parts capital onshore focus the returning front see XXXX. we of doing XXXX. we We important center, focus With side really shareholders, client initiative on in them our it's with and work even strategic great incredibly Yes. while grow it and as XXXX, really the is regards got the where behind XXX% XXXX the to capital That's shake behind to lot. XXXX initiative, we platform. the you And in at – were of in for footings. to get getting growing companies existing our really us. it's a in can that largely trying out

of of have And benefit shareholders of from in largest I months. see the of capital. any RMR, so, shakes to several return the over one And course, really the we that next where sort stand out being myself,

got I we the see months large And few we are in business. have think M&A where I think sheet. the excess get with we cash our generating then and true, the next and balance are on let's growing still if to balances to capital we private still

about as me would personally vetted and management to would tell I we not, a good in in dividend shareholders. the it of nothing you think stock of are board price the But and think thinking have make about, board, the off it form that's this some the thinking how to sense whether will capital where capital be towards returning it it. I'm I the where think bias fully the be doesn’t on table versus stock generally being might slight then a at I shareholders returning but said, depending That buyback. is sense. a about makes maybe and

Ronald Kamdem

questions. Helpful. taking for my Thanks

Operator

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

Dean Stephan

on Hi, this Stephan Mike. from is actually Dean

the question strategic Just quick around a efforts. repositioning

better the the So of values efforts the enough investor values $XX do that REIT historical mentioned revenue narrow kind you there market plans be to other some underway, Or outreach plans? of gap? opportunity. any current current know in anticipate besides you will are and that to I with capture maybe place align their million

Adam Portnoy

mainly really get be expanding to actions. cross-border, and embracing talked want the around Well, have prices things size the we that behind at we I'll see to said with shareholders we the been the focused. is stock where sort REITs us. lessening we’ll largest our the – tail – doing. especially on that do examples, that plans, tell shareholders point managed that stock we We've any at talked it's past. DHC are see – improve equity if about to of to among what the would we this REITs do and the do I warranted SVC, about be that you, have execute governance in we Things other current RMR want like in to that at REITs, years and Equity like We'll from said, We've more board the point? and about additional we additional with the more talked and price I Managed those we can reforms. boarding we've that do proxies of that the REITs. in of actions are about Other like and that our that the talking think What thing any

to annual to REITs. that you'll things we're for see are the get those as think – season see we'll meeting equity some I the and do that, And especially we going around announcements continue into

announcements spring transparent that's we've the were at But will equity of market because a think I Here lever in haven't months. been about they of in REITs. be we governance time is the the next that the expected coming in lot some that another – there'll be spent couple what telling largely that coming talking

Dean Stephan

thanks. Great,

Adam Portnoy

welcome. You’re

Operator

closing for question-and-answer now conference any I session. our Adam Portnoy to turn concludes back to This over remarks. like would the

Adam Portnoy

Thank the call. Asset you to Thank at Markets as all in prior Insurance as February New Managers, many XXXX Institutions to Capital Dealers seeing forward Brokers, look well for call. and our York. on We March XX earnings Financial and the Exchanges XXXX RBC you York in that Conference XX joining you. quarterly concludes our Conference Citi on New us of next Operator

Operator

conference now concluded. has today's for you Thank The attending presentation.

You may now disconnect.

The RMR Group Inc. (RMR) 6 Feb 202020 Q1 Earnings call transcript