RMR - Earnings call transcript Q3 2021

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

Operator

Good day, and welcome to The RMR Group Fiscal Third Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, today's event is being recorded. I would now like to turn the conference over to Michael Kodesch, Director of Investor Relations. sir. ahead, go Please

Michael Kodesch

about from and the prohibited as contains actual of company. statements today, Today's Officer, thank conference forward-looking retransmission the we joining provide consent today's conference made call. and CEO, revise Chief session. President conference meaning and call statements moment, or followed just August of is question-and-answer they call the call. of X, call securities third quarterly Litigation results other fiscal forward-looking that and Financial and are company Portnoy; no Securities XXXX With of based Adam materially results today's by the Reform forward-looking to the Jordan. prior you afternoon, XXXX differ may In of of and any details Act RMR's obligation a will for of expectations those Private on undertakes quarter are Matt and These Good me would revision the like statements recording results a the publicly RMR's to without laws. written I to our business The within project. note that today's and conference XXXX, in release beliefs on

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

I the adjusted like earnings to the net now, EBITDA over EBITDA adjusted of margin income with Accepted call, per adjusted be calculation income, Accounting earnings accordance call we turn may And share, earnings Reconciliation US income, including can during discuss net adjusted adjusted adjusted and share, per in our found to Principles to addition, non-GAAP would net Adam. of release. in EBITDA Generally this In measures determined adjusted and EBITDA adjusted margin.

Adam Portnoy

all you afternoon, you, and Thank for thank joining Good Michael. us.

a pleased basis an This XX% of year-over-year $XX.X a adjusted a net a a on per on I'm sequential of on increase XX% quarter report to adjusted Further, income $X.XX a quarter increase and on XX% and basis. basis EBITDA basis. represents million share, quarter, XX% of increase sequential year-over-year

quarter this we've navigating the past results highlight the Our over the progress made significant pandemic. year

how As I reflect with last estate quarterly away one want of impressions is what by our this come months, manage we on begin and platform to commentary, our the key resiliency seeing the commitment operating the are the metrics of sectors I start to XX and our some discussing I commercial the we're To of people real today's organization. across of lasting trending.

As totals of the the least the since are increased of at at office experiencing vaccine. utilization today, of dose beginning US XX% COVID are received adult the seen population at of we airline one manage. US traveler the pandemic properties levels highest the over has we rates and

groups we capital company, platform put continue commercial as competitive office million at growth, In most to client due dry quality Mortgage investments life deploying of generally of rates, significant Tremont real has acquisition low historically allocated private powder the most for high sectors. in $XXX the the organic and Illustrations ILPT, and landscape at impactful of over to of fund for estate being property capital and industrial our each the industrial, science our to of these work. our AUM increasing levels terms of to interest notably combination experience competition to companies,

quarter, environment. disciplined continue across $X.X the From billion to very opportunities. momentum of competitive this of alone, deals our we platform. many face in leasing we For organization underwrote positive example, this continued billion our quarter a financing signs, Nevertheless, perspective most underwriting has screened notably saw and in we remain market over industrial our $X.X in an debt operating approximately

critical on office years like client velocity acquisitions workplace take We growth rent of expanded of most just arranged roll million development feet remains to square an of capabilities, believe businesses behalf continued up which of X our XX and important moment is a through a part I over X%. belief. quarter, companies of over average difficult. more average our becomes also this the and over our reinforces with would as This leasing in to we highlight leases lease a term weighted

example redevelopment, the taken XXX,XXX RMR last with larger in project our have scale projects cost that redevelopment total XX in great a to of managed expanding the of few current approximately of capabilities. quarter on increasingly This is $XXX foot delivered project Over Washington first be a Ave years, development is million OPI's Mass expected DC, we with XXXX. square

to of cash XX%. Finally, with hover remain that pleased collection to as tenants, it we relates at approximately the strength our continue rates

X million real leases properties down our our commercial like highlighted of RMR our which assets remain acquired In is companies. two May, rent unsecured with $XXX inflation at positioned OPI generally. contractual $XXX pay inflation, in interest CPI the office of now debt. earlier. or measures clients as Additionally, and I'd of which over A positive in adjustments. of highlight client the senior XX some a cost estate higher elevated of having activities an well notable and the Ave, for environment at of such oversubscribed, commenced June, Mass In This I notes protection a OPI was bumps redevelopment total to used times proceeds managed indication Class raised and million OPI to offering of XX% office recent

quality burden successful portfolio's continue footprint performing the recycling decreased markets. and better has strategy which faster its OPI's increased expect will assets, capital average into OPI term, and into of company's lease the We weighted expanded higher growing CapEx

should diverse As by group operators. calendar which a allows Star is and to of senior agreements, This their be from for previously announced, completed Five of amended the XXX and year-end. best-in-class process Five Star DHC management well underway communities living transition

experienced growth already these be ultimately As its that company communities same-property limited DHC mutually senior the four The including positioned. increase leave to first a many beneficial agreement occupancy XX living believe decade. rapidly growing and be for from in over client should are by supply under pandemic managed began. communities better announced fundamental demographic transition We each DHC shop supports respective tailwinds, will living since senior the new operators. has sequential quarter next demand benefit target that of

significant hotel and this and managed able RevPAR. been by to rates more in occupancy, room SVC quarters, three specifically conversion over past deliver Since Turning has trends the the the that disruption primarily portfolio hotels Sonesta. for of Sonesta pandemic time XXX is it's other improvements resulted positive to despite from which occurred positive first and have managers reporting have These the since the quarter first hotel hotels XXXX. EBITDA ongoing of SVC of the quarter in transitioning

the beginning of the largest in tenants, As the this of invest future. they States, same also million in for of its since franchising brands the in the reported which compared America, results it one adjusted business continues currently United very its These increase largest of of in made EBITDA At of well and infrastructure one Sonesta hotel period SVC's the XX% is TA TravelCenters to capabilities, XXXX. has progress highlight positioning an past XXXX. $XX.X to quarter,

Tremont merger to initiatives, Mortgage Trust shareholder want Before to note mid-September. for Trust I that votes their our complete Mortgage RMR deployment I and on turn to remain track scheduled with cash

building form to the required our the a initiatives. shareholders a of for fund accretive scale that the remain ended M&A and a potential to both to cash million to what in $XXX this capital as likely reduce remains capital. growth will As sets private alternatives expect capital in quarter, later with as private liquidity continues we is handful shareholder invested be real our enhanced of to their assess with cost to with well of beyond platform providers approach to We combined continue benefit a to And mentioned return special quarter of our expectation committed billion year. initiatives, to potential to as immediately of assets of be With one-time cash. targets. form organically respective reminder, the Board LP from shareholders, It estate with last expected increased dividend growth excess dialogue of provide fully and relationships we regards most we $X approximately

coming We the are growth hopeful to announce for months. progress on in of these each initiatives

financial our announce Jordan, Matt to Chief and Finally, other as turn review into regarding on quarter, own begun call. Financial last who our will the mentioned the of call sources initiative as investors expand family results have now I Officer, I'll this such for next expect internal we high building worth team to quarterly to net more over our quarter. capital, capital our offices earnings and private markets

Matt Jordan

everyone. afternoon, good and Adam, Thanks,

recorded by $X.X and fourth financial were majority year-over-year We in results quarter. our were momentum to operating guidance our of key following million, results for on the well the for revenues increase primarily the sequential driven revenues as services drivers as increase a quarter's line the This also robust, many a metric, remarks sequential the quarter prepared characterized quarter. behind fiscal $XX.X was expectations across the of basis. in our million plan spend advisory most with detailing fourth increases strong factors. and with which and my of Management I'll reaching for straight increased every quarter This headline metrics. quarter, by

adding value almost OPI, SVC million and at enterprise First, quarter, $X.X the in incremental DHC this increased meaningfully revenues. average

articulated each $XXX,XXX in generated Secondly, which operating our occurs turn for management operators fees. reasons year, to fees. which the of construction of as of by in calendar And $X.X had construction Adam incremental incremental lastly, turn many our the increased activity course typically led across results, strong approximately in over clients million managed sequentially, earlier, approximately

and assumptions. next $XX.X advisory the million revenues expect to under and be Looking quarter, ahead million management following to $XX we between service

REITs. no values equity average managed July First, changes from across material XXXX our enterprise

Five with are be construction should projects senior is to at Secondly, revenues. at revenues by management muted meaningful oversee provides approximately Sonesta full our Star and next communities expected to recent X% operators our for in realizing in management operators. RMR that lastly, that managed flat in capital DHC living expected at million growth quarter due SVC from across activity they continued to agreements and This TA being as primarily incremental a other $X fees increases for to declines hotels construction be transition and DHC the generate from fee. major And as to platform incremental amendments first repositionings is and communities increase all to our quarter fees

Moving managed to from OPI calendar an incentive for equity REITs, incentive fees accrue to XXXX. our fee continues

we of fee each incentive revenue year. reminder, record only a December As at XXst

by we $XX.X million. approximately a Xth. of to S&P incentive our However, Global had would June REITs we calculation fee August benchmark have earned against been SNL end informed incentive the With will XXth were if of our of effective indices that be measurement the fees, an we regards recently annual period, the discontinued

finding currently are an working a SNL of most performance with the We benchmarks. with replicate identify S&P REIT closely that indices of alternative the to expiring legacy goal

the quarter vacation usage, were Turning reimbursement on for million assumptions, quarter, next to and we limits expect $XX our both quarter. headcount basis. be cash sequential flat compensation rate this tax expenses to compensation being our quarter million. reached of Based cash XX% withholding statutory a Cash post-pandemic of payroll approximately $XX.X on and

which the equity-based officers Based with approximately levels, large will incremental grant and $XXX,XXX As in approaching, not in of to equity year-end historical compensation to quarter, expect share our September. RMR's occur majority it relates fiscal recoverable. awards we compensation RMR on is next employees

As EBITDA sequential $XX.X quarter was XX% Adam basis. increase quarter a of on earlier, an adjusted million, noted this

Our basis increase was XXX quarter XX.X%, sequential of quarter adjusted this margin points. EBITDA a

platform getting and illustrates over potential margin XX% revenue EBITDA of as service our back growth. the the operating adjusted we Our earnings experience leverage

quarter, million. ahead $XX.X range million earnings adjusted EBITDA per $XX.X per to share we to $X.XX Looking be $X.XX next expect to share adjusted between to and from and

private this vertically program with operations to estate we we to ranked platform highlight to when like questions, training relationships believe clients' that of Operator, proud open remain a RMR's I the we our That and We capital. please highlight our focus go real and BOMA our would to first on International remarks. meeting be assets to with continual and education our superior of investments concludes line would integrated XXX sources national teams on our the tenants. recently potential members differentiator of team standings. questions? Before you sustainability, and performance solely look formal and our always maintaining

Operator

[Operator Bryan B. Instructions] comes FBR. go ahead. from Riley first question Please Today's with Maher

Bryan Maher

a afternoon, Good lot turning seems of levels And couple A on questions congratulations me. everyone. all, first here. different of on from like corner of the we're what

how obviously sizable hear That Adam chunks continue at being assets and as the all appetite all really you to to versus buying is and to said RMR at to listened others some TA difficulty and the reasonable of continuing the liquidity REITs assets have ILPT available, ground-up having Given and willingness deep land with calls, low rates? we've develop managed in mentioned at your most we of or of cap prices. chase

Adam Portnoy

would through expired was different and converted of may would cycles. lot a commercial in the estate developed sort you I that occurring the mean say, obviously lot minority least, you think Canada glad what seeing them And when then TravelCenter, in you of there was going I that at to the hear that that's real that Pines and of see a sort activity different you ancillary happened call, That's Mass RMR a from think, it's real as most prepared site manager been is doing into what development. growing a the, And that in going be Bryan, Caribbean, it every when what SVC hires part, properties form but fruit growing development million in life Thanks, significant part we've around of a And that's would and we market through major of department lot that focused more a use, something most it's we And in it talk have of developing useful and in this to have on real other saw to over estate of our part of been Torrey Ave, is billion, could else. the holdings. that's the in a area what say That's have I really a the state very talked of I existing that you a been capabilities would still that country, have afternoon. of that into significant RMR and still be I'm the much the a locales sort I completed, when become minimum. Nashville X that a also focused redevelopment. properties on itself on. up estate something site their remarks At have about a within activity development has story. our operator, if much it medium-term, redevelopment internally over to valuable of it investor, low-hanging that the X,XXX it's different redevelopment properties, That's you is that's becoming that's whole larger the of have mixed handful and of good at periods, activity, XX $X upwards the good is you're country short million. X largely a on to to currently a development part, question, is picked million time. the or because square DHC about grow foot we've $XXX bigger a story, small sort

So, part I bought at an it do. to developing on what the bigger our be company a a think - going industrial. development modest In have call, are into of that affiliate industrial I'd going going and to a down we land side, market first, we we become you'll Dallas is indicated what in probably the notice ILPT, the relatively from that we

think medium buying is what tear do I future, going think estate, of forward. healthy share part returns. I buying products real buying idea to this to, of deploying would sort that And - We're more more specifically to be it a pretty properties core business think down you be the to be on managing really I going with see foreseeable that's probably the what the something going core long-term, that. that's or years develop I the Well, real call, to with overtake lion's opportunities there'll estate, could doing. build of to estate redevelop Eventually, vacant don't what will lots, core. traditional for our do it's we it land, away. us continue I we're growing real but or just vacant core building to think and I

more I think that's longer-term.

see and a around you industrial what And could around You us because what maybe see for but redevelopment. it just - the and place do first start in us seeing we're a that we're maybe like might be you do doing to for sort something might basis, of industrial on acquiring gives development flavor of properties, limited the competition industrial. that

Bryan Maher

think target you private see that land within personally investment overhang vehicles REITs developing such scenario uses are the the have a non-EBITDA generating end that could the buying managed takeout we REITs game at REITs where the capital the work? the various yourself with that and your of Do don't of or managed a

Adam Portnoy

less the investors we generally existing Bryan. party that further lot look our relationships. was something of to of being It's whenever have REITs. skeptically. related I'm some you likely, then or do It's It's whatever to or I'd they're reason, engage - certainly it transaction them we they're And not as at to at for I'll And related sell fortunately in because difficult unfortunately, tell a and explain looked in party the a to and often And possible, it. transactions, into marketplace. obviously groups RMR able put confident development build capabilities related in if party try not why.

would first balance wouldn't did and ILPT. ILPT's we did is on or to start But not industrial. it be in then sure to I'm you thinking buying it. or it to we're We greenfield, and to about the it really outside sell might going around that's let's way see this say, So, the meaningful, sheet. again, might If do place that, we not and on plan RMR be do that, if be personally probably it try or

Bryan Maher

just like lot have internally, what next and seeing SVC months. clearly do out week's probably from Okay. DHC the or DHC kind With gears, looks it here downturn, positive And to accelerates who XX XX for faster the this so a earnings more outlook that of think the shifting SVC? you're corner you turned of with

Adam Portnoy

haven't It's a I Bryan. love -- thought it it's question, I that but funny way - your way, of

Bryan Maher

…like better.

Adam Portnoy

as horse right, DHC calendar of REITs, It's as Yes. second quarter those and both corner the we turned most how affect for and them, that and a it you're are we've through COVID. right, impacted results quarter There comes good like second getting all - of for course, things does it going play variables we are many - so -- XXXX sort been these - of and companies negatively back SVC very have with And, Look both was the into fall what's out. you're and race. to correct, COVID they're the two those the come through, you're are they are better. like at think both that are feel happened both by companies

impact. that SVC suspects everyone about knows, the fast question -- variant is get travel nobody answer the really have does the come business And some and the Delta fall of into On travel for business the it's to make going how does back to side, it's as come back? we but harder sort

the thing. DHC same side, On it's the

a is to occupancy will which good it debate hard the - are think if to what say are at think I rate. improve what very lot faster. what is keep spend say going to as in about bigger just hard see of hinder Both does one happen It's 'XX. then are positive. the to very ability a further economy, into and times becomes It's the in and recovery COVID get part at story 'XX That's do which businesses news that going both. speed both I of US and into recovering The both we we to grow? thinking we and As to certainly getting is recovering expected the the

the answer. And so, basic that's

Bryan Maher

Adam. from Thanks, All Great. me.

Operator

Jim ahead. And from question our of today next Please comes Sullivan go BTIG.

Jim Sullivan

you. Thank

advanced there of Adam, questions So, I'd hurdle to on to had you you of the in about curious, presumably if the start acquisitions, The Bryan could let's have follow us that to rate there. kind like a just and terms -- allocation. with of how explain capital I'm opposed is of that, premium to development? what very willing think far far from when market Number as risk lot I development some capital activity for think underwritten of kind do where alternative And you in where to acquisitions maybe connection rounds, the off third - how you If you're put expensive how find you a market? with environment, of then to one. second products do about And you've a guess or in are the you into and acquisitions? you're off from the

Adam Portnoy

Thanks, Jim.

sort acquisitions basically that that some are far than a just we some funnel of I high of Obviously, side. quality quarter, and industrial to we properties very deals million top, to ILPT you to it's through more we go transactions. think this $XXX are lot have at widely the we office the announced others processes and and bought marketed small -- It's we win. not very a at get of past winning and off, broad

to we going think I through make are to And we acquisitions will forward. be able So, grow able acquisitions.

today reason in In the the incumbent we to said our basis on in development focused earlier -- land sheet. capital a the terms built-in about of real low of legacy -- is estate and the allocation the as it - I have have again, question balance in we premium, often product the exists we the risk on properties

properties, into buy it getting cost development. of a these the land to in location were the vacant the the return of terms of in or Meaning, that some be us And factored a on will greenfield. good we so, same of parcel helps just development the if potential

returns. into your -- can that so, And

going what single-digits do incumbent is building reason properties core basis. we're hurdle. are that to call, it what speaking, high single-digits. high built-in on focused Generally a the easy activities low And at, on towards, the have because of we get trying for development on return development, it's to depend I Does to part asset sort or industrial or estate. low other varies. even if if generally a it office high or across already to targeting basis it's side, the mixed the it's that some single-digits, board, are be fact of it's the use real in if But that's if even speaking but incorporating have we it's So, we we

how Hopefully company So, it answered… a work. the return good that's get put we when helps that for capital additional client I've to

Jim Sullivan

curious property where you at looking types which have that buy business, Is look level multifamily you No, different do REITs, book, starting especially is kind finance that. And yes, Main the it and other we've we've and multifamily. like seen to end have your terms with a program developer in at of whether I'm do in the the a allocation, Green at? steroids. program, serious just it and mezz for One capital you the retain in sometimes structured seen an capital an developer you're option the it do I active thank something to to alternative or the you companies of mortgage some provide developers of that others have of of and obviously and retail office capital SL UDR But believe. REITs Street a taken

Adam Portnoy

seriously Jim, not we're it's looking at. something

meaning it's than related you're the for in just commitments, takeout providing We the takeout just part forward have of more a committing of rather financing to phase developer. talking a about what circumstances to development looked looked takeout have with we a as attached, -

if we spec commit and or the the what that you I'm have it's cap at about thought been do probably when looked that - the it's the leased of a we haven't time how we've some has commitments basis, course and/or subject takeout you it's take we getting developments have even to you're discount But just tenant to to a rate takeout. is at, want looked a a can usually it's forward that build-to-suit think meaning little around a that financing, I however could done, intel, value on think we've especially is before get telling going we better. building be to money, Yes, of about. it's it, done. before

looked the mezz it's specifically financing question, haven't on answer to way lending So, in pretty have of your you we a it We for related side, right, We still you're about. which pipeline. what that at probably to find no, development. are we terms talking robust

a I value-add And light think more work basis, a - we comfortable get money at at of just bridge the seeing of money moment. out putting this value-add, sort we looking we're feel transitional can loans. to the lot on risk-adjusted there

Jim Sullivan

final And then Okay. me. from question

absence expectations kind were whose just a of whether point a when where you that cash dividend. special a PE investigated go of simply was too the lion's it presumably lot of And or sellers share platform, the curious, - and terms just curious, the good meeting the the Regarding that of the ultimately major - in opportunities, guys be be whether while was the in terms personnel ago, scaled just an you will PE that would was back issue of buying? platform a rich toward about of the you'd marriage there of pricing talking And you RMR to minds for a platform. the a investment I'm or in PE, PE have I'm whether platform opportunities a

Adam Portnoy

question. a It's Sure. good

private was say our the off some growing I it's going bit have would I and talked we mean, little not remarks. more, has will Just the successful of that it or way - a business table. quarters prepared capital that internally clear, that be shifted ago. we completely more in organically that was around to My optimistic to be the primary a thinking think very opportunity I we ourselves. I good be growing where about think our

place. having capital with around to-date, more we believe say, M&A. are quarters, reliant lots buy, say within going will of not this of in see I specifically, price. closed-end or I something funds hopefully is We we doing that is That to this that what a dollars estate all estate. want haven't that bridge very haven't number and on - the do reason nuanced shops to out advanced discussions we've organically to this to done would as put two do year being now focused this And of of been And gets don't doing I exist you're and really now. said, market, put opportunistic about completely the us had able we us that has there. idea real the private of that That's that's work billions and we maybe being majority investing several entered real shops in discussions. been choosy of the it's that to-date, and a acquire. we what industry far would aside much we the being from together this something and that, with through still And because about too we a heavily shop I private on think are

better, that. in maybe better, real more are with of interested we that estate, synergies been that organization more more just with lot do like they're And separate - less just a with we funds, Our more fits more managed focus - a in folks our has what firm accounts. closed-end just dealing investing core a sort are it's there's it

this us to narrowed at this think M&A is while this figure And be do perspective what perspective. we've if this M&A be were doing that focus successful from I to out we - to a do an an an to the so, wanted took it M&A's on And organization, going and as an we from that.

check so, the significant an to have meet to we of And sort criteria extent example, financially, expenses. want to all to we about do that bring, a on been - we on And that's to-date, meet can think transaction. operationally. price, boxes, control talked have it We synergies a been firms - that about organization not more the like has been just certain it's identified but for not I've bear

of sort that to be has seller arrangement with go as the so, forward. we And comfortable

so, more culturally and it the more being about hasn't is groups willing very us getting together price, And to meeting been choosy of we minds, also just are and it what with picky it's buy. being been

Jim Sullivan

good. very for Adam. Thanks that, Okay,

Operator

Markets. And our Capital go ahead. Kenneth comes at next RBC Lee today from question Please

Kenneth Lee

my question. Thanks taking Hi. for

one Just scale the larger developments. about

you this You area are could an you time. capability. And up your that mentioned that grow over that is also right now mentioned ramping

you give could that meaningful to capability involved perhaps level just reach us sense can Thanks. could more we Just of the of where and start timeframes if a contributions? better you where potential see wondering,

Adam Portnoy

to want want I could providing put level business of medium contribution - don't as short the much Yes. that term overstate be don't in we too get to I to this the into term, a to development when - is probably XXXX, talking specialty short well developments XXXX, in. time long takes say I and When the medium XXXX. of we're one - This about. type here

be development not delivered it's million example, script, Mass we something going a QX prepared till $XXX to this started, mentioned Ave project, in it's our XX For XXXX. is that's

of talking handful we get like coming into start we're projects on of We of same it, I they that and scale will in years about projects other the 'XX, the what to as 'XX the as scale about. those think have those sort begin a will projects

also trying ourselves. sort it So, of in or on, do core estate company time. become real the somewhat time all quite that capabilities on from What of that could for - to stripes estate we're I this an our up that's important something Maybe could is be or I'm focus think That's legitimize an think of we're real And real integrated I capability the full really think trying I our And meaningful. a - that conservative. organization of think we're building focused I'm generally with service eyes estate. things - it's sort like buying, us real we're years build that I can investors do the focus. of either managing goes more over as vertically sort estate, what now, core helps generally

us that there. of don't it'd you place development start industrial, before where it. maybe walk the we run. And one see to see to some be I to could development I be more in overstate so, doing uptick that the the could again, Again, And on pick but core. could a want like not stuff, small we

it's a more for someday million story. going development part projects, one if we have a and could start will see We down do think an it's all-in, - be our And of us be project But going to many so be going successfully Dallas. it multiple to it's - reasons a like $XX project be us to I in for that. before I we It's on process bigger it do really go important green lighting through.

Kenneth Lee

follow-up very I That's And may. you. question, Got if helpful. one

S&P impact Could You mentioned remarks fees, about uses you be more being prepared to a the about the bit the given three-year measurement potential what you see incentive calculations Thanks. little in the indexes just REIT talk could periods? discontinued.

Matt Jordan

Ken. question, Good Yes.

very to be four this alternative we today closely where learned that of replacement pretty weeks. incentive S&P a three index, in in ultimate fee hope process SNL to be trending, So, that last a the otherwise fair, there mirrors goal with index alternatives. the we've or the the not be it'd from an similar index. the will We're what find something the our is to or have whether current To an change S&P significant prepared remarks, is or assessing is with

we need talk boards but the alternatives. RMR I goal our that's we earnings next few on weeks identify and of call, and process where go in a our through we'll have to we our So, as or both say to the earnings REIT next at next more boards think call this over respective advance the to

Kenneth Lee

Thanks very you, helpful. again. Got

Operator

Ronald go today Stanley. comes Ronald. Our from Hello, question with Kamdem next ahead. Please Morgan

on mute, Or Your line perhaps. you're open. is

Ronald Kamdem

now? Yes. Can you me hear

Adam Portnoy

Yes.

Ronald Kamdem

Okay, great.

Sorry about that.

chance time follow-up are year even the redo a remaining index still know. And sense. idea on sort for of sort can not the a for calculation that the the of would I index? the of appreciate the conversations, for had guys finding just may current of there the S&P But to new you be index a or in Just expiration. you is Hopefully, calculation that's so already middle the quick made of with passed sort

Matt Jordan

Ron. possibility, I a alternatives think are both

the I process be RMR the what process then go the alternative and is just of and to each what the of adoption through with we need Board. think will respective assessing board

Ronald Kamdem

Got it. Makes sense.

I getting wanted the to follow earlier is private up Just about conversation you to historically - of about - sector. exposure potentially talked one know multifamily on the things get maybe capital vehicles. I

sort not, in Just on core search And what's path executing real the the a curious, played of estate contemplating into maybe something that multifamily if you're manager? terms still how to realistically, side it? has the much of of on if

Adam Portnoy

have that private said, But requirement say, I core been, Yes. a would being that a either everyone I think And multifamily, their some aspect just had competencies have multifamily must or hasn't say criteria firms be the space. in of to level multifamily of amount they the a some most talked that about firm or it them. core let's that's one it. we've equity to all of

have acquisition, think be don't something clear of to and obviously with multifamily up I our think that and we building require I it would explore without bit we way going around basically suddenly in I were And That's that at of the would multifamily you're or a so it. and or it be would around to area the reusing If terms and that do an I we here think expertise. something M&A, do actively could we folks see think make be so, a not of more probably that, it. initiative to some don't are is to trying grow some little make to a expertise but that organically come of don't on And a supplementing hopefully anything own actively a course, building have around an outside that of that. sort - to going, of say, some trying likely just would would are think And, that up we in something in be to to - going I that we we though, RMR build. you an alongside not our about try if platform in announced multifamily and we're out multifamily RMR let's today, set that's want to us doing build. - vehicle to fund with could sort to some capital seed some capital get it at

likely get with where very sort if to And can of then handful of folks shorter come to multifamily of I is with handful a to line. a aspect will one and there. the conversations, and from think based run one on we ground across conversations if the these the end it it we do, build see

about we're it. So, how thinking that's

Ronald Kamdem

Helpful. Thank you.

Operator

[Operator Oppenheimer. from comes Instructions] Owen go Our question Lau Please next ahead. with

Owen Lau

taking Thank my to want question. you dividend. for to I go back special

end you still of Adam, paying think, special RMR I considering is dividend this mentioned the year. by

mentioned in and see on I whether still growth valid are think mentioned your may asking the I'm and you RMR something, in XX% like prepared be of September here. XX% because remark, to return last decision want hand. cash you September announce coming you. initiatives RMR a I Thank some also quarter, may made could just by months.

Adam Portnoy

Thanks, Owen. Yes.

and our call hasn't quarterly dividend - the changed. since timing the and really thinking sizing So, around our last

cash, it decision make our roughly let's is up our We half, be of say, our million by September plan year-end, today is and which continue to a by XXth. September which cash is to think $XXX our that hopefully of could to or half fiscal is still

Owen Lau

a helpful. Okay, got That's very Sonesta. it. on And question modeling then quick

think fourth flat higher. are And next been sure quite understand like the from to I think this something quarter, well. to Matt, revenue you this be mentioned doing want quarter, quarter. this the Sonesta dynamic Thank just fiscal $XXX,XXX I $X.X I I go is or Last mentioned the expecting quarter, I it has make like quarter you. you here. up think which in will you million to of

Adam Portnoy

thank largely opened floor very you're Yes, say I'm a me that. just things glad but of asking about the specific I you. let you Owen. up a know Hi, Sonesta, question, couple to which modeling

of because far how out we of response them marketing went for very sale with Sonesta to encumbered announced were - this hotels bit largely been that EBITDA Sonesta is Sonesta strong, is we are managers thought morning so I an idea little myself - the say, companies. us. we would, could of of potential it's inning, operator, talk by hotels, the saturate they to encumbered us on are they inning. them very, Sonesta that the sort I it I hotel will be. - analogy marketplace, for hotel It's of sort today, to I the would doing of use SVC, at are XX and selling you're folks Marriott on think robust this getting eighth is that defaulted brokers about it franchise but our two, selling together Lion in because, you're But in just with reception when may as It the to clients company. you it the its initially has back that we major because also two And Red a been importantly one, let's of and potential the by others, the began that whole very, be when with showing getting even positive that the factors. SVC the And little that that we a one what owner, in is be go probably the it's franchising, on in robust. is, and a Sonesta that's about to third, necessity quarter business talk fourth and any and And or of than that are to in earlier the early marketplace have they selling stronger we talk our as charge been Sonesta for they market. performance opportunity the to valuations the you're earnings getting of and we the bought, out the largest put announced is One, way Sonesta, brand. brand. Sonesta time ninth mean, one since don't much now largest and - about pandemic to franchisee the days not be marketplace in which a thought more they today a the Marriott, very rate SVC of if incredibly well. to the point it's more speaks if same maybe not of initially because out It's the very surprise discount unencumbered. we so heard a it's heard realized fully was them Sonesta And which I largely would experiencing, strong mentioned so they been first jumping no has

and on it's - stay. stay XXth hotels or in want you if an hotel Marriott selling extended XXth you're we're of to to at you're buy Hyatt Hilton marketplace So, that SVC, one the maybe the the or XXth extended going be the

and you the Sonestas much. or You three of not be as - one and only charge we might might Sonesta may

really likely been to and hotels to the - So, be marketplace, which why any hopefully getting and going sell pay explains interesting is realize not we're the encumbered I able think not response in to the see of little SVC a today. the in don't about the power in talk be might speaks bit you to surprise pricing, but to it discount a the why the people, at Matt, specifics? which of brand also marketplace first it's this Sonesta

Matt Jordan

Yes.

on your to Owen specific So, the modeling.

revenue. $X.X of million Labor Based about resumption travel generated million modeling on next them and we're about where leisure travel, some Sonesta hopefully out this Day quarter, quarter. see at business they So, post fee in $X.X

my end prepared are back as equal, they remarks, a in while they are at this is quarter. should whole operators mind up, the where being which things all please million, we're up, net-net, in keep Now, $X

Owen Lau

it. Got

$X.X So, $X.X million. million from

you're Okay, all discontinue better. using got trying SNL Will one final clarification the to then I'm it. S&P one specific benchmark? benchmark. And benchmarks just on just the or understand

Matt Jordan

name. and the that's to brand transactions their business they discontinue on tied to some had side and They've index any SNL mergers need No.

of all -- So, them

Owen Lau

Got it.

very thank Okay, you much.

Operator

Bryan ahead. from follow-up B. a is Please Maher FBR. question next our with go And Riley

Bryan Maher

if Sonesta prune other came and innings? you could secondarily, that Red brand. to mind in at with far than thing it a that the what's maybe lot do is can maybe in you marketing you might the Great. the the that one the came the on guessing got focus way? the brands advantage a really quantify with any other standpoint, Sonesta that to itself, as Thanks. I'm the fee Red or along you of And and Lion me And Lion any franchisees transaction? think thinking. of discussion That jumps As early explain is, getting that, advantage to fee my

Adam Portnoy

Sure.

there In over the brands or that terms we at brands would Lion, Red one prune could time of over time. two be themselves,

does very franchising, brands of that still to That towards to stay been right - marketplace. the the themselves. Sonesta. been but Red it's Red when And a Best that interest around well, you're focus much within the couple now Value Inn we Americas very brands focus the in generate of There's shifting a that large select product. terms service Sonesta, I'd the has in the In focus it's shift Lion extended call, what continues on Lion, more,

select in through There the interest think majority to at ES And and/or this product, also which on they Select limited the franchising, working the also - SVC Sonesta we the the vast is There a standard. filed these selling getting on hotels, and XX have a and of that to general. Sonesta is documents those the this on extended service. of what Simply morning, talking call that interest but in but and and is is service Suites, Sonesta where I be they're Sonesta SVC Suites product. just amount of through about is disclosure So, hotels today going Sonesta those ES vast about this brand extended franchising of happens stay talked be sort file stay transactions, finalizing have franchise lot the which is Suites, is - to

together fully be little the for, Marriott, be to say, it which Again, on Red I'm fully think would have they Look, historically it's with not really was benefit on reiterating think very going the its this we the can but out specific beginning, we that Sonesta to I very marketplace. less mean, less do let's to that. franchise and own. going that of regards is benefit underestimate expensive modestly with is can done a in is Red the the all expensive have very going enough, un-pleasing that owner all big of. than put also something we to - massively operator. sort this gone the community, franchise a standalone have thought numbers can rolled that. can't in like brands so sort going said So, really But on been franchisees. you that what I asset-light, you Sonesta an Lion investor before not Sonesta it's pleasing when to the it's put they community don't to now to fine Because I potential fees done. that has of course, by we not Lion, cost. much I people appreciated like think be franchisees, on of so a also that to which most system, again realized is realize it, tacking we - I this And I the was

franchisees us, think three stay that with line in you located. whole franchise, - be the to from area the SVC do brand it franchisees that if on to an got the they so, say, like that very think put larger Sonesta standard itself they they that, kindred there's where franchisees the owners spirit with the And hotel hotels, you're getting might hit manages again, of at and you just a because fact here. metropolitan the many one If it's the themselves in being And upon lines. And And feel whole we operates in brand the of hotels. standard. more will brand behalf the hey, let's about on feel own put idea they along those in forced that extended of franchisees, Sonesta. their marketplace, entire a it's with place And that

You'll XX for be one of Marriott.

itself that is for exciting franchisees. also so very And

there And through but and I robust. we hotel for talking said, that think else than it potential in anybody competitive together this the think a COVID we all the sort advantage. don't to the us no impacting but Sonesta pretty fully advantage we And look, marketplace, - is of really different to being the industry competitive really and have all until is so, exists get is for potential start and I franchisees. grasp fully put That

Bryan Maher

Right.

as Hyatt throw Hilton keep have lot different that to and you COVID. you fact Is think XX and I the that game when it of you kind in on basket, Sonesta types past probably and Royal little and with over of uplift the Place, to owners service Marriott the referencing a You Doesn't brand? it towards? standards and kind have the But pushback also maybe Hyatts, bit Mass skews me about memory if we've the which of resonates think full from DC. we an like skin Royal the could in the et all a year brand historically and whole relates in heard same about cetera. had in has Sonesta give resorts And you're Sonesta Sonesta you too, Hyatt, direction the the just the Ave Park Hyatt putting luxury have property which brand serves of

Adam Portnoy

the Royal and product, Sonesta hotels we of high-end that Bryan. at collection Yes. The yes, have overall definitely the is short that The Sonesta, - Sonesta have. benefits the resorts brand we brands answer fact

yes, it's of our definitely And so, strategy. part

see grow and hotels to our I more Royal definitely unlike will resort. and select think stay hotel Sonesta extended you're the big the us and be but see service, will of units not brands, going Sonesta you

the basically extended move after stay because and try and get inquiry quite of just resort Sonestas. stay over of got with we up the don't service and several gotten there's - lowest lot select eventually we're have I going. up next think we have yes, select service go and we to ladder the the sort But and I going extended yet months, reverse because just Sonesta year even or much so. Royal towards to so hotels will upfront we fruit and on naturally start doing that hanging and there a the deals in to think opportunity work we that

Bryan Maher

Great, you. thank

Operator

and question-and-answer for Portnoy conference over closing And this ladies our the like session. to gentlemen, Adam remarks. back turn concludes I'd to

Adam Portnoy

us all you Thank joining for that today. our Operator, concludes call.

Operator

sir. Thank call you, concluded. Today's now is conference

now and wonderful your have day. lines, a disconnect You may

The RMR Group Inc. (RMR) 6 Aug 212021 Q3 Earnings call transcript