One of the benefits of the recent market selloff is the emergence of new opportunities to deploy capital at higher yields.Roberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquidity of pan-Baltic capital markets. Other policy-level work includes the development of national SOE financing guidel ...

Financial Data and Key Metrics Changes - Comparable hotels total revenue was $329 million for Q4 2024 and $1.4 billion for the full year, up approximately 4% and 2.5% compared to the same periods in 2023 [26] - Fourth quarter adjusted EBITDARE increased by approximately 7% and modified funds from operations (MFFO) rose by approximately 6% compared to Q4 2023 [10][36] - Comparable hotels RevPAR for Q4 was $109, up approximately 3%, with ADR at $153, up approximately 1%, and occupancy at 71%, up 2% compared to Q4 2023 [27] Business Line Data and Key Metrics Changes - The company achieved comparable hotels RevPAR growth of approximately 3% for Q4 and more than 1% for the full year, driven by improvements in both ADR and occupancy [9] - Comparable hotels occupancy for the full year was 75%, approximately 1% higher than 2023, while comparable hotels ADR was $159, up approximately 1% [27] Market Data and Key Metrics Changes - Approximately 55% of the company's hotels had no new upper upscale, upscale, or upper midscale product under construction within a five-mile radius at the end of Q4 [11] - The company noted that supply-demand dynamics remain favorable, with limited supply growth improving the overall risk profile of the portfolio [11] Company Strategy and Development Direction - The company continues to monitor its distribution rate and timing relative to hotel performance and potential capital uses, maintaining a disciplined approach to capital allocation [12][13] - The company has focused on optimizing its portfolio through strategic acquisitions and dispositions, with recent sales of six hotels for over $63 million [14][15] - The company plans to invest between $80 million and $90 million in capital expenditures during 2025, focusing on major renovations at approximately 20 hotels [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to produce strong returns for investors over the coming years, citing stable operating fundamentals and favorable supply-demand dynamics [22][23] - The outlook for 2025 includes expectations for net income between $173 million and $202 million, with comparable hotels RevPAR change projected between 1% and 3% [39][41] Other Important Information - The company paid distributions totaling $0.24 per common share during Q4, bringing the annual payout to approximately $244 million or $1.01 per common share [12][37] - The company has approximately $1.5 billion of total debt outstanding, with a weighted average interest rate of 4.7% and a debt maturity profile averaging three years [37][38] Q&A Session Summary Question: What operating expense growth has been assumed in the 2025 guidance? - Management indicated that normalizing for fixed cost hurdles, the assumed increase for total hotel expenses is around 4.2% at the midpoint, with variable expenses outside of fixed costs around 3.5% [49][50] Question: What percentage of the portfolio is considered non-core? - Management stated that between 7% and 10% of the portfolio fits the category of smaller hotels in tertiary markets with outsized CapEx needs [52] Question: How close is the midweek ADR to weekend ADR? - Management noted that midweek ADR continues to lag behind weekend ADR, with approximately 5% to go relative to pre-pandemic levels for meaningful rate growth [60][61] Question: What is the outlook for wage benefit growth this year? - Management expects wage benefit growth to be between 3.5% and 4% [130] Question: What is the company's strategy regarding capital redeployment? - Management highlighted that share repurchases have been the most attractive opportunity for redeployment, while also considering acquisitions based on market conditions [80][81]

Financial Performance - The Company reported an ADR of $158.94 for 2024, a 0.5% increase from $158.09 in 2023[22] - Occupancy rate improved to 75.1% in 2024, up from 74.4% in 2023, reflecting a 0.9% increase[22] - RevPAR increased by 1.4% to $119.36 in 2024, compared to $117.67 in 2023[22] - The Company anticipates low single-digit RevPAR growth for its Comparable Hotels in 2025 compared to 2024[22] Acquisitions and Sales - The Company acquired two hotels in 2024 for a total of $196.3 million, funded through property sales and a $650 million revolving credit facility[23] - Six hotels were sold in 2024 for a combined gross sales price of approximately $63.4 million, resulting in a gain of approximately $19.7 million[26] Capital Expenditures and Investments - The Company plans to invest approximately $80 million to $90 million in capital improvements during 2025, following $78.3 million in 2024[36] - The Company plans to use future net proceeds from the ATM Program for acquisitions, debt repayment, capital expenditures, and working capital[43] Debt and Financing - As of December 31, 2024, the Company had approximately $1.5 billion in total outstanding debt with a weighted-average interest rate of 4.71%[39] - The unused borrowing capacity under the Revolving Credit Facility was $567.5 million as of December 31, 2024, available for acquisitions and renovations[40] - Approximately $362.5 million, or 25% of total debt, was subject to variable interest rates as of December 31, 2024, with a potential $3.6 million impact on annual net income for every 100 basis points change in interest rates[230] - The Company has 12 interest rate swap agreements that fix interest payments on approximately $735.0 million of variable-rate debt, with maturities ranging from May 2025 to December 2029[231] - Total debt maturities are projected to reach $1,476.8 million by 2029, with an average interest rate decreasing from 4.7% in 2025 to 3.6% in 2029[233] - Variable-rate debt maturities total $1,097.5 million, with the average interest rate declining from 5.0% in 2025 to 3.3% in 2029[233] - Fixed-rate debt maturities amount to $379.3 million, with average interest rates ranging from 4.0% to 3.6% over the years 2025 to 2029[233] Shareholder Returns - Approximately $300.8 million remained available for share repurchases under the Share Repurchase Program as of December 31, 2024[29] - The Company entered into an equity distribution agreement allowing the sale of up to $500 million of common shares under the ATM Program, with no shares sold in 2024[42] - In 2023, the Company sold approximately 12.8 million shares under the Prior ATM Program at an average price of $17.05 per share, generating gross proceeds of approximately $218.6 million[42] - The annualized distribution rate was $0.96 per common share as of December 31, 2024, with a combined distribution of $0.13 per common share paid in January 2025[44] Risk Management and Corporate Responsibility - The Company maintains insurance coverage for various risks, including general liability and property, but certain catastrophic losses may not be insurable[45] - The hotel industry is seasonal, with higher occupancy and revenues typically in the second and third quarters, which may lead to quarterly revenue fluctuations[56] - The Company is committed to corporate responsibility, focusing on sustainable practices and community engagement through initiatives like Apple Gives[51] Workforce and Diversity - As of December 31, 2024, the Company had 65 team members, emphasizing a diverse and inclusive work environment with competitive benefits[52]

Financial Performance - Net income for Q4 2024 was $29.8 million, a 43.6% increase from $20.8 million in Q4 2023; full year net income reached $214.1 million, up 20.6% from $177.5 million in 2023[2] - Adjusted EBITDAre for Q4 2024 was approximately $97 million, a 7% increase from the same period in 2023; full year Adjusted EBITDAre was $467 million, also up 7%[10] - Total revenue for the year ended December 31, 2024, was $1,431,468,000, an increase of 6.5% compared to $1,343,800,000 in 2023[35] - Operating income for the three months ended December 31, 2024, was $49,903,000, up 28.3% from $38,910,000 in the same period of 2023[37] - Operating margin for the year ended December 31, 2024, improved to 20.5%, up 210 basis points from 18.4% in 2023[37] Hotel Operations - Comparable Hotels RevPAR grew approximately 3% in Q4 2024 and over 1% for the full year 2024 compared to the same periods in 2023[5] - Comparable Hotels Adjusted Hotel EBITDA for Q4 2024 was approximately $108 million, a 3% increase from Q4 2023; full year Comparable Hotels Adjusted Hotel EBITDA was $509 million, a slight improvement over 2023[9] - Average Daily Rate (ADR) for Comparable Hotels was $152.97 in Q4 2024, up 0.6% from Q4 2023; full year ADR was $158.94, up 0.5%[9] - Occupancy rate for Comparable Hotels was 71.3% for the three months ended December 31, 2024, compared to 69.9% in 2023, reflecting a 2.0% increase[37] Capital Expenditures and Investments - The Company invested approximately $78 million in capital expenditures during 2024 and anticipates investing between $80 million and $90 million in 2025[18] - The Company acquired two hotels for approximately $196 million and sold six non-core hotels for over $63 million during 2024[6] - The Company sold six hotels in 2024 for a combined gross sales price of approximately $63.4 million, resulting in a gain of approximately $19.7 million[14] Debt and Financial Position - Total debt to total capitalization, net of cash and cash equivalents, was approximately 28% as of December 31, 2024[12] - The Company maintained a strong balance sheet with total debt outstanding of $0 as of December 31, 2024[2] - As of December 31, 2024, the Company had approximately $1.5 billion in total outstanding debt with a weighted-average interest rate of approximately 4.7%[19] - Total liabilities as of December 31, 2024, were $1,704,061,000, an increase from $1,613,317,000 in 2023[34] Shareholder Returns - Distributions paid per share remained stable at $0.24 for Q4 2024, with an annualized yield of approximately 6.5% based on the stock price of $14.76[12] - The Company paid distributions totaling $1.01 per common share for the year ended December 31, 2024, amounting to approximately $243.7 million[22] - The Company repurchased approximately 2.4 million common shares at a weighted-average price of approximately $14.16 per share, totaling approximately $34.7 million in 2024[20] Future Guidance - For 2025, the Company anticipates net income guidance between $173 million and $202 million, with Comparable Hotels RevPAR Change guidance of 1.0% to 3.0%[24] - The company's net income guidance for the year ending December 31, 2025, ranges from $173,214 thousand to $202,114 thousand[64] - EBITDA is projected to be between $443,422 thousand and $467,722 thousand for the same period[64] Market Performance - The overall performance in the top 20 markets indicates a recovery trend, with several markets showing significant growth in both occupancy and revenue metrics[71] - The average Adjusted ADR across all top 20 markets was $162.00, a slight increase of 0.2% from $161.61 in Q4 2023[71] - The hotel occupancy rate in the top 20 markets improved to 73.3%, up from 66.8% in the previous year, indicating a 9.7% increase[77] Operational Efficiency - The operating margin for Q1 2024 is 21.7%, an improvement from 15.8% in Q1 2023, indicating enhanced operational efficiency[49] - Total portfolio occupancy increased to 75.1% in 2024 from 74.4% in 2023, a change of 0.9%[80] - The suburban segment contributed 44.1% to the adjusted hotel EBITDA in YTD 2024, with an occupancy rate of 75.5%[96]

Core Viewpoint - The article emphasizes the importance of value investing and highlights specific stocks, particularly Apple Hospitality REIT (APLE) and Xenia Hotels & Resorts (XHR), as strong candidates for value investors based on their financial metrics and rankings [2][9]. Company Analysis - Apple Hospitality REIT (APLE) has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4]. - APLE's current P/E ratio is 9.46, significantly lower than the industry average of 15.14, suggesting it may be undervalued [4]. - The stock's Forward P/E has fluctuated between 8.35 and 10.93 over the past year, with a median of 9.42 [4]. - APLE's P/B ratio is 1.11, compared to the industry's average of 1.77, indicating an attractive valuation [5]. - The P/S ratio for APLE is 2.51, while the industry average is 4, further supporting the notion of undervaluation [6]. - APLE's P/CF ratio stands at 9.33, well below the industry's average of 16, reinforcing its appeal as a value stock [7]. Industry Comparison - Xenia Hotels & Resorts (XHR) also holds a Zacks Rank of 2 (Buy) and a Value grade of A, making it another attractive option for value investors [8]. - XHR's P/B ratio is 1.13, which is lower than the industry average of 1.77, indicating potential undervaluation [8]. - The valuation metrics for both APLE and XHR suggest that they are likely undervalued compared to their peers, making them standout options in the current market [9].

Core Viewpoint - The article emphasizes the importance of value investing and highlights Apple Hospitality REIT (APLE) as a strong candidate for value investors due to its favorable valuation metrics [2][4][8]. Company Overview - Apple Hospitality REIT (APLE) currently holds a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential for value investors [4]. - The stock is trading at a P/E ratio of 9.63, significantly lower than the industry average of 14.92, suggesting it may be undervalued [4]. Valuation Metrics - APLE has a P/B ratio of 1.14, which is below the industry average of 1.75, indicating a solid valuation compared to its peers [5]. - The P/S ratio for APLE stands at 2.62, compared to the industry's average of 3.95, further supporting the notion of undervaluation [6]. - The P/CF ratio for APLE is 9.59, which is attractive when compared to the industry average of 15.81, reinforcing its status as a potentially undervalued stock [7]. Investment Outlook - The combination of APLE's strong earnings outlook and favorable valuation metrics positions it as an impressive value stock in the current market [8].

Group 1 - Investors are anticipating that interest rates will remain stable or gradually decline over the next year, with 87% expecting at least one rate cut in 2025 [1] Group 2 - A majority of investors are optimistic about the potential for interest rate reductions, indicating a shift in market sentiment [1]

Company Overview - Brad Thomas has over 30 years of real estate investing experience and has been involved in over $1B in commercial real estate transactions [2] - Brad Thomas is the author of four books, including "REITs For Dummies" [2] - Brad Thomas co-leads the investing group iREIT®+HOYA Capital, which covers REITs, BDCs, MLPs, Preferreds, and other income-oriented alternatives [1] - The iREIT®+HOYA Capital team has a combined 100+ years of experience, including former hedge fund managers, portfolio managers, and advisors to a former U.S. President [1] Services and Offerings - iREIT® on Alpha provides in-depth research on REITs, mREIT, Preferreds, BDCs, MLPs, ETFs, Builders, and Asset Managers [1] - The iREIT® Tracker offers data on over 250 tickers, including quality scores, buy targets, and trim targets [1] Historical Context - Around the end of 2002, Brad Thomas co-owned over $100 million of commercial real estate, primarily shopping centers and net lease buildings [1]

Core Viewpoint - The article highlights 11 REITs that provide high-yield and safe dividend payouts, targeting cautious investors focused on income generation rather than share price fluctuations [1]. Group 1 - The identified REITs are suitable for investors seeking stable income without significant concern for the underlying share price [1]. - The article emphasizes the importance of cautious investment strategies in the current market environment [1].

Financial Data and Key Metrics Changes - Comparable hotels RevPAR growth was approximately 1% compared to Q3 2023, driven entirely by improvement in rate [8][10] - Third quarter adjusted EBITDAre was $129 million, up approximately 6% compared to Q3 2023, while modified funds from operations was $107 million, up approximately 3% [10][37] - Total revenue for comparable hotels was $378 million for Q3, up approximately 2% year-to-date through September [28] Business Line Data and Key Metrics Changes - Comparable hotels ADR was $163, up more than 1%, and occupancy was 77%, essentially flat compared to Q3 2023 [28] - Total hotel expenses increased year-over-year by 2.7% for Q3, decelerating from previous quarters [34] - Comparable Hotels Adjusted Hotel EBITDA margin was 36.8% for the quarter, down only 60 basis points compared to Q3 2023 [37] Market Data and Key Metrics Changes - Supply-demand dynamics remain favorable, with approximately 54% of hotels not having new upper upscale or upper midscale products under construction within a five-mile radius [11] - Actual rooms under construction within the same radius decreased by 7% year-over-year [11] - October preliminary results showed RevPAR up approximately 4% compared to October 2023 [10] Company Strategy and Development Direction - The company is focused on disciplined capital allocation, optimizing portfolio concentration through strategic dispositions and acquisitions [13][21] - Recent acquisitions have produced strong yields, with the seven hotels acquired since June yielding an unlevered 9% [19] - The company plans to continue investing in capital expenditures, expecting to spend between $75 million and $85 million during 2024 [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of leisure travel and the continued improvement in business travel demand [25][26] - The operating environment is stable with favorable supply and demand dynamics, positioning the company for continued strong performance [45] - Management anticipates continued growth in midweek occupancy and rates, with a positive outlook for 2025 [54][56] Other Important Information - The company repurchased approximately 1.4 million common shares at an average price of $14.02 per share during Q3 [17] - Total debt outstanding as of September 30, 2024, was approximately $1.5 billion, with a weighted average interest rate of 4.9% [39] - The company has approximately $301 million remaining under its share repurchase program [41] Q&A Session Summary Question: Update on the disconnect between business transient and leisure rates - Management noted that the gap continues to shrink, with weekday ADR up about 6% relative to 2019 and weekend ADR up about 18% [49] Question: Assumptions for November and December RevPAR - Management projected some RevPAR growth for both November and December based on positive booking trends [51] Question: Expectations for 2025 expense growth - Management indicated that current trends are likely to continue into the coming year [52] Question: Excitement for 2025 and changes expected - Management highlighted the resilience of leisure travel and improvements in midweek occupancy as key factors for optimism [54] Question: Midweek occupancy growth potential - Management indicated there is still room for occupancy growth midweek, with 300 to 750 basis points of opportunity relative to 2019 [64] Question: Overall transaction marketplace and interest in acquisitions - Management noted that while there are ample opportunities, sellers remain reluctant to adjust pricing, leading to fewer transactions [70][72] Question: Group business performance and bookings for next year - Management stated that group business has consistently performed well, with no significant fluctuations expected [74] Question: Impact of shorter booking windows on staffing and planning - Management acknowledged that shorter booking windows require close monitoring of staffing and scheduling [78] Question: Capital allocation strategy regarding asset sales - Management expressed intent to be more aggressive in selling assets if the market remains favorable [82]