Financial Data and Key Metrics Changes - The company reported adjusted net income of $0.28 per share and distributable earnings of $0.40 per share, which were slightly below expectations [5][13] - Recurring service revenues were $45,500,000, a sequential decrease of approximately $1,800,000, primarily due to lower capital spending and declines in enterprise values of managed equity REITs [13] - The company expects recurring service revenues for the next quarter to be between $44,000,000 and $45,000,000 [13] Business Line Data and Key Metrics Changes - The company closed two joint venture acquisitions of residential communities in South Florida for an aggregate transaction value of approximately $196,000,000 [6] - A value-add community shopping center in Chicago was acquired for $21,000,000, which is currently 77% occupied, with plans to increase occupancy and rents [7][8] - The company anticipates the Chicago acquisition to generate EBITDA of approximately $350,000 per quarter in fiscal 2025 [13] Market Data and Key Metrics Changes - The company noted a decrease in new supply in the residential sector, which is expected to support rent growth and occupancy gains heading into 2026 [6] - The company highlighted strong performance from public capital clients, with DHC's SHOP segment seeing a 49% year-over-year improvement in consolidated NOI [9] - SVC's RevPAR improved by 2.6% year over year, outpacing the industry despite renovation activities [10] Company Strategy and Development Direction - The company aims to take advantage of investment opportunities in a volatile market, particularly in the residential sector and value-add retail [5][6] - The strategy includes leveraging existing expertise in retail to establish a track record in value-add retail investments [7][20] - The company plans to grow private capital AUM, which has increased from essentially zero to over $12,000,000,000 in less than five years [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged economic volatility affecting capital expenditures and revenues but remains optimistic about future investment opportunities [5] - The company expects the current fundraising environment to improve as stability returns to interest rates [37] - Management expressed confidence in the sustainability of the dividend, with a payout ratio of approximately 79% [15][32] Other Important Information - The company has $137,000,000 in cash on hand and no corporate debt, positioning it well for strategic opportunities [15] - An annual sustainability report was published, detailing the company's commitment to sustainability across its portfolio [15] Q&A Session Summary Question: Details on the value-add retail acquisition - Management explained that the acquisition is part of a strategy to leverage retail expertise and generate high returns, with plans to build a track record before seeking third-party capital [18][20][23] Question: Outlook on lower construction fees and REIT spending - Management indicated that the current run rate for capital spending is expected to remain low for a couple of quarters due to capital constraints at REIT clients [26] Question: Dividend coverage and capital allocation - Management reassured that the dividend is well covered and emphasized the importance of providing returns to shareholders while also pursuing high-return investments [30][32] Question: Timeline for increased equity capital availability - Management noted that private capital investors are seeking higher returns and expect a more stable environment to encourage increased allocations [36][37] Question: Size of the value-add shopping center portfolio - Management confirmed the Chicago acquisition is a $21,000,000 investment and indicated plans to grow the portfolio to approximately $100,000,000 [42] Question: Impact of asset dispositions on construction supervision revenue - Management clarified that the current revenue figures account for all planned spending and active disposition activities [44]