Q2 2026 Service Properties Trust Earnings Call

August 6, 2026

Operator: Good day, and welcome to the Service Properties Trust Q2 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to hand the call over to Kevin Barry, Senior Director of Investor Relations. Please go ahead.

Speaker #1: zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your telephone keypad.

Speaker #1: To withdraw your question, please press star, then 2. Please note, this event is being recorded. I would now like to hand the call over to Kevin Barry, Senior Director of Investor Relations.

Speaker #1: Please go ahead.

Speaker #2: Good morning. Thank you for joining us today. With me on the call are Chris Bilotto, President and Chief Executive Officer; Jesse Abair, Vice President; and Brian Donley, Treasurer and Chief Financial Officer.

Kevin Barry: Good morning. Thank you for joining us today. With me on the call are Christopher Bilotto, President and Chief Executive Officer, Jesse Abair, Vice President, and Brian Donley, Treasurer and Chief Financial Officer. In just a moment, they will provide details about our business and our performance for the Q2 2026, followed by a question-and-answer session with sell-side analysts. I would like to note that the recording and retransmission of today's conference call is prohibited without the prior written consent of the company. Also note that today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on SVC's beliefs and expectations as of today, 6 August 2026, and actual results may differ materially from those that we project.

Kevin Barry: Good morning. Thank you for joining us today. With me on the call are Chris Bilotto, President and Chief Executive Officer, Jesse Abair, Vice President, and Brian Donley, Treasurer and Chief Financial Officer. In just a moment, they will provide details about our business and our performance for the Q2 2026, followed by a question-and-answer session with sell-side analysts. I would like to note that the recording and retransmission of today's conference call is prohibited without the prior written consent of the company. Also note that today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on SVC's beliefs and expectations as of today, 6 August 2026, and actual results may differ materially from those that we project.

Speaker #2: In just a moment, they will provide details about our business and our performance for the second quarter of 2026, followed by a question-and-answer session with sell-side analysts.

Speaker #2: I would like to note that the recording and retransmission of today's conference call is prohibited without the prior written consent of the company. I also note that today's conference call contains forward-looking statements within the meaning of the private securities litigation reform act of 1995 and other securities laws.

Speaker #2: These forward-looking statements are based on SVC's beliefs and expectations as of today, August 6, 2026, and actual results may differ materially from those that we project.

Speaker #2: The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call. Additional information concerning factors that could cause those differences is contained in our filings with the securities and exchange commission, which can be accessed from our website at svcreit.com or the SEC's website.

Kevin Barry: The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call. Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission, which can be accessed from our website at svcreit.com or the SEC's website. Investors are cautioned not to place undue reliance upon any forward-looking statements. In addition, this call may contain non-GAAP financial measures, including normalized funds from operations or normalized FFO, and Adjusted EBITDAre. A reconciliation of these non-GAAP figures to net income is available in SVC's earnings release presentation that we issued last night, which can be found on our website. Lastly, we will be providing guidance on this call, including estimated 2026 normalized FFO, hotel EBITDA, net operating income or NOI, and Adjusted EBITDAre.

Speaker #2: Investors are cautioned not to place undue reliance upon any forward-looking statements. In addition, this call may contain non-GAAP financial measures, including normalized funds from operations or normalized FFO, and adjusted EBITDA/RE, a reconciliation of these non-GAAP figures, the net income as available in SVC's earnings release presentation that we issued last night, which can be found on our website.

Speaker #2: Lastly, we will be providing guidance on this call, including estimated 2026 normalized FFO, hotel EBITDA, net operating income or NOI, and adjusted EBITDA/RE. We are not providing a reconciliation of these non-GAAP measures as part of our guidance because certain information required for such reconciliation is not available without unreasonable efforts or at all.

Kevin Barry: We are not providing a reconciliation of these non-GAAP measures as part of our guidance because certain information required for such reconciliation is not available without unreasonable efforts or at all. I will now turn the call over to Chris.

Speaker #2: I will now turn the call over to Chris.

Speaker #3: Thank you, Kevin. Good morning, everyone, and thank you for joining the call today. I will begin today's call with an update on our strategic priorities and highlights from our hotel portfolio performance during the second quarter.

Christopher Bilotto: Thank you, Kevin. Good morning, everyone, and thank you for joining the call today. I will begin today's call with an update on our strategic priorities and highlights from our hotel portfolio performance during Q2. Jesse will then discuss our net lease business, and Brian will conclude with a review of our financial results, balance sheet, and outlook. Last night, we reported Q2 results that reflect continued momentum advancing SVC's strategic priorities and strengthening the company's financial profile. Our net lease portfolio delivered steady NOI growth, providing a highly predictable cash flow stream that anchors our portfolio. Within our hotel segment, RevPAR outperformed the industry benchmark for the seventh consecutive quarter. Overall, Normalized FFO per share of $0.43 was in line with consensus expectations, and we are maintaining our full year earnings guidance.

Chris Bilotto: Thank you, Kevin. Good morning, everyone, and thank you for joining the call today. I will begin today's call with an update on our strategic priorities and highlights from our hotel portfolio performance during Q2. Jesse will then discuss our net lease business, and Brian will conclude with a review of our financial results, balance sheet, and outlook. Last night, we reported Q2 results that reflect continued momentum advancing SVC's strategic priorities and strengthening the company's financial profile. Our net lease portfolio delivered steady NOI growth, providing a highly predictable cash flow stream that anchors our portfolio. Within our hotel segment, RevPAR outperformed the industry benchmark for the seventh consecutive quarter. Overall, Normalized FFO per share of $0.43 was in line with consensus expectations, and we are maintaining our full year earnings guidance.

Speaker #3: Jesse will then discuss our net lease business, and Brian will conclude with review of our financial results balance sheet and outlook. Last night, we reported second quarter results that reflect continued momentum, advancing SVC's strategic priorities and strengthening the company's financial profile.

Speaker #3: Our net lease portfolio delivered steady NOI growth, providing a highly predictable cash flow stream that anchors our portfolio. And within our hotel segment, RevPAR outperformed the industry benchmark for the seventh consecutive quarter.

Speaker #3: Overall, normalized FFO per share of 43 cents was in line with consensus expectations, and we are maintaining our full year earnings guidance. Starting with our strategic priorities, we remain focused on enhancing our net lease portfolio, improving the cash flows, and offering performance of our retained hotel portfolio and further enhancing our balance sheet through disciplined capital allocation.

Christopher Bilotto: Starting with our strategic priorities, we remain focused on enhancing our net lease portfolio, improving the cash flows and operating performance of our retained hotel portfolio, and further enhancing our balance sheet through disciplined capital allocation. Since the beginning of Q2, we have sold 20 properties for approximately $32 million, including 19 net lease assets and one hotel. A portion of these proceeds, combined with over $540 million of net proceeds from SVC's successful equity offering in April, was used to redeem $550 million of unsecured debt, reducing our leverage profile and decreasing annual interest expense while providing the company with enhanced flexibility to focus on operational execution and cash flow growth. Turning to hotel performance. Our retained hotel portfolio, excluding the 15 sales hotels, delivered another quarter of improved operating results.

Chris Bilotto: Starting with our strategic priorities, we remain focused on enhancing our net lease portfolio, improving the cash flows and operating performance of our retained hotel portfolio, and further enhancing our balance sheet through disciplined capital allocation. Since the beginning of Q2, we have sold 20 properties for approximately $32 million, including 19 net lease assets and one hotel. A portion of these proceeds, combined with over $540 million of net proceeds from SVC's successful equity offering in April, was used to redeem $550 million of unsecured debt, reducing our leverage profile and decreasing annual interest expense while providing the company with enhanced flexibility to focus on operational execution and cash flow growth. Turning to hotel performance. Our retained hotel portfolio, excluding the 15 sales hotels, delivered another quarter of improved operating results.

Speaker #3: Since the beginning of the second quarter, we have sold 20 properties for approximately $32 million including 19 net lease assets and 1 hotel. A portion of these proceeds, combined with over $540 million of net proceeds from SVC's successful equity offering in April, was used to redeem $550 million of unsecured debt, reducing our leverage profile and decreasing annual interest expense while providing the company with enhanced flexibility to focus on operational growth.

Speaker #3: Turning to hotel performance, our retained hotel portfolio excluding the 15 sales hotels, delivered another quarter of improved operating results. RevPAR increased 6.6% year over year, with balance growth and occupancy in ADR.

Christopher Bilotto: RevPAR increased 6.6% year over year with balanced growth in occupancy and ADR and relative strength in full service and upper upscale hotels. RevPAR growth was partially offset by expected displacement related to our active redevelopment and renovation projects, most notably the Nautilus South Beach. Excluding the Nautilus short-term disruption, underlying RevPAR growth across the balance of the portfolio was meaningfully stronger at 9%, reinforcing our confidence in the improved fundamentals in our portfolio. The portfolio continued to benefit from completed renovations, a 22% lift in contract segment revenue, as well as rate-driven demand related to World Cup in select host cities. Importantly, this positive momentum has carried into Q3, with preliminary July RevPAR for our retained hotel portfolio of 7.1% year over year.

Chris Bilotto: RevPAR increased 6.6% year over year with balanced growth in occupancy and ADR and relative strength in full service and upper upscale hotels. RevPAR growth was partially offset by expected displacement related to our active redevelopment and renovation projects, most notably the Nautilus South Beach. Excluding the Nautilus short-term disruption, underlying RevPAR growth across the balance of the portfolio was meaningfully stronger at 9%, reinforcing our confidence in the improved fundamentals in our portfolio. The portfolio continued to benefit from completed renovations, a 22% lift in contract segment revenue, as well as rate-driven demand related to World Cup in select host cities. Importantly, this positive momentum has carried into Q3, with preliminary July RevPAR for our retained hotel portfolio of 7.1% year over year.

Speaker #3: And relative strength in full service and upper upscale hotels. RevPAR growth was partially offset by expected displacement related to our active redevelopment and renovation projects, most notably the Nautilus South Beach.

Speaker #3: Excluding the Nautilus short-term disruption, underlying RevPAR growth across the balance of the portfolio was meaningfully stronger at 9%, reinforcing our confidence in the improved fundamentals in our portfolio.

Speaker #3: The portfolio continued to benefit from completed renovations, a 22% lift in contract segment revenue, as well as rate-driven demand related to World Cup and Selecto cities.

Speaker #3: Importantly, this positive momentum has carried into the third quarter, with preliminary July RevPAR for our retained hotel portfolio up 7.1% year over year. Retained hotel EBITDA increased 4.2% this quarter, with notable strengths at the Sonesta properties in Hilton Head and Miami Airport, as well as the Radisson in Salt Lake City.

Christopher Bilotto: Retained hotel EBITDA increased 4.2% this quarter, with notable strengths at the Sonesta properties in Hilton Head and Miami Airport, as well as Radisson in Salt Lake City. To put this performance into context, our retained hotel portfolio generated a quarterly adjusted hotel EBITDA margin of approximately 19.4%. By comparison, the 15 hotels we are exiting operated at a negative EBITDA margin over that same period. This gap is the core economic logic behind our capital recycling strategy. Rather than continuing to dedicate capital and management attention to a cohort of assets with structurally negative returns, we are redirecting those resources toward a retained portfolio that is already demonstrating a clear trajectory of margin improvement. Building on this, we see significant additional opportunities for improved profitability across our retained hotel portfolio.

Chris Bilotto: Retained hotel EBITDA increased 4.2% this quarter, with notable strengths at the Sonesta properties in Hilton Head and Miami Airport, as well as Radisson in Salt Lake City. To put this performance into context, our retained hotel portfolio generated a quarterly adjusted hotel EBITDA margin of approximately 19.4%. By comparison, the 15 hotels we are exiting operated at a negative EBITDA margin over that same period. This gap is the core economic logic behind our capital recycling strategy. Rather than continuing to dedicate capital and management attention to a cohort of assets with structurally negative returns, we are redirecting those resources toward a retained portfolio that is already demonstrating a clear trajectory of margin improvement. Building on this, we see significant additional opportunities for improved profitability across our retained hotel portfolio.

Speaker #3: To put this performance into context, our retained hotel portfolio generated a quarterly adjusted hotel EBITDA margin of approximately 19.4%. By comparison, the 15 hotels we are exiting operated at a negative EBITDA margin over that same period.

Speaker #3: This gap is the core economic logic behind our capital recycling strategy. Rather than continuing to dedicate capital and management attention to a cohort of assets with structurally negative returns, we are redirecting those resources toward a retained portfolio that is already demonstrating a clear trajectory of margin improvement.

Speaker #3: Building on this, we see significant additional opportunities for improved profitability across our retained hotel portfolio. Our asset management group continues to work with our operators on several opportunities to expand hotel EBITDA margins both at Sonesta and our other operators.

Christopher Bilotto: Our asset management group continues to work with our operators on several opportunities to expand hotel EBITDA margins, both at Sonesta and our other operators. These efforts are initially centered on three primary pillars. The first pillar relates to revenue optimization, targeting customer acquisition costs by driving more business to the direct and most profitable channels like brand.com, therefore reducing reliance on higher cost OTAs. This also includes a continued focus on driving contract and group base, along with ancillary revenue streams such as food and beverage and parking. Second, in support of improved labor efficiency, our operators are implementing a leaner and more dynamic labor model to better align staffing with demand and reduce reliance on costly contract labor. Within the quarter, we are already seeing the benefits of this with Sonesta, Radisson, and IHG all improving labor productivity year over year.

Chris Bilotto: Our asset management group continues to work with our operators on several opportunities to expand hotel EBITDA margins, both at Sonesta and our other operators. These efforts are initially centered on three primary pillars. The first pillar relates to revenue optimization, targeting customer acquisition costs by driving more business to the direct and most profitable channels like brand.com, therefore reducing reliance on higher cost OTAs. This also includes a continued focus on driving contract and group base, along with ancillary revenue streams such as food and beverage and parking. Second, in support of improved labor efficiency, our operators are implementing a leaner and more dynamic labor model to better align staffing with demand and reduce reliance on costly contract labor. Within the quarter, we are already seeing the benefits of this with Sonesta, Radisson, and IHG all improving labor productivity year over year.

Speaker #3: These efforts are initially centered on three primary pillars. The first pillar relates to revenue optimization, targeting customer acquisition costs by driving more business to the direct and most profitable channels like brand.com, therefore reducing reliance on higher-cost OTAs.

Speaker #3: This also includes a continued focus on driving contract and group-based, along with ancillary revenue streams such as food and beverage and parking. Second, in support of improved labor efficiency, our operators are implementing a leaner and more dynamic labor model to better align staffing with demand and reduce reliance on costly contract labor.

Speaker #3: Within the quarter, we are already seeing the benefits of this with Sonesta, Radisson, and IHG all improving labor productivity year over year. The third pillar relates to capitalizing on operating leverage with anticipated savings from benefits plans, property insurance, utility costs.

Christopher Bilotto: The third pillar relates to capitalizing on operating leverage with anticipated savings from benefits plans, property insurance, and diligent controls over energy and utility costs. As our renovated hotels stabilize and occupancy grows, this will provide enhanced pricing power and position the properties to capture additional event-driven demand, which in turn will absorb fixed costs more effectively, ultimately driving profitability. While early in the process, initial benefits are starting to materialize, including seeing the positive trend with labor productivity, a recent 20% reduction in property insurance cost across the portfolio, the noted 22% lift from contract revenue, largely from new airline crew business, and the adoption of certain technologies and processes that will drive margin improvement. As these initiatives progress, we will provide further updates on targeted revenue and expense benefits.

Chris Bilotto: The third pillar relates to capitalizing on operating leverage with anticipated savings from benefits plans, property insurance, and diligent controls over energy and utility costs. As our renovated hotels stabilize and occupancy grows, this will provide enhanced pricing power and position the properties to capture additional event-driven demand, which in turn will absorb fixed costs more effectively, ultimately driving profitability. While early in the process, initial benefits are starting to materialize, including seeing the positive trend with labor productivity, a recent 20% reduction in property insurance cost across the portfolio, the noted 22% lift from contract revenue, largely from new airline crew business, and the adoption of certain technologies and processes that will drive margin improvement. As these initiatives progress, we will provide further updates on targeted revenue and expense benefits.

Speaker #3: As our renovated hotels stabilize and occupancy grows, this will provide enhanced pricing power and position the properties to capture additional event-driven demand which in turn will absorb fixed costs more effectively, ultimately driving profitability.

Speaker #3: While early in the process, initial benefits are positive trend with labor productivity, a recent 20% reduction in property insurance costs across the portfolio, the noted 22% lift from contract revenue, largely from new airline crew business, and the adoption of certain technologies and processes that will drive margin improvement.

Speaker #3: As these initiatives progress, we will provide further updates on targeted revenue and expense benefits. Beyond these initiatives, SVC is positioned to capture meaningful performance upside from the elimination of approximately $15 million of negative EBITDA drag from our exit hotels.

Christopher Bilotto: Beyond these initiatives, SVC is positioned to capture meaningful performance upside from the elimination of approximately $15 million of negative EBITDA drag from our exit hotels, the gradual burn-off of displacement and corresponding performance growth from our hotel renovations, most notably the ongoing redevelopment of the Nautilus in Miami Beach. While these benefits will be realized over time, they provide a roadmap for improvement in hotel EBITDA and cash flow generation, complementing our top-line initiatives focused on driving market share across the portfolio. Turning to our hotel dispositions. We remain on track to sell the previously disclosed 15 hotels, which included the sale of a 133-key hotel in July for $18.4 million. To date, we are under a purchase and sale agreement or letter of intent with 13 hotels and are marketing one hotel.

Chris Bilotto: Beyond these initiatives, SVC is positioned to capture meaningful performance upside from the elimination of approximately $15 million of negative EBITDA drag from our exit hotels, the gradual burn-off of displacement and corresponding performance growth from our hotel renovations, most notably the ongoing redevelopment of the Nautilus in Miami Beach. While these benefits will be realized over time, they provide a roadmap for improvement in hotel EBITDA and cash flow generation, complementing our top-line initiatives focused on driving market share across the portfolio. Turning to our hotel dispositions. We remain on track to sell the previously disclosed 15 hotels, which included the sale of a 133-key hotel in July for $18.4 million. To date, we are under a purchase and sale agreement or letter of intent with 13 hotels and are marketing one hotel.

Speaker #3: The gradual burnoff of displacement and corresponding performance growth from our hotel renovations most notably the ongoing redevelopment of the Nautilus in Miami Beach. While these benefits will be realized over time, they provide a roadmap for improvement in hotel EBITDA and cash flow generation, complementing our top-line initiatives focused on driving market share across the portfolio.

Speaker #3: Turning to our hotel dispositions, we remain on track to sell the previously disclosed 15 hotels, which included the sale of a 133-key hotel in July for $18.4 million.

Speaker #3: To date, we are under a purchase and sale agreement or letter of intent with 13 hotels and are marketing 1 hotel. We expect the majority of the remaining dispositions to be mostly completed over the balance of 2026, with proceeds continuing to support debt reduction and to further improve our financial flexibility.

Christopher Bilotto: We expect the majority of the remaining dispositions to be mostly completed over the balance of 2026, with proceeds continuing to support debt reduction and to further improve our financial flexibility. As part of this process, we also intend to bring to market our remaining IHG managed full-service hotel, a 495-key property located in the Atlanta perimeter submarket. As some may recall, we removed this asset from the marketing process last year while we evaluated varying strategies with the in-place agreement and capital outlook. This followed a comprehensive hold versus sell analysis undertaken as the hotel's management agreement approached its scheduled expiration. While the property has performed well operationally, we believe a sale represents the more attractive path to unlocking value for shareholders, relative to continuing to own and reinvest in the asset. We expect marketing to commence in Q3 and look forward to providing future updates.

Chris Bilotto: We expect the majority of the remaining dispositions to be mostly completed over the balance of 2026, with proceeds continuing to support debt reduction and to further improve our financial flexibility. As part of this process, we also intend to bring to market our remaining IHG managed full-service hotel, a 495-key property located in the Atlanta perimeter submarket. As some may recall, we removed this asset from the marketing process last year while we evaluated varying strategies with the in-place agreement and capital outlook. This followed a comprehensive hold versus sell analysis undertaken as the hotel's management agreement approached its scheduled expiration. While the property has performed well operationally, we believe a sale represents the more attractive path to unlocking value for shareholders, relative to continuing to own and reinvest in the asset. We expect marketing to commence in Q3 and look forward to providing future updates.

Speaker #3: As part of this process, we also intend to bring to market our remaining IHG-managed full-service hotel, a 495-key property located in the Atlanta perimeter submarket.

Speaker #3: As some may recall, we removed this asset from the marketing process last year, while the in-place agreement and capital outlook. This followed a comprehensive hold-versus-sell analysis undertaken as the hotel's management agreement approached its schedule expiration.

Speaker #3: While the property has performed well operationally, we believe a sale represents the more attractive path to unlocking value for shareholders relative to continuing to own and reinvest in the asset.

Speaker #3: We expect marketing to commence in Q3 and look forward to providing future updates. Before I conclude, I would also like to briefly touch on corporate governance.

Christopher Bilotto: Before I conclude, I would also like to briefly touch on corporate governance. As we previously announced, our board continues to actively evaluate candidates for an additional independent trustee. The search remains focused on identifying an individual with meaningful hospitality industry experience who can further complement the board's experience and support SVC's ongoing strategic evolution. Looking ahead, our priorities remain clear. Translate the operating momentum in our retained portfolio into sustained margin and cash flow improvement while completing the exit of our non-core hotels to further strengthen SVC's financial profile. With a stronger balance sheet and the initiatives we have underway to further enhance performance, we believe SVC is well-positioned to unlock value across the portfolio to drive long-term shareholder returns. I will now turn it over to Jesse to discuss the net lease portfolio in more detail.

Chris Bilotto: Before I conclude, I would also like to briefly touch on corporate governance. As we previously announced, our board continues to actively evaluate candidates for an additional independent trustee. The search remains focused on identifying an individual with meaningful hospitality industry experience who can further complement the board's experience and support SVC's ongoing strategic evolution. Looking ahead, our priorities remain clear. Translate the operating momentum in our retained portfolio into sustained margin and cash flow improvement while completing the exit of our non-core hotels to further strengthen SVC's financial profile. With a stronger balance sheet and the initiatives we have underway to further enhance performance, we believe SVC is well-positioned to unlock value across the portfolio to drive long-term shareholder returns. I will now turn it over to Jesse to discuss the net lease portfolio in more detail.

Speaker #3: As we previously announced, our board continues to actively evaluate candidates for an additional independent trustee. The search remains focused on identifying an individual with meaningful hospitality industry experience who can further complement the board's experience and support SVC's ongoing strategic evolution.

Speaker #3: Looking ahead, our priorities remain clear: translate the operating momentum in our retained portfolio into sustained margin and cash flow improvement while completing the exit of our non-core hotels to further strengthen SVC's financial profile.

Speaker #3: With a stronger balance sheet and the initiatives we have underway to further enhance performance, we believe SVC is well positioned to unlock value across the portfolio and drive long-term shareholder returns.

Speaker #3: I will now turn it over to Jesse to discuss the net lease portfolio in more detail.

Speaker #2: Thank you, and good morning. Our net lease assets continue to serve as a dependable source of cash flow for SVC. With minimal capital requirements, long-duration leases, and a diversified tenant base, the portfolio exhibited strong performance in the second quarter, led by meaningful NOI growth, sustained leasing momentum, and continued improvement in the performance of our travel centers.

Jesse Abair: Thank you. Good morning. Our net lease assets continue to serve as a dependable source of cash flow for SVC, with minimal capital requirements, long duration leases, and a diversified tenant base. The portfolio exhibited strong performance in Q2, led by meaningful NOI growth, sustained leasing momentum, and continued improvement in the performance of our travel centers. Highlights from the quarter include an increase of 2.2% in cash basis NOI quarter over quarter as a result of contributions from recent acquisitions, contractual rent growth from our existing leases, and a reduction in our credit reserves. Occupancy was unchanged from the prior quarter at 96.6%, although we expect to see incremental growth in occupancy throughout the remainder of the year, given the current state of our leasing pipeline and our asset management team's dedicated efforts to efficiently dispose of vacant properties and cycle in new brands.

Speaker #2: Highlights from the quarter included increase of 2.2% in cash basis NOI quarter over quarter, as a result of contributions from recent acquisitions, contractual rent growth from our existing leases, and a reduction in our credit reserves.

Speaker #2: Occupancy was unchanged from the prior quarter at 96.6%, although we expect to see incremental growth in occupancy throughout the remainder of the year given the current state of our leasing pipeline and our asset management team's dedicated efforts to efficiently dispose of vacant properties in cycle-in new brands.

Speaker #2: Optimizing our portfolio and developing new operator relationships will be an ongoing focus for our team as we continue to transition SVC toward the net lease side of the business.

Jesse Abair: Optimizing our portfolio and developing new operator relationships will be an ongoing focus for our team as we continue to transition SVC towards the net lease side of the business. The aggregate rent coverage of our portfolio improved to 2.09 times on a trailing 12-month basis. The improvement was driven primarily by our TA travel centers, where rent coverage increased 10 basis points to 1.34 times. This is the second straight quarter of coverage growth for TA and represents a 12% increase since Q4 of last year. For the balance of the portfolio, rent coverage again came in north of three and a half times as tenant credit quality and operating performance remained stable. On the leasing front, our asset management team executed deals totaling 210,000 square feet with a weighted average lease term of roughly seven years.

Speaker #2: The aggregate rent coverage of our portfolio improved to 2.09 times on a trailing 12-month basis, the improvement was driven primarily by our TA travel centers, where rent coverage increased 10 basis points to 1.34 times.

Speaker #2: This is the second straight quarter of coverage growth for TA, and represents a 12% increase since the fourth quarter of last year. For the balance of the portfolio, rent coverage again came in north of 3.5 times as tenant credit quality and operating performance remained stable.

Speaker #2: On the leasing front, our asset management team executed deals totaling $210,000 square feet with a weighted average lease term of roughly 7 years. With just 1% of annualized base rent scheduled to expire through year-end and 3.8% rolling through the end of 2027, our near-term expiration schedule remains very manageable, and our asset management team has been proactively engaging with tenants that have upcoming expirations to negotiate renewals.

Jesse Abair: With just 1% of annualized base rent scheduled to expire through year-end and 3.8% rolling through the end of 2027, our near-term expiration schedule remains very manageable, and our asset management team has been proactively engaging with tenants that have upcoming expirations to negotiate renewals. Turning to capital recycling, we continue to execute our measured growth strategy. On the acquisition side, year to date, we've invested approximately $9 million across four properties operating in the QSR and automotive services industries. These acquisitions were completed at weighted average cash and GAAP cap rates of 7.9% and 8.8% respectively, and carried weighted average lease terms of approximately 15 years. We are under agreement on another five properties, a mix of dollar stores and casual dining concepts, for a total of $14.2 million, which we expect to close in Q3.

Speaker #2: Turning to capital recycling, we continue to execute our measured growth strategy. On the acquisition side, year to date, we've invested approximately $9 million across four properties operating in the QSR and automotive services industries.

Speaker #2: These acquisitions were completed at weighted average cash and gap cap rates of 7.9% and 8.8%, respectively. And carried weighted average lease terms of approximately 15 years.

Speaker #2: We are under agreement on another five properties a mix of dollar stores and casual dining concepts for a total of 14.2 million dollars, which we expect to close in the third quarter.

Speaker #2: These transactions funded through capital recycling put us well ahead of schedule for our target of $25 million of annual acquisition activity. Since the beginning of the year, we have sold 21 properties for $15 million and we expect a similar level of dispositions during the second half of 2026.

Jesse Abair: These transactions, funded through capital recycling, put us well ahead of schedule for our target of $25 million of annual acquisition activity. Since the beginning of the year, we have sold 21 properties for $15 million, and we expect a similar level of dispositions during H2 2026. The net lease portfolio now consists of 745 properties with annualized base rent of nearly $400 million, and a tenant roster that includes 185 businesses operating under more than 140 brands across a diverse range of industries led by travel centers, quick service restaurants, fitness centers, and grocery stores. More than 95% of our annualized base rent is derived from leases that contain contractual rent increases or percentage rent provisions, providing embedded NOI growth and inflation protection over time.

Speaker #2: The net lease portfolio now consists of 745 properties with annualized base rent of nearly $400 million, and a tenant roster that includes 185 businesses operating under more than 140 brands across a diverse range of industries, led by travel centers, quick-service restaurants, fitness centers, and grocery stores.

Speaker #2: More than 95% of our annualized base rent is derived from leases that contain contractual rent increases or percentage rent provisions, providing embedded NOI growth and inflation protection over time.

Speaker #2: As we work to reposition SVC toward a more net lease-oriented company, our focus will be on enhancing portfolio quality maintaining strong occupancy and credit metrics, extending Walt and generating durable cash flow growth.

Jesse Abair: As we work to reposition SVC toward a more net lease oriented company, our focus will be on enhancing portfolio quality, maintaining strong occupancy and credit metrics, extending WALT, and generating durable cash flow growth. We believe our disciplined asset management and capital allocation strategies will ensure SVC's measured transition to a primarily net lease platform. With that, I'll turn the call over to Brian to discuss our financial results.

Speaker #2: We believe our disciplined asset management and capital allocation strategies will ensure SVC's measured transition to a primarily net lease platform. And with that, I'll turn the call over to Brian to discuss our financial results.

Speaker #3: Thank you, Jesse, and good morning. As we previously announced, SVC affected a 1 for 5 reverse share split in early July, and all share information on our earnings report and 10-Q have been retroactively adjusted.

Brian Donley: Thank you, Jesse, and good morning. As we previously announced, SVC affected a one for five reverse share split in early July, and all share information on our earnings report and 10-Q have been retroactively adjusted. Additionally, given SVC's recent equity issuance, comparing per share data to prior periods is not meaningful. Starting with our consolidated financial results for Q2 2026, Normalized FFO was $55 million, down $2.6 million, or 4.5% compared to the prior year quarter. Normalized FFO this quarter as compared to the prior year quarter were primarily impacted by a $20 million decline in hotel results, largely from our hotel disposition activity, partially offset by a $15 million decline in interest expense and a $2.3 million increase in performance from our retained hotels, and a $1.3 million increase in NOI from the net lease portfolio. Turning to our hotel portfolio performance.

Speaker #3: Additionally, given SVC's recent equity issuance, comparing per share data to prior periods is not meaningful. Starting with our consolidated financial results for the second quarter of 2026, normalized FFO was 55 million dollars, down 2.6 million dollars, or 4.5% compared to the prior year quarter.

Speaker #3: Normalized FFO this quarter has compared to the prior year quarter where primarily impacted by a 20 million dollar decline in hotel results largely from our hotel disposition activity, partially offset by a 50 million dollar decline in interest expense, and a 2.3 million dollar increase in performance from our retained hotels and a 1.3 million dollar increase in NOI from the net lease portfolio.

Speaker #3: Turning to our hotel portfolio performance, for our 93 comparable hotels this quarter, repire increased by 6.5%, gross operating profit margin percentage declined by 60 basis points to 28.7%.

Brian Donley: For our 93 comparable hotels this quarter, RevPAR increased by 6.5%. Gross operating profit margin percentage declined by 60 basis points to 28.7%. Below the GOP line, costs at our comparable hotels increased by $3.5 million from the prior year, driven primarily by higher insurance costs. Our 93 comparable hotels generated adjusted hotel EBITDA of $55 million during the quarter, which was relatively flat compared to the prior year quarter. The 78 hotels in our retained portfolio generated RevPAR of $135, an increase of 6.6% year-over-year. The adjusted hotel EBITDA of $57 million during the quarter, representing an increase of 4.2% year-over-year. Excluding the three hotels under renovation, hotel EBITDA increased $6.5 million, or 13.4%.

Speaker #3: Below the GOP line costs at our comparable hotels increased by 3.5 million dollars from the prior year driven primarily by higher insurance costs. Our 93 comparable hotels generated adjusted hotel EBITDA 55 million dollars during the quarter, which was relatively flat compared to the prior year quarter.

Speaker #3: The 78 hotels in our retained portfolio generated repire 135 dollars and increase of 6.6% year over year, and adjusted hotel EBITDA of 57 million dollars during the quarter representing an increase of 4.2% year over year.

Speaker #3: Excluding the three hotels under renovation, hotel EBITDA increased 6.5 million dollars, or 13.4%. The Sonesta Exit Hotels will be the sole of our continuing to market for sale of produced losses of 1.9 million dollars during this quarter.

Brian Donley: The Sonesta exit hotels that are either sold or are continuing to market for sale produced losses of $1.9 million during this quarter, a decline in profitability of $2.2 million year-over-year. NOI from our net lease portfolio increased $1.3 million over the prior year as a result of our acquisition and leasing activity, partially offset by vacancies and credit losses. Turning to the balance sheet. We have been active in the capital markets and took steps to further strengthen our balance sheet, improve our debt maturity profile, and our cash flows. During the quarter, we raised net proceeds of $542 million from our equity offering and redeemed all $450 million of our outstanding 5.5% senior guaranteed unsecured notes due 2027, and the remaining $100 million of outstanding 4.95% senior unsecured notes due 2027. This activity resulted in additional annual cash interest savings of $30 million.

Speaker #3: A decline in profitability of 2.2 million dollars year over year. NOI from our net lease portfolio increased 1.3 million dollars over the year, prior year as a result of our acquisition and leasing activity, partially offset by vacancies and credit losses.

Speaker #3: Turning to the balance sheet, we have been active in the capital markets and took steps to further strengthen our balance sheet, improve our debt maturity profile, and our cash flows.

Speaker #3: During the quarter, we raised net proceeds of 542 million dollars from our equity offering and redeemed all 450 million dollars of our outstanding 5.5% senior guaranteed unsecured notes due 2027, and the remaining 100 million dollars of outstanding 4.95% senior unsecured notes due 2027.

Speaker #3: This activity resulted in an additional annual cash interest savings of 30 million dollars. We currently have 4.7 billion dollars of debt outstanding with a weighted average interest rate of 5.66%.

Brian Donley: We currently have $4.7 billion of debt outstanding with a weighted average interest rate of 5.66%. As of today, there are no amounts outstanding on our $650 million revolving credit facility. This credit facility matures in June 2027, and we have a one-year extension option available to us. Our $580 million of zero coupon senior secured notes mature in September of 2027, and they are supported by strong net lease collateral, which we believe provides refinancing optionality. Turning to our capital expenditure activity. During Q2, we invested $30.5 million in capital improvements, which continue to be driven by the renovation of the Nautilus in Miami, as well as projects at The Royal Sonestas in Boston, New Orleans, and Columbus. Turning to our annual guidance. We are reaffirming our full-year outlook for hotel EBITDA, net lease NOI, and consolidated adjusted EBITDA.

Speaker #3: As of today, there are no amounts outstanding on our 650 million dollar revolving credit facility. This credit facility matures in June 2027, and we have a one-year extension option available to us.

Speaker #3: Our 580 million dollars of zero coupon senior secured notes mature in September of 2027, and their supported by strong net lease collateral, which we believe provides refinancing optionality.

Speaker #3: Turning to our capital expenditure activity, during the second quarter, we reinvested 30.5 million dollars in capital improvements, which continue to be driven by the renovation of the nautilus in Miami as well as projects at the Royal Sonestas in Boston, New Orleans, and Columbus.

Speaker #3: Turning to our annual guidance, we are reaffirming our full-year outlet for hotel EBITDA and net lease NOI and consolidated adjusted EBITDA. We're maintaining our normalized FFO range of 124 to 144 million dollars, or 1 dollar and 20 cents to 1 dollar and 35 cents per share.

Brian Donley: We're maintaining our Normalized FFO range of $124 to $144 million, or $1.20 to $1.35 per share. The per share amounts assume a weighted average share count of 105 million shares. This full-year guidance assumes midpoint interest expense of $360 million and G&A expense of $40 million. This guidance does not reflect the impact of completing the remaining Sonesta hotels planned for disposition, and it continues to assume $25 million of capital recycling on net lease portfolio. We continue to expect total CapEx for the year of $120 million to $140 million. Cash flow available for distribution was $42.5 million for the quarter, and we continue to expect to generate positive CAD for the full year 2026. Operator, that concludes our prepared remarks. We're ready to open the line for questions.

Speaker #3: The per share amounts assume a weighted average share count of 105 million shares. This full-year guidance assumes midpoint interest expense of 360 million dollars and G&A expense of 40 million dollars.

Speaker #3: This guidance does not reflect the impact of completing the remaining Sonesta Hotels plan for disposition, and it continues to assume 25 million dollars of capital recycling on our net lease portfolio.

Speaker #3: We continue to expect total capex of the year for the year of 120 million to 140 million dollars. Cash flow available for distribution was 42.5 million dollars for the quarter, and we continue to expect to generate positive CAD for the full year 2026.

Speaker #3: Operated that concludes our prepared remarks. We're ready to open the line for questions.

Speaker #1: We will now begin with question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the key.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble the roster. Our first question will come from Tyler Batory of Oppenheimer. Please go ahead.

Speaker #1: To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble the roster. In our first question will come from Tyler Battery of Oppenheimer.

Speaker #1: Please go ahead.

Speaker #2: Hey, good morning. Thanks for taking my questions. Few on the hotel portfolio first, and I'm really focused on the retained hotels. Talk a little bit more about the renovation activity that I believe was impacting margin in Q2.

Tyler Batory: Hey, good morning. Thanks for taking my questions. Can you on the hotel portfolio first, and I'm really focused on the retained hotels, talk a little bit more about the renovation activity that I believe was impacting margin in Q2. You talked about a number of initiatives to improve the margin performance at the retained hotels. Just talk through a little bit in terms of the timeline on when some of those initiatives might start to show up in the performance of the margin side of things. Then just remind us again where you'd like to go in terms of moving margin in the retained hotel portfolio.

Speaker #2: And you talked about a number of initiatives to improve the margin performance at the retained hotels. Just talk through a little bit in terms of the timeline on when some of those initiatives might start to show up in the performance of the margin side of things, and then just remind us again where you'd like to go in terms of moving margin in the retained hotel portfolio.

Speaker #3: Hey, good morning, Tyler. This is Brian. I'll start, then Chris will jump in with some of the more forward-looking stuff. Yeah, for the three hotels, we are marked as under renovation.

Brian Donley: Hey, good morning, Tyler. This is Brian. I'll start, then Chris will jump in with some of the more forward-looking stuff. Yeah. For the three hotels we earmarked as under renovation, those hotels, the biggest one is obviously the South Beach property, which we've been talking about. Those hotels generated $1 million of revenue this quarter, it was a $3.3 million decline year over year. One of the three is an exit property, so it's a little bit of noise on both fronts. Nautilus is projected to be completed by the end of October or early November with some phased completions with rooms and public space. That's our biggest project for the year. It's got a lot of financial impacts on both the RevPAR top line and bottom line.

Speaker #3: I mean, those hotels, I mean, the biggest one is obviously the South Beach property, which we've been talking about. But those hotels, generated a million dollars of revenue this quarter, but it was a 3.3 million dollar decline year over year.

Speaker #3: One of the three is an exit property, so it's a little bit of noise on both fronts. But the nautilus is projected to be completed by the end of October, early November, with some phased completions with rooms and public space.

Speaker #3: That's our biggest project for the year. It's got a lot of financial impacts on both the rent part, top line and bottom line. And this Q1, Q2 is the high season for Miami so that was a particular drag in our results.

Brian Donley: This Q1, Q2 is the high season for Miami so that was a particular drag in our results. As we look forward to Q4, we should see a positive uplift from that property, amongst others. Some of the other properties under renovation or that recently completed renovation have also started ramping up. Sonesta Simply Suites in Las Vegas, for example. We're doing work in Cambridge, I mentioned, in New Orleans. There's still a bit of noise and moving pieces.

Speaker #3: But as we look forward to Q4, we should see a positive uplift from that property, amongst others. Some of the other properties under renovation or that have recently completed renovation have also started ramping up.

Speaker #3: We have a simply suites in Las Vegas, for example, where we're doing work in Cambridge, I mentioned, in New Orleans. So there's still a little bit of noise, and they're moving pieces.

Speaker #4: Yeah, I would just add—and kind of to the back half of your question, with respect to some of the initiatives—look, it's iterative, right?

Christopher Bilotto: Yeah, I would just add to the back half of your question, with respect to some of the initiatives. Look, it's iterative, right? This is a broader strategy in line with what we've talked about coming into the year and over even into Q1. I think some of the small wins, we've reduced our property insurance by 20% effective 1 July, so that's a fiscal year. There's also some benefits that come with that with reduced deductible, and so we would expect there to be just less overall costs. Just the insurance premium alone is a couple million dollars for the fiscal year. We're starting to kind of see the inflow of other types of ancillary revenue alongside contract business. Those are all kind of near-term initiatives.

Chris Bilotto: Yeah, I would just add to the back half of your question, with respect to some of the initiatives. Look, it's iterative, right? This is a broader strategy in line with what we've talked about coming into the year and over even into Q1. I think some of the small wins, we've reduced our property insurance by 20% effective 1 July, so that's a fiscal year. There's also some benefits that come with that with reduced deductible, and so we would expect there to be just less overall costs. Just the insurance premium alone is a couple million dollars for the fiscal year. We're starting to kind of see the inflow of other types of ancillary revenue alongside contract business. Those are all kind of near-term initiatives.

Speaker #4: This is kind of a broader strategy, kind of in line with what we've talked about. Coming into the year, and even into Q1, I think some of the small wins—we've reduced our property insurance by 20% effective 7/1.

Speaker #4: So that's a fiscal year and there's also some benefits that come with that, with reduced deductible. And so we would expect there to be kind of just less overall costs just the insurance premium alone is a couple of million dollars.

Speaker #4: For the fiscal year, we're starting to kind of see the inflow of other types of ancillary revenue alongside contract business. So those are all kind of near-term initiatives.

Speaker #4: I think kind of the bigger piece is much more of the work being done. With our operators and Sonesta is a big piece of that.

Christopher Bilotto: I think the bigger piece is much more of the work being done with our operators, and Sonesta is a big piece of that. As you recall, there's a new management team that started there effective 1 August, and I think it goes without saying, kind of giving them room and runway to really dig in and unpack opportunities within the portfolio is something that they've been focused on and many of these strategies are kind of tied to. We would expect for more of that to flow through towards the end of the year and predominantly like some of the bigger things like benefits, in Q1 of next year. I think the idea is that we'll provide kind of more specific numbers tied to these levers after we've given them the needed time to vet through that. Potentially as early as this next Q3.

Chris Bilotto: I think the bigger piece is much more of the work being done with our operators, and Sonesta is a big piece of that. As you recall, there's a new management team that started there effective 1 August, and I think it goes without saying, kind of giving them room and runway to really dig in and unpack opportunities within the portfolio is something that they've been focused on and many of these strategies are kind of tied to. We would expect for more of that to flow through towards the end of the year and predominantly like some of the bigger things like benefits, in Q1 of next year. I think the idea is that we'll provide kind of more specific numbers tied to these levers after we've given them the needed time to vet through that. Potentially as early as this next Q3.

Speaker #4: As you recall, there's a new management team that started there effective August 1st, and I think it goes without saying kind of giving them room and runway to really kind of dig in and unpack the opportunities within the portfolio is something that they've been focused on in many of these strategies are kind of tied to.

Speaker #4: And so we would expect for more of that to flow through towards the end of the year. And predominantly, some of the bigger things like benefits in Q1 of next year.

Speaker #4: And I think provide kind of more specific numbers tied to these levers after we've given them kind of the needed time to vet through that.

Speaker #4: So potentially as early as this next Q3. The other thing I would highlight, which I think kind of goes without saying, is selling these assets, you get rid of negative 15 million dollars of EBITDA drag.

Christopher Bilotto: The other thing I would highlight, which I think kind of goes without saying, is selling these assets, you get rid of -$15 million of EBITDA drag. That's the addition by subtraction. In our guidance, we have $12 million of displacement occurring with these renovations, and so getting that money back gets you to zero, let alone the uplift that's going to come when performance turns around. When you start to add up these numbers, they become very material, and I think all those will just kind of continue to fold in and ramp up specifically as we get into 2027.

Chris Bilotto: The other thing I would highlight, which I think kind of goes without saying, is selling these assets, you get rid of -$15 million of EBITDA drag. That's the addition by subtraction. In our guidance, we have $12 million of displacement occurring with these renovations, and so getting that money back gets you to zero, let alone the uplift that's going to come when performance turns around. When you start to add up these numbers, they become very material, and I think all those will just kind of continue to fold in and ramp up specifically as we get into 2027.

Speaker #4: That's the addition by subtraction. In our guidance, we have 12 million dollars of displacement occurring with these renovations. And so getting that money back gets you to zero, let alone the uplift that's going to come when performance turns around.

Speaker #4: And so when you start to add up these numbers, they become very material. And I think all those will just kind of continue to fold in and ramp up specifically as we get into 2027.

Speaker #2: Okay, great. And to follow up on the rev par side of things, we thought Q2 was really strong. You kept the full year guidance range.

Tyler Batory: Okay, great. To follow up on the RevPAR side of things, we thought Q2 was really strong. You kept the full year guidance range. Just talk about the outlook for the rest of the year. I'm not sure if the renovation activity or anything else is impacting that outlook, but curious if there's any extra conservatism in terms of what you're providing for the, or what's implied for H2.

Speaker #2: So just talk about the outlook for the rest of the year. I'm not sure if the renovation activity or anything else is impacting that outlook.

Speaker #2: But curious if there's any extra conservatism in terms of what you're providing for the or what's implied for the second half of the year.

Speaker #3: Sure, Tyler. Thank you. I think from our standpoint, Q2 was definitely strong. We've seen our preliminary July results, which gives us some optimism going into the third quarter.

Christopher Bilotto: Sure. Tyler, thank you. I think from our standpoint, Q2 was definitely strong. We've seen our preliminary July results, which gives us some optimism going into the third quarter. If you look at our portfolio and the seasonality of it, we do expect to slow down in the back half of August and then into Q4. It's just the way our portfolio trends in some of our geographies. We feel comfortable with the guidance range as we sit here today, and there's a lot of different things and moving pieces in motion as we look to the back half of the year, as Chris outlined, and throw in some of the disposition activity and the potential timing of some of that could affect our numbers and hopefully to the upside.

Brian Donley: Sure. Tyler, thank you. I think from our standpoint, Q2 was definitely strong. We've seen our preliminary July results, which gives us some optimism going into the third quarter. If you look at our portfolio and the seasonality of it, we do expect to slow down in the back half of August and then into Q4. It's just the way our portfolio trends in some of our geographies. We feel comfortable with the guidance range as we sit here today, and there's a lot of different things and moving pieces in motion as we look to the back half of the year, as Chris outlined, and throw in some of the disposition activity and the potential timing of some of that could affect our numbers and hopefully to the upside.

Speaker #3: But if you look at our portfolio and the seasonality of it, we do expect to slow down in the back half of August and then into Q4.

Speaker #3: It's just the way our portfolio trends and some of our geographies. But yeah, we feel comfortable with the guidance range. As we sit here today, and there's a lot of different things and moving pieces in motion as we look to the back half of the year, as Chris outlined.

Speaker #3: And throw in some of the disposition activity and the potential timing of some of that could affect our numbers and hopefully to the upside.

Speaker #2: Okay. And last question from me on the asset sales. Remind us the timeline there. I think to prepare remarks, you said by the end of 2026.

Tyler Batory: Okay. Last question from me on the asset sales. Remind us that the timeline there, I think the prepared remarks, you said, by the end of 2026. Any sort of execution risk in terms of getting those completed? A bigger picture question, just talk a little bit about the market overall for asset sales, and help us think through any updated thoughts in terms of future assets that might be on the market for sale. I know you're now marketing that asset in Atlanta. I'm not sure if there's anything else in the portfolio that might make sense down the road here.

Speaker #2: But any sort of execution risk in terms of getting those completed? And then a bigger picture question, just talk a little bit about the market overall for asset sales.

Speaker #2: And help us think through any updated thoughts in terms of future assets that might be on the market for sale. I know you're now marketing that asset in Atlanta.

Speaker #2: I'm not sure if there's anything else in the portfolio that might make sense down the road here.

Speaker #3: Yeah. So I think,

Christopher Bilotto: Yeah. I think first and foremost with respect to the 15 properties that we've been active with, given where we are with those groups, again, mostly under contract, it's really kind of a Q3, Q4 type of execution. I would say of the quantum, which is just shy of $100 million, representing kind of that bucket of under contract, maybe between $20 million and $30 million might transact in Q3 with the balance in Q4. There's one that we're marketing that might find its way into the early part of 2027. Certainly I think with respect to the Atlanta Perimeter, just given where we are in the process, I think it's fair to say that an early 2027 is a reasonable expectation, depending on where pricing comes in.

Chris Bilotto: Yeah. I think first and foremost with respect to the 15 properties that we've been active with, given where we are with those groups, again, mostly under contract, it's really kind of a Q3, Q4 type of execution. I would say of the quantum, which is just shy of $100 million, representing kind of that bucket of under contract, maybe between $20 million and $30 million might transact in Q3 with the balance in Q4. There's one that we're marketing that might find its way into the early part of 2027. Certainly I think with respect to the Atlanta Perimeter, just given where we are in the process, I think it's fair to say that an early 2027 is a reasonable expectation, depending on where pricing comes in.

Speaker #4: first and foremost, with respect to the 15 properties, that we've been active with, given where we are, with those groups, again, mostly under contract, it's really kind of a Q3, Q4 type of execution.

Speaker #4: I would say of the quantum, which is just shy of 100 million dollars representing kind of that bucket of under contract, maybe between 20 and 30 million might transact in Q3 with the balance in Q4.

Speaker #4: There's one that we're marketing that might find its way into kind of the early part of 2027. And then certainly, I think with respect to the Atlanta perimeter, just given where we are in the process, I think it's fair to say that an early 2027 is a reasonable expectation depending on where pricing comes in.

Speaker #4: And so to your broader question, look, our plan has been and continues to be to really kind of dig into each hotel. And figure out where we can optimize performance.

Christopher Bilotto: To your broader question, look, our plan has been and continues to be to really kind of dig into each hotel and figure out where we can optimize performance. We've contemplated and communicated that that's a multi-year journey. I think what we're selling this year and then even the introduction of this hotel in Atlanta is a testament to kind of how we think about when the timing is right, we're ready to come to market. I think more importantly, I would set the expectation that driving performance to drive value is a big part of our business, and that's something that we will adhere to. I think that the last question you had about the broader market is it's mixed. I think for focus service hotels, I think we've continued to see some level of strength, just kind of given where that price point is.

Chris Bilotto: To your broader question, look, our plan has been and continues to be to really kind of dig into each hotel and figure out where we can optimize performance. We've contemplated and communicated that that's a multi-year journey. I think what we're selling this year and then even the introduction of this hotel in Atlanta is a testament to kind of how we think about when the timing is right, we're ready to come to market. I think more importantly, I would set the expectation that driving performance to drive value is a big part of our business, and that's something that we will adhere to. I think that the last question you had about the broader market is it's mixed. I think for focus service hotels, I think we've continued to see some level of strength, just kind of given where that price point is.

Speaker #4: And we've contemplated and communicated that that's a multi-year journey. I think what we're selling introduction of this hotel in Atlanta is a testament to kind of how we think about when the timing is right, we're ready to come to market.

Speaker #4: But I think more importantly, I would set the expectation that driving performance to drive value, is a big part of our business. And that's something that we will adhere to.

Speaker #4: I think that the last question you had about the broader market is it's mixed. I think for focused service hotels, I think we've continued to see some level of strength just kind of given where that price point is.

Speaker #4: And then for more luxury hotels, there seems to be kind of capital chasing those types of concepts. And then in between, depending on that price point, the 50 to 100 million dollar price point, it's a little bit softer.

Christopher Bilotto: For more luxury hotels, there seems to be kind of capital chasing those types of concepts. In between, depending on that price point, the $50 to $100 million price point, it's a little bit softer. It doesn't mean that there's not an ability to transact, but I think most of the transactions are coming from more kind of stabilized hotels versus kind of the journey where we're on is kind of turning around performance to kind of get us to that point.

Chris Bilotto: For more luxury hotels, there seems to be kind of capital chasing those types of concepts. In between, depending on that price point, the $50 to $100 million price point, it's a little bit softer. It doesn't mean that there's not an ability to transact, but I think most of the transactions are coming from more kind of stabilized hotels versus kind of the journey where we're on is kind of turning around performance to kind of get us to that point.

Speaker #4: And so it doesn't mean that there's not an ability to transact, but I think most of the transactions are coming from more kind of stabilized hotels versus kind of the journey where we're on is kind of turning around performance to kind of get us to that point.

Speaker #2: Great. Very helpful. That's all for me. Thank you.

Tyler Batory: Great. Very helpful. That's all from me. Thank you.

Speaker #1: The next question, once again, if you would like to ask a question, please press star, then one. And our next question will come from Jack Armstrong of Wells Fargo.

Operator: The next question. Once again, if you would like to ask a question, please press star then one. Our next question will come from Jack Armstrong of Wells Fargo. Please go ahead.

Speaker #1: Please go ahead.

Speaker #5: Hey, good morning. And thanks for taking the question. Can you provide us with your updated thoughts on the ramp for the Nautilus? When you expect it to open, what the EBITDA drag is in the third and fourth quarters, and then where are you expect the asset to stabilize in the pathway to get there?

Jack Armstrong: Hey, good morning, and thanks for taking the question. Can you provide us with your updated thoughts on the ramp for the Nautilus? When do you expect it to open? What the EBITDA drag is in Q3 and Q4, and then where you expect the asset to stabilize and the pathway to get there?

Speaker #3: Sure, Jack. Good morning. Yeah, the Nautilus project is underway today. We expect delivery by November, just ahead of when the season starts ramping up for that market.

Christopher Bilotto: Sure, Jack. Good morning. The Nautilus project is underway today. We expect delivery by November, just ahead of where the season starts ramping up for that market. I think from a cash drag standpoint for the full year, it's around $4.5 million for that property. It's a significant swing in our expectations going forward as it ramps up. We'll obviously give more color as we get into next year's guidance, but the property did around $5 or $6 million before renovation on an annual run rate, and we expect that to significantly increase going forward. Again, between that property and some of the others that are still ramping, we're optimistic we'll continue to see the right results.

Chris Bilotto: Sure, Jack. Good morning. The Nautilus project is underway today. We expect delivery by November, just ahead of where the season starts ramping up for that market. I think from a cash drag standpoint for the full year, it's around $4.5 million for that property. It's a significant swing in our expectations going forward as it ramps up. We'll obviously give more color as we get into next year's guidance, but the property did around $5 or $6 million before renovation on an annual run rate, and we expect that to significantly increase going forward. Again, between that property and some of the others that are still ramping, we're optimistic we'll continue to see the right results.

Speaker #3: I think from a cash drag standpoint for the full year, it's around four and a half million dollars for that property. So it's a significant swing in our expectations going forward as it ramps up.

Speaker #3: We'll obviously get more color as we get into next year's guidance, but the property did around five or six million dollars before renovation on an annual run rate and we expect that to significantly increase going forward.

Speaker #3: Between that property and some of the others that are still ramping, we're optimistic we'll continue to see the right results.

Speaker #5: Helpful color there. And then just can you touch on what percentage of your bookings were through the OTAs in Q2? And then maybe where that's been historically, and then what the goal is there going forward now that some of the initiatives you talked about?

Jack Armstrong: A helpful color there. Just can you touch on what percentage of your bookings were through the OTAs in Q2, and then maybe where that's been historically, and then what the goal is there going forward now that some of the initiatives you talked about?

Speaker #4: Yeah, I mean, typically, the bookings across the OTA have kind of hovered in the mid-20%. Where that bogey needs to be, I think is still TBD.

Christopher Bilotto: Yeah. Typically, the bookings across the OTA have hovered in the mid 20%. Where that bogey needs to be, I think is still TBD. Certainly, we want that to come down closer to 20%. I think there's a lot of work that needs to go in to do that. Between 20% and 25% is probably a healthy expectation in the medium term. Again, I think that's going to come through the things that I referenced with respect to just changing some of the channels, allocating more resources through growing loyalty programs and driving business through loyalty programs. I think as we bolster other areas within the business, whether it's group or contract business, let alone transient, that in itself will just truncate where that percentage comes from. I think to answer your question, it is getting closer down to that 20% mark.

Chris Bilotto: Yeah. Typically, the bookings across the OTA have hovered in the mid 20%. Where that bogey needs to be, I think is still TBD. Certainly, we want that to come down closer to 20%. I think there's a lot of work that needs to go in to do that. Between 20% and 25% is probably a healthy expectation in the medium term. Again, I think that's going to come through the things that I referenced with respect to just changing some of the channels, allocating more resources through growing loyalty programs and driving business through loyalty programs. I think as we bolster other areas within the business, whether it's group or contract business, let alone transient, that in itself will just truncate where that percentage comes from. I think to answer your question, it is getting closer down to that 20% mark.

Speaker #4: I mean, certainly we want that to come down closer to 20%. But I think that's a there's a lot of work that needs to go in to do that.

Speaker #4: So between 20 and 25 is probably kind of a healthy expectation in the medium term. And then again, I think that's going to come through the things that I referenced with respect to kind of just changing some of the channels, kind of allocating more resources through growing kind of loyalty programs and driving business through loyalty programs.

Speaker #4: And I think as we bolster other areas within the business, whether it's group or contract business, let alone transient, that in itself will kind of just truncate where that percentage comes from.

Speaker #4: But I think to answer your question, it's kind of getting closer down to that 20, 20% mark.

Speaker #5: Okay. And then maybe one on the net lease side. Can you give us your updated thoughts on credit losses and the back half of the year?

Jack Armstrong: Okay, maybe one on the net lease side. Can you give us your updated thoughts on credit losses in the back half of the year? Maybe provide an update on where the two franchisee bankruptcies stand and any changes to your tenant watch list since the Q1.

Speaker #5: Maybe provide an update on where the two franchisee bankruptcies stand and any changes to your tenant watch list.

Speaker #4: Yeah, Jack, this is Jesse. I'll take that one. With respect to the two bankruptcies we announced last quarter, I think there's good news on both of those fronts.

Jesse Abair: Yeah, Jack, this is Jesse. I'll take that one. With respect to the two bankruptcies we announced last quarter, I think good news on both of those fronts. The Popeyes franchisee will be emerging from bankruptcy in Q3. We've got a deal in place to assign those assets back to corporate, so there'll be a credit bump there. All remaining economics of the existing master lease will stay the same, so they're already back to a rent-paying status. Probably net-net, that's a good story, a positive story. With respect to the other franchisee, again, this was another QSR. Similar story, we expect all of those to remain open and get assigned to corporate, so we'll see that credit bump as well. Still negotiating the deal terms with respect to exactly how that's going to play out in terms of the rent going forward.

Speaker #4: The Popeye's franchisee will be emerging from bankruptcy in Q3. We've got a deal in place to assign those assets back to corporate, so there'll be a credit bump there.

Speaker #4: All remaining economics of those existing master lease will stay the same. So they're already back to a rent-paying status. So probably net-net that's a good story of positive story.

Speaker #4: And then with respect to the other franchisee, again, it was just another QSR. We have similar story. We expect all those to remain open and get assigned to corporate.

Speaker #4: So we'll see that credit bump as well. Still negotiating the deal terms. With respect to exactly how it's going to play out in terms of the rent going forward, I would say the big story on the net lease side of things for us relates to the TA coverage piece.

Jesse Abair: I would say that the big story on the net lease side of things for us relates to the TA coverage piece, and this is now the second straight quarter we've seen a pretty meaningful bump. As best as we can tell, we think that's probably a function of a few things. We're seeing double-digit growth both in terms of freight pricing as well as diesel margins, right? Those are two pretty big indicators of how that business is going to go. The diesel margins may be a little more transitory and related to the Middle East conflict, I think the thinking across the board in the freight industry is that increase in demand is probably something that we expect to be persistent throughout 2026. Again, a really good indicator for that business.

Speaker #4: And this is now the second straight quarter we've seen a pretty meaningful bump. As best as we can tell, we think that's probably a function of a few things.

Speaker #4: We're seeing double-digit growth both in terms of freight pricing as well as diesel margins, right? Those are two pretty big indicators of how that business is going to go.

Speaker #4: The diesel margins may be a little more transitory and related to the Middle East conflict, but I think the thinking across the board in the freight industry is that that increase in demand is probably something that we expect to be persistent throughout 2026.

Speaker #4: So again, a really good indicator for that business. And again, maybe the third piece to that is we may be seeing some early fruits of the business improvement plan that BP has implemented with respect to those TA assets.

Jesse Abair: Again, maybe the third piece to that is we may be seeing some early fruits of the business improvement plan that BP has implemented with respect to those TA assets. They've now had several quarters of new management and the opportunity to execute on that plan. Multifactorial, certainly, I think the big news in terms of how we think of the net lease portfolio is driven by the increased performance in TA.

Speaker #4: So they've now had several quarters of new management and the opportunity to execute on that plan. So, multifactorial, certainly, but I think the big news in terms of how we think of the net lease portfolio is driven by the increased performance in TA.

Speaker #5: Really helpful. That's information. Thanks.

Jack Armstrong: Really helpful. That's it for me. Thanks.

Speaker #3: Thanks.

Jesse Abair: Thanks.

Speaker #1: The next question comes from Floris Vandigum of Landberg Dahlman. Please go ahead.

Operator: The next question comes from Floris van Dijkum of Compass Point. Please go ahead.

Speaker #6: Hey, good morning. It's all down for Floris. Thank you for taking the question. Can you walk us through your current thinking on addressing the remaining 2020 debt maturities especially around the timing for that?

[Analyst] (Compass Point): Hey, good morning. It's Aram for Floris. Thank you for taking the question. Can you walk us through your current thinking on addressing the remaining 2020 debt maturities, especially around the timing for debt? Thanks.

Speaker #6: Thanks.

Speaker #3: Sure. From our standpoint, we've got 45 million dollars in at least mortgage notes. It's a variable funding note coming up in January. We expect to take that out with asset sale proceeds.

Brian Donley: Sure. From our standpoint, we've got $45 million in net lease mortgage notes. It's a variable funding note coming up in January. We expect to take that out with asset sale proceeds. I mentioned the revolver is up in June. We do have a 1-year extension option, so we're planning, thinking around that in the coming months, what to do there. The zero coupon senior secured notes mature in September of 2027. Again, back half of this year, early next year is probably when we'll consider transacting, depending on market conditions. Those notes are backed by 2 of our travel center lease pools, so very strong collateral. We think we have flexibility in refinancing those notes. Whether or not we pay some of it down with asset proceeds remains to be seen.

Speaker #3: I mentioned the revolver is up in June. We do have a one-year extension option. So we're planning, thinking around that in the coming months what to do there.

Speaker #3: And then the zero coupon senior secured notes mature in September of '27. Again, back half of this year early next year is probably when we'll consider transacting depending on market conditions, those notes are backed by two of our travel center lease pools.

Speaker #3: So very strong collateral. So we think we have flexibility in refinancing those notes. And then whether or not we pay some of it down with asset proceeds remains to be seen.

Speaker #3: Depending on the quantum, but yeah, that's our shorter-term thinking as far as what's upcoming on the balance sheet.

Brian Donley: Depending on the quantum. That's our shorter-term thinking as far as what's upcoming on the balance sheet.

Speaker #6: Thank you.

[Analyst] (Compass Point): Thank you.

Speaker #3: Thank you.

Christopher Bilotto: Thank you.

Chris Bilotto: Thank you.

Speaker #1: The next question comes from John Masoka of B. Riley. Please go ahead.

Operator: The next question comes from John Massocca of B. Riley. Please go ahead.

Speaker #7: Good morning. Maybe sticking with the balance sheet question and the zero coupon bonds in particular. I mean, do you think where you sit today after the equity raise, you're at a good enough position from a covenant perspective to refinance those with more kind of traditional secured debt?

John Massocca: Good morning. Maybe sticking with the balance sheet question and the zero coupon bonds in particular. Do you think where you sit today after the equity raise, you're in a good enough position from a covenant perspective to refinance those with more kind of traditional secured debt? Would you still need to probably, for covenant-related reasons, go a more unique angle like you did with the last debt raising?

Speaker #7: Or would you still need to probably for covenant-related reasons go a more unique angle like you did with the last debt raising?

Speaker #3: John, thanks for the question and good morning. Our current thinking is that probably most likely be a regular way-type debt instrument. The zero coupon was sort of a temporary need from a covenant standpoint as you outlined pre-equity raise.

Christopher Bilotto: John, thanks for the question. Good morning. Our current thinking is that it'll probably most likely be a regular way type debt instrument. The zero coupon was sort of a temporary need from a covenant standpoint, as you outlined, pre-equity raise. I think we do, as we sit here today and how those bonds have traded, think we'll be in pretty good position to be able to do that and absorb the cash interest that would be expected with such a refinancing. Once again, those bonds in the market have traded very well. The collateral is very strong, and I think we've set ourselves up in a good spot.

Chris Bilotto: John, thanks for the question. Good morning. Our current thinking is that it'll probably most likely be a regular way type debt instrument. The zero coupon was sort of a temporary need from a covenant standpoint, as you outlined, pre-equity raise. I think we do, as we sit here today and how those bonds have traded, think we'll be in pretty good position to be able to do that and absorb the cash interest that would be expected with such a refinancing. Once again, those bonds in the market have traded very well. The collateral is very strong, and I think we've set ourselves up in a good spot.

Speaker #3: I think we do, as we sit here today and how those bonds have traded, I think we'll be a pretty good position to be able to do that and absorb the cash interest that would be expected with such a refinancing.

Speaker #3: So again, those bonds in the market have traded very well. The collateral is very strong. And I think we set us up in a good spot.

Speaker #7: Okay. And then on the hotel front, with the two assets that you're kind of marketing but don't have pricing agreed to or under contract on, are there kind of brackets for procedural looking for?

John Massocca: Okay. On the hotel front, with the two assets that you're kind of marketing but don't have pricing agreed to or under contract on, are there kind of brackets for proceeds you're looking for? I know it might be a little bit specific given it's only two assets. Just kind of curious if there's a range of proceeds we might expect from those dispositions.

Speaker #7: I know it might be a little bit specific given it's only two assets, but just kind of curious if there's a range of proceeds we might expect from those dispositions.

Speaker #3: Yeah. We'll provide more color. As time progresses, I think where we stand, we want to let the process play out a little bit and let that guide kind of overall expectations.

Christopher Bilotto: Yeah. We'll provide more color as time progresses. I think where we stand, we want to let the process play out a little bit, let that guide kind of overall expectations.

Chris Bilotto: Yeah. We'll provide more color as time progresses. I think where we stand, we want to let the process play out a little bit, let that guide kind of overall expectations.

Speaker #7: Okay. And then with the asset in Atlanta, you had previously marketed it. Was it the operational position of the property that made it attractive to take it back for sale?

John Massocca: Okay. With the asset in Atlanta, you'd kind of previously marketed it. Was it the kind of operational position of the property that made it attractive to take it back for sale? It seemed like it did pretty well last quarter. Has there been kind of a change in overall performance that now might make it more attractive to buyers? Just kind of curious why that specific asset, why take that back into the market today.

Speaker #7: Or I mean, it seemed like it did pretty well last quarter as there have been kind of a change in overall performance that now might make it more attractive to buyers.

Speaker #7: I was kind of curious why that specific asset why take that back into the market today.

Speaker #3: Yeah. Last year, when we took it to market, there was a couple of different factors. One, was just on kind of unpacking a little bit more around the kind of the capital needs and the overall expectations with the brand.

Christopher Bilotto: Yeah. Last year when we took it to market, there was a couple different factors. One was just on kind of unpacking a little bit more around the kind of the capital needs and the overall expectations with the brand. I think where we were seeing offers was a factor as part of that as we wanted to rethink it. As we sit here today, what's attractive about where we're at with that asset is, that agreement expires at the beginning of next year, it provides optionality with the buyer pool, whether or not they want to purchase that with or without the brand. Again, just gives general flexibility on kind of execution of whatever business plan is associated with their capital needs.

Chris Bilotto: Yeah. Last year when we took it to market, there was a couple different factors. One was just on kind of unpacking a little bit more around the kind of the capital needs and the overall expectations with the brand. I think where we were seeing offers was a factor as part of that as we wanted to rethink it. As we sit here today, what's attractive about where we're at with that asset is, that agreement expires at the beginning of next year, it provides optionality with the buyer pool, whether or not they want to purchase that with or without the brand. Again, just gives general flexibility on kind of execution of whatever business plan is associated with their capital needs.

Speaker #3: I think where we were seeing offers was a factor as part of that as we wanted to rethink it. As we sit here today, what's attractive about where we're at with that asset is that agreement expires at the beginning of next year.

Speaker #3: And so it provides optionality with the buyer pool, whether or not they want to purchase that with or without the brand. And again, just gives general flexibility on kind of execution of whatever business plan is associated with their capital needs.

Speaker #3: And so, I think from a timing standpoint, and kind of timing the market relative to some of those timeframes, it, in our view, is a much more attractive candidate for a buyer.

Christopher Bilotto: I think from a timing standpoint and kind of timing the market relative to kind of some of those time frames, it just, in our view, is a much more attractive candidate for a buyer.

Chris Bilotto: I think from a timing standpoint and kind of timing the market relative to kind of some of those time frames, it just, in our view, is a much more attractive candidate for a buyer.

Speaker #7: Okay. And then bigger picture, as we look into 2027, should we kind of expect hotel sales to be one-off-ish in nature? I know it's early days, but any outlook for that versus maybe a more kind of portfolio-driven or kind of more structured disposition program next year?

John Massocca: Okay. Bigger picture, as we look into 2027, should we kind of expect hotel sales to be one-offish in nature? I know it's early days, any outlook for that versus maybe a more kind of portfolio-driven or kind of more structured disposition program next year?

Speaker #3: It's early days. John, I think as I mentioned, the real focus is around performance improvement. That's a journey that we've kind of talked about.

Christopher Bilotto: It's early days, John. I think as I've mentioned, the real focus is around performance improvement. That's a journey that we've kind of talked about. We'll let that guide how we think about dispositions. As we kind of get through the year and more specifically into 2027, I think we'll have more color on what that could look like.

Chris Bilotto: It's early days, John. I think as I've mentioned, the real focus is around performance improvement. That's a journey that we've kind of talked about. We'll let that guide how we think about dispositions. As we kind of get through the year and more specifically into 2027, I think we'll have more color on what that could look like.

Speaker #3: We'll let that guide how we think about dispositions. And so as we kind of get through the year and more specifically into '27, I think we'll have more color on what that could look like.

Speaker #7: Okay, and then one last one on the hotel front—just a quick clarification. The 7.1% July RevPAR growth, was that for the total portfolio or just the retained assets?

John Massocca: Okay. One last one on the hotel front, just a quick clarification. The 7.1% July RevPAR growth, was that for the total portfolio or just the retained assets?

Speaker #3: That was just the retained assets.

Christopher Bilotto: That was just the retained assets.

Chris Bilotto: That was just the retained assets.

Speaker #7: Okay, and then lastly, one on the net lease side: how should we think about lease expirations through the remainder of the year?

John Massocca: Okay. Lastly, one on the net lease side. How should we think about lease expirations here over the remainder of the year? Is the outlook that those are strong candidates for renewal, or how are you kind of thinking about those assets specifically?

Speaker #7: Is the outlook that those are strong candidates for renewal or how are you kind of thinking about those assets specifically?

Speaker #3: Yeah. We don't have a ton of expirations in the back half of the year. We've got our arms around most of them. We expect to be renewing the vast majority of there may be one or two that go dark, but even that would be somewhat of a surprise for us.

Jesse Abair: Yeah. We don't have a ton of expirations in the back half of the year. We've got our arms around most of them. We expect to be renewing the vast majority of There may be one or two that go dark, but even that would be somewhat of a surprise for us. I think we're in good shape for the balance of 2026, and now we're kind of trying to get ahead of the 2027s as well at this point with the team.

Speaker #3: So I think we're in good shape for the balance of 2026. And now we're kind of trying to get ahead of the '27s as well at this point with the team.

Speaker #7: Okay, that's it for me. Thank you very much.

John Massocca: Okay. That's it for me. Thank you very much.

Speaker #1: This concludes our question and answer session. I'd like to turn the call over to Chris Bilotto, President and Chief Executive Officer, for any closing remarks.

Operator: This concludes our question and answer session. I'd like to turn the call over to Chris Bilotto, President and Chief Executive Officer, for any closing remarks.

Speaker #3: Thank you for joining today's call. Please reach out to our investor relations if you're interested in scheduling a meeting with SBC. That concludes our call.

Christopher Bilotto: Thank you for joining today's call. Please reach out to our investor relations if you're interested in scheduling a meeting with SVC. That concludes our call.

Chris Bilotto: Thank you for joining today's call. Please reach out to our investor relations if you're interested in scheduling a meeting with SVC. That concludes our call.

Operator: The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect.

Q2 2026 Service Properties Trust Earnings Call

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