CHSP
#How it would rank in ---+ from what perspective.
Oh, from a growth perspective, how would it rank in the portfolio.
Okay.
Well, certainly in the first year, from an EBITDA growth perspective it's going to be at the top of the list.
After that, I would still expect to be in the higher end of the range.
Whether it's going to be our top hotel from a growth perspective or not, it's hard to say.
As <UNK> said, initially a lot of the increased EBITDA is from cost reductions, as well as certainly there's ---+ we're expecting occupancy gains in particular in the shoulder seasons where, without a strong res system or brand, the hotel historically did not do particularly well.
We do not expect initially out of the box in the first couple of quarters, we don.
t expect significant ADR growth.
But we certainly think over time that that will come.
And currently, the hotel is roundly about 80% of market, from an overall RevPAR index perspective.
We'll pick up some of that this year, but more of that will come over the next two to three years.
So I can't give you an exact number, but it would be in the higher, it would be in the top portion of our portfolio for the next two years from a growth perspective.
Well, like I said, <UNK>, we'll have roughly $100 million drawn without any further changes.
So we think that that would be a good short-term use, and then obviously we'd determine whether there was more opportunities for us to grow.
But that's a nice way to bring the leverage down a bit further than the levels we've already talked about.
We're not talking debt to EBITDA, <UNK>.
We're talking our leverage ratio as we calculate it under the revolving credit facility.
So we would be at 31, 32-ish at the end of the year assuming that we paid down the amount of working capital that we've drawn on the facility.
As I said earlier, we're about 150 drawn today on the facility.
By the end of the year, we'll be back to about 100 drawn on the facility.
That will get us to 31%, 32% leverage.
When I refer to a three times number, that's our fixed cover charge.
So as we look at fixed cover charge, that's really, factoring in all of our interest payments and all of our preferred dividend payments, we're covering at a very high rate.
So that number is going to be at the 3.1, 3.2 level by the end of the year.
We don't really quote debt to EBITDA.
I mean you can calculate our debt to EBITDA if you use adjusted hotel EBITDA of close to 200 and we'll have close to $800 million drawn at the end of the year.
We'll be at four times or lower as we move towards the end of the year.
That's right.
Well, let me ---+ yes, we've look at <UNK>t LA.
So let me start with that and pricing in <UNK>t LA has been very aggressive and ultimately, there's one or two deals that over a couple of years, there's one or two deals that we probably came in second on.
So certainly, I think <UNK>t LA is a very good market.
That said, it's not only ---+ it's not just that we're in downtown LA.
It's this specific venue that we have a lot of excitement about.
So we've looked at the books, of course, in detail and we're looking at the activity and business levels in the theater and how that impacts the hotel.
And we're pulling ---+ in our hotel now, it's ours as of today, so in our hotel, we are pulling business out of <UNK>t LA into our hotel.
And so when you look at what that theater can generate, and there's no other venue like that, and you look at the redevelopment of downtown LA, I mean it's not to suggest I'm ready to go buy another different kind of hotel in downtown LA.
But given this unique customer experience and asset in the venue, we're very comfortable.
And like I said, we're very ---+ I'm very comfortable out of the box with an 8% EBITDA yield.
And arguably, with the theater being valued separately, we're $400,000 a key for the hotel, including the restaurants and bars, but for the hotel structure, we think that's a compelling opportunity.
So it's not so much a bet on all of downtown LA, though we feel comfortable there.
It's certainly a bet on this specific venue and asset.
Overall, in New Orleans, we're certainly comfortable with the market for the rest of the year.
I would say specific to our hotels, our French Quarter hotel has done quite well and we expect it to continue to do well.
It's 97 keys of course, but it isn't at the highest end of the market and despite having an average rate well above the market, it will continuing, able to drive rate in that hotel at a very reasonable growth level in the upper single digits.
So we're comfortable there.
And at La Meridien, I think somewhat similar to Lakeshore, but it's not as large a hotel.
So it's not as significant of an issue.
It just takes time to reintroduce the product to the customer.
Group business in our hotel is picking up quickly.
We like the group pace that we see for the rest of the year in that hotel and now it's a matter, which we're seeing, by the way, we are seeing in Lakeshore where the transient customer has now returned.
And that's what we're pushing for in New Orleans.
And we'll get there.
It's just taking us a little bit of time.
We do have additional resources, again, getting back to a previous question about Starwood, working with Starwood, we do have additional resources from Starwood focused on our conversion in New Orleans for us, and we expect things to continue to pick up the remainder of the year.
All right.
Thanks.
All right.
Well, listen, thanks everybody for being on the call today and as always, we will be here to answer any questions tonight and tomorrow.
So again, appreciate the interest and good night.
Thank you.
