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281: Should We Be Buying Hotels Yet?

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Buck: Welcome back to the show, everyone. Today, my guest on Wealth Formula Podcast is Steve Usher. Steve was on not too long ago during the Pandemic. He’s the founder of a Pasadena based Titan Hospitality, which was founded in 1999, which focuses on hotel brokerage assignments located throughout California. Since its founding, Titan has closed upwards, is that 2 billion? That’s a lot of zeros. So I couldn’t tell for sure. But I think it’s 2 billion. You can correct me if I’m wrong, Steve. And prior to founding Titan, Steve worked with Cushman and Wakefield in CBRE in San Francisco. So he certainly knows real estate. Steve, welcome back to Wealth Formula Podcast.

Steve: Hi. Good to see you Buck.

Buck: So I keep wanting to talk to you because of my own sort of interest in potentially getting into hotels. We talk sort of right during the worst of the pandemic. And at that time, I think you are honest and saying basically, there’s nothing going on. There really is no opportunity right now and no one’s going to finance anything. Has anything changed? 

Steve: You know, I don’t remember what month it was, but probably last summer. I think when we spoke, a lot changed. I think that in the cycle of the pandemic, the average hotel in California was probably down, maybe in their revenue, which was huge. Some markets more than others. Obviously, San Francisco was hard hit. Markets like Anaheim that relied on Disneyland or any sort of convention business was even harder hit. And then when the vaccine came out, things bounced back, you know, fairly nicely. It was a really nice trajectory there, I would say, you know, maybe half of that had been recouped and then obviously Delta variant came out and everything kind of slowed down again. So we’re kind of in this muddle where owners are kind of making the best of what they can. They had PPP loans and things to get them through the hardest times. So there really wasn’t a lot of distress on any foreclosures. Lenders went fairly easy because if you’re going to call one loan, every loan and the bunch was bad. So what are you going to do? It’s kind of like the financial crisis from ten years ago. So it’s just kind of a wait and see right now, you know, not a lot of deals happening. A few markets did fairly well. Drive to markets, coastal markets, things like that. But for the most part, it’s just been fairly slow last twelve months, as far as deals. 

Buck: Yeah. Along that lines. I think I remember you talking about how you felt like, well, there was, you know, despite any drops in income and that kind of thing that was happening, that really the people who were looking to sell. We’re really not looking to discount. They’re really not acting in any sort of distress. The deals that are out there, are they behaving the way you would think they would behave based on decreasing amounts of occupancy? Is everybody just saying I got my PPP, I’m going to just stick through and wait until I can get what I want. 

Steve: Yeah. The deals that are out there, the owners want pre pandemic pricing and for the markets. That’s just not possible. So everyone’s just kind of waiting around. Like I said, the numbers were down, maybe. So in terms of profitability, that’s all the profit. If you lose your revenue, you have an unprofitable hotel. And it was a little bit of a bounce back. But, you know, it’s just it’s very hard to get anything done because nobody wants to discount. It’s hard to force people to sell. Yeah. It’s always hard. We always think all these deals are going to fall from the trees. And it doesn’t happen even in the financial crisis, it went on for four years, very little happen. And a lot of it is credit or driven if the lender is not pushing it. And that’s the case again now. It’s hard to really force people to do something, for sellers to do something. 

Buck: But that’s an interesting point. I didn’t know. Obviously, in multi-family residential apartment buildings and such. I mean, there was a crunch right? And hotels in the financial crisis where they are more isolated than, like, apartment buildings, are more protected, I guess.

Steve: I think what happened, as I recall, I mean, the bottom line was in order for these banks to take it back. The banks were failing, and then the FDIC would have had to bail them out and the FDIC ran out of money. So you had all sorts of games being played with splitting loans into eight pieces, as many pieces as you need. So you could say, well, some portion of that loan is performing. It’s only some little part of it over here. It’s not performing what I mean. So we really didn’t want to foreclose and have the FDIC have to step up. So after four years, not much happened. I mean, there really weren’t a lot of distressed sales, so with Covid, which was really something that came out of left field. It hit us hard, and then we expected to bounce back from it pretty quick, and to some extent did. And now probably will over the next twelve months. As Delta recedes, it’s even harder to get true distressed deals done. 

Buck: Yeah and then the PPP obviously added another level of cushion. So anything that would have been real distress was not so distressed anymore. There’s some guys I know who made more money during the pandemic. 

Steve: Exactly. Now that’s forgiven, too. I think it’s pretty easy to have the PPP forgiven. Lenders just added the loan balance onto the back of the loan, even franchise. Or were you going easy? So everyone kind of allowed. You know, everyone was pretty flexible, which is good. I mean, it’s good for the market, is good for owners, but it’s bad for true distress sales.

Buck: And it’s not really letting the market sort of do what it potentially should be doing in a capitalist market. I want to take a step back a little bit, Steve, because I know probably a number of people who listen to the earlier podcast, but there’s a lot of new listeners all the time. We are in my group. For the most part, we are a residential, multifamily investor groups. We know a lot about that stuff in hotels. How do you break down the different kinds of hotels that are out there that individual or group can invest in? 

Steve: You know, you have obviously the high end of the large full service properties, luxury properties, from a Ritz Carlton all the way down to full service Holiday Inn. So you have full service and then you have select service slash limited service and select service would be anything below full service. It’s basically a room only operation hit Place Hampton in Marriott Courtyard all the way down to really economy stuff like Motel six. And, you know, really where I would suggest investing is in that select service because you really want to sell rooms. That’s where you make your money and everything else, especially in doing business in California. The more employees you have really the worst off you are. So you want to limit your employee account. So select service is really probably where to go in the margins with some of the new type of select service that are more kind of extended, state oriented. I mean, you can do some really, really great margins. You have almost like an apartment building. I don’t know what your margin is. Maybe a profit margin before debt. With the good performing select service, you could be 45, which is historically incredibly high for a hotel. 

Buck: Yeah, that is very high. So when you talk about cap rates, what does that come out to in cap rate? 

Steve: Oh, God. I mean, cap rates or low, because that’s so cheap now. So you’re probably looking at six to seven. You know, maybe you can borrow, you know, in the mid four. 

Buck: Does that rely on whether it’s a boutique or whether it’s a full service select service, that kind of thing, too. Or is that generally not? Is there not really a difference? 

Steve: It doesn’t really matter. The hotel nets what it nets, and then you derive value from that, and then the lender will loan on that. 

Buck: Well, not so much on the lender side, but I guess my question would be per cap rates. Obviously, when we talk about multi-family, you get cap in California, I mean, it’s ridiculous. You’re not going to cash flow. You’re never going to cash flow. Whereas if we go to Phoenix or if we go to Dallas Fort Worth, we’ll have a little bit of cash flow and we could leverage that and make more cash flow. But we’re in the working class space so we can get a little bit more cash flow. But if we wanted to go to the A class, we’re not really going to cash flow. Is it the same type of thing in hotels? 

Steve: You know, a lot of it is driven by the barrier entry of the market. If it’s a market where they can build quite easily, then the cap rate is going to be higher. But then you always have the issue. Someone’s going to build two or three new deals and you’re going to have a tough time. So you might see cap rates as high as 8 or 9%. But I really question that kind of deal in California. I mean, why would a seller have to settle for an eight or nine cap in the state? It’s probably something that needs a lot of capex or is in a market where you’re going to have a couple of things built and it’s really going to hurt you, I think, for a well located deal, you know, maybe a seven cap is the number even that’s hard to find. It’s always hard to shake loose deals in California. 

Buck:  Do you have experience outside California as well? 

Steve: Not really. Everything I do is such a big market that I just stay in the state. 

Buck: Absolutely. Talk about, if you would. How does it work with say, you own a place and most of them are under the guise of some sort of franchise, right? I mean, is that pretty much what you’re looking at? Whether it’s a holiday in or whatever. That’s pretty much what you’re going to do, isn’t it? 

Steve: Yeah. I mean, I would say I don’t know what the rule is, but I would say of the inventory is franchise in some way. And now you’re seeing some of the brands because the customers like to get more kind of boutique stuff. They don’t want to be in a cookie cutter room. So you have, like, Marriott will have their autograph collection. It’s still a Marriott, but the Marriott is going to be a smaller component to it. But it’s still a branded hotel, and the franchise fees are going to be a little bit reduced. But the customer is going to see more of a boutique, independent type property, even though they probably booked it through their Marriott system. 

Buck: Is it possible? Not possible, it’s a bad word, because of course, anything is possible. But do you see a lot of barriers to success for independent owners who are not franchising? I mean, everybody’s franchising, why is that? It probably is obvious to you. It’s not so obvious for somebody from the outside here. 

Steve: Yeah. I mean, a lot of times it will be for the financing. A lender will require a brand. The loyalty programs through the brands are very popular. So if you have a Marriott name or Hilton name, you’re going to you drive a higher rate, a higher occupancy. But there are a lot of give back on that. I mean, you’ve got to. Franchise fees are enormous. The renovation costs requirements are high. If you go to sell, they really kill you on what they call a pay up the product product improvement plan, where they require the next owner to do all these upgrades. Right. I think the industry is slowly getting away from the brands. The brands are getting less and less relevant, but right now they’re still dominant. A lot of stuff comes through the TripAdvisor., the Expedia, the hotels dot com. That’s where a lot of the businesses now booked. It’s not coming in through the brand reservation systems. Now, the brands on Expedia and Hotels dot com are owned by the same brand. So one way the other, they’re going to get you. And the other thing to point out when you look at it, if you sell a room through Expedia, so you pay Expedia, they’re or whatever their Commission is, you then also pay a franchise fee because your franchise fee to Marriott or whatever is based on a percentage of the room. Even so, you pay it several different ways. So to the extent you can get away from the brand, that’s ideal. 

Buck: There’s so many fees. It’s hard to imagine making a profit, right? But obviously, obviously you can. People are. How does property management work? Is that usually part and parcel with the franchise, or is that going to be yet another deal? 

Steve: That’s a totally separate deal. I mean, some very few hotels are run, like, let’s say you have a Marriott hotel or a Hilton hotel franchise. Very few are going to be run managed by the Marriott or Hilton companies. You either self manage or you hire a third party management company to run it. 

Buck: So in many ways, it seems like the ideal situation might be for somebody who thinks that they can do a pretty good job marketing for themselves, to have a good property management company. But do the marketing and save on franchise fees, right? 

Steve: Yeah. Or the flip side of that is you have a good franchise. And because it’s such a cookie cutter operation. They’re going to tell you exactly what to do. You really don’t have to think so. Then you just have a good general manager and you don’t really need so much a sales marketing person because so much is coming in to the brand. 

Buck: And that’s a good point, too, because, I mean, in terms of marketing, it’s not like that’s for free. If you’re running on your own right, you’re going to be paying for that as well. Interesting. So in terms of, like, you know, success, obviously, there’s probably statistics on this. But, you know, when you work with buyers, typically, are you typically working with buyers with a lot of experience with hotels? Do you work with people who have not bought them before or how has it been in your experiences? Is it usually industry people?

Steve: I say it’s 50-50. I mean, some have a lot of experience. Some are coming into it because they can get a higher yield than they could on a retail center or maybe an apartment building. Or or what have you. So I do a lot of deals with, say, Korean buyers or Indian buyers, and they just want to kind of run their own business. It’s rare that I get someone that has had no experience. They usually had something, maybe a lower end deal, and they’re trading up to something nicer. But hotels are a different animal. Really, real estate, it’s a business. Generally speaking, the buyer has some experience or they think they have some experience or they think they’re knowledgeable early. I don’t know where a lot of the opportunities are because you can buy a deal from somebody who isn’t really doing very good revenue management. And you can take the same property and do better. Maybe they’re putting too many rooms online and selling them at a discount. 

Buck: Do you find yourself sometimes being a little bit of an advisor to your buyers? I know. Certainly our mutual friend who introduced me felt like you kind of taught them the business. 

Steve: Oh, yeah. Yeah. In his case, he was a true first time buyer. So that was unusual. And he was going after a kind of very high end boutique. So that was very bold to go from never having done a deal to say, well, I’m going to have the highest rated hotel, and he did it, and he did it. But not many people can pull that off. That was a unique personality. But yeah. Advisor. Yeah. Definitely. I mean, more so about what markets to go into, what markets to kind of stay away from, you know, usually with hotels, it’s the new inventory. That’s the killer. Because with the new inventory, you may have a Hilton branded hotel. And then the new guy coming in is building a dual branded Hilton. So it’ll be home to and and Hampton. And you may have a different Hilton brand, and they’re all going to work that same rest system. So the brands are getting fewer and fewer. You know, Marriot bought Starwood. Now most brands are owned by got the concentration. And it has to be like maybe two or three companies own all the brands or most of the brands.

Buck: When you have buyers. I mean, it sounds like to me from what you’re saying, depending on the type of asset that you buy, it can potentially be sort of a almost like a coupon, right? Am I wrong about that?

Steve: For periods of time and then you hit a Covid or you get a financial crisis and then you’re back to the point where hotels are rented pretty much stay today. Yeah, it’s a coupon until it’s not. And then it’s tough and then it bounces back again. So you’ve got to get a higher yield to compensate you for that. I mean, I imagine apartment buildings probably more stable, although people can stop paying rent.

Buck: How much time and energy does an individual put in? Obviously, our mutual friend puts a lot of energy and time into it. But somebody who’s buying Holiday Express or whatever. And is this something like an out of town person could buy and do reasonably well at?

Steve: Yeah, it’s very much a cookie cutter concept at that point. Now, you are a known brand. It’s like if you had a franchise, restaurant or something, it’s a little harder because you’ve got all these little transactions every day with a restaurant. But it’s the same idea. Or like a Starbucks, you’re going to put a Starbucks in a market and it’s going to do well. And it’s a cookie cutter operation until you hit a downturn and then you’re going to have to buckle down and see through it. But for the most part, it is somewhat of a coupon clipping operation. 

Buck: So let’s just put in an example. Somebody comes in. Okay. It’s me. All right. It’s me. I’m coming in and I say, Steve, I’m looking to diversify a little bit. I’m looking for a little bit better yield. I don’t know much about the hotel business, but, you know, give me some parameters. What are we going to look at? What types of things are good for a buyer like me in that situation? Like, how big should it be? What are the other considerations? 

Steve: I would probably buy a newer select service deal, a Hampton in a home to something like that. I would probably go to what I would call a second tier market, not a first tier market, because in your cap rate is going to be too low, and you’re probably it’s going to be hard to make a buck there. I would stay out of a third tier market where either the demand’s not great or there’s just absolutely no buried entry. So find what I would call a second tier market and then try to just pick it right where you don’t have again, you don’t have a lot of new inventory coming in. And then I think during that little pocket of time, you can do quite well. Maybe it’s a ten year period or something you can do quite well. Maybe you could buy it at seven or seven and a half cap. You know, maybe self manage. Get a strong enough general manager where you don’t have or manage. Get a third party management company if you have to, and you should be able to get a double digit, no cash on cash return. You should do better than apartments because you’re taking a little more risk.

Buck: In California in the secondary markets. First of all, there’s probably some parameters you have, like, don’t buy small building or business that has less than so many rooms. What would you say, what’s your number? 

Steve: I would say I wouldn’t want to be probably under 100. You probably want to be around 100 and 2125, maybe 150. That’s kind of where that select service boxes. You go under 100 and then the margins just aren’t there. It’s much harder. You got to hire the same people and you just have less rooms to amortize it over. You don’t want to get too big. You just have too many rooms for what the niche of that hotel is in that particular market and then stay away from full service or anything that has, like, a heavy food and beverage component. I mean, for example, you have a Hampton Inn and you have a Hilton Garden Inn, and they’re basically they’re obviously Hilton brands and they’re basically the same room. But the Hilton Garden Inn has this big food and beverage concept to it. So you have all these other employees involved. And what we really want to do is just sell the room. So every Hilton Garden Inn owner generally wants to be a Hampton in. But when the two brands came out, Hilton Garden Inn, because of its food and beverage, was gonna be a premium over Hampton, and it didn’t really work out that way. So stick to basically rooms only operation. And most of the select service brands are really, really good about that. They’ll give you a little food beverage component, but it’s really, really minimal. If you ever go into a Hyatt place, you actually see they have a curved counter. So you come in and you’ll be checking in and then you want to go get something at the bar. Well, the same guy that checked you in will just walk around the counter and he’ll be serving the express or the drink or the item that he just put in a heater to prepare. It’s like a microwave. 

Buck: Interesting. Okay. So now we’re talking about 100, 150 rooms in secondary markets in California. What is that going to cost you typically?

Steve: Probably around maybe 20 million, maybe low end of 15 in the high of, say, 25, say 15 to 25 million. 

Buck: Okay. So now 15 to 20 million. And what is the typical financing we’re talking about? Mostly SBA loans for this type of thing. 

Steve: Yeah. If you do an SBA loan and you do all the green, the green energy deals with solar panels and all that. I mean, you can really get into as low as down. I mean, I’m not sure I recommend that. I think generally speaking, with SBA is probably conventional loan is probably more like the SPA has more restrictions on prepay. I think the prepay it’s like a ten year sliding scale prepaid. So it’s very onerous for probably the first five years to pay it off, you know, whereas a conventional you’re not going to have that big of a prepaid penalty. 

Buck: How difficult is it to get that kind of debt from the Spa on an asset of that size? 

Steve: You know, I don’t really if you work with the right CDC and you find a good mortgage broker that got new relationships, have done a lot of these deals. It’s not really hard at all. I mean, I sold it in Bakersfield last year in the middle of Covid, and they got a high leverage SBA loan. I was really surprised. So if they can get it done, then they can certainly get it done now. 

Buck: And when you have buyers and say there’s, you’re saying maybe is about the amount that you would feel comfortable. Maybe it’s good leverage, but it’s not right. So now we’re talking about, you know, a few million dollars down. Can you do SBA? Is it typically just an individual or can you also do it as an equity group? 

Steve: Actually, it’s an individual loan. That’s a good point. It’s a personal loan to an individual and the limits to how much that you can have. It’s a good point. I’m not sure how they do that, because I know that obviously they have partners in there, but someone has to personally sign it alone. So a little different in that respect. 

Buck: Yeah. And it’s not uncommon. I mean, even certainly in the self storage space, for example, where there’s a lot less non recourse debt. I mean, with apartments, it’s easy. Fanny and Freddy, non recourse debt. You have somebody signed, but it’s really a bad boy clauses just basically putting you and saying that you’re on the hook if you do something illegal or nefarious, but with self storage and stuff, typically, that’s the way we’ve done it. You have one person who is or a couple of people who are guaranteeing the debt and then the equity group comes in behind it. I just didn’t know from the way the SBA works and with the government and all that, if it was still kosher or not. 

Steve: Yeah. I think they are personally guaranteed at least the SBA portion of the loan because you have a conventional first, I apologies. I don’t handle the loans directly. I’m somewhat familiar with it, but I don’t know all the specifics, but there’s a conventional first low leverage first, which is easy to get because that’s very well protected. And then the SBA makes that riskier piece and that’s I think what is personally guaranteed. 

Buck: I’m going to ask you another question that you may not know, but always these are the types of things I’m typically looking at as an investor. So in these apartment buildings, we typically get a ton of depreciation, and part of it is because with apartments, you can take a significant portion, typically 30% of the acquisition price during the cost segregation analysis ends up being personal property as opposed to real property. And with bonus depreciation, we’re taking that all upfront so many, in some cases, literally. We’ve got as much depreciation as we’ve got equity, and it’s passing all through almost like writing off all your investments. I know hotels are not going to be that good. I don’t think anything else is, but I’m curious if you know, when you do a cost on a hotel, how it looks typically compared to like what I just described with apartments? 

Steve: Yeah, I can’t speak obviously, compared to apartments, but, I mean, there are kind of general rules with the IRS with how they allow you to break it out on the first price allocation. What I have heard with clients is that you get accelerated depreciation for renovation. The great thing about hotels is not great, but you are constantly putting money back in much more wear and tear than you would say in an apartment building, an office building. And I do think that you get to expense a lot of that. Sure. I mean, I know from my personal hotel investments we’ve had great years because we’ve renovated for the next three years. My tax, it is very low, even though I know the underlying numbers are really strong.

Buck: On a yearly basis, does the depreciation of it for the most part, and the interest on the debt has it pretty much offset your cash flow?

Steve: To a large extent, yeah. But the offset of that is you are putting money into the deal, you are renovating, but you’re taking that out of cash flow. And if you’ve underwritten the deal correctly, you have this say for reserve that you underwrite all the time and that’s already baked into your cap rate when you bought the deal. 

Buck: So right now, you were saying it still might not be the best time. Not a lot of deals trading, is that right? 

Steve: Yeah. I mean, California, and you probably see this with apartments. California is always hard on a cash flow basis to make deals work. I think where you’ve had success in California on appreciation. But cash flow is always tough. Yeah, it’s really tough now because, like I said, it’s hard to force people to sell. Nobody ever want if they don’t want to sell, it’s really hard to make them sell, and especially when they see their numbers coming back so quick. And now, even with Delta starting to recede, people think, well, our recovery just got pushed back. Six months we’ll be out of this thing. And most of California is now vaccinated. You know, I got to believe we’re coming out of this. Maybe in that we always talked about, what I do remember talking about before was I suggested just buying hotel stock. 

Buck: Oh, by the way, let me just say that. I don’t know how many people emailed me and said, you know, that recommendation Steve had made me a lot of money. Can you please thank him? I had at least three or four emails, people who went and you had some leads that you recommended that apparently just really hit it big. 

Steve: Well, the funny thing is, at that point, I was a little more bullish. We’re going to bounce out of this quicker than we actually did so it had a much greater impact than I thought it was going to have. I thought if it’s only impacting a certain percentage of the population, everyone else will go about their business. But, yeah, underestimated that. But it didn’t matter. It was a nice pop in the market, justified or not, where we bottomed out. And I thought that discount is just too great because these companies that are recommended had phenomenal hotels and phenomenal markets. But a lot of those markets, like San Francisco really got slammed and they stayed slammed. So if I knew that, that I knew, then what I know now I probably would have been a little more cautious, but it worked out. It worked out really well. And Interestingly enough, I was reading Wall Street Journal today and they’re saying, oh, hotel stocks are great deals. These as what you invested. And I said, really, they’re not off their peak from pre Covid. I thought, my God, 10% nothing. Now they’re calling that a great deal. And I’m thinking, Boy, I wouldn’t invest in it, in something that’s pre pandemic. But they’re saying that’s a great deal. So at the time when I recommended it, everyone’s like, oh, hotels are horrible. Don’t invest in a hotel. That’s crazy. And now they’re saying hotels are hot. And I’m going, Well, I wouldn’t do that deal now at a discount. That’s crazy. Yeah, I know. You should get it much bigger. And when you think about it, you’re just talking about the equity, which is just part of the capital stack. So the value per room is probably only down. Maybe pre-pandemic. That’s no bargain, if that’s true. I don’t think hotel stocks now are a good idea, and now I would probably steer clear, you know. 

Buck: Yeah. I was going to ask you if you think it’s probably not a good idea now? 

Steve: Yeah, I haven’t really looked into it. I just assumed that there was a moment in time and we hit it and now it’s probably gone. So I didn’t really look into it. And then I saw the article and the discount is no, you’re not being reimbursed or you’re not being compensated for the kind of risk I think you’re talking about. And I think we’ve seen how stupid policy can get. Really. Now it went from stop to spread to let’s have zero infection or something, and they can really shut you down. It’s crazy.

Buck: Yeah. Well, it is what it is. I think many people in the contrarian world, we kind of had expected there to be more stuff and discount, but there really wasn’t. 

Steve: Well, it’s like I said, when everything is under water, how does the lender foreclose? Because then the lender is underwater and the regulators from the get go in this we’re saying we’re going to go easy. We’re not going to force the lenders hands to make this happen. And so I figured nothing was going to happen. And I did think this would be somewhat of a V or U or something. It would come out of it pretty quickly. It wasn’t like a normal financial recession, which could go on for four years. And then even if the lenders want to look the other way, they can’t at some point. Yeah, absolutely. But here I figured we’d get out of it quick enough that they would be able to. And I think that’s what happened. 

Buck: What do you think in terms of long term hotels? Are you still bullish? You still think it’s a good place to be? Obviously. Tell us the case for hotels in the next decade. 

Steve: Yeah, I think hotels again, I think long term, you get rewarded for the risk that you take because it’s an operating business and a good time. They do very well. You just have to probably have a bigger financial cushion. And you thought you needed because things happen. Covid happens the next Covid will happen, and you just have to be able to withstand it, withstand that twelve or 18 month period. But otherwise, I think it’s good to be wary of low barrier entry markets. Luckily, in California, California is pretty tough to build in. Generally speaking, although some markets, you can slap things up pretty quick. The cities are really bullish. So you have to be careful of new inventory. But those are few markets. Most markets are pretty high barrier to entry. And I would also look out for what did Covid do long term to like CBD, like downtown LA or certain markets. Are those going to come back or are you going to have remote work now? That’s something. What’s happened that’s going to stick with us. What was kind of already happening and Covid just accelerated the trend. Central in how many people are going to now want to go back and commute an hour to get down and they got comfortable in their living room. So there are less people flying in to meetings, right? Because they’re all doing Zoom now. Yeah. So I’d be wary of heavy, heavy convention markets. You know, this expose some things. Marcus, IG Anaheim with Disneyland. We have that one big demand generator and something like this hits. Just be wary of that because I didn’t get exposed to how vulnerable some of those areas are. Disney’s bulletproof. Disneyland. It’s great. It is. But you’ve got to build in these cushions for the moments like this. 

Buck: Good stuff, Steve. It’s always good talking to you if somebody wants to get a hold of you. Do you have a website? 

Steve: [email protected] That’s the email. 

Buck: Fantastic. And is there a website associated with that? 

Steve: Yeah. titan-hospitality.com

Buck: Perfect. Steve. Sure. Thank you again, my friend. And hopefully we’ll have you on another six months or so and see how this hotel thing is working out. It’s something I definitely am interested in focusing on potentially in the future myself. 

Steve: Great. It’s never a dull moment. 

Buck: We’ll be right back.