Greetings and welcome to the Chatham Lodging Trust Second Quarter 2017 Earnings Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chris Daly, President of Daly Gray Public Relations. Thank you, sir. You may begin.

Thank you, Christine. Good morning, everybody and welcome to the Chatham Lodging Trust 2Q 2017 Results Conference Call. Please note that many of our comments today are considered forward-looking statements as defined by Federal Securities Laws. These statements are subject to risks and uncertainties, both known and unknown, as described in our most recent Form 10-K and other SEC filings. All information in this call is as of August 2, 2017, unless otherwise noted. And the company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations. You can find copies of our SEC filings and earnings release which contain reconciliations to non-GAAP financial measures referenced on this call at our Web site at chathamlodgingtrust.com. Now to provide you with some insight in Chatham's 2017 second quarter results, allow me to introduce Jeff Fisher, Chairman, President, Chief Executive Officer; Dennis Craven, Executive Vice President, Chief Operating Officer; and Jeremy Wegner, Senior Vice President, Chief Financial Officer. Let me turn the session over to Jeff Fisher. Jeff?

Great. Good morning, everyone. While we are certainly happy to report what I consider to be a quarter that was well within our guidance on the upper end more positive news on a few different firms here and rather than have me this call walk through some of those numbers, I think we will do things just a little differently because in the release we mentioned that we are going to -- that we have some hotels under contracts to sell, and I just wanted to talk about a little more of the bigger picture and that is Jeremy will further elaborate on the rest. But, first and foremost, we are in the process of recycling capital to sell two hotels and redeployment of that capital into want we expect will be three acquisitions. I do want to emphasize that whether it’s the sale of the hotels where there is contingencies as there is always our and relative to the acquisitions. We have to say that they are not closed and they may not close but we fully expect to be able to accomplish our capital recycling goals in 2017 and going forward in 2018, one way or the other. We have a very focused and high quality portfolio as you all know hotels and diverse set of markets around the country and although the buyer universe is not deep, we do have hotels and markets that were specifically selected for a variety of reasons and one of which is where we think cap rate for the individual asset and the buyer cap rates are low and buyer pool is a little broader to both domestic and particularly foreign capital. So, we have entered into agreement to sell to hotels for gross proceeds as I said of approximately $80 million.…

Thanks Jeff. Good morning. Our second quarter was a good quarter with FFO per share of $0.65 finishing at the top-end of our range. RevPAR declined 0.5% for the quarter, which was slightly better than the midpoint of our guidance range of flat to minus 1.5%. Excluding the six hotels in our oil and gas influence markets RevPAR would have increased 1.7% for the quarter. Like many April was the weakest month of the quarter for us with RevPAR down 3.7%, May RevPAR grew 1.2% and June RevPAR rose to 0.6%. The continuing theme for us is that we have aggressively been pushing ADR, which jumped almost 3% in the quarter to a very strong $169 certainly an impressive ADR and a testament to the quality of our portfolio as Jeff alluded to just prior. Although occupancy was down a little over 3%, absolute occupancy levels remain a very healthy 83%, which is noteworthy given the substantial increase in new supply across the industry and within our markets. Working with Island Hospitality, we remain hyper focused on our revenue management strategies and in the second quarter we outperformed our markets average RevPAR growth by 162 basis points which is a phenomenal result. Popping ADRs, which also comes into play when we talk about our ability to generate high operating margins. Looking at few of our specific and key markets within Silicon Valley in Sunnyvale where we have almost 500 rooms year-to-date demand has grown 0.7%, while our new supply has grown 1.5%. Given that dynamic we are pleased that RevPAR was essentially flat but we are able to grow ADR by really impressive 5.2% in the quarter. As Jeff mentioned earlier we have strong relationships with some of the largest companies in the world and although it's difficult at times…

Thanks Dennis. Good morning everyone. For the quarter, we reported net income of $5.1 million or $0.13 per diluted share compared to net income of $12.3 million or $0.31 per diluted share in Q2 2016, $6.7 million of the $7.2 million decline as related to an impairment we took on our SpringHill Suites located in Washington, Pennsylvania. The primary differences between net income and FFO relate to non-cash costs such as depreciation which was $11.7 million in the quarter, one-time gains or losses which were $6.7 million and our share of similar items within the joint ventures which were approximately $1.8 million for the quarter. Adjusted FFO for the quarter was $25.2 million compared to $26.8 million in Q2 2016 a decrease of 6%. Adjusted FFO per share was $0.65, which represents a decrease of 5.8% from the $0.69 per share generated in Q2 2016. Adjusted EBITDA for the company declined 4.9% to $35.1 million compared to $36.9 million in Q2 2016. In the quarter, our two joint ventures contributed approximately $4.8 million of adjusted EBITDA and $2.7 million of adjusted FFO. Second quarter RevPAR was up 2% in the Inland portfolio and down 3.1% in the Innkeepers portfolio. The strong performance in the Inland portfolio was largely attributable to the significant amount of renovation was completed on those hotels in 2016. And the weaker performance in the Innkeepers portfolio was primarily due to the disruption being caused by renovation occurring in that portfolio in 2017. Our balance sheet remains in an excellent condition. Our net debt was $563 million at the end of the quarter and our leverage ratio was 39%. In Q2, we issued 648,000 shares under our ATM program after we were added to the S&P Small Cap 600 Index, which generated $12.9 million of net proceeds.…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question comes from the line of Gaurav Mehta with Cantor Fitzgerald. Please proceed with your question.

Thanks. Good morning. So couple of questions, first on asset sales, you talked about these being first asset sales since 2010, so I was wondering why you deciding to sell now and how many more assets should we expect to be sold after the two assets?

Yes. I will address that Gaurav. It's Jeff. How are you doing today? And then, Dennis and Jeremy, you could follow on. But, I think the rationale here is not to simply sit still at a time when we all know RevPAR kind of best case is flat or up a little bit or down a smidgen. In the current environment we're looking for ways to make money, I mean pure and simple. And we see some of our West Coast assets particularly are kind of in markets where foreign capital is very attracted to be there and to pay cap rates that really as I said would allows us to achieve a good positive spread on something that we might be able to buy. And if we are looking at assets that we think either or little bit older or maybe haven't upcoming even if it's just soft goods, renovation and not having to take the downtime, the displacement and the capital to do that and fell at a pretty attractive number then we think that's our job.

Okay. And I guess on the acquisition side, could you talk about what you are seeing in the market? And then, would be acquiring more asset only if you are able to sell more assets or that's not dependent on that?

Yes. I mean it's -- that's the general idea, as we did issue just a little bit of stock on an opportunistic basis because we knew we had couple of interesting things in our pipeline. The market is no different overall in terms of number of hotels that are out there to buy or folks that even really want to seriously talk about it. But, nonetheless, we are able to kind of get in there with some direct relationships and as we always have here and there make a few interesting deals and we will continue to try to do that subject to being able to and you can never match perfectly obviously the timing of selling something and buying something but we will do the best we can on that front.

Okay. And then, lastly, you talked about decline in supply growth rate in some of your markets, are they any specific markets where you are seeing that?

Well, I mean in terms of declining growth rate for us that really talks about Houston and the fact that it's been down on average 20% in terms of RevPAR for the last year and that is mitigating in the second half of the year to down approximately 9%. So, we are certainly haven't seen the bottom there yet. But, on a relative basis, it has gotten a little bit better. If you are talking about supply as well?

Yes. I think you mentioned that for three consecutive quarters, yes, you are seeing decline in the growth rate of the supply?

Yes. Across our entire portfolio, yes.

Okay. So, it's not in any specific market?

Yes. Looking to specific markets, the Seattle Bellevue area has absorbed a tremendous amount in new supply over the last few years that's coming down a little bit. In terms of growth rate of new supply, obviously, even if you look at Houston market, new supply is still coming but on a growth rate basis relative what it has happened in the last couple of years, it's down, similar stories in even Pittsburgh, Pennsylvania as well where -- there are still new supply coming and it's still going to impact us. But, the growth of that new supply is down from what it was. So, it's just an encouraging trend that it has gotten a little bit better, but it doesn't mean that it's over.

Okay. Thank you. That's all for me.

Thank you.

Our next question comes from the line of Anthony Powell with Barclays. Please proceed with your question.

Hi. Good morning, guys. In terms of your acquisitions, you talked about some of the demand characteristics you are looking for -- what about supply in some of these new markets?

Yes. I mean I think listen in each instance we look at new supply and what's coming in terms of market demand and what we believe is market growth and listen it's -- none of the markets are without new supply coming. But, certainly we believe that the demand growth is there and the corporate demand in terms of not only just this year, but as you look out one, two or three years in terms of what expansions are happening in these areas, whether that be corporate relocations are government spending or shipbuilding, whatever it maybe that we believe that just very similar to other acquisitions we made that we'll be able to absorb that and still have [outsize] [ph] growth.

Got it. Thanks. And could you give an update on the CapEx in Silicon Valley, Guest House and just overall what's maybe slowing up the expenses there and generally, if you do more development there or elsewhere in your portfolio, how would you finance new development?

Sure. Specifically with respect to Silicon Valley, there is really no update in terms of CapEx or time from there. We are still working on those projects. We've still been spending a lot of time value engineering, the demand, the construction cost and the build out of those expansions and redevelopment. So, no specific timetable yet and no -- I do believe that we will start to go back out to bid on one of those locations within the next few months and we will have a better handle on it probably as we talk to you guys in November. And then, if you look at -- the second question was related to, what again?

General financing of portal in there any development given you have slightly levers than peers, so would you issue more equity, cash flow, how would you finance these types?

Yes. Listen, generally it's going to be mixture of either asset sales on balance sheet and then if the markets allow and the pricing is right given especially relative to what we believe we are going to earn on those developments we maybe over the years capacity within our ATM. But, it's going to be a mixture of all three of those things to determine how that works. I mean obviously developments can take up to couple of years. So, in terms of a significant one-time cash requirement that usually developed over a period of time. So, it's not something that all of a sudden you are stuck with the -- yes, we got to raise $50 million to be able to fund these developments for the next couple of years.

Right. Great. That's it for me. Thank you.

Thank you.

[Operator Instructions] Our next question comes from the line of Bryan Maher with FBR Capital Markets. Please proceed with your question.

Good morning, guys. So, Jeffrey you teased us a little bit with the East Coastal markets for the new hotels, are you unwilling to get any more specific than that? And then, as a second question to that, are those purchases already signed and are they contingent upon you selling the two hotels?

First, I think you know the answer to the first part of your question Bryan.

I had to ask.

Right. We've been around this a long time. So, we know, we are not in a position to tell you that now. But, just as soon as we can -- we are still excited about them absolutely will be out there with the information. Secondly, the acquisition of the hotels are not in anyway tied to the sale of the hotels or contingent on those. So, there is CBMS assumption process relative to the hotels for sale, otherwise fire is hard and that's the current status.

Okay. Thank you.

Thanks Bryan.

Thank you. It appears we have no further questions at this time. I would now like to turn the floor back over to management for closing comments.

Well, we appreciate everybody being on the call this morning. And as you could tell or we are pleased in the kind of environment particularly with regard to RevPARs we will be able to make our numbers and get the kind of flow through particularly that we are getting and frankly get the ADR increases that we are getting with a company that for example had an 86% occupancy rate to drop to 83% to 84% to me is a good job on the revenue management department side of things. So, we will continue to try to get that flow and enhance this -- these earnings with some recycling efforts as I mentioned and we look forward to talking to you on the next call or sooner. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.