Good day and welcome to the Pebblebrook Hotel Trust Second Quarter Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Raymond Martz, Chief Financial Officer. Please go ahead.

Thank you, Teena. Good morning, everyone. Welcome to our second quarter 2014 earnings call and webcast. Joining me today is Jon Bortz, our Chairman and Chief Executive Officer. We apologize for the music that was being played on last quarter’s call, we scheduled to have Love Potion No. 9 played, but apparently our conference call provider was stuck with Katrina and away from last quarter, and it’s appropriate for this quarter results as well. But before we start, let me remind everyone that many of the comments we made today are considered forward-looking statements under federal securities laws. These statements are subject to numerous risk and uncertainties as described in our 10-K for 2013, and our other SEC filings, and could cause future results to differ materially from those expressed in, or implied by our comments. The forward-looking statements that we make today are effective only as of today, July 25, 2014 and we undertake no duty to update them later. You can find our SEC reports and our earnings release, which contain reconciliations of the non-GAAP financial measures we use on our website at pebblebrookhotels.com. Okay, so we have another good quarter to tell you about. Our second quarter performance was better than expected on all operating metrics. Same property RevPAR for the total portfolio climbed 9.2% to $210. this surpassed our outlook for RevPAR growth of set outlook for 7% to 8% due to strong demand across all of our market segments, including group and transient with both business and leisure customers. Once again, our RevPAR growth was driven by our West Coast properties, which rose 11.7%. in addition to the healthy gains from group and transient demand, we continue to see steady growth from inbound international demand, which benefits many of our hotels, given our high concentration…

Thanks, Ray. As Ray said, the second quarter was another strong quarter for both the lodging industry and for Pebblebrook. In fact, performance in the second quarter when we look at just about all fundamental variables actually improved from the first quarter. Industry demand growth, which had accelerated to 3.8% in the first quarter, grew even faster in the second quarter at 4.5%. With supply growth continuing to be subdued in Q2 at just 0.8%, occupancy growth was even stronger, up 3.6% in the second quarter versus 2.9% in Q1. an ADR growth began to pick up some stream in Q2 with year-over-year growth of 4.4%, versus a healthy 3.8% in Q1. As a result, industry RevPAR grow very healthy 8.2% in Q2, the strongest growth since the first quarter of 2011. This acceleration in demand seems somewhat inconsistent with more modest growth in retail sales in the first half of the year, as well as negative GDP performance in Q1, and likely, modest growth in Q2. So the question is what’s going on with travel, why is our industry stronger than other consumer oriented businesses. well, first off, as most of you know, we’re generally not a consumer dominated business; roughly 50% to 60% of the industry’s customers are businesses, not individual consumers. for Pebblebrook and many of the other lodging REITs, it’s more like 65% business travel and 35% leisure travel, and businesses are generally doing very well with many record profits and an expectation for a meaningful increase in the rate of profit growth in 2014. In addition many industries are beginning to see greater challenges in finding new hires and their skilled labor and white collar employees are seeing a greater number of opportunities for compensation, or positional advancement as the economic cycle lengthens. As a…

Thank you. (Operator Instructions) We will take our first question from Andrew Didora, Bank of America. Andrew Didora – Bank of America Merrill Lynch: Hi, good morning guys. Jon, just wanted to get your thoughts here on asset pricing that you’re seeing in your target markets, I guess we’ve obviously seeing pricing creep up pretty nicely here particularly as a buyer pool deepens and cash flow improves. Could you may talk about, where you’re seeing deals close relative to replacement costs in your markets and how narrowed do you think this gap could get as this cycle lengthens?

Well, you’re right. We are definitely seeing values increased based upon, cash flow is increasing and the additional flow of capital particularly from the private equity side. And the increase in leverage available that is helping facilitate that at very low interest rate levels. I think it really various by property and by market fairly dramatically. I mean our acquisition in Portland and again you never know whether you replace the unique property like The Nines, but prior developer completed the property in 2008 at 11% higher than the price we paid in 2014. We are seeing – and something we’ve been tracking recently and perhaps you’re hearing that’s from other property sectors. But there is certainly been a fairly dramatic escalation in land cost in the major urban markets, we’re seeing that in New York, we’re seeing it in San Francisco, we’re seeing that even in DC for the limited amount of land that’s trading. But we’re also seeing upwards of 4% to 5% increase in construction cost and even greater in some of FF&E costs as the more limited number of manufactures are ready to price higher and get back some of their profit margins. So it really various Andrew by market, I mean, in New York you’ve seen some transactions well over $1 million, but if you want to build a new luxury hotel as high that’s probably $5 million to $6 million, maybe even more than that today. So we still think you can buy in many markets full service, quality assets at a minimum of 10% discount to replacement cost and maybe upwards of 20 in a number of markets. Andrew Didora – Bank of America Merrill Lynch: Thank you for that. Yes, I guess that all seems to make sense to me, I guess just switching gears a little bit back to the East Coast mainly to the DC market. It seems like you have done number that we continue to see out of DC continue to pre-volatile, there is some good weeks and (indiscernible) some very poor results. I guess how much longer do you think these trends will last and are you seeing any sort of green shoots in that market it all right now.

Well, we think DC in general it’s going to be an underperformer for the next several years. It’s going to struggle with two things, it’s going to struggle with government, we don’t think other than this snapback from the closer government. We really don’t see any meaningful increase in government travel that was dramatically reduced over the last several years. We think the new levels of government travel are here to stay. And of course we are lapping them kind of as we speak; so on a year-over-year basis there won’t to be a drag anymore. And we are beginning to see employment growth come back in DC and of course that’s a healthy thing for overall demand. But I think we’re going to struggle with the supply that’s coming into the market and the lack of growth in government over the next several years and perhaps that will change as it always does after several years when government begins to grow again, but I think it’s still going to be a couple of years off based upon the political stalemate that we see here in Washington. So our view would be, the good thing is the markets running at kind of record occupancy levels, the market key will get absorbed and it comes with an ability to drive new business into the market both because of the large amount of meeting space developed with it, but also and making it more attractive for inventions to come here. And we see that in the uptick in the convention calendar in 2016 and 2017. But we also have some more supply coming into the market including at both ends of the market, the upper end, and the lower, or mid scale end. So I think it’s – we just think it’s going to be an underperformer for the next several years, but a great long-term investment market because of the barriers to entry, I mean, they are not much higher in other markets then they are in DC. Andrew Didora – Bank of America Merrill Lynch: That’s really helpful. I appreciate the color. Thanks guys.

We will take our next question from Rich Hightower, ISI Group. Richard Hightower – ISI Group: Hi, good morning guys. Couple of questions, first on the corporate finance side notwithstanding Ray’s earlier comments about the strength in the term loan market and the additional debt capacity, the Pebblebrook has I mean just given very good trading on a cap rate basis right now. Do you think that an equity raise might be conservative way to raise additional capital unpaid on the revolver just kind of given some of the uncertainty that’s still is out there in the world today.

I don’t really think so I mean I think an equity – raising equity for us at this point in the cycle with the high growth we have in the portfolio and the low leverage level. I mean we are at with The Nines acquisition, 33% debt has compared to our total gross investment, which has occurred over the last 4.5 years. So it’s occurred in general much lower values – then more values are today. So I think equity an additional, that make sense if we have something to do with it in terms of new investments, but I don’t think swapping out inexpensive debt for inexpensive equity is a good trade off when we’re growing at the pace that we are growing at. Because Rich, what – we’ll just lose some of those nice leverage we have for the shareholders over the next several years, which look to be fairly favorable from an underlying micro-perspective that will accrue to them as we get the benefit of the renovations of these properties and the recapture of the last RevPAR as well as the growth in margins all of which that are going to help drive our same property EBITDA growth into double-digits, just like it’s doing this year. Richard Hightower – ISI Group: Okay, that’s fair. The second question in New York, have you guys kind of run the mass along with your JV partner on what a condo conversion of some of the units in the Manhattan Collection might trade for and just how that compares to the value of the hotel on a per key or per square foot basis.

No, we haven’t run that mass, our partner doesn’t have an interest in telling hotels at this time to convert them to other uses regardless of what if there is financial benefit. So that couldn’t happen until the partners have – until we have an ability to trigger a sale, if we wanted to do that two more years from now. Richard Hightower – ISI Group: Okay. All right, thanks Jon. Appreciated.

Sure.

We will take our next question from David Loeb with Baird. David Loeb – Robert W. Baird and Co.: Well, that might be question number nine.

Well, yes, we are suppose to have some music related to that, but didn’t happen, sorry about that. David Loeb – Robert W. Baird and Co.: That’s okay, totally fine. And Jon, the last couple of acquisitions have been pretty complex deals and it sounds like you’re working on them for a long time. Are we getting to the point in the cycle were pretty much any transaction you buy is likely to be either complex or require some pretty dramatic overhaul. I guess that’s Part A and Part B is how much longer do you think there is a window to continue to buy in this cycle?

So, the answer to your first question is I hope not, but if that’s were our competitive advantage lies, while we remained disciplined in – what we’re willing to pay for transactions, and that’s okay with us. As we’ve demonstrated were more than happy to take advantage of those opportunities through hard work and persistence in many cases patients. And, to read the value of opportunities like the press got through visioning and creativity and again a lot of hard work, in order to drive much higher returns. I hope they are not all that way. But, maybe they will be it’s hard to say at this point, David. As it relates to your second question, which was timing for additional acquisitions. I think, what we’ve said is this year is probably the last year will do material acquisitions and they once we do beyond we need to be both compelling and also recognize the risk of recession that ultimately may come in the next five years. And so, I would expect our volume to be relatively low. I would offset that to a small extend by the fact that supply to our micro view of the market has gotten better over the last year. And, our view point on supply growth for this year and next year and at this point 2016 is being reduced. So, now we think we are probably going to be closer to 1 to 1.2 this year versus 1.3 to 1.5 of supply growth this year, we take next year is likely to be 1.4 to 1.8, which is down from a 1.6% to 2% growth forecast for next year we had previously. And then, as we look at 2016 right now, we think that’s likely somewhere in the 2 to 2.4 range, which again is a reduction from what we thought, so while there is a lot of properties in planning it’s still a lengthy process to raise the equity and the debt. In the equity because, there is a lot of equity required for new construction and the new construction financing while increasingly available continues to be expensive and demanding some fairly top terms. So, it is getting stretched construction is going up, but it’s taking longer and of course that will continue to benefit the industry. David Loeb – Robert W. Baird and Co.: Yes, sure. One more, if you don’t mind, can you talk a little bit about the trade-off between ADR and occupancy, clearly there is an optimal and losing a little occupancy to get better rate is probably good thing, that how far you are willing to push that and how are your operators doing in terms of managing that process?

Well, there is – theoretically there is an equal trade-off would be beneficial because the ADR is going to be 10% to 15% per dollar more profitable than the occupancy is going to be. I would say most of our operators in general are working with us very closely to not only push pricing, but take the risk of remixing product, remixing your customer mix, and your base. And, what we’ve done in New York, recently we’ve taken advantage of some – I guess I would call long-term stay. Two or three months stay business, at some very attractive rates, which we can accommodate, because of the suites, we have and in particular suites with kitchen in the portfolio and that’s allowing us to replace some discounted business and OTA business. So, it isn’t just raising prices, it’s being wise or being willing to take some risk to turn some business down that you historically taken, in order to either wait or take some other business, that you think is going to come into the property. And, I would say we’re having a lot of success I mean take a look at our overall RevPAR numbers and despite out growing the industry and we picked up I think in the second quarter we picked up over 280 basis points of RevPAR penetration, and I think all of that were more was within ADR. So, we are having a lot of success in making that trade-off in a smart way, where it adds to profitability, which you see coming through in the margins as well. David Loeb – Robert W. Baird and Co.: Great, thank you.

Thank you.

We'll take our next question from Jeffrey Donnelly with Wells Fargo. Jeffrey Donnelly – Wells Fargo & Company: Good morning, guys. A few questions, Jon guess back on DC, do you think that the government, federal government effectively crowded out, if you will other employment, is there – maybe the scaling back of federal government employment or provides an opportunity for private sector employees to enter overtime. I guess ultimately, maybe to reflect, but it’s not Michigan, where you had a specialized industry, pullback leaving specialized workers, just sort of office workers. And, I don’t know do you think that there is an opportunity for employment to help that market recover a little bit more robustly?

Yeah, I would say probably, Jeff, I mean it’s interesting over the years, one of the things we struggle within this market in positions often like accounting and administrative position is. We compete with the government, where people can work just 9 to 5 and get decent pay and great benefits and so from a lifestyle perspective, we do get crowded out by the government for people in those categories. So, yeah, I think – I am sure other people experience the same thing not only in those categories, but in others. : Jeffrey Donnelly – Wells Fargo & Company: And, just to switch gears on acquisitions maybe touch on your marks in a different angle. Given material profile, where you think you can get returns is it fair to say that the potential volume on acquisitions, you could do in the next 12 months, could still near, what you’ve done in the past 12?

Yeah, I think it’s possible. Jeffrey Donnelly – Wells Fargo & Company: And, I guess, what’s your appetite for? – is that David Loeb touched on sort of larger and more complex acquisitions. Do you think we’re too late in the cycle to attempt those?

Well, I view those as two different things, so larger. We’ve always, we’ve been hesitant since we started to do large transactions either portfolios or large hotels. And the reason is risk. We have rate diversification for a small company, right now with the hotels we have, we don’t have a single hotel, but I think it’s more than 7% of our EBITDA, and so, as a result of that and you look at the balance within the portfolio from property to property. It just lowers our risk and allows us and the investment community to not have to get drag down focusing on one large asset, when we have a problem. We always have problems in the portfolio, but they are spread out and none of the problems at any particular property are going to do much damage to the performance of the overall company. So, we really like the risk profile and I would say we’ll continue to retrain from adding assets that would cause that to change and increase the risk profile of the company. I think as it relates to the more complex structures, I mean that The Nines is a good example of – was a very complex ownership structure with limitations because of historic tax credits and new market tax credits about how the transaction had to be done and what the restrictions on the new owner would be for some period of time. That limited the players and also meant an awful lot of work to make sure that it could work in a REIT structure and work for a new owner without creating a huge liability for the seller who then wouldn’t be a seller. And we are willing to invest that time which is a long time all the way back…

Yes, we don’t have that information, we don’t I guess per se we don’t find tracking it is – is all that helpful other than just to report it. I suppose our asset managers are on revenue calls with our property teams weekly and so they are much more include into the dynamics of each individual market that way than just looking at some statistics. So I apologize we don’t have that information and don’t track it, but I’d say anecdotally and certainly from that perspective. As markets get up to the levels they are at there is more compression and that’s what’s giving us more pricing power on the West Coast in particular and you’d expect some of that ultimately on the East Coast markets that are at new peak, but for kind of how that – where that business is coming from and a little bit of the negative psychology that still exist in a market like DC or New York that’s refraining the willingness of property teams to take risk and price more aggressively. So compression nights are absolutely going up, but you have to rely upon that data from others. Jeffrey Donnelly – Wells Fargo & Company: Okay, thanks guys.

We will take our next question from Wes Golladay from RBC Capital Markets. Wes Golladay – RBC Capital Markets: Good morning guys. You guys are building a nice footprint in Portland; can you give us your multiyear outlook for that city?

Yes, we think the multiyear outlook is great, we wouldn’t have bought there otherwise I mean the demand growth in that market over the last several years has been as high as any West Coast market. So, long-term 25-year trends for supply are as low as most any market on the West Coast maybe but for West LA and more recently San Francisco. So the economic environment seems very favorable, there is healthy growth, there is very strong employment growth in the markets. We think that will continue, it benefits from its quality of life, public transportation, airlift as a gateway city with geographic location between San Francisco and Seattle, where it’s seeing technology company growth in the marketplace there are – there has been movements from San Francisco to Portland for quality of life and presumably, lower cost labor. and so it’s a little bit of the stepsister to Seattle right now, but it looks a lot to us, to some extent, like Seattle 10 years ago in terms of its potential evolution. Wes Golladay – RBC Capital Markets: Okay. and now looking at the West Coast versus the East Coast, the performance this year has been heavily weighted towards the West Coast. and you mentioned, this will be a multi-year trend, but do you think you can maintain the same magnitude of 3% to 5% outperformance, say through the next, call it 2016-2017?

Yes. I mean well, that’s really hard to forecast at this point, Wes. I mean I would say theoretically, short, the supply growth continues to be very limited in the West Coast markets and more active in a number of the East Coast markets. and so we certainly think, you’re going to continue to see more attractive underlying fundamentals in those markets. How big the spread will be? hard to forecast at this point. Wes Golladay – RBC Capital Markets: Okay. thanks a lot guys.

We’ll take our next question from Bill Crow with Raymond James. Bill A. Crow – Raymond James & Associates, Inc.: Hey, good morning guys. Jon, you talked about the diversification of your portfolio, and clearly from size perspective, that’s true, Kimpton continues to represent a sizable amount of the number of the assets managed. They are morphing into a large brand and they recently announced the change, their frequent guest program et cetera. how is that going to impact you? you think that’s a positive that they’re growing right, they’re growing, do you think it’s a negative or the frequent guest program add to expenses, do you have any less flexibility and dealing with them as a bigger company today?

Yes, all good questions. I would say 100% across the board, what’s going in Kimpton from a growth perspective is a positive. It is a lot more cross customer utilization, there is much better visibility. they continue to move back towards their routes of being a fun different company focused on providing a unique experience, which we think is debt on in terms of what the customer trends are in the industry. and they continue to do it without adding cost. So the restructuring of their loyalty program into Kimpton Karma, which is so cool, funny by the way, and is not adding costs to the hotels. They’ve done it very thoughtfully, and they’ve done it, I think really well from a design and structure perspective. So we’re really pleased with where Kimpton is going. they have been a great partner, they continue to be extremely sensitive to the cost side and totally understand, they have new competition. There have new competitions, there are new competitions beginning to come from the big brands with Curio and with autograph and luxury collection, on which the brands are pushing, because that’s where the consumer trends are growing the fastest. And so they get it, and they know that they have to run faster, but they also have to be even more owner sensitive, particularly on the cost side, and they’re doing that and they’ve been a great partner from that perspective. So we think what’s happening with Kimpton right now is all for the positive. Bill A. Crow – Raymond James & Associates, Inc.: Jon, are they using that increased size and leverage against the OTAs at all to try and reduce that commission rate?

They are having different levels of success and as an example; I know with one of the vendors, they’ve continued to be at a stand, still on where they are with negotiations, because their owners are not supportive of what that OTA vendor is looking for. so they’re being very responsive to the ownership groups and basically, following their desires. But yes, they’re – in fact, we’re seeing it through the whole portfolio, not just to Kimpton, but we’re having a very good success shrinking the amount of OTA business being done in the portfolio and increasing the amount of company.com or brand.com, or property website business in the portfolio and that continues to be a big focus of ours and our property teams, because it’s obviously much more profitable. Bill A. Crow – Raymond James & Associates, Inc.: Yes. Thank you. Finally, from me, Jon, are you seeing any pushback on rate from your clientele, I mean are you losing people that have to go, because of per diems or whatever issues are out there, are we starting to see rates get to that point where you start losing occupancy?

We haven’t really seen that Bill, and in fact the historical trends are as there’s more competition for people, the travel policies tend to get more lacks and allow more trade up within the portfolio. We obviously saw that with government and it’s limited to per diem. and in fact, unfortunately in DC, from a competitive standpoint, there is a lot of business being did and done right now below per diem with government. So the market is kind of cracked from that perspective and competition is challenging in this market in DC with government. But on an overall basis, with the general demographic, we’re not seeing any more price sensitivity than we’ve been seeing. Bill A. Crow – Raymond James & Associates, Inc.: Great, that’s it from me. Thank you.

We’ll take our next question from Jim Sullivan with Cowen. James W. Sullivan – Cowen & Co. LLC: Thank you, good morning. Jon, you had talked about in the prepared remarks the work you’re doing at the W and LA, some parameters for value creation there. I wonder if you could talk to us a little bit more about this conversion from suites to rooms, you’ve had some experience in New York and you are now doing in at the W and that W, I think was an all suite hotel at the time you bought it. I’m just curious with the – when you think about the cost per room to do this, how the cost for making that conversion in LA compares to the experience in New York and how much more opportunity you might have in the portfolio to do that?

Yes, you’re right. In WLA, the opportunity comes from the fact that the hotel is all suites. And in many cases, we don’t get the value for those suites from a customer. So the property has been running in the mid to upper 80s on an annual basis and occupancy and we’ll do north of $300 and rate this year at the property. And so it seems like the demand in the market, which is running 82% occupancy or something in that Western LA market, it gives us an opportunity to add some keys where nothing else is going on in the marketplace. So economics of doing it are actually a little less expensive than they were in New York, not because costs are necessarily materially different, but in New York, at Affinia 50, we added an elevator, which ended up costing us about, for the added keys cost us something like 15,000, 20,000 more keys. So we’re ending up here at about $15,000 a key for total cost, recall we bought this property in the low 500s per key, and that was a couple of years ago and the markets continue to move, we think values are probably somewhere between 600 and 700 a key in the marketplace. And so ultimately, with stabilization, we think those keys are going to cover their costs by upwards of $500,000 a key or more. James W. Sullivan – Cowen & Co. LLC: One of the prospects for a continued conversion, say in New York, you have continued to have in the Affinia portfolio, a number of larger rooms I believe? Thank you.

Yes. The Dumont is all suites, The Gardens is all suites, The Benjamin has too many suites. And so all three of those suites have an opportunity for conversion, we’ve looked at it, specifically at The Benjamin and if I recall, we can add again, somewhere between 40 and 50 keys. We do have a vertical logistics issue that we have to figure out likely did at the 50 we’re tight on vertical transportation from a customer perspective at the Benjamin, and so we need to find the solution for that in order to add the keys. So it’s – there is nothing eminent there Jim, but there is opportunity at all three properties. James W. Sullivan – Cowen & Co. LLC: Okay, then secondly from me, I wonder if you could just give us an update on labor cost pressures that you maybe see or may aren’t seeing in new markets. And whether there are any markets where the pressure is look like they might materialize sooner.

So I would say across the board we’re not seeing any market related pressures. We are seeing obviously in various cities around the U.S. political pressure or legislation for living wage or extreme wage increases that at least in Seattle have been legislated and we’ll work their way in over the next three years. Our sense right now is the varying degrees, that’s going to happen in numerous cities around the country. It’s happened in some states although clearly too much lower increases in minimum wage. And what we believe will happen is – it’s going to get pass through one way or another to the customer. It will reduce some labor causing us to look a greater – the need for greater efficiencies, it’s going to create more outsourcing particularly outsourcing outside of – if it’s a city outside of the city service providers into other service providers. San Francisco is a good example of two things, one several years ago they passed, they called healthy SF, which is required payment per hour for all non-covered employees, I think it’s $2.44 we’ve completely pass that through to the customer through a separate charge on all the menus and all the outlet prices. So that happened in that market it’s prevalent within the restaurant industry there. And the other thing in San Francisco is we’re now moving our laundry to Sacramento and even though it’s obviously a higher transportation cost, the labor costs are much lower and the benefit costs are much lower using the state minimum wages and we’re significantly lowering our laundry cost. So those are the kinds of things that will react to with the pressure and whatever gets legislated in these cities, if it is in a full extensive national or regional increase in wages. James W. Sullivan – Cowen & Co. LLC: Okay, then finally from me. Ray use to phrase readily available talking about the five to seven year term loan market. And you address it is well talking about acquisition financing. What are we talking about over the last six months a year in terms of spread compression and what we’re at five to seven year term debt cost into that?

Well we’ve seen – what we say 25 basis point movement down in spreads and it continues quarter-to-quarter because there is lot of competition in the baking side to get the dollars out. So we continue to evaluate that now so that would imply right now spreads on five to seven year term debt could be in a range of 150 to 200 basis point depending your leverage level. And a typical five year term and then for a seven year term you probably look at increasing spread of about 20 or 30 basis points. Depending on who you work with. So per diem perspective you’re looking at a five year term in the low two’s and seven year you’re looking at a mid 2% range. So all sub 3% and I know (indiscernible) basis you decided swap it out you will add a little bit, but right now we’re looking at all in debt five year side 4% or less. So that’s when we evaluate users on a credit facility, also as we evaluate into 2016 as we have some other debt maturities and preferred equity maturities the options in front of us. James W. Sullivan – Cowen & Co. LLC: Sure, very good. Okay, thank you.

Okay, our next question from Luke Hartwich, Green Street Advisors. Lukas Hartwich – Green Street Advisors: Thank you. Good morning guys. Just quick one for me, can you update us on your thoughts on acquisition or disposition?

Sure, I think as we’ve talked before, we continue to look at dispositions in markets that we don’t view as a perpetual markets. Those would be potentially markets like Minneapolis, Buckhead, Miami and Philadelphia. And so what we are – interestingly what we continue to see in those markets on a micro basis is very little new supply coming into the market getting started. So from our perspective we’ll continue to look at the right time to dispose of those maybe this year, maybe next year and it will really depend upon what the market look like, but I think the acquisition market for those properties today it’s generally very attractive with all the equity and debt available. Lukas Hartwich – Green Street Advisors: Great, thank you.

(Operator Instructions) We have no questions in the queue at this time.

Thank you very much operator. Thank you all for listening in and have a great weekend and we look forward to updating you again three months from now.