LaSalle Hotel Properties (NYSE:LHO.PRI) Q4 2016 Earnings Conference Call - Final Transcript
Feb 23, 2017 • 02:00 pm ET
(Operator Instructions). Smedes Rose, Citi.
Hi, thanks. I wanted to ask you a couple of things. Just first of all, on the increasing the buyback authorization, it's a pretty large number and you haven't been particularly active in that department previously. So I am just wondering is that a checking the box and have it there or how you are thinking about buyback activity now? And then the other question just a little bit along the same lines is would you expect to have to make any kind of special dividend given the gains on your sale of the Deca hotel?
Good morning, Smedes. It's not really check the box in terms of the buyback. If that was the case I guess we would have done one a long time ago. The simple answer, though, is really optionality. So a buyback authorization really is just another tool at our disposal to use whenever the timing makes sense.
As far as the amount, the size it does tie into recent proceeds over the last 12 months from the sales of our preferred, the Merit Indianapolis, Casa, Shutters and the Deca. But it also represents an amount that we have capacity for and it also represents an amount that we could do within the boundaries of our covenants. So from that perspective that's part of the reason that we came up with the size.
But again, and we need to emphasize this that having this tool does not mean we are going to use it soon or ever. I just want to be clear about that. It really just is another tool in the tool belt. On your second part, the second part of your question, the special dividend, it's really way too early for us to make any decision on special dividend. We did have a gain on Deca, but we have the better part of 11 months to go before we figure out what, if anything, we need to do. And a lot of things have come into that process in terms of how the hotels do, if we buy anything, if we sell anything, etcetera, etcetera. So, we are a long way from making that decision.
Okay, thanks. That wasn't a good choice of words on my side. I didn't mean to sound flippant there, checking the box. It's been a long season. One last question if I could. Could you just as a reminder, are there any markets where you are operating now where you are going to see a legislative raise in cost that we should just be reminded of?
I think in New York something phases in this year and then maybe something in Seattle. But just if you could do a quick round-up, that would be valuable.
I think the short answer is we've seen those movements across the country. Really DC, Chicago, pretty much everywhere in the West Coast and I'm certainly happy to walk through any of those off-line. The big picture is that