Operator: [Operator Instructions] Our next question comes from David Katz of Jefferies. David, your line is open. Please proceed.
David Katz: Hi. Morning, everyone. Thanks for taking my question. I want to Atish go back to some of your prepared remarks. We appreciate the detail around Scottsdale and how that rolls into 2024. I think you did suggest that there could or would be more projects in 2024. And what I’m trying to envision is whether they could have the same kind of impact to Scottsdale, or we start to get into more of a cash flow pivot or harvest mode?
Atish Shah: Yes, thanks David. Yes, that comment was really meant to indicate that there are, in any given year, some projects that we do. We don’t expect to do anything next year of the magnitude of the project in Scottsdale. But while I was giving the displacement number for Scottsdale, I’m not really rolling up any in all displacement for next year, just given that we’re still in the budgeting process and capital planning mode. So that’s really what that comment was meant to indicate that there, in any given year, we have some other smaller projects. We expect will have those next year as well and we expect those, in fact, to be similar to the projects we have this year. We had a handful of other projects that we were working on, so we likely will have several other projects next year that we’ll work on as well.
David Katz: So should I think about those magnitude-wise, as something order of magnitude similar to what you did this year ex-Scottsdale? Is that a fair way to think about the outlook?
Atish Shah: Yes. I think more or less. I mean, yes, that look we still — we don’t have a specific number for those projects and the timing will obviously vary, relative to the projects we did this year, namely Grand Bohemian Orlando and the project at Salt Lake. But I think it’s probably a fair guess to do that.
Marcel Verbaas: Yes, it’s really — I’ll just add to that, David, that’s a really is — as Atish said just kind of indicating that, there may be some more disruption than essentially the $12 million that you outlined for Scottsdale. If you think about this year’s disruption, we’ve talked about $18 million of total disruption, $14 million of which came from Scottsdale. So it was an additional roughly $4 million that came from some other projects this year. We just not pinpointing exactly what it is for any additional projects because, frankly, we’re still going through the whole process of finalizing capital budget for next year and really looking at what we may or may not want to tackle next year. So, as I’m sure you can understand, we’ll get into a lot more detail on that as we do our next earnings call at the beginning of next year.
David Katz: Got it. If I could sneak one more quick one, and I’d appreciate it. One of the other public REITs announced a transaction recently, and I’m just wondering whether you think the capital markets landscape is better, worse, or the same, and whether there’s a message in that or not?
Marcel Verbaas: You know, from a capital markets perspective, maybe just, I don’t know if you want to be more specific about what you’re asking about exactly what transaction. Are you talking about company-wide transactions or you’re talking about a specific individual asset acquisition?
David Katz: Well, I mean what prompted the question was the Boston asset that Sunstone sold and —
Marcel Verbaas: Oh, got you. Sure.
David Katz: You know whether there is a message in that about receptivity or underwriting conviction and the receptivity of the capital markets? That’s what I was getting at.
Marcel Verbaas: Yes. No, Thanks. Thanks for the clarification, David. So from our perspective, I mean there’s still — clearly there are transactions being completed and there is interest in and well-located assets and good assets that are out there. And we know about our transactions that are for R&D and the pipeline that will also be viewed probably pretty constructively, as it relates to evaluations of hotel assets. And I think we all know that interest rates have obviously increased significantly. And I’m sure you’ve seen some recent refinancings that have been done that were mortgage rates are kind of the high 8% kind of range. But I think people are underwriting debt and then probably underwriting some sort of refinance down the road at hopefully more attractive levels, that gives them confidence in what their long-term returns could be.
Now that being said, I think the market is still not overly deep for larger-sized asset acquisitions and both from a number of assets that are out there and number of transactions that are getting completed. You know, we still seeing some more deals done at some kind of smaller-sized transactions than you’re seeing the larger sizes. But I do think there is certainly interest in the lodging space. And I think part of that is also being driven by kind of looking past these next six to 12 months. And looking at what’s supplied — the supply picture looks like for the space, which is obviously very, very appealing, compared to where we’ve been historically. So I think that there is certainly plenty of interest in the hotel space overall. And obviously, from our perspective, we see a pretty good path forward for growth in a portfolio like ours as well.
David Katz: Thank you. I appreciate it.
Operator: Thank you. Our next question comes from Michael Bellisario of Baird. Michael, your line is open. Please go ahead.
Michael Bellisario: Thanks. Good morning, everyone.
Marcel Verbaas: Good morning.
Michael Bellisario: Just a couple of quick clarifications. Just on the — good morning. First, on the fourth quarter outlook. It sounds like it’s all on the top line coming down a little bit. Is that correct? Or is there any incremental expense headwinds that you’re also baking into updated full-year guidance?
Atish Shah: No. Mike, I think you got it right. It’s really RevPAR-driven. I mean if you look at everything else, how we’re thinking about the renovation impact or the expense backdrop that hasn’t changed. It’s really top line-driven and primarily associated with the two things that I mentioned. The demand, a little bit lighter on weekends, and then BT ramping but ramping up slightly slower.
