Question-and-Answer Session
Operator
(Operator instructions) And our first question comes from the line of Jeffrey Donnelly with Wells Fargo. Please proceed.
Jeffrey Donnelly – Wells Fargo
Good morning, guys. Mark, I think in prior calls -- and you guys touched on this already, but in prior calls you indicated that you think you will eventually see that buyers’ market for assets. And I guess I’d say your peers are sounding a bit more enthusiastic about near-term acquisition opportunities, and we’re certainly seeing more headlines on buying rate activity. I guess, why do you think there is a disparity on the thinking about timing of acquisitions in the current depth of the acquisition market?
Mark Brugger
Jeff, as you know, the transaction volume is way down and we are starting to see some more deals these days. But I think it’s just too early to call that there is more of a buyers’ market yet maturing. I think everyone kind of sees the pig in the python, if you will, that it’s coming. And obviously people are trying to call the time. I think some of it is just world perspective how optimistic people are about the future deals versus what they may have in hand today. We are not seeing a tremendous volume of deals coming through our doors at the moment.
John Williams
Jeff, this is John. Just to add to that, if you think about it, in most cycles, and this is no different, the first opportunities to come out are the ones that really don’t fit also in most public companies. They are either limited service or in treachery markets or possibly with negative cash flow, none of which meet our strategic needs. But I think if you add it up all these opportunities that are out there, whether they are strategic fits or not, you can make a case that there is a growing number of potential acquisitions. But the way we characterize our pipeline and we tend to focus on strategic assets that are cash flowing and have a greater growth rate than the portfolio in general, we are just not seeing that kind of volume.
Jeffrey Donnelly – Wells Fargo
Do you think the caliber of assets that you are looking for is more of a late 2010 event? And I guess, where do you think those deals will be coming from? Are they going to be coming out of the hands of banks or, call it, distressed owners or private equity funds? How do you, I guess, identify those?
- To read the full transcript on Seeking Alpha, click here »
