Nareit’s REITwise: 2021 Law, Accounting & Finance Conference provides attendees with the opportunity to learn about the latest developments impacting legal, financial, accounting, and tax professionals in the REIT and publicly traded real estate industry. The conference will be held virtually on March 23-25, and attendees will have the opportunity earn CPE/CLE credits.
Sourav Ghosh, EVP, CFO & Treasurer at Host Hotels & Resorts (Nasdaq: HST), is one of four program directors this year. He will be moderating the “Leveraging Technology to Drive Shareholder and Stakeholder Value” session. Ghosh provides a preview of the session and reflects on the challenges of being a CFO during the COVID-19 pandemic below.
What are the most important tax, law, finance, and accounting issues that you’re watching in 2021?
From an accounting perspective, we are closely watching future cash flows, which are complicated and challenging to really forecast because of the uncertainty around the speed of business recovery.
Related to that, we are focused on reporting new non-GAAP measures that have no standard definition. Unfortunately, in the lodging REIT world we are dealing with losses due to reduced revenue and cash outflows until we get back to profitability. Cash burn is a brand new measure that we’ve discussed at length on our earnings calls. Achieving consistency in reporting new non-GAAP measures where no standard exists has been challenging. This has required clear, transparent disclosures with respect to these non-standard metrics to enable the Street to accurately compare results.
On the tax front, I would say the most critical issue right now is what the new administration’s approach is going to be towards like-kind-exchanges specifically. There is concern that the like- kind exchange provision could be limited or repealed, and the potential impact of that is at the top of our minds.
As a previous REITwise attendee, what are you looking forward to most this year? Are there any sessions you’re particularly excited about?
I think the two that really stand out are the “Economic Outlook: This Year and Post Pandemic” and “Post-Pandemic Business & Accounting Issues” sessions. We’re all so focused on the pandemic that we’re living through right now that thinking about post-pandemic challenges should be an interesting topic.
You’re moderating the “Leveraging Technology to Drive Shareholder and Stakeholder Value” session at REITwise. Can you give us a preview of this session?
The four broad themes that we will be covering are:
- How do we harness data and data analytics to drive real-time business decisions?
- Implementation of technology that can help drive incremental revenue as well as reduce operating costs to maximize EBITDA;
- The opportunities and challenges that companies are faced with as they go through the journey of digital maturity;
- The role of technology in enabling ESG initiatives.
On the ESG front, we’ll be discussing questions such as can we solve the real estate greenhouse gas problem simply by putting solar panels of roofs? Other than solar panels, what technologies can help buildings de-carbonize? How can you drive ESG initiatives with technology?
Evan Regan-Levine, EVP, Strategic Innovation & Research at JBG SMITH (NYSE: JBGS), will also be talking about their initiative with Smart Cities. He will address how a 5G connected city can drive ESG initiatives, including operations and maintenance technologies helping buildings be more efficient and sustainable.
As a CFO during COVID-19, what have been the biggest challenges you’ve faced over the last year?
I would say it has been juggling multiple challenges and issues to manage a real-time crisis while solving for long-term success. Everything needed immediate attention and making sure all the i’s were dotted and the t’s were crossed before making decisions through a rapidly evolving business environment was the biggest challenge.
For us as a lodging REIT, we obviously had a precipitous drop in occupancy and immediately had to make sure we had enough liquidity to weather the pandemic. While monitoring liquidity and keeping an eye on how much cash we were burning on a monthly basis, we were also working with our operators to make sure we were thinking beyond the pandemic and making operating model changes that would allow us to get back to our prior levels of EBITDA—and then some—much quicker.
The past year has been a mix of making short-term decisions while thinking proactively about the future. We’ve had to make sure we’re making the right decisions today that set us up for long-term success post-pandemic.