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What changed in Apple Hospitality REIT, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Apple Hospitality REIT, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+316 added−298 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-22)

Top changes in Apple Hospitality REIT, Inc.'s 2024 10-K

316 paragraphs added · 298 removed · 252 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

52 edited+14 added−10 removed57 unchanged
Biggest changeThe Company did not dispose of any properties in the year ended December 31, 2023. As of December 31, 2023, the Company had an outstanding contract to sell two of its hotels, which were both sold to an unrelated third party, for a gross sales price of approximately $33.5 million in February 2024.
Biggest changeAs of December 31, 2024, the Company had outstanding contracts to sell two of its hotels, one of which was sold to an unrelated party in February 2025, while the other is expected to be sold in the first quarter of 2025 to a separate unrelated third party, for a combined gross sales price of approximately $21.0 million.
Depending on market conditions, over the long term, the Company may also receive proceeds from strategic additional secured and unsecured debt financing, dispositions of its hotel properties or issuance of common shares through equity offerings, such as the Company’s at-the-market offering program described below.
Depending on market conditions, over the long term, the Company may also receive proceeds from strategic additional secured and unsecured debt financing, dispositions of its hotel properties or issuance of common shares through equity offerings, such as through the Company’s at-the-market offering program described below.
These policies offer coverage features and insured limits that the Company believes are customary for similar types of properties in similar locations. However, various types of catastrophic losses, like earthquakes, hurricanes, or certain types of terrorism, may not be insurable or may not be economically insurable.
These policies offer coverage features and insured limits that the Company believes are customary for similar types of properties and risks in similar locations. However, various types of catastrophic losses, like earthquakes, hurricanes, or certain types of terrorism, may not be insurable or may not be economically insurable.
In May 2023, the Company entered into an operating lease for an initial 15-year term with a third-party hotel operator at its independent boutique hotel in New York, New York for all hotel operations of the hotel’s 210 hotel rooms (“non-hotel property”).
In May 2023, the Company entered into an operating lease for an initial 15-year term with a third-party hotel operator at its independent boutique hotel in New York, New York for all hotel operations of the hotel’s 210 guest rooms (“non-hotel property”).
See Note 4 title “Debt” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, appearing elsewhere in this Annual Report on Form 10-K, for a description of the Company’s unsecured credit facilities.
See Note 4 title “Debt” 5 of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, appearing elsewhere in this Annual Report on Form 10-K, for a description of the Company’s unsecured credit facilities.
New York Independent Boutique Hotel Lease In May 2023, the Company entered into an operating lease for an initial 15-year term with a third-party hotel operator at its independent boutique hotel in New York, New York for all hotel operations of the hotel’s 210 hotel rooms.
New York Independent Boutique Hotel Lease In May 2023, the Company entered into an operating lease for an initial 15-year term with a third-party hotel operator at its independent boutique hotel in New York, New York for all hotel operations of the hotel’s 210 guest rooms.
The Company intends to maintain staggered maturities of its debt, utilize unsecured debt when available and fix the rate on a portion of its debt. All of these strategies reduce shareholder risk related to the Company’s financing structure.
The Company intends to maintain staggered maturities of its debt when possible, utilize unsecured debt when available and fix the rate on a portion of its debt. All of these strategies reduce shareholder risk related to the Company’s financing structure.
During the year ended December 31, 2023, the Company sold approximately 12.8 million shares under its ATM Program at a weighted-average market sales price of approximately $17.05 per common share and received aggregate gross proceeds of approximately $218.6 million and proceeds net of offering costs, which included $2.6 million of commissions, of approximately $216.0 million.
During the year ended December 31, 2023, the Company sold approximately 12.8 million shares under the Prior ATM Program at a weighted-average market sales price of approximately $17.05 per common share and received aggregate gross proceeds of approximately $218.6 million and proceeds net of offering costs, which included $2.6 million of commissions, of approximately $216.0 million.
During 2023, all employees involved in the day-to-day operation of the Company’s hotels were employed by one of 16 third-party management companies engaged pursuant to the hotel management agreements. Seasonality The hotel industry historically has been seasonal in nature. Seasonal variations in occupancy at the Company’s hotels may cause quarterly fluctuations in its revenues.
During 2024, all employees involved in the day-to-day operation of the Company’s hotels were employed by one of 16 third-party management companies engaged pursuant to the hotel management agreements. Seasonality The hotel industry historically has been seasonal in nature. Seasonal variations in occupancy at the Company’s hotels may cause quarterly fluctuations in its revenues.
The Company attempts to set a rate that can be consistent over a period of time as it forecasts its cash available from operations. The Company’s annualized distribution rate was $0.96 per common share at December 31, 2023.
The Company attempts to set a rate that can be consistent over a period of time as it forecasts its cash available from operations. The Company’s annualized distribution rate was $0.96 per common share at December 31, 2024.
The Company has implemented various initiatives to ensure the Company remains inclusive, equitable and supportive for all, including a formal online training program that all employees of the Company are required to complete annually for the prevention of discrimination and harassment in the workplace, including unconscious bias.
The Company has implemented various initiatives to ensure the Company remains inclusive, equitable and supportive for all, including a formal online training program that all employees of the Company are required to complete annually for the prevention of discrimination and harassment in the workplace.
The Company is committed to working safely and maintaining a safe workplace in compliance with cleanliness guidelines set forth by the Centers for Disease Control and Prevention (CDC), and in compliance with applicable Occupational Safety and Health Act (OSHA) standards.
The Company is committed to working safely and maintaining a safe workplace in compliance with cleanliness guidelines set forth by the Centers for Disease Control and Prevention (CDC), and in compliance with applicable Occupational Safety and Health Administration (OSHA) standards.
The Company’s Corporate Responsibility Report, issued in December 2023, provides further detail of the Company’s environmental, social and governance progress, and can be found on the Company’s website at www.applehospitalityreit.com .
The Company’s Corporate Responsibility Report, issued in December 2024, provides further detail of the Company’s environmental, social and governance progress, and can be found on the Company’s website at www.applehospitalityreit.com .
The Company also owns one property leased to third parties. As of December 31, 2023, substantially all of the Company’s hotels operate under Marriott or Hilton brands. The hotels are operated and managed under separate management agreements with 16 hotel management companies, none of which are affiliated with the Company.
The Company also owns one property leased to third parties. As of December 31, 2024, substantially all of the Company’s hotels operated under Marriott or Hilton brands. The hotels are operated and managed under separate management agreements with 16 hotel management companies, none of which are affiliated with the Company.
As of December 31, 2023, approximately 85% of the Company’s hotels operated under a variable management fee agreement, with an average initial term of approximately one to two years, which the Company believes better aligns incentives for each hotel manager to maximize each property’s performance than a base-plus-incentive management fee structure, as described below, which is more common throughout the industry.
As of December 31, 2024, approximately 82% of the Company’s hotels operated under a variable management fee agreement, with an average initial term of approximately one to two years, which the Company believes better aligns incentives for each hotel manager to maximize each property’s performance than a base-plus-incentive management fee structure, as described below, which is more common throughout the industry.
More specifically, Apple Gives organizes company-wide community events with charitable organizations, deploys aid to markets and associates affected by natural disasters, and allocates funds and other resources to a variety of causes. Human Capital The Company believes that each of its 63 team members (as of December 31, 2023) plays a vital role in the success of the organization.
More specifically, Apple Gives organizes company-wide community events with charitable organizations, deploys aid to markets and associates affected by natural disasters, and allocates funds and other resources to a variety of causes. Human Capital The Company believes that each of its 65 team members (as of December 31, 2024) plays a vital role in the success of the organization.
Repurchases under the Share Repurchase Program have been funded, and the Company intends to fund future repurchases, with cash on hand or availability under its unsecured credit facilities, subject to applicable restrictions under the Company’s unsecured credit facilities (if any).
Repurchases under the Share Repurchase Program have been funded, and the Company intends to fund future repurchases, with cash on hand, proceeds from dispositions or availability under its unsecured credit facilities, subject to applicable restrictions under the Company’s unsecured credit facilities (if any).
See Note 4 title “Debt” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, appearing elsewhere in this Annual Report on Form 10-K, for a description of the Company’s debt instruments as of December 31, 2023 and a summary of the financial and restrictive covenants as defined in the credit agreements.
See Note 4 titled “Debt” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, appearing elsewhere in this Annual Report on Form 10-K, for a description of the Company’s debt instruments as of December 31, 2024 and a summary of the financial and restrictive covenants as defined in the credit agreements.
The Company defines metrics from Comparable Hotels as results generated by the 223 hotels owned and held for use as of the end of the reporting period.
The Company defines metrics from Comparable Hotels as results generated by the 219 hotels owned and held for use as of the end of the reporting period.
Item 1. Business The Company, formed in November 2007 as a Virginia corporation, is a self-advised REIT that invests in income-producing real estate, primarily in the lodging sector, in the U.S. The Company has elected to be treated as a REIT for U.S. federal income tax purposes.
Item 1. Business The Company, formed in November 2007 as a Virginia corporation, is a self-advised REIT that invests in income-producing real estate, primarily in the lodging sector, in the United States (“U.S.”). The Company has elected to be treated as a REIT for U.S. federal income tax purposes.
In addition to the regular monthly cash distribution of $0.08 per common share approved by the Board of Directors in December 2023, the Board of Directors approved a special cash distribution of $0.05 per common share for a combined distribution of $0.13 per common share, paid in January 2024, to shareholders of record as of December 29, 2023.
In addition to the regular monthly cash distribution of $0.08 per common share approved by the Board of Directors in December 2024, the Board of Directors approved a special cash distribution of $0.05 per common share for a combined distribution of $0.13 per common share, paid in January 2025, to shareholders of record as of December 31, 2024.
In May 2023, the Company’s Board of Directors approved a one-year extension of its existing share repurchase program, authorizing share repurchases up to an aggregate of $338.7 million (the “Share Repurchase Program”). The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2024 if not terminated or extended earlier.
In May 2024, the Company’s Board of Directors approved a one-year extension of its existing share repurchase program, authorizing share repurchases up to an aggregate of $335.4 million (the “Share Repurchase Program”). The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2025 if not terminated or extended earlier.
The timing of share repurchases and the number of common shares to be repurchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of December 31, 2023, approximately $335.4 million remained available for purchase under the Share Repurchase Program. 6 Hotel Industry and Competition The hotel industry is highly competitive.
The timing of share repurchases and the number of common shares to be repurchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of December 31, 2024, approximately $300.8 million remained available for purchase under the Share Repurchase Program. 6 Hotel Industry and Competition The hotel industry is highly competitive.
During 2024, the Company anticipates investing approximately $75 million to $85 million in capital improvements, which includes comprehensive renovation projects for approximately 20 properties. Financing The Company’s principal short-term sources of liquidity are the operating cash flows generated from the Company’s properties and availability under its Revolving Credit Facility.
During 2025, the Company anticipates investing approximately $80 million to $90 million in capital improvements, which includes comprehensive renovation projects for approximately 20 properties. Financing The Company’s principal short-term sources of liquidity are the operating cash flows generated from the Company’s properties and availability under its Revolving Credit Facility.
By maintaining a flexible balance sheet, with a total debt, net of cash, to total capitalization (total debt outstanding, net of cash, plus equity market capitalization based on the Company’s December 29, 2023 closing share price) ratio at December 31, 2023 of 25.4%, the Company is not only positioned to opportunistically consider investments that further improve shareholder value, but management believes it is equipped to address developments caused by adverse economic environments. 4 Hotel Operating Performance As of December 31, 2023, the Company owned 225 hotels, including two properties classified as held for sale, with a total of 29,900 rooms as compared to 220 hotels with a total of 28,983 rooms as of December 31, 2022.
By maintaining a flexible balance sheet, with a total debt, net of cash, to total capitalization (total debt outstanding, net of cash, plus equity market capitalization based on the Company’s December 31, 2024 closing share price) ratio at December 31, 2024 of 28.5%, the Company is not only positioned to opportunistically consider investments that further improve shareholder value, but management believes it is equipped to address developments caused by adverse economic environments. 4 Hotel Operating Performance As of December 31, 2024, the Company owned 221 hotels with a total of 29,764 guest rooms, including two hotels with a total of 206 guest rooms classified as held for sale, as compared to 225 hotels with a total of 29,900 guest rooms as of December 31, 2023.
The Company’s unused borrowing capacity under its Revolving Credit Facility as of December 31, 2023 was $650 million, which is available for acquisitions, hotel renovations, share repurchases, working capital and other general corporate funding purposes, including the payment of distributions to shareholders.
The Company’s unused borrowing capacity under its Revolving Credit Facility as of December 31, 2024 was $567.5 million, which is available for acquisitions, hotel renovations, share repurchases, working capital and other general corporate purposes, including the payment of distributions to shareholders.
The Company plans to utilize its available cash, net proceeds from sale of shares under the ATM program or borrowings under its unsecured credit facilities for any future hotel acquisitions.
The Company plans to utilize its available cash, net proceeds from the sale of shares under the ATM program (as defined below), proceeds from the sales of properties or borrowings under its unsecured credit facilities for any future hotel acquisitions.
Operating performance is included only for the period of ownership for hotels acquired or disposed of during 2023 and 2022. During 2023, the Company acquired six hotels and did not dispose of any properties.
Operating performance is included only for the period of ownership for hotels acquired or disposed of during 2024 and 2023. During 2024, the Company acquired two hotels and sold six hotels. During 2023, the Company acquired six hotels and did not dispose of any hotels.
The Company’s hotels have an ongoing need for renovation and refurbishment. To maintain and enhance each property’s competitive position in its market, the Company has invested in and plans to continue to reinvest in its hotels. During 2023, 2022 and 2021, the Company’s capital improvements for its hotels were approximately $76.8 million, $61.7 million and $25.8 million, respectively.
The Company’s hotels have a periodic need for renovation and refurbishment. To maintain and enhance each property’s competitive position in its market, the Company has invested in and plans to continue to reinvest in its hotels. During 2024, 2023 and 2022, the Company’s capital improvements for its hotels were approximately $78.3 million, $76.8 million and $61.7 million, respectively.
As of December 31, 2023, the Company had approximately $1.4 billion of total outstanding debt with a combined weighted-average interest rate, including the effect of interest rate swaps, of approximately 4.26%, consisting of approximately $283.0 million in outstanding mortgage debt secured by 15 properties, with maturity dates ranging from August 2024 to May 2038 and stated interest rates ranging from 3.40% to 4.46%, and approximately $1.1 billion in outstanding debt under its unsecured credit facilities with maturity dates ranging from July 2024 to March 2030 and effective interest rates, including the effect of interest rate swaps, ranging from 2.61% to 7.15%.
As of December 31, 2024, the Company had approximately $1.5 billion of total outstanding debt with a combined weighted-average interest rate, including the effect of interest rate swaps, of approximately 4.71%, consisting of approximately $254.3 million in outstanding mortgage debt secured by 14 properties, with maturity dates ranging from April 2025 to May 2038 and stated interest rates ranging from 3.40% to 4.46%, and approximately $1.2 billion in outstanding debt under its unsecured credit facilities with maturity dates ranging from August 2025 to March 2030 and effective interest rates, including the effect of interest rate swaps, ranging from 2.61% to 6.13%.
As of December 31, 2023, approximately $5.3 million remained available for issuance under the ATM Program. 8 The Company plans to use future net proceeds from the sale of shares under the ATM Program, or under a similar successor program, for general corporate purposes which may include, among other things, acquisitions of hotel properties, the repayment of outstanding indebtedness, capital expenditures, improvement of properties in its portfolio and working capital.
The Company plans to use future net proceeds from the sale of shares under the ATM Program, or under a similar successor program, for 8 general corporate purposes which may include, among other things, acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures, improvement of properties in its portfolio and working capital.
During the year ended December 31, 2023, the Company purchased approximately 0.5 million of its common shares under its Share Repurchase Program at a weighted-average market purchase price of approximately $14.34 per common share for an aggregate purchase price, including commissions, of approximately $6.9 million.
During the year ended December 31, 2024, the Company purchased, under its Share Repurchase Program, approximately 2.4 million of its common shares at a weighted-average market purchase price of approximately $14.16 per common share for an aggregate purchase price, including commissions, of approximately $34.7 million.
The Company’s ratio of total debt, net of cash, to total capitalization (total debt outstanding, net of cash, plus equity market capitalization based on the Company's December 29, 2023 closing share price) ratio as of December 31, 2023 was 25.4%.
The Company’s ratio of total debt, net of cash, to total capitalization (total debt outstanding, net of cash, plus equity market capitalization based on the Company's December 31, 2024 closing share price) ratio as of December 31, 2024 was 28.5%.
Although the Company is working towards acquiring these hotels, in each case there are a number of conditions to closing that have not yet been satisfied, and there can be no assurance that closings on these hotels will occur under the outstanding purchase contracts.
Although the Company is working towards acquiring this hotel, there are a number of conditions to closing that have not yet been satisfied, and there can be no assurance that closing on this hotel will occur under the outstanding purchase contract.
On August 12, 2020, the Company entered into an equity distribution agreement pursuant to which the Company may sell, from time to time, up to an aggregate of $300 million of its common shares under an at-the-market offering program (the “ATM Program”) under the Company’s prior shelf registration statement and the current shelf registration statement described above.
On February 23, 2024, the Company entered into an equity distribution agreement pursuant to which the Company may sell, from time to time, up to an aggregate of $500 million of its common shares under an at-the-market offering program (the “ATM Program”) under the Company’s shelf registration statement.
The net proceeds from the sale of both hotels were used for general corporate purposes.
The net proceeds from the sale of both hotels are expected to be used for general corporate purposes.
Management and Franchise Agreements Substantially all of the Company’s hotels operate under Marriott or Hilton brands, and as of December 31, 2023, consisted of the following: Number of Hotels and Guest Rooms by Brand Number of Number of Brand Hotels Rooms Hilton Garden Inn 40 5,593 Hampton 37 4,953 Courtyard 35 4,982 Residence Inn 30 3,694 Homewood Suites 30 3,417 SpringHill Suites 10 1,544 Fairfield 10 1,213 Home2 Suites 10 1,146 TownePlace Suites 9 931 Embassy Suites 3 508 AC Hotels 3 468 Hyatt Place 3 411 Marriott 2 619 Hyatt House 2 264 Aloft 1 157 Total 225 29,900 Each of the Company’s 225 hotels owned as of December 31, 2023 is operated and managed under separate management agreements with 16 hotel management companies, none of which are affiliated with the Company.
Management and Franchise Agreements Substantially all of the Company’s hotels operate under Marriott or Hilton brands, and as of December 31, 2024, consisted of the following: Number of Hotels and Guest Rooms by Brand Number of Number of Brand Hotels Guest Rooms Hilton Garden Inn 39 5,476 Hampton 36 4,831 Courtyard 34 4,892 Residence Inn 30 3,695 Homewood Suites 29 3,291 Fairfield 10 1,213 Home2 Suites 10 1,146 SpringHill Suites 9 1,463 TownePlace Suites 8 834 Embassy Suites 4 770 AC Hotels 4 702 Hyatt Place 3 411 Marriott 2 619 Hyatt House 2 264 Aloft Hotels 1 157 Total 221 29,764 Each of the Company’s 221 hotels owned as of December 31, 2024 is operated and managed under separate management agreements with 16 hotel management companies, none of which are affiliated with the Company.
To fund the acquisitions, the Company utilized its available cash on hand, net proceeds from sale of shares under the ATM program (as defined below) and borrowings under its $650 million revolving credit facility with an initial maturity date of July 25, 2026 (the “Revolving Credit Facility”).
The Company utilized proceeds from the sale of properties and borrowings under its $650 million revolving credit facility with an initial maturity date of July 25, 2026 (the “Revolving Credit Facility”) to fund these acquisitions.
Lease revenue from this property is recorded in other revenue in the Company’s consolidated statements of operations and comprehensive income. As a result of the lease agreement, this property is excluded from the Company’s hotel and room counts effective May 2023 through the end of the lease term.
Lease revenue from this property is recorded in other revenue in the Company’s consolidated statements of operations and comprehensive income. As a result of the lease and transfer of possession to the operator, this property has been excluded from the Company’s hotel and guest room counts since May 2023.
Years Ended December 31, 2023 2022 Percent Change ADR $ 155.76 $ 149.36 4.3 % Occupancy 74.2 % 72.6 % 2.2 % RevPAR $ 115.60 $ 108.45 6.6 % Comparable Hotels Operating Performance The following table reflects certain operating statistics for the Company’s 223 hotels owned and held for use as of December 31, 2023 (“Comparable Hotels”).
Years Ended December 31, 2024 2023 Percent Change ADR $ 158.01 $ 155.76 1.4 % Occupancy 75.0 % 74.2 % 1.1 % RevPAR $ 118.54 $ 115.60 2.5 % Comparable Hotels Operating Performance The following table reflects certain operating statistics for the Company’s 219 hotels owned and held for use as of December 31, 2024 (“Comparable Hotels”).
The Company used the net proceeds from the sale of these shares to pay down borrowings under the Revolving Credit Facility, acquisitions of hotel properties and for general corporate purposes. No shares were sold under the Company’s ATM Program during the year ended December 31, 2022.
The Company used the net proceeds from the sale of these shares to pay down borrowings under the Revolving Credit Facility, for acquisitions of hotel properties and for general corporate purposes. As of December 31, 2024, approximately $500 million remained available for issuance under the ATM Program.
Lease revenue from this property is recorded in other revenue in the Company’s consolidated statements of operations and comprehensive income. As a result of the lease agreement, this property is excluded from the Company’s hotel and room counts effective May 2023 and is considered a non-hotel property through the end of the lease term.
Lease revenue from this property is recorded in other revenue in the Company’s consolidated statements of operations and comprehensive income. As a result of the lease and transfer of possession to the operator, this property has been excluded from the Company’s hotel and guest room counts since May 2023.
The following table reflects certain operating statistics for the Company’s hotels for their respective periods of ownership by the Company. Average Daily Rate (“ADR”) is calculated as room revenue divided by the number of rooms sold, and revenue per available room (“RevPAR”) is calculated as occupancy multiplied by ADR.
Average Daily Rate (“ADR”) is calculated as room revenue divided by the number of rooms sold, and revenue per available room (“RevPAR”) is calculated as occupancy multiplied by ADR.
The Company is committed to diversity, equity and inclusion and does not tolerate discrimination or harassment in the workplace.
The Company is committed to the health and safety of its employees and does not tolerate violence, discrimination or harassment in the workplace.
As of December 31, 2023, the Company owned 225 hotels with an aggregate of 29,900 rooms located in urban, high-end suburban and developing markets throughout 38 states, including two hotels with a total of 248 rooms classified as held for sale, which were both sold to an unrelated party in February 2024.
As of December 31, 2024, the Company owned 221 hotels with an aggregate of 29,764 guest rooms located in urban, high-end suburban and developing markets throughout 37 states and the District of Columbia (“D.C.”), including two hotels with a total of 206 guest rooms classified as held for sale, one of which was sold to an unrelated party in February 2025, while the other is expected to be sold in the first quarter of 2025.
Generally, occupancy rates and hotel revenues for the Company’s hotels are greater in the second and third quarters than in the first and fourth quarters. However, due to the effects of COVID-19, these typical seasonal patterns were disrupted until 2023.
Generally, occupancy rates and hotel revenues for the Company’s hotels are greater in the second and third quarters than in the first and fourth quarters.
The Company is forecasting low-to-mid single digit RevPAR growth and a slight increase in operating results for its Comparable Hotels for 2024 as compared to 2023, which is comparable to broader industry expectations.
As a result, the Company’s revenue and operating results have modestly improved during the year ended December 31, 2024, compared to the year ended December 31, 2023, which is consistent with the overall lodging industry. The Company expects low single digit RevPAR growth for its Comparable Hotels for 2025 as compared to 2024, which is comparable to broader industry expectations.
If the Company were unable to extend its maturing debt in future periods or if it were to default on its debt, it may be unable to make distributions. Insurance The Company maintains insurance coverage for general liability, property, business interruption, cyber threats and other risks with respect to all of its hotels.
If the Company were unable to extend its maturing debt in future periods or if it were to default on its debt, it may be unable to make distributions.
Years Ended December 31, 2023 2022 Percent Change ADR $ 156.55 $ 149.62 4.6 % Occupancy 74.2 % 72.6 % 2.2 % RevPAR $ 116.23 $ 108.67 7.0 % Hotel performance is impacted by many factors, including the economic conditions in the U.S. and in each individual locality.
Years Ended December 31, 2024 2023 Percent Change ADR $ 158.94 $ 158.09 0.5 % Occupancy 75.1 % 74.4 % 0.9 % RevPAR $ 119.36 $ 117.67 1.4 % Hotel performance is impacted by many factors, including the economic conditions in the U.S. and in each individual locality. Economic indicators in the U.S. have generally been stable throughout 2024.
Results of the hotel operations for the Company’s independent boutique hotel in New York, New York are included only for the period prior to the lease agreement becoming effective in May 2023. During 2022, the Company acquired two hotels and sold one hotel.
Results of the hotel operations for this property are included only for the period prior to the lease agreement becoming effective in May 2023. The following table reflects certain operating statistics for the Company’s hotels for their respective periods of ownership by the Company.
If the sellers meet all of the conditions to closing, the Company is obligated to specifically perform under the applicable purchase contracts and acquire these hotels. The Company plans to utilize its available cash or borrowings under its unsecured credit facilities available at closing to purchase the properties under contract if closings occur.
If the seller meets all of the conditions to closing, the Company is obligated to specifically perform under the purchase contract and acquire this hotel. As this hotel is under development, at this time, the seller has not met all of the conditions to closing.
As of December 31, 2023, the Company had separate outstanding contracts for the potential purchase of two hotels, consisting of one hotel in Madison, Wisconsin and one hotel in Nashville, Tennessee, for a total combined purchase price of approximately $177.5 million.
As of December 31, 2024, the Company had one outstanding contract, which was entered into during May 2023, for the potential purchase of a hotel in Nashville, Tennessee for an expected purchase price of approximately $98.2 million. The hotel is under development and is currently planned to be completed and opened for business in late 2025, as a 260-guest-room Motto.
Removed
The Company’s revenue and operating results improved during the year ended December 31, 2023 compared to the year ended December 31, 2022, which is consistent with the overall lodging industry.
Added
Consistent with this strategy and the Company’s focus on investing in rooms-focused hotels, in 2024, the Company acquired two hotels for an aggregate purchase price of $196.3 million: an existing 234-guest-room AC Hotel in Washington, D.C. and a 262-guest-room Embassy Suites in Madison, Wisconsin that was purchased at the completion of development.
Removed
Hotel occupancy was negatively impacted in many markets by the Omicron variant of COVID-19 during the first quarter of 2022, contributing to an increase of the Company’s Comparable Hotels RevPAR of approximately 7.0% for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Added
As of December 31, 2024, a $1.1 million contract deposit (refundable if the seller does not meet its obligations under the contract) had been paid. If the closing occurs, the Company plans to utilize its available cash or borrowings, including borrowings under its unsecured credit facilities available at closing, to purchase the hotel under contract.
Removed
There is no way to predict future economic conditions, and there continue to be additional factors that could negatively affect the lodging industry and the Company, including but not limited to, historical seasonal trends, travel-related health concerns, deterioration of consumer sentiment, labor shortages, supply chain disruptions, a recessionary macroeconomic environment or inflationary pressures.
Added
As a result, during the year ended December 31, 2024, the Company sold six hotels in five separate transactions with unrelated parties for a combined gross sales price of approximately $63.4 million, resulting in a combined gain on the sales of approximately $19.7 million, net of transaction costs.
Removed
Consistent with this strategy and the Company’s focus on investing in rooms-focused hotels, in 2023, the Company acquired six existing hotels and one free-standing parking garage for an aggregate 5 purchase price of approximately $289.8 million: a 154-room Courtyard in Cleveland, Ohio, a 175-room Courtyard in Salt Lake City, Utah, a 159-room Hyatt House in Salt Lake City, Utah, a free-standing parking garage which serves both of the Salt Lake City, Utah hotels and the surrounding area, a 146-room Residence Inn in Renton, Washington, a 192-room Embassy Suites in South Jordan, Utah and a 299-room SpringHill Suites in Las Vegas, Nevada.
Added
The Company used a portion of the net proceeds from the sale of two of the hotels to complete a like-kind exchange, in accordance with Section 1031 of the Internal Revenue Code of 1986, as amended, for the acquisition of the AC Hotel in Washington, D.C., which was completed in March 2024.
Removed
Both hotels are under development, with the hotel in Madison, Wisconsin currently planned to be completed and opened for business in mid-2024 and the Nashville, Tennessee hotel currently planned to be completed and opened for business in late 2025, at which respective times the Company expects to complete the purchases of these hotels.
Added
The net proceeds from the sale of the other four hotels were used for share repurchases and general corporate purposes.
Removed
Expenditures for 2023 were higher than 2022 and 2021 due to an increased number of capital improvement projects in 2023 compared to 2022 and 2021, as the number of projects in 2022 and 2021 were limited as a result of COVID-19.
Added
As a result of the operator's failure to make lease payments, the Company has commenced legal proceedings to remove the operator from possession of the hotel.
Removed
On July 19, 2023, the Company entered into an amendment of its unsecured $225 million term loan facility, which extended the maturity date of the existing $50 million term loan by two years to August 2, 2025.
Added
The Company intends to enforce its rights under the lease and transition management of the hotel to a third-party manager, however, the removal process is still ongoing and the timing of the resolution of this matter and the transition of management operations cannot be predicted at this time.
Removed
The Company has a universal shelf registration statement on Form S-3 (No. 333-262915) that was automatically effective upon filing on February 23, 2022.
Added
The Company previously entered into and expects to continue to enter into written trading plans as part of the Share Repurchase Program that provide for share repurchases in open market transactions that are intended to comply with Rule 10b5-1 under the Exchange Act.
Removed
The Company may offer an indeterminate number or amount, as the case may be, of (1) common shares, no par value per share; (2) preferred shares, no par value per share; (3) depository shares representing the Company’s preferred shares; (4) warrants exercisable for the Company’s common shares, preferred shares or depository shares representing preferred shares; (5) rights to purchase common shares; and (6) unsecured senior or subordinate debt securities, all of which may be issued from time to time on a delayed or continuous basis pursuant to Rule 415 under the Securities Act.
Added
However, macroeconomic pressures, including inflation, increases in interest rates and general market uncertainty, could affect the Company’s ability to raise debt or equity capital to fund long-term liquidity requirements in a cost-effective manner.
Removed
In the first quarter of 2022, the Company experienced lower than expected operating results due to the Omicron variant of COVID-19 along with the typical seasonal decrease associated with the first quarter. Since that time, the seasonal variability has recovered to its pre-COVID-19 trend.
Added
On July 17, 2024, the Company amended the 2017 $85 million term loan facility, which increased the amount of the term loan facility to $130 million, with the additional $45 million funded at closing, and extended the maturity date to July 25, 2026.
Added
The interest rate, subject to certain exceptions, is equal to an annual rate of the one-month SOFR plus a 0.10% SOFR spread adjustment plus a margin ranging from 1.35% to 2.20%, depending on the Company's leverage ratio, as calculated under the terms of the amended credit agreement.
Added
Subject to certain conditions, including covenant compliance and additional fees, the maturity date of the $130 million term loan facility may be extended by the Company to July 25, 2027.
Added
During the year ended December 31, 2024, the Company did not sell any common shares under the ATM Program, and no common shares were sold during the year ended December 31, 2024 under the previous $300 million at-the-market offering program (the “Prior ATM Program”), which was terminated in February 2024 in connection with the commencement of the current ATM Program.
Added
Insurance The Company maintains insurance coverage for general liability, property, business interruption, cyber threats and other risks with respect to all of its hotels either under insurance policies obtained by the Company or by its third-party managers.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

60 edited+15 added−8 removed172 unchanged
Biggest changeThe following is a summary of risks that may affect the hotel industry in general and as a result may affect the Company: • over-building of hotels in the markets in which the Company operates, resulting in an increase in supply of hotel rooms that exceeds increases in demand; • competition from other hotels and lodging alternatives in the markets in which the Company operates; • a downturn in the hospitality industry; • dependence on business and leisure travel; • increases in energy costs and other travel expenses, which may affect travel patterns and reduce business and leisure travel; • reduced business and leisure travel due to geo-political uncertainty, including terrorism and acts of war, travel-related health concerns, including widespread outbreaks of infectious or contagious diseases in the U.S., inclement weather conditions, including natural disasters such as hurricanes, earthquakes and wildfires, and government shutdowns, airline strikes or equipment failures, or other disruptions; • reduced travel due to adverse national, regional or local economic and market conditions; • seasonality of the hotel industry may cause quarterly fluctuations in operating results; • changes in marketing and distribution for the hospitality industry, including the cost and the ability of third-party internet and other travel intermediaries to attract and retain customers; • changes in hotel room demand generators in a local market; 11 • ability of a hotel franchise to fulfill its obligations to franchisees; • brand expansion; • the performance of third-party managers of the Company’s hotels; • increases in operating costs, including ground lease payments, renovation projects, property and casualty insurance, utilities and real estate and personal property taxes, due to inflation, climate change and other factors that may not be offset by increases in room rates or room revenue; • inflation which could adversely affect consumer confidence thereby reducing consumer purchasing power and demand for lodging; • labor shortages and other increases in the cost of labor due to low unemployment rates or to government regulations surrounding work rules, wage rates, health care coverage, immigration policies and other benefits; • supply chain disruptions and broader inflationary pressures throughout the overall economy and global tensions driving shortages and cost increases for materials and supplies such as food and equipment; • changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with applicable laws and regulations; • claims, litigation and threatened litigation from guests, visitors to the Company’s hotel properties, contractors, sub-contractors, government agencies and others; • business interruptions, regulatory costs and equipment loss due to cyber-attacks and other technological events; • requirements for periodic capital reinvestment to repair and upgrade hotels; • limited alternative uses for hotel buildings; and • condemnation or uninsured losses.
Biggest changeThe following is a summary of risks that may affect the hotel industry in general and as a result may affect the Company: • over-building of hotels in the markets in which the Company operates, resulting in an increase in supply of hotel rooms that exceeds increases in demand; • competition from other hotels and lodging alternatives in the markets in which the Company operates; • a downturn in the hospitality industry; • dependence on business and leisure travel; • increases in energy costs and other travel expenses, which may affect travel patterns and reduce business and leisure travel; • reduced business and leisure travel due to geo-political uncertainty, including terrorism and acts of war, travel-related health concerns, including widespread outbreaks of infectious or contagious diseases in the U.S. and the related impacts such as the Company experienced in connection with the COVID-19 pandemic, inclement weather conditions, including natural disasters such as hurricanes, earthquakes and wildfires, and government shutdowns, airline strikes or equipment failures, or other disruptions; • reduced travel due to adverse national, regional or local economic and market conditions; • seasonality of the hotel industry may cause quarterly fluctuations in operating results; • changes in marketing and distribution for the hospitality industry, including the cost and the ability of third-party internet and other travel intermediaries to attract and retain customers; 11 • changes in hotel room demand generators in a local market; • ability of a hotel franchise to fulfill its obligations to franchisees; • brand expansion; • the performance of third-party managers of the Company’s hotels; • increases in operating costs, including ground lease payments, renovation projects, property and casualty insurance, utilities and real estate and personal property taxes, due to inflation, climate change, supply chain disruptions, tariffs, natural disasters, regulatory compliance and other factors that may not be offset by increases in room rates or room revenue; • inflation which could adversely affect consumer confidence thereby reducing consumer purchasing power and demand for lodging; • labor shortages and other increases in the cost of labor due to low unemployment rates or to government regulations surrounding work rules, wage rates, health care coverage, immigration policies and other benefits; • supply chain disruptions and broader inflationary pressures throughout the overall economy and global tensions driving shortages and cost increases for materials and supplies such as food and equipment; • changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with applicable laws and regulations; • business interruptions, regulatory costs, financial loss and equipment loss due to cyber-attacks and other technological events; • requirements for periodic capital reinvestment to repair and upgrade hotels; • limited alternative uses for hotel buildings; and • condemnation or uninsured losses.
Even if the Company qualifies for taxation as a REIT, it may be subject to certain U.S. federal, state and local taxes, including payroll taxes, taxes on any undistributed income, taxes on income from some activities conducted as a result of a foreclosure, a 100% 20 excise tax on any transactions with a TRS that are not conducted on an arm’s-length basis, and state or local income, franchise, property and transfer taxes.
Even if the Company qualifies for taxation as a REIT, it may be subject to certain U.S. federal, state and local taxes, including payroll taxes, taxes on any undistributed income, taxes on income from some activities conducted as a result of a foreclosure, a 100% excise tax on any transactions with a TRS that are not conducted on an arm’s-length basis, and state or local income, franchise, property and transfer taxes.
For the rent paid pursuant to the hotel leases with the Company’s TRSs, which the Company currently expects will continue to constitute substantially all of the REIT’s gross income, to qualify for purposes of the gross income tests, the leases must be respected as true leases for U.S. federal income tax purposes and must not be 21 treated as service contracts, joint ventures or some other type of arrangement.
For the rent paid pursuant to the hotel leases with the Company’s TRSs, which the Company currently expects will continue to constitute substantially all of the REIT’s gross income, to qualify for purposes of the gross income tests, the leases must be respected as true leases for U.S. federal income tax purposes and must not be treated as service contracts, joint ventures or some other type of arrangement.
The full extent of the impact of a pandemic on the Company’s business is largely uncertain and dependent on a number of factors beyond its control, and the Company is not able to estimate with any degree of certainty the effect a pandemic or measures intended to curb its spread could have on the Company’s business, results of operations, financial condition, and cash flows.
The full extent of the impact of a future pandemic on the Company’s business is largely uncertain and dependent on a number of factors beyond its control, and the Company is not able to estimate with any degree of certainty the effect a future pandemic or measures intended to curb its spread could have on the Company’s business, results of operations, financial condition, and cash flows.
The ability of the Company to access capital markets, including commercial debt markets, could also be negatively impacted by unfavorable, or the possibility of unfavorable, outcomes from adverse regulatory actions or lawsuits. 18 Heightened focus on corporate responsibility, specifically related to ESG practices, may impose additional costs and expose the Company to new risks.
The ability of the Company to access capital markets, including commercial debt markets, could also be negatively impacted by unfavorable, or the possibility of unfavorable, outcomes from adverse regulatory actions or lawsuits. Heightened focus on corporate responsibility, specifically related to ESG practices, may impose additional costs and expose the Company to new risks.
COVID-19 disrupted the industry and dramatically reduced business and impacted leisure travel from March 2020 into 2022, which disrupted the Company’s business and had a significant adverse effect, and a similar outbreak could, in the future, significantly adversely impact and disrupt its business, financial performance and condition, operating results and cash flows.
COVID-19 and its variants disrupted the industry and dramatically reduced business and impacted leisure travel from March 2020 into 2022, which disrupted the Company’s business and had a significant adverse effect, and a similar outbreak could, in the future, significantly adversely impact and disrupt its business, financial performance and condition, operating results and cash flows.
In order to 22 meet these tests, the Company may be required to liquidate from its portfolio, or contribute to a TRS, otherwise attractive investments in order to maintain its qualification as a REIT. These actions could have the effect of reducing the Company’s income and amounts available for distribution to its shareholders.
In order to meet these tests, the Company may be required to liquidate from its portfolio, or contribute to a TRS, otherwise attractive investments in order to maintain its qualification as a REIT. These actions could have the effect of reducing the Company’s income and amounts available for distribution to its shareholders.
The Company’s ability to exercise any extension options relating to its ground leases is subject to the condition that the Company is not in default under the terms of the ground lease at the time that it exercises such options, and the Company can provide no assurances that it will be able to exercise any available options at such time.
The Company’s ability to exercise any extension options relating to its ground leases is subject to the condition that the Company is not in default under the terms of the ground lease at the time that it exercises such options, and the Company can 14 provide no assurances that it will be able to exercise any available options at such time.
The Company’s common shares are listed on the NYSE under the ticker symbol “APLE.” The market price and trading volume of the Company’s common shares may fluctuate widely, depending on many factors, some of which may be beyond the Company’s control, including: • actual versus anticipated differences in the Company’s operating results, liquidity, or financial condition; • publication of research reports about the Company and the accuracy of information published in these reports, regarding its hotels or the lodging or overall real estate industry; • changes in and/or failure to meet analysts’ revenue or earnings estimates; • the reputation of REITs and real estate investments generally, and the attractiveness of REIT equity securities in comparison to other equity securities, including securities issued by other real estate companies, and fixed income instruments; • changes in accounting principles or other laws and regulations that may adversely affect the Company or its industry; 23 • strategic actions by the Company or its competitors, such as acquisitions or dispositions, and announcements by franchisors, operators or REITs and other owners in the hospitality industry; • fluctuations in the stock price and operating results of the Company’s competitors; and • the realization of any of the other risk factors presented in this Annual Report on Form 10-K.
The Company’s common shares are listed on the NYSE under the ticker symbol “APLE.” The market price and trading volume of the Company’s common shares may fluctuate widely, depending on many factors, some of which may be beyond the Company’s control, including: • actual versus anticipated differences in the Company’s operating results, liquidity, or financial condition; • publication of research reports about the Company and the accuracy of information published in these reports, regarding its hotels or the lodging or overall real estate industry; • changes in and/or failure to meet analysts’ revenue or earnings estimates; • the reputation of REITs and real estate investments generally, and the attractiveness of REIT equity securities in comparison to other equity securities, including securities issued by other real estate companies, and fixed income instruments; • changes in accounting principles or other laws and regulations that may adversely affect the Company or its industry; • strategic actions by the Company or its competitors, such as acquisitions or dispositions, and announcements by franchisors, operators or REITs and other owners in the hospitality industry; • public announcement by, and fluctuations in the stock price and operating results of, the Company’s competitors; and • the realization of any of the other risk factors presented in this Annual Report on Form 10-K.
The Company and its hotel managers and franchisors rely on information technology networks and systems, including the Internet, to process, transmit and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, personally identifiable information, reservations, billing and operating data.
The Company and its hotel managers and franchisors rely on information technology networks and systems, including the Internet, to process, transmit and store electronic information, and to manage or support a variety of business processes, including 16 financial transactions and records, personally identifiable information, reservations, billing and operating data.
Climate change also may have indirect effects on the Company’s business by increasing the cost of (or making unavailable) property insurance on terms the Company finds acceptable, as well as increasing the cost of renovations, energy and water at its 17 properties.
Climate change also may have indirect effects on the Company’s business by increasing the cost of (or making unavailable) property insurance on terms the Company finds acceptable, as well as increasing the cost of renovations, energy and water at its properties.
Common shareholders bear the risk that the Company’s future issuances of preferred shares or debt securities will negatively affect the market price of the Company’s common shares. 19 Provisions of the Company’s third amended and restated bylaws could inhibit changes in control.
Common shareholders bear the risk that the Company’s future issuances of preferred shares or debt securities will negatively affect the market price of the Company’s common shares. Provisions of the Company’s third amended and restated bylaws could inhibit changes in control.
As the Company continues to invest and focus on ESG practices that the Company believes are appropriate for its business, the Company could also be criticized by ESG detractors for the scope or nature of its initiatives or goals.
As the Company continues to invest in and focus on ESG practices that the Company believes are appropriate for its business, the Company could also be criticized by ESG detractors for the scope or nature of its initiatives or goals.
In addition, anticipated downward pressure on the price of the Company’s common shares due to actual or anticipated sales of common shares could cause some institutions or individuals to engage in short sales of the common shares, which may itself cause the price of the common shares to decline.
In addition, anticipated downward pressure on the price of the 24 Company’s common shares due to actual or anticipated sales of common shares could cause some institutions or individuals to engage in short sales of the common shares, which may itself cause the price of the common shares to decline.
The Company’s failure to comply with the covenants in its existing or future indebtedness, or its inability to make required principal and interest payments, could cause a default under the applicable debt agreement, which could result in the acceleration of the debt, requiring the Company to repay such debt with capital obtained from other sources, which may not be available to the Company or may only be available on unfavorable terms.
The Company’s failure to comply with the covenants in its existing or future indebtedness, or its inability to make required principal and interest payments, could cause a default under the applicable debt agreement, which could result in increased interest rates and the acceleration of the debt, requiring the Company to repay such debt with capital obtained from other sources, which may not be available to the Company or may only be available on unfavorable terms.
If the Company were to lose or was unable to renew a franchise or license agreement, the Company would be required to re-brand the hotel, which could result in a decline in the value of the hotel, the loss of marketing support and participation in guest loyalty programs, and harm to the Company’s relationship with the franchisor, impeding the Company’s ability to operate other hotels under the same brand.
If the Company were to lose or was unable to renew a franchise or license agreement, the Company would be required to re-brand or de-flag the hotel, which could result in a decline in the value of the hotel, the loss of marketing support and participation in guest loyalty programs, and harm to the Company’s relationship with the franchisor, impeding the Company’s ability to operate other hotels under the same brand.
The Company and its hotel managers and franchisors rely on commercially available and internally developed systems, software, tools and monitoring to provide security for processing, transmission and storage of confidential operator and customer information, such as personally identifiable information, including information relating to financial accounts.
The Company and its hotel managers and franchisors rely on commercially available and internally developed systems, software, tools and monitoring to provide security for processing, transmission and storage of confidential employee, operator and customer information, such as personally identifiable information, including information relating to payroll and financial accounts.
The Board of Directors evaluates the distribution rate on an ongoing basis and may make changes at any time if it believes the rate is not appropriate based on REIT taxable income, limitations under financing arrangements, or other cash needs.
The Board of Directors evaluates the distribution rate on an ongoing basis and has made and may make changes at any time if it believes the rate is not appropriate based on REIT taxable income, limitations under financing arrangements, or other cash needs.
With this increased focus, public reporting regarding ESG practices is becoming more broadly expected. The Company summarizes its existing ESG programs in its annual Corporate Responsibility Report, which is available on its website. The focus on and activism around ESG and related matters may constrain business operations or cause the Company to incur additional costs.
With this increased focus, public reporting regarding ESG practices has become more broadly expected. The Company summarizes its existing ESG programs in its annual Corporate Responsibility Report, which is available on its website. The focus on and activism around ESG and related matters may constrain business operations or cause the Company to incur additional costs.
Labor shortages and increased labor costs could cause significant increases to the Company’s operating costs and decreases to the Company’s operating revenues. The Company’s third-party hotel managers are responsible for hiring and maintaining the labor force at each of the Company’s hotels.
Labor shortages and increased labor costs could cause significant increases to the Company’s operating costs and decreases to the Company’s operating income. The Company’s third-party hotel managers are responsible for hiring and maintaining the labor force at each of the Company’s hotels.
Significant labor shortages could prohibit the Company from operating its hotels at full capacity which could result in a decrease in operating revenues. An increased exposure to a unionized labor force could lead to labor disputes, causing higher labor costs, either by increases in wages or benefits or by changes in local labor regulations that raise hotel operating costs.
Significant labor shortages could prohibit the Company’s hotels from operating at full capacity which could result in a decrease in operating revenues. An increased exposure to a unionized labor force could lead to labor disputes, causing higher labor costs, either by increases in wages or benefits or by changes in local labor regulations that raise hotel operating costs.
The Company may be required to incur costs to comply with these standards and these standards could potentially conflict with the Company’s ability to create specific business plans tailored to each property and to each market. Failure to comply with these brand standards may result in termination of the applicable franchise or license agreement.
The Company has been and, in the future, may be required to incur costs to comply with these standards and these standards could potentially conflict with the Company’s ability to create specific business plans tailored to each property and to each market. Failure to comply with these brand standards may result in termination of the applicable franchise or license agreement.
A failure by the Company’s hotel managers to successfully manage its hotels could lead to an increase in its operating expenses, a decrease in its revenues, or both. 13 Furthermore, if one of the Company’s third-party managers is financially unable or unwilling to perform its obligations pursuant to its management agreements with the Company, the Company’s ability to find a replacement manager or managers for those properties could be costly and time-consuming for the Company and disrupt hotel operations which could materially and adversely affect the Company.
A failure by the Company’s hotel managers to successfully manage its hotels could lead to an increase in its operating expenses, a decrease in its revenues, or both and have a material adverse effect on the Company. 13 Furthermore, if one of the Company’s third-party managers is financially unable or unwilling to perform its obligations pursuant to its management agreements with the Company, the Company’s ability to find a replacement manager or managers for those properties could be costly and time-consuming for the Company and disrupt hotel operations which could materially and adversely affect the Company.
If the Company were to lose the right to use a hotel due to a breach or non-renewal of a ground lease, it would be 14 unable to derive income from such hotel. Finally, the Company may not be permitted to sell or finance a hotel subject to a ground lease without the consent of the lessor.
If the Company were to lose the right to use a property due to a breach or non-renewal of a ground lease, it would be unable to derive income from such property. Finally, the Company may not be permitted to sell or finance a property subject to a ground lease without the consent of the lessor.
As a result of changes in an individual hotel’s operating results or to the Company’s planned hold period for a hotel, the Company may be required to record an impairment loss for a property. The Company analyzes its hotel properties individually for indicators of impairment throughout the year.
As a result of changes in an individual hotel’s operating results or to the Company’s planned hold period for a hotel, the Company may be, and has been, required to record an impairment loss for a property. The Company analyzes its hotel properties individually for indicators of impairment throughout the year.
Although the Company anticipates maintaining relatively low levels of debt, it may periodically use financing to acquire properties, perform renovations to its properties, or make shareholder distributions or share repurchases in periods of fluctuating income from its properties.
Although the Company anticipates maintaining relatively low levels of debt, it may periodically use, and has used, financing to acquire properties, perform renovations to its properties, or make shareholder distributions or share repurchases in periods of fluctuating income from its properties.
The Company is subject to the risks associated with the physical effects of climate change, which could include more frequent or severe storms, droughts, wildfires, hurricanes, flooding, and utility outages, any of which could have a material adverse effect on the Company’s properties, operations and business.
The Company is subject to the risks associated with the physical effects of climate change, including more frequent or severe storms, extreme temperatures, droughts, wildfires, hurricanes, flooding, and utility outages, any of which could have a material adverse effect on the Company’s properties, operations and business.
Moreover, the risk of a security breach or disruption, particularly through cyber-attack or cyber intrusion, including by computer hackers, nation-state affiliated actors and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
Moreover, the risk of a cybersecurity incident or disruption, particularly through cyber-attack or cyber intrusion, including by computer hackers, nation-state affiliated actors and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
Pandemics, such as COVID-19, as well as both future widespread and localized outbreaks of infectious diseases and other health concerns, and the measures taken to prevent the spread or lessen the impact, could cause a material disruption to the hotel industry or the economy as a whole.
Pandemics, such as COVID-19, as well as both future widespread and localized outbreaks of infectious diseases and other health concerns, and the measures taken to prevent the spread or lessen the impact, have caused and, may in the future cause, a material disruption to the hotel industry or the economy as a whole.
Therefore, the Company cannot predict whether it will be able to sell any hotels on acceptable terms, or at all. In addition, provisions of the Code relating to REITs have certain limits on the Company’s ability to sell hotels. Real estate impairment losses may adversely affect the Company’s financial condition and results of operations.
Therefore, the Company cannot predict whether it will be able to sell any hotels on acceptable terms, or at all. In addition, provisions of the Code relating to REITs impose certain limits on the number of hotels the Company may sell in a calendar year. Real estate impairment losses may adversely affect the Company’s financial condition and results of operations.
In addition, the Company’s TRSs will be subject to U.S. federal, state and local corporate income taxes on their net taxable income, if any. Any of these taxes would decrease cash available for other uses, such as the payment of the Company’s debt obligations and distributions to shareholders.
In addition, the Company’s TRSs will be subject to U.S. federal, state and local corporate income taxes on their net taxable income, if any. Any of these taxes would decrease cash available for other uses, such as the payment of the Company’s debt obligations and distributions to shareholders and may have a material adverse effect on the Company.
Additional factors that may negatively impact the Company’s ability to operate successfully as a result of a pandemic, include, among others: • sustained negative consumer or business sentiment or corporate travel policy restrictions, which could further adversely impact demand for lodging; • postponement and cancellation of events, including sporting events, conferences and meetings; • hotel closures and the Company’s ability to reopen hotels that are temporarily closed in a timely manner, and its ability to attract customers to its hotels when they are able to reopen; • a severe disruption or instability in the global financial markets or deterioration in credit and financing conditions; • increased costs and potential difficulty accessing supplies related to personal protective equipment, increased sanitation, social distancing and other mitigation measures at hotels; and • increased labor costs to attract employees due to perceived risk of exposure to an infectious disease or virus, as well as potential for increased workers’ compensation claims if hotel employees are exposed to such diseases or viruses in the workplace. 16 Moreover, many risk factors set forth in this Annual Report on Form 10-K would be heightened as a result of another potential pandemic.
Additional factors that have negatively impacted or may in the future negatively impact the Company’s ability to operate successfully as a result of a pandemic, include, among others: • sustained negative consumer or business sentiment or corporate travel policy restrictions, which could further adversely impact demand for lodging; • postponement and cancellation of events, including sporting events, conferences and meetings; • hotel closures and the Company’s ability to reopen hotels that are temporarily closed in a timely manner, and its ability to attract customers to its hotels when they are able to reopen; • a severe disruption or instability in the global financial markets or deterioration in credit and financing conditions; • increased costs and potential difficulty accessing supplies related to personal protective equipment, increased sanitation, social distancing and other mitigation measures at hotels; and • increased labor costs to attract employees due to perceived risk of exposure to an infectious disease or virus, as well as potential for increased workers’ compensation claims if hotel employees are exposed to such diseases or viruses in the workplace.
The Company could be materially and adversely affected if any of its third-party managers fail to effectively manage revenues and expenses, provide quality services and amenities, or otherwise fail to manage its hotels in its best interest, and may be financially responsible for the actions and inactions of the managers.
The Company could be materially and adversely affected if any of its third-party managers fail to effectively manage revenues and expenses, provide quality services and amenities, secure its data and systems, timely and accurately report financial results, or otherwise fail to manage its hotels in its best interest, and may be financially responsible for the actions and inactions of the managers.
The Company cannot predict the pace or duration of an economic recession or cycle or the cycles of the lodging industry. In the event conditions in the industry deteriorate or do not continue to see sustained improvement, or there is an extended period of economic weakness, the Company’s revenue and profitability could be adversely affected.
The Company cannot predict the pace or duration of an economic recession or cycle or the cycles of the lodging industry. In the event conditions in the industry deteriorate or there is an extended period of economic weakness, the Company’s revenue and profitability could be adversely affected.
Security breaches, whether through physical or electronic break-ins, cyber-attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to emails, social engineering or phishing schemes, can create system disruptions, shutdowns, deployment of ransomware, theft of the Company’s data, or unauthorized disclosure of confidential information.
Cybersecurity incidents, whether through physical or electronic break-ins, cyber-attacks, cyber intrusions or the deployment of ransomware over the Internet, malware, computer viruses, attachments to emails, social engineering or phishing schemes, have created and may in the future create system disruptions, shutdowns, deployment of ransomware, theft of the Company’s data, or unauthorized disclosure of confidential information.
To the extent climate change causes changes in weather patterns, the markets in which the Company operates could experience increases in storm intensity and rising sea levels causing damage to the Company’s properties. Over time, these conditions could result in declining hotel demand or the Company’s inability to operate the affected hotels at all.
The markets in which the Company operates have experienced and may continue to experience increases in storm intensity and rising sea levels causing damage to the Company’s properties. Over time, these conditions could result in declining hotel demand or the Company’s inability to operate the affected hotels at all.
If there is an adjustment to any of the Company’s taxable income or dividends-paid deductions, the Company could elect to use the deficiency dividend procedure in order to maintain the Company’s REIT status. That deficiency dividend procedure could require the Company to make significant distributions to its shareholders and to pay significant interest to the IRS.
If there is an adjustment to any of the Company’s taxable income or dividends-paid deductions, the Company could elect to use the deficiency dividend procedure in order to maintain the Company’s REIT status.
These requirements are wide-ranging and include among others, state and local fire and life safety requirements, federal laws such as the Americans with Disabilities Act of 1990 and the Accessibility Guidelines promulgated thereunder (“ADA”) and the Sarbanes-Oxley Act of 2002. Liabilities and costs associated with complying with these requirements are and could be material.
These requirements are wide-ranging and include among others, state and local fire and life safety requirements, state laws such as the California Climate 18 Corporate Data Accountability Act, and federal laws such as the Americans with Disabilities Act of 1990 and the Accessibility Guidelines promulgated thereunder (“ADA”) and the Sarbanes-Oxley Act of 2002.
It is possible that the safety and security measures taken by the Company and its hotel managers and franchisors will not be able to prevent damage to the systems, the systems’ improper functioning, or the improper access or disclosure of personally identifiable information.
The safety and security measures taken by the Company and its hotel managers, third-party vendors and franchisors have not been, and in the future may not be, able to completely prevent damage to the systems, the systems’ improper functioning, or the improper access or disclosure of personally identifiable information.
There also can be risks such as certain environmental hazards that may be deemed to fall outside of the coverage. In the event of a substantial loss, the Company’s insurance coverage may not be sufficient to cover the full current market value or replacement cost of its lost investment.
In the event of a substantial loss, the Company’s insurance coverage may not be sufficient to cover the full current market value or replacement cost of its lost investment.
The Company urges shareholders and prospective shareholders to consult with their tax advisors with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in the Company’s shares.
The Company urges shareholders and prospective shareholders to consult with their tax advisors with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in the Company’s shares. 23 General Risk Factors The Company may change its distribution policy or may not have funds available to make distributions to shareholders.
In addition, the Company’s TRS lessees have engaged hotel management companies that are intended to qualify as “eligible independent contractors.” Among other requirements, in order to qualify as an “eligible independent contractor,” the hotel management company must not own, directly or through its shareholders, more than 35% of the Company’s outstanding shares, and no person or group of persons can own more than 35% of the Company’s outstanding shares and the shares (or ownership interest) of the hotel management company (taking into account certain ownership attribution rules).
Although the Company intends to monitor future acquisitions and improvements of hotels, the REIT provisions of the Code provide only limited guidance for making determinations under the requirements for “qualified lodging facilities,” and there can be no assurance that these requirements will be satisfied in all cases. 22 In addition, the Company’s TRS lessees have engaged hotel management companies that are intended to qualify as “eligible independent contractors.” Among other requirements, in order to qualify as an “eligible independent contractor,” the hotel management company must not own, directly or through its shareholders, more than 35% of the Company’s outstanding shares, and no person or group of persons can own more than 35% of the Company’s outstanding shares and the shares (or ownership interest) of the hotel management company (taking into account certain ownership attribution rules).
Moreover, while the Company makes voluntary disclosures in its Corporate Responsibility Report regarding its ESG practices, certain disclosures are based on hypothetical expectations and assumptions that may differ from actual results. In addition, the SEC is currently evaluating potential new ESG disclosure and other requirements that would impact the Company.
Moreover, while the Company makes voluntary disclosures in its Corporate Responsibility Report regarding its ESG practices, certain disclosures are based on assumptions that may differ from actual results.
The Company faces possible risks associated with the physical effects of, and laws and regulations related to, climate change.
The Company has experienced, and may continue to experience, premium increases applicable to its portfolio. The Company faces possible risks associated with the physical effects of, and laws and regulations related to, climate change.
Potential losses not covered by insurance may adversely affect the Company’s financial condition. The Company maintains comprehensive insurance coverage for general liability, property, business interruption and other risks with respect to all of its hotels. These policies offer coverage features and insured limits that the Company believes are customary for similar types of properties.
Potential losses not covered by insurance may adversely affect the Company’s financial condition. The Company maintains comprehensive insurance coverage for general liability, property, business interruption, cyber threats and other risks with respect to all of its hotels either under insurance policies obtained by the Company or by its third-party managers.
If the Company is found to be in breach of a ground lease, it could lose the right to use the hotel.
Accordingly, the Company effectively only owns a long-term leasehold interest in these properties. If the Company is found to be in breach of a ground lease, it could lose the right to use the property.
The growing use of non-franchisor lodging distribution channels could adversely affect the Company’s business and profitability. Although a majority of rooms sold are sold through the hotel franchisors’ distribution channels, many are sold through other channels or intermediaries. Rooms sold through non-franchisors’ channels are generally less profitable (after associated fees) than rooms sold through franchisors’ channels.
The Company has experienced, and may in the future experience, increased costs due to these factors. The growing use of non-franchisor lodging distribution channels could adversely affect the Company’s business and profitability. Although a majority of rooms sold are sold through the hotel franchisors’ distribution channels, many are sold through other channels or intermediaries.
Tax-Related Risks and Risks Related to the Company’s Status as a REIT Qualifying as a REIT involves highly technical and complex provisions of the Code and failure of the Company to qualify as a REIT would have adverse consequences to the Company and its shareholders.
Knight is not required to devote a fixed amount of time and attention to the Company’s business affairs as opposed to the other companies, which could detract from time devoted to the Company. 20 Tax-Related Risks and Risks Related to the Company’s Status as a REIT Qualifying as a REIT involves highly technical and complex provisions of the Code and failure of the Company to qualify as a REIT would have adverse consequences to the Company and its shareholders.
As a result, the Company may find it difficult or impossible to meet distribution requirements in certain circumstances.
In addition, differences in timing between the recognition of taxable income and the actual receipt of cash may occur. As a result, the Company may find it difficult or impossible to meet distribution requirements in certain circumstances.
These hotel operating expenses may not decrease when hotel revenues decrease, and some expenses, such as wages, utilities and insurance, may also increase due to factors unrelated to hotel operating performance, such as inflation rates.
These hotel operating expenses generally do not decrease when hotel revenues decrease, and some expenses, such as wages, utilities and insurance, have increased and may continue to increase due to factors unrelated to hotel operating performance, such as inflation rates, events impacting insurance markets unrelated to the Company’s hotels and adverse weather conditions increasing variable utility rates.
In addition, as a result of these significant regulations, the Company could become subject to regulatory investigations and lawsuits.
In addition, existing requirements could change, and future requirements might require the Company to make significant unanticipated expenditures, which could have material and adverse effects on the Company. In addition, as a result of these significant regulations, the Company could become subject to regulatory investigations and lawsuits.
Certain hotels are subject to ground leases that may affect the Company’s ability to use the hotel or restrict its ability to sell the hotel. As of December 31, 2023, 14 of the Company’s hotels were subject to ground leases. Accordingly, the Company effectively only owns a long-term leasehold interest in these hotels.
Certain hotels are subject to ground leases that may affect the Company’s ability to use the hotel or restrict its ability to sell the hotel. As of December 31, 2024, 14 of the Company’s properties were subject to ground leases, not including the Company’s three parking lot ground leases.
There is no assurance that the Company’s hedging strategy will achieve its objectives, and the Company may be subject to costs, such as transaction fees or breakage costs, if it terminates these hedging arrangements. 15 Loans under the Company’s Revolving Credit Facility and term loan agreements may bear interest based on SOFR, but experience with SOFR based loans is limited.
There is no assurance that the Company’s hedging strategy will achieve its objectives, and the Company may be subject to costs, such as transaction fees or breakage costs, if it terminates these hedging arrangements. 15 Compliance with financial and other covenants in the Company’s existing or future debt agreements may reduce operational flexibility and create default risk.
From time to time, the Company may generate taxable income greater than its income for financial reporting purposes prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). In addition, differences in timing between the recognition of taxable income and the actual receipt of cash may occur.
That deficiency dividend procedure could require the Company to make significant distributions to its shareholders and to pay significant interest to the IRS. 21 From time to time, the Company may generate taxable income greater than its income for financial reporting purposes prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”).
A number of hotels, hotel management companies, and brands have been subject to successful cyber-attacks, including those seeking guest credit card information.
The Company’s corporate information technology systems are not used to process business transactions with its guests and those systems currently have no connectivity to hotel and/or third-party management and brand technology platforms. A number of hotels, hotel management companies, and brands have been subject to successful cyber-attacks, including those seeking guest credit card information.
If the Company fails to comply with these various requirements, it could incur governmental fines or private damage awards. In addition, existing requirements could change, and future requirements might require the Company to make significant unanticipated expenditures, which could have material and adverse effects on the Company.
Liabilities and costs associated with complying with these requirements are and could be material. If the Company fails to comply with these various requirements, it could incur governmental fines or private damage awards.
Additionally, as a result of substantial claims, insurance carriers may reduce insured limits and/or increase premiums, if insurance coverage is provided at all, in the future. Any of these or similar events could have a material adverse effect on the Company’s financial condition and results of operations.
Additionally, as a result of substantial claims, insurance carriers may reduce insured limits and/or increase premiums, if insurance coverage is provided at all, in the future. Property insurance premiums in the hotel industry generally 17 have increased in recent years, and exposure to certain markets has resulted in increased costs.
There are no assurances that coverage will be available or at reasonable rates in the future. Also, various types of catastrophic losses, like earthquakes, hurricanes and other storms, wildfires, or certain types of terrorism, may not be insurable or may not be economically insurable for all or certain locations.
Also, various types of catastrophic losses, like earthquakes, hurricanes and other storms, wildfires, or certain types of terrorism, may not be insurable or may not be economically insurable for all or certain locations, and the Company has no control over these decisions by insurance carriers. Even when insurable, these policies may have high deductibles and/or high premiums.
Even when insurable, these policies may have high deductibles and/or high premiums. Additionally, although the Company may be insured for a particular loss, the Company is not insured against the impact a catastrophic event may have on the hospitality industry as a whole.
Additionally, although the Company may be insured for a particular loss, the Company is not insured against the impact a catastrophic event may have on the hospitality industry as a whole. There also can be risks such as certain environmental hazards that may be deemed to fall outside of the coverage.
Risks Related to the Company’s Organization and Structure The Company’s ownership limitations may restrict or prevent certain acquisitions and transfers of its shares.
In addition, the frequency of claims and the outcome of litigation may affect the future availability or the cost of some of the Company’s insurance coverage, increasing its costs and exposing it to risks which could materially and adversely affect its financial results and cash flows. 19 Risks Related to the Company’s Organization and Structure The Company’s ownership limitations may restrict or prevent certain acquisitions and transfers of its shares.
Removed
The Company’s Revolving Credit Facility and term loan agreements currently bear interest at rates based on the Secured Overnight Financing Rate published by the Federal Reserve Bank of New York (“SOFR”) plus prescribed margins.
Added
Rooms sold through non-franchisors’ channels are generally less profitable (after associated fees) than rooms sold through franchisors’ channels.
Removed
The use of SOFR based rates replaced rates based on the London Interbank Offered Rate (“LIBOR”), and reflects the cessation of the publication of LIBOR rates previously announced by regulators in the United Kingdom and the discontinuation of the use of LIBOR in the financial markets.
Added
Moreover, many risk factors set forth in this Annual Report on Form 10-K would be heightened as a result of another potential pandemic.
Removed
The use of SOFR based rates may result in interest rates and/or payments that are higher or lower than the rates and payments that the Company experienced under its prior credit facilities or term loan agreements where interest rates were based on LIBOR.
Added
The Company has incurred, and will continue to incur, expenses to comply with data protection standards and protocols imposed by law, regulation, industry standards and contractual obligations.
Removed
Also, the use of SOFR based rates is relatively new, and there could be unanticipated difficulties or disruptions with the calculation and publication of SOFR based rates. Compliance with financial and other covenants in the Company’s existing or future debt agreements may reduce operational flexibility and create default risk.
Added
Increased regulation of data collection, use and retention practices, including self-regulation and industry standards, changes in existing laws and regulations, enactment of new laws and regulations, increased enforcement activity, and changes in interpretation of laws, could increase the Company’s cost of compliance and operation, limit its ability to grow its business or otherwise harm its business.
Removed
Knight is not required to devote a fixed amount of time and attention to the Company’s business affairs as opposed to the other companies, which could detract from time devoted to the Company.
Added
In addition, unauthorized disclosure or loss of personally identifiable information or confidential or proprietary information could result in damage to the Company or the hotel management company’s reputation, a loss of confidence among hotel guests, reputational harm for the Company’s hotels, legal liability, potential litigation, and increased regulatory oversight, including governmental investigations, enforcement actions, and regulatory fines, investigatory costs and costs to comply with notification and monitoring requirements.
Removed
Although the Company intends to monitor future acquisitions and improvements of hotels, the REIT provisions of the Code provide only limited guidance for making determinations under the requirements for “qualified lodging facilities,” and there can be no assurance that these requirements will be satisfied in all cases.
Added
The Company has processes in place to deter, detect and report cybersecurity incidents but there can be no guaranty that those processes will be successful in preventing every attempted intrusion or attack.
Removed
Although REITs generally receive certain tax advantages compared to entities taxed as C corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated as a C corporation for U.S. federal income tax purposes.
Added
While the Company is not aware of any cybersecurity incidents that have materially affected it as of December 31, 2024, there can be no guarantee that the Company will not be the subject of future attacks, threats or incidents, that may have a material impact on its business strategy, results of operations or financial condition.
Removed
General Risk Factors The Company may change its distribution policy or may not have funds available to make distributions to shareholders.
Added
While the Company maintains cybersecurity insurance, there are no assurances that the coverage would be adequate in relation to any incurred losses. Moreover, as cyber-attacks increase in frequency and magnitude, the Company may be unable to retain or obtain cybersecurity insurance in amounts and on terms it views as adequate for its operations.
Added
These policies offer coverage features and insured limits that the Company believes are customary for similar types of properties. There are no assurances that coverage will be available or at reasonable rates in the future.
Added
In addition, the Company also will be required to make certain mandatory disclosures as California has instituted disclosure requirements that will be applicable to the Company and the SEC is currently evaluating potential new ESG disclosure and other requirements that would impact the Company. The Company anticipates incurring additional expenses and expending employee resources to comply with the disclosure mandates.
Added
The nature of the hotel business exposes the Company to litigation and claims that may result in costs and expenses that cannot be anticipated with any degree of certainty. The Company is subject to various claims and litigation from guests, tenants, occupants, visitors, contractors and other individuals as a result of the operation of the Company’s hotels.
Added
The Company, as landlord, is also a party to certain lease, license and other occupancy agreements with third parties that have involved, and in the future may involve, the Company in claims, disputes, litigation and proceedings arising from, or related to, those agreements, including the failure to pay rent.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+2 added−0 removed10 unchanged
Biggest changeCybersecurity Risks The Company faces a number of cybersecurity risks in connection with its business, although such risks have not materially affected the Company, including its business strategy, results of operations or financial condition, to date. The Company has not experienced any material cybersecurity incidents to date.
Biggest changeThe Chief Financial Officer also apprises the Audit Committee of cybersecurity incidents consistent with the Company’s incident response procedures for more significant incidents and in the aggregate for less significant incidents. 25 Cybersecurity Risks The Company faces a number of cybersecurity risks in connection with its business, although such risks have not materially affected the Company, including its business strategy, results of operations or financial cond ition, to date.
The Audit Committee receives regular reports from the Chief Financial Officer on, among other things: the Company’s cybersecurity risks and threats; the status of projects to strengthen the Company’s information security systems; internal and third-party assessments of the Company’s cybersecurity program; and the emerging threat landscape.
The Audit Committee receives regular reports from the Chief Financial Officer on, among other things: the Company’s cybersecurity risks and threats; the status of projects to strengthen the Company’s information security systems; internal and third-party assessments of the Company’s cybersecurity program; and the emerging cyber threat landscape.
The Audit Committee also receives updates on any cybersecurity incidents experienced by third-party business partners that may pose significant risk to the Company. The Audit Committee provides periodic reporting to the Board of Directors on cybersecurity matters.
The Audit Committee also receives updates on cybersecurity incidents experienced by third-party business partners that may pose significant risk to the Company. The Audit Committee provides periodic reporting to the Board of Directors on cybersecurity matters.
For more information about the cybersecurity risks the Company faces, see the risk factor entitled “Technology is used in operations, and any material failure, inadequacy, interruption or security failure of that technology from cyber-attacks or other events could harm the Company’s business” in Item 1A- Risk Factors. 25
For more information about the cybersecurity risks the Company faces, see the risk factor entitled “Technology is used in operations, and any material failure, inadequacy, interruption or security failure of that technology from cyber-attacks or other events could harm the Company’s business” in Item 1A- Risk Factors. 26
The Company uses a risk-based approach with respect to its use and oversight of third-party service providers, tailoring processes according to the nature and sensitivity of network connectivity or of data accessed, processed, or stored by such third-party service provider. 24 The Company’s corporate IT systems are not used to process business transactions with its guests and those systems currently have no connectivity to hotel and/or third-party management and brand technology platforms.
The Company uses a risk-based approach with respect to its use and oversight of third-party service providers , tailoring processes according to the nature and sensitivity of network connectivity or of data accessed, processed, or stored by such third-party service provider.
The Company’s IT and risk management departments report directly to the Chief Financial Officer and are directed to immediately report any incidents to the Chief Financial Officer. The Chief Financial Officer also apprises the Audit Committee of cybersecurity incidents consistent with the Company’s incident response procedures for more significant incidents and in the aggregate for less significant incidents.
The Company’s IT and risk management departments report directly to the Chief Financial Officer and are directed to promptly report incidents to the Chief Financial Officer in accordance with the Company’s incident response plan.
Added
The Company’s corporate IT systems are not used to process business transactions with its guests and those systems currently have no connectivity to hotel and/or third-party management and brand technology platforms.
Added
While the Company is not aware of any cybersecurity incidents that have materially affected its business as of December 31, 2024, there can be no guarantee that the Company will not be the subject of future attacks, threats or incidents, that may have a material impact on its business strategy, results of operations or financial condition.

Item 2. Properties

Properties — owned and leased real estate

10 edited+3 added−0 removed2 unchanged
Biggest changeLouis MO Hampton Raymond 4/30/2010 126 Hattiesburg MS Courtyard LBA 3/1/2014 84 Hattiesburg MS Residence Inn LBA 12/11/2008 84 Carolina Beach NC Courtyard Crestline 3/1/2014 144 Charlotte NC Fairfield Newport 9/1/2016 94 Durham NC Homewood Suites McKibbon 12/4/2008 122 Fayetteville NC Home2 Suites LBA 2/3/2011 118 Greensboro NC SpringHill Suites Newport 3/1/2014 82 Jacksonville NC Home2 Suites LBA 9/1/2016 105 Wilmington NC Fairfield Crestline 3/1/2014 122 Winston-Salem NC Hampton McKibbon 9/1/2016 94 Omaha NE Courtyard Marriott 3/1/2014 181 Omaha NE Hampton HHM 9/1/2016 139 Omaha NE Hilton Garden Inn HHM 9/1/2016 178 (1) Omaha NE Homewood Suites HHM 9/1/2016 123 Cranford NJ Homewood Suites Dimension 3/1/2014 108 Mahwah NJ Homewood Suites Dimension 3/1/2014 110 Mount Laurel NJ Homewood Suites Newport 1/11/2011 118 Somerset NJ Courtyard Newport 3/1/2014 162 (2) West Orange NJ Courtyard Newport 1/11/2011 131 Las Vegas NV SpringHill Suites Crescent 12/27/2023 299 Islip/Ronkonkoma NY Hilton Garden Inn Crestline 3/1/2014 166 New York NY (non-hotel) N/A 3/1/2014 - (2)(5) Syracuse NY Courtyard Crestline 10/16/2015 102 Syracuse NY Residence Inn Crestline 10/16/2015 78 29 City State Brand Manager (3) Date Acquired or Completed Rooms Cleveland OH Courtyard Concord 6/30/2023 154 Mason OH Hilton Garden Inn Raymond 9/1/2016 110 Twinsburg OH Hilton Garden Inn Concord 10/7/2008 142 Oklahoma City OK Hampton Raymond 5/28/2010 200 Oklahoma City OK Hilton Garden Inn Raymond 9/1/2016 155 Oklahoma City OK Homewood Suites Raymond 9/1/2016 100 Oklahoma City (West) OK Homewood Suites Chartwell 9/1/2016 90 Portland OR Hampton Raymond 11/17/2021 243 Collegeville/Philadelphia PA Courtyard Newport 11/15/2010 132 Malvern/Philadelphia PA Courtyard Newport 11/30/2010 127 Pittsburgh PA AC Hotels Concord 10/25/2022 134 Pittsburgh PA Hampton Newport 12/31/2008 132 Charleston SC Home2 Suites LBA 9/1/2016 122 Columbia SC Hilton Garden Inn Newport 3/1/2014 143 Columbia SC TownePlace Suites Newport 9/1/2016 91 Greenville SC Hyatt Place Crestline 9/1/2021 130 Hilton Head SC Hilton Garden Inn McKibbon 3/1/2014 104 Chattanooga TN Homewood Suites LBA 3/1/2014 76 Franklin TN Courtyard Chartwell 9/1/2016 126 Franklin TN Residence Inn Chartwell 9/1/2016 124 Knoxville TN Homewood Suites McKibbon 9/1/2016 103 Knoxville TN SpringHill Suites McKibbon 9/1/2016 103 Knoxville TN TownePlace Suites McKibbon 9/1/2016 97 Memphis TN Hampton Crestline 2/5/2018 144 Memphis TN Hilton Garden Inn Crestline 10/28/2021 150 Nashville TN Hilton Garden Inn Dimension 9/30/2010 194 Nashville TN Home2 Suites Dimension 5/31/2012 119 Nashville TN TownePlace Suites Chartwell 9/1/2016 101 Addison TX SpringHill Suites Marriott 3/1/2014 159 Arlington TX Hampton Western 12/1/2010 98 Austin TX Courtyard HHM 11/2/2010 145 Austin TX Fairfield HHM 11/2/2010 150 Austin TX Hampton Dimension 4/14/2009 124 Austin TX Hilton Garden Inn HHM 11/2/2010 117 Austin TX Homewood Suites Dimension 4/14/2009 97 Austin/Round Rock TX Hampton Dimension 3/6/2009 94 Austin/Round Rock TX Homewood Suites Dimension 9/1/2016 115 Dallas TX Homewood Suites Western 9/1/2016 130 Denton TX Homewood Suites Chartwell 9/1/2016 107 El Paso TX Homewood Suites Western 3/1/2014 114 Fort Worth TX Courtyard LBA 2/2/2017 124 Fort Worth TX Hilton Garden Inn Raymond 11/17/2021 157 Fort Worth TX Homewood Suites Raymond 11/17/2021 112 Fort Worth TX TownePlace Suites Western 7/19/2010 140 Frisco TX Hilton Garden Inn Western 12/31/2008 102 Grapevine TX Hilton Garden Inn Western 9/24/2010 110 Houston TX Courtyard LBA 9/1/2016 124 Houston TX Marriott Western 1/8/2010 206 Houston TX Residence Inn Western 3/1/2014 129 Houston TX Residence Inn Western 9/1/2016 120 30 City State Brand Manager (3) Date Acquired or Completed Rooms Lewisville TX Hilton Garden Inn Western 10/16/2008 165 San Antonio TX TownePlace Suites Western 3/1/2014 106 Shenandoah TX Courtyard LBA 9/1/2016 124 Stafford TX Homewood Suites Western 3/1/2014 78 Texarkana TX Hampton Western 1/31/2011 81 Provo UT Residence Inn Dimension 3/1/2014 114 Salt Lake City UT Residence Inn Huntington 10/20/2017 136 Salt Lake City UT SpringHill Suites HHM 11/2/2010 143 Salt Lake City UT Courtyard North Central 10/11/2023 175 Salt Lake City UT Hyatt House North Central 10/11/2023 159 South Jordan UT Embassy Suites HHM 11/21/2023 192 Alexandria VA Courtyard Marriott 3/1/2014 178 Alexandria VA SpringHill Suites Marriott 3/28/2011 155 Charlottesville VA Courtyard Crestline 3/1/2014 139 Manassas VA Residence Inn Crestline 2/16/2011 107 Richmond VA Courtyard White Lodging 12/8/2014 135 (1) Richmond VA Marriott White Lodging 3/1/2014 413 (2) Richmond VA Residence Inn White Lodging 12/8/2014 75 (1) Suffolk VA Courtyard Crestline 3/1/2014 92 Suffolk VA TownePlace Suites Crestline 3/1/2014 72 Virginia Beach VA Courtyard Crestline 3/1/2014 141 Virginia Beach VA Courtyard Crestline 3/1/2014 160 Kirkland WA Courtyard InnVentures 3/1/2014 150 Renton WA Residence Inn InnVentures 10/18/2023 146 Seattle WA Residence Inn InnVentures 3/1/2014 234 Tukwila WA Homewood Suites Dimension 3/1/2014 106 Madison WI Hilton Garden Inn Raymond 2/18/2021 176 Total 29,900 (1) Hotel is encumbered by mortgage.
Biggest changeLouis MO Hampton Raymond 4/30/2010 126 Hattiesburg MS Courtyard LBA 3/1/2014 84 Hattiesburg MS Residence Inn LBA 12/11/2008 84 Carolina Beach NC Courtyard Crestline 3/1/2014 144 Charlotte NC Fairfield Newport 9/1/2016 94 Durham NC Homewood Suites McKibbon 12/4/2008 122 Fayetteville NC Home2 Suites LBA 2/3/2011 118 Jacksonville NC Home2 Suites LBA 9/1/2016 105 Wilmington NC Fairfield Crestline 3/1/2014 122 Winston-Salem NC Hampton McKibbon 9/1/2016 94 Omaha NE Courtyard Marriott 3/1/2014 181 Omaha NE Hampton HHM 9/1/2016 139 Omaha NE Hilton Garden Inn HHM 9/1/2016 178 (2) Omaha NE Homewood Suites HHM 9/1/2016 123 Cranford NJ Homewood Suites Dimension 3/1/2014 108 Mahwah NJ Homewood Suites Dimension 3/1/2014 110 Mount Laurel NJ Homewood Suites Newport 1/11/2011 118 Somerset NJ Courtyard Newport 3/1/2014 162 (3) West Orange NJ Courtyard Newport 1/11/2011 131 Las Vegas NV SpringHill Suites Highgate 12/27/2023 300 (5) Islip/Ronkonkoma NY Hilton Garden Inn Crestline 3/1/2014 166 30 City State Brand Manager (1) Date Acquired or Completed Guest Rooms New York NY (non-hotel) N/A 3/1/2014 - (3)(6) Syracuse NY Courtyard Crestline 10/16/2015 102 Syracuse NY Residence Inn Crestline 10/16/2015 78 Cleveland OH Courtyard Concord 6/30/2023 154 Mason OH Hilton Garden Inn Raymond 9/1/2016 110 Twinsburg OH Hilton Garden Inn Concord 10/7/2008 142 Oklahoma City OK Hampton Raymond 5/28/2010 200 Oklahoma City OK Hilton Garden Inn Raymond 9/1/2016 155 Oklahoma City OK Homewood Suites Raymond 9/1/2016 100 Oklahoma City (West) OK Homewood Suites Chartwell 9/1/2016 90 Portland OR Hampton Raymond 11/17/2021 243 Collegeville/Philadelphia PA Courtyard Newport 11/15/2010 132 Malvern/Philadelphia PA Courtyard Newport 11/30/2010 127 Pittsburgh PA AC Hotels Concord 10/25/2022 134 Pittsburgh PA Hampton Newport 12/31/2008 132 Charleston SC Home2 Suites LBA 9/1/2016 122 Columbia SC Hilton Garden Inn Newport 3/1/2014 143 Columbia SC TownePlace Suites Newport 9/1/2016 91 Greenville SC Hyatt Place Crestline 9/1/2021 130 Hilton Head SC Hilton Garden Inn McKibbon 3/1/2014 104 Chattanooga TN Homewood Suites LBA 3/1/2014 76 (7) Franklin TN Courtyard Chartwell 9/1/2016 126 Franklin TN Residence Inn Chartwell 9/1/2016 124 Knoxville TN Homewood Suites McKibbon 9/1/2016 103 Knoxville TN SpringHill Suites McKibbon 9/1/2016 103 Memphis TN Hampton Crestline 2/5/2018 144 Memphis TN Hilton Garden Inn Crestline 10/28/2021 150 Nashville TN Hilton Garden Inn Dimension 9/30/2010 194 Nashville TN Home2 Suites Dimension 5/31/2012 119 Nashville TN TownePlace Suites Chartwell 9/1/2016 101 Addison TX SpringHill Suites Marriott 3/1/2014 159 Arlington TX Hampton Western 12/1/2010 98 Austin TX Courtyard HHM 11/2/2010 145 Austin TX Fairfield HHM 11/2/2010 150 Austin TX Hampton Dimension 4/14/2009 124 Austin TX Homewood Suites Dimension 4/14/2009 97 Austin/Round Rock TX Hampton Dimension 3/6/2009 94 Austin/Round Rock TX Homewood Suites Dimension 9/1/2016 115 Dallas TX Homewood Suites Western 9/1/2016 130 Denton TX Homewood Suites Chartwell 9/1/2016 107 El Paso TX Homewood Suites Western 3/1/2014 114 Fort Worth TX Courtyard LBA 2/2/2017 124 Fort Worth TX Hilton Garden Inn Raymond 11/17/2021 157 Fort Worth TX Homewood Suites Raymond 11/17/2021 112 Fort Worth TX TownePlace Suites Western 7/19/2010 140 Frisco TX Hilton Garden Inn Western 12/31/2008 102 Grapevine TX Hilton Garden Inn Western 9/24/2010 110 Houston TX Courtyard LBA 9/1/2016 124 31 City State Brand Manager (1) Date Acquired or Completed Guest Rooms Houston TX Marriott Western 1/8/2010 206 Houston TX Residence Inn Western 3/1/2014 129 Houston TX Residence Inn Western 9/1/2016 120 Lewisville TX Hilton Garden Inn Western 10/16/2008 165 San Antonio TX TownePlace Suites Western 3/1/2014 106 Shenandoah TX Courtyard LBA 9/1/2016 124 Stafford TX Homewood Suites Western 3/1/2014 78 Texarkana TX Hampton Western 1/31/2011 81 Provo UT Residence Inn Dimension 3/1/2014 114 Salt Lake City UT Courtyard North Central 10/11/2023 175 Salt Lake City UT Hyatt House North Central 10/11/2023 159 Salt Lake City UT Residence Inn Huntington 10/20/2017 136 Salt Lake City UT SpringHill Suites HHM 11/2/2010 143 South Jordan UT Embassy Suites HHM 11/21/2023 192 Alexandria VA Courtyard Marriott 3/1/2014 178 Alexandria VA SpringHill Suites Marriott 3/28/2011 155 Charlottesville VA Courtyard Crestline 3/1/2014 139 Manassas VA Residence Inn Crestline 2/16/2011 107 Richmond VA Courtyard White Lodging 12/8/2014 135 (2) Richmond VA Marriott White Lodging 3/1/2014 413 (3) Richmond VA Residence Inn White Lodging 12/8/2014 75 (2) Suffolk VA Courtyard Crestline 3/1/2014 92 Suffolk VA TownePlace Suites Crestline 3/1/2014 72 Virginia Beach VA Courtyard Crestline 3/1/2014 141 Virginia Beach VA Courtyard Crestline 3/1/2014 160 Kirkland WA Courtyard InnVentures 3/1/2014 150 Renton WA Residence Inn InnVentures 10/18/2023 146 Seattle WA Residence Inn InnVentures 3/1/2014 234 Tukwila WA Homewood Suites Dimension 3/1/2014 106 Madison WI Hilton Garden Inn Raymond 2/18/2021 176 Madison WI Embassy Suites Raymond 6/20/2024 262 Washington, D.C. - AC Hotels HHM 3/25/2024 234 Total 29,764 (1) The management companies are defined in Note 9 titled “Management and Franchise Agreements” in Part II, Item 8 in this Annual Report on Form 10-K.
City State Brand Manager (3) Date Acquired or Completed Rooms Anchorage AK Embassy Suites InnVentures 4/30/2010 169 Anchorage AK Home2 Suites InnVentures 12/1/2017 135 Auburn AL Hilton Garden Inn LBA 3/1/2014 101 Birmingham AL Courtyard LBA 3/1/2014 84 Birmingham AL Hilton Garden Inn LBA 9/12/2017 104 Birmingham AL Home2 Suites LBA 9/12/2017 106 Birmingham AL Homewood Suites McKibbon 3/1/2014 95 Dothan AL Hilton Garden Inn LBA 6/1/2009 104 Dothan AL Residence Inn LBA 3/1/2014 84 Huntsville AL Hampton LBA 9/1/2016 98 Huntsville AL Hilton Garden Inn LBA 3/1/2014 101 Huntsville AL Home2 Suites LBA 9/1/2016 77 Huntsville AL Homewood Suites LBA 3/1/2014 107 Mobile AL Hampton McKibbon 9/1/2016 101 (2) Prattville AL Courtyard LBA 3/1/2014 84 Rogers AR Hampton Raymond 8/31/2010 122 (4) Rogers AR Homewood Suites Raymond 4/30/2010 126 (4) Chandler AZ Courtyard North Central 11/2/2010 150 Chandler AZ Fairfield North Central 11/2/2010 110 Phoenix AZ Courtyard North Central 11/2/2010 164 Phoenix AZ Hampton North Central 9/1/2016 125 (2) Phoenix AZ Hampton North Central 5/2/2018 210 Phoenix AZ Homewood Suites North Central 9/1/2016 134 (2) Phoenix AZ Residence Inn North Central 11/2/2010 129 Scottsdale AZ Hilton Garden Inn North Central 9/1/2016 122 Tempe AZ Hyatt House Crestline 8/13/2020 105 (2) Tempe AZ Hyatt Place Crestline 8/13/2020 154 (2) Tucson AZ Hilton Garden Inn Western 7/31/2008 125 Tucson AZ Residence Inn Western 3/1/2014 124 Tucson AZ TownePlace Suites Western 10/6/2011 124 Agoura Hills CA Homewood Suites Dimension 3/1/2014 125 Burbank CA Courtyard Huntington 8/11/2015 190 (1) Burbank CA Residence Inn Marriott 3/1/2014 166 Burbank CA SpringHill Suites Marriott 7/13/2015 170 (1) Clovis CA Hampton Dimension 7/31/2009 86 Clovis CA Homewood Suites Dimension 2/2/2010 83 Cypress CA Courtyard Dimension 3/1/2014 180 Cypress CA Hampton Dimension 6/29/2015 110 Oceanside CA Courtyard Marriott 9/1/2016 142 (1) Oceanside CA Residence Inn Marriott 3/1/2014 125 Rancho Bernardo/San Diego CA Courtyard InnVentures 3/1/2014 210 Sacramento CA Hilton Garden Inn Dimension 3/1/2014 153 San Bernardino CA Residence Inn InnVentures 2/16/2011 95 San Diego CA Courtyard Huntington 9/1/2015 245 (1) San Diego CA Hampton Dimension 3/1/2014 177 (1) San Diego CA Hilton Garden Inn InnVentures 3/1/2014 200 San Diego CA Residence Inn Dimension 3/1/2014 121 San Jose CA Homewood Suites Dimension 3/1/2014 140 (1) San Juan Capistrano CA Residence Inn Marriott 9/1/2016 130 (2) 27 City State Brand Manager (3) Date Acquired or Completed Rooms Santa Ana CA Courtyard Dimension 5/23/2011 155 (1) Santa Clarita CA Courtyard Dimension 9/24/2008 140 Santa Clarita CA Fairfield Dimension 10/29/2008 66 Santa Clarita CA Hampton Dimension 10/29/2008 128 Santa Clarita CA Residence Inn Dimension 10/29/2008 90 Tustin CA Fairfield Marriott 9/1/2016 145 Tustin CA Residence Inn Marriott 9/1/2016 149 Colorado Springs CO Hampton Chartwell 9/1/2016 101 Denver CO Hilton Garden Inn InnVentures 9/1/2016 221 (1) Highlands Ranch CO Hilton Garden Inn Dimension 3/1/2014 128 Highlands Ranch CO Residence Inn Dimension 3/1/2014 117 Boca Raton FL Hilton Garden Inn Dimension 9/1/2016 149 Cape Canaveral FL Hampton LBA 4/30/2020 116 Cape Canaveral FL Homewood Suites LBA 9/1/2016 153 Cape Canaveral FL Home2 Suites LBA 4/30/2020 108 Fort Lauderdale FL Hampton Dimension 6/23/2015 156 Fort Lauderdale FL Residence Inn LBA 9/1/2016 156 Gainesville FL Hilton Garden Inn McKibbon 9/1/2016 104 Gainesville FL Homewood Suites McKibbon 9/1/2016 103 Jacksonville FL Homewood Suites McKibbon 3/1/2014 119 Jacksonville FL Hyatt Place Crestline 12/7/2018 127 Miami FL Courtyard Dimension 3/1/2014 118 (2) Miami FL Hampton HHM 4/9/2010 121 Miami FL Homewood Suites Dimension 3/1/2014 162 Orlando FL Fairfield Marriott 7/1/2009 200 Orlando FL Home2 Suites LBA 3/19/2019 128 Orlando FL SpringHill Suites Marriott 7/1/2009 200 Panama City FL Hampton LBA 3/12/2009 95 Panama City FL TownePlace Suites LBA 1/19/2010 103 Pensacola FL TownePlace Suites McKibbon 9/1/2016 97 Tallahassee FL Fairfield LBA 9/1/2016 97 Tallahassee FL Hilton Garden Inn LBA 3/1/2014 85 (2) Tampa FL Embassy Suites HHM 11/2/2010 147 Atlanta/Downtown GA Hampton McKibbon 2/5/2018 119 Atlanta/Perimeter Dunwoody GA Hampton LBA 6/28/2018 132 Atlanta GA Home2 Suites McKibbon 7/1/2016 128 Macon GA Hilton Garden Inn LBA 3/1/2014 101 (2) Savannah GA Hilton Garden Inn Newport 3/1/2014 105 (2) Cedar Rapids IA Hampton Chartwell 9/1/2016 103 Cedar Rapids IA Homewood Suites Chartwell 9/1/2016 95 Davenport IA Hampton Chartwell 9/1/2016 103 Boise ID Hampton Raymond 4/30/2010 186 (1) Des Plaines IL Hilton Garden Inn Raymond 9/1/2016 253 Hoffman Estates IL Hilton Garden Inn HHM 9/1/2016 184 Mettawa IL Hilton Garden Inn HHM 11/2/2010 170 Mettawa IL Residence Inn HHM 11/2/2010 130 Rosemont IL Hampton Raymond 9/1/2016 158 Skokie IL Hampton Raymond 9/1/2016 225 Warrenville IL Hilton Garden Inn HHM 11/2/2010 135 Indianapolis IN SpringHill Suites HHM 11/2/2010 130 28 City State Brand Manager (3) Date Acquired or Completed Rooms Merrillville IN Hilton Garden Inn HHM 9/1/2016 124 Mishawaka IN Residence Inn HHM 11/2/2010 106 South Bend IN Fairfield HHM 9/1/2016 119 Overland Park KS Fairfield Raymond 3/1/2014 110 Overland Park KS Residence Inn Raymond 3/1/2014 120 Wichita KS Courtyard Chartwell 3/1/2014 90 Louisville KY AC Hotels Concord 10/25/2022 156 Lafayette LA Hilton Garden Inn LBA 7/30/2010 153 (2) Lafayette LA SpringHill Suites LBA 6/23/2011 103 New Orleans LA Homewood Suites Dimension 3/1/2014 166 (1) Marlborough MA Residence Inn Crestline 3/1/2014 112 Westford MA Hampton Crestline 3/1/2014 110 Westford MA Residence Inn Crestline 3/1/2014 108 (1) Annapolis MD Hilton Garden Inn Crestline 3/1/2014 126 Silver Spring MD Hilton Garden Inn Crestline 7/30/2010 107 Portland ME AC Hotels Crestline 8/20/2021 178 Portland ME Aloft Crestline 9/10/2021 157 Portland ME Residence Inn Crestline 10/13/2017 179 (1) Novi MI Hilton Garden Inn HHM 11/2/2010 148 Maple Grove MN Hilton Garden Inn North Central 9/1/2016 121 Rochester MN Hampton Raymond 8/3/2009 124 St.
City State Brand Manager (1) Date Acquired or Completed Guest Rooms Anchorage AK Embassy Suites InnVentures 4/30/2010 169 Anchorage AK Home2 Suites InnVentures 12/1/2017 135 Auburn AL Hilton Garden Inn LBA 3/1/2014 101 Birmingham AL Courtyard LBA 3/1/2014 84 Birmingham AL Hilton Garden Inn LBA 9/12/2017 104 Birmingham AL Home2 Suites LBA 9/12/2017 106 Birmingham AL Homewood Suites McKibbon 3/1/2014 95 Dothan AL Hilton Garden Inn LBA 6/1/2009 104 Dothan AL Residence Inn LBA 3/1/2014 84 Huntsville AL Hampton LBA 9/1/2016 98 Huntsville AL Hilton Garden Inn LBA 3/1/2014 101 Huntsville AL Home2 Suites LBA 9/1/2016 77 Huntsville AL Homewood Suites LBA 3/1/2014 107 Mobile AL Hampton McKibbon 9/1/2016 101 (3) Prattville AL Courtyard LBA 3/1/2014 84 Chandler AZ Courtyard North Central 11/2/2010 150 Chandler AZ Fairfield North Central 11/2/2010 110 Phoenix AZ Courtyard North Central 11/2/2010 164 Phoenix AZ Hampton North Central 9/1/2016 125 (3) Phoenix AZ Hampton North Central 5/2/2018 210 Phoenix AZ Homewood Suites North Central 9/1/2016 134 (3) Phoenix AZ Residence Inn North Central 11/2/2010 129 Scottsdale AZ Hilton Garden Inn North Central 9/1/2016 122 Tempe AZ Hyatt House Crestline 8/13/2020 105 (3) Tempe AZ Hyatt Place Crestline 8/13/2020 154 (3) Tucson AZ Hilton Garden Inn Western 7/31/2008 125 Tucson AZ Residence Inn Western 3/1/2014 124 Tucson AZ TownePlace Suites Western 10/6/2011 124 Agoura Hills CA Homewood Suites Dimension 3/1/2014 125 Burbank CA Courtyard Huntington 8/11/2015 190 (2) Burbank CA Residence Inn Marriott 3/1/2014 166 Burbank CA SpringHill Suites Marriott 7/13/2015 170 (2) Clovis CA Hampton Dimension 7/31/2009 86 Clovis CA Homewood Suites Dimension 2/2/2010 83 Cypress CA Courtyard Dimension 3/1/2014 180 Cypress CA Hampton Dimension 6/29/2015 110 Oceanside CA Courtyard Marriott 9/1/2016 142 (2) Oceanside CA Residence Inn Marriott 3/1/2014 125 Rancho Bernardo/San Diego CA Courtyard InnVentures 3/1/2014 210 Sacramento CA Hilton Garden Inn Dimension 3/1/2014 153 San Bernardino CA Residence Inn InnVentures 2/16/2011 95 San Diego CA Courtyard Huntington 9/1/2015 245 (2) San Diego CA Hampton Dimension 3/1/2014 177 (2) San Diego CA Hilton Garden Inn InnVentures 3/1/2014 200 San Diego CA Residence Inn Dimension 3/1/2014 122 San Jose CA Homewood Suites Dimension 3/1/2014 140 (2) 28 City State Brand Manager (1) Date Acquired or Completed Guest Rooms San Juan Capistrano CA Residence Inn Marriott 9/1/2016 130 (3) Santa Ana CA Courtyard Dimension 5/23/2011 155 (2) Santa Clarita CA Courtyard Dimension 9/24/2008 140 Santa Clarita CA Fairfield Dimension 10/29/2008 66 Santa Clarita CA Hampton Dimension 10/29/2008 128 Santa Clarita CA Residence Inn Dimension 10/29/2008 90 Tustin CA Fairfield Marriott 9/1/2016 145 Tustin CA Residence Inn Marriott 9/1/2016 149 Colorado Springs CO Hampton Chartwell 9/1/2016 101 Denver CO Hilton Garden Inn InnVentures 9/1/2016 221 (2) Highlands Ranch CO Hilton Garden Inn Dimension 3/1/2014 128 Highlands Ranch CO Residence Inn Dimension 3/1/2014 117 Boca Raton FL Hilton Garden Inn Dimension 9/1/2016 149 Cape Canaveral FL Hampton LBA 4/30/2020 116 Cape Canaveral FL Homewood Suites LBA 9/1/2016 153 Cape Canaveral FL Home2 Suites LBA 4/30/2020 108 Fort Lauderdale FL Hampton Dimension 6/23/2015 156 Fort Lauderdale FL Residence Inn LBA 9/1/2016 156 Gainesville FL Hilton Garden Inn McKibbon 9/1/2016 104 Gainesville FL Homewood Suites McKibbon 9/1/2016 103 Jacksonville FL Homewood Suites McKibbon 3/1/2014 119 Jacksonville FL Hyatt Place Crestline 12/7/2018 127 Miami FL Courtyard Dimension 3/1/2014 118 (3) Miami FL Hampton HHM 4/9/2010 121 Miami FL Homewood Suites Dimension 3/1/2014 162 Orlando FL Fairfield Marriott 7/1/2009 200 Orlando FL Home2 Suites LBA 3/19/2019 128 Orlando FL SpringHill Suites Marriott 7/1/2009 200 Panama City FL Hampton LBA 3/12/2009 95 Panama City FL TownePlace Suites LBA 1/19/2010 103 Pensacola FL TownePlace Suites McKibbon 9/1/2016 97 Tallahassee FL Fairfield LBA 9/1/2016 97 Tallahassee FL Hilton Garden Inn LBA 3/1/2014 85 (3) Tampa FL Embassy Suites HHM 11/2/2010 147 Atlanta/Downtown GA Hampton McKibbon 2/5/2018 119 Atlanta/Perimeter Dunwoody GA Hampton LBA 6/28/2018 132 Atlanta GA Home2 Suites McKibbon 7/1/2016 128 Macon GA Hilton Garden Inn LBA 3/1/2014 101 (3) Savannah GA Hilton Garden Inn Newport 3/1/2014 105 (3) Cedar Rapids IA Hampton Chartwell 9/1/2016 103 Cedar Rapids IA Homewood Suites Chartwell 9/1/2016 95 Davenport IA Hampton Chartwell 9/1/2016 103 Boise ID Hampton Raymond 4/30/2010 186 (2) Des Plaines IL Hilton Garden Inn Raymond 9/1/2016 253 Hoffman Estates IL Hilton Garden Inn HHM 9/1/2016 184 Mettawa IL Hilton Garden Inn HHM 11/2/2010 170 Mettawa IL Residence Inn HHM 11/2/2010 130 Rosemont IL Hampton Raymond 9/1/2016 158 29 City State Brand Manager (1) Date Acquired or Completed Guest Rooms Skokie IL Hampton Raymond 9/1/2016 225 Warrenville IL Hilton Garden Inn HHM 11/2/2010 135 Indianapolis IN SpringHill Suites HHM 11/2/2010 130 (4) Merrillville IN Hilton Garden Inn HHM 9/1/2016 124 Mishawaka IN Residence Inn HHM 11/2/2010 106 South Bend IN Fairfield HHM 9/1/2016 119 Overland Park KS Fairfield Raymond 3/1/2014 110 Overland Park KS Residence Inn Raymond 3/1/2014 120 Louisville KY AC Hotels Concord 10/25/2022 156 Lafayette LA Hilton Garden Inn LBA 7/30/2010 153 (3) Lafayette LA SpringHill Suites LBA 6/23/2011 103 New Orleans LA Homewood Suites Dimension 3/1/2014 166 Marlborough MA Residence Inn Crestline 3/1/2014 112 Westford MA Hampton Crestline 3/1/2014 110 Westford MA Residence Inn Crestline 3/1/2014 108 (2) Annapolis MD Hilton Garden Inn Crestline 3/1/2014 126 Silver Spring MD Hilton Garden Inn Crestline 7/30/2010 107 Portland ME AC Hotels Crestline 8/20/2021 178 Portland ME Aloft Hotels Crestline 9/10/2021 157 Portland ME Residence Inn Crestline 10/13/2017 179 (2) Novi MI Hilton Garden Inn HHM 11/2/2010 148 Maple Grove MN Hilton Garden Inn North Central 9/1/2016 121 Rochester MN Hampton Raymond 8/3/2009 124 St.
See “Management and Franchise Agreements” in Part I, Item 1, Business, appearing elsewhere in this Annual Report on Form 10-K, for a table summarizing the number of hotels and rooms by brand.
See “Management and Franchise Agreements” in Part I, Item 1, Business, appearing elsewhere in this Annual Report on Form 10-K, for a table summarizing the number of hotels and guest rooms by brand.
(5) In May 2023, the Company entered into an operating lease for an initial 15-year term with a third-party hotel operator at its independent boutique hotel in New York, New York for all hotel operations of the hotel’s 210 hotel rooms.
(6) In May 2023, the Company entered into an operating lease for an initial 15-year term with a third-party hotel operator at its independent boutique hotel in New York, New York for all hotel operations of the hotel’s 210 guest rooms.
As noted below, 14 of the Company’s hotels are subject to ground leases and 15 of its hotels are encumbered by mortgage notes.
As noted below, 14 of the Company’s properties are subject to ground leases and 14 of its hotels are encumbered by mortgage notes.
The following table summarizes the number of hotels and rooms by state: Number of Hotels and Guest Rooms by State Number of Number of State Hotels Rooms Alabama 13 1,246 Alaska 2 304 Arizona 13 1,776 Arkansas 2 248 California 26 3,721 Colorado 4 567 Florida 22 2,844 Georgia 5 585 Idaho 1 186 Illinois 7 1,255 Indiana 4 479 Iowa 3 301 Kansas 3 320 Kentucky 1 156 Louisiana 3 422 Maine 3 514 Maryland 2 233 Massachusetts 3 330 Michigan 1 148 Minnesota 3 405 Mississippi 2 168 Missouri 4 544 Nebraska 4 621 Nevada 1 299 New Jersey 5 629 New York 3 346 North Carolina 8 881 Ohio 3 406 Oklahoma 4 545 Oregon 1 243 Pennsylvania 4 525 South Carolina 5 590 Tennessee 11 1,337 Texas 27 3,328 Utah 6 919 Virginia 11 1,667 Washington 4 636 Wisconsin 1 176 Total 225 29,900 26 The following table summarizes the location, brand, manager, date acquired or completed and number of rooms for each of the 225 hotels and the non-hotel property that the Company owned as of December 31, 2023.
The following table summarizes the number of hotels and guest rooms by state: Number of Hotels and Guest Rooms by State Number of Number of State Hotels Guest Rooms Alabama 13 1,246 Alaska 2 304 Arizona 13 1,776 California 26 3,722 Colorado 4 567 Florida 22 2,844 Georgia 5 585 Idaho 1 186 Illinois 7 1,255 Indiana 4 479 Iowa 3 301 Kansas 2 230 Kentucky 1 156 Louisiana 3 422 Maine 3 514 Maryland 2 233 Massachusetts 3 330 Michigan 1 148 Minnesota 3 405 Mississippi 2 168 Missouri 4 544 Nebraska 4 621 Nevada 1 300 New Jersey 5 629 New York 3 346 North Carolina 7 799 Ohio 3 406 Oklahoma 4 545 Oregon 1 243 Pennsylvania 4 525 South Carolina 5 590 Tennessee 10 1,240 Texas 26 3,211 Utah 6 919 Virginia 11 1,667 Washington 4 636 Wisconsin 2 438 Washington D.C. 1 234 Total 221 29,764 27 The following table summarizes the location, brand, manager, date acquired or completed and number of guest rooms for each of the 221 hotels and the non-hotel property that the Company owned as of December 31, 2024.
Lease revenue from this property is recorded in other revenue in the Company’s consolidated statements of operations and comprehensive income. As a result of the lease agreement, this property is excluded from the Company’s hotel and room counts effective May 2023 and is considered a non-hotel property through the end of the lease term.
Lease revenue from this property is recorded in other revenue in the Company’s consolidated statements of operations and comprehensive income. As a result of the lease and transfer of possession to the operator, this property has been excluded from the Company’s hotel and guest room counts since May 2023 and is considered a non-hotel property.
The Company’s investment in real estate as of December 31, 2023, consisted of the following (in thousands): Land $ 828,868 Building and improvements 4,917,105 Furniture, fixtures and equipment 571,026 Finance ground lease assets 102,084 Franchise fees 21,233 6,440,316 Less accumulated depreciation and amortization (1,662,942 ) Investment in real estate, net $ 4,777,374 For additional information about the Company’s properties, refer to Schedule III – Real Estate and Accumulated Depreciation and Amortization included at the end of Part IV, appearing elsewhere in this Annual Report on Form 10-K. 31
(7) Hotel was classified as held for sale as of December 31, 2024 and was sold to an unrelated party in February 2025. 32 The Company’s investment in real estate as of December 31, 2024, consisted of the following (in thousands): Land $ 839,187 Building and improvements 5,064,866 Furniture, fixtures and equipment 610,062 Finance ground lease assets 102,084 Franchise fees 25,893 6,642,092 Less accumulated depreciation and amortization (1,821,344 ) Investment in real estate, net $ 4,820,748 For additional information about the Company’s properties, refer to Schedule III – Real Estate and Accumulated Depreciation and Amortization included at the end of Part IV, appearing elsewhere in this Annual Report on Form 10-K.
Item 2. P roperties As of December 31, 2023, the Company owned 225 hotels with an aggregate of 29,900 rooms located in 38 states, including two hotels with a total of 248 rooms classified as held for sale, which were both sold to an unrelated party in February 2024.
P roperties As of December 31, 2024, the Company owned 221 hotels with an aggregate of 29,764 guest rooms located in 37 states and the District of Columbia, including two hotels with a total of 206 guest rooms classified as held for sale, one of which was sold to an unrelated party in February 2025, while the other is expected to be sold in the first quarter of 2025.
(2) Hotel is subject to ground lease. (3) The management companies are defined in Note 9 titled “Management and Franchise Agreements” in Part II, Item 8 in this Annual Report on Form 10-K. (4) Hotel is classified as held for sale as of December 31, 2023 and was sold to an unrelated party in February 2024.
(2) Hotel is encumbered by mortgage. (3) Property is subject to ground lease. (4) Hotel was classified as held for sale as of December 31, 2024 and is expected to be sold to an unrelated party in the first quarter of 2025.
Added
(5) In the second quarter of 2024, the property converted a meeting room into a guest room, increasing the number of guest rooms from 299 at acquisition to 300.
Added
As a result of the operator's failure to make lease payments, the Company has commenced legal proceedings to remove the operator from possession of the hotel.
Added
The Company intends to enforce its rights under the lease and transition management of the hotel to a third-party manager, however, the removal process is still ongoing and the timing of the resolution of this matter and the transition of management operations cannot be predicted at this time.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Saf ety Disclosures Not Applicable. 32 PART II
Biggest changeMine Saf ety Disclosures Not Applicable. 33 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 32 Part II Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 33 Item 6. Reserved 35 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 36 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 48 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 33 Part II Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 34 Item 6. Reserved 37 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 38 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 50 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following is a summary of all share repurchases during the fourth quarter of 2023: Issuer Purchases of Equity Securities (a) (b) (c) (d) Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) (1) October 1 - October 31, 2023 - - - $ 335,446 November 1 - November 30, 2023 - - - $ 335,446 December 1 - December 31, 2023 (2) 134,085 $ 16.90 - $ 335,446 Total 134,085 - (1) Represents amount outstanding under the Company’s authorized $338.7 million Share Repurchase Program.
Biggest changeAdditionally, during 2024, certain of the Company’s employees surrendered common shares to satisfy their tax withholding obligations associated with the vesting of common shares issued under the 2014 Omnibus Incentive Plan as described in Note 8 titled “Compensation Plans” in Part II, Item 8, of the Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Annual Report on Form 10-K. 35 The following is a summary of all share repurchases during the fourth quarter of 2024: Issuer Purchases of Equity Securities (a) (b) (c) (d) Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) (1) October 1 - October 31, 2024 - - - $ 300,794 November 1 - November 30, 2024 - - - $ 300,794 December 1 - December 31, 2024 (2) 170,970 $ 16.05 - $ 300,794 Total 170,970 - (1) Represents amount outstanding under the Company’s authorized $335.4 million Share Repurchase Program.
In order to comply with certain requirements related to the Company’s qualification as a REIT, the Company’s Charter provides that, subject to certain exceptions, no person or entity (other than a person or entity who has been granted 33 an exemption) may directly or indirectly, beneficially or constructively, own more than 9.8% of the aggregate of its outstanding common shares or 9.8% of the aggregate of the outstanding preferred shares of any class or series.
In order to comply with certain requirements related to the Company’s qualification as a REIT, the Company’s Charter provides that, subject to certain exceptions, no person or entity (other than a person or entity who has been granted an exemption) may directly or indirectly, beneficially or constructively, own more than 9.8% of the aggregate of its outstanding common shares or 9.8% of the aggregate of the outstanding preferred shares of any class or series.
In May 2015, the Directors’ Plan was terminated effective upon the Listing, and no further grants can be made under the Directors’ Plan, provided however, that the termination did not affect any outstanding director option awards previously issued under the Directors’ Plan.
In May 2015, the Directors’ Plan was terminated effective upon the Listing, and no further grants can be made under the Directors’ Plan, provided however, that the termination did not affect any outstanding director option awards previously issued under the Directors’ Plan. All outstanding option awards under the Directors’ Plan expired in 2024.
Repurchases under the Share Repurchase Program have been funded, and the Company intends to fund future repurchases, with cash on hand or availability under its unsecured credit facilities, subject to applicable restrictions under the Company’s unsecured credit facilities (if any).
Repurchases under the Share Repurchase Program have been funded, and the Company intends to fund future repurchases, with cash on hand, proceeds from dispositions or availability under its unsecured credit facilities, subject to applicable restrictions under the Company’s unsecured credit facilities (if any).
In addition to the regular monthly cash distribution of $0.08 per common share approved by the Board of Directors in December 2023, the Board of Directors approved a special cash distribution of $0.05 per common share for a combined distribution of $0.13 per common share, paid in January 2024, to shareholders of record as of December 29, 2023.
In addition to the regular monthly cash distribution of $0.08 per common share approved by the Board of Directors in December 2024, the Board of Directors approved a special cash distribution of $0.05 per common share for a combined distribution of $0.13 per common share, paid in January 2025, to shareholders of record as of December 31, 2024.
Share Repurchases In May 2023, the Company’s Board of Directors approved a one-year extension of its existing Share Repurchase Program, authorizing share repurchases up to an aggregate of $338.7 million. The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2024 if not terminated or extended earlier.
Share Repurchases In May 2024, the Company’s Board of Directors approved a one-year extension of its existing Share Repurchase Program, authorizing share repurchases up to an aggregate of $335.4 million. The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2025 if not terminated or extended earlier.
The timing of share repurchases and the number of common shares to be repurchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of December 31, 2023, approximately $335.4 million remained available for purchase under the Share Repurchase Program.
The timing of share repurchases and the number of common shares to be repurchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of December 31, 2024, approximately $300.8 million remained available for purchase under the Share Repurchase Program.
For the years ended December 31, 2023 and 2022, the Company paid distributions of $1.04 and $0.61 per common share for a total of approximately $238.3 million and $139.5 million, respectively. The Company’s current annual distribution rate, payable monthly, is $0.96 per common share.
For the years ended December 31, 2024 and 2023, the Company paid distributions of $1.01 and $1.04 per common share for a total of approximately $243.7 million and $238.3 million, respectively. The Company’s current annual distribution rate, payable monthly, is $0.96 per common share.
The performance graph is not indicative of future investment performance. The Company does not make or endorse any predictions as to future share price performance. Shareholder Information As of February 12, 2024, the Company had approximately 100 holders of record of its common shares and there were approximately 242 million common shares outstanding.
The performance graph is not indicative of future investment performance. The Company does not make or endorse any predictions as to future share price performance. 34 Shareholder Information As of February 18, 2025, the Company had approximately 99 holders of record of its common shares and there were approximately 240 million common shares outstanding.
During the year ended December 31, 2023, the Company purchased approximately 0.5 million of its common shares under its Share Repurchase Program at a weighted-average market purchase price of approximately $14.34 per common share for an aggregate purchase price, including commissions, of approximately $6.9 million.
During the year ended December 31, 2024, the Company purchased, under its Share Repurchase Program, approximately 2.4 million of its common shares at a weighted-average market purchase price of approximately $14.16 per common share for an aggregate purchase price, including commissions, of approximately $34.7 million.
(2) Consists of common shares surrendered to the Company to satisfy tax withholding obligations associated with the vesting of restricted common shares. 34 Equity Compensation Plans The Company’s Board of Directors adopted and the Company’s shareholders approved the Omnibus Plan, which provides for the issuance of up to 10 million common shares, subject to adjustments, to employees, officers, and directors of the Company or affiliates of the Company, consultants or advisers currently providing services to the Company or affiliates of the Company, and any other person whose participation in the Omnibus Plan is determined by the Compensation Committee of the Board of Directors (the “Compensation Committee”) to be in the best interests of the Company.
Equity Compensation Plans The Company’s Board of Directors adopted and the Company’s shareholders approved the 2024 Omnibus Incentive Plan (“2024 Omnibus Plan”), which provides for the issuance of up to 7.25 million common shares, subject to adjustments, to employees, officers, and directors of the Company or affiliates of the Company, consultants or advisers currently providing services to the Company or affiliates of the Company, and any other person whose participation in the 2024 Omnibus Plan is determined by the Compensation Committee of the Board of Directors (the “Compensation Committee”) to be in the best interests of the Company.
Real Estate Hotels Index $ 100.00 $ 115.88 $ 85.39 $ 97.80 $ 82.76 $ 94.91 This performance graph shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing by the Company under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Real Estate Hotels Index $ 100.00 $ 73.69 $ 84.40 $ 71.42 $ 81.91 $ 79.75 This performance graph shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing by the Company under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
As of December 31, 2023 and February 12, 2024, the last reported closing price per share for the Company’s common shares as reported on the NYSE was $16.61 and $16.22, respectively.
As of December 31, 2024 and February 18, 2025, the last reported closing price per share for the Company’s common shares as reported on the NYSE was $15.35 and $15.38, respectively.
This program, which was announced in 2015 and most recently extended in May 2023, may be suspended or terminated at any time by the Company and will end in July 2024 if not terminated or extended earlier.
This program, which was announced in 2015 and most recently extended in May 2024, may be suspended or terminated at any time by the Company and will end in July 2025 if not terminated or extended earlier. (2) Consists of common shares surrendered to the Company to satisfy tax withholding obligations associated with the vesting of restricted common shares.
The following is a summary of securities issued under the Company’s equity compensation plans as of December 31, 2023: Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (2) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in First Column) (3) Equity compensation plans approved by security holders 115,961 $ 20.50 6,625,302 Equity compensation plans not approved by security holders - - - Total equity compensation plans 115,961 $ 20.50 6,625,302 (1) Includes 40,132 stock options granted to the Company’s current and former directors under the Directors’ Plan.
The following is a summary of securities issued under the Company’s equity compensation plans as of December 31, 2024: Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (2) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in First Column) (3) Equity compensation plans approved by security holders 80,563 $ - 7,945,177 Equity compensation plans not approved by security holders - - - Total equity compensation plans 80,563 $ - 7,945,177 (1) Consists of 80,563 fully vested deferred stock units, including quarterly distributions earned, under the Non-Employee Director Deferral Program that are not included in the calculation of the weighted-average exercise price of outstanding options.
Value of Initial Investment at Name 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 Apple Hospitality REIT, Inc. $ 100.00 $ 121.97 $ 98.91 $ 124.05 $ 127.03 $ 142.67 S&P 500 Index $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 Dow Jones U.S.
Value of Initial Investment at Name 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Apple Hospitality REIT, Inc. $ 100.00 $ 81.09 $ 101.70 $ 104.15 $ 116.97 $ 115.49 S&P 500 Index $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 Dow Jones U.S.
Removed
Additionally, during 2023, certain of the Company’s employees surrendered common shares to satisfy their tax withholding obligations associated with the vesting of common shares issued under the 2014 Omnibus Incentive Plan (the “Omnibus Plan”) as described in Note 8 titled “Compensation Plans” in Part II, Item 8, of the Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Annual Report on Form 10-K.
Added
The Company previously entered into and expects to continue to enter into written trading plans as part of the Share Repurchase Program that provide for share repurchases in open market transactions that are intended to comply with Rule 10b5-1 under the Exchange Act.
Removed
Also includes 75,829 fully vested deferred stock units, including quarterly distributions earned, under the Non-Employee Director Deferral Program under the Omnibus Plan, adopted by the Board of Directors in 2018, effective June 1, 2018, that are not included in the calculation of the weighted-average exercise price of outstanding options.
Added
The Company’s Board of Directors previously adopted, and the Company’s shareholders approved, the 2014 Omnibus Incentive Plan (“2014 Omnibus Plan”), which similarly provided for the issuance of common shares.
Removed
(2) The weighted-average exercise price of outstanding options relates solely to stock options, which are the only currently outstanding exercisable security. (3) Does not include remaining shares registered under the Directors’ Plan, as no further grants can be made under the Directors’ Plan.
Added
In May 2024, the 2014 Omnibus Plan was terminated effective upon shareholder approval of the 2024 Omnibus Plan, and no further grants can be made under the 2014 Omnibus Plan, provided however, that the termination did not affect any outstanding incentive awards previously issued under the 2014 Omnibus Plan.
Added
(2) As of December 31, 2024, there are no outstanding exercisable securities, therefore, there is no weighted-average exercise price of outstanding securities. 36 (3) Includes 7,248,900 shares available under the 2024 Omnibus Plan and an estimated 696,277 shares as of December 31, 2024, that were subject to outstanding awards (which includes an estimated number of common shares based on “target” performance with respect to February 2024 awards authorized under the 2014 Omnibus Plan in February 2024, which were outstanding but not yet earned) under the 2014 Omnibus Plan which was terminated in May 2024 upon shareholder approval of the 2024 Omnibus Plan.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

98 edited+26 added−25 removed48 unchanged
Biggest changeYear Ended December 31, (in thousands, except statistical data) 2023 Percent of Revenue 2022 Percent of Revenue Change 2022 to 2023 2021 Percent of Revenue Change 2021 to 2022 Total revenue $ 1,343,800 100.0 % $ 1,238,417 100.0 % 8.5 % $ 933,869 100.0 % 32.6 % Hotel operating expense 780,725 58.1 % 710,481 57.4 % 9.9 % 542,178 58.1 % 31.0 % Property taxes, insurance and other expense 79,307 5.9 % 72,907 5.9 % 8.8 % 71,980 7.7 % 1.3 % General and administrative expense 47,401 3.5 % 42,464 3.4 % 11.6 % 41,038 4.4 % 3.5 % Loss on impairment of depreciable real estate assets 5,644 26,175 -78.4 % 10,754 143.4 % Depreciation and amortization expense 183,242 181,697 0.9 % 184,471 -1.5 % Gain on sale of real estate - 1,785 n/a 3,596 -50.4 % Interest and other expense, net 68,857 59,733 15.3 % 67,748 -11.8 % Income tax expense 1,135 1,940 -41.5 % 468 314.5 % Net income 177,489 144,805 22.6 % 18,828 669.1 % Adjusted Hotel EBITDA (1) 481,892 455,579 5.8 % 320,273 42.2 % Number of hotels owned at end of period 225 220 2.3 % 219 0.5 % ADR $ 155.76 $ 149.36 4.3 % $ 123.78 20.7 % Occupancy 74.2 % 72.6 % 2.2 % 66.3 % 9.5 % RevPAR $ 115.60 $ 108.45 6.6 % $ 82.03 32.2 % (1) See reconciliation of Adjusted Hotel EBITDA to net income in “Non-GAAP Financial Measures” below. 37 Comparable Hotels Operating Results The following table reflects certain operating statistics for the Company’s 223 hotels owned and held for use as of December 31, 2023.
Biggest changeYear Ended December 31, (in thousands, except statistical data) 2024 Percent of Revenue 2023 Percent of Revenue Change 2023 to 2024 2022 Percent of Revenue Change 2022 to 2023 Total revenue $ 1,431,468 100.0 % $ 1,343,800 100.0 % 6.5 % $ 1,238,417 100.0 % 8.5 % Hotel operating expense 837,871 58.5 % 780,725 58.1 % 7.3 % 710,481 57.4 % 9.9 % Property taxes, insurance and other expense 84,382 5.9 % 79,307 5.9 % 6.4 % 72,907 5.9 % 8.8 % General and administrative expense 42,542 3.0 % 47,401 3.5 % -10.3 % 42,464 3.4 % 11.6 % Impairment of depreciable real estate 3,055 5,644 -45.9 % 26,175 -78.4 % Depreciation and amortization expense 190,603 183,242 4.0 % 181,697 0.9 % Gain on sale of real estate 19,744 - n/a 1,785 n/a Interest and other expense, net 77,748 68,857 12.9 % 59,733 15.3 % Income tax expense 947 1,135 -16.6 % 1,940 -41.5 % Net income 214,064 177,489 20.6 % 144,805 22.6 % Adjusted Hotel EBITDA (1) 509,544 481,892 5.7 % 455,579 5.8 % Number of hotels owned at end of period 221 225 -1.8 % 220 2.3 % ADR $ 158.01 $ 155.76 1.4 % $ 149.36 4.3 % Occupancy 75.0 % 74.2 % 1.1 % 72.6 % 2.2 % RevPAR $ 118.54 $ 115.60 2.5 % $ 108.45 6.6 % (1) See reconciliation of Adjusted Hotel EBITDA to net income in “Non-GAAP Financial Measures” below. 39 Comparable Hotels Operating Results The following table reflects certain operating statistics for the Company’s 219 hotels owned and held for use as of December 31, 2024.
The Board of Directors monitors the Company’s distribution rate relative to the performance of its hotels on an ongoing basis and may make adjustments to the distribution rate as determined to be prudent in relation to other cash requirements of the Company or to the extent required to maintain REIT status.
The Board of Directors monitors the Company’s distribution rate relative to the performance of its hotels on an ongoing basis and may make adjustments to the distribution rate as determined to be prudent in relation to other cash requirements of the Company or to the extent required to maintain the Company’s REIT status.
See Note 9, titled “Management and Franchise Agreements” of the Consolidated Financial Statements 45 and Notes thereto in Part II, Item 8, in this Annual Report on Form 10-K, for additional information pertaining to the management and franchise agreements, including a listing of the Company’s hotel management companies.
See Note 9, titled “Management and Franchise Agreements” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, in this Annual Report on Form 10-K, for additional information pertaining to the management and franchise agreements, including a listing of the Company’s hotel management companies.
The Company further excludes actual corporate-level general and administrative expense for the Company as well as Adjusted EBITDAre from its non-hotel property from Adjusted EBITDAre (Adjusted Hotel EBITDA) to isolate property-level operational performance over which the Company’s hotel operators have direct control.
The Company further excludes actual corporate-level general and administrative expense for the Company as well as Adjusted EBITDAre from the non-hotel property from Adjusted EBITDAre (Adjusted Hotel EBITDA) to isolate property-level operational performance over which the Company’s hotel operators have direct control.
See “Management and Franchise Agreements” in Part I, Item 1, Business, appearing elsewhere in this Annual Report on Form 10-K, for a table summarizing the number of hotels and rooms by brand.
See “Management and Franchise Agreements” in Part I, Item 1, Business, appearing elsewhere in this Annual Report on Form 10-K, for a table summarizing the number of hotels and guest rooms by brand.
Fair values for these assets are not directly observable and estimates are based on comparables and other information which is subjective in nature, including comparable land sales as well as industry and Company data regarding building and furniture, fixture and equipment costs, including adjustments for estimated depreciation based on the age of the property acquired and time since its most recent renovation.
Fair values for these assets are not directly observable and estimates are based on comparable asset sales and other information which is subjective in nature, including comparable land sales as well as industry and Company data regarding building and furniture, fixture and equipment costs, including adjustments for estimated depreciation based on the age of the property acquired and time since its most recent renovation.
Indicators of impairment include a property with current or potential losses from operations, when it becomes more likely than not that a property will be sold before the end of its previously estimated useful life or when events, trends, contingencies or changes in circumstances indicate that a triggering event has occurred and an asset’s carrying value may not be recoverable.
Indicators of impairment include a property with current or potential losses from operations, when it becomes more likely than not that a property will be disposed of before the end of its previously estimated useful life or when events, trends, contingencies or changes in circumstances indicate that a triggering event has occurred and an asset’s carrying value may not be recoverable.
During the year ended December 31, 2023, the Company sold approximately 12.8 million shares under its ATM Program at a weighted-average market sales price of approximately $17.05 per common share and received aggregate gross proceeds of approximately $218.6 million and proceeds net of offering costs, which included $2.6 million of commissions, of approximately $216.0 million.
During the year ended December 31, 2023, the Company sold approximately 12.8 million shares under the Prior ATM Program at a weighted-average market sales price of approximately $17.05 per common share and received aggregate gross proceeds of approximately $218.6 million and proceeds net of offering costs, which included $2.6 million of commissions, of approximately $216.0 million.
However, competitive pressures could limit the operators’ ability to raise room rates and, as a result, the Company may not be able to offset increased operating expenses with increases in revenue. Business Interruption Being in the real estate industry, the Company is exposed to natural disasters on both a local and national scale.
However, competitive pressures and other factors could limit the operators’ ability to raise room rates and, as a result, the Company may not be able to offset increased operating expenses with increases in revenue. Business Interruption Being in the real estate industry, the Company is exposed to natural disasters on both a local and national scale.
The Company plans to use future net proceeds from the sale of shares under the ATM Program, or under a similar successor program, for general corporate purposes which may include, among other things, acquisitions of hotel properties, the repayment of outstanding indebtedness, capital expenditures, improvement of properties in its portfolio and working capital.
The Company plans to use future net proceeds from the sale of shares under the ATM Program, or under a similar successor program, for general corporate purposes which may include, among other things, acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures, improvement of properties in its portfolio and working capital.
The credit agreements require that the Company comply with various covenants, which include, among others, a minimum tangible net worth, maximum debt limits, minimum interest and fixed charge coverage ratios, and restrictions on certain investments. The Company was in compliance with the applicable covenants as of December 31, 2023.
The credit agreements require that the Company comply with various covenants, which include, among others, a minimum tangible net worth, maximum debt limits, minimum interest and fixed charge coverage ratios, and restrictions on certain investments. The Company was in compliance with the applicable covenants as of December 31, 2024.
See Note 4 titled “Debt” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, in this Annual Report on Form 10-K, for a description of the Company’s debt instruments as of December 31, 2023 and a summary of the financial and restrictive covenants as defined in the credit agreements.
See Note 4 titled “Debt” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, in this Annual Report on Form 10-K, for a description of the Company’s debt instruments as of December 31, 2024 and a summary of the financial and restrictive covenants as defined in the credit agreements.
See Note 4 titled “Debt” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, in this Annual Report on Form 10-K, for more detail regarding future maturities of the Company’s debt instruments as of December 31, 2023.
See Note 4 titled “Debt” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, in this Annual Report on Form 10-K, for more detail regarding future maturities of the Company’s debt instruments as of December 31, 2024.
The remainder of the Company’s hotels are managed by companies that are not affiliated with either Marriott, Hilton or Hyatt, and, as a result, the branded hotels they manage were required to obtain separate franchise agreements with each respective franchisor.
Thirteen of the Company’s hotels are managed by affiliates of Marriott. The remainder of the Company’s hotels are managed by companies that are not affiliated with either Marriott, Hilton or Hyatt, and, as a result, the branded hotels they manage were required to obtain separate franchise agreements with each respective franchisor.
A discussion regarding the results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021 can be found under the section titled “Results of Operations” in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 21, 2023, which is incorporated herein by reference and which is available free of charge on the SEC’s website at www.sec.gov and in the Investor Information section of the Company’s website at www.applehospitalityreit.com .
A discussion regarding the results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found under the section titled “Results of Operations” in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 22, 2024, which is incorporated herein by reference and which is available free of charge on the SEC’s website at www.sec.gov and in the Investor Information section of the Company’s website at www.applehospitalityreit.com .
The following table reconciles the Company’s GAAP net income to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA for the years ended December 31, 2023, 2022 and 2021 (in thousands).
The following table reconciles the Company’s GAAP net income to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA for the years ended December 31, 2024, 2023 and 2022 (in thousands).
The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2024 if not terminated or extended earlier.
The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2025 if not terminated or extended earlier.
As a result, the comparability of results for the years ended December 31, 2023 and 2022, as discussed below, is also impacted by these transactions.
As a result, the comparability of results for the years ended December 31, 2024 and 2023, as discussed below, is also impacted by these transactions.
Under certain loan and management agreements, the Company is required to place in escrow funds for the repair, replacement and refurbishing of furniture, fixtures, and equipment, based on a percentage of gross revenues, provided that such amount may be used for the Company’s capital expenditures with respect to the hotels.
Under certain loan and management agreements, the Company is required to place in escrow funds for the repair, replacement and refurbishing of furniture, fixtures, and equipment at the applicable hotels, based on a percentage of the hotel’s gross revenues, provided that such amount may be used for the Company’s capital expenditures with respect to those hotels.
Repurchases under the Share Repurchase Program have been funded, and the Company intends to fund future repurchases, with cash on hand or availability under its unsecured credit facilities, subject to applicable restrictions under the Company’s unsecured credit facilities (if any).
Repurchases under the Share Repurchase Program have been funded, and the Company intends to fund future repurchases, with cash on hand, proceeds from dispositions or availability under its unsecured credit facilities, subject to applicable restrictions under the Company’s unsecured credit facilities (if any).
The Company defines metrics from Comparable Hotels as results generated by the 223 hotels owned and held for use as of the end of the reporting period.
The Company defines metrics from Comparable Hotels as results generated by the 219 hotels owned and held for use as of the end of the reporting period.
Results of Operations A discussion regarding the Company’s results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 is presented below.
Results of Operations A discussion regarding the Company’s results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 is presented below.
Furthermore, future revenues could be negatively impacted by, among other things, historical seasonal trends, travel-related health concerns, deterioration of consumer sentiment, a recessionary macroeconomic environment or inflationary pressures. Hotel Operating Expense Hotel operating expense consists of direct room operating expense, hotel administrative expense, sales and marketing expense, utilities expense, repair and maintenance expense, franchise fees and management fees.
Future revenues could be negatively impacted by, among other things, historical seasonal trends, deterioration of consumer sentiment, a recessionary macroeconomic environment or inflationary pressures. Hotel Operating Expense Hotel operating expense consists of direct room operating expense, hotel administrative expense, sales and marketing expense, utilities expense, repair and maintenance expense, franchise fees and management fees.
As of December 31, 2023, the Company had available corporate cash on hand of approximately $10.3 million, and unused borrowing capacity under its Revolving Credit Facility of approximately $650 million. The credit agreements governing the unsecured credit facilities contain mandatory prepayment requirements, customary affirmative and negative covenants and events of default.
As of December 31, 2024, the Company had available corporate cash on hand of approximately $10.3 million, and unused borrowing capacity under its Revolving Credit Facility of approximately $567.5 million. The credit agreements governing the unsecured credit facilities contain mandatory prepayment requirements, customary affirmative and negative covenants and events of default.
Revenues The Company’s principal source of revenue is hotel revenue consisting of room, food and beverage, and other related revenue. For the years ended December 31, 2023 and 2022, the Company had total revenue of $1.3 billion and $1.2 billion, respectively.
Revenues The Company’s principal source of revenue is hotel revenue consisting of room, food and beverage, and other related revenue. For the years ended December 31, 2024 and 2023, the Company had total revenue of $1.4 billion and $1.3 billion, respectively.
Results of operations are included only for the period of ownership for hotels acquired or disposed of during all periods presented. During 2023, the Company acquired six hotels and did not dispose of any hotels. During 2022, the Company acquired two hotels and sold one hotel.
Results of operations are included only for the period of ownership for hotels acquired or disposed of during all periods presented. During 2024, the Company acquired two hotels and sold six hotels. During 2023, the Company acquired six hotels and did not dispose of any hotels.
Loss on Impairment of Depreciable Real Estate Assets Loss on impairment of depreciable real estate assets was approximately $5.6 million for the year ended December 31, 2023, consisting of impairment losses at two hotel properties identified by the Company in the fourth quarter of 2023.
Impairment of depreciable real estate was $5.6 million for the year ended December 31, 2023, consisting of impairment losses at two hotel properties identified by the Company in the fourth quarter of 2023.
Interest expense related to the Company’s debt instruments for the year ended December 31, 2023 increased compared to the year ended December 31, 2022 as a result of higher average borrowings associated with variable-rate debt and higher average interest rates on the Company’s variable-rate debt due to the high inflationary environment within the current economy.
Interest expense related to the Company’s debt instruments for the year ended December 31, 2024 increased compared to the year ended December 31, 2023 as a result of higher average borrowings associated with variable-rate debt and higher average interest rates on the Company's variable-rate debt due to the current inflationary environment.
If the Company were unable to extend its maturing debt in future periods or if it were to default on its debt, it may be unable to make distributions. Share Repurchases In May 2023, the Company’s Board of Directors approved a one-year extension of its existing Share Repurchase Program, authorizing share repurchases up to an aggregate of $338.7 million.
If the Company were unable to extend its maturing debt in future periods or if it were to default on its debt, it may be unable to make distributions. Share Repurchases In May 2024, the Company’s Board of Directors approved a one-year extension of its existing Share Repurchase Program, authorizing share repurchases up to an aggregate of $335.4 million.
The Company plans to pay outstanding amounts and service payments due upon the upcoming debt maturity dates using funds from operations, borrowings under its Revolving Credit Facility and/or proceeds from new financing, refinancing or loan extensions.
The Company plans to pay outstanding amounts and service payments due upon the upcoming debt maturity dates using funds from operations, borrowings under its Revolving Credit Facility, proceeds from new financing, available credit extensions under its unsecured credit facilities or refinancing the maturing debt.
Certain of its ground leases have options to extend beyond the initial lease term by periods ranging from five to 120 years. As of December 31, 2023, the Company had total remaining minimum lease payments of $283.4 million, including $7.3 million due in the next year.
Certain of its ground leases have options to extend beyond the initial lease term by periods ranging from five to 120 years. As of December 31, 2024, the Company had total remaining minimum lease payments of $276.2 million, including $7.4 million due in the next year.
The Company anticipates spending approximately $75 million to $85 million during 2024, which includes various comprehensive renovation projects for approximately 20 properties, however, inflationary pressures or supply chain shortages, among other issues, may result in increased costs or delays for anticipated projects. The Company does not currently have any existing or planned projects for new property development.
The Company anticipates spending approximately $80 million to $90 million during 2025, which includes various comprehensive renovation projects for approximately 20 properties, however, inflationary pressures or supply chain shortages, among other issues, may result in increased costs and delays for anticipated projects. The Company does not currently have any existing or planned projects for new property development.
Property Taxes, Insurance and Other Expense Property taxes, insurance and other expense for the years ended December 31, 2023 and 2022 totaled $79.3 million and $72.9 million, respectively, or 5.9% of total revenue for each respective year.
Property Taxes, Insurance and Other Expense Property taxes, insurance and other expense for the years ended December 31, 2024 and 2023 totaled $84.4 million and $79.3 million, respectively, or 5.9% of total revenue for each respective year.
New York Independent Boutique Hotel Lease During the year ended December 31, 2023, the Company entered into an operating lease for an initial 15-year term with a third-party hotel operator at its independent boutique hotel in New York, New York for all hotel operations of the hotel’s 210 hotel rooms.
New York Independent Boutique Hotel Lease In May 2023, the Company entered into an operating lease for an initial 15-year term with a third-party hotel operator at its independent boutique hotel in New York, New York for all hotel operations of the hotel’s 210 guest rooms.
The Company utilized its available cash on hand, net proceeds from sale of shares under the ATM program and borrowings under its Revolving Credit Facility to fund the acquisitions and plans to utilize its available cash or borrowings under its unsecured credit facilities for any future acquisitions.
The Company utilized proceeds from the sale of properties and borrowings under its Revolving Credit Facility to fund these acquisitions. The Company plans to utilize its available cash, net proceeds from the sale of shares under the ATM program, proceeds from the sales of properties or borrowings under its unsecured credit facilities for any future hotel acquisitions.
Lease Commitments The Company is the lessee on certain ground leases, hotel equipment leases and office space leases. As of December 31, 2023, the Company had 14 hotels subject to ground leases and three parking lot ground leases with remaining terms ranging from approximately 15 to 95 years, excluding renewal options.
Lease Commitments The Company is the lessee on certain ground leases, hotel equipment leases and office space leases. As of December 31, 2024, the Company had 14 properties subject to ground leases and three parking lot ground leases with remaining terms ranging from approximately 14 to 94 years, excluding renewal options.
Distributions paid for the years ended December 31, 2023, 2022 and 2021 were $1.04, $0.61 and $0.03 per common share, respectively, for a total of approximately $238.3 million, $139.5 million and $6.8 million, respectively. The Company's current annual distribution rate, payable monthly, is $0.96 per common share.
Distributions paid for the years ended December 31, 2024, 2023 and 2022 were $1.01, $1.04 and $0.61 per common share, respectively, for a total of approximately $243.7 million, $238.3 million and $139.5 million, respectively. The Company's current annual distribution rate, payable monthly, is $0.96 per common share.
In August and October 2022, the Board of Directors approved subsequent increases to the monthly cash distribution to $0.07 and $0.08 per common share, respectively.
In August and October 2022, the Board of Directors approved subsequent increases to the monthly cash distribution to $0.07 and $0.08 per common share, respectively. The Company continued a monthly cash distribution of $0.08 per common share in 2023 and 2024.
The Company expects low-to-mid single digit RevPAR growth and a slight increase in operating results for its Comparable Hotels for 2024 as compared to 2023, which is comparable to broader industry expectations. For the year ended December 31, 2023, the Company’s hotels in general have shown results that have been consistent with or exceeded industry, brand and chain scale averages.
The Company expects low single digit RevPAR growth for its Comparable Hotels for 2025 as compared to 2024, which is comparable to broader industry expectations. For the year ended December 31, 2024, the Company’s hotels in general have shown results that have been broadly consistent with industry, brand and chain scale averages.
For the years ended December 31, 2023 and 2022, hotel operating expense totaled $780.7 million and $710.5 million, respectively, or 58.1% and 57.4% of total revenue for each respective year.
For the years ended December 31, 2024 and 2023, hotel operating expense totaled $837.9 million and $780.7 million, respectively, or 58.5% and 58.1% of total revenue for each respective year.
The Company will continue to aggressively appeal tax assessments in certain jurisdictions in an attempt to minimize tax increases, as warranted. General and Administrative Expense General and administrative expense for the years ended December 31, 2023 and 2022 was $47.4 million and $42.5 million, respectively, or 3.5% and 3.4% of total revenue, respectively.
The Company will continue to proactively pursue tax assessment appeals in certain jurisdictions in an attempt to minimize tax increases, as warranted. General and Administrative Expense General and administrative expense for the years ended December 31, 2024 and 2023 was $42.5 million and $47.4 million, respectively, or 3.0% and 3.5% of total revenue, respectively.
For its existing portfolio, the Company monitors each property’s profitability, market conditions and capital requirements and attempts to maximize shareholder value by disposing of properties when it believes that superior value can be provided from the sale of the property. The Company did not dispose of any properties in the year ended December 31, 2023.
For its existing portfolio, the Company monitors each property’s profitability, market conditions and capital requirements and attempts to maximize shareholder value by disposing of properties when it believes that superior value can be provided from the sale of the property.
Subsequent Events On January 16, 2024, the Company paid approximately $31.4 million, or $0.13 per common share, in distributions to shareholders of record as of December 29, 2023. On January 19, 2024, the Company declared a monthly cash distribution of $0.08 per common share.
Subsequent Events On January 15, 2025, the Company paid approximately $31.2 million, or $0.13 per common share, in distributions to shareholders of record as of December 31, 2024. On January 17, 2025, the Company declared a monthly cash distribution of $0.08 per common share.
The Company also owns one property leased to third parties. Substantially all of the Company’s hotels operate under Marriott or Hilton brands. The hotels are operated and managed under separate management agreements with 16 hotel management companies, none of which are affiliated with the Company.
Substantially all of the Company’s hotels operate under Marriott or Hilton brands. The hotels are operated and managed under separate management agreements with 16 hotel management companies, none of which are affiliated with the Company.
During the year ended December 31, 2023, the Company purchased approximately 0.5 million of its common shares under its Share Repurchase Program at a weighted-average market purchase price of approximately $14.34 per common share for an aggregate purchase price, including commissions, of approximately $6.9 million.
During the year ended December 31, 2024, the Company purchased, under its Share Repurchase Program, approximately 2.4 million of its common shares at a weighted-average market purchase price of approximately $14.16 per common share for an aggregate purchase price, including commissions, of approximately $34.7 million.
The Company’s ongoing analyses and annual recoverability analyses have identified impairment losses on two properties recorded in 2023, two properties recorded in 2022 and five properties recorded in 2021 totaling approximately $5.6 million, $26.2 million and $10.8 million, respectively, as discussed in Note 2, titled “Investment in Real Estate” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, in this Annual Report on Form 10-K.
The Company’s ongoing analyses and annual recoverability analyses have identified impairment losses on three properties recorded in 2024, two properties recorded in 2023 and two properties recorded in 2022 totaling approximately $3.1 million, $5.6 million and $26.2 million, respectively, as discussed in Note 3, titled “Assets Held for Sale and Dispositions” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, in this Annual Report on Form 10-K.
Although the Company is working towards acquiring these hotels, in each case there are a number of conditions to closing that have not yet been satisfied, and there can be no assurance that closings on these hotels will occur under the outstanding purchase contracts.
Although the Company is working towards acquiring this hotel, there are a number of conditions to closing that have not yet been satisfied, and there can be no assurance that closing on this hotel will occur under the outstanding purchase contract.
Although the Company is working towards acquiring these hotels, in each case there are a number of conditions to closing that have not yet been satisfied, and there can be no assurance that closings on these hotels will occur under the outstanding purchase contracts.
Although the Company is working towards acquiring this hotel, there are a number of conditions to closing that have not yet been satisfied, and there can be no assurance that closing on this hotel will occur under the outstanding purchase contract.
As of December 31, 2023, the Company had approximately $1.4 billion of total outstanding debt consisting of $283.0 million of mortgage debt and $1.1 billion outstanding under its credit facilities, excluding unamortized debt issuance costs and fair value adjustments.
As of December 31, 2024, the Company had approximately $1.5 billion of total outstanding debt consisting of $254.3 million of mortgage debt and $1.2 billion outstanding under its credit facilities, excluding unamortized debt issuance costs and fair value adjustments.
Related Parties The Company has engaged in, and is expected to continue to engage in, transactions with related parties. These transactions cannot be construed to be at arm’s length, and the results of the Company’s operations may have been different if these transactions 42 were conducted with non-related parties.
These transactions cannot be construed to be at arm’s length, and the results of the Company’s operations may have been different if these transactions were conducted with non-related parties.
Future offerings will depend on a variety of factors to be determined by the Company, including market conditions, the trading price of the Company’s common shares and opportunities for uses of any proceeds. 43 As discussed in Note 3, titled “Assets Held for Sale and Dispositions” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, in this Annual Report on Form 10-K, as of December 31, 2023, the Company had an outstanding contract to sell two of its hotels, which were both sold to an unrelated party for a combined gross sales price of approximately $33.5 million in February 2024.
Future offerings will depend on a variety of factors to be determined by the Company, including market conditions, the trading price of the Company’s common shares and opportunities for uses of any proceeds. 45 As discussed in Note 3, titled “Assets Held for Sale and Dispositions” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, in this Annual Report on Form 10-K, as of December 31, 2024, the Company had outstanding contracts with separate unrelated parties to sell two of its hotels for a combined gross sales price of approximately $21.0 million, one of which was sold in February 2025, while the other is expected to be sold in the first quarter of 2025.
Year Ended December 31, 2023 2022 2021 Net income $ 177,489 $ 144,805 $ 18,828 Depreciation of real estate owned 180,185 178,641 179,275 Gain on sale of real estate - (1,785 ) (3,596 ) Loss on impairment of depreciable real estate assets 5,644 26,175 10,754 Funds from operations 363,318 347,836 205,261 Amortization of finance ground lease assets 3,038 3,038 5,178 Amortization of favorable and unfavorable operating leases, net 383 396 393 Non-cash straight-line operating ground lease expense 145 154 169 Modified funds from operations $ 366,884 $ 351,424 $ 211,001 41 EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA EBITDA is a commonly used measure of performance in many industries and is defined as net income (loss) excluding interest, income taxes, depreciation and amortization.
Year Ended December 31, 2024 2023 2022 Net income $ 214,064 $ 177,489 $ 144,805 Depreciation of real estate owned 187,555 180,185 178,641 Gain on sale of real estate (19,744 ) - (1,785 ) Impairment of depreciable real estate 3,055 5,644 26,175 Funds from operations 384,930 363,318 347,836 Amortization of finance ground lease assets 3,038 3,038 3,038 Amortization of favorable and unfavorable operating leases, net 408 383 396 Non-cash straight-line operating ground lease expense 135 145 154 Modified funds from operations $ 388,511 $ 366,884 $ 351,424 43 EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA EBITDA is a commonly used measure of performance in many industries and is defined as net income (loss) excluding interest, income taxes, depreciation and amortization.
In February 2022, the Board of Directors of the Company reinstated its policy of distributions on a monthly basis and declared a monthly cash distribution of $0.05 per common share with the first monthly distribution paid in March 2022.
After a suspension of its monthly distributions due to the impact of COVID-19 on its operating cash flows, the Board of Directors of the Company reinstated its policy of distributions on a monthly basis and declared a monthly cash distribution of $0.05 per common share with the first monthly distribution paid in March 2022.
The net proceeds from the sale of both hotels were used for general corporate purposes.
The net proceeds from the sale of both hotels are expected to be used for general corporate purposes.
Year Ended December 31, 2023 2022 2021 Net income $ 177,489 $ 144,805 $ 18,828 Depreciation and amortization 183,242 181,697 184,471 Amortization of favorable and unfavorable operating leases, net 383 396 393 Interest and other expense, net 68,857 59,733 67,748 Income tax expense 1,135 1,940 468 EBITDA 431,106 388,571 271,908 Gain on sale of real estate - (1,785 ) (3,596 ) Loss on impairment of depreciable real estate assets 5,644 26,175 10,754 EBITDAre 436,750 412,961 279,066 Non-cash straight-line operating ground lease expense 145 154 169 Adjusted EBITDAre 436,895 413,115 279,235 General and administrative expense 47,401 42,464 41,038 Adjusted EBITDAre from non-hotel property (1) (2,404 ) - - Adjusted Hotel EBITDA $ 481,892 $ 455,579 $ 320,273 (1) Non-hotel property only includes the results of one hotel in New York, New York that is leased to a third-party hotel operator.
Year Ended December 31, 2024 2023 2022 Net income $ 214,064 $ 177,489 $ 144,805 Depreciation and amortization 190,603 183,242 181,697 Amortization of favorable and unfavorable operating leases, net 408 383 396 Interest and other expense, net 77,748 68,857 59,733 Income tax expense 947 1,135 1,940 EBITDA 483,770 431,106 388,571 Gain on sale of real estate (19,744 ) - (1,785 ) Impairment of depreciable real estate 3,055 5,644 26,175 EBITDAre 467,081 436,750 412,961 Non-cash straight-line operating ground lease expense 135 145 154 Adjusted EBITDAre 467,216 436,895 413,115 General and administrative expense 42,542 47,401 42,464 Adjusted EBITDAre from non-hotel property (1) (214 ) (2,404 ) - Adjusted Hotel EBITDA $ 509,544 $ 481,892 $ 455,579 (1) Non-hotel property only includes the results of one hotel in New York, New York that is leased to a third-party hotel operator.
This property’s Adjusted EBITDAre results are not included in Adjusted Hotel EBITDA starting in the second half of 2023.
The Company is in the process of removing the operator from possession of the hotel. This property’s Adjusted EBITDAre results are not included in Adjusted Hotel EBITDA starting in the second half of 2023.
On August 12, 2020, the Company entered into an equity distribution agreement pursuant to which the Company may sell, from time to time, up to an aggregate of $300 million of its common shares under the ATM Program under the Company’s prior shelf registration statement and the current shelf registration statement described above.
On February 23, 2024, the Company entered into an equity distribution agreement pursuant to which the Company may sell, from time to time, up to an aggregate of $500 million of its common shares under the ATM Program under the Company’s shelf registration statement.
Refer to Part I, Item 2, of this Annual Report on Form 10-K for tables summarizing the number of hotels and rooms by state, and summarizing the location, brand, manager, date acquired or completed and number of rooms for each of the 225 hotels the Company owned as of December 31, 2023.
Refer to Part I, Item 2, of this Annual Report on Form 10-K for tables summarizing the number of hotels and guest rooms by state, and summarizing the location, brand, manager, date acquired or completed and number of guest rooms for each of the 221 hotels the Company owned as of December 31, 2024. 44 Related Parties The Company has engaged in, and is expected to continue to engage in, transactions with related parties.
The timing of share repurchases and the number of common shares to be repurchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of December 31, 2023, approximately $335.4 million remained available for purchase under the Share Repurchase Program.
The timing of share repurchases and the number of common shares to be repurchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors.
As of December 31, 2023, the Company held approximately $30.4 million in reserves related to these properties. During 2023, the Company invested approximately $76.8 million in capital expenditures.
As of December 31, 2024, the Company held approximately $31.0 million in reserves related to these properties. During 2024, the Company invested approximately $78.3 million in capital expenditures.
The Company believes Adjusted Hotel EBITDA provides useful supplemental information to investors regarding operating performance and it is used by management to measure the performance of the Company’s hotels and effectiveness of the operators of the hotels.
The Company believes Adjusted Hotel EBITDA provides useful supplemental information to investors regarding operating performance and it is used by management to measure the performance of the Company’s hotels and effectiveness of the operators of the hotels. In addition, Adjusted EBITDAre and Adjusted Hotel EBITDA are both components of key compensation measures of operational performance within the 2024 Incentive Plan.
Seasonal variations in occupancy at the Company’s hotels may cause quarterly fluctuations in its revenues. Generally, occupancy rates and hotel revenues for the Company’s hotels are greater in the second and third quarters than in the first and fourth quarters. However, due to the effects of COVID-19, these typical seasonal patterns were disrupted until 2023.
Seasonal variations in occupancy at the Company’s hotels may cause quarterly fluctuations in its revenues. Generally, occupancy rates and hotel revenues for the Company’s hotels are greater in the second and third quarters than in the first and fourth quarters.
The Company used the net proceeds from the sale of these shares to pay down borrowings under the Revolving Credit Facility, acquisitions of hotel properties and for general corporate purposes. No shares were sold under the Company’s ATM Program during the year ended December 31, 2022.
The Company used the net proceeds from the sale of these shares to pay down borrowings under the Revolving Credit Facility, for acquisitions of hotel properties and for general corporate purposes. As of December 31, 2024, approximately $500 million remained available for issuance under the ATM Program.
Interest and Other Expense, net Interest and other expense, net for the years ended December 31, 2023 and 2022 was $68.9 million and $59.7 million, respectively, and is net of approximately $1.5 million and $1.3 million, respectively, of interest capitalized associated with renovation projects.
The increase was partially offset by the sale of six hotels in 2024. 41 Interest and Other Expense, net Interest and other expense, net for the years ended December 31, 2024 and 2023 was $77.7 million and $68.9 million, respectively, and is net of approximately $1.4 million and $1.5 million, respectively, of interest capitalized associated with renovation projects.
Depreciation and amortization expense primarily represents expense of the Company’s hotel buildings and related improvements, and associated personal property (furniture, fixtures, and equipment) for their respective periods owned.
Depreciation and Amortization Expense Depreciation and amortization expense for the years ended December 31, 2024 and 2023 was $190.6 million and $183.2 million, respectively. Depreciation and amortization expense primarily represents expense of the Company’s hotel buildings and related improvements, and associated personal property (furniture, fixtures, and equipment) for their respective periods owned.
Distributions The Company generally must distribute annually at least 90% of its REIT taxable income, subject to certain adjustments and excluding any net capital gain, in order to maintain its REIT status. Subsequent to the distribution paid in March 2020, the Company announced the suspension of its monthly distributions due to the impact of COVID-19 on its operating cash flows.
Distributions The Company generally must distribute annually at least 90% of its REIT taxable income, subject to certain adjustments and excluding any net capital gain, in order to maintain its REIT status.
Lease revenue from this property is recorded in other revenue in the Company’s consolidated statements of operations and comprehensive income. As a result of the lease agreement, this property is excluded from the Company’s hotel and room counts effective May 2023 and is considered a non-hotel property through the end of the lease term.
Lease revenue from this property is recorded in other revenue in the Company’s consolidated statements of operations and comprehensive income. As a result of the lease and transfer of possession to the operator, this property has been excluded from the Company’s hotel and guest room counts since May 2023.
Loss on impairment of depreciable real estate assets was $26.2 million for the year ended December 31, 2022, consisting of impairment losses at two hotel properties identified by the Company in the fourth quarter of 2022.
Impairment of Depreciable Real Estate Impairment of depreciable real estate was approximately $3.1 million for the year ended December 31, 2024, consisting of impairment losses at two hotel properties identified by the Company in the third quarter of 2024, and one property identified in the fourth quarter of 2024.
The Company will continue to evaluate and work with its management companies to implement adjustments to the hotel operating model in response to continued changes in the operating environment and guest preferences, including evaluating staffing levels at its hotels to maximize efficiency.
The Company will continue to support its management companies in implementing adjustments to the hotel operating model in response to continued changes in the operating environment and guest preferences, including its efforts to maximize operational efficiency.
Year Ended December 31, 2023 2022 Change 2022 to 2023 2021 Change 2021 to 2022 ADR $ 156.55 $ 149.62 4.6 % $ 125.67 19.1 % Occupancy 74.2 % 72.6 % 2.2 % 66.3 % 9.5 % RevPAR $ 116.23 $ 108.67 7.0 % $ 83.26 30.5 % Same Store Operating Results The following table reflects certain operating statistics for the 207 hotels owned and held for use by the Company as of January 1, 2021 and during the entirety of the reporting periods being compared (“Same Store Hotels”).
Year Ended December 31, 2024 2023 Change 2023 to 2024 2022 Change 2022 to 2023 ADR $ 158.94 $ 158.09 0.5 % $ 150.88 4.8 % Occupancy 75.1 % 74.4 % 0.9 % 72.7 % 2.3 % RevPAR $ 119.36 $ 117.67 1.4 % $ 109.74 7.2 % Same Store Operating Results The following table reflects certain operating statistics for the 209 hotels owned and held for use by the Company as of January 1, 2022 and during the entirety of the reporting periods being compared (“Same Store Hotels”).
The Company performs an annual recoverability analysis by comparing each property’s net book value to its estimated operating income based on assumptions and estimates about the property’s future revenues, expenses and capital expenditures after recovery from disruption resulting from COVID-19 and other disruptive events such as renovations or newly opened hotels in the same market.
The Company performs quarterly recoverability analyses by comparing each property’s net book value to its estimated operating income based on assumptions and estimates about the property’s future revenues, expenses and capital expenditures after disruptive events such as renovations or newly opened hotels in the same market. The Company’s planned initial hold period for each property is generally 39 years.
As of December 31, 2023, the Company owned 225 hotels with an aggregate of 29,900 rooms located in urban, high-end suburban and developing markets throughout 38 states, including two hotels with a total of 248 rooms classified as held for sale, which were both sold to an unrelated party in February 2024.
As of December 31, 2024, the Company owned 221 hotels with an aggregate of 29,764 guest rooms located in urban, high-end suburban and developing markets throughout 37 states and the District of Columbia, including two hotels with a total of 206 guest rooms classified as held for sale, one of which was sold to an unrelated party in February 2025, while the other is expected to be sold in the first quarter of 2025.
The Company’s Comparable Hotels and Same Store Hotels revenue and operating results improved during the year ended December 31, 2023 compared to the year ended December 31, 2022, which is consistent with the overall lodging industry.
Economic indicators in the U.S. have generally been stable throughout 2024. As a result, the Company’s Comparable Hotels and Same Store Hotels revenue and operating results have modestly improved during the year ended December 31, 2024, compared to the year ended December 31, 2023, which is consistent with the overall lodging industry.
The increase in hotel operating expense for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was due to increased labor, repairs and maintenance and utility costs driven by increased staff and inflationary pressures throughout the overall economy.
The increase in hotel operating expense for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was led by the additional hotels acquired in 2023 and 2024 and amplified by increased labor costs, repairs and maintenance and sales and marketing costs driven by inflationary pressures throughout the overall economy, as well as revenue growth for certain variable expenses.
Capital Improvements Management routinely monitors the condition and operations of its hotels and plans renovations and other improvements as it deems prudent. The Company is committed to maintaining and enhancing each property’s competitive position in its market. The 44 Company has invested in and plans to continue to reinvest in its hotels.
As of December 31, 2024, approximately $300.8 million remained available for purchase under the Share Repurchase Program. 46 Capital Improvements Management routinely monitors the condition and operations of its hotels and plans renovations and other improvements as it deems prudent. The Company is committed to maintaining and enhancing each property’s competitive position in its market.
For the years ended December 31, 2023 and 2022, respectively, Comparable Hotels achieved combined average occupancy of 74.2% and 38 72.6%, ADR of $156.55 and $149.62 and RevPAR of $116.23 and $108.67. ADR is calculated as room revenue divided by the number of rooms sold, and RevPAR is calculated as occupancy multiplied by ADR.
For the years ended December 31, 2024 and 2023, respectively, Comparable Hotels achieved combined average occupancy of 75.1% and 74.4%, ADR of $158.94 and $158.09 and RevPAR of $119.36 and $117.67. ADR is calculated as room revenue divided by the number of rooms sold, and RevPAR is calculated as occupancy multiplied by ADR.
Year Ended December 31, 2023 2022 Change 2022 to 2023 2021 Change 2021 to 2022 ADR $ 153.99 $ 147.34 4.5 % $ 124.26 18.6 % Occupancy 74.3 % 72.7 % 2.2 % 66.7 % 9.0 % RevPAR $ 114.47 $ 107.17 6.8 % $ 82.88 29.3 % As discussed above, hotel performance is impacted by many factors, including the economic conditions in the U.S. as well as each individual locality.
Year Ended December 31, 2024 2023 Change 2023 to 2024 2022 Change 2022 to 2023 ADR $ 156.49 $ 156.18 0.2 % $ 149.71 4.3 % Occupancy 75.1 % 74.4 % 0.9 % 72.7 % 2.3 % RevPAR $ 117.56 $ 116.21 1.2 % $ 108.89 6.7 % As discussed above, hotel performance is impacted by many factors, including the economic conditions in the U.S. as well as each individual locality.
See Note 4 titled “Debt” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, in this Annual Report on Form 10-K, for additional discussion of the Company’s amended unsecured credit facilities.
See Note 3, titled “Assets Held for Sale and Dispositions” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, in this Annual Report on Form 10-K, for additional information concerning these impairment losses.
Management and Franchise Agreements Each of the Company’s 225 hotels owned as of December 31, 2023 is operated and managed under separate management agreements with 16 hotel management companies, none of which are affiliated with the Company. Thirteen of the Company’s hotels are managed by affiliates of Marriott.
The amounts outstanding at any point in time are not significant to either of the companies. 47 Management and Franchise Agreements Each of the Company’s 221 hotels owned as of December 31, 2024 is operated and managed under separate management agreements with 16 hotel management companies, none of which are affiliated with the Company.
The increase in property taxes, insurance, and other expense was primarily due to increases in insurance premiums and increases in property taxes in certain locations due to the reassessment of property values by localities related to the improved economy, partially offset by decreases at other locations due to successful appeals of tax assessments.
The increase in property taxes, insurance, and other expense was primarily due to an increase in casualty insurance premiums and increases in property taxes in certain locations, partially offset by decreases at other locations due to successful appeals of tax assessments, decreases in property insurance premiums and a state franchise tax refund received during the third quarter of 2024 resulting from legislative changes.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAll dollar amounts are in thousands. 2024 2025 2026 2027 2028 Thereafter Total Fair Market Value Total debt: Maturities $ 113,597 $ 295,140 $ 74,649 $ 278,602 $ 334,066 $ 281,948 $ 1,378,002 $ 1,331,522 Average interest rates (1) 4.6 % 4.9 % 5.3 % 5.3 % 4.7 % 3.9 % Variable-rate debt: Maturities $ 85,000 $ 225,000 $ - $ 275,000 $ 300,000 $ 85,000 $ 970,000 $ 967,761 Average interest rates (1) 4.8 % 5.4 % 5.8 % 5.9 % 5.2 % 3.6 % Fixed-rate debt: Maturities $ 28,597 $ 70,140 $ 74,649 $ 3,602 $ 34,066 $ 196,948 $ 408,002 $ 363,761 Average interest rates 4.1 % 4.0 % 4.0 % 4.1 % 4.1 % 4.1 % (1) The average interest rate gives effect to interest rate swaps, as applicable. 48
Biggest changeAll dollar amounts are in thousands. 2025 2026 2027 2028 2029 Thereafter Total Fair Market Value Total debt: Maturities $ 295,035 $ 287,149 $ 278,602 $ 334,066 $ 162,294 $ 119,654 $ 1,476,800 $ 1,443,377 Average interest rates (1) 4.7 % 4.8 % 4.8 % 4.4 % 3.8 % 3.6 % Variable-rate debt: Maturities $ 225,000 $ 212,500 $ 275,000 $ 300,000 $ 85,000 $ - $ 1,097,500 $ 1,097,220 Average interest rates (1) 5.0 % 5.1 % 5.1 % 4.6 % 3.3 % n/a Fixed-rate debt: Maturities $ 70,035 $ 74,649 $ 3,602 $ 34,066 $ 77,294 $ 119,654 $ 379,300 $ 346,157 Average interest rates 4.0 % 4.0 % 4.1 % 4.1 % 3.9 % 3.6 % (1) The average interest rate gives effect to interest rate swaps, as applicable. 50
See Note 5 titled “Fair Value of Financial Instruments” in Part II, Item 8, of the Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Annual Report on Form 10-K, for a description of the Company’s interest rate swaps as of December 31, 2023.
See Note 5 titled “Fair Value of Financial Instruments” in Part II, Item 8, of the Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Annual Report on Form 10-K, for a description of the Company’s interest rate swaps as of December 31, 2024.
Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk As of December 31, 2023, the Company’s financial instruments were not exposed to significant market risk due to foreign currency exchange risk, commodity price risk or equity price risk.
Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk As of December 31, 2024, the Company’s financial instruments were not exposed to significant market risk due to foreign currency exchange risk, commodity price risk or equity price risk.
The following table summarizes the annual maturities and average interest rates of the Company’s mortgage debt and borrowings outstanding under its unsecured credit facilities at December 31, 2023.
The following table summarizes the annual maturities and average interest rates of the Company’s mortgage debt and borrowings outstanding under its unsecured credit facilities at December 31, 2024.
Based on the Company’s variable-rate debt outstanding as of December 31, 2023, every 100 basis points change in interest rates will impact the Company’s annual net income by approximately $1.5 million, all other factors remaining the same. With the exception of interest rate swap transactions, the Company has not engaged in transactions in derivative financial instruments or derivative commodity instruments.
Based on the Company’s variable-rate debt outstanding as of December 31, 2024, every 100 basis points change in interest rates will impact the Company’s annual net income by approximately $3.6 million, all other factors remaining the same. With the exception of interest rate swap transactions, the Company has not engaged in transactions in derivative financial instruments or derivative commodity instruments.
As of December 31, 2023, the Company had 14 interest rate swap agreements that effectively fix the interest payments on approximately $820.0 million of the Company’s variable-rate debt outstanding with swap maturity dates ranging from January 2024 to December 2029.
As of December 31, 2024, the Company had 12 interest rate swap agreements that effectively fix the interest payments on approximately $735.0 million of the Company’s variable-rate debt outstanding with swap maturity dates ranging from May 2025 to December 2029.
As of December 31, 2023, after giving effect to interest rate swaps, as described below, approximately $150.0 million, or approximately 11% of the Company’s total debt outstanding, was subject to variable interest rates.
As of December 31, 2024, after giving effect to interest rate swaps, as described below, approximately $362.5 million, or approximately 25% of the Company’s total debt outstanding, was subject to variable interest rates.
As of December 31, 2023, the Company’s variable-rate debt consisted of its unsecured credit facilities, including $970 million of term loans. Currently, the Company uses interest rate swaps to manage its interest rate risk on a portion of its variable-rate debt.
As of December 31, 2024, the Company’s variable-rate debt consisted of its unsecured credit facilities, including $82.5 million in borrowings outstanding under its Revolving Credit Facility and $1.0 billion of term loans. Currently, the Company uses interest rate swaps to manage its interest rate risk on a portion of its variable-rate debt.

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