10q10k10q10k.net

What changed in Apple Hospitality REIT, Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Apple Hospitality REIT, Inc.'s 2024 and 2025 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 2025 report.

+344 added−331 removedSource: 10-K (2026-02-23) vs 10-K (2025-02-24)

Top changes in Apple Hospitality REIT, Inc.'s 2025 10-K

344 paragraphs added · 331 removed · 267 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

63 edited+19 added−15 removed45 unchanged
Biggest changeAs 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%.
Biggest changeAs of December 31, 2025, 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 4.70%, consisting of approximately $184.3 million in outstanding mortgage debt secured by 10 properties, with maturity dates ranging from June 2026 to May 2038 and stated interest rates ranging from 3.40% to 4.37%, and approximately $1.4 billion in outstanding debt under its unsecured credit facilities with maturity dates ranging from July 2026 to July 2030 and effective interest rates, including the effect of interest rate swaps, ranging from 2.64% to 5.86%. 8 The Company’s unused borrowing capacity under its Revolving Credit Facility as of December 31, 2025 was $586.9 million, after taking a $2.1 million letter of credit into account, 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 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.
The Company plans to use future net proceeds from the sale of shares under the ATM Program, or 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.
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.
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 current shelf registration statement.
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.
The Company previously entered into and expects to continue to enter into written trading plans as part of the Share Repurchase Program that 6 provide for share repurchases in open market transactions that are intended to comply with Rule 10b5-1 under the Exchange Act.
The Company targets specific environmental efficiency enhancements, including equipment upgrades and replacements, that reduce energy and water usage and 9 improve waste management. As part of its acquisition due diligence, the Company performs sustainability assessments to identify areas of opportunity that will improve the property’s environmental performance.
The Company targets specific environmental efficiency enhancements, including equipment upgrades and replacements, that reduce energy and water usage and improve waste management. As part of its acquisition due diligence, the Company performs sustainability assessments to identify areas of opportunity that will improve the property’s environmental performance.
The Company may also use the net proceeds to acquire another REIT or other company that invests in income producing properties. Distribution Policy The Company plans to continue to pay distributions on a monthly basis, with distributions based on anticipated cash generated from operations.
The Company may also use the future net proceeds to acquire another REIT or other company that invests in income-producing properties. Distribution Policy The Company plans to continue to pay distributions on a monthly basis, with distributions based on anticipated cash generated from operations.
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).
Purchases under the Share Repurchase Program have been funded, and the Company intends to fund future share 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 contents of the Company’s Corporate Responsibility Report are not incorporated by reference into this Annual Report on Form 10-K and do not form a part of this Form 10-K. Environmental Stewardship and Sustainability The environment is a key consideration in the operations of the Company’s hotels.
The 9 contents of the Company’s Corporate Responsibility Report are not incorporated by reference into this Annual Report on Form 10-K and do not form a part of this Form 10-K. Environmental Stewardship and Sustainability The environment is a key consideration in the operations of the Company’s hotels.
Under this structure, base management fees are calculated as a percentage of gross revenues and the incentive management fees are calculated as a percentage of operating profit in excess of a priority return to the Company, as defined in the management agreements.
Under this structure, base management fees are calculated as a percentage of gross revenues and the incentive management fees are calculated as a percentage of operating profit in excess of a priority return to the Company, as defined in the 7 management 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.
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, 2025 and a summary of the financial and restrictive covenants as defined in the credit agreements.
Dispositions and Contracts for Potential Dispositions 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.
Dispositions 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.
Apple Gives collaborates with organizations that are important to the Company’s employees, its third-party management companies, its hotels and numerous industry organizations, including the American Hotel & Lodging Association (“AHLA”), and works to make a positive impact across the Company’s community and the communities its hotels serve.
Apple Gives collaborates with organizations that are important to the Company’s employees, its third-party management companies, its hotels and numerous industry organizations, including the American Hotel & Lodging Association (“AHLA”) and the AHLA Foundation, and works to make a positive impact across the Company’s community and the communities its hotels serve.
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 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, 2025.
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.
However, macroeconomic pressures, including inflation, increases in interest rates and general market uncertainty, could impact the Company’s ability to raise debt or equity capital to fund long-term liquidity requirements in a cost-effective manner.
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. Certain employees of the Company also provide support services to Apple Realty Group, 10 Inc. (“ARG”), which is wholly owned by Glade M. Knight, Executive Chairman of the Company.
These transactions cannot be construed as being 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. Certain employees of the Company also provide support services to Apple Realty Group, Inc. (“ARG”), which is wholly owned by Glade M. Knight, Executive Chairman of the Company.
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’s Corporate Responsibility Report, issued in December 2025, 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 .
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.
As of December 31, 2025, approximately 81% 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 65 team members (as of December 31, 2024) 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 64 team members (as of December 31, 2025) plays a vital role in the success of the organization.
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.
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 unsecured credit facilities.
Corporate Responsibility The Company’s environmental, social and governance strategy aims to enhance long-term value for its shareholders through responsible investment in sustainable and equitable practices at the corporate and property levels that: strengthen the resilience of the Company and its hotels while minimizing its overall environmental impact and enhancing the value of its assets; encourage stakeholder engagement and advance human capital; and make positive contributions throughout the Company, the hotel industry, its local community and the many communities its hotels serve.
Corporate Responsibility The Company’s corporate responsibility practices aim to enhance long-term value for its shareholders through responsible investment in sustainable and equitable practices at the corporate and property levels that: strengthen the resilience of the Company and its hotels while minimizing its overall environmental impact and enhancing the value of its assets; encourage stakeholder engagement and advance human capital; and make positive contributions throughout the Company, the hotel industry, its local community and the many communities its hotels serve.
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.
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 through interest rate swaps. All of these strategies reduce shareholder risk related to the Company’s financing structure.
The management agreements generally provide for initial terms of one to 30 years and are terminable by the Company for either failure to achieve performance thresholds, upon sale of the property, or without cause.
The management agreements generally provide for initial terms of one to 30 years and are terminable by the Company for either failure to achieve performance thresholds, certain events of default, upon sale of the property or without cause.
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.
During the years ended December 31, 2025 and 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, which was terminated in February 2024 in connection with the commencement of the current ATM Program.
The Company aims to provide an inspiring, diverse, equitable and inclusive work environment where employees feel valued, empowered and encouraged to make positive differences within the Company and throughout their communities, with a belief that the most successful management provides clear leadership while empowering the team to make timely and responsible decisions and to take actions necessary to achieve exceptional operating results.
The Company aims to provide an inspiring, inclusive workplace, where employees feel valued, empowered and encouraged to make positive differences within the Company and throughout their communities, with a belief that the most successful management provides clear leadership while empowering the team to make timely and responsible decisions and to take actions necessary to achieve exceptional operating results.
The Company offers competitive compensation and benefits, a flexible leave policy, fully paid parental leave for up to 12 weeks for primary caregivers and three weeks for secondary caregivers for the birth or adoption of a new child, financial assistance for adoption of a new child, a tuition reimbursement program, and a culture that encourages balance of work and personal life.
The Company offers competitive compensation and benefits, a flexible leave policy, fully paid parental leave for up to 12 weeks for primary caregivers and three weeks for secondary caregivers for the birth or adoption of a new child, financial assistance for adoption of a new child, a tuition reimbursement program, an employee stock purchase plan and a culture that encourages balance of work and personal life.
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.
In May 2025, 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 $262.6 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 2026 if not terminated or extended earlier.
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%.
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, 2025 closing share price) ratio as of December 31, 2025 was 35.5%.
Although the Company has relatively low levels of debt, there can be no assurance it will be successful with this strategy and may need to reduce its distributions to required levels to maintain its REIT status.
Although the Company has relatively low levels of debt, there can be no assurance it will be successful with this strategy, and it may need to reduce its distributions to minimum levels required to maintain its qualification as a REIT.
In addition to the above, management fees for all of the Company’s hotels generally include accounting fees and other fees for centralized services, which are allocated among all of the hotels that receive the benefit of such services. Thirteen of the Company’s hotels are managed by affiliates of Marriott.
In addition to the above, management fees for all of the Company’s hotels generally include accounting fees and other fees for centralized services, which are allocated among all of the hotels that receive the benefit of such services.
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.
The remainder of the Company’s hotels are also managed by companies that are not affiliated with Marriott, Hilton or Hyatt, and as a result, the branded hotels are required to obtain and maintain separate franchise agreements with each respective franchisor.
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.
The timing of share repurchases and the number of common shares to be purchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of December 31, 2025, approximately $242.5 million remained available for purchase under the Share Repurchase Program. Hotel Industry and Competition The hotel industry is highly competitive.
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.
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, 2025 closing share price) ratio at December 31, 2025 of 35.5%, the Company is not only positioned to opportunistically consider investments that further improve shareholder value, but management also believes it is equipped to address developments caused by adverse economic environments. 4 Hotel Operating Performance As of December 31, 2025, the Company owned 217 hotels with a total of 29,583 guest rooms as compared to 221 hotels with a total of 29,764 guest rooms as of December 31, 2024.
If cash flows from operations and the Revolving Credit Facility are not adequate to meet liquidity requirements, the Company may utilize additional financing sources to make distributions as necessary to maintain its REIT status.
If cash flows from operations and the Revolving Credit Facility are not adequate to meet liquidity requirements, the Company may utilize additional financing sources to make distributions.
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.
Management and Franchise Agreements Substantially all of the Company’s hotels operate under Marriott or Hilton brands, and as of December 31, 2025, 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 Courtyard 34 4,892 Hampton 34 4,642 Residence Inn 30 3,695 Homewood Suites 27 3,163 Fairfield 10 1,213 Home2 Suites 10 1,146 SpringHill Suites 8 1,333 TownePlace Suites 8 834 Embassy Suites 4 770 AC Hotels 4 702 Hyatt Place 3 411 Hyatt House 2 264 Marriott 1 413 Motto 1 260 Independent 1 212 Aloft Hotels 1 157 Total 217 29,583 Each of the Company’s 217 hotels owned as of December 31, 2025 is operated and managed under separate management agreements with one of 16 hotel management companies, none of which are affiliated with the Company.
See Note 2 titled “Investment in Real Estate” and Note 3 titled “Assets Held for Sale and Dispositions” in Part II, Item 8, of the Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Annual Report on Form 10-K for additional information concerning these transactions.
See Note 2 titled “Investment in Real Estate,” Note 3 titled “Dispositions” and Note 13 titled “Contract Commitments” in Part II, Item 8, of the Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Annual Report on Form 10-K for additional information concerning these transactions.
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.
During the year ended December 31, 2025, the Company purchased, under its Share Repurchase Program, approximately 4.6 million of its common shares at a weighted-average market purchase price of approximately $12.55 per common share for an aggregate purchase price, including commissions, of approximately $58.3 million.
The franchise and/or management agreements provide a variety of benefits for the Company, which include national advertising, publicity, and other marketing programs designed to increase brand awareness, training of personnel, continuous review of quality standards, centralized reservation systems and best practices within the industry. 7 Hotel Maintenance and Renovation Management routinely monitors the condition and operations of its hotels and plans renovations and other improvements as it deems prudent.
The franchise and/or management agreements provide a variety of benefits for the Company, which include national advertising, publicity, and other marketing programs designed to increase brand awareness, training of personnel, continuous review of quality standards, centralized reservation systems, loyalty programs and best practices within the industry.
While management expects monthly cash distributions to continue, each distribution is subject to approval by the Company’s Board of Directors and there can be no assurance of the classification, timing or duration of distributions at the current distribution rate.
While management currently expects monthly cash distributions to continue at $0.08 per common share, any distribution will be subject to approval of the Company’s Board of Directors, and there can be no assurance of the classification, timing or duration of distributions or any particular distribution rate.
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.
As a result, during the year ended December 31, 2025, the Company sold seven hotels to five unrelated parties for a combined gross sales price of approximately $73.3 million, resulting in a combined gain on the sales of approximately $13.1 million, net of transaction costs.
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.
Following the third-party hotel operator’s failure to make lease payments, the Company commenced legal proceedings in 2024 to remove the third-party hotel operator from possession of the property.
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 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.
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”).
Years Ended December 31, 2025 2024 Percent Change ADR $ 159.06 $ 158.01 0.7 % Occupancy 74.1 % 75.0 % -1.2 % RevPAR $ 117.90 $ 118.54 -0.5 % Comparable Hotels Operating Performance The following table reflects certain operating statistics for 216 hotels owned by the Company as of December 31, 2025, and excludes the New York Property (“Comparable Hotels”).
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.
The Company defines metrics from Comparable Hotels as results generated by the 216 hotels owned as of the end of the reporting period, excluding the New York Property.
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 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. 10 During 2025, 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.
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.
Years Ended December 31, 2025 2024 Percent Change ADR $ 159.09 $ 159.31 -0.1 % Occupancy 74.1 % 75.3 % -1.6 % RevPAR $ 117.95 $ 119.92 -1.6 % Hotel performance is impacted by many factors, including the economic conditions in the U.S. as well as each individual locality.
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, 2025, the hotels are operated and managed under separate management agreements with one of 16 hotel management companies, none of which are affiliated with the Company.
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.
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. 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.
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.
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.
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.
Consistent with this strategy and the Company’s focus on investing in rooms-focused hotels, during the year ended December 31, 2025, the Company acquired two hotels for an aggregate purchase price of approximately $117.0 million: an existing 126-guest-room Homewood Suites in Tampa, Florida and a newly constructed 260-guest-room Motto in Nashville, Tennessee that was purchased at the completion of development.
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.
The outstanding principal under the $385 million term loan facility bears interest at an annual variable rate equal to a term SOFR, depending on the interest period options elected by the Company, plus a margin ranging from 1.35% to 2.20%, based on the Company’s leverage ratio as calculated under the terms of the credit agreement.
The franchise agreements generally provide for initial terms of approximately 10 to 30 years and generally provide for renewals subject to franchise requirements at the time of renewal.
The franchise agreements generally provide for initial terms of approximately 10 to 30 years and the Company has historically been able to renew the franchise agreements upon the expiration of the terms.
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.
Results of the hotel operations for the New York Property are included only for the period prior to the lease agreement becoming effective in May 2023 and following the April 4, 2025 recovery of this property. During 2024, the Company acquired two hotels and sold six hotels.
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.
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 $650 million revolving credit facility with an initial maturity date of July 25, 2026 (the “Revolving Credit Facility”).
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.
Hotel Maintenance and Renovation Management routinely monitors the condition and operations of its hotels and plans renovations and other improvements as it deems prudent. 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.
The net proceeds from the sale of the other four hotels were used for share repurchases and general corporate purposes.
Similarly, a portion of the proceeds from the sale of two hotels in November 2025 were used to complete a 1031 Exchange for the acquisition of the Motto in Nashville, Tennessee, which was completed in December 2025. The net proceeds from the sale of the other four hotels were used for share repurchases and general corporate purposes.
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.
As of December 31, 2025, the Company had one outstanding contract, which was entered into during the third quarter of 2025, for the potential purchase of a hotel in Anchorage, Alaska for an expected purchase price of approximately $65.5 million.
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.
The Company used a portion of the net proceeds from the sale of the one hotel in March 2025 to complete a 1031 Exchange for the acquisition of the Homewood Suites in Tampa, Florida, which was completed in June 2025.
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.
As of December 31, 2025, the Company owned 217 hotels with an aggregate of 29,583 guest rooms located in urban, high-end suburban and developing markets throughout 37 states and the District of Columbia (“D.C.”) and substantially all of the Company’s hotels operated under Marriott or Hilton brands.
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.
As a result, the Company’s Comparable Hotels revenue and operating results decreased slightly during the year ended December 31, 2025, compared to the year ended December 31, 2024.
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.
Operating performance is included only for the period of ownership for hotels acquired or disposed of during 2025 and 2024. During 2025, the Company acquired two hotels and sold seven hotels. Also included in the Company’s hotel and guest room counts as of December 31, 2025 was its independent boutique hotel in New York, New York (the “New York Property”).
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.
During 2025, 2024 and 2023, the Company’s capital improvements for its hotels were approximately $88.2 million, $78.3 million and $76.8 million, respectively. During 2026, the Company anticipates investing approximately $80 million to $90 million in capital improvements, which includes comprehensive renovation projects for approximately 21 properties.
This information has not been audited, either for the periods owned or prior to ownership by the Company. For dispositions and assets held for sale, results have been excluded for the Company’s period of ownership.
For dispositions and the New York Property, results have been excluded for the Company’s period of ownership.
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.
As of December 31, 2025, approximately $500 million remained available for issuance under the ATM Program.
Removed
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”).
Added
On April 4, 2025, the Company recovered possession of this property and reinstated operations of the hotel’s 209 guest rooms through a third-party manager engaged by the Company.
Removed
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.
Added
From May 2023 through March 2025, the Company classified the property as a “non-hotel property” and excluded it from hotel and guest room counts, as it was leased to a third-party hotel operator.
Removed
As 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.
Added
During the year ended December 31, 2025, demand was modestly impacted across the portfolio by weather related travel disruption in January and February, reduced government travel, the prolonged government shutdown and heightened macroeconomic uncertainty in the U.S.
Removed
The net proceeds from the sale of both hotels are expected to be used for general corporate purposes.
Added
The Company cannot 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, continued increased hotel supply in certain markets, labor uncertainty both for the economy as a whole and the lodging industry in particular, global volatility, government fiscal policies, travel related health concerns, political changes and economic concerns in the U.S.
Removed
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.
Added
In 2026, the Company expects RevPAR to be similar for its Comparable Hotels as compared to 2025, which is consistent with broader expectations for applicable industry chain scale averages, and assuming the current macroeconomic environment continues.
Removed
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.
Added
The Company utilized its available cash, 5 proceeds from the sales of properties, which included proceeds from two separate like-kind exchanges, in accordance with Section 1031 of the Code (“1031 Exchange”) and borrowings under its unsecured credit facilities to fund these acquisitions.
Removed
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.
Added
The hotel is under development as a 160-guest-room AC Hotel and is currently planned to be completed and opened for business in the fourth quarter of 2027. As of December 31, 2025, a $2.0 million contract deposit (refundable if the seller does not meet its obligations under the contract) had been paid.
Removed
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
Development Project During the third quarter of 2025, the Company entered into a contract with a third party to develop a dual-branded property, consisting of an AC Hotel and a Residence Inn, on Company-owned land in Las Vegas, Nevada, adjacent to its existing SpringHill Suites.
Removed
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.

… 17 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

61 edited+12 added−16 removed170 unchanged
Biggest changeCybersecurity 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.
Biggest changeThe 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 technology networks or systems, ensure their proper functioning, or prevent against cybersecurity incidents, including those resulting in unauthorized access to or disclosure of personally identifiable information. 16 Cybersecurity incidents, including intentional or unintentional physical or electronic break-ins, cyber-attacks, cyber intrusions or the deployment of ransomware or other extortion tactics, malware, computer viruses, attachments to emails, social engineering or phishing schemes, or fraudulent schemes, have created and may in the future create system disruptions, shutdowns, deployment of malware or ransomware, theft of the Company’s data, or unauthorized access to or disclosure of confidential information.
Furthermore, if competitors outperform the Company in such metrics, potential or current investors may elect to invest with the Company’s competitors, and employees, hotel brands, hotel management companies, vendors and guests may choose not to do business with the Company, which could have a material and adverse impact on the Company’s financial condition, the market price of its common shares and ability to raise capital.
Furthermore, if competitors outperform the Company in such metrics, potential or current investors may elect to invest with the Company’s competitors, and employees, hotel brands, hotel management companies, vendors and guests may choose not to do business with the Company, which could have a material and adverse impact on the Company’s financial condition, the market price of its common shares and its ability to raise capital.
Although insurance may be available to cover some or all of the costs to defend and resolve these claims and the resulting litigation, it is possible that certain claims may not be covered by insurance or that the insurance coverage and policy limits may not be adequate to satisfy the expense, judgment, settlement or other resolution arising from the claims, which could result in substantial costs to the Company and adversely affect its financial position and results of operations.
Although insurance may be available to cover some or all of the costs to defend and resolve these claims and the resulting litigation, it is possible that certain claims may not be covered by insurance or that the 19 insurance coverage and policy limits may not be adequate to satisfy the expense, judgment, settlement or other resolution arising from the claims, which could result in substantial costs to the Company and adversely affect its financial position and results of operations.
The Company’s wholly-owned taxable REIT subsidiaries (“TRSs”) (or subsidiaries thereof) operate substantially all of its hotels pursuant to franchise or license agreements with nationally recognized hotel brands. These franchise and license agreements contain specific standards for, and restrictions and limitations on, the operation and maintenance of the Company’s hotels in order to maintain 12 uniformity within the franchisor system.
The Company’s wholly-owned taxable REIT subsidiaries (“TRSs”) (or subsidiaries thereof) operate substantially all of its hotels pursuant to franchise or license agreements with nationally recognized hotel brands. These franchise and license agreements contain specific standards for, and restrictions and limitations on, the operation and maintenance of the Company’s hotels in order to maintain uniformity within the franchisor system.
In that event, the Company might nevertheless remain obligated for any mortgage debt or other financial obligations related to the hotel. Inflation, changes in building codes and ordinances, environmental considerations and other factors might also prevent the Company from using insurance proceeds to replace or renovate a hotel after it has been damaged or destroyed.
In that event, the Company might nevertheless remain obligated for any mortgage debt or other financial obligations related to the hotel. Inflation, changes in building codes and ordinances, environmental considerations and other factors might also prevent the Company from using insurance proceeds 17 to replace or renovate a hotel after it has been damaged or destroyed.
Construction delays and cost overruns, including increases in the cost of labor, goods and materials and delays and cost increases caused by supply chain disruptions, have increased and may continue to increase renovation or development costs for the Company and have delayed and may in the future delay the acquisition or opening of hotels or the length of time that rooms are out of service.
Construction delays and cost overruns, including increases in the cost of labor, goods and materials and delays and cost increases caused by supply chain disruptions or tariffs, have increased and may continue to increase renovation or development costs for the Company and have delayed and may in the future delay the acquisition or opening of hotels or the length of time that rooms are out of service.
In addition, from time to time, the Company will need to make renovations and capital improvements to comply with applicable laws and regulations, to remain competitive with other hotels and to maintain the economic value of its hotels. As properties increase in age, the frequency and cost of renovations needed to maintain appealing facilities for hotel guests may increase.
In addition, from time to time, the Company will need to make renovations and capital improvements to comply with applicable laws and regulations, to remain competitive with other hotels and to maintain the economic value of its hotels. As properties increase in age, the frequency and 14 cost of renovations needed to maintain appealing facilities for hotel guests may increase.
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 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 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.
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 nature of litigation is highly uncertain and, regardless of the outcome of any pending or threatened claims, the Company has and may in the future, incur legal and other costs, including the diversion of employee time and resources in responding to the claims, settlement expenses and loss of revenue.
The nature of litigation is highly uncertain and, regardless of the outcome of any pending or threatened claims, the Company has incurred and may in the future incur, legal and other costs, including the diversion of employee time and resources in responding to the claims, settlement expenses and loss of revenue.
Furthermore, even if the economy in the U.S. improves, the Company cannot provide any assurances that demand for hotels will increase from current levels, nationally or more specifically, where the Company’s properties are located.
Furthermore, even if the economy in the U.S. improves, the Company cannot 12 provide any assurances that demand for hotels will increase from current levels, nationally or more specifically, where the Company’s properties are located.
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.
The Company has processes in place to deter, detect, report, and respond to cybersecurity incidents but there can be no guaranty that those processes will be successful in preventing every attempted intrusion or attack.
Any failure to maintain proper function, security and availability of information systems could interrupt operations, interfere with the Company’s ability to comply with financial reporting requirements, damage the reputations of the Company, the Company’s hotel managers or franchisors, and subject the Company to liability claims or regulatory penalties that may not be fully covered by insurance, all of which could have a material adverse effect on the business, financial condition and results of operations of the Company.
Any failure to maintain proper function, security and availability of information systems could interrupt operations, interfere with the Company’s ability to comply with financial reporting requirements, damage the reputations of the Company, the Company’s hotel managers or franchisors, and subject the Company to liability claims, notification and monitoring requirements or regulatory penalties that may not be fully covered by insurance, all of which could have a material adverse effect on the business, financial condition and results of operations of the Company.
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 property 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 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.
In addition, unauthorized access to, disclosure of, or loss of personally identifiable information or confidential or proprietary information could result in damage to the Company or the hotel management company’s or franchisor’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.
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.
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, or require 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.
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.
With this increased focus, public reporting regarding corporate responsibility practices has become more broadly expected. The Company summarizes its existing corporate responsibility programs in its annual Corporate Responsibility Report, which is available on its website. The focus on and activism around this topic and related matters may constrain business operations or cause the Company to incur additional costs.
The 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.
The 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; 11 • dependence on business and leisure travel; • increases in travel-related expenses, including gas prices, 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, government shutdowns, travel-related health concerns, including widespread outbreaks of infectious or contagious diseases in the U.S. and the related impacts, inclement weather conditions, including natural disasters such as hurricanes, earthquakes and wildfires, airline strikes or equipment failures, or other disruptions; • reduced travel due to adverse national, regional or local economic, political 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; • ability of a hotel franchisor 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.
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.
Potential losses not covered by insurance may adversely affect the Company’s financial condition. The Company maintains insurance coverage for commercial 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.
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.
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 have increased in recent years, and exposure to certain markets has resulted in increased costs to the Company.
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.
These requirements are wide-ranging and include among others, state and local labor laws, fire and life safety requirements, state laws such as the California Climate 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.
Declines in government and corporate budgets and consumer demand due to adverse general economic conditions, risks affecting or reducing travel patterns, lower consumer confidence or adverse political conditions may lower the revenue and profitability of the Company’s hotels and therefore the net operating profits of its investments.
Declines in government and corporate budgets and consumer demand due to adverse general economic conditions, risks affecting or reducing travel patterns, lower consumer confidence or adverse political conditions, including government shutdowns, may lower the revenue and profitability of the Company’s hotels and therefore the net operating profits of its investments.
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.
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 fall outside of the coverage.
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.
In addition, existing laws or requirements could change, and future laws and 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.
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.
The Company cannot predict the pace or duration of an economic recession or cycle, government shutdowns, 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.
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.
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, 2025, 14 of the Company’s properties were subject to ground leases, not including the Company’s three parking lot ground leases.
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.
The Company has experienced, and may continue to experience, premium increases and coverage changes applicable to its portfolio. The Company faces possible risks associated with the physical effects of, and laws and regulations related to, climate change.
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.
Liabilities and costs associated with complying with these laws and requirements are and could continue to be material. If the Company fails to comply with these various laws and requirements, it could incur governmental fines or private damage awards.
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.
The Company maintains cybersecurity insurance, but there can be 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.
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.
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 may impose additional costs and expose the Company to new risks.
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 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 data. Such data may include employee, operator and customer information, such as personally identifiable information, and information relating to payroll and financial accounts.
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.
The markets in which the Company operates have experienced, and may continue to experience, increases in storm intensity and rising sea levels, which have caused and in the future may cause 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 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.
The Company’s corporate information technology systems are not used to process business transactions with its hotel guests, and those systems currently have no connectivity to hotel and/or third-party management and brand technology platforms. A number of hospitality and consumer-facing brands have been subject to successful cyber-attacks, including those seeking guest credit card information.
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.
While the Company is not aware of any cybersecurity incidents, including third-party incidents, that have materially affected it as of December 31, 2025, there can be no guarantee that the Company will not be the subject of future attacks, threats or cybersecurity incidents that may have a material impact on its business strategy, results of operations or financial condition.
If the Company is unable to refinance its debt, it may be forced to dispose of hotels or issue equity at inopportune times or on disadvantageous terms, which could result in higher costs of capital.
If the Company is unable to refinance its debt, it may be forced to dispose of hotels or issue equity at inopportune times or on disadvantageous terms, which could result in higher costs of capital and may reduce the Company’s profitability.
A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. Overall, no more than 20% of the value of a REIT’s assets may consist of stock or securities of one or more TRSs.
A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. Overall, no more than 20% (25% commencing in 2026) of the value of a REIT’s assets may consist of stock or securities of one or more TRSs.
Although substantially all of the Company’s hotels operate under the brands noted above, the Company may from time to time acquire independent hotels or hotels affiliated with other brands, and/or may choose to operate hotels independently of a brand if the Company believes that these properties will operate most effectively as independent hotels.
Although substantially all of the Company’s hotels operate under the brands noted above, the Company has previously acquired and may from time to time in the future acquire independent hotels or hotels affiliated with other brands, and/or may choose to operate hotels independently of a brand if the Company believes that these properties will operate most effectively as independent hotels.
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.
As the Company continues to invest in and focus on corporate responsibility practices that the Company believes are appropriate for its business, the Company could also be criticized by detractors for the scope or nature of its corporate responsibility initiatives.
Labor costs can increase due to many factors, including but not limited to, a shortage of hospitality workers, increased dependence on contract workers, increased wages and employee benefit costs, changes in laws and regulations, increased labor turnover and increases in a unionized labor force.
Labor costs can increase due to many factors, including, but not limited to, a shortage of hospitality workers, increased dependence on contract workers, increased wages and employee benefit costs, changes in laws and regulations, increased labor turnover, termination costs, including costs associated with labor law claims, and increases in a unionized labor force.
Companies across industries face increasing scrutiny from various stakeholders on how they address a variety of Environmental, Social and Governance (“ESG”) matters. Potential and current employees, hotel brands, hotel management companies and vendors may consider these factors when establishing and extending business relationships and hotel guests may consider these factors when choosing a hotel.
Companies across industries face increasing scrutiny from various stakeholders on how they address a variety of corporate responsibility matters. Potential and current employees, hotel brands, hotel management companies and vendors may consider these factors when establishing and extending business relationships and hotel guests may consider these factors when choosing a hotel.
Stock markets in general have historically experienced volatility that has often been unrelated to the operating performance of a particular company or industry. Similar broad market fluctuations may adversely affect the trading price and volume of the Company’s common shares.
Stock markets in general have historically experienced volatility that has often been unrelated to the operating performance of a particular company or industry. Similar broad market fluctuations may adversely affect the trading price and volume of the Company’s common shares. Item 1B. Unresolve d Staff Comments None.
The discovery of material environmental liabilities at its properties could subject the Company to unanticipated significant costs, which could significantly reduce or eliminate its profitability. The Company may incur significant costs complying with various regulatory requirements, which could materially and adversely affect the Company. The Company and its hotels are subject to various U.S. federal, state and local regulatory requirements.
The discovery of material environmental liabilities at its properties could subject the Company to unanticipated significant costs, which could significantly reduce or eliminate its profitability. 18 The Company may incur significant costs complying with various regulatory requirements, which could materially and adversely affect the Company.
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.
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.
The Company could be subjected to negative responses of governmental actors (such as anti-ESG legislation or retaliatory legislative treatment), hotel brands, hotel management companies and hotel guests, that could have a material adverse effect on the Company’s reputation, financial condition and results of operations.
The Company could be subjected to negative responses of governmental actors (such as retaliatory legislative treatment, loss of federal contracts or other government business or legislation or executive action targeted against such practices), hotel brands, hotel management companies and hotel guests, that could have a material adverse effect on the Company’s reputation, financial condition and results of operations.
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.
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.
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.
Moreover, while the Company makes voluntary disclosures in its Corporate Responsibility Report regarding its practices around governance, energy and water use and conservation and social responsibility, certain disclosures are based on assumptions that may differ from actual results.
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.
If there is an adjustment to any of the Company’s taxable income or dividends-paid 21 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.
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.
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.
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).
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).
In addition, as the Company’s franchise and license agreements expire, the Company may not be able to renew them on favorable terms, or at all.
Failure to comply with these brand standards may result in monetary penalties or the termination of the applicable franchise or license agreement. In addition, as the Company’s franchise and license agreements expire, the Company may not be able to renew them on favorable terms, or at all.
As a result, the Company has entered into management agreements with third-party managers to operate its hotels. For this reason, the Company’s ability to direct and control how its hotels are operated is less than if the Company were able to manage its hotels directly.
For this reason, the Company’s ability to direct and control how its hotels are operated is less than if the Company were able to manage its hotels directly.
The Company’s inability to obtain financing on favorable terms or pay amounts due on its financing may adversely affect the Company’s operating results.
Furthermore, the Company may be subject to unknown or contingent liabilities related to hotels it acquires. 15 The Company’s inability to obtain financing on favorable terms or pay amounts due on its financing may adversely affect the Company’s operating results.
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.
Additionally, defaulting under a loan may damage the Company’s reputation as a borrower and may limit its ability to secure financing in the future. 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.
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.
Knight is not 20 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.
Also, if the Company does not reinvest proceeds received from hotel dispositions into new properties in a timely manner, the Company’s profitability could be negatively impacted.
Also, if the Company does not reinvest proceeds received from hotel dispositions into new properties in a timely manner, the Company’s profitability could be negatively impacted. The Company’s profitability may also suffer because hotel acquisitions may not yield the returns the Company expects and the integration of such acquisitions may disrupt the Company’s business or may take longer than projected.
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.
As a result, the Company may find it difficult or impossible to meet distribution requirements in certain circumstances.
An increase in the number of competitive hotels, vacation ownership resorts and alternative lodging arrangements in a particular area could have a material adverse effect on the occupancy, ADR and RevPAR of the Company’s hotels in that area and lower the Company’s revenue and profitability.
An increase in the number of competitive hotels, vacation ownership resorts and alternative lodging accommodations in a particular area could have a material adverse effect on the occupancy, ADR and RevPAR of the Company’s hotels in that area and lower the Company’s revenue and profitability. 13 The Company is dependent on third-party hotel managers to operate its hotels and could be adversely affected if such management companies do not manage the hotels successfully.
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.
The Company’s actual hedging decisions are determined in light of the facts and circumstances existing at the time of the hedge. 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.
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”).
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.
The Company is dependent on third-party hotel managers to operate its hotels and could be adversely affected if such management companies do not manage the hotels successfully. To maintain its status as a REIT, the Company is not permitted to operate any of its hotels.
To maintain its status as a REIT, the Company is not permitted to operate any of its hotels. As a result, the Company has entered into management agreements with third-party managers to operate its hotels.
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.
In addition, the Company may in the future be required by local, state and federal authorities to make certain mandatory disclosures related to greenhouse gas emissions and climate-related risks, including specific disclosures required by certain California legislation. The Company anticipates incurring additional expenses and expending employee resources to comply with the disclosure mandates.
Removed
The Company’s profitability may also suffer because future acquisitions of hotels may not yield the returns the Company expects and the integration of such acquisitions may disrupt the Company’s business or may take longer than projected. Furthermore, the Company may be subject to unknown or contingent liabilities related to hotels it acquires.
Added
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.
Removed
The Company’s actual hedging decisions are determined in light of the facts and circumstances existing at the time of the hedge.
Added
Compliance with financial and other covenants in the Company’s existing or future debt agreements may reduce operational flexibility and create default risk.
Removed
Additionally, defaulting under a loan may damage the Company’s reputation as a borrower and may limit its ability to secure financing in the future. Pandemics and other health crises could negatively impact the Company’s business, financial performance and condition, operating results and cash flows.
Added
Due to the complexity and interconnectedness of the Company’s information systems and networks, and those upon which the Company and its hotel managers and franchisors rely, the process of upgrading or patching protective measures could itself create a risk of cybersecurity issues or system disruptions for the Company, as well as for its hotel managers, franchisors, and others who rely upon, or have exposure to, such information systems and networks.
Removed
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.
Added
Further, adoption of artificial intelligence (“AI”) tools by the Company or by third parties may pose new cybersecurity challenges. Threat actors may use AI tools to automate and enhance cybersecurity attacks against the Company.
Removed
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.
Added
The Company uses software and platforms designed to detect such cybersecurity threats, including AI-based tools, but these threats could become more sophisticated and harder to detect and counteract, which may pose significant risks to the Company’s data security and systems.
Removed
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.
Added
In the conduct of its business, both the Company and its hotel managers and franchisors rely on relationships with third parties, including cloud data storage and other information technology service providers, suppliers, distributors, contractors and other external business partners, for certain functions or for services in support of key portions of the Company’s operations.
Removed
Moreover, many risk factors set forth in this Annual Report on Form 10-K would be heightened as a result of another potential pandemic.
Added
These third-party entities are subject to similar risks related to cybersecurity, privacy violations, and business interruption, and a cybersecurity incident or disruption affecting the Company’s third-party service providers or partners could have a material adverse effect on the Company’s business.
Removed
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.
Added
While the Company may be entitled to damages if its third-party service providers fail to satisfy their cybersecurity-related obligations to the Company, any award may be insufficient to cover the Company’s damages, or the Company may be unable to recover such award.
Removed
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.
Added
The Company and its hotels are subject to various U.S. federal, state and local regulatory requirements and laws creating private rights of action.
Removed
Future offerings or the perception that future offerings could occur may adversely affect the market price of the Company’s common shares and future offerings may be dilutive to existing shareholders. The Company has in the past issued and may in the future issue additional common shares.

… 9 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+2 added−0 removed9 unchanged
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.
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 cond ition, to date.
Should a cybersecurity event occur within its corporate systems, the Company is positioned to coordinate a swift response to mitigate impacts to its information technology infrastructure and systems. The Company has in place an incident response plan which provides guidance for leadership and employees to swiftly evaluate and respond to cybersecurity incidents.
Should a cybersecurity event occur within its corporate systems, the Company is positioned to coordinate a swift response to mitigate impacts to its information technology infrastructure, systems and data. The Company has in place an incident response plan which provides guidance for leadership and employees to swiftly evaluate and respond to cybersecurity incidents.
These processes include, among other items, the Company’s information technology and risk management departments’ use of an internal set of applications and control activities to actively monitor potential threats to its corporate IT environment and regularly conduct internal testing to identify potential vulnerabilities to the Company’s corporate information technology infrastructure and systems.
These processes include, among other items, the Company’s information technology and risk management departments’ use of an internal set of applications and control activities to actively monitor potential threats to the Company’s corporate IT environment and to regularly conduct internal testing to identify potential vulnerabilities to the Company’s corporate information technology infrastructure and systems.
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
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
These activities include, but are not limited to, continuous monitoring of network and infrastructure vulnerabilities, automated patching and software updates, redundancy and back-up systems, and incident response planning and handling. The Company’s employees are required to report cybersecurity events, including suspicious activity or emails, to the Company’s information technology department.
These activities include, but are not limited to, continuous monitoring of network and infrastructure vulnerabilities, automated patching and software updates, redundancy and back-up systems, data protection controls, and incident response planning and handling. The Company’s employees are required to report cybersecurity events, including suspicious activity or emails, to the Company’s information technology department.
Risk Management Strategy The Director of Information Technology, who reports to the Chief Financial Officer, has extensive information technology (“IT”) and cybersecurity knowledge and skills gained from over 15 years of relevant work experience at the Company , and is responsible for leading the Company’s cybersecurity and cyber risk management program which includes certain cybersecurity processes covering the Company’s corporate systems.
This program is part of the Company’s enterprise risk management program. 24 Risk Management Strategy The Director of Information Technology, who reports to the Chief Financial Officer, has extensive information technology (“IT”) and cybersecurity knowledge and skills gained from over 15 years of relevant work experience at the Company , and is responsible for leading the Company’s cybersecurity and cyber risk management program, which includes certain cybersecurity processes covering the Company’s corporate systems and data.
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.
While the Company is not aware of any cybersecurity incidents, including third-party incidents, that have materially affected its business as of December 31, 2025, 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 1C. Cybersecurity To effectively identify, assess and manage risks from cybersecurity threats, the Company maintains a cybersecurity and cyber risk management program which is comprised of the Company-wide cybersecurity strategy and its supporting policies, processes and architecture. This program is part of the Company’s enterprise risk management program.
Item 1C. Cybersecurity To effectively identify, assess and manage risks from cybersecurity threats, the Company maintains a cybersecurity and cyber risk management program which is comprised of the Company-wide cybersecurity strategy and its supporting policies, processes and architecture.
The Company also carries cybersecurity insurance to further mitigate certain potential losses from a cybersecurity incident affecting its corporate IT equipment and systems. The Company’s cybersecurity processes also include self-assessments using industry benchmarks as well as input from external industry consultants and ongoing communication with third-party business partners to identify cybersecurity incidents and threats that could potentially impact the Company.
The Company’s cybersecurity processes also include self-assessments using industry benchmarks as well as input from external industry consultants and ongoing communication with third-party business partners to identify cybersecurity incidents and threats that could potentially impact the Company.
Added
The Company also carries cybersecurity insurance to further mitigate certain potential losses from a cybersecurity incident affecting its corporate IT infrastructure, systems and data.
Added
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.

Item 2. Properties

Properties — owned and leased real estate

9 edited+4 added−4 removed2 unchanged
Biggest changeCity 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.
Biggest changeCity 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 (2) 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 (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 (3) Burbank CA Residence Inn Marriott 3/1/2014 166 (4) Burbank CA SpringHill Suites Marriott 7/13/2015 170 (3)(4) Cypress CA Courtyard Dimension 3/1/2014 180 Cypress CA Hampton Dimension 6/29/2015 110 Oceanside CA Courtyard Marriott 9/1/2016 142 (4) Oceanside CA Residence Inn Marriott 3/1/2014 125 (4) 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 (3) San Diego CA Hampton Dimension 3/1/2014 177 (3) 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 (3) San Juan Capistrano CA Residence Inn Marriott 9/1/2016 130 (2)(5) Santa Ana CA Courtyard Dimension 5/23/2011 155 (3) 27 City State Brand Manager (1) Date Acquired or Completed Guest Rooms 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 (4) Tustin CA Residence Inn Marriott 9/1/2016 149 (4) Colorado Springs CO Hampton Chartwell 9/1/2016 101 Denver CO Hilton Garden Inn InnVentures 9/1/2016 221 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 (6) Orlando FL Home2 Suites LBA 3/19/2019 128 Orlando FL SpringHill Suites Marriott 7/1/2009 200 (6) 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 Tampa FL Homewood Suites HHM 6/10/2025 126 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) Davenport IA Hampton Chartwell 9/1/2016 103 Boise ID Hampton Raymond 4/30/2010 186 (3) 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 Merrillville IN Hilton Garden Inn HHM 9/1/2016 124 28 City State Brand Manager (1) Date Acquired or Completed Guest Rooms 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 (2) 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 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 (3) 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.
Louis 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.
Louis 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 HHM 3/1/2014 181 Omaha NE Hampton HHM 9/1/2016 139 Omaha NE Hilton Garden Inn HHM 9/1/2016 178 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 Highgate 12/27/2023 300 Islip/Ronkonkoma NY Hilton Garden Inn Crestline 3/1/2014 166 New York NY Independent Highgate 3/1/2014 212 (2)(7) 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 29 City State Brand Manager (1) Date Acquired or Completed Guest Rooms 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 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 Motto Chartwell 12/19/2025 260 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 Western 3/1/2014 159 Arlington TX Hampton Western 12/1/2010 98 Austin TX Courtyard Dimension 11/2/2010 145 Austin TX Fairfield Dimension 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 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 30 City State Brand Manager (1) Date Acquired or Completed Guest Rooms 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 North Central 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 North Central 10/20/2017 136 Salt Lake City UT SpringHill Suites North Central 11/2/2010 143 South Jordan UT Embassy Suites HHM 11/21/2023 192 Alexandria VA Courtyard HHM 3/1/2014 178 Alexandria VA SpringHill Suites HHM 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 (3) Richmond VA Marriott White Lodging 3/1/2014 413 (2) Richmond VA Residence Inn White Lodging 12/8/2014 75 (3) 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 29,583 (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.
As noted below, 14 of the Company’s properties are subject to ground leases and 14 of its hotels are encumbered by mortgage notes.
As noted below, 14 of the Company’s properties are subject to ground leases and 10 of its hotels are encumbered by mortgage debt.
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.
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 24 3,553 Colorado 4 567 Florida 23 2,970 Georgia 5 585 Idaho 1 186 Illinois 7 1,255 Indiana 3 349 Iowa 1 103 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 4 558 North Carolina 7 799 Ohio 3 406 Oklahoma 4 545 Oregon 1 243 Pennsylvania 4 525 South Carolina 5 590 Tennessee 10 1,424 Texas 25 3,005 Utah 6 919 Virginia 11 1,667 Washington 4 636 Wisconsin 2 438 Washington D.C. 1 234 Total 217 29,583 26 The following table summarizes the location, brand, manager, date acquired or completed and number of guest rooms for each of the 217 hotels that the Company owned as of December 31, 2025.
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.
Following the third-party hotel operator’s failure to make lease payments, the Company commenced legal proceedings in 2024 to remove the third-party hotel operator from possession of the property.
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.
As of December 31, 2025, the hotels are operated and managed under separate management agreements with one of 16 hotel management companies, none of which are affiliated with the Company.
(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.
In December 2025, the Company added three guest rooms bringing the total guest room count to 212 as of December 31, 2025. 31 The Company’s investment in real estate as of December 31, 2025 consisted of the following (in thousands): Land $ 841,027 Building and improvements 5,137,909 Furniture, fixtures and equipment 649,910 Finance ground lease assets 102,084 Franchise fees 29,198 6,760,128 Less accumulated depreciation and amortization (1,972,264 ) Investment in real estate, net $ 4,787,864 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.
(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.
(2) Property is subject to ground lease. (3) Hotel is encumbered by mortgage. (4) Manager noted is as of December 31, 2025. In January 2026, management responsibility of this property was transferred from Marriott to Huntington. (5) Manager noted is as of December 31, 2025. In January 2026, management responsibility of this property was transferred from Marriott to Dimension.
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.
Item 2. P roperties As of December 31, 2025, the Company owned 217 hotels with an aggregate of 29,583 guest rooms located in 37 states and the District of Columbia and substantially all of the Company’s hotels operated under Marriott or Hilton brands.
Removed
(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
(6) Manager noted is as of December 31, 2025. In January 2026, management responsibility of this property was transferred from Marriott to Crestline. (7) As of December 31, 2025, this property was included in the Company’s hotel and guest room counts.
Removed
(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.
Added
On April 4, 2025, the Company recovered possession of the New York Property and reinstated operations of the hotel’s 209 guest rooms through a third-party manager engaged by the Company.
Removed
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.
Added
From May 2023 through March 2025, the Company classified the property as a “non-hotel property” and excluded it from hotel and guest room counts, as it was leased to a third-party hotel operator.
Removed
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.
Added
In April 2025, the Company and the third-party hotel operator entered into an agreement to mutually release all claims, to terminate the lease and for the third-party hotel operator to voluntarily surrender possession of the property back to the Company.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeMine Saf ety Disclosures Not Applicable. 33 PART II
Biggest changeMine Saf ety Disclosures Not Applicable. 32 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 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.
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 36 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 37 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 49 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

16 edited+3 added−4 removed9 unchanged
Biggest changeThe 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.
Biggest changeThe following is a summary of securities issued under the Company’s equity compensation plans as of December 31, 2025: 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 92,169 $ - 7,189,593 Equity compensation plans not approved by security holders - - - Total equity compensation plans 92,169 $ - 7,189,593 (1) Consists of 16,207 fully vested deferred stock units from the Amended and Restated Non-Employee Director Deferral Program under the 2024 Omnibus Plan and 75,962 fully vested deferred stock units from the Non-Employee Director Deferral Program under the 2014 Omnibus Plan, including quarterly dividends earned, that are not included in the calculation of the weighted-average exercise price of outstanding options.
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).
Purchases under the Share Repurchase Program have been funded, and the Company intends to fund future share 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).
Real Estate Hotels Index is comprised of publicly traded REITs which focus on investments in hotel properties. The graph assumes an initial investment of $100 in the Company’s common shares and in each of the indices, and also assumes the reinvestment of dividends.
Real Estate Hotels Index are comprised of publicly traded REITs which focus on investments in hotel properties. The graph assumes an initial investment of $100 in the Company’s common shares and in each of the indices, and also assumes the reinvestment of dividends.
As it has done historically, due to seasonality, the Company may use its Revolving Credit Facility to maintain the consistency of the distribution rate, taking into consideration any acquisitions, dispositions, capital improvements and economic cycles.
As it has done historically, due to seasonality, the Company may use its Revolving Credit Facility to maintain the consistency of the distribution rate during the year, taking into consideration any acquisitions, dispositions, capital improvements and economic cycles.
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.
This program, which was announced in 2015 and most recently extended in May 2025, may be suspended or terminated at any time by the Company and will end in July 2026 if not terminated or extended earlier. (2) Includes common shares surrendered to the Company to satisfy tax withholding obligations associated with the vesting of restricted common shares.
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.
Share Repurchases In May 2025, 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 $262.6 million. The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2026 if not terminated or extended earlier.
Share Return Performance The following graph compares the five-year cumulative total shareholder return of the Company’s common shares to the cumulative total returns of the Standard and Poor’s 500 Stock Index (“S&P 500 Index”) and the Dow Jones U.S. Real Estate Hotels Index. The Dow Jones U.S.
Share Return Performance The following graph compares the five-year cumulative total shareholder return of the Company’s common shares to the cumulative total returns of the Standard and Poor’s 500 Stock Index (“S&P 500 Index”), the FTSE Nareit Equity Lodging/Resorts Index and the Dow Jones U.S. Real Estate Hotels Index. The FTSE Nareit Equity Lodging/Resorts Index and the Dow Jones U.S.
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.
The timing of share repurchases and the number of common shares to be purchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of December 31, 2025, approximately $242.5 million remained available for purchase under the Share Repurchase Program.
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.
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 or deferred stock units from the Non-Employee Director Deferral Program previously issued under the 2014 Omnibus Plan.
Additionally, 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.
Additionally, during 2025, 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. 34 The following is a summary of all share repurchases during the fourth quarter of 2025: 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, 2025 256,266 $ 11.86 256,266 $ 252,522 November 1 - November 30, 2025 85,754 $ 11.89 85,754 $ 251,502 December 1 - December 31, 2025 (2) 869,024 $ 11.77 766,409 $ 242,507 Total 1,211,044 1,108,429 (1) Represents amount outstanding under the Company’s authorized $262.6 million Share Repurchase Program.
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.
During the year ended December 31, 2025, the Company purchased, under its Share Repurchase Program, approximately 4.6 million of its common shares at a weighted-average market purchase price of approximately $12.55 per common share for an aggregate purchase price, including commissions, of approximately $58.3 million.
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.
For the years ended December 31, 2025 and 2024, the Company paid distributions of $1.01 per common share, including a special distribution of $0.05 per common share, in each period for a total of approximately $240.4 million and $243.7 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. 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.
The Company does not make or endorse any predictions as to future share price performance. Shareholder Information As of February 17, 2026, the Company had approximately 95 holders of record of its common shares and there were approximately 236 million common shares outstanding.
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.
As of December 31, 2025 and February 17, 2026, the last reported closing price per share for the Company’s common shares as reported on the NYSE was $11.85 and $12.29, respectively.
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.
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 33 specific reference in such filing. The performance graph is not indicative of future investment performance.
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.
Value of Initial Investment at Name 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Apple Hospitality REIT, Inc. $ 100.00 $ 125.42 $ 128.44 $ 144.25 $ 142.43 $ 118.77 S&P 500 Index $ 100.00 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 FTSE Nareit Equity Lodging/Resorts Index (1) $ 100.00 $ 117.97 $ 97.06 $ 117.25 $ 108.56 $ 98.17 Dow Jones U.S.
Removed
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.
Added
Real Estate Hotels Index (1) $ 100.00 $ 114.53 $ 96.92 $ 111.16 $ 108.23 $ 106.05 (1) The Company is replacing the Dow Jones U.S. Real Estate Hotels Index with the FTSE Nareit Equity Lodging/Resorts Index as its comparative index, as the FTSE Nareit Equity Lodging/Resorts Index more closely represents the industry in which the Company operates.
Removed
The Company’s Board of Directors previously adopted, and the Company’s shareholders approved, the non-employee directors’ stock option plan (the “Directors’ Plan”) to provide incentives to attract and retain directors.
Added
(2) As of December 31, 2025, there are no outstanding exercisable securities, therefore, there is no weighted-average exercise price of outstanding securities.
Removed
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.
Added
(3) Consists only of shares available under the 2024 Omnibus Plan, which is net of the 16,207 fully vested deferred stock units from the Amended and Restated Non-Employee Director Deferral Program under the 2024 Omnibus Plan included in the first column. 35
Removed
(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+37 added−25 removed49 unchanged
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.
Biggest changeYear Ended December 31, (in thousands, except statistical data) 2025 Percent of Revenue 2024 Percent of Revenue Change 2024 to 2025 2023 Percent of Revenue Change 2023 to 2024 Total revenue $ 1,412,386 100.0 % $ 1,431,468 100.0 % -1.3 % $ 1,343,800 100.0 % 6.5 % Hotel operating expense 847,322 60.0 % 837,871 58.5 % 1.1 % 780,725 58.1 % 7.3 % Property taxes, insurance and other expense 89,732 6.4 % 84,382 5.9 % 6.3 % 79,307 5.9 % 6.4 % General and administrative expense 32,293 2.3 % 42,542 3.0 % -24.1 % 47,401 3.5 % -10.3 % Impairment of depreciable real estate 5,724 3,055 87.4 % 5,644 -45.9 % Depreciation and amortization expense 192,627 190,603 1.1 % 183,242 4.0 % Gain on sale of real estate 13,116 19,744 -33.6 % - n/a Interest and other expense, net 81,481 77,748 4.8 % 68,857 12.9 % Income tax expense 959 947 1.3 % 1,135 -16.6 % Net income 175,364 214,064 -18.1 % 177,489 20.6 % Adjusted Hotel EBITDA (1) 476,525 509,544 -6.5 % 481,892 5.7 % Number of hotels owned at end of period 217 221 -1.8 % 225 -1.8 % ADR $ 159.06 $ 158.01 0.7 % $ 155.76 1.4 % Occupancy 74.1 % 75.0 % -1.2 % 74.2 % 1.1 % RevPAR $ 117.90 $ 118.54 -0.5 % $ 115.60 2.5 % (1) See reconciliation of Adjusted Hotel EBITDA to net income in “Non-GAAP Financial Measures” below.
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 Company plans to use future net proceeds from the sale of shares under the ATM Program, or 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.
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 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.
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.
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.
RevPAR and operating results may be impacted by regional and local economies and local regulations as well as changes in lodging demand due to macroeconomic factors including inflationary pressures, higher energy prices or a recessionary environment. The following is a summary of the results from operations of the Company’s hotels for their respective periods of ownership by the Company.
RevPAR and operating results may be impacted by regional and local economies and local regulations as well as changes in lodging demand due to macroeconomic factors including inflationary pressures, higher energy prices or a recessionary environment. 38 The following is a summary of the results from operations of the Company’s hotels for their respective periods of ownership by the Company.
These items should be read to gain a further understanding of the principles and estimates used to prepare the Company’s financial statements. These principles and estimates include application of judgment; therefore, changes in judgments may have a material impact on the Company’s reported results of operations and financial condition.
These items should be read to gain a further understanding of the principles and estimates used to prepare the Company’s financial 47 statements. These principles and estimates include application of judgment; therefore, changes in judgments may have a material impact on the Company’s reported results of operations and financial condition.
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.
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 current shelf registration statement.
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).
Purchases under the Share Repurchase Program have been funded, and the Company intends to fund future share 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).
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.
Impairment of depreciable real estate was $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.
In evaluating financial condition and operating performance, the most important indicators on which the Company focuses are revenue measurements, such as average occupancy, ADR and RevPAR, and expenses, such as hotel operating expenses, general and administrative expenses and other expenses described below.
Operating Results In evaluating financial condition and operating performance, the most important indicators on which the Company focuses are revenue measurements, such as average occupancy, ADR and RevPAR, and expenses, such as hotel operating expenses, general and administrative expenses and other expenses described below.
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.
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, fixtures and equipment costs, including adjustments for estimated depreciation based on the age of the property acquired and time since its most recent renovation.
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.
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 2025 Incentive Plan.
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 a description of the Company’s debt instruments as of December 31, 2025 and a summary of the financial and restrictive covenants as defined in the credit agreements.
The Company may also use the net proceeds to acquire another REIT or other company that invests in income producing properties.
The Company may also use the future net proceeds to acquire another REIT or other company that invests in income-producing properties.
The Company presents MFFO when evaluating its performance because it believes that it provides further useful supplemental information to investors regarding its ongoing operating performance. In addition, MFFO is a component of a key compensation measure of operational performance within the 2024 Incentive Plan.
The Company presents MFFO when evaluating its performance because it believes that it provides further useful supplemental information to investors regarding its ongoing operating performance. In addition, MFFO is a component of a key compensation measure of operational performance within the 2025 Incentive Plan.
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.
The Company further excludes actual corporate-level general and administrative expense for the Company as well as Adjusted EBITDAre from the non-hotel property (the New York Property) from Adjusted EBITDAre (Adjusted Hotel EBITDA) to isolate property-level operational performance over which the Company’s hotel operators have direct control.
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 .
A discussion regarding the results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 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, 2024, filed with the SEC on February 24, 2025, 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 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 Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2026 if not terminated or extended earlier.
The following table reconciles the Company’s GAAP net income to FFO and MFFO for the years ended December 31, 2024, 2023 and 2022 (in thousands).
The following table reconciles the Company’s GAAP net income to FFO and MFFO for the years ended December 31, 2025, 2024 and 2023 (in thousands).
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.
Future revenues could be negatively impacted by, among other things, historical seasonal trends, deterioration of consumer sentiment, a recessionary macroeconomic environment, inflationary pressures or a continuation of reduced government travel. 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.
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.
Results of Operations A discussion regarding the Company’s results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024 is presented below.
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.
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 2025, 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 $262.6 million.
Although the Company has relatively low levels of debt, there can be no assurance it will be successful with this strategy, and it may need to reduce its distributions to minimum levels required to maintain its qualification as a real estate investment trust.
Although the Company has relatively low levels of debt, there can be no assurance it will be successful with this strategy, and it may need to reduce its distributions to minimum levels required to maintain its qualification as a REIT.
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.
The remainder of the Company’s hotels are managed by companies that are not affiliated with Marriott, Hilton or Hyatt, and, as a result, those branded hotels they manage are required to obtain separate franchise agreements with each respective franchisor.
If the Company replaces expiring interest rate swaps in the current interest rate environment with new agreements, the Company anticipates those new agreements to be at higher rates than the expiring swap agreements.
If the Company continues to replace expiring interest rate swaps in the current interest rate environment with new agreements, the Company anticipates those new agreements to generally be at higher rates than the expiring swap agreements.
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.
The Company plans to pay outstanding amounts and service payments due upon the upcoming debt maturity dates using one or a combination of any of the following: funds from operations, borrowings under its Revolving Credit Facility, proceeds from new financing, available credit extensions under its unsecured credit facilities or by refinancing the maturing debt.
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.
Interest expense related to the Company’s debt instruments for the year ended December 31, 2025 increased compared to the year ended December 31, 2024 as a result of higher average borrowings associated with variable-rate debt and higher average interest rates on the Company’s variable-rate debt.
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.
As of December 31, 2025, the Company had approximately $1.5 billion of total outstanding debt consisting of $184.3 million of mortgage debt and $1.4 billion outstanding under its credit facilities, excluding unamortized debt issuance costs and fair value adjustments.
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.
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.
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.
The Company’s ongoing analyses and annual recoverability analyses have identified impairment losses on two properties recorded in 2025, three properties recorded in 2024 and two properties recorded in 2023 totaling approximately $5.7 million, $3.1 million and $5.6 million, respectively, as discussed in Note 3, titled “Dispositions” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, in this Annual Report on Form 10-K.
Upcoming Debt Maturities and Debt Service Payments As of December 31, 2024, the Company had approximately $361.0 million of principal and interest payments due on its debt over the next 12 months.
Upcoming Debt Maturities and Debt Service Payments As of December 31, 2025, the Company had approximately $335.4 million of principal and interest payments due on its debt over the next 12 months.
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.
Subsequent Events On January 15, 2026, the Company paid approximately $18.9 million, or $0.08 per common share, in distributions to shareholders of record as of December 31, 2025. On January 20, 2026, the Company declared a monthly cash distribution of $0.08 per common share.
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.
See Note 4 titled “Debt” and Note 5 titled “Fair Value of Financial Instruments” 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 and interest rate swap agreements as of December 31, 2025.
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.
The covenants 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, 2025.
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.
Impairment of Depreciable Real Estate Impairment of depreciable real estate was approximately $5.7 million for the year ended December 31, 2025, consisting of impairment losses at two hotel properties identified by the Company in the third quarter of 2025.
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.
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, 2025 and 2024, the Company had total revenue of $1.4 billion in each respective year.
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 Prior ATM Program, which was terminated in February 2024 in connection with the commencement of the current ATM Program.
During the years ended December 31, 2025 and 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, which was terminated in February 2024 in connection with the commencement of the current ATM Program.
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.
For the years ended December 31, 2025 and 2024, respectively, Comparable Hotels achieved combined average occupancy of 74.1% and 75.3%, ADR of $159.09 and $159.31 and RevPAR of $117.95 and $119.92. ADR is calculated as room revenue divided by the number of rooms sold, and RevPAR is calculated as occupancy multiplied by ADR.
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. 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.
The hotel is under development as a 160-guest-room AC Hotel and is currently planned to be completed and opened for business in the fourth quarter of 2027. As of December 31, 2025, a $2.0 million contract deposit (refundable if the seller does not meet its obligations under the contract) had been paid.
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.
Year Ended December 31, 2025 2024 2023 Net income $ 175,364 $ 214,064 $ 177,489 Depreciation of real estate owned 189,589 187,555 180,185 Gain on sale of real estate (13,116 ) (19,744 ) - Impairment of depreciable real estate 5,724 3,055 5,644 Funds from operations 357,561 384,930 363,318 Amortization of finance ground lease assets 3,038 3,038 3,038 Amortization of favorable and unfavorable operating leases, net 408 408 383 Non-cash straight-line operating ground lease expense 126 135 145 Modified funds from operations $ 361,133 $ 388,511 $ 366,884 42 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.
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.
As of December 31, 2025, the Company held approximately $28.0 million in reserves related to these properties. During 2025, the Company invested approximately $88.2 million in capital expenditures.
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.
During the year ended December 31, 2025, the Company purchased, under its Share Repurchase Program, approximately 4.6 million of its common shares at a weighted-average market purchase price of approximately $12.55 per common share for an aggregate purchase price, including commissions, of approximately $58.3 million.
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.
Related Parties The Company has engaged in, and is expected to continue to engage in, transactions with related parties. These transactions cannot be construed as being 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.
Capital Uses The Company anticipates that cash flow from operations, availability under its Revolving Credit Facility, additional borrowings, and proceeds from hotel dispositions and equity offerings will be adequate to meet its anticipated liquidity requirements, including required distributions to shareholders, share repurchases, capital improvements, debt service, hotel acquisitions, lease commitments, and cash management activities.
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. 44 Capital Uses The Company anticipates that cash flow from operations, availability under its Revolving Credit Facility, additional borrowings, and proceeds from hotel dispositions and equity offerings will be adequate to meet its anticipated liquidity requirements, including required distributions to shareholders, share repurchases, capital improvements, debt service, hotel acquisitions, lease commitments, and cash management activities.
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.
The Company anticipates spending approximately $80 million to $90 million during 2026, which includes various comprehensive renovation 45 projects for approximately 21 properties, however, inflationary pressures, supply chain shortages or tariffs, among other issues, may result in increased costs and delays for anticipated projects.
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.
Refer to Part I, Item 2, of this Annual 43 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 217 hotels the Company owned as of December 31, 2025.
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).
For the year ended December 31, 2025, the expense recorded for share-based compensation totaled $7.7 million. 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, 2025, 2024 and 2023 (in thousands).
The Company anticipates a slightly more favorable operating expense environment assuming the impact of inflationary pressures moderates in 2025. The Company continues to monitor its management companies’ efforts to realize operational efficiencies and mitigate the impact of cost pressures resulting from inflation and a tight labor market.
The Company continues to monitor its management companies’ efforts to realize operational efficiencies and mitigate the impact of cost pressures resulting from inflation and a tight labor market.
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.
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.
Hotel Purchase Contract Commitments 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.
Hotel Purchase Contract Commitments As of December 31, 2025, the Company had one outstanding contract, which was entered into during the third quarter of 2025, for the potential purchase of a hotel in Anchorage, Alaska for an expected purchase price of approximately $65.5 million.
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.
As a result, during the year ended December 31, 2025, the Company sold seven hotels to five unrelated parties for a combined gross sales price of approximately $73.3 million, resulting in a combined gain on the sales of approximately $13.1 million, net of transaction costs.
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.
Interest and Other Expense, net Interest and other expense, net for the years ended December 31, 2025 and 2024 was $81.5 million and $77.7 million, respectively, and is net of approximately $1.6 million and $1.4 million, respectively, of interest capitalized associated with renovation projects.
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.
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.
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.
As of December 31, 2025, the Company had available corporate cash on hand of approximately $8.5 million, and unused borrowing capacity under its Revolving Credit Facility of approximately $586.9 million after taking a $2.1 million letter of credit into account. The credit agreements governing the unsecured credit facilities contain customary affirmative and negative covenants and events of default.
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.
For the years ended December 31, 2025 and 2024, hotel operating expense totaled $847.3 million and $837.9 million, respectively, or 60.0% and 58.5% of total revenue, respectively.
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.
See Note 2 titled “Investment in Real Estate,” Note 3 titled “Dispositions” and Note 13 titled “Contract Commitments” 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 transactions.
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.
The timing of share repurchases and the number of common shares to be purchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of December 31, 2025, approximately $242.5 million remained available for purchase under the Share Repurchase Program.
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”).
Year Ended December 31, 2025 2024 Change 2024 to 2025 2023 Change 2023 to 2024 ADR $ 159.09 $ 159.31 -0.1 % $ 158.42 0.6 % Occupancy 74.1 % 75.3 % -1.6 % 74.6 % 0.9 % RevPAR $ 117.95 $ 119.92 -1.6 % $ 118.22 1.4 % Same Store Operating Results The following table reflects certain operating statistics for the 206 hotels owned by the Company as of January 1, 2023 and during the entirety of the reporting periods being compared, excluding the New York Property (“Same Store Hotels”).
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.
Year Ended December 31, 2025 2024 Change 2024 to 2025 2023 Change 2023 to 2024 ADR $ 157.07 $ 157.23 -0.1 % $ 156.81 0.3 % Occupancy 74.2 % 75.3 % -1.5 % 74.6 % 0.9 % RevPAR $ 116.54 $ 118.34 -1.5 % $ 116.94 1.2 % 39 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 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.
Year Ended December 31, 2025 2024 2023 Net income $ 175,364 $ 214,064 $ 177,489 Depreciation and amortization 192,627 190,603 183,242 Amortization of favorable and unfavorable operating leases, net 408 408 383 Interest and other expense, net 81,481 77,748 68,857 Income tax expense 959 947 1,135 EBITDA 450,839 483,770 431,106 Gain on sale of real estate (13,116 ) (19,744 ) - Impairment of depreciable real estate 5,724 3,055 5,644 EBITDAre 443,447 467,081 436,750 Non-cash straight-line operating ground lease expense 126 135 145 Adjusted EBITDAre 443,573 467,216 436,895 General and administrative expense 32,293 42,542 47,401 Adjusted EBITDAre from non-hotel property (1) 659 (214 ) (2,404 ) Adjusted Hotel EBITDA $ 476,525 $ 509,544 $ 481,892 (1) Non-hotel property consists of the results of the New York Property that was leased to a third-party hotel operator before possession was recovered and operations reinstated through a third-party manager on April 4, 2025.
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.
Following the third-party hotel operator’s failure to make lease payments, the Company commenced legal proceedings in 2024 to remove the third-party hotel operator from possession of the property.
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.
Distributions paid for the years ended December 31, 2025, 2024 and 2023 were $1.01, $1.01 and $1.04 per common share, respectively, for a total of approximately $240.4 million, $243.7 million and $238.3 million, respectively.
See further discussion in Note 2 titled “Investments in Real Estate” and 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.
Results of the hotel operations of the New York Property are included only after April 4, 2025. See further discussion in Note 2 titled “Investments in Real Estate” and Note 3 titled “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, 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.
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 Company has invested in and plans to continue to reinvest in its hotels.
Refer to Note 10, titled “Lease Commitments” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, in this Annual Report on Form 10-K for additional details.
As of December 31, 2025, the Company had total remaining minimum lease payments of $268.7 million, including $7.4 million due in the next year. Refer to Note 10, titled “Lease Commitments” of the Consolidated Financial Statements and Notes thereto in Part II, Item 8, in this Annual Report on Form 10-K for additional details.
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.
As of December 31, 2025, the hotels are operated and managed under separate management agreements with one of 16 hotel management companies, none of which are affiliated with the Company.
The Company continues to feel upward pressure on wage rates given a competitive labor market. However, the rate of wage growth has slowed and management companies have made progress in reducing their use of contract labor, which costs more on average than in-house labor.
The Company continues to feel upward pressure on total payroll costs given a competitive labor market where the demand for strong hotel talent remains high. However, the rate of wage growth has slowed, and management companies have made progress in reducing their use of contract labor. The Company anticipates a similar operating expense environment in 2026.
If the Company continues to replace expiring interest rate swaps in the current interest rate environment with new agreements, the Company expects those new agreements to be at higher rates than the expiring swap agreements. 42 Non-GAAP Financial Measures The Company considers the following non-GAAP financial measures useful to investors as key supplemental measures of its operating performance: Funds from Operations (“FFO”), Modified Funds from Operations (“MFFO”), Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”), Earnings Before Interest, Income Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”), Adjusted EBITDAre (“Adjusted EBITDAre”) and Adjusted Hotel EBITDA.
Interest expense related to the Company’s unsecured credit facilities in 2026 is expected to be similar to or slightly lower than in 2025, with similar borrowings and slightly lower average interest rates. 41 Non-GAAP Financial Measures The Company considers the following non-GAAP financial measures useful to investors as key supplemental measures of its operating performance: Funds from Operations (“FFO”), Modified Funds from Operations (“MFFO”), Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”), Earnings Before Interest, Income Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”), Adjusted EBITDAre (“Adjusted EBITDAre”) and Adjusted Hotel EBITDA.
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.
The increase in hotel operating expense for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily driven by increased labor costs, utility costs, repair and maintenance costs and general inflationary pressures throughout the overall economy.
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.
As a result, the Company’s Comparable Hotels and Same Store Hotels revenue and operating results decreased slightly during the year ended December 31, 2025, compared to the year ended December 31, 2024. For the year ended December 31, 2025, the Company’s hotels, in general, have shown results that have been broadly consistent with applicable industry, brand and chain scale averages.
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.
Management and Franchise Agreements Each of the Company’s 217 hotels owned as of December 31, 2025 is operated and managed under separate management agreements with one of 16 hotel management companies, none of which are affiliated with the Company. As of December 31, 2025, nine of the Company’s hotels are managed by affiliates of Marriott.
The proportion of fixed-rate debt decreased over the year ended December 31, 2024 compared to the same period of 2023, as the Company had six interest rate swaps in effect on $285.0 million of variable-rate debt that matured during 2024 while the Company entered into four new swaps in effect on $200.0 million of variable rate debt during 2024, but at a higher fixed rate than the swaps that expired.
The average proportion of variable-rate debt that is fixed by interest rate swaps was lower over the year ended December 31, 2025 compared to the same period of 2024, as the Company had three interest rate swaps in effect on $150.0 million of variable-rate debt mature during 2025 and six interest rate swaps in effect on $285.0 million of variable-rate debt mature during 2024.
This process allows each company to minimize its cash on hand and reduces the cost for each company.
This process allows each company to minimize its cash on hand and reduces the cost for each company. The amounts outstanding at any point in time are not significant to either of the companies.
The acquisitions of real estate subject to this estimate totaled two properties, for a combined purchase price of approximately $196.3 million for the year ended December 31, 2024 and seven properties, including six hotels and one free-standing parking garage, for a combined purchase price of $289.8 million for the year ended December 31, 2023. 48 Impairment Losses Policy The Company records impairment losses on hotel properties used in operations if indicators of impairment are present, and the sum of the undiscounted cash flows estimated to be generated by the respective properties over their estimated remaining useful life, based on historical and industry data, is less than the properties’ carrying amount.
Impairment Losses Policy The Company records impairment losses on hotel properties used in operations if indicators of impairment are present, and the sum of the undiscounted cash flows estimated to be generated by the respective properties over their estimated remaining useful life, based on historical and industry data, is less than the properties’ carrying amount.
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.
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.
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.
As of December 31, 2025, the Company had 14 properties subject to ground leases and three parking lot ground leases with remaining terms ranging from approximately 13 to 93 years, excluding renewal options. Certain of its ground leases have options to extend beyond the initial lease 46 term by periods ranging from five to 120 years.
The proportion of variable-rate debt that is fixed by interest rate swaps has decreased during the year ended December 31, 2024 as the Company had six interest rate swaps in effect on $285.0 million of variable-rate debt that matured while the Company entered into four new interest rate swaps in effect on $200.0 million but at higher rates than the expiring swap agreements.
However, this was partially offset as the Company entered into two new interest rate swaps in effect on $100.0 million of variable-rate debt during the third quarter of 2025 and four new interest rate swaps in effect on $200.0 million of variable-rate debt during 2024, but at higher fixed rates than the swap agreements that expired.
The principal components of general and administrative expense are payroll and related benefit costs, executive incentive compensation, legal fees, accounting fees and reporting expenses. The decrease in general and administrative expense in 2024 as compared to 2023 was primarily due to a decrease in the Company’s executive incentive compensation plan accrual, partially offset by increased payroll and related benefit costs.
The decrease in general and administrative expense in 2025 as compared to 2024 was primarily due to a decrease in the Company’s executive incentive compensation plan accrual.
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.
Consistent with this strategy and the Company’s focus on investing in rooms-focused hotels, during the year ended December 31, 2025, the Company acquired two hotels for an aggregate purchase price of approximately $117.0 million: an existing 126-guest-room Homewood Suites in Tampa, Florida and a newly constructed 260-guest-room Motto in Nashville, Tennessee that was purchased at the completion of development.
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.
The outstanding principal under the $385 million term loan facility bears interest at an annual variable rate equal to a term SOFR, depending on the interest period options elected by the Company, plus a margin ranging from 1.35% to 2.20%, based on the Company’s leverage ratio as calculated under the terms of the credit agreement.

… 80 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+0 added−0 removed2 unchanged
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
Biggest changeAll dollar amounts are in thousands. 2026 2027 2028 2029 2030 Thereafter Total Fair Market Value Total debt: Maturities $ 265,649 $ 278,602 $ 334,066 $ 162,294 $ 460,016 $ 44,638 $ 1,545,265 $ 1,527,828 Average interest rates (1) 4.7 % 4.7 % 4.6 % 4.6 % 4.6 % 3.7 % Variable-rate debt: Maturities $ 191,000 $ 275,000 $ 300,000 $ 85,000 $ 385,000 $ - $ 1,236,000 $ 1,237,272 Average interest rates (1) 4.9 % 4.9 % 4.8 % 4.9 % 5.0 % n/a Fixed-rate debt: Maturities $ 74,649 $ 3,602 $ 34,066 $ 77,294 $ 75,016 $ 44,638 $ 309,265 $ 290,556 Average interest rates 4.0 % 4.1 % 4.1 % 3.9 % 3.6 % 3.7 % (1) The average interest rate gives effect to interest rate swaps, as applicable. 49
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.
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, 2025.
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.
Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk As of December 31, 2025, 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, 2024.
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, 2025.
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.
Based on the Company’s variable-rate debt outstanding as of December 31, 2025, every 100 basis points change in interest rates will impact the Company’s annual net income by approximately $5.5 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.
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.
As of December 31, 2025, the Company’s variable-rate debt consisted of its unsecured credit facilities, including $61.0 million in borrowings outstanding under its Revolving Credit Facility and $1.2 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.
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, 2025, the Company had 11 interest rate swap agreements that effectively fix the interest payments on approximately $685.0 million of the Company’s variable-rate debt outstanding with swap maturity dates ranging from May 2026 to December 2029.
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, 2025, after giving effect to interest rate swaps, as described below, approximately $551.0 million, or approximately 36% of the Company’s total debt outstanding, was subject to variable interest rates.
Under the terms of all of the Company’s interest rate swaps, the Company pays a fixed rate of interest and receives a floating rate of interest equal to the annual rate of the one-month SOFR plus a 0.10% SOFR spread adjustment.
Under the terms of the Company’s interest rate swaps, the Company pays a fixed rate of interest and receives a floating rate of interest equal to the annual rate of the one-month SOFR with nine out of eleven swaps also including an additional 0.10% SOFR spread adjustment.

Other APLE 10-K year-over-year comparisons