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What changed in Pebblebrook Hotel Trust's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Pebblebrook Hotel Trust'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.

+224 added−227 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in Pebblebrook Hotel Trust's 2025 10-K

224 paragraphs added · 227 removed · 192 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

17 edited+1 added−3 removed44 unchanged
Biggest changeSpecific acquisition criteria may include, but are not limited to, the following: • premier locations, facilities and other competitive advantages that are not easily replicated; • barriers-to-entry in the market, such as scarcity of development sites, regulatory hurdles, high per-room development costs and long lead times for new development; • acquisition prices at a discount to replacement cost; • properties not subject to long-term management contracts with hotel management companies; • potential return on investment initiatives, including redevelopment, rebranding, redesign, expansion and change of management; • opportunities to implement value-added operational improvements; and • strong demand growth characteristics supported by favorable demographic indicators.
Biggest changeSpecific acquisition criteria may include, but are not limited to, the following: • premier locations, facilities and other competitive advantages that are not easily replicated; • barriers-to-entry in the market, such as scarcity of development sites, regulatory hurdles, high per-room development costs and long lead times for new development; • acquisition prices at a discount to replacement cost; • properties not subject to long-term management contracts with hotel management companies; • potential return on investment initiatives, including redevelopment, rebranding, redesign, expansion and change of management; • opportunities to implement value-added operational improvements; • strong demand growth characteristics supported by favorable demographic indicators; and • a detailed evaluation of risks of all types, including supply, government, labor, weather, airlift, economic base and others. 5 We believe that upper-upscale, full-service hotels and resorts and upscale hotels located in major U.S. urban, convention and drive-to and destination resort markets are likely to generate some of the most favorable risk-adjusted returns in the lodging industry over the long-term.
The obligation to make readily achievable accommodations is an ongoing one, and we will continue to assess our properties and make alterations as appropriate in this respect. 7 Tax Status We have elected to be taxed as a REIT under Sections 856 through 860 of the Code.
The obligation to make readily achievable accommodations is an ongoing one, and we will continue to assess our properties and make alterations as appropriate in this respect. Tax Status We have elected to be taxed as a REIT under Sections 856 through 860 of the Code.
We provide employees with standing desks, ergonomic desk chairs, a desk wellness series and complimentary fitness center memberships. We are deeply committed to our community, through volunteering, donations and sourcing locally, when available. We currently employ 60 full-time employees. None of our employees is a member of a union.
We provide employees with standing desks, ergonomic desk chairs, a desk wellness series and complimentary fitness center memberships. We are deeply committed to our community, through volunteering, donations and sourcing locally, when available. We currently employ 52 full-time employees. None of our employees is a member of a union.
We believe these markets have barriers-to-entry and provide diverse sources of meeting and room night demand generators. In addition, we also opportunistically target investments in resort properties located near our primary urban target markets and select destination resort markets such as southern Florida and southern California. We focus on both branded and independent full-service “upper-upscale” hotels.
We believe these markets have barriers-to-entry and provide diverse sources of meeting and room night demand generators. In addition, we also opportunistically target investments in resort properties located near our primary urban target markets and select destination resort markets such as southern Florida and southern California. We focus on both branded and independent full-service "upper-upscale" hotels.
Curator We and four industry-leading hotel operators are founding members of Curator Hotel & Resort Collection, a collection of small brands and independent lifestyle hotels and resorts worldwide.
Curator We and three industry-leading hotel operators are founding members of Curator Hotel & Resort Collection ("Curator"), a collection of small brands and independent lifestyle hotels and resorts worldwide.
Generally, our hotels have lower revenue, operating income and cash flow in the first quarter of each year and higher revenue, operating income and cash flow in the third quarter of each year. Regulations Our hotel properties are subject to various federal, state and local environmental laws.
Generally, our hotels have lower revenue, operating income and cash flow in the first and fourth quarters of each year and higher revenue, operating income and cash flow in the second and third quarters of each year. Regulations Our hotel properties are subject to various federal, state and local environmental laws.
At December 31, 2024, the Company owned 99.2% of the common limited partnership units issued by our Operating Partnership ("common units"). The remaining 0.8% of the common units are owned by the other limited partners of our Operating Partnership. For the Company to maintain its qualification as a REIT under the Code, it cannot operate the hotels it owns.
At December 31, 2025, the Company owned 99.0% of the common limited partnership units issued by our Operating Partnership ("common units"). The remaining 1.0% of the common units are owned by the other limited partners of our Operating Partnership. For the Company to maintain its qualification as a REIT under the Code, it cannot operate the hotels it owns.
As of December 31, 2024, the Company owned interests in 46 hotels with a total of 11,933 guest rooms. Substantially all of the Company’s assets are held by, and all of the Company's operations are conducted through, Pebblebrook Hotel, L.P. (our “Operating Partnership”). The Company is the sole general partner of our Operating Partnership.
As of December 31, 2025, the Company owned interests in 44 hotels with a total of 11,052 guest rooms. Substantially all of the Company's assets are held by, and all of the Company's operations are conducted through, Pebblebrook Hotel, L.P. (our "Operating Partnership"). The Company is the sole general partner of our Operating Partnership.
We believe that hotel supply growth will be favorable, declining significantly from the historical growth rate prior to the pandemic with minimal new hotel openings in a number of our markets for many years. 5 We generally seek to enter into flexible management contracts, when possible, with third-party hotel management companies for the operation of our hotels and resorts that provide us with the ability to replace operators and/or reposition properties, to the extent that we determine to do so and align our operators with our objective of maximizing our return on investment.
We generally seek to enter into flexible management contracts, when possible, with third-party hotel management companies for the operation of our hotels and resorts that provide us with the ability to replace operators and/or reposition properties, to the extent that we determine to do so and align our operators with our objective of maximizing our return on investment.
When purchasing hotel properties, we may issue limited partnership interests in our Operating Partnership as full or partial consideration to sellers who may desire to take advantage of tax deferral on the sale of a hotel or participate in the potential appreciation in value of our common shares of beneficial interest ("common shares").
When purchasing hotel properties, we may issue limited partnership interests in our Operating Partnership as full or partial consideration to sellers who may desire to take advantage of tax deferral on the sale of a hotel or participate in the potential appreciation in value of our common shares of beneficial interest ("common shares"). 6 Competition We compete for hotel investment opportunities with institutional investors, private equity investors, other REITs and numerous local, regional, national and international owners, including franchisors, in each of our target markets.
We have not received written notice from any governmental authority of any material noncompliance, liability or claim relating to hazardous or toxic substances or other environmental matters in connection with any of our properties.
We have not received written notice from any governmental authority of any material noncompliance, liability or claim relating to hazardous or toxic substances or other environmental matters in connection with any of our properties. 7 Our properties must comply with Title III of the Americans with Disabilities Act (the "ADA") to the extent that such properties are "public accommodations" as defined by the ADA.
Additionally, properties that we may acquire may not comply with the requirements of the ADA, and we endeavor to identify such noncompliance prior to our acquisition.
However, noncompliance with the ADA could result in litigation, retrofit costs and imposition of fines or an award of damages to private litigants. Additionally, properties that we may acquire may not comply with the requirements of the ADA, and we endeavor to identify such noncompliance prior to our acquisition.
Competitive factors include, among others, location, convenience, brand affiliation, room rates, range of services, facilities and guest amenities or accommodations offered and quality of guest service. Competition in our hotels' markets includes competition from existing, newly renovated and newly developed hotels.
The hotel industry is highly competitive. Our hotels compete with other hotels and alternative lodging for guests in our markets. Competitive factors include, among others, location, convenience, brand affiliation, room rates, range of services, facilities and guest amenities or accommodations offered and quality of guest service.
Seasonality Demand in the lodging industry is affected by recurring seasonal patterns which are greatly influenced by overall economic cycles, geographic locations, weather and customer mix at the hotels.
We may be required to provide additional amenities, incur additional costs or make capital improvements that we otherwise might not choose to make, which may adversely affect our profitability. Seasonality Demand in the lodging industry is affected by recurring seasonal patterns which are greatly influenced by overall economic cycles, geographic locations, weather and customer mix at the hotels.
Our properties must comply with Title III of the Americans with Disabilities Act (the "ADA") to the extent that such properties are “public accommodations” as defined by the ADA. The ADA may require the removal of structural barriers to access by persons with disabilities in certain public areas of our properties where such removal is readily achievable.
The ADA may require the removal of structural barriers to access by persons with disabilities in certain public areas of our properties where such removal is readily achievable. We believe that our properties are in substantial compliance with the ADA and that we will not be required to make substantial capital expenditures to address the requirements of the ADA.
Competition We compete for hotel investment opportunities with institutional investors, private equity investors, other REITs and numerous local, regional, national and international owners, including franchisors, in each of our target markets. Some of these entities have substantially greater financial resources than we do and may be able and willing to accept more risk than we can prudently manage.
Some of these entities have substantially greater financial resources than we do and may be able and willing to accept more risk than we can prudently manage. Competition generally may increase the bargaining power of property owners seeking to sell and reduce the number of suitable investment opportunities offered to us or purchased by us.
Competition can adversely affect our hotels' occupancy, ADR and room revenue per available room ("RevPAR"), and thus our financial results. We may be required to provide additional amenities, incur additional costs or make capital improvements that we otherwise might not choose to make, which may adversely affect our profitability.
Competition in our hotels' markets includes competition from existing, newly renovated and newly developed hotels. Competition can adversely affect our hotels' occupancy, ADR and room revenue per available room ("RevPAR"), and thus our financial results.
Removed
We believe that upper-upscale, full-service hotels and resorts and upscale hotels located in major U.S. urban, convention and drive-to and destination resort markets are likely to generate some of the most favorable risk-adjusted returns in the lodging industry over the long-term.
Added
We believe that hotel supply growth will be favorable, declining significantly from the historical growth rate prior to the pandemic with minimal new hotel openings in a number of our markets for many years.
Removed
Competition generally may increase the bargaining power of property owners seeking to sell and reduce the number of suitable investment opportunities offered to us or purchased by us. 6 The hotel industry is highly competitive. Our hotels compete with other hotels and alternative lodging for guests in our markets.
Removed
We believe that our properties are in substantial compliance with the ADA and that we will not be required to make substantial capital expenditures to address the requirements of the ADA. However, noncompliance with the ADA could result in litigation, retrofit costs and imposition of fines or an award of damages to private litigants.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

92 edited+16 added−13 removed252 unchanged
Biggest changeIn connection with the forward-looking statements that appear in this Annual Report on Form 10-K, in these risk factors and elsewhere, you should carefully review the section titled “ Forward-Looking Statements. ” Summary of Risk Factors Risks Related to Our Business and Properties • Risks related to the potential loss of our executive officers • Risks related to third-party management companies • Risks related to the purchase or sale of hotel properties • Risks related to financing and use of financial institutions • Risks related to financial performance 8 • Risks related to restrictive covenants • Risks related to highly competitive markets and regional downturns • Risks related to our TRS lessee structure • Risks related to investment decisions • Risks related to conflicts of interest • Risks related to joint ventures and franchise agreements Risks Related to Debt and Financing • Risks related to debt service obligations • Risks related to our existing indebtedness • Risks related to “cash trap” provisions • Risks related to refinancing or defaulting on debt • Risks related to acquiring outstanding debt Risks Related to the Lodging Industry • Risks related to hotel profitability • Risks related to operations • Risks related to competition for acquisitions • Risks related to the seasonality and cyclical nature of the lodging industry • Risks related to capital expenditure requirements • Risks related to hotel and resort development • Risks related to changing technology and its effects on the lodging industry and cyber-attacks • Risks related to hotel personnel and unionization • Risks related to natural disasters, climate change and other environmental factors and regulations • Risks related to terrorist attacks • Risks related to underinsurance or lack of insurance • Risks related to unknown or contingent liabilities • Risks related to compliance with federal law and other legislative changes • Risks related to potential litigation General Risks Related to the Real Estate Industry • Risks related to illiquidity of real estate investments • Risks related to changing tax regimes in states and localities in which we own property • Risks related to liabilities under environmental laws Risks Related to Our Organization and Structure • Risks related to change of control • Risks related to ownership limitations in our declaration of trust • Risks related to actions against our trustees and officers • Risks related to changes in major policies • Risks related to further issuances of securities • Risks related to future offerings of debt securities or preferred shares • Risks related to the rights of holders of common shares or preferred shares • Risks related to employment agreements with our executive officers • Risks related to internal controls 9 U.S.
Biggest changeIn connection with the forward-looking statements that appear in this Annual Report on Form 10-K, in these risk factors and elsewhere, you should carefully review the section titled " Forward-Looking Statements." 8 Summary of Risk Factors Risks Related to Our Business and Properties • Risks related to the potential loss of our executive officers • Risks related to third-party management companies • Risks related to the purchase or sale of hotel properties • Risks related to financing and use of financial institutions • Risks related to financial performance • Risks related to restrictive covenants • Risks related to highly competitive markets and regional downturns • Risks related to our TRS lessee structure • Risks related to investment decisions • Risks related to conflicts of interest • Risks related to joint ventures and franchise agreements Risks Related to Debt, Financing and Future Securities Issuances • Risks related to debt service obligations • Risks related to financial covenants • Risks related to "cash trap" provisions • Risks related to refinancing or defaulting on debt • Risks related to acquiring outstanding debt • Risks related to our capped call transactions • Risks related to further issuances of securities • Risks related to future offerings of debt securities or preferred shares Risks Related to the Lodging Industry • Risks related to hotel profitability • Risks related to operations • Risks related to competition for acquisitions • Risks related to the seasonality and cyclical nature of the lodging industry • Risks related to capital expenditure requirements • Risks related to hotel and resort development • Risks related to changing technology, including artificial intelligence, and cyber-attacks • Risks related to hotel personnel and unionization • Risks related to natural disasters, climate change and other environmental factors and regulations • Risks related to terrorism and disruptive geopolitical activity • Risks related to underinsurance or lack of insurance • Risks related to unknown or contingent liabilities • Risks related to compliance with federal, state and local environmental laws and other legislative changes • Risks related to potential litigation General Risks Related to the Real Estate Industry • Risks related to illiquidity of real estate investments • Risks related to changing tax regimes in states and localities in which we own property • Risks related to liabilities under environmental laws 9 Risks Related to Our Organization and Structure • Risks related to change of control • Risks related to ownership limitations in our declaration of trust • Risks related to actions against our trustees and officers • Risks related to changes in major policies • Risks related to the rights of holders of common shares or preferred shares • Risks related to employment agreements with our executive officers • Risks related to internal controls U.S.
To maintain our qualification as a REIT for U.S. federal income tax purposes, we are required to distribute at least 90 percent of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding any net capital gains) each year to our shareholders and we generally expect to make distributions in excess of such amount.
To maintain our qualification as a REIT for U.S. federal income tax purposes, we are required to distribute at least 90 percent of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding any net capital gains) each year to our shareholders and we generally expect to make distributions in excess of such amount.
These ownership limits could delay or prevent a transaction or a change in control that might involve a premium price for our shares or otherwise be in the best interest of the shareholders.
These ownership limits could delay or prevent a transaction or a change of control that might involve a premium price for our shares or otherwise be in the best interest of the shareholders.
Upon the occurrence of a change of control (as defined in our declaration of trust) as the result of which our common shares and the common securities of the acquiring or surviving entity (or American Depositary Receipts representing such securities) are not listed on the New York Stock Exchange (the “NYSE”), the NYSE American LLC or Nasdaq or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE American LLC or Nasdaq, holders of Series E Preferred Shares, Series F Preferred Shares, Series G Preferred Shares or Series H Preferred Shares will have the right (unless, as provided in our declaration of trust, we have provided or provide notice of our election to redeem the applicable series) to convert some or all of their preferred shares into our common shares (or equivalent value of alternative consideration), and under these circumstances we will also have a special optional redemption right to redeem such shares.
Upon the occurrence of a change of control (as defined in our declaration of trust) as the result of which our common shares and the common securities of the acquiring or surviving entity (or American Depositary Receipts representing such securities) are not listed on the New York Stock Exchange (the "NYSE"), the NYSE American LLC or Nasdaq or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE American LLC or Nasdaq, holders of Series E Preferred Shares, Series F Preferred Shares, Series G Preferred Shares or Series H Preferred Shares will have the right (unless, as provided in our declaration of trust, we have provided or provide notice of our election to redeem the applicable series) to convert some or all of their preferred shares into our common shares (or equivalent value of alternative consideration), and under these circumstances we will also have a special optional redemption right to redeem such shares.
Hotel development and redevelopment involves a number of risks, including risks associated with: • construction delays or cost overruns that may increase project costs; • the receipt of zoning, occupancy and other required governmental permits and authorizations; • development costs incurred for projects that are not pursued to completion; • acts of God such as earthquakes, hurricanes, floods or fires that could adversely impact a project; • the negative impact of construction on operating performance during and soon after the construction period; 16 • the ability to raise capital; and • governmental restrictions on the nature or size of a project.
Hotel development and redevelopment involves a number of risks, including risks associated with: • construction delays or cost overruns that may increase project costs; • the receipt of zoning, occupancy and other required governmental permits and authorizations; • development costs incurred for projects that are not pursued to completion; • acts of God such as earthquakes, hurricanes, floods or fires that could adversely impact a project; • the negative impact of construction on operating performance during and soon after the construction period; • the ability to raise capital; and • governmental restrictions on the nature or size of a project.
These capital improvements may give rise to the following risks: • possible environmental problems; • construction cost overruns and delays, including those caused by supply chain disruptions; • the possibility that revenues will be reduced while rooms or restaurants are out of service due to capital improvement projects; • a possible shortage of available cash to fund capital improvements and the related possibility that financing for these capital improvements may not be available to us on attractive terms; and • uncertainties as to market demand or a loss of market demand after capital improvements have begun.
These capital improvements may give rise to the following risks: • possible environmental problems; • construction cost overruns and delays, including those caused by supply chain disruptions and tariffs; • the possibility that revenues will be reduced while rooms or restaurants are out of service due to capital improvement projects; • a possible shortage of available cash to fund capital improvements and the related possibility that financing for these capital improvements may not be available to us on attractive terms; and • uncertainties as to market demand or a loss of market demand after capital improvements have begun.
Our qualification as a REIT depends on our satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis. 25 Moreover, new tax legislation, administrative guidance or court decisions, in each instance potentially applicable with retroactive effect, could make it more difficult or impossible for us to maintain our qualification as a REIT.
Our qualification as a REIT depends on our satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis. Moreover, new tax legislation, administrative guidance or court decisions, in each instance potentially applicable with retroactive effect, could make it more difficult or impossible for us to maintain our qualification as a REIT.
We have made “protective” TRS elections with respect to each of our subsidiary REITs and may implement other protective arrangements intended to avoid such an outcome if our subsidiary REITs were not to qualify as a REIT, but there can be no assurance that such “protective” elections and other arrangements will be effective to avoid the resulting adverse consequences to us.
We have made "protective" TRS elections with respect to each of our subsidiary REITs and may implement other protective arrangements intended to avoid such an outcome if our subsidiary REITs were not to qualify as a REIT, but there can be no assurance that such "protective" elections and other arrangements will be effective to avoid the resulting adverse consequences to us.
The costs to clean up a contaminated property, to defend against a claim, or to comply with environmental laws could be material and could adversely affect our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders. As a result, we may become subject to material environmental liabilities.
The costs to clean up a contaminated property, to defend against a claim, or to comply with environmental laws could be material and could adversely affect our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders. 20 As a result, we may become subject to material environmental liabilities.
These provisions may have the effect of inhibiting a third party from making an acquisition proposal for us or of delaying, deferring or preventing a change in control of us under the circumstances that otherwise could provide our common shareholders with the opportunity to realize a premium over the then current market price.
These provisions may have the effect of inhibiting a third party from making an acquisition proposal for us or of delaying, deferring or preventing a change of control of us under the circumstances that otherwise could provide our common shareholders with the opportunity to realize a premium over the then current market price.
To the extent we do not consummate one or more of the transactions, these expenses will not be offset by revenues or proceeds from these properties or dispositions. Our cash and cash equivalents are maintained in a limited number of financial institutions and the funds in those institutions may not be fully or federally insured.
To the extent we do not consummate one or more of the transactions, these expenses will not be offset by revenues or proceeds from these properties or dispositions. 12 Our cash and cash equivalents are maintained in a limited number of financial institutions and the funds in those institutions may not be fully or federally insured.
These factors could reduce the revenues and net operating profits of our TRS lessees, which in turn could adversely affect our financial condition, results of operations, the market price of our common shares, and our ability to make distributions to our shareholders. 15 Competition for acquisitions may reduce the number of properties we can acquire.
These factors could reduce the revenues and net operating profits of our TRS lessees, which in turn could adversely affect our financial condition, results of operations, the market price of our common shares, and our ability to make distributions to our shareholders. Competition for acquisitions may reduce the number of properties we can acquire.
As a result, we may have to enter into short-term borrowings in certain quarters in order to offset these fluctuations in revenues and to make distributions to our shareholders. The cyclical nature of the lodging industry may cause the returns from our investments to be less than we expect. The lodging industry is highly cyclical in nature.
As a result, we may have to enter into short-term borrowings in certain quarters in order to offset these fluctuations in revenues and to make distributions to our shareholders. 16 The cyclical nature of the lodging industry may cause the returns from our investments to be less than we expect. The lodging industry is highly cyclical in nature.
In addition, losses in our TRSs will generally not provide any tax benefit, except for being carried forward against future taxable income in the TRSs. If our subsidiary REITs failed to qualify as REITs, we could be subject to higher taxes and could fail to remain qualified as REITs.
In addition, losses in our TRSs will generally not provide any tax benefit, except for being carried forward against future taxable income in the TRSs. 29 If our subsidiary REITs failed to qualify as REITs, we could be subject to higher taxes and could fail to remain qualified as REITs.
Although we intend to monitor ownership of our shares by our hotel managers and their owners, there can be no assurance that these ownership levels will not be exceeded. 28 Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.
Although we intend to monitor ownership of our shares by our hotel managers and their owners, there can be no assurance that these ownership levels will not be exceeded. Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.
The real estate market is affected by many factors beyond our control, including: • adverse changes in international, national, regional and local economic and market conditions; • changes in interest rates and in the availability, cost and terms of debt financing; • changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances; • the ongoing need for capital improvements, particularly in older structures; • changes in operating expenses; and 20 • civil unrest, acts of God, including earthquakes, floods, wildfires and other natural disasters, which may result in uninsured losses, and acts of war or terrorism.
The real estate market is affected by many factors beyond our control, including: • adverse changes in international, national, regional and local economic and market conditions; • changes in interest rates and in the availability, cost and terms of debt financing; 21 • changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances; • the ongoing need for capital improvements, particularly in older structures; • changes in operating expenses; and • civil unrest, acts of God, including earthquakes, floods, wildfires and other natural disasters, which may result in uninsured losses, and acts of war or terrorism.
Some of our properties may have conditions that are subject to these requirements, and we could be liable for such fines or penalties and/or liable to third parties. Certain hotel properties we own or may own in the future may contain, or may have contained, ACBMs.
Some of our properties may have conditions that are subject to these requirements, and we could be liable for such fines or penalties and/or liable to third parties. 22 Certain hotel properties we own or may own in the future may contain, or may have contained, ACBMs.
If we pay dividends in our own shares and a significant number of our shareholders sell our shares in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our shares. Our TRS lessees increase our overall tax liability.
If we pay dividends in our own shares and a significant number of our shareholders sell our shares in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our shares. 27 Our TRS lessees increase our overall tax liability.
In addition, our hotel properties are subject to various operating risks common to the lodging industry, many of which are beyond our control, including the following: • competition from other hotel properties and non-hotel properties that provide nightly and short-term rentals in our markets; • over building of new hotels in our markets, which could adversely affect occupancy and revenues at our hotel properties; • dependence on business and commercial travelers, conventions and tourism; • increases in energy costs, airplane fares, government taxes and fees, and other expenses affecting travel, which may affect travel patterns and reduce the number of business and commercial travelers and tourists; • increases in operating costs due to inflation and other factors that may not be offset by increased room rates; • changes in interest rates and in the availability, cost and terms of debt financing; • changes in governmental laws and regulations (including minimum wage increases), fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances; • adverse effects of international, national, regional and local economic and market conditions; • labor strikes or disruptions; • unforeseen events beyond our control, such as terrorist attacks, cyber-attacks, travel-related health concerns and restrictions as a result of pandemics and epidemics such as COVID-19, H1N1 influenza (swine flu), avian bird flu, Zika virus, SARS and MERS, political instability, regional hostilities, imposition of taxes or surcharges by regulatory authorities, travel-related accidents and unusual weather patterns, including natural disasters such as hurricanes, tsunamis or earthquakes; • strength of the U.S. dollar which may reduce in-bound international travel and encourage out-bound international travel; • adverse effects of a downturn in the lodging industry; and • risks generally associated with the ownership of hotel properties and real estate, as we discuss in more detail below.
In addition, our hotel properties are subject to various operating risks common to the lodging industry, many of which are beyond our control, including the following: • competition from other hotel properties and non-hotel properties that provide nightly and short-term rentals in our markets; • over building of new hotels in our markets, which could adversely affect occupancy and revenues at our hotel properties; • dependence on business and commercial travelers, conventions and tourism; • increases in energy costs, airplane fares, government taxes and fees, and other expenses affecting travel, which may affect travel patterns and reduce the number of business and commercial travelers and tourists; • increases in operating costs due to inflation and other factors that may not be offset by increased room rates; • changes in interest rates and in the availability, cost and terms of debt financing; • changes in governmental laws and regulations (including minimum wage increases), fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances; • adverse effects of international, national, regional and local economic and market conditions; • labor strikes or disruptions; • unforeseen events beyond our control, such as terrorist attacks, rumors or threats of war, cyber-attacks, travel-related health concerns and restrictions as a result of pandemics and epidemics such as, without limitation, COVID-19, H1N1 influenza (swine flu), avian bird flu, Zika virus, SARS and MERS, political instability, regional hostilities, imposition of taxes or surcharges by regulatory authorities, travel-related accidents and unusual weather patterns, including natural disasters such as hurricanes, tsunamis and earthquakes; • strength of the U.S. dollar which may reduce in-bound international travel and encourage out-bound international travel; • adverse effects of a downturn in the lodging industry; and • risks generally associated with the ownership of hotel properties and real estate, as we discuss in more detail below.
However, our board of trustees may by resolution elect to opt in to the business combination provisions of the MGCL and we may, by amendment to our bylaws, opt in to the control share provisions of the MGCL in the future. 22 Additionally, Title 8, Subtitle 3 of the MGCL permits our board of trustees, without shareholder approval and regardless of what is currently provided in our declaration of trust or bylaws, to implement certain takeover defenses, such as a classified board.
However, our board of trustees may by resolution elect to opt in to the business combination provisions of the MGCL and we may, by amendment to our bylaws, opt in to the control share provisions of the MGCL in the future. 23 Additionally, Title 8, Subtitle 3 of the MGCL permits our board of trustees, without shareholder approval and regardless of what is currently provided in our declaration of trust or bylaws, to implement certain takeover defenses, such as a classified board.
If states and localities in which we own material amounts of property or conduct material amounts of business raise their income and property tax rates or amend their tax regimes in a manner that increases our state and local tax liabilities, we would have less cash available for distribution to our shareholders and the market price of our shares could be adversely affected.
If states and localities in which we own material amounts of property or conduct material amounts of business raise their transfer taxes, income or property tax rates or amend their tax regimes in a manner that increases our state and local tax liabilities, we would have less cash available for distribution to our shareholders and the market price of our shares could be adversely affected.
These requirements prevent shareholders from removing trustees except for cause and with a substantial affirmative vote and from replacing trustees with their own nominees and may prevent a change in control of our company that is in the best interests of our shareholders. 23 The ability of our board of trustees to change our major policies without the consent of shareholders may not be in our shareholders' interest.
These requirements prevent shareholders from removing trustees except for cause and with a substantial affirmative vote and from replacing trustees with their own nominees and may prevent a change of control of our company that is in the best interests of our shareholders. 24 The ability of our board of trustees to change our major policies without the consent of shareholders may not be in our shareholders' interest.
Any income from a properly identified hedging transaction we enter into to manage risk of interest rate changes, price changes or currency fluctuations with respect to borrowings made or to be made to acquire or carry real estate assets does not constitute “gross income” for purposes of the 75 percent or 95 percent gross income tests.
Any income from a properly identified hedging transaction we enter into to manage risk of interest rate changes, price changes or currency fluctuations with respect to borrowings made or to be made to acquire or carry real estate assets does not constitute "gross income" for purposes of the 75 percent or 95 percent gross income tests.
To maintain our qualification as a REIT, we must satisfy two gross income tests, under which specified percentages of our gross income must be derived from certain sources, such as “rents from real property.” Rents paid to our Operating Partnership by our TRS lessees pursuant to the lease of our hotel properties constitute substantially all of our gross income.
To maintain our qualification as a REIT, we must satisfy two gross income tests, under which specified percentages of our gross income must be derived from certain sources, such as "rents from real property." Rents paid to our Operating Partnership by our TRS lessees pursuant to the lease of our hotel properties constitute substantially all of our gross income.
Overall, no more than 20 percent of the value of a REIT's assets may consist of stock or securities of one or more TRSs. In addition, the TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation.
Overall, no more than 25 percent of the value of a REIT's assets may consist of stock or securities of one or more TRSs. In addition, the TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation.
We have obtained, and we may in the future obtain, one or more forms of interest rate protection — in the form of swap agreements, interest rate cap contracts or similar agreements that are consistent with our intention to remain qualified as a REIT — to “hedge” against the possible negative effects of interest rate fluctuations.
We have obtained, and we may in the future obtain, one or more forms of interest rate protection — in the form of swap agreements, interest rate cap contracts or similar agreements that are consistent with our intention to remain qualified as a REIT — to "hedge" against the possible negative effects of interest rate fluctuations.
The delay in approving a budget and continuing appropriation legislation to fund the federal government's operations caused many federal agencies to cease or curtail some activities during the fourth quarter of 2013 and for an even longer period of time beginning in the fourth quarter of 2018.
The delay in approving a budget and continuing appropriation legislation to fund the federal government's operations caused many federal agencies to cease or curtail some activities during the fourth quarter of 2013 and for an even longer period of time beginning in the fourth quarter of 2018 and the third quarter of 2025.
We believe that the aggregate value of the stock and securities of our TRSs is and will continue to be less than 20 percent of the value of our total assets (including our TRS stock and securities). Furthermore, we will monitor the value of our respective investments in our TRSs for the purpose of ensuring compliance with TRS ownership limitations.
We believe that the aggregate value of the stock and securities of our TRSs is and will continue to be less than 25 percent of the value of our total assets (including our TRS stock and securities). Furthermore, we will monitor the value of our respective investments in our TRSs for the purpose of ensuring compliance with TRS ownership limitations.
Our existing mortgage loan agreements contain, and mortgage loan agreements we may enter into in the future may contain, cash trap provisions that may be triggered if the performance of the hotels securing the loans declines below a threshold.
Our existing mortgage loan agreement contains, and mortgage loan agreements we may enter into in the future may contain, cash trap provisions that may be triggered if the performance of the hotels securing the loans declines below a threshold.
States and localities may seek additional sources of revenue to reduce budget deficits and otherwise improve their financial condition or provide more services, they may, among other steps, raise income and property tax rates and/or amend their tax regimes to eliminate for state income tax purposes the favorable tax treatment REITs enjoy for U.S. federal income tax purposes.
States and localities may seek additional sources of revenue to reduce budget deficits and otherwise improve their financial condition or provide more services, they may, among other steps, increase transfer taxes, raise income and property tax rates and/or amend their tax regimes to eliminate for state income tax purposes the favorable tax treatment REITs enjoy for U.S. federal income tax purposes.
Certain provisions of the Maryland General Corporation Law (the "MGCL") applicable to Maryland real estate investment trusts may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide our common shareholders with the opportunity to realize a premium over the then-prevailing market price of such shares, including: • “business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested shareholder” (defined generally as any person who beneficially owns 10 percent or more of the voting power of our shares) or an affiliate of any interested shareholder for five years after the most recent date on which the shareholder becomes an interested shareholder, and thereafter imposes special appraisal rights and special shareholder voting requirements on these combinations; and • “control share” provisions that provide that our “control shares” (defined as shares which, when aggregated with other shares controlled by the shareholder, entitle the shareholder to exercise one of three increasing ranges of voting power in electing trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by our shareholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
Certain provisions of the Maryland General Corporation Law (the "MGCL") applicable to Maryland real estate investment trusts may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide our common shareholders with the opportunity to realize a premium over the then-prevailing market price of such shares, including: • "business combination" provisions that, subject to limitations, prohibit certain business combinations between us and an "interested shareholder" (defined generally as any person who beneficially owns 10 percent or more of the voting power of our shares) or an affiliate of any interested shareholder for five years after the most recent date on which the shareholder becomes an interested shareholder, and thereafter imposes special appraisal rights and special shareholder voting requirements on these combinations; and • "control share" provisions that provide that our "control shares" (defined as shares which, when aggregated with other shares controlled by the shareholder, entitle the shareholder to exercise one of three increasing ranges of voting power in electing trustees) acquired in a "control share acquisition" (defined as the direct or indirect acquisition of ownership or control of "control shares") have no voting rights except to the extent approved by our shareholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
There is refinancing risk associated with our debt. Our typical debt contains limited principal amortization; therefore, the vast majority of the principal must be repaid at the maturity of the loan in a so-called “balloon payment.” At the maturity of these loans, assuming we do not have sufficient funds to repay the debt, we will need to refinance the debt.
There is refinancing risk associated with our debt. Our typical debt contains limited principal amortization; therefore, the vast majority of the principal must be repaid at the maturity of the loan in a so-called "balloon payment." At the maturity of these loans, assuming we do not have sufficient funds to repay the debt, we will need to refinance the debt.
Moreover, even if the “protective” TRS elections were to be effective in the event of the failure of our subsidiary REITs to maintain their qualifications as REITs, such subsidiary REITs would be subject to U.S. federal income tax and we cannot assure you that we would not fail to satisfy the requirement that not more than 20 percent of the value of our total assets may be represented by the securities of one or more TRSs.
Moreover, even if the "protective" TRS elections were to be effective in the event of the failure of our subsidiary REITs to maintain their qualifications as REITs, such subsidiary REITs would be subject to U.S. federal income tax and we cannot assure you that we would not fail to satisfy the requirement that not more than 25 percent of the value of our total assets may be represented by the securities of one or more TRSs.
Risks Related to Debt and Financing Debt service obligations could adversely affect our overall operating results, may require us to sell hotel properties, may jeopardize our qualification as a REIT and could adversely affect our ability to make distributions to our shareholders and the market price of our common shares.
Risks Related to Debt, Financing and Future Securities Issuances Debt service obligations could adversely affect our overall operating results, may require us to sell hotel properties, may jeopardize our qualification as a REIT and could adversely affect our ability to make distributions to our shareholders and the market price of our common shares.
If we failed to meet either the asset or gross income tests, we would likely lose our REIT qualification for U.S. federal income tax purposes. Additionally, if our hotel managers do not qualify as “eligible independent contractors,” we will fail to qualify as a REIT.
If we failed to meet either the asset or gross income tests, we would likely lose our REIT qualification for U.S. federal income tax purposes. Additionally, if our hotel managers do not qualify as "eligible independent contractors," we will fail to qualify as a REIT.
Federal Income Tax Risk Factors • Risks related to potential failures to qualify as a REIT, whether by us or by LaSalle prior to the merger • Risks related to REIT requirements • Risks related to distributions of REIT taxable income • Risks related to our TRS and TRS lessees • Risks related to our Operating Partnership • Risks related to taxation on dividends • Risks related to subsidiary REITs • Risks related to revocation of our REIT qualification • Risks related to share ownership restrictions • Risks related to prohibited transactions tax • Risks related to legislative or regulatory tax changes Risks Related to Our Business and Properties We depend on the efforts and expertise of our executive officers and would be adversely affected by the loss of their services.
Federal Income Tax Risk Factors • Risks related to potential failures to qualify as a REIT • Risks related to REIT requirements • Risks related to distributions of REIT taxable income • Risks related to our TRS and TRS lessees • Risks related to our Operating Partnership • Risks related to taxation on dividends • Risks related to subsidiary REITs • Risks related to revocation of our REIT qualification • Risks related to share ownership restrictions • Risks related to prohibited transactions tax • Risks related to legislative or regulatory tax changes Risks Related to Our Business and Properties We depend on the efforts and expertise of our executive officers and would be adversely affected by the loss of their services.
Moreover, some of these Internet travel intermediaries attempt to offer hotel rooms as a commodity by increasing the importance of price and general quality indicators (such as “three-star downtown hotel”), at the expense of brand identification, quality of product or service.
Moreover, some of these Internet travel intermediaries attempt to offer hotel rooms as a commodity by increasing the importance of price and general quality indicators (such as "three-star downtown hotel"), at the expense of brand identification, quality of product or service.
In addition, our mortgage loan agreements contain restrictions (including cash management provisions) that may under circumstances specified in the loan agreements prohibit our subsidiaries that own our hotels from making distributions or paying dividends, repaying loans to us or other subsidiaries or transferring any of their assets to us or another subsidiary which could adversely affect our ability to make distributions to our shareholders.
In addition, our mortgage loan agreement contains restrictions (including cash management provisions) that may under circumstances specified in the loan agreement prohibit our subsidiaries that own our hotels from making distributions or paying dividends, repaying loans to us or other subsidiaries or transferring any of their assets to us or another subsidiary which could adversely affect our ability to make distributions to our shareholders.
For example, as a result of the COVID-19 pandemic and subsequent government mandates and health official recommendations and restrictions such as quarantines, restrictions on travel, “shelter in place” rules and restrictions on the types of business that could continue to operate, hotel demand was nearly eliminated during the second quarter of 2020 and occupancy levels reached historic lows.
For example, as a result of the COVID-19 pandemic and subsequent government mandates and health official recommendations and restrictions such as quarantines, restrictions on travel, "shelter in place" rules and restrictions on the types of business that could continue to operate, hotel demand was nearly eliminated during the second quarter of 2020 and occupancy levels reached historic lows.
In order for such rent to qualify as “rents from real property” for purposes of the gross income tests, the leases must be respected as true leases for U.S. federal income tax purposes and not be treated as service contracts, joint ventures or some other type of arrangement.
In order for such rent to qualify as "rents from real property" for purposes of the gross income tests, the leases must be respected as true leases for U.S. federal income tax purposes and not be treated as service contracts, joint ventures or some other type of arrangement.
Each of the hotel management companies that enter into a management contract with our TRS lessees must qualify as an “eligible independent contractor” under the REIT rules in order for the rent paid to us by our TRS lessees to be qualifying income for purposes of the REIT gross income tests.
Each of the hotel management companies that enter into a management contract with our TRS lessees must qualify as an "eligible independent contractor" under the REIT rules in order for the rent paid to us by our TRS lessees to be qualifying income for purposes of the REIT gross income tests.
So long as any TRS lessee qualifies as a TRS, it will not be treated as a “related party tenant” with respect to our properties that are managed by an independent hotel management company that qualifies as an “eligible independent contractor.” We believe that our TRSs qualify to be treated as TRSs for U.S. federal income tax purposes, but there can be no assurance that the IRS will not challenge the status of a TRS for U.S. federal income tax purposes or that a court would not sustain such a challenge.
So long as any TRS lessee qualifies as a TRS, it will not be treated as a "related party tenant" with respect to our properties that are managed by an independent hotel management company that qualifies as an "eligible independent contractor." We believe that our TRSs qualify to be treated as TRSs for U.S. federal income tax purposes, but there can be no assurance that the IRS will not challenge the status of a TRS for U.S. federal income tax purposes or that a court would not sustain such a challenge.
Rent paid by a lessee that is a “related party tenant” of ours will not be qualifying income for purposes of the two gross income tests applicable to REITs. We lease all of our hotels to our TRS lessees.
Rent paid by a lessee that is a "related party tenant" of ours will not be qualifying income for purposes of the two gross income tests applicable to REITs. We lease all of our hotels to our TRS lessees.
In addition, in general, no more than 5 percent of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, no more than 20 percent of the value of our total assets can be represented by the securities of one or more TRSs and no more than 25 percent of our assets can be represented by debt of "publicly offered REITs" (i.e., REITs that are required to file annual and periodic reports with the SEC under the Exchange Act) that is not secured by real property or interests in real property.
In addition, in general, no more than 5 percent of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, no more than 25 percent (20 percent for taxable years beginning before January 1, 2026) of the value of our total assets can be represented by the securities of one or more TRSs and no more than 25 percent of our assets can be represented by debt of "publicly offered REITs" (i.e., REITs that are required to file annual and periodic reports with the SEC under the Exchange Act) that is not secured by real property or interests in real property.
The terms of our debt may restrict our ability to engage in transactions that we believe would otherwise be in the best interests of our shareholders. Our existing mortgage loan agreements contain, and mortgage loan agreements we may enter into in the future may contain, “cash trap” provisions that could limit our ability to make distributions to our shareholders.
The terms of our debt may restrict our ability to engage in transactions that we believe would otherwise be in the best interests of our shareholders. Our existing mortgage loan agreement contains, and mortgage loan agreements we may enter into in the future may contain, "cash trap" provisions that could limit our ability to make distributions to our shareholders.
For taxable years beginning before January 1, 2026, non-corporate taxpayers may deduct up to 20 percent of certain pass-through business income, including “qualified REIT dividends” (generally, dividends received by a REIT shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S. federal income tax rate of 29.6 percent on such income.
Non-corporate taxpayers may deduct up to 20 percent of certain pass-through business income, including "qualified REIT dividends" (generally, dividends received by a REIT shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S. federal income tax rate of 29.6 percent on such income.
Our mortgage loans are secured by either single property first mortgage liens or leasehold interests under the ground leases on the applicable hotel. If we default on a secured loan, the applicable lender will be able to foreclose on the property pledged to secure the loan.
Our mortgage loan is, and mortgage loans we may have in the future may be, secured by either single property first mortgage liens or leasehold interests under the ground leases on the applicable hotel. If we default on a secured loan, the applicable lender will be able to foreclose on the property pledged to secure the loan.
In addition, in periods of weak demand, as may occur during a general economic recession, profitability is adversely affected by the relatively high fixed costs of operating upper-upscale hotels and resorts. 11 Our TRS lessee structure subjects us to the risk of increased hotel operating expenses.
This competition could reduce occupancy levels and RevPAR at our hotels. In addition, in periods of weak demand, as may occur during a general economic recession, profitability is adversely affected by the relatively high fixed costs of operating upper-upscale hotels and resorts. Our TRS lessee structure subjects us to the risk of increased hotel operating expenses.
Uninsured and underinsured losses could result in a loss of capital. We maintain comprehensive property insurance on each of our hotel properties, including liability, fire and extended coverage, of the type and amount we believe are customarily obtained for or by hotel owners. There are no assurances that coverage will remain available at reasonable rates.
We maintain comprehensive property insurance on each of our hotel properties, including liability, fire and extended coverage, of the type and amount we believe are customarily obtained for or by hotel owners. There are no assurances that coverage will remain available at reasonable rates.
Our hotels may be subject to additional costs to manage consumer expectations for sustainable buildings and hotel operations. There can be no assurance that climate change will not have a material adverse effect on our hotels, operating results or cash flows.
Climate change may also affect our business by causing a shift in consumer preferences for sustainable travel. Our hotels may be subject to additional costs to manage consumer expectations for sustainable buildings and hotel operations. There can be no assurance that climate change will not have a material adverse effect on our hotels, operating results or cash flows.
In order to avoid any actual or perceived conflicts of interest with our trustees, officers or employees, we have adopted a conflicts of interest policy to specifically address some of the potential conflicts relating to our activities.
Our conflicts of interest policy may not adequately address all of the conflicts of interest that may arise with respect to our activities. In order to avoid any actual or perceived conflicts of interest with our trustees, officers or employees, we have adopted a conflicts of interest policy to specifically address some of the potential conflicts relating to our activities.
The aggregate liquidation preference with respect to the outstanding preferred shares is approximately $690.0 million as of December 31, 2024, and aggregate annual dividends on our outstanding preferred shares of approximately $42.5 million. Holders of any of these preferred shares are entitled to cumulative dividends before any dividends may be declared or set aside on our common shares.
The aggregate liquidation preference with respect to the outstanding preferred shares is approximately $676.7 million as of December 31, 2025, and aggregate annual dividends on our outstanding preferred shares of approximately $41.7 million. Holders of any of these preferred shares are entitled to cumulative dividends before any dividends may be declared or set aside on our common shares.
Accordingly, our shareholders will have limited control over changes in our policies and those changes could adversely affect our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders. Further issuances of equity securities may be dilutive to current shareholders.
Accordingly, our shareholders will have limited control over changes in our policies and those changes could adversely affect our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders.
We can make no assurances that future laws or regulations will not impose material environmental liabilities or that the current environmental condition of our hotel properties will not be affected by the condition of the properties in the vicinity of our hotel properties (such as the presence of leaking underground storage tanks) or by third parties unrelated to us. 19 Compliance with the Americans with Disabilities Act could require us to incur substantial costs.
We can make no assurances that future laws or regulations will not impose material environmental liabilities or that the current environmental condition of our hotel properties will not be affected by the condition of the properties in the vicinity of our hotel properties (such as the presence of leaking underground storage tanks) or by third parties unrelated to us.
While our operations have significantly improved, and COVID-19 is now endemic, future pandemics of other diseases (whether due to novel sources or the re-emergent of previous sources) could occur, which could have a material adverse effect on our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders. 18 Terrorist attacks or changes in terror alert levels could adversely affect travel and hotel demand.
While our operations have significantly improved, and COVID-19 is now endemic, future pandemics of other diseases (whether due to novel sources or the re-emergent of previous sources) could occur, which could have a material adverse effect on our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders. 19 Terrorism, terror alerts, rumors or threats of war and other disruptive geopolitical activity could adversely affect travel and hotel demand.
These actions could have the effect of reducing our income and amounts available for distribution to our shareholders. 26 To maintain our qualification as a REIT and avoid corporate income tax and excise tax, we must distribute annually a certain percentage of our REIT taxable income, which could require us to raise capital on terms or sell properties at prices or at times that are unfavorable.
To maintain our qualification as a REIT and avoid corporate income tax and excise tax, we must distribute annually a certain percentage of our REIT taxable income, which could require us to raise capital on terms or sell properties at prices or at times that are unfavorable.
In particular, we must ensure that at the end of each calendar quarter, at least 75 percent of the value of our assets consists of cash, cash items, government securities and qualified real estate assets.
Thus, compliance with the REIT requirements may hinder our performance. 26 In particular, we must ensure that at the end of each calendar quarter, at least 75 percent of the value of our assets consists of cash, cash items, government securities and qualified real estate assets.
Such issuances could result in dilution of our shareholders' equity interests. Future offerings of debt securities or preferred shares, which would be senior to our common shares upon liquidation and for the purpose of distributions, may cause the market price of our common shares to decline.
Future offerings of debt securities or preferred shares, which would be senior to our common shares upon liquidation and for the purpose of distributions, may cause the market price of our common shares to decline.
A period of economic weakness would likely have an adverse impact on our revenues and negatively affect our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders.
A period of economic weakness would likely have an adverse impact on our revenues and negatively affect our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders. 15 Our operating results and ability to make distributions to our shareholders may be adversely affected by various operating risks common to the lodging industry.
Under the ADA, all public accommodations must meet various federal requirements related to access and use by disabled persons. While we believe that our hotels substantially comply with these requirements, a determination to the contrary could require removal of access barriers and non-compliance could result in litigation costs, costs to remediate deficiencies, U.S. government fines or damages to private litigants.
While we believe that our hotels substantially comply with these requirements, a determination to the contrary could require removal of access barriers and non-compliance could result in litigation costs, costs to remediate deficiencies, U.S. government fines or damages to private litigants.
The agreements that we have entered into with our executive officers provide benefits under certain circumstances that could make it more difficult or expensive for us to terminate these officers and may prevent or deter a change of control of our company that would otherwise be in the interest of our shareholders.
The agreements that we have entered into with our executive officers provide benefits under certain circumstances that could make it more difficult or expensive for us to terminate these officers and may prevent or deter a change of control of our company that would otherwise be in the interest of our shareholders. 25 If we fail to maintain an effective system of internal controls, we may not be able to accurately determine our financial results or prevent fraud.
Attribution rules in the Code determine if any individual or entity actually or constructively owns our shares under this requirement. Additionally, at least 100 persons must beneficially own our shares during at least 335 days of each taxable year.
Attribution rules in the Code determine if any individual or entity actually or constructively owns our shares under this requirement. Additionally, at least 100 persons must beneficially own our shares during at least 335 days of each taxable year. To help insure that we meet these tests, our declaration of trust restricts the acquisition and ownership of our shares.
The resolution of labor disputes or new or re-negotiated labor contracts could lead to increased labor costs, either by increases in wages or benefits or by changes in work rules that raise hotel operating costs.
We also may incur increased legal costs and indirect labor costs as a result of contract disputes or other events. The resolution of labor disputes or new or re-negotiated labor contracts could lead to increased labor costs, either by increases in wages or benefits or by changes in work rules that raise hotel operating costs.
As bookings through these intermediaries increase, these intermediaries may be able to obtain higher commissions, reduced room rates or other significant contract concessions from the management companies that operate the hotels we own and acquire.
Some of our hotel rooms are booked through Internet travel intermediaries, such as Travelocity.com, Expedia.com, Booking.com and Priceline.com. As bookings through these intermediaries increase, these intermediaries may be able to obtain higher commissions, reduced room rates or other significant contract concessions from the management companies that operate the hotels we own and acquire.
For example, the terms of some management contracts may restrict our ability to sell a property unless the purchaser is not a competitor of the manager and assumes the related management contract and meets specified other conditions which may preclude us from taking actions that would otherwise be in our best interest or could cause us to incur substantial expense.
For example, the terms of some management contracts may restrict our ability to sell a property unless the purchaser is not a competitor of the manager and assumes the related management contract and meets specified other conditions which may preclude us from taking actions that would otherwise be in our best interest or could cause us to incur substantial expense. 11 We invest primarily in upper-upscale hotel properties, which, as a highly competitive sector and generally subject to greater volatility than most other lodging sectors, could negatively affect our profitability.
Also, the failure of our Operating Partnership to qualify as a partnership would cause it to become subject to federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its partners, including us.
Also, the failure of our Operating Partnership to qualify as a partnership would cause it to become subject to federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its partners, including us. 28 If our TRSs fail to qualify as TRSs for U.S. federal income tax purposes or our hotel managers do not qualify as "eligible independent contractors," we would fail to qualify as a REIT.
We may be subject to adverse legislative or regulatory tax changes that could increase our tax liability, reduce the tax benefits of our REIT structure compared to non-REIT corporations, reduce our operating flexibility and reduce the market price of our shares.
Consequently, we may choose not to engage in certain sales of real property or may conduct such sales through a TRS. 30 We may be subject to adverse legislative or regulatory tax changes that could increase our tax liability, reduce the tax benefits of our REIT structure compared to non-REIT corporations, reduce our operating flexibility and reduce the market price of our shares.
Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. We may in the future discover areas of our internal controls that need improvement.
As a result, our shareholders could lose confidence in our financial results, which could harm our business and the value of our common shares. Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. We may in the future discover areas of our internal controls that need improvement.
ESAs are intended to evaluate information regarding the environmental condition of the surveyed property and surrounding properties based generally on visual observations, interviews and certain publicly available databases.
We have obtained Phase I ESAs on our hotel properties and expect to do so for hotel properties we acquire in the future. ESAs are intended to evaluate information regarding the environmental condition of the surveyed property and surrounding properties based generally on visual observations, interviews and certain publicly available databases.
The performance of the lodging industry has historically been closely linked to the performance of the general economy and, specifically, growth in U.S. Gross Domestic Product ("GDP"). It is also sensitive to business and personal discretionary spending levels. Declines in corporate travel budgets and consumer demand due to adverse general economic conditions, such as declines in U.S.
Risks Related to the Lodging Industry Economic conditions may reduce demand for hotel properties and adversely affect hotel profitability. The performance of the lodging industry has historically been closely linked to the performance of the general economy and, specifically, growth in U.S. Gross Domestic Product ("GDP"). It is also sensitive to business and personal discretionary spending levels.
To help insure that we meet these tests, our declaration of trust restricts the acquisition and ownership of our shares. 29 Our declaration of trust, with certain exceptions, authorizes our board of trustees to take such actions as are necessary and desirable to preserve our qualification as a REIT.
Our declaration of trust, with certain exceptions, authorizes our board of trustees to take such actions as are necessary and desirable to preserve our qualification as a REIT.
Therefore, a downturn in the lodging industry, in general, and markets (especially West Coast major gateway metropolitan markets) in which we operate, in particular, would have a material adverse effect on our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders. 10 If we cannot obtain financing, our growth will be limited.
Our primary business is hotel-related. Therefore, a downturn in the lodging industry, in general, and markets in which we operate, in particular, would have a material adverse effect on our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders.
In order to meet these tests, we may be required to forego investments we might otherwise make. Thus, compliance with the REIT requirements may hinder our performance.
In order to meet these tests, we may be required to forego investments we might otherwise make.
As of December 31, 2024, 4,400,000 shares of our 6.375% Series E Cumulative Redeemable Preferred Shares (the “Series E Preferred Shares”), 6,000,000 shares of our 6.30% Series F Cumulative Redeemable Preferred Shares (the “Series F Preferred Shares”), 9,200,000 shares of our 6.375% Series G Cumulative Redeemable Preferred Shares (the “Series G Preferred Shares”) and 8,000,000 shares of our 5.70% Series H Cumulative Redeemable Preferred Shares (the “Series H Preferred Shares”) were issued and outstanding.
As of December 31, 2025, 4,265,374 shares of our 6.375% Series E Cumulative Redeemable Preferred Shares (the "Series E Preferred Shares"), 5,890,475 shares of our 6.30% Series F Cumulative Redeemable Preferred Shares (the "Series F Preferred Shares"), 9,085,949 shares of our 6.375% Series G Cumulative Redeemable Preferred Shares (the "Series G Preferred Shares") and 7,827,164 shares of our 5.70% Series H Cumulative Redeemable Preferred Shares (the "Series H Preferred Shares") were issued and outstanding.
In an effort to mitigate the impact of climate change, our hotels could become subject to increased governmental regulations mandating energy efficiency standards, the usage of sustainable energy sources and updated equipment specifications, which may require additional capital investments or increased operating costs. Climate change may also affect our business by causing a shift in consumer preferences for sustainable travel.
In an effort to mitigate the impact of climate change, our hotels could become subject to increased governmental regulations (whether federal, state, county or local) mandating energy efficiency standards, the usage of sustainable energy sources, updated equipment specifications, additional disclosure requirements (and potentially additional monitoring systems) and limits on carbon emissions, which may require additional capital investments or increased operating costs.
In addition, holders of these preferred shares have the right to elect two additional trustees to our board of trustees whenever dividends on the preferred shares are in arrears for six or more quarterly dividends, whether or not consecutive. 24 The change of control conversion and redemption features of the Series E Preferred Shares, the Series F Preferred Shares, the Series G Preferred Shares and the Series H Preferred Shares may make it more difficult for a party to take over our company or discourage a party from taking over our company.
The change of control conversion and redemption features of the Series E Preferred Shares, the Series F Preferred Shares, the Series G Preferred Shares and the Series H Preferred Shares may make it more difficult for a party to take over our company or discourage a party from taking over our company.
Third parties may be permitted by law to seek recovery from owners or operators for property damage and/or personal injury associated with exposure to contaminants, including, but not limited to, petroleum products, hazardous or toxic substances and asbestos fibers. 21 We have obtained Phase I ESAs on our hotel properties and expect to do so for hotel properties we acquire in the future.
These operations create a potential for the release of petroleum products or other hazardous or toxic substances. Third parties may be permitted by law to seek recovery from owners or operators for property damage and/or personal injury associated with exposure to contaminants, including, but not limited to, petroleum products, hazardous or toxic substances and asbestos fibers.
The rules also impose a 100 percent excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm's-length basis. 27 Our TRSs are subject to applicable U.S. federal, state and local income tax on their taxable income, and their after-tax net income will be available for distribution to us, but is not required to be distributed to us.
Our TRSs are subject to applicable U.S. federal, state and local income tax on their taxable income, and their after-tax net income will be available for distribution to us, but is not required to be distributed to us.
Our TRS lessees engage hotel managers pursuant to management contracts and pay the managers fees for managing the hotels. The TRS lessees receive all the operating profit or losses of the hotels.
Our hotel properties have different economic characteristics than many other real estate assets and a hotel REIT is structured differently than many other types of REITs. Our TRS lessees engage hotel managers pursuant to management contracts and pay the managers fees for managing the hotels. The TRS lessees receive all the operating profit or losses of the hotels.
We expect to issue additional common shares or preferred shares to raise the capital necessary to finance hotel acquisitions or improvements, refinance debt or pay portions of future dividends. In addition, we may issue units in our Operating Partnership, which are redeemable on a one-for-one basis for our common shares, to acquire hotels.
We expect to issue additional common shares or preferred shares or issue additional debt securities convertible into our common shares to raise the capital necessary to finance hotel acquisitions or improvements, refinance debt or pay portions of future dividends.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Factors—Our hotel managers and we rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.”
Biggest changeRisk Factors—Our hotel managers and we rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business." 31
The MSP and we developed a cybersecurity incident response plan that sets forth roles and responsibilities for the identification, assessment, triage, communication and resolution of cybersecurity incidents. 30 In addition, the MSP performs facility and system penetration tests, compromise assessments and security maturity assessments of our corporate and operational networks.
The MSP and we developed a cybersecurity incident response plan that sets forth roles and responsibilities for the identification, assessment, triage, communication and resolution of cybersecurity incidents. In addition, the MSP performs facility and system penetration tests, compromise assessments and security maturity assessments of our corporate and operational networks.
Many of our hotel managers and franchisors carry cyber insurance policies to protect and offset a portion of potential costs incurred from a security breach. Additionally, we currently have cyber insurance policies to provide supplemental coverage above the coverage carried by our hotel managers and franchisors. For additional information about cybersecurity risk, see “Item 1A.
Many of our hotel managers and franchisors carry cyber insurance policies to protect and offset a portion of potential costs incurred from a security breach. Additionally, we currently have cyber insurance policies to provide supplemental coverage above the coverage carried by our hotel managers and franchisors. For additional information about cybersecurity risk, see "Item 1A.
As of December 31, 2024, no risk from cybersecurity threats, including as a result of any previous cybersecurity incident, has materially affected our business, results of operations or financial condition.
As of December 31, 2025, no risk from cybersecurity threats, including as a result of any previous cybersecurity incident, has materially affected our business, results of operations or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe majority of our management agreements are terminable at will by us upon payment of a termination fee and some are terminable upon sale of the property. Most of the agreements also provide us the ability to terminate based on failure to achieve defined operating performance thresholds.
Biggest changeThe remaining terms of our management agreements are up to eight years, not including renewals, and up to 27 years, including renewals. • Ability to Terminate. The majority of our management agreements are terminable at will by us. Some of our management agreements require the payment of a termination fee and some are terminable upon sale of the property.
Each manager supervises all managerial and other hotel employees, reviews hotel operation and maintenance, prepares reports, budgets and projections, and provides other administrative and accounting support services for the hotel. Under certain management agreements, we have approval rights over the hiring of certain key management personnel at the hotel. • Chain Services.
Each manager supervises all managerial and other hotel employees, reviews hotel operation and maintenance, prepares reports, budgets and projections, and provides other administrative and accounting support services for the hotel. Under certain management agreements, we have approval rights over the hiring of certain key executive management personnel at the hotel. • Chain Services.
Our management agreements generally require the managers to prepare an annual estimate of the expenditures necessary for major capital repairs, alterations, improvements, renewals and replacements to the structural, mechanical, electrical, heating, ventilating, air conditioning, plumbing and vertical transportation elements of the hotels.
Our management agreements generally require the managers to prepare an annual estimate of the expenditures necessary for major capital repairs, alterations, improvements, renewals and replacements to the structural, mechanical, electrical, heating, ventilating, air conditioning, plumbing and vertical transportation elements of the hotels for our review and approval.
The hotels with non-terminable management agreements and their respective expiration dates (assuming contracts with unilateral extension options of the management company are exercised) are as follows: Property Expiration Date The Westin Michigan Avenue Chicago December 2026 The Westin Copley Place, Boston December 2028 Mondrian Los Angeles May 2041 The Westin San Diego Gaslamp Quarter April 2051 W Los Angeles - West Beverly Hills August 2052 • Operational Services.
The hotels with non-terminable management agreements and their respective expiration dates (assuming contracts with unilateral extension options of the management company are exercised) are as follows: Property Expiration Date The Westin Copley Place, Boston December 2028 Mondrian Los Angeles May 2041 The Westin San Diego Gaslamp Quarter April 2051 W Los Angeles - West Beverly Hills August 2052 • Operational Services.
Some of our management agreements provide for the payment of incentive management fees. Generally, incentive management fees are 10% to 20% of net operating income above a specified return on project costs or as a percentage of net operating income above various net operating income thresholds.
Some of our management agreements provide for the payment of incentive management fees. Generally, incentive management fees are 10% to 20% of net operating income above a specified return on project costs or as a percentage of net operating income above various net operating income thresholds. Some of our incentive fees are subject to a limit. • Terms.
W Boston June 8, 2011 Boston, MA 238 43. The Hotel Zags August 28, 2013 Portland, OR 174 44. The Nines, a Luxury Collection Hotel, Portland July 17, 2014 Portland, OR 331 45. Newport Harbor Island Resort June 23, 2022 Newport, RI 258 46.
W Boston June 8, 2011 Boston, MA 238 41. The Hotel Zags August 28, 2013 Portland, OR 174 42. The Nines, a Luxury Collection Hotel, Portland July 17, 2014 Portland, OR 331 43. Newport Harbor Island Resort June 23, 2022 Newport, RI 258 44.
Hyatt Regency Boston Harbor (1) November 30, 2018 Boston, MA 270 39. Revere Hotel Boston Common December 18, 2014 Boston, MA 356 40. The Liberty, a Luxury Collection Hotel, Boston (1) (3) November 30, 2018 Boston, MA 298 41. The Westin Copley Place, Boston (1) November 30, 2018 Boston, MA 803 42.
Hyatt Regency Boston Harbor (1) November 30, 2018 Boston, MA 270 37. Revere Hotel Boston Common December 18, 2014 Boston, MA 356 38. The Liberty, a Luxury Collection Hotel, Boston (1) (3) November 30, 2018 Boston, MA 298 39. The Westin Copley Place, Boston (1) November 30, 2018 Boston, MA 803 40.
(4) This property is subject to mortgage debt. 32 Hotel Managers and Hotel Management Agreements We are a party to hotel management agreements with Davidson Hospitality Group, HEI Hotels and Resorts, Highgate, Kimpton Hotels and Restaurants, Marriott International, Noble House Hotels & Resorts, Pyramid Global Hospitality, Sage Hospitality, sbe Hotel Group, SH Hotels & Resorts, Springboard Hospitality and Viceroy Hotel Group.
Hotel Managers and Hotel Management Agreements We are a party to hotel management agreements with Davidson Hospitality Group, HEI Hotels and Resorts, Highgate, Kimpton Hotels and Restaurants, Marriott International, Noble House Hotels & Resorts, Pyramid Global Hospitality, Sage Hospitality, sbe Hotel Group, SH Hotels & Resorts, Springboard Hospitality and Viceroy Hotel Group.
Skamania Lodge November 3, 2010 Stevenson, WA 271 Total number of guest rooms 11,933 ______________________ (1) This property is subject to a long-term ground, air rights or hotel lease. (2) The restaurant facility at this property is subject to a ground lease . (3) We own a 99.99% controlling interest in this property.
Skamania Lodge November 3, 2010 Stevenson, WA 271 Total number of guest rooms 11,052 ______________________ (1) This property is subject to a long-term ground, air rights or hotel lease. (2) One of the restaurant facilities at this property is subject to a ground lease .
Item 2. Properties. We lease office space to use as our headquarters located at 4747 Bethesda Avenue, Suite 1100, Bethesda, Maryland 20814. As of December 31, 2024, we owned interests in 46 hotels with a total of 11,933 guest rooms, all of which are consolidated in our financial statements.
Item 2. Properties. We lease office space to use as our headquarters located at 4747 Bethesda Avenue, Suite 1100, Bethesda, Maryland 20814. As of December 31, 2025, we owned interests in 44 hotels with a total of 11,052 guest rooms, all of which are consolidated in our financial statements. The following table sets forth certain information about our hotels.
Hotel Zeppelin San Francisco (1) May 22, 2014 San Francisco, CA 196 24. Hotel Zetta San Francisco April 4, 2012 San Francisco, CA 116 25. Chaminade Resort & Spa November 30, 2018 Santa Cruz, CA 156 26. George Hotel November 30, 2018 Washington, DC 139 27. Hotel Monaco Washington DC (1) September 9, 2010 Washington, DC 184 28.
Hotel Zephyr Fisherman's Wharf (1) December 9, 2013 San Francisco, CA 361 22. Hotel Zeppelin San Francisco (5) May 22, 2014 San Francisco, CA 196 23. Hotel Zetta San Francisco April 4, 2012 San Francisco, CA 116 24. Chaminade Resort & Spa November 30, 2018 Santa Cruz, CA 156 25. George Hotel November 30, 2018 Washington, DC 139 26.
Inn on Fifth May 11, 2022 Naples, FL 119 34. LaPlaya Beach Resort & Club May 21, 2015 Naples, FL 189 35. Jekyll Island Club Resort (1) July 22, 2021 Jekyll Island, GA 200 36. Hotel Chicago Downtown, Autograph Collection November 30, 2018 Chicago, IL 354 37. The Westin Michigan Avenue Chicago November 30, 2018 Chicago, IL 752 38.
Margaritaville Hollywood Beach Resort (1) (4) September 23, 2021 Hollywood, FL 369 32. Inn on Fifth May 11, 2022 Naples, FL 119 33. LaPlaya Beach Resort & Club May 21, 2015 Naples, FL 193 34. Jekyll Island Club Resort (1) July 22, 2021 Jekyll Island, GA 200 35. Hotel Chicago Downtown, Autograph Collection November 30, 2018 Chicago, IL 354 36.
Hotel Zena Washington DC November 30, 2018 Washington, DC 191 29. Viceroy Washington DC November 30, 2018 Washington, DC 178 30. Southernmost Beach Resort (2) November 30, 2018 Key West, FL 296 31. The Marker Key West Harbor Resort November 30, 2018 Key West, FL 96 32. Margaritaville Hollywood Beach Resort (1) (4) September 23, 2021 Hollywood, FL 369 33.
Hotel Monaco Washington DC (1) September 9, 2010 Washington, DC 184 27. Hotel Zena Washington DC November 30, 2018 Washington, DC 191 28. Viceroy Washington DC November 30, 2018 Washington, DC 178 29. Southernmost Beach Resort (2) November 30, 2018 Key West, FL 296 30. The Marker Key West Harbor Resort November 30, 2018 Key West, FL 96 31.
W Los Angeles - West Beverly Hills August 23, 2012 Los Angeles, CA 297 4. Chamberlain West Hollywood November 30, 2018 West Hollywood, CA 115 5. Hotel Ziggy November 30, 2018 West Hollywood, CA 108 6. Le Parc at Melrose November 30, 2018 West Hollywood, CA 154 7. Mondrian Los Angeles May 3, 2011 West Hollywood, CA 236 8.
Chamberlain West Hollywood November 30, 2018 West Hollywood, CA 115 5. Hotel Ziggy November 30, 2018 West Hollywood, CA 108 6. Le Parc at Melrose November 30, 2018 West Hollywood, CA 154 7. Mondrian Los Angeles May 3, 2011 West Hollywood, CA 236 8. Hyatt Centric Delfina Santa Monica November 19, 2010 Santa Monica, CA 315 9.
The following table sets forth certain information about our hotels. 31 Property Date Acquired Location Number of Guest Rooms 1. L'Auberge Del Mar November 30, 2018 Del Mar, CA 121 2. Hotel Palomar Los Angeles Beverly Hills (1) November 20, 2014 Los Angeles, CA 264 3.
Property Date Acquired Location Number of Guest Rooms 1. L'Auberge Del Mar November 30, 2018 Del Mar, CA 121 2. Hotel Palomar Los Angeles Beverly Hills (1) November 20, 2014 Los Angeles, CA 264 3. W Los Angeles - West Beverly Hills August 23, 2012 Los Angeles, CA 297 4.
The Westin San Diego Gaslamp Quarter April 6, 2011 San Diego, CA 450 17. Estancia La Jolla Hotel & Spa (1) (4) December 1, 2021 La Jolla, CA 210 18. Argonaut Hotel (1) February 16, 2011 San Francisco, CA 252 19.
San Diego Mission Bay Resort (1) November 30, 2018 San Diego, CA 357 14. Margaritaville Hotel San Diego Gaslamp Quarter November 30, 2018 San Diego, CA 235 15. The Westin San Diego Gaslamp Quarter April 6, 2011 San Diego, CA 450 16. Estancia La Jolla Hotel & Spa (1) (4) December 1, 2021 La Jolla, CA 210 17.
Termination fees range from zero to up to three times the annual base management and incentive management fees, depending on the agreement and the reason for termination.
Most of the agreements also provide us the ability to terminate based on failure to achieve defined operating performance thresholds. Termination fees range from zero to up to three times the annual base management and incentive management fees, depending on the agreement and the reason for termination.
Harbor Court Hotel San Francisco (1) November 30, 2018 San Francisco, CA 131 20. 1 Hotel San Francisco (1) November 30, 2018 San Francisco, CA 200 21. Hotel Zelos San Francisco (1) October 25, 2012 San Francisco, CA 202 22. Hotel Zephyr Fisherman's Wharf (1) December 9, 2013 San Francisco, CA 361 23.
Argonaut Hotel (1) February 16, 2011 San Francisco, CA 252 18. Harbor Court Hotel San Francisco (1) November 30, 2018 San Francisco, CA 131 19. 1 Hotel San Francisco (1) November 30, 2018 San Francisco, CA 200 20. Hotel Zelos San Francisco (1) October 25, 2012 San Francisco, CA 202 21.
Montrose at Beverly Hills November 30, 2018 West Hollywood, CA 133 9. Hyatt Centric Delfina Santa Monica November 19, 2010 Santa Monica, CA 315 10. Viceroy Santa Monica Hotel (1) November 30, 2018 Santa Monica, CA 169 11. Embassy Suites San Diego Bay - Downtown January 29, 2013 San Diego, CA 341 12.
Viceroy Santa Monica Hotel (1) November 30, 2018 Santa Monica, CA 169 10. Embassy Suites San Diego Bay - Downtown January 29, 2013 San Diego, CA 341 11. Hilton San Diego Gaslamp Quarter November 30, 2018 San Diego, CA 286 12. Paradise Point Resort & Spa (1) November 30, 2018 San Diego, CA 462 13.
Removed
Hilton San Diego Gaslamp Quarter November 30, 2018 San Diego, CA 286 13. Paradise Point Resort & Spa (1) November 30, 2018 San Diego, CA 462 14. San Diego Mission Bay Resort (1) November 30, 2018 San Diego, CA 357 15. Margaritaville Hotel San Diego Gaslamp Quarter November 30, 2018 San Diego, CA 235 16.
Added
(3) We own a 99.99% controlling interest in this property. 32 (4) This property is subject to mortgage debt. The Margaritaville Hollywood Beach Resort mortgage was paid off in February 2026. (5) This property consists of a 116-guest room building which is owned fee simple and an adjoining building with 80 guest-rooms which is subject to a lease agreement.
Removed
Some of our management agreements have a maximum incentive fee of 2% of revenue. • Terms. The remaining terms of our management agreements are up to 9 years, not including renewals, and up to 28 years, including renewals. • Ability to Terminate.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis $150.0 million share repurchase program commenced in June 2023, upon the completion of our prior $100.0 million share repurchase program which begun in 2017. Under our current program, we may repurchase common shares from time to time in transactions on the open market or by private agreement. We may suspend or discontinue this program at any time.
Biggest changeOn October 21, 2025, our board of trustees terminated the February 2023 program and authorized a new share repurchase program of up to $150.0 million of common shares. Under our current program, we may repurchase common shares from time to time in transactions on the open market or by private agreement.
Total return values were calculated assuming a $100 investment on December 31, 2019 with reinvestment of all dividends in (i) our common shares, (ii) the Russell 2000 and (iii) the FTSE Nareit All Equity REITs. The total return values do not include any dividends declared, but not paid, during the period.
Total return values were calculated assuming a $100 investment on December 31, 2020 with reinvestment of all dividends in (i) our common shares, (ii) the Russell 2000 and (iii) the FTSE Nareit All Equity REITs. The total return values do not include any dividends declared, but not paid, during the period.
Securities Authorized for Issuance Under Equity Compensation Plan The following table sets forth information regarding securities authorized for issuance under our equity compensation plan, our 2009 Equity Incentive Plan, as amended and restated, as of December 31, 2024. See Note 8.
Securities Authorized for Issuance Under Equity Compensation Plan The following table sets forth information regarding securities authorized for issuance under our equity compensation plan, our 2009 Equity Incentive Plan, as amended and restated, as of December 31, 2025. See Note 8.
Issuer Purchases of Equity Securities Common Shares 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 (1) (in millions) October 1, 2024 - October 31, 2024 — $ — — $ — November 1, 2024 - November 30, 2024 — $ — — $ — December 1, 2024 - December 31, 2024 — $ — — $ — Total — $ — — $ 131.0 ______________________ (1) On February 17, 2023, our board of trustees authorized a share repurchase program of up to $150.0 million of our outstanding common shares.
Issuer Purchases of Equity Securities Common Shares 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 (1) (in millions) October 1, 2025 - October 31, 2025 653,412 $ 10.77 7,034,874 $ — November 1, 2025 - November 30, 2025 — $ — — $ — December 1, 2025 - December 31, 2025 — $ — — $ — Total 653,412 $ 10.77 7,034,874 $ 150.0 ______________________ (1) On February 17, 2023, our board of trustees authorized a share repurchase program of up to $150.0 million of our outstanding common shares.
Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans Equity compensation plans approved by security holders — — 1,177,236 Equity compensation plans not approved by security holders — — — Total — — 1,177,236 During the year ended December 31, 2024, certain of our employees chose to have us acquire from such employees an aggregate of 115,389 common shares to pay taxes due upon vesting of restricted common shares granted pursuant to share award agreements.
Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans Equity compensation plans approved by security holders — — 3,846,257 Equity compensation plans not approved by security holders — — — Total — — 3,846,257 During the year ended December 31, 2025, certain of our employees chose to have us acquire from such employees an aggregate of 95,824 common shares to pay taxes due upon vesting of restricted common shares granted pursuant to share award agreements.
The following graph provides a comparison of the cumulative total return on our common shares from December 31, 2019, to the NYSE closing price per share on December 31, 2024, with the cumulative total return on the Russell 2000 Index (the “Russell 2000”) and the FTSE Nareit All Equity REITs Index (the “FTSE Nareit All Equity REITs”) for the same period.
The following graph provides a comparison of the cumulative total return on our common shares from December 31, 2020, to the NYSE closing price per share on December 31, 2025, with the cumulative total return on the Russell 2000 Index (the "Russell 2000") and the FTSE Nareit All Equity REITs Index (the "FTSE Nareit All Equity REITs") for the same period.
Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. Market Information Our common shares began trading on the NYSE on December 9, 2009 under the symbol “PEB.” Shareholder Information On February 21, 2025, there were 73 holders of record of our common shares.
Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. Market Information Our common shares began trading on the NYSE on December 9, 2009 under the symbol "PEB." Shareholder Information On February 20, 2026, there were 64 holders of record of our common shares.
We may suspend or discontinue this program at any time. As of December 31, 2024, $84.2 million of preferred shares remained available for repurchase under this program.
We may suspend or discontinue this program at any time. As of December 31, 2025, $74.1 million of preferred shares remained available for repurchase under this program.
The average price paid by the Company for these shares was $16.03 per share.
The average price paid by the Company for these shares was $13.36 per share.
As of December 31, 2024, $131.0 million of common shares remained available for repurchase under this program. 36 Preferred Shares 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 (1) (in millions) October 1, 2024 - October 31, 2024 — $ — — $ — November 1, 2024 - November 30, 2024 — $ — — $ — December 1, 2024 - December 31, 2024 — $ — — $ — Total — $ — — $ 84.2 ______________________ (1) On February 17, 2023, our board of trustees authorized a share repurchase program of up to $100.0 million of our outstanding preferred shares.
We may suspend or discontinue this program at any time. 36 Preferred Shares 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 (1) (in millions) October 1, 2025 - October 31, 2025 — $ — — $ — November 1, 2025 - November 30, 2025 208,447 $ 19.19 4,000,000 $ — December 1, 2025 - December 31, 2025 264,748 $ 18.89 4,999,988 $ — Total 473,195 $ 19.02 8,999,988 $ 74.1 ______________________ (1) On February 17, 2023, our board of trustees authorized a share repurchase program of up to $100.0 million of our outstanding preferred shares.
The actual returns shown on the graph above are as follows: Value of Initial Investment at December 31, Name 2019 2020 2021 2022 2023 2024 Pebblebrook Hotel Trust $ 100.00 $ 70.33 $ 83.83 $ 50.30 $ 60.20 $ 51.19 Russell 2000 $ 100.00 $ 119.93 $ 137.67 $ 109.50 $ 127.98 $ 142.73 FTSE Nareit All Equity REITs $ 100.00 $ 94.92 $ 134.14 $ 100.79 $ 112.22 $ 117.73 35 Distributions Distributions to the extent of our current and accumulated earnings and profits for federal income tax purposes generally will be taxable to a shareholder as ordinary income.
The actual returns shown on the graph above are as follows: Value of Initial Investment at December 31, Name 2020 2021 2022 2023 2024 2025 Pebblebrook Hotel Trust $ 100.00 $ 119.19 $ 71.52 $ 85.59 $ 72.78 $ 61.03 Russell 2000 $ 100.00 $ 114.78 $ 91.30 $ 106.71 $ 119.00 $ 134.23 FTSE Nareit All Equity REITs $ 100.00 $ 141.31 $ 106.18 $ 118.22 $ 124.03 $ 126.82 35 Distributions Distributions to the extent of our current and accumulated earnings and profits for federal income tax purposes generally will be taxable to a shareholder as ordinary income.

Item 7. Management's Discussion & Analysis

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

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Biggest changeDuring 2024, we had the following transactions and events: • We finalized a settlement agreement with our insurance carriers for damage caused by Hurricane Ian in 2022 totaling $146.5 million and recognized business interruption insurance income of $23.8 million and a gain on insurance settlement of $24.8 million. • We repurchased 1,127,255 common shares for an aggregate purchase price of $15.0 million, or an average of $13.31 per share, under our common share repurchase program. • We paid down $463.3 million of our term loans. • We extended the maturity of $356.7 million of our Term Loan 2024 to January 2028 and extended $185.2 million of our Term Loan 2025 to January 2029. • We issued $400.0 million aggregate principal amount of 6.375% senior notes due October 2029. 37 While we do not operate our hotel properties, both our asset management team and our executive management team monitor and work cooperatively with our hotel managers by advising and making recommendations in all aspects of our hotels’ operations, including property positioning and repositioning, revenue and expense management, operations analysis, physical design, renovation and capital improvements, guest experience and overall strategic direction.
Biggest changeWhile we do not operate our hotel properties, both our asset management team and our executive management team monitor and work cooperatively with our hotel managers by advising and making recommendations in all aspects of our hotels' operations, including property positioning and repositioning, revenue and expense management, operations analysis, physical design, renovation and capital improvements, guest experience and overall strategic direction.
As such, we expect to continue to raise capital through equity and debt offerings to fund our growth. Our material cash requirements include the following contractual and other obligations. Debt Our outstanding debt consisted of floating- and fixed-rate unsecured term loans, convertible senior notes, senior unsecured notes and mortgage loans with varying maturities.
As such, we expect to continue to raise capital through equity and debt offerings to fund our growth. Our material cash requirements include the following contractual and other obligations. Debt Our outstanding debt consisted of floating- and fixed-rate unsecured term loans, convertible senior notes, unsecured senior notes and mortgage loans with varying maturities.
In order to maintain our qualification as a REIT, we must pay dividends to our shareholders of at least 90% of our taxable income. As a result of this requirement, we cannot rely on retained earnings to fund long-term liquidity requirements such as hotel property acquisitions, redevelopments and repayments of long-term debt.
In order to maintain our qualification as a REIT, we must pay dividends to our shareholders of at least 90 percent of our taxable income. As a result of this requirement, we cannot rely on retained earnings to fund long-term liquidity requirements such as hotel property acquisitions, redevelopments and repayments of long-term debt.
Our primary cash requirements in the short term (i.e., those requiring cash on or before December 31, 2025) will be to fund property lease obligations, interest and current principal on debt, capital improvements, dividends on common and preferred shares, and working capital of our property operations.
Our primary cash requirements in the short term (i.e., those requiring cash on or before December 31, 2026) will be to fund property lease obligations, interest and current principal on debt, capital improvements, dividends on common and preferred shares, and working capital of our property operations.
Once triggered, all of the cash flow generated by the hotel is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our lender. As of December 31, 2024, none of the mortgage loans were in a cash trap.
Once triggered, all of the cash flow generated by the hotel is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our lender. As of December 31, 2025, none of the mortgage loans were in a cash trap.
In addition, after we acquire a hotel property, we are often required by the franchisor or brand manager, if any, to complete a property improvement plan (“PIP”) in order to bring the hotel property up to the franchisor’s or brand’s standards.
In addition, after we acquire a hotel property, we are often required by the franchisor or brand manager, if any, to complete a property improvement plan ("PIP") in order to bring the hotel property up to the franchisor's or brand's standards.
Based on when a property was acquired or disposed, operating results for certain properties are not comparable for the years ended December 31, 2024 and 2023.
Based on when a property was acquired or disposed, operating results for certain properties are not comparable for the years ended December 31, 2025 and 2024.
As of December 31, 2024, we have interest rate swap agreements with an aggregate notional amount of $855.0 million to hedge variable interest rates on our unsecured term loans and a mortgage loan. We have designated these pay-fixed, receive-floating interest rate swap derivatives as cash flow hedges. For a further discussion of our derivative instruments see Note 5.
As of December 31, 2025, we have interest rate swap agreements with an aggregate notional amount of $665.0 million to hedge variable interest rates on our unsecured term loans and a mortgage loan. We have designated these pay-fixed, receive-floating interest rate swap derivatives as cash flow hedges. For a further discussion of our derivative instruments see Note 5.
Adjusted FFO is defined as FFO, as adjusted for transaction costs, non-cash ground rent on operating and capital leases, management/franchise contract transition costs, interest expense adjustment for acquired liabilities, finance lease adjustment, non-cash amortization of acquired intangibles, gain on insurance settlement, early extinguishment of debt, amortization of share-based compensation expense, issuance costs of redeemed preferred shares, hurricane-related costs, non-cash interest expense and deferred tax asset provision (benefit).
Adjusted FFO is defined as FFO, as adjusted for transaction costs, non-cash ground rent on operating and finance lease liabilities, management/franchise contract transition costs, interest expense adjustment for acquired liabilities, finance lease adjustment, non-cash amortization of acquired intangibles, gain on insurance settlement, early extinguishment of debt, amortization of share-based compensation expense, issuance costs of redeemed preferred shares, hurricane-related costs, non-cash interest expense, unrealized loss on investment and deferred tax asset provision (benefit).
At December 31, 2024 and 2023, our consolidated financial statements included the operations of 46 hotel properties, which have been included in our results of operations during the respective periods since their dates of acquisition or through their dates of disposition.
At December 31, 2025 and 2024, our consolidated financial statements included the operations of 44 and 46 hotel properties, respectively, which have been included in our results of operations during the respective periods since their dates of acquisition or through their dates of disposition.
We believe our cash and cash equivalents, restricted cash and the amount available on our senior unsecured revolving credit facility, which totaled $860.2 million as of December 31, 2024, along with cash generated from ongoing operations will be sufficient to satisfy our short-term cash requirements. As of December 31, 2024 we had no off-balance sheet arrangements.
We believe our cash and cash equivalents, restricted cash and the amount available on our senior unsecured revolving credit facility, which totaled $838.3 million as of December 31, 2025, along with cash generated from ongoing operations will be sufficient to satisfy our short-term cash requirements. As of December 31, 2025, we had no off-balance sheet arrangements.
Minimum fixed rent may be adjusted annually by increases in consumer price index ("CPI") and may be subject to minimum and maximum increases. Future fixed minimum payments associated with our hotel, ground and finance leases total $1.8 billion as of December 31, 2024, with $23.0 million payable on or before December 31, 2025.
Minimum fixed rent may be adjusted annually by increases in consumer price index ("CPI") and may be subject to minimum and maximum increases. Future fixed minimum payments associated with our hotel, ground and finance leases total $1.8 billion as of December 31, 2025, with $24.3 million payable on or before December 31, 2026.
Preferred dividends and Series Z preferred operating partnership units We expect to pay aggregate annual dividends and distributions of approximately $47.2 million on our outstanding Series E, Series F, Series G and Series H Cumulative Redeemable Preferred Shares and Series Z Cumulative Perpetual Preferred Units on or before December 31, 2025 and in future years until the shares/units are redeemed.
Preferred dividends and Series Z preferred operating partnership units We expect to pay aggregate annual dividends and distributions of approximately $46.4 million on our outstanding Series E, Series F, Series G and Series H Cumulative Redeemable Preferred Shares and Series Z Cumulative Perpetual Preferred Units on or before December 31, 2026 and in future years until the shares/units are redeemed.
Purchase commitments As of December 31, 2024, we had $9.1 million of outstanding purchase commitments, all of which will be paid on or before December 31, 2025. These purchase commitments represent outstanding purchase orders and contracts that have been executed for capital and renovation projects at our properties. See Capital Investments for discussion on planned capital investments.
Purchase commitments As of December 31, 2025, we had $2.2 million of outstanding purchase commitments, all of which will be paid on or before December 31, 2026. These purchase commitments represent outstanding purchase orders and contracts that have been executed for capital and renovation projects at our properties. See Capital Investments (below) for discussion on planned capital investments.
The program does not require us to repurchase any specific number of common shares. The program does not have an expiration date and may be suspended, modified or discontinued at any time. Preferred Share Repurchase Program On February 17, 2023, our board of trustees authorized a share repurchase program of up to $100.0 million of preferred shares.
The program does not have an expiration date and may be suspended, modified or discontinued at any time. 44 Preferred Share Repurchase Program On February 17, 2023, our board of trustees authorized a share repurchase program of up to $100.0 million of preferred shares.
Assuming we exercise all extension options available in our debt agreements, we expect that future principal and interest payments associated with our remaining debt obligations outstanding as of December 31, 2024 will be $2.6 billion through their maturity, with $19.2 million of principal and $95.3 million of interest payable on or before December 31, 2025.
Assuming we exercise all extension options available in our debt agreements, we expect that future principal and interest payments associated with our remaining debt obligations outstanding as of December 31, 2025 will be $2.4 billion through their maturity, with $392.3 million of principal and $92.6 million of interest payable on or before December 31, 2026.
Our net cash provided by operating activities was $275.0 million for the year ended December 31, 2024 and $236.2 million for the year ended December 31, 2023. Fluctuations in our net cash provided by operating activities are primarily the result of changes in hotel revenues, operating cash requirements and corporate expenses.
Our net cash provided by operating activities was $249.7 million for the year ended December 31, 2025 and $275.0 million for the year ended December 31, 2024. Fluctuations in our net cash provided by operating activities are primarily the result of changes in hotel revenues, operating cash requirements and corporate expenses. Investing Activities.
Adjusted EBITDA re is defined as EBITDA re , as adjusted for transaction costs, non-cash ground rent on operating and capital leases, management/franchise contract transition costs, non-cash amortization of acquired intangibles, gain on insurance settlement, amortization of share-based compensation expense, and hurricane-related costs.
Adjusted EBITDA re is defined as EBITDA re , as adjusted for transaction costs, non-cash ground rent on operating and finance lease liabilities, management/franchise contract transition costs, non-cash amortization of acquired intangibles, gain on insurance settlement, amortization of share-based compensation expense, unrealized loss on investment and hurricane-related costs.
Results of Operations This section includes comparisons of certain 2024 financial information to the same information for 2023. Year-to-year comparisons of the 2023 financial information to the same information for 2022 are contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 21, 2024.
Year-to-year comparisons of the 2024 financial information to the same information for 2023 are contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 26, 2025.
This increase was partially offset by a $18.0 million decrease due to the sales of our non-comparable properties in 2023.
This increase was partially offset by a $2.4 million decrease due to the sales of our non-comparable properties in 2025.
Our net cash used in financing activities was $158.2 million for the year ended December 31, 2024 and $236.8 million for the year ended December 31, 2023.
Financing Activities. Our net cash used in financing activities was $281.4 million for the year ended December 31, 2025 and $158.2 million for the year ended December 31, 2024.
Our total debt had an aggregate face value of $2.3 billion as of December 31, 2024, as summarized below: December 31, 2024 (in thousands) Revolving credit facilities $ — Term loans 916,652 Convertible senior notes 750,000 Senior unsecured notes 402,400 Mortgage loans 195,413 Total debt at face value $ 2,264,465 For further discussion on the components of our debt, see Note 5.
Our total debt had an aggregate face value of $2.1 billion as of December 31, 2025, as summarized below: December 31, 2025 (in thousands) Unsecured revolving credit facilities $ — Unsecured term loans 901,869 Convertible senior notes 750,000 Unsecured senior notes 400,000 Mortgage loans 93,395 Total debt at face value $ 2,145,264 For further discussion on the components of our debt, see Note 5.
We believe that EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA provide investors useful financial measures to evaluate our operating performance, excluding the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization). 40 The following table reconciles net income (loss) to EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA for the years ended December 31, 2024, 2023 and 2022 (in thousands): For the year ended December 31, 2024 2023 2022 Net income (loss) $ 16 $ (74,276) $ (84,981) Adjustments: Interest expense 112,432 115,660 99,988 Income tax expense (benefit) (25,628) 655 277 Depreciation and amortization 229,531 240,645 239,583 EBITDA $ 316,351 $ 282,684 $ 254,867 Gain on sale of hotel properties — (30,375) (6,194) Impairment 48,146 81,788 89,633 EBITDA re $ 364,497 $ 334,097 $ 338,306 Transaction costs 44 688 430 Non-cash ground rent 7,476 7,608 7,737 Management/franchise contract transition costs 163 359 817 Non-cash amortization of acquired intangibles (1,927) (5,494) (2,149) Gain on insurance settlement (24,824) — — Amortization of share-based compensation expense 13,602 12,545 11,349 Hurricane-related costs 183 6,598 249 Adjusted EBITDA re $ 359,214 $ 356,401 $ 356,739 Business interruption insurance income (23,751) (32,985) — Corporate general and administrative and other 33,706 27,871 27,686 Hotel EBITDA $ 369,169 $ 351,287 $ 384,425 FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA do not represent cash generated from operating activities as determined by U.S.
We believe that EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA provide investors useful financial measures to evaluate our operating performance, excluding the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization). 40 The following table reconciles net income (loss) to EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA for the years ended December 31, 2025, 2024 and 2023 (in thousands): For the year ended December 31, 2025 2024 2023 Net income (loss) $ (62,230) $ 16 $ (74,276) Adjustments: Interest expense 103,333 112,432 115,660 Income tax expense (benefit) 6,291 (25,628) 655 Depreciation and amortization 227,659 229,531 240,645 EBITDA $ 275,053 $ 316,351 $ 282,684 Gain on sale of hotel properties — — (30,375) Impairment 48,871 48,146 81,788 EBITDA re $ 323,924 $ 364,497 $ 334,097 Transaction costs 200 44 688 Non-cash ground rent on operating and finance leases 7,191 7,476 7,608 Management/franchise contract transition costs 12 163 359 Non-cash amortization of acquired intangibles (1,711) (1,927) (5,494) Gain on insurance settlement (4,747) (24,824) — Amortization of share-based compensation expense 13,717 13,602 12,545 Hurricane-related costs — 183 6,598 Unrealized loss on investment 3,900 — — Adjusted EBITDA re $ 342,486 $ 359,214 $ 356,401 Business interruption insurance income (12,675) (23,751) (32,985) Corporate general and administrative and other 31,372 33,706 27,871 Hotel EBITDA $ 361,183 $ 369,169 $ 351,287 FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA do not represent cash generated from operating activities as determined by U.S.
Business interruption insurance income and gain on insurance settlement — We recognized business interruption insurance income and gain on insurance settlement in 2024 and 2023 of $48.6 million and $33.0 million, respectively, related to the settlement of property damage, business interruption and other costs sustained at LaPlaya Beach Resort & Club resulting from Hurricane Ian.
Business interruption insurance income and gain on insurance settlement — We recognized business interruption insurance income and gain on insurance settlement in 2025 and 2024 related to the settlements of property damage, business interruption and other costs sustained at LaPlaya Beach Resort & Club resulting from Hurricanes Helene and Milton in 2025 and Hurricane Ian in 2024.
Fluctuations in our net cash used in financing activities are primarily the result of our issuance and repurchase of debt and equity securities and distributions paid on our preferred and common shares. • During the year ended December 31, 2024, we borrowed $400.0 million and repaid $465.4 million in other debt, repurchased $16.9 million of common shares through our common share repurchase program and for tax withholding purposes in connection with vestings of share-based equity awards, paid $52.0 million in preferred and common distributions and paid $22.1 million in financing costs. • During the year ended December 31, 2023, we borrowed and repaid $10.0 million of revolving credit facility borrowings, borrowed $140.0 million and repaid $211.1 million in other debt, repurchased $92.8 million of common shares through our common share repurchase program and for tax withholding purposes in connection with vestings of share-based equity awards, repurchased $15.8 million of preferred shares through our preferred share repurchase program and paid $53.6 million in common and preferred distributions.
Fluctuations in our net cash used in financing activities are primarily the result of our issuance and repurchase of debt and equity securities and distributions paid on our preferred and common shares. 43 • During the year ended December 31, 2025, we borrowed $400.0 million and repaid $511.2 million in other debt, repurchased $72.6 million of common shares through our common share repurchase program and for tax withholding purposes in connection with vestings of share-based equity awards, repurchased $6.1 million of preferred shares through our preferred share repurchase program, paid $51.9 million in preferred and common distributions, purchased $27.2 million in capped call transactions and paid $11.0 million in financing costs. • During the year ended December 31, 2024, we borrowed $400.0 million and repaid $465.4 million in other debt, repurchased $16.9 million of common shares through our common share repurchase program and for tax withholding purposes in connection with vestings of share-based equity awards, paid $52.0 million in preferred and common distributions and paid $22.1 million in financing costs.
Depending on market conditions, and in some instances subject to approval from governmental authorities, we expect to invest an additional $65.0 million to $75.0 million in capital investments in 2025, which includes normal hotel capital refurbishments and repositioning projects and excludes capital expenditures related to the repair and remediation of LaPlaya Beach Resort & Club.
Depending on market conditions, and in some instances subject to approval from governmental authorities, we expect to invest an additional $65.0 million to $75.0 million in capital investments in 2026, which includes normal hotel capital refurbishments and repositioning projects.
As of June 30, 2023, no common shares remained available for repurchase under this program. On February 17, 2023, our board of trustees authorized a share repurchase program of up to $150.0 million of common shares. Under this program, we may repurchase common shares from time to time in transactions on the open market or by private agreement.
On October 21, 2025, our board of trustees terminated the February 2023 Common Share Repurchase Program and authorized a new share repurchase program of up to $150.0 million of common shares (the "October 2025 Common Share Repurchase Program"). Under this program, we may repurchase common shares from time to time in transactions on the open market or by private agreement.
Fluctuations in our net cash provided by (used in) investing activities are primarily the result of acquisition and disposition activities, as well as capital improvements and additions to our properties. • During the year ended December 31, 2024, we invested $128.8 million in improvements to our hotel properties and received $36.8 million in property insurance proceeds. • During the year ended December 31, 2023, we invested $200.6 million in improvements to our hotel properties, received $314.9 million from the sale of five hotel properties and two retail components of our hotel properties and received $30.2 million in property insurance proceeds. 43 Financing Activities.
Fluctuations in our net cash provided by (used in) investing activities are primarily the result of disposition activities, as well as capital improvements and additions to our properties. • During the year ended December 31, 2025, we invested $97.4 million in improvements to our hotel properties, received $102.6 million from the sales of two hotel properties and received $5.6 million in property insurance proceeds. • During the year ended December 31, 2024, we invested $128.8 million in improvements to our hotel properties and received $36.8 million in property insurance proceeds.
Key Indicators of Financial Condition and Operating Performance We measure hotel results of operations and the operating performance of our business by evaluating financial and non-financial metrics such as room revenue per available room ("RevPAR"); total revenue per available room ("Total RevPAR"); average daily rate ("ADR"); occupancy rate ("Occupancy"); funds from operations ("FFO"); Adjusted FFO; earnings before interest, income taxes, depreciation and amortization ("EBITDA"); and EBITDA for real estate ("EBITDA re " ); Adjusted EBITDA re ; and hotel-level EBITDA (“Hotel EBITDA”).
Through these efforts, we seek to improve property efficiencies, lower costs, maximize revenues and enhance property operating margins, which we expect will enhance returns to our shareholders. 37 Key Indicators of Financial Condition and Operating Performance We measure hotel results of operations and the operating performance of our business by evaluating financial and non-financial metrics such as room revenue per available room ("RevPAR"); total revenue per available room ("Total RevPAR"); average daily rate ("ADR"); occupancy rate ("Occupancy"); funds from operations ("FFO"); Adjusted FFO; earnings before interest, income taxes, depreciation and amortization ("EBITDA"); and EBITDA for real estate ("EBITDA re " ); Adjusted EBITDA re; and hotel-level EBITDA ("Hotel EBITDA").
General and administrative expenses consist of employee compensation costs, legal and professional fees, insurance and other expenses. Impairment — In 2024, we recognized a loss of $10.0 million related to damage caused by Hurricane Helene and Hurricane Milton at LaPlaya Beach Resort & Club and an impairment loss of $38.1 million related to one hotel property.
In 2024, we recognized a loss of $10.0 million related to damage caused by Hurricanes Helene and Milton at LaPlaya Beach Resort & Club and an impairment loss of $38.1 million related to one hotel property.
The following table reconciles net income (loss) to FFO, FFO available to common share and unit holders and Adjusted FFO available to common share and unit holders for the years ended December 31, 2024, 2023 and 2022 (in thousands): For the year ended December 31, 2024 2023 2022 Net income (loss) $ 16 $ (74,276) $ (84,981) Adjustments: Real estate depreciation and amortization 229,230 240,304 239,231 Gain on sale of hotel properties — (30,375) (6,194) Impairment 48,146 81,788 89,633 FFO $ 277,392 $ 217,441 $ 237,689 Distribution to preferred shareholders and unit holders (47,182) (48,306) (48,049) Redemption of preferred shares — 8,396 8,186 FFO available to common share and unit holders $ 230,210 $ 177,531 $ 197,826 Transaction costs 44 688 430 Non-cash ground rent 7,476 7,608 7,737 Management/franchise contract transition costs 163 359 817 Interest expense adjustment for acquired liabilities 1,110 1,672 2,549 Finance lease adjustment 2,995 2,952 2,906 Non-cash amortization of acquired intangibles (1,927) (5,494) (2,149) Gain on insurance settlement (24,824) — — Early extinguishment of debt 3,781 1,035 7,995 Amortization of share-based compensation expense 13,602 12,545 11,349 Redemption of preferred shares — (8,396) (8,186) Hurricane-related costs 183 6,598 249 Non-cash interest expense — — 49 Deferred tax provision (benefit) (28,483) — — Adjusted FFO available to common share and unit holders $ 204,330 $ 197,098 $ 221,572 EBITDA is defined as earnings before interest, income taxes, depreciation and amortization.
We believe Adjusted FFO provides useful supplemental information regarding our ongoing operating performance. 39 The following table reconciles net income (loss) to FFO, FFO available to common share and unit holders and Adjusted FFO available to common share and unit holders for the years ended December 31, 2025, 2024 and 2023 (in thousands): For the year ended December 31, 2025 2024 2023 Net income (loss) $ (62,230) $ 16 $ (74,276) Adjustments: Real estate depreciation and amortization 227,427 229,230 240,304 Gain on sale of hotel properties — — (30,375) Impairment 48,871 48,146 81,788 FFO $ 214,068 $ 277,392 $ 217,441 Distribution to preferred shareholders and unit holders (46,973) (47,182) (48,306) Repurchase of preferred shares 2,404 — 8,396 FFO available to common share and unit holders $ 169,499 $ 230,210 $ 177,531 Transaction costs 200 44 688 Non-cash ground rent on operating and finance leases 7,191 7,476 7,608 Management/franchise contract transition costs 12 163 359 Interest expense adjustment for acquired liabilities 1,031 1,110 1,672 Finance lease adjustment 3,036 2,995 2,952 Non-cash amortization of acquired intangibles (1,711) (1,927) (5,494) Gain on insurance settlement (4,747) (24,824) — Early extinguishment of debt (6,472) 3,781 1,035 Amortization of share-based compensation expense 13,717 13,602 12,545 Repurchase of preferred shares (2,404) — (8,396) Hurricane-related costs — 183 6,598 Deferred tax provision (benefit) 4,197 (28,483) — Unrealized loss on investment 3,900 — — Adjusted FFO available to common share and unit holders $ 187,449 $ 204,330 $ 197,098 EBITDA is defined as earnings before interest, income taxes, depreciation and amortization.
Non-GAAP Financial Measures Non-GAAP financial measures are measures of our historical or future financial performance that are different from measures calculated and presented in accordance with U.S. GAAP.
These costs are included in the determination of net income (loss) attributable to common shareholders. Non-GAAP Financial Measures Non-GAAP financial measures are measures of our historical or future financial performance that are different from measures calculated and presented in accordance with U.S. GAAP.
As of December 31, 2024, $131.0 million of common shares remained available for repurchase under this program. 44 The timing, manner, price and amount of any repurchases will be determined by us in our discretion and will depend on a variety of factors, including legal requirements, price, liquidity and economic considerations and market conditions.
The timing, manner, price and amount of any repurchases will be determined by us in our discretion and will depend on a variety of factors, including legal requirements, price, liquidity and economic considerations, and market conditions. The program does not require us to repurchase any specific number of common shares.
We report FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA, which are non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance. 39 We calculate FFO in accordance with standards established by Nareit, formerly known as the National Association of Real Estate Investment Trusts, which defines FFO as net income (calculated in accordance with U.S.
We calculate FFO in accordance with standards established by Nareit, formerly known as the National Association of Real Estate Investment Trusts, which defines FFO as net income (calculated in accordance with U.S.
Hotel Operating Statistics The following table represents the key same-property hotel operating statistics for our hotels for the years ended December 31, 2024 and 2023: For the year ended December 31, 2024 2023 Same-Property Occupancy 71.0 % 68.3 % Same-Property ADR $ 299.22 $ 306.14 Same-Property RevPAR $ 212.41 $ 209.04 Same-Property Total RevPAR $ 327.27 $ 320.61 The above table of hotel operating statistics includes information from all hotels owned as of December 31, 2024, except for LaPlaya Beach Resort & Club which was excluded for both years due to disruption from Hurricane Ian and Newport Harbor Island Resort which was excluded for the first, second and fourth quarters only due to its redevelopment.
Hotel Operating Statistics The following table represents the key same-property hotel operating statistics for our hotels for the years ended December 31, 2025 and 2024: For the year ended December 31, 2025 2024 Same-Property Occupancy 72.4 % 70.7 % Same-Property ADR $ 294.96 $ 303.14 Same-Property RevPAR $ 213.49 $ 214.42 Same-Property Total RevPAR $ 339.48 $ 335.88 The above table of hotel operating statistics includes information from all hotels owned as of December 31, 2025, except for LaPlaya Beach Resort & Club which was excluded for the fourth quarter due to its closure in 2024 following Hurricane Milton and Newport Harbor Island Resort which was excluded for the first and second quarters due to its redevelopment.
For the year ended December 31, 2024, we invested $128.8 million in capital investments (or $104.0 million excluding the repair and remediation of LaPlaya Beach Resort & Club) to reposition and/or improve our properties, including the renovations of Newport Harbor Island Resort, Skamania Lodge, Estancia La Jolla Hotel & Spa, Southernmost Beach Resort and Hyatt Centric Delfina Santa Monica.
For the year ended December 31, 2025, we invested $97.4 million in capital investments (or $76.6 million excluding the repair and remediation of LaPlaya Beach Resort & Club) to reposition and/or improve our properties, including the capital maintenance projects and renovations of Hyatt Centric Delfina Santa Monica, Skamania Lodge, Chaminade Resort & Spa, The Westin Copley Place, Boston, Paradise Point Resort & Spa and Margaritaville Hollywood Beach Resort.
The following capital projects are expected to be completed in 2025: • $16.0 million conversion of Hyatt Centric Delfina Santa Monica, which commenced in the fourth quarter of 2024 and is expected to be completed in the first quarter of 2025; and • The refurbishment of Paradise Point Resort & Spa's convention center space, and guestroom refurbishments at Chaminade Resort & Spa and Argonaut Hotel.
The following significant capital projects are expected to be completed in 2026: • The refurbishment of Paradise Point Resort & Spa's convention center space; and • Guest room refurbishments at Chaminade Resort & Spa.
The increase in cash provided by operating activities in 2024 is primarily due to an increase in operations at our hotel properties that had been under renovation in 2023. Investing Activities. Our net cash provided by (used in) investing activities was $(92.8) million for the year ended December 31, 2024 and $142.0 million for the year ended December 31, 2023.
Our net cash provided by (used in) investing activities was $10.3 million for the year ended December 31, 2025 and $(92.8) million for the year ended December 31, 2024.
Common Share Repurchase Programs and Preferred Share Repurchase Program Common Share Repurchase Programs On July 27, 2017, our board of trustees authorized a share repurchase program of up to $100.0 million of common shares. Under this program, we could repurchase common shares from time to time in transactions on the open market or by private agreement.
Under this program, we could repurchase common shares from time to time in transactions on the open market or by private agreement. We could have suspended or discontinued this program at any time.
We may suspend or discontinue this program at any time. Repurchased common shares cease to be outstanding and become authorized but unissued common shares. During the year ended December 31, 2024, we repurchased 1,127,255 common shares for an aggregate purchase price of $15.0 million, or an average of approximately $13.31 per share.
We may suspend or discontinue this program at any time. Common shares repurchased by us cease to be outstanding and become authorized but unissued common shares.
The properties listed in the table below are hereinafter referred to as "non-comparable properties" for the periods indicated and all other properties are referred to as "comparable properties": Property Location Disposition Date The Heathman Hotel Portland, OR February 22, 2023 Retail at The Westin Michigan Avenue Chicago Chicago, IL March 17, 2023 Hotel Colonnade Coral Gables Coral Gables, FL March 28, 2023 Hotel Monaco Seattle Seattle, WA May 9, 2023 Hotel Vintage Seattle Seattle, WA May 24, 2023 Hotel Zoe Fisherman’s Wharf San Francisco, CA November 14, 2023 Marina City Retail at Hotel Chicago Downtown, Autograph Collection Chicago, IL December 21, 2023 Comparison of the year ended December 31, 2024 to the year ended December 31, 2023 Revenues — Total revenues increased by $33.4 million primarily due to increases at LaPlaya Beach Resort & Club, which was partially closed in 2023 due to Hurricane Ian, at Margaritaville Hotel San Diego Gaslamp Quarter and Hilton San Diego Gaslamp Quarter, which were both under renovation in 2023, and at The Westin Michigan Avenue Chicago.
The properties listed in the table below are hereinafter referred to as "non-comparable properties" for the periods indicated and all other properties are referred to as "comparable properties": Property Location Disposition Date Montrose at Beverly Hills Los Angeles, CA November 19, 2025 The Westin Michigan Avenue Chicago Chicago, IL December 3, 2025 Comparison of the year ended December 31, 2025 to the year ended December 31, 2024 Revenues — Total revenues increased by $22.2 million primarily due to increases at Newport Harbor Island Resort, which was closed for renovation for part of 2024; LaPlaya Beach Resort & Club, where the Beach House was closed in 2024 due to hurricane damage and reopened in 2025; recovery in demand at our San Francisco properties; and higher revenues at Estancia La Jolla Hotel & Spa and The Westin Copley Place, Boston.
During the year ended December 31, 2024, no preferred shares were repurchased under this program. As of December 31, 2024, $84.2 million of preferred shares remained available for repurchase under this program.
During the year ended December 31, 2025, we repurchased 531,038 preferred shares for an aggregate purchase price of $10.1 million, or an average of approximately $18.95 per share. As of December 31, 2025, $74.1 million of preferred shares remained available for repurchase under this program.
Income tax (expense) benefit — In 2024, we recognized an income tax benefit due to a $31.7 million reduction in the valuation allowance, offset by $6.1 million of income tax expense. Non-controlling interests — Non-controlling interests represent the allocation of income or loss of our Operating Partnership to third-party common OP unit holders and to the preferred OP unit holders.
Non-controlling interests — Non-controlling interests represent the allocation of income or loss of our Operating Partnership to third-party common OP unit holders and to the preferred OP unit holders. Issuance costs of repurchased preferred shares — Issuance costs of repurchased preferred shares increased due to the repurchase of 531,038 preferred shares under our preferred share repurchase program.
This increase was partially offset by a $2.1 million decrease in real estate taxes as a result of tax appeals and lower tax assessments. General and administrative — General and administrative expense increased by $3.3 million primarily due to an increase in employee compensation expense.
Depreciation and amortization — Depreciation and amortization expense decreased by $1.9 million primarily due to the sale of our non-comparable properties in 2025. 38 Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent increased by $7.2 million primarily due to lower property taxes in 2024 on several California properties as a result of the successful settlement of appeals from previous years and an increase in real estate tax assessments in 2025.
Removed
Overview Our 2024 operating results showed continued improvement in group and business transient demand. Leisure demand remained healthy and was boosted by customers returning to the cities for cultural, sporting and entertainment events. Our recently redeveloped properties performed well, gaining market share versus the prior year.
Added
Overview Our 2025 operating results showed continued recovery in several urban markets and resilient leisure demand throughout the portfolio. The operating environment was shaped by significant macro uncertainty, shifting policies and market-specific events that reduced visibility. San Francisco, Chicago, and Portland led the recovery, while San Diego and Washington, D.C. were challenged by weaker convention and government-related demand.
Removed
Our properties in San Francisco, Los Angeles and Portland muted our overall performance, but strong markets such as San Diego, Boston, and Chicago helped to offset the weaker results.
Added
Los Angeles was our most challenged market in 2025 due to the lingering impact of early-2025 wildfires and related disruptions. We remained focused on driving operating efficiency and reducing our operating costs — through both traditional discipline and the expanded use of technology — so we can continue to improve profitability and cash flow.
Removed
Certain of our properties experienced demand headwinds in 2024, including our Los Angeles properties, which were affected by the entertainment industry strikes in 2023, which slowed production into 2024, and our LaPlaya Beach Resort & Club ("LaPlaya"), which was impacted by Hurricane Helene on September 26, 2024 and Hurricane Milton on October 9, 2024.
Added
During 2025, we completed the following transactions: • We sold the Montrose at Beverly Hills for $44.3 million and The Westin Michigan Avenue Chicago for $72.0 million. • We issued $400.0 million of our 1.625% Convertible Senior Notes due January 2030 and used net proceeds and cash on hand to repurchase $400.0 million of the 1.75% Convertible Senior Notes due December 2026 at a discount, for $392.0 million, which resulted in a gain on debt extinguishment of $7.4 million. • We repurchased 6,277,068 common shares for an aggregate purchase price of $71.4 million, or an average of $11.37 per share, under our common share repurchase program. • We repurchased 531,038 preferred shares for an aggregate purchase price of $10.1 million, or an average of approximately $18.95 per share, under our preferred share repurchase program. • We finalized settlement agreements for our Hurricane Helene and Hurricane Milton insurance claims. • We repaid $100.0 million of the $140.0 million mortgage loan on Margaritaville Hollywood Beach Resort.
Removed
The damage to LaPlaya primarily impacted the ground floor of the Beach House, pool complex, landscaping and parking garage. LaPlaya closed following Hurricane Milton to facilitate clean-up, repairs and a full assessment of damage. The property's Bay Tower and Gulf Tower reopened November 1, 2024 and the upper floors of the Beach House reopened in January 2025.
Added
The above table of hotel operating statistics also includes Montrose at Beverly Hills and The Westin Michigan Avenue Chicago for the first, second and third quarters and excluded in the fourth quarter due to their sale in the fourth quarter of 2025. Results of Operations This section includes comparisons of certain 2025 financial information to the same information for 2024.
Removed
The ground floor of the Beach House is expected to open in the second quarter of 2025.
Added
These increase were partially offset by lower revenue at Hyatt Centric Delfina Santa Monica, which continued to ramp up from its renovation and conversion to the Hyatt brand; and demand decreases at W Los Angeles - West Beverly Hills and Viceroy Santa Monica Hotel.
Removed
In 2024, we recorded a loss of $10.0 million related to the damage from Hurricanes Helene and Milton, and we expect our property and flood insurance proceeds to cover the physical damage and business interruption losses from the hurricanes in excess of the applicable deductibles.
Added
Additionally, the increase was offset by a $3.1 million decrease due to the sales of our non-comparable properties in 2025.
Removed
Through these efforts, we seek to improve property efficiencies, lower costs, maximize revenues and enhance property operating margins, which we expect will enhance returns to our shareholders.
Added
Hotel operating expenses — Total hotel operating expenses increased by $24.6 million primarily due to increased operations at Newport Harbor Island Resort, The Westin Copley Place, Boston, 1 Hotel San Francisco and LaPlaya Beach Resort & Club, as well as an increase in wages and benefits throughout most of our portfolio.
Removed
This increase was partially offset by a $23.7 million decrease due to the sales of our non-comparable properties in 2023 and the decrease at Hyatt Centric Delfina Santa Monica as a result of disruption from the brand conversion in 2024. 38 Hotel operating expenses — Total hotel operating expenses increased by $19.9 million primarily due to increased operations at LaPlaya Beach Resort & Club, Margaritaville Hotel San Diego Gaslamp Quarter, The Westin Michigan Avenue Chicago and Hilton San Diego Gaslamp Quarter, as well as an increase in staffing, wage rates and benefits at our comparable properties due to higher demand levels.
Added
General and administrative — General and administrative expense increased by $1.4 million primarily due to an increase in legal costs in 2025. General and administrative expenses consist of employee compensation costs, legal and professional fees, insurance and other expenses. Impairment — In 2025, we recognized an impairment loss of $48.9 million related to three hotels.
Removed
Depreciation and amortization — Depreciation and amortization expense decreased by $11.1 million due to Newport Harbor Island Resort's useful life reduction of its furniture, fixtures and equipment in 2023 due to its scheduled renovation in November 2023, as well as the sales of our non-comparable properties in 2023.
Added
Interest expense — Interest expense decreased by $9.1 million primarily due to a $7.4 million gain on debt extinguishment recorded as a result of repurchasing a portion of our convertible debt at a discount.
Removed
Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent increased by $1.6 million primarily due to a $3.9 million increase in property insurance due to higher insurance premiums.
Added
Income tax (expense) benefit — In 2024, the Company had an income tax benefit of $25.6 million as a result of the release of a portion of the valuation allowance. In 2025, the Company had an income tax expense of $6.3 million as a result of taxable income of its taxable REIT subsidiary.
Removed
In 2023 we recognized an impairment loss of $81.8 million on three hotels and one retail component of a hotel property. Gain on sale of hotel properties — We recognized a gain on sale of $30.4 million primarily due to the sales of five hotels and two retail components of our hotels in 2023.
Added
We report FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA, which are non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance.
Removed
Other operating expenses — Other operating expenses decreased by $7.7 million primarily due to a decrease in hurricane related payroll costs and claims administration costs at LaPlaya Beach Resort & Club.
Added
Common Share Repurchase Programs and Preferred Share Repurchase Program Common Share Repurchase Programs On February 17, 2023, our board of trustees authorized a share repurchase program of up to $150.0 million of common shares (the "February 2023 Common Share Repurchase Program").
Removed
Interest expense — Interest expense decreased by $3.2 million due to pay-downs on our term loans during the first quarter of 2024, pay-downs of our senior notes during the fourth quarter of 2023 and interest being capitalized related to our Newport Harbor Island Resort redevelopment.
Added
During the year ended December 31, 2025, we repurchased 6,277,068 common shares for an aggregate purchase price of $71.4 million, or an average of approximately $11.37 per share, under the February 2023 Common Share Repurchase Program.
Removed
This decrease was partially offset by an increase resulting from costs associated with the extensions of the revolver and term loans and higher interest rates on our unhedged floating rate debt. Other — Other decreased by $1.4 million due to a decrease in interest income earned as a result of lower excess cash balances in 2024.
Added
As of December 31, 2025, no common shares were available for repurchase under the February 2023 Common Share Repurchase Program, as the program had been terminated. As of December 31, 2025, $150.0 million of common shares remained available for repurchase under the October 2025 Common Share Repurchase Program.
Removed
Distributions to preferred shareholders — Distributions to preferred shareholders decreased by $1.1 million as result of the redemption of one million of our 5.70% Series H Cumulative Redeemable Preferred Shares in November 2023.
Removed
Issuance costs of redeemed preferred shares — Issuance costs of redeemed preferred shares decreased due to the redemption of one million of our 5.70% Series H Cumulative Redeemable Preferred Shares in November 2023. These costs are included in the determination of net income (loss) attributable to common shareholders.
Removed
We believe Adjusted FFO provides useful supplemental information regarding our ongoing operating performance.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed3 unchanged
Biggest changeFor debt obligations, the table presents scheduled maturities, including annual amortization of principal, and related weighted-average interest rates for the debt maturing in each specified period (dollars in thousands). 2025 2026 2027 2028 2029 Total Liabilities Fixed rate debt (1) $ 4,418 $ 752,308 $ 2,429 $ 48,658 $ 400,000 $ 1,207,813 Average interest rate 4.99 % 1.76 % 5.07 % 5.07 % 6.38 % 3.44 % Variable rate debt (1) $ 14,783 $ — $ 360,000 $ 496,652 $ 185,217 $ 1,056,652 Average interest rate 6.44 % — % 6.44 % 6.91 % 6.44 % 6.66 % Total $ 19,201 $ 752,308 $ 362,429 $ 545,310 $ 585,217 $ 2,264,465 ______________________ (1) Scheduled maturities assume we exercise all extension options available in our debt agreements.
Biggest changeFor debt obligations, the table presents scheduled maturities, including annual amortization of principal, and related weighted-average interest rates for the debt maturing in each specified period (dollars in thousands). 2026 2027 2028 2029 2030 Total Liabilities Fixed rate debt (1) $ 352,308 $ 2,429 $ 48,658 $ 400,000 $ 400,000 $ 1,203,395 Average interest rate 1.77 % 5.07 % 5.07 % 6.38 % 1.63 % 3.39 % Variable rate debt (1) $ 40,000 $ 360,000 $ 356,652 $ 185,217 $ — $ 941,869 Average interest rate 7.62 % 6.17 % 6.07 % 6.17 % — % 6.19 % Total $ 392,308 $ 362,429 $ 405,310 $ 585,217 $ 400,000 $ 2,145,264 45 ______________________ (1) For a discussion of our debt, see Note 5.
While these agreements are intended to lessen the impact of rising interest rates, they also expose us to the risks that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly effective cash flow hedges under guidance included in ASC 815 "Derivatives and Hedging." 45 The table below provides information about financial instruments that are sensitive to changes in interest rates, including senior notes, term loans, mortgage loans and credit facilities.
While these agreements are intended to lessen the impact of rising interest rates, they also expose us to the risks that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly effective cash flow hedges under guidance included in ASC 815 "Derivatives and Hedging." The table below provides information about financial instruments that are sensitive to changes in interest rates, including senior notes, term loans, mortgage loans and credit facilities.
If interest rates on our unhedged variable rate debt increase or decrease by 0.1 percent, our annual interest expense will increase or decrease by approximately $0.2 million, respectively.
If interest rates on our unhedged variable rate debt increase or decrease by 0.1 percent, our annual interest expense will increase or decrease by approximately $0.3 million, respectively.
For a discussion of our debt, see Note 5. Debt , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. This table reflects indebtedness outstanding as of December 31, 2024 and does not reflect indebtedness, if any, incurred after that date.
Debt , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. This table reflects indebtedness outstanding as of December 31, 2025 and does not reflect indebtedness, if any, incurred after that date.
As of December 31, 2024, the estimated fair value of our fixed rate debt was $1.1 billion. As of December 31, 2024, $201.7 million of the Company's aggregate indebtedness (8.9% of total indebtedness) was subject to variable interest rates, excluding amounts outstanding under the term loan facilities that have been effectively swapped into fixed rates.
As of December 31, 2025, the estimated fair value of our fixed rate debt was $1.2 billion. As of December 31, 2025, $276.9 million of the Company's aggregate indebtedness (12.9% of total indebtedness) was subject to variable interest rates, excluding amounts outstanding under the term loan facilities and a mortgage loan that have been effectively swapped into fixed rates.

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