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What changed in Pebblebrook Hotel Trust's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Pebblebrook Hotel Trust's 2022 and 2023 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 2023 report.

+225 added−231 removedSource: 10-K (2024-02-21) vs 10-K (2023-02-21)

Top changes in Pebblebrook Hotel Trust's 2023 10-K

225 paragraphs added · 231 removed · 183 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

17 edited+3 added−4 removed45 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. 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.
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.
All reports that we have filed with the United States Securities and Exchange Commission (the "SEC") including this Annual Report on Form 10-K and our current reports on Form 8-K, can be obtained free of charge from the SEC's website at www.sec.gov or through our website. 8
All reports that we have filed with the United States Securities and Exchange Commission (the "SEC") including this Annual Report on Form 10-K and our current reports on Form 8-K, can be obtained free of charge from the SEC's website at www.sec.gov or through our website.
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. The hotel industry is highly competitive. Our hotels compete with other hotels and alternative lodging for guests in our markets.
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.
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 58 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 60 full-time employees. None of our employees is a member of a union.
At December 31, 2022, the Company owned 99.3% of the common limited partnership units issued by the Operating Partnership ("common units"). The remaining 0.7% of the common units are owned by the other limited partners of the 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, 2023, the Company owned 99.3% of the common limited partnership units issued by the Operating Partnership ("common units"). The remaining 0.7% of the common units are owned by the other limited partners of the Operating Partnership. For the Company to maintain its qualification as a REIT under the Code, it cannot operate the hotels it owns.
In addition, we believe that flexible management contracts facilitate the sale of hotels, and we may seek to sell hotels opportunistically if we believe sales proceeds may be used to repay debt or invest in other hotel properties that offer more attractive risk-adjusted returns.
In addition, we believe that flexible management contracts facilitate the sale of hotels, and we may seek to sell hotels opportunistically if we believe sales proceeds may be used to repay debt, repurchase our shares or invest in other hotel properties that offer more attractive risk-adjusted returns.
Our hotel properties are located in Boston, Massachusetts; Chicago, Illinois; Hollywood, Florida; Jekyll Island, Georgia; Key West, Florida; Los Angeles, California (Beverly Hills, Santa Monica, and West Hollywood); Miami (Coral Gables), Florida; Naples, Florida; Newport, Rhode Island; Portland, Oregon; San Diego, California; San Francisco, California; Santa Cruz, California; Seattle, Washington; Stevenson, Washington; and Washington, D.C.
Our hotel properties are located in Boston, Massachusetts; Chicago, Illinois; Hollywood, Florida; Jekyll Island, Georgia; Key West, Florida; Los Angeles, California (Beverly Hills, Santa Monica, and West Hollywood); Naples, Florida; Newport, Rhode Island; Portland, Oregon; San Diego, California; San Francisco, California; Santa Cruz, California; Stevenson, Washington; and Washington, D.C.
However, most of the properties in our portfolio have returned to normal historical seasonality trends in 2022. Regulations Our hotel properties are subject to various federal, state and local environmental laws.
However, the properties in our portfolio returned to normal historical seasonality trends in 2023. Regulations Our hotel properties are subject to various federal, state and local environmental laws.
As of December 31, 2022, the Company owned interest in 51 hotels with a total of 12,756 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 the Operating Partnership.
As of December 31, 2023, the Company owned interests in 46 hotels with a total of 11,924 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 the Operating Partnership.
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 believe that hotel supply growth, following the delivery of current supply construction, will decline from the historical growth rate prior to the pandemic for the foreseeable future. 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.
Curator In 2020, we and five industry-leading hotel operators jointly launched Curator Hotel & Resort Collection, a collection of small brands and independent lifestyle hotels and resorts worldwide.
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.
Tax Status We have elected to be taxed as a REIT under Sections 856 through 860 of the Code. As a result, we generally are not subject to corporate federal income tax on that portion of our REIT taxable income that we currently distribute to our shareholders.
As a result, we generally are not subject to corporate federal income tax on that portion of our REIT taxable income that we currently distribute to our shareholders.
However, these Phase I ESAs or other investigations may not reveal all environmental costs that might have a material adverse effect on our business, assets, results of operations or liquidity and may not identify all potential environmental liabilities. 7 We believe that our hotels comply, in all material respects, with all federal, state and local environmental ordinances and regulations regarding hazardous or toxic substances and other environmental matters, the violation of which could have a material adverse effect on us.
We believe that our hotels comply, in all material respects, with all federal, state and local environmental ordinances and regulations regarding hazardous or toxic substances and other environmental matters, the violation of which could have a material adverse effect on us.
We believe that portfolio diversification will allow us to benefit from growth in various customer segments, including business transient, leisure transient and group and convention room-night demand. We believe that hotel supply growth, following the delivery of current supply construction, will decline from the historical growth rate prior to the pandemic for the foreseeable future.
We believe that portfolio diversification will allow us to benefit from growth in various customer segments, including business transient, leisure transient and group and convention room-night demand.
Financing Strategies Over time, we intend to finance our long-term growth with issuances of common and preferred equity securities and debt financings having staggered maturities.
Financing Strategies Over time, we intend to finance our long-term growth with issuances of common and preferred equity securities and debt financings having staggered maturities. Our debt includes senior unsecured credit facilities, term loans, convertible debt, unsecured notes and mortgage debt secured by our hotel properties, and may in the future include other unsecured debt.
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. 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.
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.
Our debt includes senior unsecured credit facilities, term loans, convertible debt, unsecured notes and mortgage debt secured by our hotel properties, and may in the future include other unsecured debt. 6 We anticipate using net proceeds from equity and debt offerings and property sales to fund future acquisitions as well as for property redevelopments, return on investment initiatives and working capital requirements.
We anticipate using net proceeds from equity and debt offerings and property sales to fund future acquisitions as well as for property redevelopments, return-on-investment initiatives, share repurchases and working capital requirements.
Removed
In March 2020, the World Health Organization declared the novel coronavirus ("COVID-19") to be a global pandemic and the virus spread throughout the United States and the world. As a result of this pandemic and subsequent government mandates, health official recommendations, corporate policy changes and individuals' responses, hotel demand dramatically declined.
Added
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.
Removed
Demand has since improved as a result of an increase in vaccinations and corresponding lifting of governmental restrictions and recommendations. See further discussion in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II of this Annual Report on Form 10-K.
Added
However, these Phase I ESAs or other investigations may not reveal all environmental costs that might have a material adverse effect on our business, assets, results of operations or liquidity and may not identify all potential environmental liabilities.
Removed
As discussed in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II of this Annual Report on Form 10-K, the COVID-19 pandemic has materially disrupted hotel occupancy and daily rates, particularly in urban markets in which we have invested.
Added
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.
Removed
Despite the dramatic decline in demand, revenue and operating income as a result of COVID-19 as well as uncertainty related to international travel restrictions and political factors, the successful vaccination distribution and effective therapeutics throughout the U.S. and the world have gradually allowed for a steady return to normalcy.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

79 edited+12 added−13 removed275 unchanged
Biggest changeRisks Related to Our Organization and Structure Provisions of our declaration of trust may limit the ability of a third party to acquire control of us by authorizing our board of trustees to authorize issuances of additional securities. Our declaration of trust authorizes our board of trustees to issue up to 500,000,000 common shares and up to 100,000,000 preferred shares.
Biggest changeThe discovery of material environmental liabilities at our properties could subject us to unanticipated significant costs, which could significantly reduce our profitability and the cash available for distribution to our shareholders. 22 Risks Related to Our Organization and Structure Provisions of our declaration of trust may limit the ability of a third party to acquire control of us by authorizing our board of trustees to authorize issuances of additional securities.
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.
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 H1N1 influenza (swine flu), avian bird flu, Zika virus, SARS, MERS and COVID-19 (coronavirus), 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: 15 • 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 H1N1 influenza (swine flu), avian bird flu, Zika virus, SARS, MERS and COVID-19 (coronavirus), 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.
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 joint ventures and franchise agreements • Risks related to investment decisions • Risks related to conflicts of interest 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 COVID-19 or other pandemics • 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 terrorist attacks • Risks related to natural disasters, climate change and other environmental factors and regulations • 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 9 • 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 U.S.
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 8 • 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 joint ventures and franchise agreements • Risks related to investment decisions • Risks related to conflicts of interest 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 COVID-19 or other pandemics • 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 terrorist attacks • Risks related to natural disasters, climate change and other environmental factors and regulations • 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 9 • Risks related to internal controls U.S.
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 22 • 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; • 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.
Our qualification as a REIT depends on our satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis. 27 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.
In addition, we may not earn a current return on such investments particularly if the loan that we acquire is in default. Risks Related to the Lodging Industry The COVID-19 pandemic has had, and is expected to continue to have, a material adverse impact on our financial condition, results of operations, cash flows, liquidity and prospects.
In addition, we may not earn a current return on such investments particularly if the loan that we acquire is in default. 14 Risks Related to the Lodging Industry The COVID-19 pandemic has had, and is expected to continue to have, a material adverse impact on our financial condition, results of operations, cash flows, liquidity and prospects.
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. 20 Uninsured and underinsured losses could result in a loss of capital.
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. Uninsured and underinsured losses could result in a loss of capital.
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. 17 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. 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, 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. Our TRS lessee structure subjects us to the risk of increased hotel operating expenses.
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. 11 Our TRS lessee structure subjects us to the risk of increased hotel operating expenses.
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.
These third-party rights may adversely affect our ability to timely dispose of these properties on favorable terms, or at all. The purchase or sale of properties we put under contract may not be consummated. From time to time, we enter into purchase and sale agreements for hotel properties.
These third-party rights may adversely affect our ability to timely dispose of these properties on favorable terms, or at all. 12 The purchase or sale of properties we put under contract may not be consummated. From time to time, we enter into purchase and sale agreements for hotel properties.
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. 30 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.
Another domestic or global economic downturn may lead to a significant decline in demand for products and services provided by the lodging industry, lower occupancy levels and significantly reduced room rates. 16 We cannot predict the pace or duration of the global economic cycles or the cycles in the lodging industry.
Another domestic or global economic downturn may lead to a significant decline in demand for products and services provided by the lodging industry, lower occupancy levels and significantly reduced room rates. We cannot predict the pace or duration of the global economic cycles or the cycles in the lodging industry.
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.
Such issuances could result in dilution of our shareholders' equity interests. 24 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.
If we default on any of the secured loans, the applicable lender will be able to foreclose on the property pledged to secure the loan. 14 In addition to causing us to lose the property, a foreclosure may result in taxable income.
If we default on any of the secured loans, the applicable lender will be able to foreclose on the property pledged to secure the loan. In addition to causing us to lose the property, a foreclosure may result in taxable income.
We depend on the efforts and expertise of Jon E. Bortz, our Chairman, President and Chief Executive Officer, and our two other executive officers, to execute our business strategy.
We depend on the efforts and expertise of Jon E. Bortz, our Chairman and Chief Executive Officer, and our two other executive officers, to execute our business strategy.
Any income from a 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.
As of December 31, 2022, 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 9,000,000 shares of our 5.70% Series H Cumulative Redeemable Preferred Shares (the “Series H Preferred Shares”) were issued and outstanding.
As of December 31, 2023, 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.
While our operations have improved, they are still below pre-pandemic levels overall, and there can be no assurance that our operations will continue to improve or that our operations will not deteriorate again as a result of surges in the pandemic and government, business and individual responses.
While our operations have significantly improved, they are still below pre-pandemic levels in some markets, and there can be no assurance that our operations will continue to improve or that our operations will not deteriorate again as a result of surges in the pandemic and government, business and individual responses.
The increased use of teleconference and video-conference technology by businesses, particularly given its widespread use and increased acceptance during the COVID-19 pandemic, which may lead to continued use after the pandemic, could result in decreased business travel as companies increase the use of technologies that allow multiple parties from different locations to participate at meetings without traveling to a centralized meeting location.
The increased use of teleconference and video-conference technology by businesses, particularly given its widespread use and increased acceptance during the COVID-19 pandemic, could result in decreased business travel as companies increase the use of technologies that allow multiple parties from different locations to participate at meetings without traveling to a centralized meeting location.
If anyone transfers our shares in a way that would violate the share ownership limit or prevent us from qualifying as a REIT under the U.S. federal income tax laws, those shares instead will be transferred to a trust for the benefit of a charitable beneficiary and will be either redeemed by us or sold to a person whose ownership of the shares will not violate the share ownership limit or we will consider the transfer to be null and void from the outset, and the intended transferee of those shares will be deemed never to have owned the shares.
Generally, any of our shares owned by affiliated owners will be added together for purposes of the share ownership limit. 23 If anyone transfers our shares in a way that would violate the share ownership limit or prevent us from qualifying as a REIT under the U.S. federal income tax laws, those shares instead will be transferred to a trust for the benefit of a charitable beneficiary and will be either redeemed by us or sold to a person whose ownership of the shares will not violate the share ownership limit or we will consider the transfer to be null and void from the outset, and the intended transferee of those shares will be deemed never to have owned the shares.
To preserve liquidity, we have worked with our operators to significantly reduce staffing and expenses at our hotels, reduced the quarterly cash dividend on our common shares to $0.01 per share and reduced planned capital expenditures.
To preserve liquidity, we worked with our operators to significantly reduce staffing and expenses at our hotels, reduced the quarterly cash dividend on our common shares to $0.01 per share.
Concern about indoor mold exposure has been increasing as exposure to mold may cause various adverse health effects and symptoms, including allergic or other reactions. Some of our properties may contain microbial matter such as mold and mildew.
Some molds may produce airborne toxins or irritants. Concern about indoor mold exposure has been increasing as exposure to mold may cause various adverse health effects and symptoms, including allergic or other reactions. Some of our properties may contain microbial matter such as mold and mildew.
The aggregate liquidation preference with respect to the outstanding preferred shares is approximately $715.0 million as of December 31, 2022, and aggregate annual dividends on our outstanding preferred shares of approximately $44.0 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 $690.0 million as of December 31, 2023, and aggregate annual dividends on our outstanding preferred shares of approximately $47.2 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.
If our Operating Partnership failed to qualify as a partnership for U.S. federal income tax purposes, we would cease to qualify as a REIT and would be subject to higher taxes and have less cash available for distribution to our shareholders and suffer other adverse consequences.
If our leases are not respected as true leases for U.S. federal income tax purposes, we would fail to qualify as a REIT. 28 If our Operating Partnership failed to qualify as a partnership for U.S. federal income tax purposes, we would cease to qualify as a REIT and would be subject to higher taxes and have less cash available for distribution to our shareholders and suffer other adverse consequences.
Therefore, a downturn in the lodging industry, in general, and the segments 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.
Therefore, a downturn in the lodging industry, in general, and the segments 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.
Notwithstanding the opinion of counsel, if the IRS successfully challenged LaSalle’s REIT status prior to the merger, we could face adverse tax consequences, including: • succeeding to LaSalle’s liability for U.S. federal income taxes at regular corporate rates for the periods in which LaSalle failed to qualify as a REIT (without regard to the deduction for dividends paid for such periods); • succeeding to any built-in gain on LaSalle’s assets, for which we could be liable for U.S. federal income tax at regular corporate rates, if we were to recognize such gain in the five-year period following the merger; and • succeeding to LaSalle’s earnings and profits accumulated during the periods in which LaSalle failed to qualify as a REIT, which we would be required to distribute to our shareholders in order to satisfy the REIT distribution requirements and avoid the imposition of any excise tax.
Notwithstanding the opinion of counsel, if the IRS successfully challenged LaSalle’s REIT status prior to the merger, we could face adverse tax consequences, including: • succeeding to LaSalle’s liability for U.S. federal income taxes at regular corporate rates for the periods in which LaSalle failed to qualify as a REIT (without regard to the deduction for dividends paid for such periods); • succeeding to any built-in gain on LaSalle’s assets, for which we could be liable for U.S. federal income tax at regular corporate rates, if we were to recognize such gain in the five-year period following the merger; and • succeeding to LaSalle’s earnings and profits accumulated during the periods in which LaSalle failed to qualify as a REIT, which we would be required to distribute to our shareholders in order to satisfy the REIT distribution requirements and avoid the imposition of any excise tax. 26 As a result, we would have less cash available for operations and distributions to our shareholders, which could require us to raise capital on unfavorable terms or pay deficiency dividends.
If the amount of bookings made through Internet travel intermediaries or the use of alternative lodging marketplaces prove to be more significant than we expect, profitability may be lower than expected, and our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders may be adversely affected.
If the amount of bookings made through Internet travel intermediaries or the use of alternative lodging marketplaces prove to be more significant than we expect, profitability may be lower than expected, and our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders may be adversely affected. 17 We may be adversely affected by increased use of business-related technology which may reduce the need for business-related travel.
Declines in demand trends, occupancy and the average daily rates at our hotels may indicate that one or more of our hotels is impaired, which would adversely affect our financial condition and results of operations.
Declines in demand trends, occupancy and the average daily rates at our hotels may indicate that one or more of our hotels is impaired, which would adversely affect our financial condition and results of operations. Economic conditions may reduce demand for hotel properties and adversely affect hotel profitability.
Incurring debt subjects us to many risks, including the risks that our cash flow from operations will be insufficient to make required payments of principal and interest, our debt may increase our vulnerability to adverse economic and industry conditions, we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, and the terms of any refinancing will not be as favorable as the terms of the debt being refinanced. 13 We have placed and may in the future place mortgages on certain of our hotel properties to secure debt.
Incurring debt subjects us to many risks, including the risks that our cash flow from operations will be insufficient to make required payments of principal and interest, our debt may increase our vulnerability to adverse economic and industry conditions, we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, and the terms of any refinancing will not be as favorable as the terms of the debt being refinanced.
Differences in timing between the recognition of income and the related cash receipts or the effect of required debt amortization payments could require us to borrow or raise capital on terms or sell properties at prices or at times that we regard as unfavorable in order to distribute enough of our REIT taxable income to satisfy the distribution requirement and to avoid corporate income tax and the 4 percent nondeductible excise tax in a particular year.
Differences in timing between the recognition of income and the related cash receipts or the effect of required debt amortization payments could require us to borrow or raise capital on terms or sell properties at prices or at times that we regard as unfavorable in order to distribute enough of our REIT taxable income to satisfy the distribution requirement and to avoid corporate income tax and the 4 percent nondeductible excise tax in a particular year. 27 We may pay taxable dividends partly in shares and partly in cash, in which case shareholders may sell our shares to pay tax on such dividends, placing downward pressure on the market price of our shares.
These actions could have the effect of reducing our income and amounts available for distribution to our shareholders. 28 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.
Our third-party hotel managers are responsible for hiring and maintaining the labor force at our hotels. Although we do not directly employ or manage employees at our hotels, we are subject to risks associated with the employment of hotel personnel, particularly at those hotels with unionized labor.
We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor. Our third-party hotel managers are responsible for hiring and maintaining the labor force at our hotels.
If we are required to make substantial modifications to our hotel properties, whether to comply with the ADA or other changes in governmental rules and regulations, our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders could be adversely affected.
If we are required to make substantial modifications to our hotel properties, whether to comply with the ADA or other changes in governmental rules and regulations, our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders could be adversely affected. 20 The nature of the operations of our hotels exposes us to the risk of claims and litigation that may arise in the normal course of business.
Also, covenants applicable to debt could impair our planned investment strategy and, if violated, result in a default. If we violate covenants relating to indebtedness, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all.
If we violate covenants relating to indebtedness, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all.
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. 25 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 in control of our company that is in the best interests of our shareholders.
Terrorist attacks or changes in terror alert levels could adversely affect travel and hotel demand. Previous terrorist attacks and subsequent terrorist alerts have adversely affected the U.S. travel and hospitality industries over the past several years, often disproportionately to the effect on the overall economy.
Previous terrorist attacks and subsequent terrorist alerts have adversely affected the U.S. travel and hospitality industries over the past several years, often disproportionately to the effect on the overall economy.
However, such hedging incurs costs and we cannot assure you that any hedging will adequately relieve the adverse effects of interest rate increases or that counterparties under these agreements will honor their obligations thereunder. Adverse economic conditions could also cause the terms on which we borrow to be unfavorable.
However, such hedging incurs costs and we cannot assure you that any hedging will adequately relieve the adverse effects of interest rate increases or that counterparties under these agreements will honor their obligations thereunder.
In addition, those features of the Series E Preferred Shares, Series F Preferred Shares, Series G Preferred Shares and Series H Preferred Shares may have the effect of inhibiting a third party from making an acquisition proposal for our company or of delaying, deferring or preventing a change of control of our company under circumstances that otherwise could provide the holders of our common shares, Series E Preferred Shares, Series F Preferred Shares, Series G Preferred Shares or Series H Preferred Shares with the opportunity to realize a premium over the then-current market price or that shareholders may otherwise believe is in their best interests.
In addition, those features of the Series E Preferred Shares, Series F Preferred Shares, Series G Preferred Shares and Series H Preferred Shares may have the effect of inhibiting a third party from making an acquisition proposal for our company or of delaying, deferring or preventing a change of control of our company under circumstances that otherwise could provide the holders of our common shares, Series E Preferred Shares, Series F Preferred Shares, Series G Preferred Shares or Series H Preferred Shares with the opportunity to realize a premium over the then-current market price or that shareholders may otherwise believe is in their best interests. 25 We have entered into an agreement with each of our executive officers that requires us to make payments in the event the officer's employment is terminated by us without cause, by the officer for good reason or under certain circumstances following a change of control of our company.
These claims and proceedings are inherently uncertain and their costs and outcomes cannot be predicted with certainty. Regardless of their outcomes, such claims and legal proceedings can adversely impact us because of the legal and other costs, diversion of management time and resources and other factors.
Regardless of their outcomes, such claims and legal proceedings can adversely impact us because of the legal and other costs, diversion of management time and resources and other factors.
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.
A decline in lodging demand, or a continued growth in lodging supply, could result in continued deterioration in lodging industry fundamentals and returns that are substantially below expectations, or result in losses, which 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.
A decline in lodging demand, or a continued growth in lodging supply, could result in continued deterioration in lodging industry fundamentals and returns that are substantially below expectations, or result in losses, which 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. 16 Capital expenditure requirements at our properties may be costly and require us to incur debt, postpone improvements, reduce distributions or otherwise adversely affect the results of our operations and the market price of our common shares.
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. 24 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.
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.
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. 21 Our hotel properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem.
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.
Inflation, changes in building codes and ordinances, environmental considerations and other factors might also keep us from using insurance proceeds to replace or renovate a hotel after it has been damaged or destroyed. Under those circumstances, the insurance proceeds we receive might be inadequate to restore our economic position on the damaged or destroyed property.
Inflation, changes in building codes and ordinances, environmental considerations and other factors might also keep us from using insurance proceeds to replace or renovate a hotel after it has been damaged or destroyed.
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.
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.
The majority of our hotels are running in a more limited capacity as compared to pre-pandemic levels. Use of our cash during this period of lower demand and certain restrictive covenants of our credit agreements have reduced the amount of cash available for hotel capital expenditures, future business opportunities and other purposes, including distributions to our shareholders.
Use of our cash during this period of lower demand and certain restrictive covenants of our credit agreements reduced the amount of cash available for hotel capital expenditures, future business opportunities and other purposes, including distributions to our shareholders.
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.
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.
Our board of trustees determines our major policies, including policies and guidelines relating to our acquisitions, leverage, financing, growth, operations and distributions to shareholders. Our board of trustees may amend or revise these and other policies and guidelines from time to time without the vote or consent of our shareholders.
Our board of trustees may amend or revise these and other policies and guidelines from time to time without the vote or consent of our shareholders.
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.
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.
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.
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.
These factors and any others that would impede our ability to respond to adverse changes in the performance of the hotel properties or a need for liquidity 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. 21 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.
In addition, our managers or their affiliates may manage, and in some cases may own, invest in or provide credit support or operating guarantees, to hotels that compete with hotel properties that we own or acquire, which may result in conflicts of interest and decisions regarding the operation of our hotels that are not in our best interests. 10 We do not have the authority to require any hotel property to be operated in a particular manner or to govern any particular aspect of the daily operations of any hotel property (for example, setting room rates).
In addition, our managers or their affiliates may manage, and in some cases may own, invest in or provide credit support or operating guarantees, to hotels that compete with hotel properties that we own or acquire, which may result in conflicts of interest and decisions regarding the operation of our hotels that are not in our best interests.
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.
In response to the COVID-19 pandemic in 2020, we temporarily suspended operations at the vast majority of our hotels.
In response to the COVID-19 pandemic in 2020, we temporarily suspended operations at the vast majority of our hotels. The hotels reopened through the first half of 2021 and operations and occupancy began to increase through 2021 and 2022.
To help insure that we meet these tests, our declaration of trust restricts the acquisition and ownership of our shares. 31 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.
To the extent we cannot meet any of our debt service obligations, we may be required to sell or we will risk losing to foreclosure some or all of our mortgaged hotel properties. If we are required to sell one or more of our hotel properties to meet debt service obligations, we may have to accept unfavorable terms.
We have placed and may in the future place mortgages on certain of our hotel properties to secure debt. To the extent we cannot meet any of our debt service obligations, we may be required to sell or we will risk losing to foreclosure some or all of our mortgaged hotel properties.
The loss of a franchise license could materially and adversely affect the operations and the underlying value of the hotel property because of the loss of associated name recognition, marketing support and centralized reservation system provided by the franchisor and adversely affect our revenues, financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders. 12 Any joint venture investments that we may make in the future could be adversely affected by our lack of sole decision-making authority, our reliance on our co-venturers' financial condition and disputes between us and our co-venturers.
The loss of a franchise license could materially and adversely affect the operations and the underlying value of the hotel property because of the loss of associated name recognition, marketing support and centralized reservation system provided by the franchisor and adversely affect our revenues, financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders.
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. 26 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. 23 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.
If we made a taxable distribution payable in cash and our common shares and a significant number of our shareholders determine to sell our common shares in order to pay taxes owed on distributions, it may put downward pressure on the trading price of our common shares. 11 Restrictive covenants in our management contracts could preclude us from taking actions with respect to the sale or refinancing of a hotel property that would otherwise be in our best interest.
If we made a taxable distribution payable in cash and our common shares and a significant number of our shareholders determine to sell our common shares in order to pay taxes owed on distributions, it may put downward pressure on the trading price of our common shares.
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. 29 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.
Potential labor activities at these hotels could significantly increase the administrative, labor and legal expenses of the third-party management companies operating these hotels and reduce our profits. The unionization of additional employees at our hotels or increased labor shortages could have a material adverse effect on our business, financial condition and results of operations.
Potential labor activities at these hotels could significantly increase the administrative, labor and legal expenses of the third-party management companies operating these hotels and reduce our profits.
The presence of hazardous substances on a property may limit our ability to sell the property on favorable terms or at all, and we may incur substantial remediation costs. The discovery of material environmental liabilities at our properties could subject us to unanticipated significant costs, which could significantly reduce our profitability and the cash available for distribution to our shareholders.
The presence of hazardous substances on a property may limit our ability to sell the property on favorable terms or at all, and we may incur substantial remediation costs.
Pursuant to a provision in our bylaws, we have opted out of the control share provisions of the MGCL.
Pursuant to a provision in our bylaws, we have opted out of the control share provisions of the MGCL. 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.
Despite various precautionary steps to protect our hotels from losses resulting from cyber-attacks, any cyber-attack occurrence could still result in losses at our properties, which could affect our results of operations.
Despite various precautionary steps to protect our hotels from losses resulting from cyber-attacks, any cyber-attack occurrence could still result in losses at our properties, which could affect our results of operations. For more information regarding cybersecurity risk and our management of it, see Part I, Item 1C of this Annual Report on Form 10-K.
To assist us in maintaining our qualification as a REIT, our declaration of trust contains a share ownership limit. Generally, any of our shares owned by affiliated owners will be added together for purposes of the share ownership limit.
To assist us in maintaining our qualification as a REIT, our declaration of trust contains a share ownership limit.
While we have taken steps to increase our cash position and preserve our financial flexibility, given the unprecedented impact of COVID-19 on the global market and our hotel operations, we cannot assure you that these steps will prove to be sufficient or that our forecast or the assumptions we used to estimate our liquidity requirements will be correct.
While we have returned to positive cash flows, we cannot assure you that these steps will prove to be sufficient or that our forecast or the assumptions we used to estimate our liquidity requirements will be correct.
When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants.
Our hotel properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem. When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time.
Our inability to complete a project on time or within budget 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. 18 The increasing use by consumers of Internet travel intermediaries and alternative lodging marketplaces may reduce our revenues.
We cannot assure you that any development or redevelopment project will be completed on time or within budget. Our inability to complete a project on time or within budget 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.
Our existing indebtedness contains financial covenants that could limit our operations and our ability to make distributions to our shareholders.
Adverse economic conditions could also cause the terms on which we borrow to be unfavorable. 13 Our existing indebtedness contains financial covenants that could limit our operations and our ability to make distributions to our shareholders.
In general, the representations and warranties provided under the transaction agreements related to the sales of the hotel properties may not survive the closing of the transactions.
The hotel properties that we own or may acquire are or may be subject to unknown or contingent liabilities for which we may have no recourse, or only limited recourse, against the sellers. In general, the representations and warranties provided under the transaction agreements related to the sales of the hotel properties may not survive the closing of the transactions.
From time to time, strikes, lockouts, public demonstrations or other negative actions and publicity may disrupt hotel operations. In addition, we may be affected by shortages of qualified labor. If our managers cannot hire qualified labor for reasonable wages or at all, our indirect labor costs may rise and our hotel customers may not receive adequate service.
If our managers cannot hire qualified labor for reasonable wages or at all, our indirect labor costs may rise and our hotel customers may not receive adequate service. We also may incur increased legal costs and indirect labor costs as a result of contract disputes or other events.
The nature of the operations of our hotels exposes us to the risk of claims and litigation that may arise in the normal course of business. As owners of hotel properties, we face potential claims, litigation and threatened litigation from guests, visitors to our properties, contractors, sub-contractors and others.
As owners of hotel properties, we face potential claims, litigation and threatened litigation from guests, visitors to our properties, contractors, sub-contractors and others. These claims and proceedings are inherently uncertain and their costs and outcomes cannot be predicted with certainty.
This will reduce the remaining amount of our assets, if any, available to distribute to holders of our common shares.
This will reduce the remaining amount of our assets, if any, available to distribute to holders of our common shares. 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.
Our hotels may be subject to unknown or contingent liabilities which could cause us to incur substantial costs. The hotel properties that we own or may acquire are or may be subject to unknown or contingent liabilities for which we may have no recourse, or only limited recourse, against the sellers.
Under those circumstances, the insurance proceeds we receive might be inadequate to restore our economic position on the damaged or destroyed property. 19 Our hotels may be subject to unknown or contingent liabilities which could cause us to incur substantial costs.
We may pay taxable dividends partly in shares and partly in cash, in which case shareholders may sell our shares to pay tax on such dividends, placing downward pressure on the market price of our shares. We may pay taxable dividends partly in shares and partly in cash.
We may pay taxable dividends partly in shares and partly in cash.
As a result, we would have less cash available for operations and distributions to our shareholders, which could require us to raise capital on unfavorable terms or pay deficiency dividends. Complying with REIT requirements may cause us to forego otherwise attractive business opportunities or liquidate otherwise attractive investments.
Complying with REIT requirements may cause us to forego otherwise attractive business opportunities or liquidate otherwise attractive investments.
Removed
If we cannot obtain financing, our growth will be limited.

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Item 2. Properties

Properties — owned and leased real estate

18 edited+3 added−5 removed12 unchanged
Biggest changeThe Liberty, a Luxury Collection Hotel, Boston (1) (3) November 30, 2018 Boston, MA 298 43. The Westin Copley Place, Boston (1) November 30, 2018 Boston, MA 803 44. W Boston June 8, 2011 Boston, MA 238 45. The Heathman Hotel November 30, 2018 Portland, OR 151 46. The Hotel Zags August 28, 2013 Portland, OR 174 47.
Biggest changeW 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 257 46.
To fund the furniture, fixtures and equipment replacements, a specified percentage of the gross revenues of each hotel (typically 4.0%) is either deposited by the manager with our funds or out of the property's cash flow in an escrow account or held by us, as owner. 34 • Building Alterations, Improvements and Renewals.
To fund the furniture, fixtures and equipment replacements, a specified percentage of the gross revenues of each hotel (typically 4.0%) is either deposited by the manager with our funds or out of the property's cash flow in an escrow account or held by us, as owner. • Building Alterations, Improvements and Renewals.
In addition to the foregoing, the management agreements generally provide that the managers may propose such changes, alterations and improvements to the hotels as are required by reason of laws or regulations or, in the manager's reasonable judgment, to keep the hotels in a safe, competitive and efficient operating condition. • Sale of a Hotel.
In addition to the foregoing, the management agreements generally provide that the managers may propose such changes, alterations and improvements to the hotels as are required by reason of laws or regulations or, in the manager's reasonable judgment, to keep the hotels in a safe, competitive and efficient operating condition. 33 • Sale of a Hotel.
Pursuant to these agreements, we pay franchise or sub-license fees based on a percentage of gross room revenues, as well as certain other fees for marketing and reservations services. Franchise or sub-license fees for room revenues are approximately 1% to 5% of gross room revenues. Some of these agreements provide us with termination rights.
Pursuant to these agreements, we pay franchise or sub-license fees based on a percentage of gross room revenues, as well as certain other fees for marketing and reservations services. Franchise or sub-license fees for room revenues are approximately 1% to 6% of gross room revenues. Some of these agreements provide us with termination rights.
Skamania Lodge November 3, 2010 Stevenson, WA 260 Total number of guest rooms 12,756 ______________________ 33 (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 263 Total number of guest rooms 11,924 ______________________ 32 (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.
The agreements for the respective hotels expire as follows: Property Expiration Date Embassy Suites San Diego Bay - Downtown January 2028 Margaritaville Hollywood Beach Resort July 2028 Le Méridien Delfina Santa Monica September 2033 The Nines, a Luxury Collection Hotel, Portland October 2033 Hotel Chicago Downtown, Autograph Collection February 2034 The Liberty, a Luxury Collection Hotel, Boston January 2036 Hotel Colonnade Coral Gables, Autograph Collection April 2039 Hilton San Diego Gaslamp Quarter June 2041 Paradise Point Resort & Spa 15th anniversary after hotel is re-branded as a Margaritaville Solamar Hotel 15th anniversary after hotel is re-branded as a Margaritaville
The agreements for the respective hotels expire as follows: Property Expiration Date Embassy Suites San Diego Bay - Downtown January 2028 Margaritaville Hollywood Beach Resort July 2028 Le Méridien Delfina Santa Monica September 2033 The Nines, a Luxury Collection Hotel, Portland October 2033 Hotel Chicago Downtown, Autograph Collection February 2034 The Liberty, a Luxury Collection Hotel, Boston January 2036 Margaritaville Hotel San Diego Gaslamp Quarter August 2038 Hilton San Diego Gaslamp Quarter June 2041 Hyatt Regency Boston Harbor December 2042 Paradise Point Resort & Spa 15th anniversary after hotel is re-branded as a Margaritaville
Hotel Managers and Hotel Management Agreements We are a party to hotel management agreements with Benchmark Hotels and Resorts, Davidson Hospitality Group, HEI Hotels and Resorts, Highgate, Hyatt, 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.
(4) This property is subject to mortgage debt. 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.
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, 2022, we owned interests in 51 hotels with a total of 12,756 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, 2023, we owned interests in 46 hotels with a total of 11,924 guest rooms, all of which are consolidated in our financial statements. The following table sets forth certain information about our hotels.
The following table sets forth certain information about our hotels. 32 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.
Solamar Hotel November 30, 2018 San Diego, CA 235 16. 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.
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. 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.
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 six times the annual base management and incentive management fees, depending on the agreement and the reason for termination. • Operational Services.
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. • Operational Services.
The remaining terms of our management agreements are up to 11 years, not including renewals, and up to 30 years, including renewals. • Ability to Terminate. The 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.
The 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.
W Los Angeles - West Beverly Hills August 23, 2012 Los Angeles, CA 297 4. Chamberlain West Hollywood Hotel November 30, 2018 West Hollywood, CA 115 5. Hotel Ziggy (Grafton on Sunset) November 30, 2018 West Hollywood, CA 108 6. Le Parc Suite Hotel November 30, 2018 West Hollywood, CA 154 7.
Chamberlain West Hollywood Hotel 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. Montrose at Beverly Hills November 30, 2018 West Hollywood, CA 133 9.
Jekyll Island Club Resort (1) July 22, 2021 Jekyll Island, GA 200 38. Hotel Chicago Downtown, Autograph Collection November 30, 2018 Chicago, IL 354 39. The Westin Michigan Avenue Chicago November 30, 2018 Chicago, IL 752 40. Hyatt Regency Boston Harbor (1) November 30, 2018 Boston, MA 270 41. Revere Hotel Boston Common December 18, 2014 Boston, MA 356 42.
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.
Harbor Court Hotel San Francisco (1) November 30, 2018 San Francisco, CA 131 20. 1 Hotel San Francisco (formerly Hotel Vitale) (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.
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. 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.
Embassy Suites San Diego Bay - Downtown January 29, 2013 San Diego, CA 341 12. 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.
Le Méridien 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. Hilton San Diego Gaslamp Quarter November 30, 2018 San Diego, CA 286 13.
Hotel Monaco Washington DC (1) September 9, 2010 Washington, DC 184 29. Hotel Zena Washington DC November 30, 2018 Washington, DC 191 30. Viceroy Washington DC November 30, 2018 Washington, DC 178 31. Southernmost Beach Resort (2) November 30, 2018 Key West, FL 293 32. The Marker Key West Harbor Resort November 30, 2018 Key West, FL 96 33.
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 Zena Washington DC November 30, 2018 Washington, DC 191 29. Viceroy Washington DC November 30, 2018 Washington, DC 178 30.
Hotel Colonnade Coral Gables, Autograph Collection November 12, 2014 Miami, FL 157 34. Margaritaville Hollywood Beach Resort (1) (4) September 23, 2021 Hollywood, FL 369 35. Inn on Fifth May 11, 2022 Naples, FL 119 36. LaPlaya Beach Resort & Club May 21, 2015 Naples, FL 189 37.
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. Inn on Fifth May 11, 2022 Naples, FL 119 34.
Removed
Mondrian Los Angeles May 3, 2011 West Hollywood, CA 236 8. Montrose West Hollywood November 30, 2018 West Hollywood, CA 133 9. Le Méridien Delfina Santa Monica November 19, 2010 Santa Monica, CA 310 10. Viceroy Santa Monica Hotel (1) November 30, 2018 Santa Monica, CA 169 11.
Added
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. The Westin San Diego Gaslamp Quarter April 6, 2011 San Diego, CA 450 17.
Removed
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. Hotel Zoe Fisherman's Wharf June 11, 2015 San Francisco, CA 221 26. Chaminade Resort & Spa November 30, 2018 Santa Cruz, CA 156 27. George Hotel November 30, 2018 Washington, DC 139 28.
Added
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.
Removed
The Nines, a Luxury Collection Hotel, Portland July 17, 2014 Portland, OR 331 48. Newport Harbor Island Resort (formerly Gurney's Newport Resort & Marina) June 23, 2022 Newport, RI 257 49. Hotel Monaco Seattle April 7, 2011 Seattle, WA 189 50 Hotel Vintage Seattle July 9, 2012 Seattle, WA 125 51.
Added
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 10 years, not including renewals, and up to 29 years, including renewals. • Ability to Terminate.
Removed
(4) This property is subject to mortgage debt.
Removed
Some of our management agreements provide for an incentive fee of the lesser of 1% of revenues or the amount by which net operating income exceeds a threshold. Some of our management agreements have a maximum incentive fee of 2% of revenue. • Terms.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

10 edited+2 added−2 removed5 unchanged
Biggest changeAs of December 31, 2022, $87.0 million of common shares remained available for repurchase under the $100.0 million share repurchase program. 37 5.70% Series H Cumulative Redeemable Preferred Shares Period Total Number of Shares Purchased (1) Average Price Paid Per Share (1) 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 October 1, 2022 - October 31, 2022 — $ — — $ — November 1, 2022 - November 30, 2022 — $ — — $ — December 1, 2022 - December 31, 2022 1,000,000 $ 16.00 — $ — Total 1,000,000 $ 16.00 — $ — ______________________ (1) On December 27, 2022, we repurchased 1.0 million of our 5.70% Series H Cumulative Redeemable Preferred Shares at the repurchase price of $16.00 per share pursuant to a private agreement following an unsolicited inquiry made to us.
Biggest changeAs of December 31, 2023, $146.0 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, 2023 - October 31, 2023 — $ — — $ — November 1, 2023 - November 30, 2023 1,000,000 $ 15.79 1,000,000 $ — December 1, 2023 - December 31, 2023 — $ — — $ — Total 1,000,000 $ 15.79 1,000,000 $ 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.
Total return values were calculated assuming a $100 investment on December 31, 2017 with reinvestment of all dividends in (i) our common shares, (ii) the Russell 2000 and (iii) the FTSE Nareit 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, 2018 with reinvestment of all dividends in (i) our common shares, (ii) the Russell 2000 and (iii) the FTSE Nareit 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, 2022. 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, 2023. See Note 8.
The following graph provides a comparison of the cumulative total return on our common shares from December 31, 2017, to the NYSE closing price per share on December 31, 2022, with the cumulative total return on the Russell 2000 Index (the “Russell 2000”) and the FTSE Nareit Equity REITs Index (the “FTSE Nareit Equity REITs”) for the same period.
The following graph provides a comparison of the cumulative total return on our common shares from December 31, 2018, to the NYSE closing price per share on December 31, 2023, with the cumulative total return on the Russell 2000 Index (the “Russell 2000”) and the FTSE Nareit Equity REITs Index (the “FTSE Nareit Equity REITs”) for the same period.
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 — — 1,718,248 Equity compensation plans not approved by security holders — — — Total — — 1,718,248 During the year ended December 31, 2022, certain of our employees chose to have us acquire from such employees an aggregate of 49,787 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 — — 1,499,388 Equity compensation plans not approved by security holders — — — Total — — 1,499,388 During the year ended December 31, 2023, certain of our employees chose to have us acquire from such employees an aggregate of 122,140 common shares to pay taxes due upon vesting of restricted common shares granted pursuant to share award agreements.
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 16, 2023, there were 80 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 14, 2024, there were 72 holders of record of our common shares.
The average price paid by the Company for these shares was $22.37 per share.
The average price paid by the Company for these shares was $13.96 per share.
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) October 1, 2022 - October 31, 2022 — $ — — $ — November 1, 2022 - November 30, 2022 2,540,523 $ 15.39 2,540,523 $ — December 1, 2022 - December 31, 2022 2,019,316 $ 15.11 2,019,316 $ — Total 4,559,839 $ 15.27 4,559,839 $ 87,009,731 ______________________ (1) On February 22, 2016, we announced that 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, 2023 - October 31, 2023 — $ — — $ — November 1, 2023 - November 30, 2023 — $ — — $ — December 1, 2023 - December 31, 2023 — $ — — $ — Total — $ — — $ 146.0 ______________________ (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.
Under these programs, 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. In December 2022, we completed the $150.0 million share repurchase program and commenced the $100.0 million share repurchase program.
This $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.
The actual returns shown on the graph above are as follows: Value of Initial Investment at December 31, Name 2017 2018 2019 2020 2021 2022 Pebblebrook Hotel Trust $ 100.00 $ 79.50 $ 79.41 $ 55.86 $ 66.58 $ 39.95 Russell 2000 $ 100.00 $ 88.97 $ 111.65 $ 133.90 $ 153.70 $ 122.25 FTSE Nareit Equity REITs $ 100.00 $ 95.94 $ 123.42 $ 117.15 $ 165.51 $ 124.27 36 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 2018 2019 2020 2021 2022 2023 Pebblebrook Hotel Trust $ 100.00 $ 99.89 $ 70.26 $ 83.74 $ 50.25 $ 60.14 Russell 2000 $ 100.00 $ 125.49 $ 150.50 $ 172.75 $ 137.40 $ 160.60 FTSE Nareit Equity REITs $ 100.00 $ 128.65 $ 122.12 $ 172.52 $ 129.53 $ 144.14 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.
Removed
On July 17, 2017, we announced that our board of trustees authorized a new share repurchase program of up to $100.0 million of our outstanding common shares. This $100.0 million share repurchase program commenced upon the completion of the $150.0 million share repurchase program.
Added
Under this program we may repurchase up to an aggregate of $100.0 million of our 6.375% Series E Cumulative Redeemable Preferred Shares, 6.30% Series F Cumulative Redeemable Preferred Shares, 6.375% Series G Cumulative Redeemable Preferred Shares and 5.70% Series H Cumulative Redeemable Preferred Shares from time to time in transactions on the open market or by private agreement.
Removed
The repurchase was not made through a publicly announced program.
Added
We may suspend or discontinue this program at any time. As of December 31, 2023, $84.2 million of preferred shares remained available for repurchase under this program.

Item 7. Management's Discussion & Analysis

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

55 edited+22 added−24 removed29 unchanged
Biggest changeFluctuations 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, 2022, we borrowed and repaid $190.2 million of revolving credit facility borrowings, repaid and borrowed $1.4 billion in other debt, repurchased $70.7 million of common shares through our common share repurchase program, paid $52.7 million in preferred and common distributions, used $16.0 million to redeem one million Series H Preferred Shares and paid $12.4 million in financing fees. • During the year ended December 31, 2021, we received gross proceeds of $480.0 million from the issuance of our Series G and Series H Preferred Shares, which was partially offset by the payment $15.9 million in offering costs, received proceeds from the issuance of convertible notes and other debt of $268.6 million, repaid $392.2 million in other debt and $40.0 million of revolving credit facilities borrowings, used $250.0 million to redeem all our Series C and Series D Preferred Shares, paid $44.7 million in preferred and common distributions, purchased $21.0 million in Capped Call Transactions and paid $14.5 million in financing fees. 44 Capital Investments We maintain and intend to continue maintaining all of our hotels in good repair and condition, in conformity with applicable laws and regulations, in accordance with franchisor standards when applicable and in accordance with agreed-upon requirements in our management agreements.
Biggest changeFluctuations 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, 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 and $15.8 million of common shares and preferred shares, respectively, through our common and preferred share repurchase programs, and paid $53.6 million in preferred and common distributions. • During the year ended December 31, 2022, we borrowed and repaid $190.2 million of revolving credit facility borrowings, borrowed and repaid $1.4 billion in other debt, repurchased $70.7 million of common shares through our common share repurchase program, paid $52.7 million in preferred and common distributions, used $16.0 million to redeem one million Series H Preferred Shares and paid $12.4 million in financing fees.
We will adjust our assumptions with respect to the remaining useful life of the hotel property when circumstances change, such as an expiring ground lease or it is more likely than not that the hotel property will be sold prior to its previously expected useful life. 42 New Accounting Pronouncements See Note 2.
We will adjust our assumptions with respect to the remaining useful life of the hotel property when circumstances change, such as an expiring ground lease or it is more likely than not that the hotel property will be sold prior to its previously expected useful life. New Accounting Pronouncements See Note 2.
Under the terms of the program, we may repurchase up to an aggregate of $100.0 million of our 6.375% Series E Cumulative Redeemable Preferred Shares, 6.30% 45 Series F Cumulative Redeemable Preferred Shares, 6.375% Series G Cumulative Redeemable Preferred Shares and 5.70% Series H Cumulative Redeemable Preferred Shares from time to time in transactions on the open market or by private agreement.
Under the terms of the program, we may repurchase up to an aggregate of $100.0 million of our 6.375% Series E Cumulative Redeemable Preferred Shares, 6.30% Series F Cumulative Redeemable Preferred Shares, 6.375% Series G Cumulative Redeemable Preferred Shares and 5.70% Series H Cumulative Redeemable Preferred Shares from time to time in transactions on the open market or by private agreement.
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. 41 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.
The timing, manner, price and amount of any repurchases under the program 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.
The timing, manner, price and amount of any repurchases under the 2023 program 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.
Based on when a property was acquired or disposed, operating results for certain properties are not comparable for the years ended December 31, 2022 and 2021.
Based on when a property was acquired or disposed, operating results for certain properties are not comparable for the years ended December 31, 2023 and 2022.
The program does not have an expiration date and may be suspended, modified or discontinued at any time. On April 29, 2021, we filed a prospectus supplement with the SEC to sell up to $200.0 million of common shares under an "at the market" offering program (the "ATM program").
The program does not have an expiration date and may be suspended, modified or discontinued at any time. ATM Program On April 29, 2021, we filed a prospectus supplement with the SEC to sell up to $200.0 million of common shares under an "at the market" offering program (the "ATM program"). On February 21, 2023, the ATM program expired.
The program does not have an expiration date and may be suspended, modified or discontinued at any time. On February 21, 2023, we announced that our Board of Trustees approved a repurchase program of up to $100.0 million of our outstanding preferred shares (the “Preferred Share Repurchase Program”).
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 approved a repurchase program of up to $100.0 million of our outstanding preferred shares (the “Preferred Share Repurchase Program”).
Our primary cash requirements in the short term (i.e., those requiring cash before January 1, 2024) 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, 2024) 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.
We believe our cash and cash equivalents, restricted cash and the amount available on our senior unsecured revolving credit facility, which totaled $689.7 million as of December 31, 2022, along with cash generated from ongoing operations will be sufficient to satisfy our short-term cash requirements. As of December 31, 2022 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 $830.0 million as of December 31, 2023, along with cash generated from ongoing operations will be sufficient to satisfy our short-term cash requirements. As of December 31, 2023 we had no off-balance sheet arrangements.
Preferred dividends and Series Z operating partnership units We expect to pay aggregate annual dividends and distributions of approximately $48.6 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, 2023 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 $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, 2024 and in future years until the shares/units are redeemed.
Depending on market conditions, and in some instances subject to approval from governmental authorities, we expect to invest an additional $145.0 million to $155.0 million in capital investments in 2023, which includes normal hotel capital refurbishments, return of investment projects and major capital projects.
Depending on market conditions, and in some instances subject to approval from governmental authorities, we expect to invest an additional $85.0 million to $90.0 million in capital investments in 2024, which includes normal hotel capital refurbishments, return of investment projects and major capital projects.
The first building reopened for guests in January 2023. 38 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.
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.
Impairment and other losses — We recognized impairment and other losses of $89.9 million in 2022 related to three properties as well as an impairment related to damage caused by Hurricane Ian at LaPlaya Beach Resort & Club in Naples, Florida and Southernmost Beach Resort in Key West, Florida.
We recognized an impairment loss of $89.6 million in 2022 related to three hotels as well as an impairment related to damage caused by Hurricane Ian at LaPlaya Beach Resort & Club in Naples, Florida and Southernmost Beach Resort in Key West, Florida.
Financing Activities. Our net cash used in financing activities was $209.3 million for the year ended December 31, 2022 and $33.3 million for the year ended December 31, 2021.
Financing Activities. Our net cash used in financing activities was $236.8 million for the year ended December 31, 2023 and $209.3 million for the year ended December 31, 2022.
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, 2022, none of the mortgage loans were in a cash trap.
Cash trap provisions may be triggered if the hotel's performance is below a certain threshold. 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, 2023, none of the mortgage loans were in a cash trap.
The following table reconciles net income (loss) to FFO and FFO available to common share and unit holders for the years ended December 31, 2022, 2021 and 2020 (in thousands): For the year ended December 31, 2022 2021 2020 Net income (loss) $ (84,981) $ (186,372) $ (392,593) Adjustments: Real estate depreciation and amortization 239,231 223,813 224,124 (Gain) loss on sale of hotel properties (6,194) (64,729) (117,401) Impairment loss 89,633 14,856 74,556 FFO $ 237,689 $ (12,432) $ (211,314) Distribution to preferred shareholders and unit holders (48,049) (42,105) (32,556) Redemption of preferred shares 8,186 (8,055) — FFO available to common share and unit holders $ 197,826 $ (62,592) $ (243,870) EBITDA is defined as earnings before interest, income taxes, depreciation and amortization.
The following table reconciles net income (loss) to FFO and FFO available to common share and unit holders for the years ended December 31, 2023, 2022 and 2021 (in thousands): For the year ended December 31, 2023 2022 2021 Net income (loss) $ (74,276) $ (84,981) $ (186,372) Adjustments: Real estate depreciation and amortization 240,304 239,231 223,813 Gain on sale of hotel properties (30,375) (6,194) (64,729) Impairment loss 81,788 89,633 14,856 FFO $ 217,441 $ 237,689 $ (12,432) Distribution to preferred shareholders and unit holders (48,306) (48,049) (42,105) Redemption of preferred shares 8,396 8,186 (8,055) FFO available to common share and unit holders $ 177,531 $ 197,826 $ (62,592) EBITDA is defined as earnings before interest, income taxes, depreciation and amortization.
Common Share Repurchase Programs, Preferred Share Repurchase Program and ATM Program On February 22, 2016, we announced that our Board of Trustees authorized a share repurchase program of up to $150.0 million of the Company's outstanding common shares. Under this program, we may repurchase common shares from time to time in transactions on the open market or by private agreement.
Common Share Repurchase Programs, Preferred Share Repurchase Program and ATM 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 our outstanding common shares. Under this program, we could repurchase common shares from time to time in transactions on the open market or by private agreement.
Routine capital investments will be administered by the hotel management companies. However, we maintain approval rights over the capital investments as part of the annual budget process and as otherwise required from time to time.
However, we maintain approval rights over the capital investments as part of the annual budget process and as otherwise required from time to time.
Seasonality For discussion on the seasonality of our hotels' operations, see Part I, Item 1 of this Annual Report on Form 10-K. Derivative Instruments In the normal course of business, we are exposed to the effects of interest rate changes. We may enter into derivative instruments including interest rate swaps, caps and collars to manage or hedge interest rate risk.
Seasonality For discussion on the seasonality of our hotels' operations, see Part I, Item 1 of this Annual Report on Form 10-K. 44 Derivative Instruments In the normal course of business, we are exposed to the effects of interest rate changes.
Derivative instruments are subject to fair value reporting at each reporting date and the increase or decrease in fair value is recorded in net income (loss) or accumulated other comprehensive income (loss), based on the applicable hedge accounting guidance.
We may enter into derivative instruments including interest rate swaps, caps and collars to manage or hedge interest rate risk. Derivative instruments are subject to fair value reporting at each reporting date and the increase or decrease in fair value is recorded in net income (loss) or accumulated other comprehensive income (loss), based on the applicable hedge accounting guidance.
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"); earnings before interest, income taxes, depreciation and amortization ("EBITDA"); and EBITDA for real estate ("EBITDA re " ) .
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"); earnings before interest, income taxes, depreciation and amortization ("EBITDA"); and EBITDA for real estate ("EBITDA re " ) .
Our net cash used in investing activities was $109.4 million for the year ended December 31, 2022 and $81.6 million for the year ended December 31, 2021.
Our net cash provided by (used in) investing activities was $142.0 million for the year ended December 31, 2023 and $(109.4) million for the year ended December 31, 2022.
Fluctuations in our net cash 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, 2022, we invested $116.7 million in improvements to our hotel properties, received $248.9 million from the sale of four hotel properties and purchased two hotel properties using cash of $247.2 million. • During the year ended December 31, 2021, we invested $83.8 million in improvements to our hotel properties, received $255.9 million from the sale of three hotel properties and purchased three hotel properties using cash of $253.5 million.
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, 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. • During the year ended December 31, 2022, we invested $116.7 million in improvements to our hotel properties, received $248.9 million from the sale of four hotel properties and purchased two hotel properties using cash of $247.2 million.
We may suspend or discontinue this program at any time. Upon repurchase by the Company, common shares cease to be outstanding and become authorized but unissued common shares.
Under this 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. Common shares repurchased by the Company cease to be outstanding and become authorized but unissued common shares.
As of December 31, 2022, we have interest rate swap agreements with an aggregate notional amount of $1.0 billion to hedge variable interest rates on our unsecured term loans. We have designated these pay-fixed, receive-floating interest rate swap derivatives as cash flow hedges.
As of December 31, 2023, we have interest rate swap agreements with an aggregate notional amount of $1.2 billion 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.
For a further discussion of our derivative instruments see Note 5 , Debt , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
Debt , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
Assuming we exercise all extension options available in our debt agreements, we expect that future principal and interest payments associated with our debt obligations outstanding as of December 31, 2022 will be $2.7 billion through their maturity, with $49.6 million of principal and $93.0 million of interest payable on or before January 1, 2024.
Assuming we exercise all extension options available in our debt agreements and after adjusting for the aforementioned January 2024 term loan extension and repayments, we expect that future principal and interest payments associated with our remaining debt obligations outstanding as of December 31, 2023 will be $2.6 billion through their maturity, with $45.2 million of principal and $102.4 million of interest payable on or before December 31, 2024.
December 31, 2022 (in thousands) Revolving credit facilities $ — Term loans 1,380,000 Convertible senior notes 750,000 Senior unsecured notes 50,000 Mortgage loans 220,985 Total debt at face value $ 2,400,985 For further discussion on the components of our debt, see Note 5.
Our total debt had an aggregate face value of $2.3 billion as of December 31, 2023, as summarized below: December 31, 2023 (in thousands) Revolving credit facilities $ — Term loans 1,380,000 Convertible senior notes 750,000 Senior unsecured notes 2,400 Mortgage loans 197,497 Total debt at face value $ 2,329,897 For further discussion on the components of our debt, see Note 5.
We have the following significant capital projects that are expected to be completed in 2023 or 2024: • $25.0 million comprehensive redevelopment and renovation of Hilton San Diego Gaslamp Quarter, which commenced in 2022 and is expected to be completed in the second quarter of 2023; • $27.0 million comprehensive redevelopment and repositioning of Solamar Hotel into Margaritaville Hotel San Diego Gaslamp Quarter, which commenced in 2022 and is expected to be completed in the second quarter of 2023; • $20.0 million to $22.0 million comprehensive renovation at Jekyll Island Club Resort, which commenced in 2022 and is expected to be completed in the second quarter of 2023; • $20.0 million to $25.0 million comprehensive renovation of Estancia La Jolla Hotel & Spa, which commenced in 2022 and is expected to be completed in the second quarter of 2024; and • $11.0 million first phase of a multi-phase master plan at Skamania Lodge, which commenced in 2022 and is expected to be completed in the third quarter of 2023.
We have the following significant capital projects that are expected to be completed in 2024: 43 • $49.0 million comprehensive redevelopment of Newport Harbor Island Resort, which commenced in 2023 and is expected to be completed in the second quarter of 2024; • $26.0 million comprehensive redevelopment of Estancia La Jolla Hotel & Spa, which commenced in 2022 and is expected to be completed in the second quarter of 2024; and • $20.0 million first phase of a multi-phase master plan at Skamania Lodge, which commenced in 2022 and is expected to be completed in the second quarter of 2024.
No common shares were issued or sold under the ATM program during the year ended December 31, 2022. As of December 31, 2022, $200.0 million of common shares remained available for issuance under the ATM program. Inflation We rely on the performance of the hotels to increase revenues to keep pace with inflation.
No common shares were issued or sold under the ATM program. Inflation We rely on the performance of the hotels to increase revenues to keep pace with inflation.
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. We report FFO, EBITDA and EBITDA re , which are non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance.
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.
GAAP and should not be considered as alternatives to U.S. GAAP net income (loss), as indications of our financial performance, or to U.S. GAAP cash flow from operating activities, as measures of liquidity. In addition, FFO, EBITDA and EBITDA re are not indicative of funds available to fund cash needs, including the ability to make cash distributions.
GAAP and should not be considered as alternatives to U.S. GAAP net income (loss), as indications of our financial performance, or to U.S. GAAP cash flow from operating activities, as measures of liquidity.
General and administrative — General and administrative expense increased by $1.0 million due to compensation expense, offset by a decrease in legal fees. General and administrative expense consists of employee compensation costs, legal and professional fees, insurance and other expenses.
General and administrative — General and administrative expense increased by $5.6 million primarily due to an increase in professional fees and employee compensation expense. General and administrative expenses consist of employee compensation costs, legal and professional fees, insurance and other expenses.
We believe that EBITDA and EBITDA re 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). 41 The following table reconciles net income (loss) to EBITDA and EBITDA re for the years ended December 31, 2022, 2021 and 2020 (in thousands): For the year ended December 31, 2022 2021 2020 Net income (loss) $ (84,981) $ (186,372) $ (392,593) Adjustments: Interest expense 99,988 96,633 104,098 Income tax expense (benefit) 277 61 (3,697) Depreciation and amortization 239,583 224,251 224,560 EBITDA $ 254,867 $ 134,573 $ (67,632) (Gain) loss on sale of hotel properties (6,194) (64,729) (117,401) Impairment loss 89,633 14,856 74,556 EBITDA re $ 338,306 $ 84,700 $ (110,477) FFO, EBITDA and EBITDA re do not represent cash generated from operating activities as determined by U.S.
The following table reconciles net income (loss) to EBITDA and EBITDA re for the years ended December 31, 2023, 2022 and 2021 (in thousands): For the year ended December 31, 2023 2022 2021 Net income (loss) $ (74,276) $ (84,981) $ (186,372) Adjustments: Interest expense 115,660 99,988 96,633 Income tax expense (benefit) 655 277 61 Depreciation and amortization 240,645 239,583 224,251 EBITDA $ 282,684 $ 254,867 $ 134,573 (Gain) loss on sale of hotel properties (30,375) (6,194) (64,729) Impairment loss 81,788 89,633 14,856 EBITDA re $ 334,097 $ 338,306 $ 84,700 FFO, EBITDA and EBITDA re do not represent cash generated from operating activities as determined by U.S.
Critical Accounting Policies We consider these policies critical because they require estimates about matters that are inherently uncertain, involve various assumptions and require significant management judgment, and because they are important for understanding and evaluating our reported financial results.
In addition, FFO, EBITDA and EBITDA re are not indicative of funds available to fund cash needs, including the ability to make cash distributions. 40 Critical Accounting Policies We consider these policies critical because they require estimates about matters that are inherently uncertain, involve various assumptions and require significant management judgment, and because they are important for understanding and evaluating our reported financial results.
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 report FFO, EBITDA and EBITDA re , 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.
For the year ended December 31, 2022, the Company made $13.0 million in repurchases under this program and, as of December 31, 2022, $87.0 million of common shares remained available for repurchase under this program.
During the year ended December 31, 2023, we repurchased $4.0 million of common shares under this program, and as of December 31, 2023, $146.0 million of common shares remained available for repurchase under this program.
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, 2023, we had $15.4 million of outstanding purchase commitments, all of which will be paid on or before December 31, 2024. 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.
Interest expense — Interest expense increased by $3.4 million due to the refinancing costs incurred in conjunction with the refinancing of our senior unsecured credit facility on October 13, 2022. Non-controlling interests — Non-controlling interests represent the allocation of income or loss of the Operating Partnership to third-party common OP unit holders and to the preferred OP unit holders.
Other — Other increased by $3.7 million due to an increase in interest income earned on excess cash. Non-controlling interests — Non-controlling interests represent the allocation of income or loss of the Operating Partnership to third-party common OP unit holders and to the preferred OP unit holders.
Hotel Operating Statistics The following table represents the key same-property hotel operating statistics for our hotels for the years ended December 31, 2022 and 2021: For the year ended December 31, 2022 2021 Same-Property Occupancy 62.6 % 43.0 % Same-Property ADR $ 308.00 $ 268.23 Same-Property RevPAR $ 192.83 $ 115.44 Same-Property Total RevPAR $ 294.49 $ 178.40 The above table of hotel operating statistics includes information from all hotels owned as of December 31, 2022 except for 1 Hotel San Francisco (formerly Hotel Vitale) for 2022 and 2021 due to its closure for renovation from the third quarter of 2021 to the second quarter of 2022, Inn on Fifth for the first quarter of 2022 and 2021 due to its acquisition on May 11, 2022, Newport Harbor Island Resort (formerly Gurney's Newport Resort & Marina) for the first and the second quarters of 2022 and 2021 due to its acquisition on June 23, 2022 and LaPlaya Beach Resort & Club for the fourth quarter of 2022 and 2021 due to its closure following Hurricane Ian.
Hotel Operating Statistics The following table represents the key same-property hotel operating statistics for our hotels for the years ended December 31, 2023 and 2022: For the year ended December 31, 2023 2022 Same-Property Occupancy 67.7 % 63.1 % Same-Property ADR $ 302.96 $ 312.01 Same-Property RevPAR $ 205.24 $ 196.96 Same-Property Total RevPAR $ 316.02 $ 298.38 The above table of hotel operating statistics includes information from all hotels owned as of December 31, 2023, except for LaPlaya Beach Resort & Club due to its closure following Hurricane Ian, 1 Hotel San Francisco for the first and second quarters only due to its closure for redevelopment and Newport Harbor Island Resort for the fourth quarter only due to its ongoing redevelopment.
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 Sir Francis Drake San Francisco, CA April 1, 2021 The Roger New York New York, NY June 10, 2021 Villa Florence San Francisco on Union Square San Francisco, CA September 9, 2021 The Marker San Francisco San Francisco, CA June 28, 2022 Sofitel Philadelphia at Rittenhouse Square Philadelphia, PA August 2, 2022 Hotel Spero San Francisco, CA August 25, 2022 Hotel Vintage Portland Portland, OR September 14, 2022 Property Location Acquisition Date Jekyll Island Club Resort Jekyll Island, GA July 22, 2021 Margaritaville Hollywood Beach Resort Hollywood, FL September 23, 2021 Estancia La Jolla Hotel & Spa La Jolla, CA December 1, 2021 Inn on Fifth Naples, FL May 11, 2022 Newport Harbor Island Resort (formerly Gurney's Newport Resort & Marina) Newport, RI June 23, 2022 Comparison of the year ended December 31, 2022 to the year ended December 31, 2021 Revenues — Total revenues increased by $658.8 million, of which $157.9 million was due to non-comparable properties, and the balance was primarily due to an increase in leisure and business travel in 2022.
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 Marker San Francisco San Francisco, CA June 28, 2022 Sofitel Philadelphia at Rittenhouse Square Philadelphia, PA August 2, 2022 Hotel Spero San Francisco, CA August 25, 2022 Hotel Vintage Portland Portland, OR September 14, 2022 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 Property Location Acquisition Date Inn on Fifth Naples, FL May 11, 2022 Newport Harbor Island Resort Newport, RI June 23, 2022 38 Comparison of the year ended December 31, 2023 to the year ended December 31, 2022 Revenues — Total revenues increased by $28.1 million, which includes a $63.3 million increase at our comparable properties primarily due to an increase in leisure and business travel as well as a significant increase in revenue at 1 Hotel San Francisco, which was under renovation through June 2022 and began ramping up operations in the third quarter of 2022.
Year-to-year comparisons of the 2021 financial information to the same information for 2020 are contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 22, 2022. 39 At December 31, 2022 and 2021, our consolidated financial statements included the operations of 51 and 53 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.
At December 31, 2023 and 2022, our consolidated financial statements included the operations of 46 and 51 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 intend to pay amounts due with available cash, borrowings under our revolving credit facility, or refinance with long term debt. We are in compliance with all covenants governed by our existing credit facilities, term loan and senior note facilities.
We intend to pay amounts due with available cash, borrowings under our revolving credit facility, proceeds from property sales and/or refinance with long-term debt. We are in compliance with all of our debt covenants. Our mortgage loans contain customary provisions regarding events of default, as well as customary cash management, cash trap and lockbox provisions.
Future fixed minimum payments associated with our hotel, ground and finance leases total $1.8 billion as of December 31, 2022, with $20.8 million payable on or before December 31, 2023. 43 Purchase commitments As of December 31, 2022, we had $5.5 million of outstanding purchase commitments, all of which will be paid on or before December 31, 2023.
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, 2023, with $21.5 million payable on or before December 31, 2024.
Sources and Uses of Cash Our principal sources of cash are cash from operations, draws on our credit facilities, net proceeds from equity and debt offerings, and net proceeds from property sales. Our principal uses of cash are asset acquisitions, debt service payments, the redemption of equity securities, capital investments, operating costs, corporate expenses and dividends. Operating Activities.
Our principal uses of cash are asset acquisitions, debt service payments, the redemption of equity securities, capital investments, operating costs, corporate expenses and dividends. Operating Activities. Our net cash provided by operating activities was $236.2 million for the year ended December 31, 2023 and $278.7 million for the year ended December 31, 2022.
Our net cash provided by operating activities was $278.7 million for the year ended December 31, 2022 and $70.8 million for the year ended December 31, 2021. Fluctuations in our net cash provided by operating activities are primarily the result of changes in hotel revenues, operating cash requirements and corporate expenses.
Fluctuations in our net cash provided by operating activities are primarily the result of changes in hotel revenues, operating cash requirements and corporate expenses. The decrease in cash provided by operations in 2023 as compared to 2022 is primarily due to the disposition of five hotel properties and two retail components of our hotel properties in 2023. Investing Activities.
For further discussion on our preferred shares and preferred units, see Note 7. Equity to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
Equity to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. 42 Sources and Uses of Cash Our principal sources of cash are cash from operations, draws on our credit facilities, net proceeds from equity and debt offerings, and net proceeds from property sales.
On February 21, 2023, we announced that our Board of Trustees authorized a new share repurchase program of up to $150.0 million of the Company's outstanding common shares. Under this program, we may repurchase common shares from time to time in transactions on the open market or by private agreement.
During the year ended December 31, 2023, we repurchased $87.0 million of common shares under this program, and as of December 31, 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 our outstanding common shares.
We recognized an impairment loss of $14.9 million in 2021 related to one hotel. Gain on sale of hotel properties — We recognized a gain on sale of $6.2 million related to the sales of Sofitel Philadelphia Rittenhouse Square and Hotel Vintage Portland in 2022.
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. We recognized a gain on sale of $6.2 million primarily due to the sales of four hotels in 2022.
Results of Operations This section includes comparisons of certain 2022 financial information to the same information for 2021.
Results of Operations This section includes comparisons of certain 2023 financial information to the same information for 2022. Year-to-year comparisons of the 2022 financial information to the same information for 2021 are contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 21, 2023.
Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent increased by $14.5 million primarily due to an increase at our three non-comparable properties acquired in 2021.
Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent decreased by $1.5 million primarily due to a $9.3 million decrease in real estate taxes as a result of tax appeals and lower tax assessments.
For the year ended December 31, 2022, we invested $116.7 million in capital investments to reposition and improve our properties, including the renovations of 1 Hotel San Francisco (formerly Hotel Vitale), Hotel Ziggy (formerly Grafton on Sunset) and Skamania Lodge.
For the year ended December 31, 2023, we invested $200.6 million in capital investments to reposition and improve our properties, including the renovations of Newport Harbor Island Resort, Margaritaville Hotel San Diego Gaslamp Quarter, Estancia La Jolla Hotel & Spa, Jekyll Island Club Resort, Hilton San Diego Gaslamp Quarter and Skamania Lodge, as well as capital expenditures related to the repair and remediation of LaPlaya Beach Resort & Club and Southernmost Beach Resort, which were damaged by Hurricane Ian.
Debt to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. We have the option to extend certain of our current debt maturities with the payment of extension fees.
Debt to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. On January 3, 2024, the Company entered into the First Amendment to the Fifth Amended and Restated Credit Agreement ("Credit Agreement") which extended the maturity date of $356.7 million borrowed under Term Loan 2024 to January 2028.
Our new $2.0 billion credit facility provides for a $650.0 million senior unsecured revolving credit facility and three $460.0 million unsecured term loan facilities totaling $1.38 billion. During the fourth quarter of 2022, we repurchased 4,559,839 common shares for an aggregate purchase price of $69.6 million under our existing common share repurchase programs.
During 2023, we repurchased 6,498,901 common shares for an aggregate purchase price of $91.0 million, or an average of $14.01 per share, and 1,000,000 preferred shares for an aggregate purchase price of $15.8 million, or an average of $15.79 per share, under our existing common and preferred share repurchase programs.
Removed
Overview In March 2020, the World Health Organization declared the novel coronavirus ("COVID-19") to be a global pandemic and the virus spread throughout the United States and the world.
Added
Overview Our hotel portfolio continued to recover in 2023 with strong growth in occupancy at many of our urban properties, especially our properties in Washington, D.C. and San Francisco, which had trailed the recovery in other markets and our resort properties. We have observed continued stable demand from both the business and leisure segments.
Removed
As a result of this pandemic and subsequent government mandates, health official recommendations, corporate policy changes and individual responses, hotel demand dramatically declined and we implemented significant cost controls, salary reductions and the temporary suspension of operations at 47 of our properties in 2020, along with other actions to improve liquidity.
Added
We believe 2024 will continue this trend and anticipate positive benefits from a robust convention calendar in many urban markets, including San Diego, Washington, D.C., Boston and Chicago. International inbound travel is expected to continue to recover. Our LaPlaya Beach Resort & Club, which was closed in 2022 due to Hurricane Ian, has been substantially restored.
Removed
All of our properties reopened in 2021 with the exception of 1 Hotel San Francisco (formerly Hotel Vitale), whose operations remained suspended until the completion of its renovations and repositioning in June 2022. Demand has significantly improved throughout 2022 led by strong leisure travel demand with a significant improvement in business travel compared to 2021.
Added
Two of the resort buildings were fully operational for most of 2023 and the final resort building, the Beach House, is expected to be substantially completed by the end of this month.
Removed
Recent inflation and the expectation of future inflation have caused labor, capital and other costs to increase and the reaction by the Federal Reserve to rapidly and substantially increase interest rates has created economic uncertainty and significant concerns and risk of an economic downturn, softening or recession.
Added
We have agreed to a partial business interruption insurance settlement with our insurance company during 2023 and will continue to work with our insurance company through full completion of our insurance claim. During 2023, we sold five hotels and two retail components of our hotels in separate transactions for an aggregate sales price of $330.8 million.
Removed
During 2022, we acquired Inn on Fifth in Naples, Florida and Newport Harbor Island Resort (formerly Gurney's Newport Resort & Marina) in Newport, Rhode Island for a gross purchase price of $330.0 million and we sold four hotels in separate transactions for aggregate sales prices of $260.9 million.
Added
During 2023, we repaid $71.1 million of debt, which includes of $47.6 million of senior unsecured notes and $23.5 million of mortgage loans. In January 2024, we extended the maturity date of $356.7 million borrowed under Term Loan 2024 to January 2028.
Removed
In addition, as of December 31, 2022 we have entered into an agreement to sell The Heathman Hotel in Portland, Oregon for $45.0 million, however, no assurances can be given that the sale will be completed on these terms or at all. On October 13, 2022, we refinanced our senior unsecured revolving credit facility and all of the term loans.
Added
We also repaid $60.0 million outstanding on Term Loan 2024 and $50.0 million outstanding on the Term Loan 2025 with available cash. The remaining $43.3 million of Term Loan 2024 that was not extended will continue to mature in October 2024.
Removed
In addition, following an unsolicited private inquiry, we repurchased 1,000,000 shares of outstanding 5.70% Series H Cumulative Redeemable Preferred Shares for $16.0 million which was a discount to their $25.0 million liquidation value. In September 2022, our LaPlaya Beach Resort & Club sustained damage as a result of Hurricane Ian and closed.
Added
The above table of hotel operating statistics also includes Hotel Monaco Seattle and Hotel Vintage Seattle for the first quarter only due to their sales in May 2023, Retail at The Westin Michigan Avenue Chicago for the first quarter only due to its sale in March 2023, Hotel Zoe Fisherman’s Wharf for the first, second and third quarters only due to its sale in November 2023, and Marina City Retail at Hotel Chicago Downtown, Autograph Collection for the first, second and third quarters only due to its sale in December 2023.
Removed
We have continued to make progress completing significant repairs and rebuilding at the property. The resort will be reopened in stages through the middle of 2023.
Added
These increases were partially offset by a $35.2 million decrease due to our non-comparable properties as well as a significant decrease in revenue at LaPlaya Beach Resort & Club, which was closed in September 2022 as a result of Hurricane Ian and was partially reopened in 2023.
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 $57.6 million as a result of an increase in staffing, wages and benefits to accommodate occupancy increases, particularly at our urban properties, as well as an increase in hotel operating expenses at 1 Hotel San Francisco, which was closed most of the first and second quarters of 2022 for renovations.
Removed
Additionally, the schedule excludes The Marker San Francisco for the second, third and fourth quarters of 2022 and 2021 due to its sale on June 28, 2022, Sofitel Philadelphia at Rittenhouse Square for the third and fourth quarters of 2022 and 2021 due to its sale on August 2, 2022, Hotel Spero for the third and fourth quarters of 2022 and 2021 due to its sale on August 25, 2022 and Hotel Vintage Portland for the third and fourth quarters of 2022 and 2021 due to its sale on September 14, 2022.
Added
Our overall increase in hotel operating expenses was partially offset by a $27.1 million decrease due to our non-comparable properties. Depreciation and amortization — Depreciation and amortization expense increased by $1.1 million primarily due to redevelopment and renovation activities at Margaritaville Hotel San Diego Gaslamp Quarter and Estancia La Jolla Hotel & Spa which commenced in 2022.
Removed
In addition, several of our hotels remained temporarily suspended throughout the first quarter of 2021. Hotel operating expenses — Total hotel operating expenses increased by $386.9 million, of which $93.9 million was due to non-comparable properties, and the balance was primarily due to resuming operations at our comparable properties and returning demand in 2022.
Added
This decrease was partially offset by a $5.9 million increase in property insurance due to higher insurance premium assessments and a $1.9 million increase in ground rent on ground leases whose rent is based on a percentage of revenues.
Removed
Depreciation and amortization — Depreciation and amortization expense increased by $15.3 million primarily due to our property acquisitions in 2021 and 2022, offset by a decrease in depreciation from the properties sold in 2021 and 2022.
Added
Impairment — We recognized an impairment loss of $81.8 million in 2023 related to three hotels and one retail component of a hotel property.
Removed
We recognized a gain on sale of $64.7 million in 2021 primarily due to the sale of Sir Francis Drake. Other operating expenses — Other operating expenses increased by $3.1 million primarily due to an increase in pre-opening expenses and hotel management transition costs.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest 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). 2023 2024 2025 2026 2027 Thereafter Total Liabilities Fixed rate debt (1) $ 49,588 $ 2,084 $ 4,602 $ 752,318 $ 2,439 $ 48,454 $ 859,485 Average interest rate 4.71 % 5.07 % 5.00 % 1.76 % 5.07 % 5.07 % 2.15 % Variable rate debt (1) $ — $ 621,500 $ 460,000 $ — $ 460,000 $ — $ 1,541,500 Average interest rate — % 6.19 % 5.95 % — % 5.95 % — % 6.05 % Total $ 49,588 $ 623,584 $ 464,602 $ 752,318 $ 462,439 $ 48,454 $ 2,400,985 ______________________ (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). 2024 2025 2026 2027 2028 Thereafter Total Liabilities Fixed rate debt (1) $ 1,910 $ 4,592 $ 752,308 $ 2,429 $ 48,658 $ — $ 809,897 Average interest rate 5.07 % 5.00 % 1.76 % 5.07 % 5.07 % — % 1.99 % Variable rate debt (1) $ 460,000 $ 460,000 $ — $ 460,000 $ 140,000 $ — $ 1,520,000 Average interest rate 7.66 % 7.66 % — % 7.61 % 9.06 % — % 7.77 % Total $ 461,910 $ 464,592 $ 752,308 $ 462,429 $ 188,658 $ — $ 2,329,897 ______________________ (1) Scheduled maturities assume we exercise all extension options available in our debt agreements.
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. 46 This table reflects indebtedness outstanding as of December 31, 2022 and does not reflect indebtedness, if any, incurred after that date.
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, 2023 and does not reflect indebtedness, if any, incurred after that date.
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 $0.5 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 $0.4 million, respectively.
As of December 31, 2022, the estimated fair value of our fixed rate debt was $700.5 million. As of December 31, 2022, $501.5 million of the Company's aggregate indebtedness (20.9% 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, 2023, the estimated fair value of our fixed rate debt was $686.3 million. As of December 31, 2023, $365.0 million of the Company's aggregate indebtedness (15.7% 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.

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