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What changed in Chatham Lodging Trust's 10-K — 2023 vs 2024

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

+155 added−155 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-27)

Top changes in Chatham Lodging Trust's 2024 10-K

155 paragraphs added · 155 removed · 134 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

25 edited+8 added−6 removed59 unchanged
Biggest changeCertain key terms of our franchise agreements for our hotels as of December 31, 2023 were as follows: Property Franchise Company Franchise/Royalty Fee Marketing/Program Fee Expiration Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington Promus Hotels, Inc. 4.0 % 4.0 % 2025 Homewood Suites by Hilton Minneapolis-Mall of America Promus Hotels, Inc. 4.0 % 4.0 % 2025 Homewood Suites by Hilton Nashville-Brentwood Promus Hotels, Inc. 4.0 % 4.0 % 2025 Homewood Suites by Hilton Hartford-Farmington Promus Hotels, Inc 4.0 % 4.0 % 2025 Homewood Suites by Hilton Orlando-Maitland Promus Hotels, Inc. 4.0 % 4.0 % 2025 Hampton Inn & Suites Houston-Medical Center Hampton Inns Franchise LLC 6.0 % 4.0 % 2035 Residence Inn Long Island Holtsville Marriott International, Inc. 5.5 % 2.5 % 2025 Residence Inn White Plains Marriott International, Inc. 5.5 % 2.5 % 2030 Residence Inn New Rochelle Marriott International, Inc. 5.5 % 2.5 % 2030 Residence Inn Garden Grove Marriott International, Inc. 5.0 % 2.5 % 2031 Homewood Suites by Hilton San Antonio River Walk Promus Hotels, Inc. 4.0 % 4.0 % 2026 Residence Inn Washington DC Marriott International, Inc. 5.5 % 2.5 % 2033 Residence Inn Tysons Corner Marriott International, Inc. 5.0 % 2.5 % 2031 Hampton Inn Portland Downtown Hampton Inns Franchise LLC 6.0 % 4.0 % 2032 Courtyard Houston Marriott International, Inc. 5.5 % 2.0 % 2030 Hyatt Place Pittsburgh North Shore Hyatt Hotels, LLC 5.0 % 3.5 % 2030 Hampton Inn Exeter Hampton Inns Franchise LLC 6.0 % 4.0 % 2031 Hilton Garden Inn Denver Tech Hilton Garden Inns Franchise LLC 5.5 % 4.3 % 2028 Residence Inn Bellevue Marriott International, Inc. 5.5 % 2.5 % 2033 SpringHill Suites Savannah Marriott International, Inc. 5.0 % 2.5 % 2033 Residence Inn Silicon Valley I Marriott International, Inc. 5.5 % 2.5 % 2029 Residence Inn Silicon Valley II Marriott International, Inc. 5.5 % 2.5 % 2029 Residence Inn San Mateo Marriott International, Inc. 5.5 % 2.5 % 2029 Residence Inn Mountain View Marriott International, Inc. 5.5 % 2.5 % 2029 Hyatt Place Cherry Creek Hyatt Hotels, LLC 5.0 % 3.5 % 2034 Courtyard Addison Marriott International, Inc. 5.5 % 2.0 % 2029 Residence Inn San Diego Gaslamp Marriott International, Inc. 6.0 % 2.5 % 2035 Hilton Garden Inn Marina del Rey Hilton Franchise Holding LLC 5.5 % 4.3 % 2030 Residence Inn Dedham Marriott International, Inc. 6.0 % 2.5 % 2030 Residence Inn Il Lugano Marriott International, Inc. 6.0 % 2.5 % 2045 Hilton Garden Inn Portsmouth Hilton Garden Inns Franchise LLC 5.5 % 4.0 % 2037 Courtyard Summerville Marriott International, Inc. 6.0 % 2.5 % 2037 Embassy Suites Springfield Hilton Franchise Holding LLC 5.5 % 4.0 % 2037 Residence Inn Summerville Marriott International, Inc. 6.0 % 2.5 % 2038 Courtyard Dallas Marriott International, Inc. 6.0 % 2.0 % 2038 Residence Inn Austin Northwest/The Domain Area Marriott International, Inc. 5.5% to 6.0% 2.5 % 2036 TownePlace Suites Austin Northwest/The Domain Area Marriott International, Inc. 3.0% to 5.5% 2.0 % 2041 Home2 Suites Woodland Hills Hilton Franchise Holding LLC 3.0% to 5.0% 3.0 % 2040 Hilton Garden Inn Destin Miramar Beach Hilton Franchise Holding LLC 5.5 % 4.0 % 2042 Franchise and marketing/program fees totaled approximately $24.9 million, $23.7 million and $16.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. 11 Operating Leases The Residence Inn San Diego Gaslamp hotel property is subject to a ground lease with an expiration of January 31, 2065 and we have an extension option of up to three additional terms of ten years each.
Biggest changeCertain key terms of our franchise agreements for our hotels as of December 31, 2024 were as follows: Property Franchise Company Franchise/Royalty Fee Marketing/Program Fee Expiration Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington Promus Hotels, Inc. 4.0 % 4.0 % 2025 Homewood Suites by Hilton Nashville-Brentwood Promus Hotels, Inc. 4.0 % 4.0 % 2025 Homewood Suites by Hilton Hartford-Farmington Promus Hotels, Inc 4.0 % 4.0 % 2025 Hampton Inn & Suites Houston-Medical Center Hampton Inns Franchise LLC 6.0 % 4.0 % 2035 Residence Inn Long Island Holtsville Marriott International, Inc. 5.5 % 2.5 % 2025 Residence Inn White Plains Marriott International, Inc. 5.5 % 2.5 % 2030 Residence Inn New Rochelle Marriott International, Inc. 5.5 % 2.5 % 2030 Residence Inn Garden Grove Marriott International, Inc. 5.0 % 2.5 % 2031 Homewood Suites by Hilton San Antonio River Walk Promus Hotels, Inc. 4.0 % 4.0 % 2026 Residence Inn Washington DC Marriott International, Inc. 5.5 % 2.5 % 2033 Residence Inn Tysons Corner Marriott International, Inc. 5.0 % 2.5 % 2031 Hampton Inn Portland Downtown Hampton Inns Franchise LLC 6.0 % 4.0 % 2032 Courtyard Houston Marriott International, Inc. 5.5 % 2.0 % 2030 Hyatt Place Pittsburgh North Shore Hyatt Hotels, LLC 5.0 % 3.5 % 2030 Hampton Inn Exeter Hampton Inns Franchise LLC 6.0 % 4.0 % 2031 Residence Inn Bellevue Marriott International, Inc. 5.5 % 2.5 % 2033 SpringHill Suites Savannah Marriott International, Inc. 5.0 % 2.5 % 2033 Residence Inn Silicon Valley I Marriott International, Inc. 5.5 % 2.5 % 2029 Residence Inn Silicon Valley II Marriott International, Inc. 5.5 % 2.5 % 2029 Residence Inn San Mateo Marriott International, Inc. 5.5 % 2.5 % 2029 Residence Inn Mountain View Marriott International, Inc. 5.5 % 2.5 % 2029 Hyatt Place Cherry Creek Hyatt Hotels, LLC 5.0 % 3.5 % 2034 Courtyard Addison Marriott International, Inc. 5.5 % 2.0 % 2029 Residence Inn San Diego Gaslamp Marriott International, Inc. 6.0 % 2.5 % 2035 Hilton Garden Inn Marina del Rey Hilton Franchise Holding LLC 5.5 % 4.3 % 2030 Residence Inn Dedham Marriott International, Inc. 6.0 % 2.5 % 2030 Residence Inn Il Lugano Marriott International, Inc. 6.0 % 2.5 % 2045 Hilton Garden Inn Portsmouth Hilton Garden Inns Franchise LLC 5.5 % 4.0 % 2037 Courtyard Summerville Marriott International, Inc. 6.0 % 2.5 % 2037 Embassy Suites Springfield Hilton Franchise Holding LLC 5.5 % 4.0 % 2037 Residence Inn Summerville Marriott International, Inc. 6.0 % 2.5 % 2038 Courtyard Dallas Marriott International, Inc. 6.0 % 2.0 % 2038 Residence Inn Austin Northwest/The Domain Area Marriott International, Inc. 6.0 % 2.5 % 2036 TownePlace Suites Austin Northwest/The Domain Area Marriott International, Inc. 5.5 % 2.0 % 2041 Home2 Suites Woodland Hills Hilton Franchise Holding LLC 5.0% 3.0 % 2040 Hilton Garden Inn Destin Miramar Beach Hilton Franchise Holding LLC 5.5 % 4.0 % 2042 Home2 Suites Phoenix Downtown Hilton Franchise Holding LLC 3.0% to 5.0% 3.5 % 2044 Franchise and marketing/program fees totaled approximately $25.4 million, $24.9 million and $23.7 million for the years ended December 31, 2024, 2023 and 2022, respectively. 11 Leases The Company is the lessee under ground, property, air rights, garage and office lease agreements for certain of its properties.
This competition may increase the bargaining power of property owners seeking to sell, reduce the number of suitable investment opportunities available to us and increase the cost of acquiring our targeted hotel properties. The lodging industry is highly competitive. Our hotels compete with other hotels, and alternative lodging marketplaces, for guests in each market in which they operate.
This competition may increase the bargaining power of property owners seeking to sell, reduce the number of suitable investment opportunities available to us and increase the cost of acquiring our targeted hotel properties. 6 The lodging industry is highly competitive. Our hotels compete with other hotels, and alternative lodging marketplaces, for guests in each market in which they operate.
Competition We face competition for investments in hotel properties from institutional pension funds, private equity investors, 6 REITs, hotel companies and others who are engaged in hotel investments. Some of these entities have substantially greater financial and operational resources than we have or may be willing to use higher leverage.
Competition We face competition for investments in hotel properties from institutional pension funds, private equity investors, REITs, hotel companies and others who are engaged in hotel investments. Some of these entities have substantially greater financial and operational resources than we have or may be willing to use higher leverage.
To support these objectives, our human resource programs are designed to develop talent to prepare employees for critical roles and leadership positions for the future; reward and support employees through competitive pay and benefit programs; enhance our culture through efforts to foster, promote and preserve a culture of diversity and inclusion; and invest in technology, tools, and resources to enable employees at work.
To support these objectives, our human resource programs are designed to develop talent to prepare employees for critical roles and leadership positions for the future; reward and support employees through competitive pay and benefit programs; enhance our culture through efforts to foster, promote and preserve a culture of inclusion and belonging; and invest in technology, tools, and resources to enable employees at work.
The TRS Lessees have entered into management agreements with third-party management companies that provide day-to-day management for the hotels. As of December 31, 2023, Island Hospitality Management, LLC (“IHM”), which is 100% owned by Jeffrey H. Fisher, the Company's Chairman, President and Chief Executive Officer, managed all of the Company’s hotels.
The TRS Lessees have entered into management agreements with third-party management companies that provide day-to-day management for the hotels. As of December 31, 2024, Island Hospitality Management, LLC (“IHM”), which is 100% owned by Jeffrey H. Fisher, the Company's Chairman, President and Chief Executive Officer, managed all of the Company’s hotels.
Environmental and Sustainability Our initiatives are intended to improve energy efficiency at our hotels but also to enhance the value and profitability of our hotels. Among these energy efficiency programs are the installation of energy efficient lighting, guestroom “smart” thermostats that adjust room conditions based upon occupancy status, low-flow toilet systems, and recycling laundry water.
Environmental and Sustainability Our initiatives are intended to improve energy efficiency at our hotels and enhance the value and profitability of our hotels. Among these energy efficiency programs are the installation of energy efficient lighting, guestroom “smart” thermostats that adjust room conditions based upon occupancy status, low-flow toilet systems, and recycling laundry water.
In December 2023, we published our annual Corporate Responsibility Report which includes reporting with standards from the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB) and Task Force on Climate-related Financial Disclosures (TCFD). The report is available on our website at www.chathamlodgingtrust.com.
In December 2024, we published our annual Corporate Responsibility Report which includes reporting with standards from the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB) and Task Force on Climate-related Financial Disclosures (TCFD). The report is available on our website at www.chathamlodgingtrust.com.
We plan to maintain a prudent capital structure and intend to maintain our leverage over the long term at a ratio of net debt to investment in hotels at cost (defined as our initial acquisition price plus the gross amount of any subsequent capital investment and excluding any impairment charges) at a level that will be similar to the levels at which we have operated in the past.
We plan to maintain a prudent capital structure and intend to maintain our leverage over the long term at a ratio of net debt to investment in hotels at cost (defined as our initial acquisition price plus the gross amount of any subsequent capital investment) at a level that will be similar to the levels at which we have operated in the past.
We utilize independent management companies, including IHM, a hotel management company 100% owned by Mr. Fisher that as of December 31, 2023, managed all of our hotels.
We utilize independent management companies, including IHM, a hotel management company 100% owned by Mr. Fisher that as of December 31, 2024, managed all of our hotels.
As of December 31, 2023, our hotels include upscale extended-stay hotels that operate under the Residence Inn by Marriott ® brand (sixteen hotels), the Homewood Suites by Hilton ® brand (six hotels), the Home2 Suites by Hilton ® brand (one hotel) and the TownePlace Suites by Marriott ® brand (one hotel), as well as premium-branded select-service hotels that operate under the Courtyard by Marriott ® brand (four hotels), the Hampton Inn or Hampton Inn and Suites by Hilton ® brand (three hotels), the Hilton Garden Inn by Hilton ® brand (four hotels), the SpringHill Suites by Marriott ® brand (one hotel), the Hyatt Place® brand (two hotels), and all-suite hotels that operate under the upper scale Embassy Suites ® brand (one hotel).
As of December 31, 2024, our hotels include upscale extended-stay hotels that operate under the Residence Inn by Marriott ® brand (sixteen hotels), the Homewood Suites by Hilton ® brand (four hotels), the Home2 Suites by Hilton ® brand (two hotels) and the TownePlace Suites by Marriott ® brand (one hotel), as well as premium-branded select-service hotels that operate under the Courtyard by Marriott ® brand (four hotels), the Hampton Inn or Hampton Inn and Suites by Hilton ® brand (three hotels), the Hilton Garden Inn by Hilton ® brand (three hotels), the SpringHill Suites by Marriott ® brand (one hotel), the Hyatt Place® brand (two hotels), and all-suite hotels that operate under the upper upscale Embassy Suites ® brand (one hotel).
The incentive management fee is capped at 1% of gross hotel revenues for the applicable calculation. 9 As of December 31, 2023, certain key terms of our management agreements for our 39 hotels were as follows (dollars are not in thousands): Property Management Company Base Management Fee Monthly Accounting Fee Monthly Revenue Management Fee Incentive Management Fee Cap Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington IHM 3.0 % $1,200 $1,000 1.0 % Homewood Suites by Hilton Minneapolis-Mall of America IHM 3.0 % $1,200 $1,000 1.0 % Homewood Suites by Hilton Nashville-Brentwood IHM 3.0 % $1,200 $1,000 1.0 % Homewood Suites by Hilton Hartford-Farmington IHM 3.0 % $1,200 $1,000 1.0 % Homewood Suites by Hilton Orlando-Maitland IHM 3.0 % $1,200 $1,000 1.0 % Hampton Inn & Suites Houston-Medical Center IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn Long Island Holtsville IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn White Plains IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn New Rochelle IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn Garden Grove IHM 3.0 % $1,500 $1,000 1.0 % Homewood Suites by Hilton San Antonio River Walk IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn Washington DC IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn Tysons Corner IHM 3.0 % $1,200 $1,000 1.0 % Hampton Inn Portland Downtown IHM 3.0 % $1,200 $1,000 1.0 % Courtyard Houston IHM 3.0 % $1,500 $1,000 1.0 % Hyatt Place Pittsburgh North Shore IHM 3.0 % $1,500 $1,000 1.0 % Hampton Inn Exeter IHM 3.0 % $1,200 $1,000 1.0 % Hilton Garden Inn Denver Tech IHM 3.0 % $1,500 $1,000 1.0 % Residence Inn Bellevue IHM 3.0 % $1,500 $1,000 1.0 % SpringHill Suites Savannah IHM 3.0 % $1,500 $1,000 1.0 % Residence Inn Silicon Valley I IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn Silicon Valley II IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn San Mateo IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn Mountain View IHM 3.0 % $1,200 $1,000 1.0 % Hyatt Place Cherry Creek IHM 3.0 % $1,500 $1,000 1.0 % Courtyard Addison IHM 3.0 % $1,500 $1,000 1.0 % Residence Inn San Diego Gaslamp IHM 3.0 % $1,500 $1,000 1.0 % Hilton Garden Inn Marina del Rey IHM 3.0 % $1,500 $1,000 1.0 % Residence Inn Dedham IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn Il Lugano IHM 3.0 % $1,500 $1,000 1.0 % Hilton Garden Inn Portsmouth IHM 3.0 % $1,500 $1,000 1.0 % Courtyard Summerville IHM 3.0 % $1,500 $1,000 1.0 % Embassy Suites Springfield IHM 3.0 % $1,500 $1,000 1.0 % Residence Inn Summerville IHM 3.0 % $1,500 $1,000 1.0 % Courtyard Dallas IHM 3.0 % $1,500 $1,000 1.0 % Residence Inn Austin Northwest/The Domain Area IHM 3.0 % $1,500 $1,000 1.0 % TownePlace Suites Austin Northwest/The Domain Area IHM 3.0 % $1,500 $1,000 1.0 % Home2 Suites Woodland Hills IHM 3.0 % $1,500 $1,000 1.0 % Hilton Garden Inn Destin Miramar Beach IHM 3.0 % $1,500 $1,000 1.0 % Management fees totaled approximately $10.6 million, $10.1 million and $7.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. 10 Hotel Franchise Agreements The fees associated with the franchise agreements are calculated as a specified percentage of the hotel's gross room revenue.
The incentive management fee is capped at 1% of gross hotel revenues for the applicable calculation. 9 As of December 31, 2024, certain key terms of our management agreements for our 37 hotels were as follows (dollars are not in thousands): Property Management Company Base Management Fee Monthly Accounting Fee Monthly Revenue Management Fee Incentive Management Fee Cap Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington IHM 3.0 % $1,200 $1,000 1.0 % Homewood Suites by Hilton Nashville-Brentwood IHM 3.0 % $1,200 $1,000 1.0 % Homewood Suites by Hilton Hartford-Farmington IHM 3.0 % $1,200 $1,000 1.0 % Hampton Inn & Suites Houston-Medical Center IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn Long Island Holtsville IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn White Plains IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn New Rochelle IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn Garden Grove IHM 3.0 % $1,500 $1,000 1.0 % Homewood Suites by Hilton San Antonio River Walk IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn Washington DC IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn Tysons Corner IHM 3.0 % $1,200 $1,000 1.0 % Hampton Inn Portland Downtown IHM 3.0 % $1,200 $1,000 1.0 % Courtyard Houston IHM 3.0 % $1,500 $1,000 1.0 % Hyatt Place Pittsburgh North Shore IHM 3.0 % $1,500 $1,000 1.0 % Hampton Inn Exeter IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn Bellevue IHM 3.0 % $1,500 $1,000 1.0 % SpringHill Suites Savannah IHM 3.0 % $1,500 $1,000 1.0 % Residence Inn Silicon Valley I IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn Silicon Valley II IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn San Mateo IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn Mountain View IHM 3.0 % $1,200 $1,000 1.0 % Hyatt Place Cherry Creek IHM 3.0 % $1,500 $1,000 1.0 % Courtyard Addison IHM 3.0 % $1,500 $1,000 1.0 % Residence Inn San Diego Gaslamp IHM 3.0 % $1,500 $1,000 1.0 % Hilton Garden Inn Marina del Rey IHM 3.0 % $1,500 $1,000 1.0 % Residence Inn Dedham IHM 3.0 % $1,200 $1,000 1.0 % Residence Inn Il Lugano IHM 3.0 % $1,500 $1,000 1.0 % Hilton Garden Inn Portsmouth IHM 3.0 % $1,500 $1,000 1.0 % Courtyard Summerville IHM 3.0 % $1,500 $1,000 1.0 % Embassy Suites Springfield IHM 3.0 % $1,500 $1,000 1.0 % Residence Inn Summerville IHM 3.0 % $1,500 $1,000 1.0 % Courtyard Dallas IHM 3.0 % $1,500 $1,000 1.0 % Residence Inn Austin Northwest/The Domain Area IHM 3.0 % $1,500 $1,000 1.0 % TownePlace Suites Austin Northwest/The Domain Area IHM 3.0 % $1,500 $1,000 1.0 % Home2 Suites Woodland Hills IHM 3.0 % $1,500 $1,000 1.0 % Hilton Garden Inn Destin Miramar Beach IHM 3.0 % $1,500 $1,000 1.0 % Home2 Suites Phoenix Downtown IHM 3.0 % $1,500 $1,000 1.0 % Management fees totaled approximately $10.7 million, $10.6 million and $10.1 million for the years ended December 31, 2024, 2023 and 2022, respectively. 10 Hotel Franchise Agreements The fees associated with the franchise agreements are calculated as a specified percentage of the hotel's gross room revenue.
The annual base rent for the garage lease is the hotel’s proportionate share of the city’s adopted budget for the operations, management and maintenance of the garage and established reserves to fund for the cost of capital repairs. Aggregate rent for 2023 under these leases amounted to approximately $30 thousand per quarter.
The annual base rent for the garage lease is the hotel’s proportionate share of the city’s adopted budget for the operations, management and maintenance of the garage and established reserves to fund for the cost of capital repairs. Aggregate rent for 2024 under these leases amounted to approximately $32 thousand per quarter.
We are proud to have published our first Corporate Responsibility Report in March 2021. In February 2022, the Company established a standalone Environmental Social and Governance Committee made up of members of the Board of Trustees of the Company (the "Board of Trustees") and two of our executive officers.
We published our first Corporate Responsibility Report in March 2021. In February 2022, the Company established a standalone Environmental Social and Governance Committee made up of members of the Board of Trustees of the Company (the "Board of Trustees") and two of our executive officers.
Certain of the Company's executive officers hold vested and unvested long-term incentive plan units in the Operating Partnership ("LTIP Units"), which are presented as non-controlling interests on our consolidated balance sheets. As of December 31, 2023, the Company owned 39 hotels with an aggregate of 5,915 rooms located in 16 states and the District of Columbia.
Certain of the Company's executive officers hold vested and unvested long-term incentive plan units in the Operating Partnership ("LTIP Units"), which are presented as non-controlling interests on our consolidated balance sheets. As of December 31, 2024, the Company owned 37 hotels with an aggregate of 5,596 rooms located in 16 states and the District of Columbia.
We have maintained a leverage ratio between the mid 20s and the low 50s. A subsequent decrease in hotel property values will not necessarily cause us to repay debt to comply with this target. At December 31, 2023, our leverage ratio was approximately 24.8 percent, which decreased from 26.6 percent at December 31, 2022.
We have maintained a leverage ratio between the mid 20s and the low 50s. A subsequent decrease in hotel property values will not necessarily cause us to repay debt to comply with this target. At December 31, 2024, our leverage ratio was approximately 23.1 percent, which decreased from 24.8 percent at December 31, 2023.
The partial termination of this lease required the Company to apply ASC 842 and remeasure the right of use asset and lease liability and recognize those adjustments in the consolidated statement of operations. The Company shares the space with related parties and is reimbursed for the pro-rata share of rentable space occupied by the related parties.
The partial termination of this lease required the Company to apply ASC 842 and remeasure the ROU asset and lease liability and recognize those adjustments in the consolidated statements of operations. The Company shares the space with related parties and is reimbursed for the pro-rata share of rentable space occupied by the related parties.
Business Strategy Our primary objective is to generate attractive returns for our shareholders through investing in hotel properties (whether wholly owned or through a joint venture) at prices that provide strong returns on invested capital, paying dividends and generating long-term value appreciation.
Accordingly, we do not report segment information. Business Strategy Our primary objective is to generate attractive returns for our shareholders through investing in hotel properties (whether wholly owned or through a joint venture) at prices that provide strong returns on invested capital, paying dividends and generating long-term value appreciation.
Chatham sold its interest in the NewINK JV in March 2021. To maintain our qualification as a REIT, the Company cannot operate its hotels. Therefore, the Operating Partnership and its subsidiaries lease our wholly owned hotels to taxable REIT subsidiary lessees (“TRS Lessees”), which are wholly owned by the Company’s taxable REIT subsidiary (“TRS”) holding company.
To maintain our qualification as a REIT, the Company cannot operate its hotels. Therefore, the Operating Partnership and its subsidiaries lease our wholly owned hotels to taxable REIT subsidiary lessees (“TRS Lessees”), which are wholly owned by the Company’s taxable REIT subsidiary (“TRS”) holding company.
In combination with IHM, we have engaged in events for charitable organizations in a number of ways including participating in race events for charity, collecting food and feeding those in need, and reading and providing gifts to underprivileged children during the holidays. Our employees' volunteer efforts have directly added value to our local community.
In combination with IHM, we have engaged in events for charitable organizations in a number of ways including participating in race events for charity, collecting food and feeding those in need, and reading and providing gifts to underprivileged children during the holidays.
Extended-stay and all-suite hotels typically have the following characteristics: • principal customer base includes business travelers, whether short-term transient travelers or those on extended assignments and corporate relocations; • services and amenities include complimentary breakfast and evening hospitality hour, high-speed internet access, in-room movie channels, limited meeting space, linen and room cleaning service, 24-hour front desk, guest grocery services, and an on-site maintenance staff; and • physical facilities include large suites, quality construction, full separate kitchens in each guest suite or suites that include a wet bar, refrigerator and microwave, quality room furnishings, pool, and exercise facilities. 5 Additionally, we invest in premium-branded select-service hotels such as Courtyard by Marriott ® , Hampton Inn ® , Hampton Inn and Suites by Hilton ® , Hyatt Place ® and Hilton Garden Inn by Hilton ® .
Extended-stay and all-suite hotels typically have the following characteristics: • principal customer base includes business travelers, whether short-term transient travelers or those on extended assignments and corporate relocations; • services and amenities include complimentary breakfast, high-speed internet access, in-room movie channels, limited meeting space, linen and room cleaning service, 24-hour front desk, guest grocery services, and an on-site maintenance staff; and • physical facilities include large suites, quality construction, full separate kitchens in each guest suite or suites that include a wet bar, refrigerator and microwave, quality room furnishings, pool, and exercise facilities.
Lease obligations are based on contractually-required cash payments while lease expense is recognized on a straight-line basis.
Lease obligations are based on contractually required cash payments, while lease expense is recognized on a straight-line basis for its operating leases and as interest expense on the lease liability for its finance lease.
The service and amenity offerings of these hotels typically include complimentary breakfast or a smaller for pay breakfast or evening dining option, high-speed internet access, local calls, in-room movie channels, and linen and room cleaning service.
The service and amenity offerings of these hotels typically include complimentary breakfast or a smaller for pay breakfast or evening dining option, high-speed internet access, local calls, in-room movie channels, and linen and room cleaning service. 5 Financial Information About Industry Segments We evaluate all of our hotels as a single industry segment because all of our hotels have similar economic characteristics and provide similar services to similar types of customers.
The following table includes information regarding the Company's total minimum lease payments for which it is the lessee, as of December 31, 2023, for each of the next five calendar years and thereafter (in thousands): Total Future Lease Payments Amount 2024 $ 1,875 2025 1,940 2026 1,728 2027 1,272 2028 1,272 Thereafter 62,282 Total lease payments $ 70,369 12 Human Capital As of February 27, 2024, we had 17 employees.
Expenses related to the finance lease are included in depreciation and amortization and interest expense, in the Company’s consolidated statements of operations. 12 The following table includes information regarding the Company's total minimum lease payments for which it is the lessee, as of December 31, 2024, for each of the next five calendar years and thereafter (in thousands): Total Future Lease Payments Amount 2025 $ 1,966 2026 1,768 2027 1,313 2028 1,338 2029 1,338 Thereafter 61,172 Total lease payments $ 68,895 Human Capital As of February 26, 2025, we had 17 employees.
The Residence Inn New Rochelle hotel property is subject to an air rights lease and a garage lease, each of which expires on December 1, 2104.
The hotel is subject to supplemental rent payments annually calculated as 5% of gross revenues during the applicable lease year, minus 12 times the monthly base rent scheduled for the lease year. The Residence Inn New Rochelle hotel property is subject to an air rights lease and a garage lease, each of which expires on December 1, 2104.
The Company is the lessee under ground, air rights, garage and office lease agreements for certain of its properties, all of which qualify as operating leases as of December 31, 2023. The leases typically provide multi-year renewal options to extend the term as lessee at the Company's option.
The Company's leases are classified as operating or finance leases. The Company recognizes a right of use ("ROU") asset and lease liability at the estimated present value of the minimum lease payments over the lease term. The leases typically provide multi-year renewal options to extend the term as lessee at the Company's option.
Removed
Prior to September 23, 2021, the Company held a 10.0% noncontrolling interest in a joint venture (the "Inland JV") with affiliates of Colony Capital, Inc. ("CLNY"), which owned 48 hotels acquired from Inland American Real Estate Trust, Inc. ("Inland"), comprising an aggregate of 6,402 rooms. Chatham sold its interest in the Inland JV in September 2021.
Added
Additionally, we invest in premium-branded select-service hotels such as Courtyard by Marriott ® , Hampton Inn ® , Hampton Inn and Suites by Hilton ® , Hyatt Place ® and Hilton Garden Inn by Hilton ® .
Removed
Prior to March 18, 2021, the Company also held a 10.3% noncontrolling interest in a joint venture (the “NewINK JV”) with affiliates of CLNY, which owned 46 hotels acquired from a joint venture (the "Innkeepers JV") between the Company and Cerberus Capital Management (“Cerberus”), comprising an aggregate of 5,948 rooms.
Added
Operating Leases The Residence Inn San Diego Gaslamp hotel property is subject to a ground lease with an expiration of January 31, 2065 and we have an extension option of up to three additional terms of ten years each. Monthly payments are currently approximately $44 thousand per month and increase 10% every five years.
Removed
Financial Information About Industry Segments We evaluate all of our hotels as a single industry segment because all of our hotels have similar economic characteristics and provide similar services to similar types of customers. Accordingly, we do not report segment information.
Added
The Company entered into a new 10-year corporate office lease in May 2024, which was subsequently amended in September 2024, that will commence when the Company takes possession of the space for leasehold improvements, on or before September 1, 2026. Annual base rent will range from $0.6 million to $0.7 million over the term of the lease.
Removed
Monthly payments are currently approximately $44 thousand per month and increase 10% every five years. The hotel is subject to supplemental rent payments annually calculated as 5% of gross revenues during the applicable lease year, minus 12 times the monthly base rent scheduled for the lease year.
Added
The new office space will be shared with a related party and the Company will be reimbursed for the pro-rata share of rentable space that will be occupied by the related party. Finance Leases The Home2 Phoenix hotel property is subject to a Government Property Lease Excise Tax ("GPLET") agreement with the City of Phoenix.
Removed
Diversity, Equity and Inclusion The Company maintains a strong focus on achieving its objectives with respect to diversity, equity and inclusion. In August 2021, the Company increased racial and gender diversity in the composition of its board. 28.6% of Chatham's board members are female and 14.3% identify as members of an underrepresented group.
Added
As part of the agreement, title of the hotel property was conveyed to the City of Phoenix and leased back to the Company for a term of 8 years with fixed annual rent payments ranging from $26 thousand to $81 thousand.
Removed
In January 2022, the Company and the CEO became proud participants in the CEO Action for Diversity and Inclusion™ pledge. As part of the pledge, the Company commits to cultivate a diverse and inclusive workplace environment with the free exchange of ideas. 13 Available Information Our Internet website is www.chathamlodgingtrust.com.
Added
Title of the hotel property will be re-conveyed to the Company at no cost at the expiration of the 8-year lease term. The GPLET agreement can be terminated by the Company at any time for a fee of $0.1 million and title of the hotel property would be re-conveyed back to the Company.
Added
The Home2 Phoenix ROU assets are recorded as finance lease assets within Investment in hotel properties, net and the lease liability is recorded within Lease liability in the Company’s consolidated balance sheet.
Added
Our employees' volunteer efforts have directly added value to our local community. 13 Available Information Our Internet website is www.chathamlodgingtrust.com.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe were co-investors with CLNY in each of the NewINK JV and the Inland JV, which owned 46 and 48 hotels, respectively, and we may invest in additional joint ventures in the future. We may not be in a position to exercise decision-making authority regarding the properties owned through joint ventures that we may invest in.
Biggest changeWe were co-investors in joint ventures in the past, and we may invest in additional joint ventures in the future. We may not be in a position to exercise decision-making authority regarding the properties owned through joint ventures that we may invest in.
Decline in lodging demand, or a continued growth in lodging supply, could result in returns that are substantially below expectations or result in losses, which could have a material adverse effect on our business, financial condition, results of operations and our ability to make distributions to our shareholders. 23 Due to our concentration in hotel investments, a downturn in the lodging industry would adversely affect our operations and financial condition.
A decline in lodging demand, or a continued growth in lodging supply, could result in returns that are substantially below expectations or result in losses, which could have a material adverse effect on our business, financial condition, results of operations and our ability to make distributions to our shareholders. 23 Due to our concentration in hotel investments, a downturn in the lodging industry would adversely affect our operations and financial condition.
There may be conflicts of interest between us and affiliates owned by our Chief Executive Officer. Our Chief Executive Officer, Mr. Fisher, owned 100% of IHM, a hotel management company that, as of December 31, 2023, managed all of our hotels and may manage additional hotels that we acquire or own (wholly or through a joint venture) in the future.
There may be conflicts of interest between us and affiliates owned by our Chief Executive Officer. Our Chief Executive Officer, Mr. Fisher, owned 100% of IHM, a hotel management company that, as of December 31, 2024, managed all of our hotels and may manage additional hotels that we acquire or own (wholly or through a joint venture) in the future.
Fisher, our Chairman and Chief Executive Officer, controls IHM, a hotel management company that, as of December 31, 2023, managed all of our hotels and may manage additional hotels that we acquire in the future.
Fisher, our Chairman and Chief Executive Officer, controls IHM, a hotel management company that, as of December 31, 2024, managed all of our hotels and may manage additional hotels that we acquire in the future.
See "There may be conflicts of interest between us and affiliates owned by our Chief Executive Officer" below. 17 The management of the hotels in our portfolio is currently concentrated in one hotel management company. As of December 31, 2023, IHM managed all 39 of our hotels.
See "There may be conflicts of interest between us and affiliates owned by our Chief Executive Officer" below. 17 The management of the hotels in our portfolio is currently concentrated in one hotel management company. As of December 31, 2024, IHM managed all 37 of our hotels.
Inflation in the United States and the rest of the world has rapidly risen to levels not experienced in decades, and currency volatility and downgrades to the U.S. government’s credit rating, or concerns about its credit and deficit levels in general, could cause interest rates and borrowing costs to rise further.
Over the last several years, inflation in the United States and the rest of the world rose to levels not experienced in decades, and currency volatility and downgrades to the U.S. government’s credit rating, or concerns about its credit and deficit levels in general, could cause interest rates and borrowing costs to rise further.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIHM and the Company’s Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and General Counsel (the “Executive Leadership Team”) are responsible for assessing and managing cybersecurity risks. Certain members of IHM periodically report to the Company’s management on cybersecurity issues and management presents information to our Audit Committee as well as our full Board, as appropriate, on cybersecurity matters.
Biggest changeCertain members of IHM periodically report to the Company’s management on cybersecurity issues and management presents information to our Audit Committee as well as our full Board, as appropriate, on cybersecurity matters.
In addition, the Audit Committee and the General Counsel will review on at least an annual basis the Incident Response Plan and update the Incident Response Plan, as appropriate, to address applicable legal requirements and the Company’s policies, procedures and information security and business objectives.
In addition, our Audit Committee and General Counsel will review on at least an annual basis the Incident Response Plan and update the Incident Response Plan, as appropriate, to address applicable legal requirements and the Company’s policies, procedures and information security and business objectives.
In addition, much of the sensitive information relating to hotel guests are controlled by the respective franchisor companies, affiliates of Marriott International, Inc., Hilton Worldwide Holdings, Inc., and Hyatt Hotels Corporation, each of which is a public company with enhanced cybersecurity protection policies in place which each publicly discloses.
In addition, much of the sensitive information relating to hotel guests is controlled by the respective franchisor companies, affiliates of Marriott International, Inc., Hilton Worldwide Holdings, Inc., and Hyatt Hotels Corporation, each of which is a public company with cybersecurity protection policies in place which each publicly discloses.
IHM, in coordination with the General Counsel, is responsible for testing the Incident Response Plan on a periodic basis.
IHM, in coordination with our General Counsel, is responsible for testing the Incident Response Plan on a periodic basis.
In addition, to aid its own security, the Company has adopted a number of cybersecurity policies including an Incident Response Plan, an Acceptable Use Policy for employees and a Service Provide Cybersecurity Management Policy (the “Cybersecurity Policies”), through which the Company ensures that key vendors with access to sensitive information have contractual terms obligating their compliance with the Company processes, policies and procedures.
In addition, to aid its own security, the Company has adopted a number of cybersecurity policies including an Incident Response Plan, an Acceptable Use Policy for employees and a Service Provider Cybersecurity Management Policy (collectively, the “Cybersecurity Policies”), through which the Company ensures that key vendors with access to sensitive information have contractual terms obligating their compliance with the Company's processes, policies and procedures.
Added
IHM and the Company’s Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and General Counsel (collectively, the “Executive Leadership Team”) are responsible for assessing and managing cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties The following table sets forth certain operating information for our hotels as of December 31, 2023: Property Location Date of Acquisition Year Opened Number of Rooms Purchase Price Purchase Price per Room Mortgage Debt Balance Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington Billerica, Massachusetts 4/23/2010 1999 147 $ 12.5 million $ 85,714 $ 14.5 million Homewood Suites by Hilton Minneapolis-Mall of America Bloomington, Minnesota 4/23/2010 1998 144 $ 18.0 million $ 125,000 — Homewood Suites by Hilton Nashville-Brentwood Brentwood, Tennessee 4/23/2010 1998 121 $ 11.3 million $ 93,388 — Homewood Suites by Hilton Hartford-Farmington Farmington, Connecticut 4/23/2010 1999 121 $ 11.5 million $ 95,041 — Homewood Suites by Hilton Orlando-Maitland Maitland, Florida 4/23/2010 2000 143 $ 9.5 million $ 66,433 — Hampton Inn & Suites Houston-Medical Center Houston, Texas 7/2/2010 1997 120 $ 16.5 million $ 137,500 $ 16.3 million Residence Inn Long Island Holtsville Holtsville, New York 8/3/2010 2004 124 $ 21.3 million $ 171,774 — Residence Inn White Plains White Plains, New York 9/23/2010 1982 136 $ 21.2 million $ 159,398 — Residence Inn New Rochelle New Rochelle, New York 10/5/2010 2000 127 $ 21.0 million $ 169,355 — Residence Inn Garden Grove Garden Grove, California 7/14/2011 2003 200 $ 43.6 million $ 218,000 $ 29.5 million Homewood Suites by Hilton San Antonio River Walk San Antonio, Texas 7/14/2011 1996 146 $ 32.5 million $ 222,603 — Residence Inn Washington DC Washington, DC 7/14/2011 1974 104 $ 29.4 million $ 280,000 — Residence Inn Tysons Corner Vienna, Virginia 7/14/2011 2001 121 $ 37.0 million $ 305,785 — Hampton Inn Portland Downtown Portland, Maine 12/27/2012 2011 125 $ 28.0 million $ 229,508 — Courtyard Houston Houston, Texas 2/5/2013 2010 197 $ 34.8 million $ 176,395 — Hyatt Place Pittsburgh North Shore Pittsburgh, Pennsylvania 6/17/2013 2010 178 $ 40.0 million $ 224,719 — Hampton Inn Exeter Exeter, New Hampshire 8/9/2013 2010 111 $ 15.2 million $ 136,937 — Hilton Garden Inn Denver Tech Denver, Colorado 9/26/2013 1999 180 $ 27.9 million $ 155,000 — Residence Inn Bellevue Bellevue, Washington 10/31/2013 2008 231 $ 71.8 million $ 316,883 — Springhill Suites Savannah Savannah, Georgia 12/5/2013 2009 160 $ 39.8 million $ 248,438 $ 27.8 million Residence Inn Silicon Valley I Sunnyvale, CA 6/9/2014 1983 231 $ 92.8 million $ 401,776 $ 60.1 million Residence Inn Silicon Valley II Sunnyvale, CA 6/9/2014 1985 248 $ 102.0 million $ 411,103 $ 65.6 million Residence Inn San Mateo San Mateo, CA 6/9/2014 1985 160 $ 72.7 million $ 454,097 $ 45.1 million Residence Inn Mountain View Mountain View, CA 6/9/2014 1985 144 $ 56.4 million $ 503,869 $ 35.2 million Hyatt Place Cherry Creek Glendale, CO 8/29/2014 1987 199 $ 32.0 million $ 164,948 — Courtyard Addison Addison, TX 11/17/2014 2000 176 $ 24.1 million $ 137,178 — Residence Inn San Diego Gaslamp San Diego, CA 2/25/2015 2009 240 $ 90.0 million $ 375,000 — Residence Inn Dedham Dedham, MA 7/17/2015 2008 81 $ 22.0 million $ 271,605 — Residence Inn Il Lugano Fort Lauderdale, FL 8/17/2015 2013 105 $ 33.5 million $ 319,048 — Hilton Garden Inn Marina del Rey Marina del Rey, CA 9/17/2015 1998 136 $ 45.1 million $ 336,194 $ 19.0 million Home2 Suites Woodland Hills Woodland Hills, CA 8/29/2017 2022 170 $ 70.9 million $ 418,107 — Hilton Garden Inn Portsmouth Portsmouth, NH 9/20/2017 2006 131 $ 43.5 million $ 332,061 — Summerville Courtyard Summerville, SC 11/15/2017 2014 96 $ 20.2 million $ 210,417 $ 9.0 million Embassy Suites Springfield Springfield, VA 12/6/2017 2013 219 $ 68.0 million $ 310,502 — Summerville Residence Inn Summerville, SC 8/27/2018 2018 96 $ 20.8 million $ 216,667 $ 9.5 million Dallas DT Courtyard Dallas, TX 12/5/2018 2018 167 $ 49.0 million $ 293,413 $ 24.5 million Residence Inn Austin Northwest/The Domain Area Austin, TX 8/3/2021 2016 132 $ 37.0 million $ 280,000 $ 20.9 million TownePlace Suites Austin Northwest/The Domain Area Austin, TX 8/3/2021 2021 137 $ 34.3 million $ 250,000 $ 19.1 million Hilton Garden Inn Destin Miramar Beach Miramar Beach, FL 3/8/2022 2020 111 $ 31.0 million $ 279,000 — Total 5,915 $ 1,488.1 million $ 251,581 $ 396.1 million We lease our headquarters at 222 Lakeview Avenue, Suite 200, West Palm Beach, FL 33401.
Biggest changeProperties The following table sets forth certain operating information for our hotels as of December 31, 2024: Property Location Date of Acquisition Year Opened Number of Rooms Purchase Price Purchase Price per Room Mortgage Debt Balance Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington Billerica, Massachusetts 4/23/2010 1999 147 $ 12.5 million $ 85,714 — Homewood Suites by Hilton Nashville-Brentwood Brentwood, Tennessee 4/23/2010 1998 121 $ 11.3 million $ 93,388 — Homewood Suites by Hilton Hartford-Farmington Farmington, Connecticut 4/23/2010 1999 121 $ 11.5 million $ 95,041 — Hampton Inn & Suites Houston-Medical Center Houston, Texas 7/2/2010 1997 120 $ 16.5 million $ 137,500 $ 16.0 million Residence Inn Long Island Holtsville Holtsville, New York 8/3/2010 2004 124 $ 21.3 million $ 171,774 — Residence Inn White Plains White Plains, New York 9/23/2010 1982 136 $ 21.2 million $ 159,398 — Residence Inn New Rochelle New Rochelle, New York 10/5/2010 2000 127 $ 21.0 million $ 169,355 — Residence Inn Garden Grove Garden Grove, California 7/14/2011 2003 200 $ 43.6 million $ 218,000 — Homewood Suites by Hilton San Antonio River Walk San Antonio, Texas 7/14/2011 1996 146 $ 32.5 million $ 222,603 — Residence Inn Washington DC Washington, DC 7/14/2011 1974 104 $ 29.4 million $ 280,000 — Residence Inn Tysons Corner Vienna, Virginia 7/14/2011 2001 121 $ 37.0 million $ 305,785 — Hampton Inn Portland Downtown Portland, Maine 12/27/2012 2011 125 $ 28.0 million $ 229,508 — Courtyard Houston Houston, Texas 2/5/2013 2010 197 $ 34.8 million $ 176,395 — Hyatt Place Pittsburgh North Shore Pittsburgh, Pennsylvania 6/17/2013 2010 178 $ 40.0 million $ 224,719 $ 23.3 million Hampton Inn Exeter Exeter, New Hampshire 8/9/2013 2010 111 $ 15.2 million $ 136,937 $ 15.0 million Residence Inn Bellevue Bellevue, Washington 10/31/2013 2008 231 $ 71.8 million $ 316,883 — Springhill Suites Savannah Savannah, Georgia 12/5/2013 2009 160 $ 39.8 million $ 248,438 $ 22.0 million Residence Inn Silicon Valley I Sunnyvale, CA 6/9/2014 1983 231 $ 92.8 million $ 401,776 — Residence Inn Silicon Valley II Sunnyvale, CA 6/9/2014 1985 248 $ 102.0 million $ 411,103 — Residence Inn San Mateo San Mateo, CA 6/9/2014 1985 160 $ 72.7 million $ 454,097 — Residence Inn Mountain View Mountain View, CA 6/9/2014 1985 144 $ 56.4 million $ 503,869 — Hyatt Place Cherry Creek Glendale, CO 8/29/2014 1987 199 $ 32.0 million $ 164,948 — Courtyard Addison Addison, TX 11/17/2014 2000 176 $ 24.1 million $ 137,178 — Residence Inn San Diego Gaslamp San Diego, CA 2/25/2015 2009 240 $ 90.0 million $ 375,000 — Residence Inn Dedham Dedham, MA 7/17/2015 2008 81 $ 22.0 million $ 271,605 — Residence Inn Il Lugano Fort Lauderdale, FL 8/17/2015 2013 105 $ 33.5 million $ 319,048 — Hilton Garden Inn Marina del Rey Marina del Rey, CA 9/17/2015 1998 136 $ 45.1 million $ 336,194 — Home2 Suites Woodland Hills Woodland Hills, CA 8/29/2017 2022 170 $ 70.9 million $ 418,107 — Hilton Garden Inn Portsmouth Portsmouth, NH 9/20/2017 2006 131 $ 43.5 million $ 332,061 — Summerville Courtyard Summerville, SC 11/15/2017 2014 96 $ 20.2 million $ 210,417 $ 9.0 million Embassy Suites Springfield Springfield, VA 12/6/2017 2013 219 $ 68.0 million $ 310,502 — Summerville Residence Inn Summerville, SC 8/27/2018 2018 96 $ 20.8 million $ 216,667 $ 9.5 million Dallas DT Courtyard Dallas, TX 12/5/2018 2018 167 $ 49.0 million $ 293,413 $ 24.5 million Residence Inn Austin Northwest/The Domain Area Austin, TX 8/3/2021 2016 132 $ 37.0 million $ 280,000 $ 20.9 million TownePlace Suites Austin Northwest/The Domain Area Austin, TX 8/3/2021 2021 137 $ 34.3 million $ 250,000 $ 19.1 million Hilton Garden Inn Destin Miramar Beach Miramar Beach, FL 3/8/2022 2020 111 $ 31.0 million $ 279,000 — Home2 Suites Phoenix Downtown Phoenix, AZ 5/30/2024 2024 148 $ 43.3 million $ 293,000 — Total 5,596 $ 1,476.0 million $ 263,760 $ 159.2 million We lease our headquarters at 222 Lakeview Avenue, Suite 200, West Palm Beach, FL 33401.
The lease for our headquarters has an initial term that expires in 2026 and the Company has an option to renew the lease for up to two successive terms of five years each. The Residence Inn New Rochelle hotel is subject to an air rights lease and garage lease that each expire on December 1, 2104.
The lease for our headquarters has an initial term that expires in 2026. We entered into a new 10-year corporate office lease in 2024 that will commence on or before September 1, 2026. The Residence Inn New Rochelle hotel is subject to an air rights lease and garage lease that each expire on December 1, 2104.
The Residence Inn San Diego Gaslamp hotel is subject to a ground lease with an expiration of 37 January 31, 2065. The Hilton Garden Inn Marina del Rey hotel is subject to a ground lease with an expiration of December 31, 2067. For more information on the leases to which we or our hotels are subject, see "Item 1.
The Residence Inn San Diego Gaslamp hotel is subject to a ground lease with an expiration of January 31, 2065. The Hilton Garden Inn Marina del Rey hotel is subject to a ground lease with an expiration of December 31, 2067. The Home2 Phoenix Downtown hotel is subject to a finance lease with an expiration in 2032.
Added
For more information on the leases to which we or our hotels are subject, see "Item 1. Business - Leases". 37

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeRefer to Note 14 “Commitments and Contingencies” of the notes to consolidated financial statements for discussion of all litigation matters, which is incorporated by reference herein and is considered an integral part of Part I, Item 3 “Legal Proceedings”.
Biggest changeRefer to Note 13 “Commitments and Contingencies” of the notes to consolidated financial statements for discussion of all litigation matters, which is incorporated by reference herein and is considered an integral part of Part I, Item 3 “Legal Proceedings”.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−0 removed5 unchanged
Biggest changeValue of initial investment at December 31, 2018 2019 2020 2021 2022 2023 Chatham Lodging Trust $ 100.00 $ 111.28 $ 66.47 $ 84.44 $ 75.95 $ 68.24 Russell 2000 $ 100.00 $ 125.52 $ 150.58 $ 172.90 $ 137.56 $ 160.85 FTSE Nareit All Equity REITs $ 100.00 $ 128.07 $ 120.56 $ 168.64 $ 126.30 $ 140.81 FTSE Nareit Lodging $ 100.00 $ 115.65 $ 88.36 $ 104.46 $ 88.47 $ 109.63 39 Distribution Information In order to maintain our qualification as a REIT, we must make distributions to our shareholders each year in an amount equal to at least: • 90% of our REIT taxable income determined without regard to the dividends paid deduction and excluding net capital gains; plus • 90% of the excess of our net income from foreclosure property over the tax imposed on such income by the Code; minus • any excess non-cash income (as defined in the Code).
Biggest changeValue of initial investment at December 31, 2019 2020 2021 2022 2023 2024 Chatham Lodging Trust $ 100.00 $ 59.73 $ 75.88 $ 68.25 $ 61.32 $ 52.81 Russell 2000 $ 100.00 $ 119.96 $ 137.74 $ 109.59 $ 128.14 $ 142.93 FTSE Nareit All Equity REITs $ 100.00 $ 94.14 $ 131.68 $ 98.62 $ 109.95 $ 114.71 FTSE Nareit Lodging $ 100.00 $ 76.40 $ 90.32 $ 76.50 $ 94.80 $ 92.90 39 Distribution Information In order to maintain our qualification as a REIT, we must make distributions to our shareholders each year in an amount equal to at least: • 90% of our REIT taxable income determined without regard to the dividends paid deduction and excluding net capital gains; plus • 90% of the excess of our net income from foreclosure property over the tax imposed on such income by the Code; minus • any excess non-cash income (as defined in the Code).
The 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, (iii) the FTSE Nareit All Equity REITs and (iv) the FTSE Nareit Lodging. The total return values include any dividends paid during the period.
The total return values were calculated assuming a $100 investment on December 31, 2019 with reinvestment of all dividends in (i) our common shares, (ii) the Russell 2000, (iii) the FTSE Nareit All Equity REITs and (iv) the FTSE Nareit Lodging. The total return values include any dividends paid during the period.
Once shares are forfeited, they are not eligible to be reissued. There were no common shares forfeited in the years ended December 31, 2023 and 2022, respectively, related to such repurchases. Item 6. [Reserved] 41
Once shares are forfeited, they are not eligible to be reissued. There were no common shares forfeited in the years ended December 31, 2024 and 2023, respectively, related to such repurchases. Item 6. [Reserved] 41
The below graph provides a comparison of the five-year 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”), the FTSE Nareit All Equity REITs Index (the “FTSE Nareit All Equity REITs”) and the FTSE Nareit Lodging/Resorts Index (the “FTSE Nareit Lodging”).
The below graph provides a comparison of the five-year cumulative total return on our common shares from December 31, 2019 to the NYSE closing price per share on December 31, 2024 with the cumulative total return on the Russell 2000 Index (the “Russell 2000”), the FTSE Nareit All Equity REITs Index (the “FTSE Nareit All Equity REITs”) and the FTSE Nareit Lodging/Resorts Index (the “FTSE Nareit Lodging”).
The following table sets forth information regarding the income tax characterization of regular distributions by the Company on its shares for the years ended December 31, 2023 and 2022, respectively: 2023 2022 Common shares: Ordinary income $ 0.28 100.0 % $ 0.07 100.0 % Return of capital — — % — — % Total $ 0.28 100.0 % $ 0.07 100.0 % Series A preferred shares: Ordinary income $ 1.65624 100.0 % $ 1.65624 100.0 % Return of capital — — % — — % Total $ 1.65624 100.0 % $ 1.65624 100.0 % Equity Compensation Plan Information The following table provides information, as of December 31, 2023, relating to our Equity Incentive Plan pursuant to which grants of common share options, share awards, share appreciation rights, performance units, LTIP units and other equity-based awards options may be granted from time to time.
The following table sets forth information regarding the income tax characterization of regular distributions by the Company on its shares for the years ended December 31, 2024 and 2023, respectively: 2024 2023 Common shares: Ordinary income $ 0.21568 77.0 % $ 0.28 100.0 % Return of capital 0.06432 23.0 % — — % Total $ 0.28 100.0 % $ 0.28 100.0 % Series A preferred shares: Ordinary income $ 1.65624 100.0 % $ 1.65624 100.0 % Return of capital — — % — — % Total $ 1.65624 100.0 % $ 1.65624 100.0 % Equity Compensation Plan Information The following table provides information, as of December 31, 2024, relating to our Equity Incentive Plan pursuant to which grants of common share options, share awards, share appreciation rights, performance units, LTIP units and other equity-based awards options may be granted from time to time.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common shares began trading on the NYSE, on April 16, 2010 under the symbol "CLDT". Shareholder Information On December 31, 2023, there were 271 registered holders of record of our common shares.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common shares began trading on the NYSE, on April 16, 2010 under the symbol "CLDT". Shareholder Information On December 31, 2024, there were 252 registered holders of record of our common shares.
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 holders¹ — — 1,252,326 Equity compensation plans not approved by security holders — — — Total — — 1,252,326 ¹ Our Equity Incentive Plan was approved by our company's sole trustee and our company's sole shareholder prior to completion of our IPO.
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 holders¹ — — 744,619 Equity compensation plans not approved by security holders — — — Total — — 744,619 ¹ Our Equity Incentive Plan was approved by our company's sole trustee and our company's sole shareholder prior to completion of our IPO.
Se e Note 12 to our consolidated financial statements for additional information regarding our Equity Incentive Plan.
See Note 11 to our consolidated financial statements for additional information regarding our Equity Incentive Plan.

Item 7. Management's Discussion & Analysis

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

83 edited+11 added−15 removed50 unchanged
Biggest changeFor the year ended December 31, 2023 December 31, 2022 % Change Same Property (39 hotels) Actual (39 hotels) Same Property (39 hotels) Actual (43 hotels) Same Property (39 hotels) Actual (39/43 hotels) Occupancy 74.3 % 74.3 % 71.9 % 71.5 % 3.3 % 3.9 % ADR $ 177.60 $ 177.60 $ 173.01 $ 171.77 2.7 % 3.4 % RevPAR $ 132.01 $ 132.01 $ 124.43 $ 122.81 6.1 % 7.5 % Same property RevPAR increased 6.1% due to an increase in occupancy of 3.3% and an increase in ADR of 2.7%. 44 Hotel Operating Expenses Hotel operating expenses consisted of the following for the periods indicated (dollars in thousands): For the year ended December 31, 2023 December 31, 2022 % Change Hotel operating expenses: Room $ 61,794 $ 56,073 10.2 % Food and beverage expense 6,352 5,520 15.1 % Telephone expense 1,439 1,449 (0.7) % Other expense 3,712 3,488 6.4 % General and administrative 28,884 26,085 10.7 % Franchise and marketing fees 24,897 23,674 5.2 % Advertising and promotions 6,085 5,397 12.7 % Utilities 13,007 12,048 8.0 % Repairs and maintenance 15,837 14,145 12.0 % Management fees paid to related parties 10,557 10,133 4.2 % Insurance 2,822 2,746 2.8 % Total hotel operating expenses $ 175,386 $ 160,758 9.1 % Hotel operating expenses increased $14.6 million, or 9.1%, to $175.4 million for the year ended December 31, 2023 from $160.8 million for the year ended December 31, 2022.
Biggest changeHotel Operating Expenses Hotel operating expenses consisted of the following for the periods indicated (dollars in thousands): For the year ended December 31, 2024 December 31, 2023 % Change Hotel operating expenses: Room $ 65,311 $ 61,794 5.7 % Food and beverage expense 6,218 6,352 (2.1) % Telephone expense 1,360 1,439 (5.5) % Other expense 4,127 3,712 11.2 % General and administrative 28,826 28,884 (0.2) % Franchise and marketing fees 25,355 24,897 1.8 % Advertising and promotions 6,229 6,085 2.4 % Utilities 13,161 13,007 1.2 % Repairs and maintenance 16,516 15,837 4.3 % Management fees paid to related parties 10,733 10,557 1.7 % Insurance 3,340 2,822 18.4 % Total hotel operating expenses $ 181,176 $ 175,386 3.3 % Hotel operating expenses increased $5.8 million, or 3.3%, to $181.2 million for the year ended December 31, 2024 from $175.4 million for the year ended December 31, 2023.
For properties the Company considers held for sale, depreciation and amortization are no longer recorded and the value the properties is recorded at the lower of depreciated cost or fair value, less costs to sell.
For properties the Company considers held for sale, depreciation and amortization are no longer recorded and the value of the properties is recorded at the lower of depreciated cost or fair value, less costs to sell.
Some of these limitations are: • FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; • FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect changes in, or cash requirements for, our working capital needs; • FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect funds available to make cash distributions; • EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts; • Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may need to be replaced in the future, and FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect any cash requirements for such replacements; • Non-cash compensation is and will remain a key element of our overall long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period using Adjusted EBITDA; • Adjusted FFO, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect the impact of certain cash charges (including acquisition transaction costs) that result from matters we consider not to be indicative of the underlying performance of our hotel properties; • Other companies in our industry may calculate FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA differently than we do, limiting their usefulness as a comparative measure; and 50 • FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA do not represent cash generated from operating activities as determined by GAAP and should not be considered as alternatives to net income or loss, cash flows from operations or any other operating performance measure prescribed by GAAP.
Some of these limitations are: • FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; • FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect changes in, or cash requirements for, our working capital needs; • FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect funds available to make cash distributions; • EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts; • Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may need to be replaced in the future, and FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect any cash requirements for such replacements; • Non-cash compensation is and will remain a key element of our overall long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period using Adjusted EBITDA; • Adjusted FFO, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect the impact of certain cash charges (including acquisition transaction costs) that result from matters we consider not to be indicative of the underlying performance of our hotel properties; • Other companies in our industry may calculate FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA differently than we do, limiting their usefulness as a comparative measure; and • FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA do not represent cash generated from operating activities as determined by GAAP and should not be considered as alternatives to net income or loss, cash flows from operations or any other operating performance measure prescribed by GAAP.
Material Trends or Uncertainties We are not aware of any material trends or uncertainties, favorable or unfavorable, that may be reasonably anticipated to have a material impact on either the capital resources or the revenues or income to be derived from the acquisition and operation of properties, loans and other permitted investments, other than those referred to in this section and the risk factors identified in the “Risk Factors” section of this Annual Report on this Form 10-K.
Material Trends or Uncertainties 46 We are not aware of any material trends or uncertainties, favorable or unfavorable, that may be reasonably anticipated to have a material impact on either the capital resources or the revenues or income to be derived from the acquisition and operation of properties, loans and other permitted investments, other than those referred to in this section and the risk factors identified in the “Risk Factors” section of this Annual Report on this Form 10-K.
Sales, use, occupancy, and similar taxes are collected and presented on a net basis (excluded from revenues) in the accompanying consolidated statements of operations. 54 Share-Based Compensation We measure compensation expense for the restricted share awards based upon the fair market value of our common shares at the date of grant.
Sales, use, occupancy, and similar taxes are collected and presented on a net basis (excluded from revenues) in the accompanying consolidated statements of operations. Share-Based Compensation We measure compensation expense for the restricted share awards based upon the fair market value of our common shares at the date of grant.
We also present Adjusted EBITDA which includes additional adjustments for items such as other charges, gains or losses on extinguishment of indebtedness, amortization of share-based compensation and certain other expenses that we 48 consider outside the normal course of operations.
We also present Adjusted EBITDA which includes additional adjustments for items such as other charges, gains or losses on extinguishment of indebtedness, amortization of share-based compensation and certain other expenses that we consider outside the normal course of operations.
The TRS Lessees have entered into management agreements with third-party management companies that provide day-to-day management for the hotels. As of December 31, 2023, Island Hospitality Management Inc. (“IHM”), which is 100% owned by Jeffrey H. Fisher, the Company's Chairman, President and Chief Executive Officer, managed all of the Company’s hotels.
The TRS Lessees have entered into management agreements with third-party management companies that provide day-to-day management for the hotels. As of December 31, 2024, Island Hospitality Management Inc. (“IHM”), which is 100% owned by Jeffrey H. Fisher, the Company's Chairman, President and Chief Executive Officer, managed all of the Company’s hotels.
Cantor Fitzgerald & Co., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., BTIG, LLC, Citigroup Global Markets Inc., Regions Securities LLC, Stifel, Nicolaus & Company, Incorporated and Wells Fargo Securities act as sales agents under the ATM Program. The Company did not issue any shares under the ATM Program during the year ended December 31, 2023.
Cantor Fitzgerald & Co., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., BTIG, LLC, Citigroup Global Markets Inc., Regions Securities LLC, Stifel, Nicolaus & Company, Incorporated and Wells Fargo Securities act as sales agents under the ATM Program. The Company did not issue any shares under the ATM Program during the year ended December 31, 2024.
As of December 31, 2023, there was approximately $77.5 million in common shares available for issuance under the ATM Program. We expect to meet our short-term liquidity requirements generally through existing cash balances and availability under our revolving credit facility and unsecured term loan.
As of December 31, 2024, there was approximately $77.5 million in common shares available for issuance under the ATM Program. We expect to meet our short-term liquidity requirements generally through existing cash balances and availability under our revolving credit facility and unsecured term loan.
See “Risks Related to Our Business” and Note 15, “Related Party Transactions”, to our consolidated financial statements included in this Annual Report on Form 10-K. See also Item 13 of this Form 10-K. Inflation Operators of hotels, in general, possess the ability to adjust room rates daily to reflect the effects of inflation.
See “Risks Related to Our Business” and Note 14, “Related Party Transactions”, to our consolidated financial statements included in this Annual Report on Form 10-K. See also Item 13 of this Form 10-K. Inflation Operators of hotels, in general, possess the ability to adjust room rates daily to reflect the effects of inflation.
If the estimated undiscounted future cash flows are less than the carrying amount, an adjustment to reduce the carrying amount to the related hotel property's estimated fair value is recorded and an impairment loss recognized. For the year ended December 31, 2023, the Company incurred an impairment loss on one hotel property (See Note 5).
If the estimated undiscounted future cash flows are less than the carrying amount, an adjustment to reduce the carrying amount to the related hotel property's estimated fair value is recorded and an impairment loss recognized. For the year ended December 31, 2024, the Company incurred an impairment loss on one hotel property (See Note 5).
Same property Occupancy, ADR, and RevPAR reflect results for the hotels owned by the Company as of December 31, 2023 that have been in operation for a full year regardless of our ownership during the period presented, which is a non-GAAP financial measure.
Same property Occupancy, ADR, and RevPAR reflect results for the hotels owned by the Company as of December 31, 2024 that have been in operation for a full year regardless of our ownership during the period presented, which is a non-GAAP financial measure.
The Company classifies properties as held for sale when all criteria within the Financial Accounting Standards Board's ("FASB") guidance on the impairment or disposal of long-lived assets are met. As of December 31, 2023, we had no hotel properties that met the criteria to be presented as held for sale.
The Company classifies properties as held for sale when all criteria within the Financial Accounting Standards Board's ("FASB") guidance on the impairment or disposal of long-lived assets are met. As of December 31, 2024, we had no hotel properties that met the criteria to be presented as held for sale.
We were in compliance with all financial covenants at December 31, 2023. Our mortgage debt agreements contain “cash trap” provisions that are triggered when the hotel’s operating results fall below a certain debt service coverage ratio or debt yield.
We were in compliance with all financial covenants at December 31, 2024. Our mortgage debt agreements contain “cash trap” provisions that are triggered when the hotel’s operating results fall below a certain debt service coverage ratio or debt yield.
See Note 13, “Leases” to our consolidated financial statements for additional information relating to our corporate office and ground leases . Related Party Transactions We have entered into transactions and arrangements with related parties that could result in potential conflicts of interest.
See Note 12, “Leases” to our consolidated financial statements for additional information relating to our corporate office and ground leases . Related Party Transactions We have entered into transactions and arrangements with related parties that could result in potential conflicts of interest.
See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for comparative a discussion of our consolidated results of operations between fiscal 2022 and fiscal 2021.
See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for comparative a discussion of our consolidated results of operations between fiscal 2023 and fiscal 2022.
Liquidity and Capital Resources We plan to maintain a prudent capital structure and intend to maintain our leverage over the long term at a ratio of net debt to investment in hotels (at cost) (defined as our initial acquisition price plus the gross amount of any subsequent capital investment and excluding any impairment charges) at a level that will be similar to the levels at which we have operated in the past.
Liquidity and Capital Resources We plan to maintain a prudent capital structure and intend to maintain our leverage over the long term at a ratio of net debt to investment in hotels (at cost) (defined as our initial acquisition price plus the gross amount of any subsequent capital investment) at a level that will be similar to the levels at which we have operated in the past.
For the year ended December 31, 2022, there were no impairment losses. For the year ended December 31, 2021, the Company incurred an impairment loss on one hotel property (See Note 5).
For the year ended December 31, 2023, the Company incurred an impairment loss on one hotel property (See Note 5). For the year ended December 31, 2022, there were no impairment losses.
See “Non-GAAP Financial Measures” for further discussion of FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA. Results of Operations Comparison of the year ended December 31, 2023 to the year ended December 31, 2022 The section below provides a comparative discussion of our consolidated results of operations between fiscal year 2023 and 2022.
See “Non-GAAP Financial Measures” for further discussion of FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA. 42 Results of Operations Comparison of the year ended December 31, 2024 to the year ended December 31, 2023 The section below provides a comparative discussion of our consolidated results of operations between fiscal year 2024 and 2023.
The gain in 2023 is related to the Company's termination of a portion of its corporate office lease to vacate and surrender possession of 7,374 rentable square feet in exchange for an early termination payment of $0.1 million. Income Tax Expense Income tax expense remained unchanged at zero for the year ended December 31, 2022 and 2023.
The gain in 2023 is related to the Company's termination of a portion of its corporate office lease to vacate and surrender possession of 7,374 rentable square feet in exchange for an early termination payment of $0.1 million. Income Tax Expense Income tax expense remained unchanged at zero for the years ended December 31, 2024 and 2023.
We declared total dividends of $1.65624 and $1.65624 per Series A preferred share for the years ended December 31, 2023 and 2022, respectively.
We declared total dividends of $1.65624 and $1.65624 per Series A preferred share for the years ended December 31, 2024 and 2023, respectively.
Since all of our hotels are select-service or limited-service hotels, room revenue is the primary revenue source as these hotels do not have significant food and beverage revenue or large group conference facilities. Room revenue comprised 91.6% and 92.3% of total revenue for the years ended December 31, 2023 and 2022, respectively.
Since all of our hotels are select-service or limited-service hotels, room revenue is the primary revenue source as these hotels do not have significant food and beverage revenue or large group conference facilities. Room revenue comprised 91.5% and 91.6% of total revenue for the years ended December 31, 2024 and 2023, respectively.
Room revenue was $285.0 million and $272.3 million for the years ended December 31, 2023 and 2022, respectively, and the increase in room revenue primarily was related to the same factors discussed above. Food and beverage revenue was $8.1 million and $7.3 million for the years ended December 31, 2023 and 2022, respectively.
Room revenue was $290.3 million and $285.0 million for the years ended December 31, 2024 and 2023, respectively, and the increase in room revenue primarily was related to the same factors discussed above. Food and beverage revenue was $7.7 million and $8.1 million for the years ended December 31, 2024 and 2023, respectively.
We declared total dividends of $0.28 and $0.28 per common share and LTIP unit, respectively, for the year ended December 31, 2023 and $0.07 and $0.07 per common share and LTIP unit, respectively, for the year ended December 31, 2022.
We declared total dividends of $0.28 and $0.28 per common share and LTIP unit, respectively, for the year ended December 31, 2024, and $0.28 and $0.28 per common share and LTIP unit, respectively, for the year ended December 31, 2023.
At December 31, 2023, our leverage ratio was approximately 24.8%, which decreased from 26.6% at December 31, 2022 based on the ratio of our net debt (total debt outstanding before deferred financing costs less unrestricted cash and cash equivalents) to hotel investments at cost.
At December 31, 2024, our leverage ratio was approximately 23.1%, which decreased from 24.8% at December 31, 2023 based on the ratio of our net debt (total debt outstanding before deferred financing costs less unrestricted cash and cash equivalents) to hotel investments at cost.
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period.
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates and assumptions.
Other Charges Other charges increased from $0.7 million for the year ended December 31, 2022 to $2.3 million for the year ended December 31, 2023. The increase primarily was related to the write-off of $2.2 million of previous expenditures related to the development of a hotel in California that the Company decided to no longer pursue.
Other Charges Other charges decreased from $2.3 million for the year ended December 31, 2023 to $0.3 million for the year ended December 31, 2024. The decrease primarily was related to the 2023 write-off of $2.2 million of previous expenditures related to the development of a hotel in California that the Company decided to no longer pursue.
Combined with its $90.0 million unsecured delayed-draw term loan, Chatham has $350.0 million of total commitments under the new facilities.
Combined with its $140.0 million unsecured delayed-draw term loan, Chatham has $400.0 million of total commitments under the new facilities.
Net Income Net income was $2.5 million for the year ended December 31, 2023, compared to net income of $9.9 million for the year ended December 31, 2022. The change in net income primarily was due to the factors discussed above.
Net Income Net income was $4.0 million for the year ended December 31, 2024, compared to net income of $2.5 million for the year ended December 31, 2023. The change in net income primarily was due to the factors discussed above.
Reimbursable Costs from Related Parties Reimbursable costs from related parties, comprised of corporate payroll and rent costs were $1.3 million and $1.3 million for the years ended December 31, 2023 and 2022, respectively. The cost reimbursements were offset by the cost reimbursements from related parties included in revenues.
Reimbursable Costs from Related Parties Reimbursable costs from related parties, comprised of shared office expenses and rent, were $1.1 million and $1.3 million for the years ended December 31, 2024 and 2023, respectively. The cost reimbursements were offset by the cost reimbursements from related parties included in revenues.
Interest and Other Income Interest on cash and cash equivalents and other income increased $1.5 million from $10 thousand for the year ended December 31, 2022 to $1.5 million for the year ended December 31, 2023. The increase was due to higher cash balances and higher interest rates received on cash balances during the year ended December 31, 2023.
Interest and Other Income Interest on cash and cash equivalents and other income increased $0.2 million from $1.5 million for the year ended December 31, 2023 to $1.7 million for the year ended December 31, 2024. The increase was due to higher cash balances and higher interest rates received on cash balances during the year ended December 31, 2024.
At December 31, 2023, we had total debt of $486.1 million at an average rate of approximately 5.5%. We intend to continue to fund our investments with a prudent balance of debt and equity. Our debt may include mortgage debt collateralized by our hotel properties and unsecured debt.
At December 31, 2024, we had total debt of $409.2 million at an average rate of approximately 6.8%. We intend to continue to fund our investments with a prudent balance of debt and equity. Our debt may include mortgage debt collateralized by our hotel properties and unsecured debt.
We anticipate that continued improvement in operating trends will be dependent on continued strength in leisure travel and a recovery of business travel. 42 Key Indicators of Operating Performance and Financial Condition We measure financial condition and hotel operating performance by evaluating non-financial and financial metrics and measures such as: • Average Daily Rate (“ADR”), which is the quotient of room revenue divided by total rooms sold, • Occupancy, which is the quotient of total rooms sold divided by total rooms available, • Revenue Per Available Room (“RevPAR”), which is the product of occupancy and ADR, and does not include food and beverage revenue, or other operating revenue, • Funds From Operations (“FFO”), • Adjusted FFO, • Earnings before interest, taxes, depreciation and amortization (“EBITDA”), • EBITDA re , • Adjusted EBITDA, and • Adjusted Hotel EBITDA.
Key Indicators of Operating Performance and Financial Condition We measure financial condition and hotel operating performance by evaluating non-financial and financial metrics and measures such as: • Average Daily Rate (“ADR”), which is the quotient of room revenue divided by total rooms sold, • Occupancy, which is the quotient of total rooms sold divided by total rooms available, • Revenue Per Available Room (“RevPAR”), which is the product of occupancy and ADR, and does not include food and beverage revenue, or other operating revenue, • Funds From Operations (“FFO”), • Adjusted FFO, • Earnings before interest, taxes, depreciation and amortization (“EBITDA”), • EBITDA re , • Adjusted EBITDA, and • Adjusted Hotel EBITDA.
Smith Travel Research reported that U.S. lodging industry RevPAR increased 16.7% in the first quarter of 2023, increased 2.5% in the second quarter of 2023, increased 1.7% in the third quarter of 2023 and increased 1.3% in the fourth quarter of 2023. We expect that in 2024, lodging industry RevPAR will continue to increase modestly.
Smith 43 Travel Research reported that U.S. lodging industry RevPAR increased 0.2% in the first quarter of 2024, increased 2.5% in the second quarter of 2024, increased 0.9% in the third quarter of 2024 and increased 3.6% in the fourth quarter of 2024. We expect that in 2025, lodging industry RevPAR will continue to increase modestly.
Actual results may differ from these estimates and assumptions. 53 Investment in Hotel Properties We allocate the purchase prices of hotel properties acquired as asset acquisitions based on the fair value of the acquired real estate, furniture, fixtures and equipment, identifiable intangible assets and assumed liabilities.
Investment in Hotel Properties We allocate the purchase prices of hotel properties acquired as asset acquisitions based on the fair value of the acquired real estate, furniture, fixtures and equipment, identifiable intangible assets and assumed liabilities.
The Company's TRS is expecting taxable losses in 2023 and recognizes a full valuation allowance equal to 100% of the net deferred tax assets due to the uncertainty of the TRS's ability to utilize these net deferred tax assets.
The Company's TRS is expecting the taxable income in 2024 to be offset by prior year net operating losses and recognizes a full valuation allowance equal to 100% of the net deferred tax assets due to the uncertainty of the TRS's ability to utilize these net deferred tax assets.
The success of our acquisition strategy depends, in part, on our ability to access additional capital through other sources. There can be no assurance that we will continue to make investments in properties that meet our investment criteria. Additionally, we may choose to dispose of certain hotels as a means to provide liquidity.
The success of our acquisition strategy depends, in part, on our ability to access additional capital through other sources. There can be no assurance that we will continue to make investments in properties that meet our investment criteria.
Under the terms of the Performance-Based LTIP units, a holder of a Performance-Based LTIP unit will generally (i) be entitled to receive 10% of the distributions made on a common unit of the Operating Partnership during the period prior to vesting of such Performance-Based LTIP unit (the “Pre-Vesting Distributions”), (ii) be entitled, upon the vesting of such Performance-Based LTIP unit, to receive a special one-time “catch-up” distribution equal to the aggregate amount of distributions that were paid on a common unit during the period prior to vesting of such Performance-Based LTIP unit minus the aggregate amount of Pre-Vesting Distributions paid on such Performance-Based LTIP unit, and (iii) be entitled, following the vesting of such Performance-Based LTIP unit, to receive the same amount of distributions paid on a common unit of the Operating Partnership.
Under the terms of the Performance-Based LTIP units, a holder of a Performance-Based LTIP unit will generally (i) be entitled to receive 10% of the distributions made on a common unit of the Operating Partnership during the period prior to vesting of such Performance-Based LTIP unit (the “Pre-Vesting Distributions”), (ii) be entitled, upon the vesting of such Performance-Based LTIP unit, to receive a special one-time “catch-up” distribution equal to the aggregate amount of distributions that were paid on a common unit during the period prior to vesting of such Performance-Based LTIP unit minus the aggregate amount of Pre-Vesting Distributions paid on such Performance-Based LTIP unit, and (iii) be entitled, following the vesting of such Performance-Based LTIP unit, to receive the same amount of distributions paid on a common unit of the Operating Partnership. 54 Income Taxes We elected to be taxed as a REIT for federal income tax purposes commencing with our 2010 taxable year.
The changes in results described below were driven primarily by the continued recovery of business travel following the COVID-19 pandemic, the sale of four hotels, the acquisition of one hotel, and the ramp-up from opening one hotel.
The changes in results described below were driven primarily by the continued recovery of business travel following the COVID-19 pandemic, the sale of three hotels, the acquisition of one hotel, and inflationary cost pressures.
We present Adjusted Hotel EBITDA because we believe it is useful to investors in comparing our hotel operating performance between periods and comparing our Adjusted Hotel EBITDA margins to those of our peer companies.
We present Adjusted Hotel EBITDA because we believe it is useful to investors in comparing our hotel operating performance between periods and comparing our Adjusted Hotel EBITDA margins to those of our peer companies. Adjusted Hotel EBITDA represents the results of operations for our wholly owned hotels only.
Revenue Revenue, w hich consists primarily of room, food and beverage and other operating revenues from our hotels, was as follows for the periods indicated (dollars in thousands): For the year ended December 31, 2023 December 31, 2022 % Change Room $ 284,999 $ 272,265 4.7 % Food and beverage 8,124 7,303 11.2 % Other 16,703 13,958 19.7 % Cost reimbursements from related parties 1,283 1,325 (3.2) % Total revenue $ 311,109 $ 294,851 5.5 % Total revenue increased $16.2 million to $311.1 million for the year ended December 31, 2023 compared to total revenue of $294.9 million for the 2022 period.
Revenue Revenue, w hich consists primarily of room, food and beverage and other operating revenues from our hotels, was as follows for the periods indicated (dollars in thousands): For the year ended December 31, 2024 December 31, 2023 % Change Room $ 290,290 $ 284,999 1.9 % Food and beverage 7,737 8,124 (4.8) % Other 18,077 16,703 8.2 % Cost reimbursements from related parties 1,105 1,283 (13.9) % Total revenue $ 317,209 $ 311,109 2.0 % Total revenue increased $6.1 million to $317.2 million for the year ended December 31, 2024 compared to total revenue of $311.1 million for the 2023 period.
Adjusted Hotel EBITDA represents the results of operations for our wholly owned hotels only. 49 The following is a presentation of Adjusted Hotel EBITDA for the years ended December 31, 2023, 2022 and 2021 (in thousands): For the year ended December 31, 2023 2022 2021 Net income (loss) $ 2,488 $ 9,871 $ (18,845) Add: Interest expense 27,128 26,454 24,460 Depreciation and amortization 58,254 59,350 54,215 Corporate general and administrative 17,517 17,339 15,752 Other charges 2,300 683 711 Impairment loss 4,266 — 5,640 Loss on early extinguishment of debt 696 138 — Loss from unconsolidated real estate entities — — 1,231 Loss on sale of hotel property — — 21 Less: Interest and other income (1,534) (10) (243) Gain on sale of hotel property (18) (2,268) — Gain from partial lease termination (164) — — Gain on sale of investment in unconsolidated real estate entities — — (23,817) Adjusted Hotel EBITDA $ 110,933 $ 111,557 $ 59,125 Although we present FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA because we believe they are useful to investors in comparing our operating performance between periods and between REITs that report similar measures, these measures have limitations as analytical tools.
The following is a presentation of Adjusted Hotel EBITDA for the years ended December 31, 2024, 2023 and 2022 (in thousands): For the year ended December 31, 2024 2023 2022 Net income $ 4,035 $ 2,488 $ 9,871 Add: Interest expense, including amortization of deferred fees 30,880 27,128 26,454 Depreciation and amortization 60,741 58,254 59,350 Corporate general and administrative 18,388 17,517 17,339 Other charges 327 2,300 683 Impairment loss 4,256 4,266 — Loss on early extinguishment of debt 17 696 138 Less: Interest and other income (1,712) (1,534) (10) Gain on sale of hotel properties (5,713) (18) (2,268) Gain from partial lease termination — (164) — Adjusted Hotel EBITDA $ 111,219 $ 110,933 $ 111,557 49 Although we present FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA because we believe they are useful to investors in comparing our operating performance between periods and between REITs that report similar measures, these measures have limitations as analytical tools.
See Note 7, “Debt” to our consolidated financial statements for additional information relating to our property loans, revolving credit facility and unsecured term loan . • Lease payments due within the next 12 months from year-end 2023 total $1.9 million.
The Company has two 1-year extension options for its $140.0 million unsecured term loan. See Note 6, “Debt” to our consolidated financial statements for additional information relating to our property loans, revolving credit facility and unsecured term loan . 52 • Lease payments due within the next 12 months from year-end 2024 total $2.0 million.
We expect to invest approximately $36.8 million on renovations, discretionary and emergency expenditures on our existing hotels in 2024, including improvements required under any brand PIP. Financing Activities Cash Flow s Net cash flows used in financing activities decreased $78.5 million to $(7.7) million in 2023 compared to $(86.2) million in 2022.
We expect to invest approximately $25.7 million on renovations, discretionary and emergency expenditures on our existing hotels in 2025, including improvements required under any brand property improvement plan ("PIP"). Financing Activities Cash Flow s Net cash flows used in financing activities increased $92.8 million to $(100.6) million in 2024 compared to $(7.7) million in 2023.
The increase in hotel operating expenses was related to the increase in revenues and occupancy caused by the continued recovery from the COVID-19 pandemic, increased staffing levels, and inflation.
The increase in hotel operating expenses was related to the increase in revenues and occupancy caused by the continued recovery of business travel following the COVID-19 pandemic, increases in staffing levels, wage and benefit costs, insurance costs, and inflation.
At December 31, 2023 and 2022, we had $0 and $0, respectively, in outstanding borrowings under our revolving credit facility. We had $90.0 million and $0 in outstanding borrowings under our unsecured term loan at December 31, 2023 and 2022, respectively.
At December 31, 2024 and 2023, we had $110.0 million and $0, respectively, in outstanding borrowings under our revolving credit facility. We had $140.0 million and $90.0 million in outstanding borrowings under our unsecured term loan at December 31, 2024 and 2023, respectively. At December 31, 2024, the maximum remaining borrowing availability under our revolving credit facility was $150.0 million.
Chatham sold its interest in the NewINK JV in March 2021. To qualify as a REIT, the Company cannot operate its hotels. Therefore, the Operating Partnership and its subsidiaries lease the Company's hotels to taxable REIT subsidiary lessees (“TRS Lessees”), which are wholly owned by the Company’s taxable REIT subsidiary (“TRS”) holding company.
Therefore, the Operating Partnership and its subsidiaries lease the Company's hotels to taxable REIT subsidiary lessees (“TRS Lessees”), which are wholly owned by the Company’s taxable REIT subsidiary (“TRS”) holding company.
The increase primarily was related to increases in property tax assessments and an increase in insurance costs. General and Administrative General and administrative expenses principally consist of employee-related costs, including base payroll, bonuses and amortization of restricted stock and awards of LTIP units. These expenses also include corporate operating costs, professional fees and trustees’ fees.
The increase primarily was related to increases in property tax assessments and an increase in insurance costs partially offset by successful property tax appeals at multiple hotel properties. General and Administrative General and administrative expenses principally consist of employee-related costs, including base payroll, bonuses and amortization of restricted stock and awards of LTIP units.
For the year ended December 31, 2022, net cash flows used in financing activities of $86.2 million were comprised of net repayments of our senior unsecured revolving credit facility of $70.0 million, principal payments on mortgage debt of $9.0 million, payments of deferred financing and offering costs of $3.5 million, distributions to unit holders of $0.1 million, and distributions on preferred shares of $8.0 million, partially offset by net borrowings on our construction loan of $4.3 million.
For the year ended December 31, 2024, net cash flows used in financing activities of $(100.6) million were comprised of the repayment of mortgage debt of $297.2 million, distributions to common share and unit holders of $14.4 million, distributions on preferred shares of $8.0 million, payments of financing costs of $1.1 million, and payments of offering costs on common shares of $0.3 million, partially offset by net borrowings on our revolving credit facility of $110.0 million, borrowings on our unsecured term loan of $50.0 million, and proceeds from the issuance of mortgage debt of $60.3 million.
Total general and administrative expenses (excluding amortization of stock based compensation of $6.1 million and $5.6 million for the years ended December 31, 2023 and 2022, respectively) decreased $0.4 million to $11.4 million in 2023 from $11.8 million in 2022.
These expenses also include corporate operating costs, professional fees and trustees’ fees. Total general and administrative expenses (excluding amortization of stock based compensation of $6.4 million and $6.1 million for the years ended December 31, 2024 and 2023, respectively) increased $0.6 million to $12.0 million in 2024 from $11.4 million in 2023.
Interest Expense, Including Amortization of Deferred Fees Interest expense increased $0.6 million, or 2.5%, from $26.5 million for the year ended December 31, 2022 to $27.1 million for the year ended December 31, 2023.
Interest Expense, Including Amortization of Deferred Fees Interest expense increased $3.8 million, or 13.8%, from $27.1 million for the year ended December 31, 2023 to $30.9 million for the year ended December 31, 2024.
The loss in 2023 is related to the Company's repayment of the construction loan on the Home2 Woodland Hills hotel property. Gain from Partial Lease Termination Gain from partial lease termination increased $0.2 million from $0 for the year ended December 31, 2022.
Loss on Early Extinguishment of Debt Loss on early extinguishment of debt decreased $0.7 million from $0.7 million for the year ended December 31, 2023 to $17 thousand for the year ended December 31, 2024. The loss in 2023 is related to the Company's repayment of the construction loan on the Home2 Woodland Hills hotel property.
The following is a reconciliation of net income (loss) to FFO and Adjusted FFO for the years ended December 31, 2023, 2022 and 2021 (in thousands, except share data): For the year ended December 31, 2023 2022 2021 Funds From Operations (“FFO”): Net income (loss) $ 2,488 $ 9,871 $ (18,845) Preferred dividends (7,950) (7,950) (3,975) Net (loss) income attributable to common shares and common units (5,462) 1,921 (22,820) (Gain) loss on sale of hotel property (18) (2,268) 21 Gain on sale of investment in unconsolidated real estate entities — — (23,817) Depreciation 58,040 59,123 53,967 Impairment loss 4,266 — 5,640 Adjustments for unconsolidated real estate entity items — — 568 FFO attributed to common share and unit holders 56,826 58,776 13,559 Other charges 2,300 683 711 Loss on early extinguishment of debt 696 138 — Gain from partial lease termination (164) — — Adjustments for unconsolidated real estate entity items — — 46 Adjusted FFO attributed to common share and unit holders $ 59,658 $ 59,597 14,316 Weighted average number of common shares and units Basic 50,374,481 49,971,823 49,281,763 Diluted 50,532,122 50,234,903 49,490,938 Diluted weighted average common share count used for calculation of adjusted FFO per share may differ from diluted weighted average common share count used for calculation of GAAP Net Income per share by LTIP units, which may be converted to common shares of beneficial interest, and if Net Income per share is negative and Adjusted FFO is positive.
We believe that Adjusted FFO provides investors with another financial measure that may facilitate comparisons of operating performance between periods and between REITs that make similar adjustments to FFO. 47 The following is a reconciliation of net income (loss) to FFO and Adjusted FFO for the years ended December 31, 2024, 2023 and 2022 (in thousands, except share data): For the year ended December 31, 2024 2023 2022 Funds From Operations (“FFO”): Net income $ 4,035 $ 2,488 $ 9,871 Preferred dividends (7,950) (7,950) (7,950) Net (loss) income attributable to common shares and common units (3,915) (5,462) 1,921 Gain on sale of hotel properties (5,713) (18) (2,268) Depreciation of hotel properties owned 59,513 58,040 59,123 Impairment loss 4,256 4,266 — FFO attributed to common share and unit holders 54,141 56,826 58,776 Amortization of finance lease assets 1,010 — — Other charges 327 2,300 683 Loss on early extinguishment of debt 17 696 138 Gain from partial lease termination — (164) — Adjusted FFO attributed to common share and unit holders $ 55,495 $ 59,658 59,597 Weighted average number of common shares and units Basic 50,757,548 50,374,481 49,971,823 Diluted 51,172,183 50,532,122 50,234,903 Diluted weighted average common share count used for calculation of adjusted FFO per share may differ from diluted weighted average common share count used for calculation of GAAP Net Income per share by LTIP units, which may be converted to common shares of beneficial interest, and if Net Income per share is negative and Adjusted FFO is positive.
We believe that these items reflect historical cost of our asset base and our acquisition and disposition activities and are less reflective of our ongoing operations, and that by adjusting to exclude the effects of the items, FFO is useful to investors in comparing our operating performance between periods and between REITs that report FFO using the Nareit definition. 47 We calculate Adjusted FFO by further adjusting FFO for certain additional items that are not addressed in Nareit’s definition of FFO, including other charges, losses on the early extinguishment of debt and similar items related to our unconsolidated real estate entities that we believe do not represent costs related to hotel operations.
We calculate Adjusted FFO by further adjusting FFO for certain additional items that are not addressed in Nareit’s definition of FFO, including other charges, losses on the early extinguishment of debt and similar items related to our unconsolidated real estate entities that we believe do not represent costs related to hotel operations.
The cost reimbursements were offset by the reimbursed costs from related parties included in operating expenses. As reported by Smith Travel Research, U.S. lodging industry RevPAR for the years ended December 31, 2023 and 2022 increased 4.9% and increased 29.8%, respectively, as compared to the years ended December 31, 2022 and 2021.
As reported by Smith Travel Research, U.S. lodging industry RevPAR for the years ended December 31, 2024 and 2023 increased 1.8% and increased 4.9%, respectively, as compared to the years ended December 31, 2023 and 2022.
Our hotel properties are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable over management's estimated holding period.This estimated holding period incorporates management’s intent and ability to hold the hotel properties over the estimated holding period.
Upon the sale or retirement of property and equipment, the cost and related accumulated depreciation are removed from the Company’s accounts and any resulting gain or loss is recognized in the consolidated statements of operations. 53 Our hotel properties are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable over management's estimated holding period.This estimated holding period incorporates management’s intent and ability to hold the hotel properties over the estimated holding period.
The following is a reconciliation of net income (loss) to EBITDA, EBITDA re and Adjusted EBITDA for the years ended December 31, 2023, 2022 and 2021 (in thousands): For the year ended December 31, 2023 2022 2021 Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”): Net income (loss) $ 2,488 $ 9,871 $ (18,845) Interest expense 27,128 26,454 24,460 Depreciation and amortization 58,254 59,350 54,215 Adjustments for unconsolidated real estate entity items — — 1,184 EBITDA 87,870 95,675 61,014 Impairment loss 4,266 — 5,640 (Gain) loss on sale of hotel property (18) (2,268) 21 Gain on sale of investment in unconsolidated real estate entities — — (23,817) EBITDA re 92,118 93,407 42,858 Other charges 2,300 683 711 Loss on early extinguishment of debt 696 138 — Gain from partial lease termination (164) — — Adjustments for unconsolidated real estate entity items — — 46 Share based compensation 6,117 5,551 4,823 Adjusted EBITDA $ 101,067 $ 99,779 $ 48,438 Adjusted Hotel EBITDA is defined as net income before interest, income taxes, depreciation and amortization, corporate general and administrative, impairment loss, loss on early extinguishment of debt, other charges, interest and other income, losses on sales of hotel properties and income or loss from unconsolidated real estate entities.
We believe that Adjusted EBITDA provides useful supplemental information to investors regarding our ongoing operating performance that, when considered with net income, EBITDA and EBITDA re , is beneficial to an investor's understanding of our performance. 48 The following is a reconciliation of net income (loss) to EBITDA, EBITDA re and Adjusted EBITDA for the years ended December 31, 2024, 2023 and 2022 (in thousands): For the year ended December 31, 2024 2023 2022 Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”): Net income $ 4,035 $ 2,488 $ 9,871 Interest expense, including amortization of deferred fees 30,880 27,128 26,454 Depreciation and amortization 60,741 58,254 59,350 EBITDA 95,656 87,870 95,675 Impairment loss 4,256 4,266 — Gain on sale of hotel properties (5,713) (18) (2,268) EBITDA re 94,199 92,118 93,407 Other charges 327 2,300 683 Loss on early extinguishment of debt 17 696 138 Gain from partial lease termination — (164) — Share based compensation 6,398 6,117 5,551 Adjusted EBITDA $ 100,941 $ 101,067 $ 99,779 Adjusted Hotel EBITDA is defined as net income before interest, income taxes, depreciation and amortization, corporate general and administrative, impairment loss, loss on early extinguishment of debt, other charges, interest and other income, losses on sales of hotel properties and income or loss from unconsolidated real estate entities.
The increase in food and beverage revenue primarily was related to an increase in occupancies at our hotels due to the continued recovery from the COVID-19 pandemic. Other revenue, comprised of parking, meeting room, gift shop, in-room movie and other ancillary amenities revenue, increased $2.7 million for the year ended December 31, 2023.
The decrease in food and beverage revenue was related to the sale of three hotels. Other revenue, comprised of parking, meeting room, gift shop, in-room movie and other ancillary amenities revenue, increased $1.4 million for the year ended December 31, 2024. The increase in other operating revenue primarily was related to increases in revenue from parking.
The remaining hotel operating expenses increased $8.9 million, or 8.5%, from $104.7 million in 2022 to $113.6 million in 2023. The increase in other remaining expenses was related primarily to an increase in occupancies and revenues at our hotels due to the continued recovery from the COVID-19 pandemic and inflation.
The increase in room expenses was related to an increase in occupancies and revenues at our hotels due to the continued recovery of business travel following the COVID-19 pandemic, increased staffing levels, wage and benefit costs, and inflation. The remaining hotel operating expenses increased $2.3 million, or 2.0%, from $113.6 million in 2023 to $115.9 million in 2024.
Gain on Sale of Hotel Property Gain on the sale of hotel property decreased $2.3 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Gain on Sale of Hotel Properties 45 Gain on the sale of hotel properties increased $5.7 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Our principal uses of cash include acquisitions, capital expenditures, operating costs, corporate expenditures, interest costs, debt repayments and distributions to equity holders.
Sources and Uses of Cash Our principal sources of cash include net cash from operations, availability under our revolving credit facility, proceeds from debt and equity issuances, and proceeds from the sale of hotel properties. Our principal uses of cash include acquisitions, capital expenditures, operating costs, corporate expenditures, interest costs, debt repayments and distributions to equity holders.
Cash, cash equivalents, and restricted cash totaled $85.7 million as of December 31, 2023, an increase of $40.6 million from December 31, 2022, primarily due to net cash provided by operating activities of $76.4 million, net cash used in investing activities of $28.1 million, and net cash used in financing activities $7.7 million.
Cash, cash equivalents, and restricted cash totaled $29.8 million as of December 31, 2024, a decrease of $55.9 million from December 31, 2023, primarily due to net cash provided by operating activities of $73.8 million, net cash used in investing activities of $29.2 million, and net cash used in financing activities $100.6 million.
The one hotel acquired in 2022 contributed $5.5 million of revenue during the year ended December 31, 2023, up $0.3 million from the $5.2 million contributed during the year ended December 31, 2022.
The one hotel acquired during the year ended December 31, 2024, which was not owned during the year ended December 31, 2023, contributed $3.3 million of room revenue during the year ended December 31, 2024.
On October 28, 2022, Chatham entered into a $215.0 million unsecured revolving credit facility and a $90.0 million unsecured delayed-draw term loan facility that replaced the Company’s previous $250 million revolving credit facility that was scheduled to mature on March 8, 2023. The revolving credit facility has an initial maturity of October 28, 2026 and provides two six-month extension options.
We also had mortgage debt on individual hotels aggregating $159.2 million and $396.1 million at December 31, 2024 and 2023, respectively. 50 On October 28, 2022, Chatham entered into a $215.0 million unsecured revolving credit facility and a $90.0 million unsecured delayed-draw term loan facility that replaced the Company’s previous $250 million revolving credit facility that was scheduled to mature on March 8, 2023.
The impairment loss in 2023 was due to the impairment recorded on the HGI Denver Tech hotel property which is under contract to be sold. 45 Property Taxes, Ground Rent and Insurance Total property taxes, ground rent and insurance expenses increased $2.3 million from $21.2 million for the year ended December 31, 2022 to $23.5 million for the year ended December 31, 2023.
Impairment Loss Impairment loss was $4.3 million and $4.3 million for the years ended December 31, 2024 and 2023, respectively. The impairment loss in 2024 was due to the impairment recorded on a hotel property which is under contract to be sold.
Interest expense is comprised of the following (dollars in thousands): For the year ended December 31, 2023 December 31, 2022 % Change Mortgage debt interest $ 19,305 $ 20,431 (5.5) % Credit facility and term loan interest and unused fees 6,198 2,229 178.1 % Interest rate cap (16) (784) (98.0) % Construction loan interest 415 3,469 (88.0) % Capitalized interest — (330) (100.0) % Amortization of deferred financing costs 1,226 1,439 (14.8) % Total $ 27,128 $ 26,454 2.5 % 46 Loss on Early Extinguishment of Debt Loss on early extinguishment of debt increased $0.6 million from $0.1 million for the year ended December 31, 2022 to $0.7 million for the year ended December 31, 2023.
Interest expense is comprised of the following (dollars in thousands): For the year ended December 31, 2024 December 31, 2023 % Change Mortgage debt interest $ 16,085 $ 19,305 (16.7) % Credit facility and term loan interest and unused fees 13,372 6,198 115.7 % Interest rate cap — (16) (100.0) % Construction loan interest — 415 (100.0) % Interest on finance lease liability 14 — 100.0 % Amortization of deferred financing costs 1,409 1,226 14.9 % Total $ 30,880 $ 27,128 13.8 % The increase in interest expense was due to the refinancing of maturing debt which had interest rates below current levels.
Investing Activities Cash Flow s Net cash flows (used in) provided by investing activities decreased $58.1 million to $(28.1) million in 2023 compared to $30.0 million in 2022. For the year ended December 31, 2023, net cash flows used in investing activities of $(28.1) million consisted of $28.1 million related to capital improvements on our hotels.
For the year ended December 31, 2024, net cash flows used in investing activities of $(29.2) million consisted of $30.6 million related to capital improvements on our hotels, $43.7 million related to the acquisition of one hotel, and $0.7 million of payments of franchise application costs, partially offset by $45.9 million in net proceeds related to the sale of three hotels For the year ended December 31, 2023, net cash flows used in investing activities of $28.1 million consisted of $28.1 million related to capital improvements on our hotels.
Results of operations for the year ended December 31, 2023 include the operating activities of the 39 hotels we owned for the entire period. We sold one hotel located in Burlington, MA on May 6, 2022, and sold one hotel located in Dallas, TX and two hotels located in Houston, TX on May 13, 2022.
Results of operations for the year ended December 31, 2024 include the operating activities of the 36 hotels we owned for the entire period and partial year results for three hotels sold during the period and one hotel acquired during the period.
The unsecured delayed-draw term loan facility has an initial maturity of October 28, 2025 and provides two one-year extension options. On December 19, 2022, Chatham executed an amendment to its unsecured revolving credit facility increasing commitments by $45.0 million for a total borrowing capacity of $260.0 million.
The revolving credit facility has an initial maturity of October 28, 2026 and provides two six-month extension options. The unsecured delayed-draw term loan facility has an initial maturity of October 28, 2025 and provides two one-year extension options.
The increase in total revenue primarily was related to the recovery from the 43 COVID-19 pandemic, the ramp-up of the Home2 Woodland hills, which opened on January 24, 2022, the acquisition of one hotel on March 8, 2022, partially offset by the decrease in revenue from the sale of four hotels during during the year ended December 31, 2022.
The increase in total revenue primarily was related to the 2.8% increase in same property RevPAR, the acquisition of one hotel on May 30, 2024, partially offset by the decrease in revenue from the sales of three hotels during the year ended December 31, 2024.
Cash from Operations Net cash flows provided by operating activities increased $4.9 million to $76.4 million in 2023 compared to $71.5 million in 2022. The increase in cash from operating activities was primarily due to improving operating results from our hotels which generated RevPAR growth of 6.1% in 2023 versus 2022.
Cash from Operations Net cash flows provided by operating activities decreased $2.6 million to $73.8 million in 2024 compared to $76.4 million in 2023. The decrease in cash from operating activities was primarily due to an increase in interest expense.
The increase was partially offset by the impact from selling four hotels during the second quarter of 2022 that contributed $0 of revenue during the year ended December 31, 2023, down $4.9 million from the $4.9 million these hotels contributed during the year ended December 31, 2022.
This was partially offset by the decrease in revenue from the sale of three hotels that contributed $10.4 million in room revenue for the year ended December 31, 2024, down $6.3 million from the $16.7 million these hotels contributed for the year ended December 31, 2023.
The increase was partially offset by the sale of four hotels during the second quarter of 2022 that contributed $0 of operating expenses during the year ended December 31, 2023, down $3.5 million from the $3.5 million these hotels contributed during the year ended December 31, 2022.
The increase was partially offset by the sale of three hotels during the year ended December 31, 2024 that contributed $7.3 million of operating expenses during the year ended December 31, 2024, down $4.6 million from the $11.9 million the sold hotels contributed during the year ended December 31, 2023. 44 Room expenses, which are the most significant component of hotel operating expenses, increased $3.5 million from $61.8 million in 2023 to $65.3 million in 2024.
The increase in other operating revenue primarily was related to an increase in occupancies at our hotels due to the continued recovery from the COVID-19 pandemic. Reimbursed costs from related parties were $1.3 million and $1.3 million for the years ended December 31, 2023 and 2022, respectively.
Reimbursed costs from related parties were $1.1 million and $1.3 million for the years ended December 31, 2024 and 2023, respectively. The cost reimbursements were offset by the reimbursed costs from related parties included in operating expenses.
Room expenses, which are the most significant component of hotel operating expenses, increased $5.7 million from $56.1 million in 2022 to $61.8 million in 2023. The increase in room expenses was related primarily to an increase in occupancy and revenues at our hotels due to the continued recovery from the COVID-19 pandemic, increased staffing levels, and inflation.
The increase in other remaining expenses primarily was related to an increase in occupancies and revenues at our hotels due to the continued recovery of business travel following the COVID-19 pandemic, increased insurance costs and inflation.
As of December 31, 2023, the Company owned 39 hotels with an aggregate of 5,915 rooms located in 16 states and the District of Columbia. Prior to September 23, 2021, the Company held a 10.0% noncontrolling interest in a joint venture (the "Inland JV") with affiliates of Colony Capital, Inc.
As of December 31, 2024, the Company owned 37 hotels with an aggregate of 5,596 rooms located in 16 states and the District of Columbia. To qualify as a REIT, the Company cannot operate its hotels.
Depreciation and Amortization Depreciation and amortization expense decreased $1.1 million from $59.4 million for the year ended December 31, 2022 to $58.3 million for the year ended December 31, 2023. The decrease was primarily due to the depreciation expense from four hotels that were sold during the second quarter of 2022.
Depreciation and Amortization Depreciation and amortization expense increased $2.4 million from $58.3 million for the year ended December 31, 2023 to $60.7 million for the year ended December 31, 2024.
During the year ended December 31, 2023, the Company issued 5,896 common shares under the DRSPP at a weighted average price of $10.27, which generated $61 thousand of proceeds. As of December 31, 2023, there was approximately $47.8 million in common shares available for issuance under the DRSPP.
Shareholders may also make optional cash purchases of the Company's common shares subject to certain limitations detailed in the prospectus for the DRSPP. During the year ended December 31, 2024, the Company issued 5,844 common shares under the DRSPP at a weighted average price of $9.15, which generated $53 thousand of proceeds.
We do not expect that such cash traps will affect our ability to satisfy our short-term liquidity requirements. 51 In December 2017, we established a $50 million dividend reinvestment and stock purchase plan (the "DRSPP") which we renewed in December 2020 and renewed again in January 2024.
In December 2017, we established a $50 million dividend reinvestment and stock purchase plan (the "DRSPP") which we renewed in December 2020 and renewed again in January 2024. Under the DRSPP, shareholders may purchase additional common shares by reinvesting some or all of the cash dividends received on common shares.
As of December 31, 2023, four of our mortgage debt lenders have enforced cash trap provisions resulting in $5.6 million of restricted cash.
As of December 31, 2024, one of our mortgage debt lenders have enforced cash trap provisions resulting in $0.2 million of restricted cash. We do not expect that such cash traps will affect our ability to satisfy our short-term liquidity requirements.

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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 changeThe following table provides information about the maturities of our financial instruments as of December 31, 2023 that are sensitive to changes in interest rates (dollars in thousands): 2024 2025 2026 2027 2028 Thereafter Total Fair Value Floating rate: Debt $ — $ 90,000 $ — $ — $ — $ — $ 90,000 $ 90,000 Average interest rate — 6.65 % — — — — 6.65 % Fixed rate: Debt $ 297,210 $ 15,974 $ — $ — $ 24,590 $ 58,335 $ 396,109 $ 396,001 Average interest rate 4.64 % 4.25 % — — 7.61 % 7.39 % 5.21 % As of December 31, 2023, we estimate that a hypothetical 100 basis points increase in SOFR would result in additional interest of approximately $0.9 million annually.
Biggest changeThe following table provides information about the maturities of our financial instruments as of December 31, 2024 that are sensitive to changes in interest rates (dollars in thousands): 2025 2026 2027 2028 2029 Thereafter Total Fair Value Floating rate: Debt $ 140,000 $ 110,000 $ — $ — $ — $ — $ 250,000 $ 250,000 Average interest rate 6.75 % 6.66 % — — — — 6.71 % Fixed rate: Debt $ 15,957 $ — $ — $ 24,590 $ 23,681 $ 94,954 $ 159,182 $ 164,817 Average interest rate 4.25 % — — 7.61 % 7.29 % 7.12 % 6.93 % As of December 31, 2024, we estimate that a hypothetical 100 basis points increase in SOFR would result in additional interest of approximately $2.5 million annually.
This assumes that the total amount of floating rate debt outstanding on our revolving credit facility and unsecured term loan remains $90.0 million, the balance as of December 31, 2023. 56
This assumes that the total amount of floating rate debt outstanding on our revolving credit facility and unsecured term loan remains $250.0 million, the balance as of December 31, 2024. 56
Rates take into consideration general market conditions, maturity and fair value of the underlying collateral. The estimated fair value of the Company’s fixed rate debt at December 31, 2023 and 2022 was $396.0 million and $412.7 million, respectively. At December 31, 2023, our consolidated debt was comprised of floating and fixed interest rate debt.
Rates take into consideration general market conditions, maturity and fair value of the underlying collateral. The estimated fair value of the Company’s fixed rate debt at December 31, 2024 and 2023 was $164.8 million and $396.0 million, respectively. At December 31, 2024, our consolidated debt was comprised of floating and fixed interest rate debt.

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