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What changed in Chatham Lodging Trust's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Chatham Lodging Trust's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+171 added−160 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-26)

Top changes in Chatham Lodging Trust's 2025 10-K

171 paragraphs added · 160 removed · 134 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

20 edited+2 added−1 removed71 unchanged
Biggest changeThe 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.
Biggest changeAs of December 31, 2025, certain key terms of our management agreements for our 33 hotels were as follows (dollars are not in thousands): Monthly Base Monthly Revenue Incentive Management Management Accounting Management Management Property Company Fee Fee Fee Fee Cap Homewood Suites by Hilton Hartford-Farmington 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 % 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 $9.9 million, $10.7 million and $10.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. 9 Table of Contents Hotel Franchise Agreements The fees associated with the franchise agreements are calculated as a specified percentage of the hotel's gross room revenue.
Additionally, any income earned by our TRS Lessees will be fully subject to federal, state and local corporate income tax. 8 Hotel Management Agreements The management agreements with IHM have an initial term of five years and will automatically renew for two successive five-year periods unless IHM provides written notice no later than 90 days prior to the then-current term's expiration date of their intent not to renew.
Additionally, any income earned by our TRS Lessees will be fully subject to federal, state and local corporate income tax. 8 Table of Contents Hotel Management Agreements The management agreements with IHM have an initial term of five years and will automatically renew for two successive five-year periods unless IHM provides written notice no later than 90 days prior to the then-current term's expiration date of their intent not to renew.
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 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 Table of Contents 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.
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.
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 $49 thousand per month and increase 10% every five years.
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.
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, 2025, 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.
One example is laws that require a business using chemicals to manage them carefully and to notify local officials if regulated spills occur. 7 Although it is our policy to require an acceptable Phase I environmental site assessment for all real property in which we invest prior to our investment, such surveys are limited in scope.
One example is laws that require a business using chemicals to manage them carefully and to notify local officials if regulated spills occur. 7 Table of Contents Although it is our policy to require an acceptable Phase I environmental site assessment for all real property in which we invest prior to our investment, such surveys are limited in scope.
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).
As of December 31, 2025, our hotels include upscale extended-stay hotels that operate under the Residence Inn by Marriott® brand (sixteen hotels), the Homewood Suites by Hilton® brand (two 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 (three hotels), the Hampton Inn or Hampton Inn and Suites by Hilton® brand (two 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 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.
The partial termination of this lease required the Company to apply Accounting Standards Codification ("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.
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.
We utilize independent management companies, including IHM, a hotel management company 100% owned by Mr. Fisher that as of December 31, 2025, managed all of our hotels.
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.
In February 2026, 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.
Certain 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.
Certain key terms of our franchise agreements for our hotels as of December 31, 2025 were as follows: Franchise Franchise/ Marketing/ Property Company Royalty Fee Program Fee Expiration Homewood Suites by Hilton Hartford-Farmington Promus Hotels, Inc 4.0 % 4.0 % 2039 Residence Inn Long Island Holtsville Marriott International, Inc. 6.0 % 2.5 % 2026 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 Hilton Franchise Holding LLC 4.0 % 3.5 % 2041 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 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 4.0 % 3.5 % 2044 Franchise and marketing/program fees totaled approximately $23.6 million, $25.4 million and $24.9 million for the years ended December 31, 2025, 2024 and 2023, respectively. 10 Table of Contents Leases The Company is the lessee under ground, property, air rights, garage and office lease agreements for certain of its properties.
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.
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 2025 under these leases amounted to approximately $31 thousand per quarter.
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.
We have maintained a leverage ratio between the low 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, 2025, our leverage ratio was approximately 20.1 percent, which decreased from 23.1 percent at December 31, 2024.
The information on our website is not, and shall not be deemed to be, a part of this report or incorporated into any other filings that we make with the SEC. 14
The information on our website is not, and shall not be deemed to be, a part of this report or incorporated into any other filings that we make with the SEC. 13 Table of Contents
We are committed to seeking new environmental initiatives to implement across our portfolio. Corporate Citizenship and Community Impact The Company prioritizes the need to invest in the communities in which our properties are located.
We are committed to seeking new environmental initiatives to implement across our portfolio. 12 Table of Contents Corporate Citizenship and Community Impact The Company prioritizes the need to invest in the communities in which our properties are located.
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.
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, 2025, the Company owned 33 hotels with an aggregate of 5,021 rooms located in 15 states and the District of Columbia.
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.
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.
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.
Expenses related to the finance lease are included in depreciation and amortization and interest expense, in the Company’s consolidated statements of operations. 11 Table of Contents The following table includes information regarding the Company's total minimum lease payments for which it is the lessee, as of December 31, 2025, for each of the next five calendar years and thereafter (in thousands): Total Future Lease Payments Amount 2026 $ 1,768 2027 1,313 2028 1,338 2029 1,338 2030 1,407 Thereafter 59,765 Total lease payments $ 66,929 Human Capital As of February 27, 2026, we had 16 employees.
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.
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 Table of Contents The lodging industry is highly competitive.
Competitive advantage is based on a number of factors, including location, convenience, brand affiliation, room rates, range of services and guest amenities or accommodations offered and quality of customer service. Competition is often specific to the individual markets in which our hotels are located and includes competition from existing and new hotels and alternative lodging market places.
Our hotels compete with other hotels, and alternative lodging marketplaces, for guests in each market in which they operate. Competitive advantage is based on a number of factors, including location, convenience, brand affiliation, room rates, range of services and guest amenities or accommodations offered and quality of customer service.
Removed
Our employees' volunteer efforts have directly added value to our local community. 13 Available Information Our Internet website is www.chathamlodgingtrust.com.
Added
Competition is often specific to the individual markets in which our hotels are located and includes competition from existing and new hotels and alternative lodging market places.
Added
The incentive management fee is capped at 1% of gross hotel revenues for the applicable calculation.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

33 edited+11 added−4 removed237 unchanged
Biggest changeAmong the factors that could impair our ability to make distributions to our shareholders are: • our inability to realize attractive returns on our investments; • unanticipated expenses that reduce our cash flow or non-cash earnings; • decreases in the value of the underlying assets; and • the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates.
Biggest changeAmong the factors that could impair our ability to make distributions to our shareholders are: • our inability to realize attractive returns on our investments; • unanticipated expenses that reduce our cash flow or non-cash earnings; • decreases in the value of the underlying assets; and • the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates. 31 Table of Contents As a result, no assurance can be given that we will be able to make distributions to our shareholders or that the level of any distributions we do make to our shareholders will achieve a market yield or increase or even be maintained over time, any of which could materially and adversely affect the market price of our common shares.
SUMMARY Risks Related to Our Business • The COVID-19 pandemic has had, and may continue to have, or a future pandemic could have, adverse effects on our financial condition, results of operations, cash flows and performance. • Our investment policies are subject to revision from time to time at our Board of Trustees' discretion. • We depend on the efforts and expertise of our key executive officers whose continued service is not guaranteed. • Our future growth depends on obtaining new financing. • We must rely on third-party management companies to operate our hotels in order to qualify as a REIT. • The management of the hotels in our portfolio is currently concentrated in one hotel management company. • Our franchisors could cause us to expend additional funds on upgraded operating standards. • Our franchisors may cancel or fail to renew our existing franchise licenses. • Fluctuations in our financial performance, capital expenditure requirements and excess cash flow could adversely affect our ability to make distributions. • Future debt service obligations could adversely affect our overall operating results or cash flow and may require us to liquidate our properties. • If we are unable to repay our debt obligations in the future, we may be forced to refinance debt or dispose of or encumber our assets, which could adversely affect distributions to shareholders. • Interest expense on our debt may limit our cash available to fund growth strategies and shareholder distributions. • Failure to hedge effectively against interest rate changes may adversely affect us. • Joint venture investments that we may make could be adversely affected by our lack of decision-making authority, our reliance on joint venture partners' financial condition and disputes between us and our joint-venture partners. • We may from time to time make distributions to our shareholders in the form of our common shares, which could result in shareholders incurring tax liability without receiving sufficient cash to pay such tax. • Our conflict of interest policy may not be successful in eliminating the influence of future conflicts of interest that may arise between us and our trustees, officers and employees. • There may be conflicts of interest between us and affiliates owned by our Chief Executive Officer. • Hotel development is subject to timing, cost, and other risks. • Inflation and price volatility could impact our business and results of operations.
SUMMARY Risks Related to Our Business • The COVID-19 pandemic had, and a future pandemic could have, adverse effects on our financial condition, results of operations, cash flows and performance. • Our investment policies are subject to revision from time to time at our Board of Trustees' discretion. • We depend on the efforts and expertise of our key executive officers whose continued service is not guaranteed. • Our future growth depends on obtaining new financing. • We must rely on third-party management companies to operate our hotels in order to qualify as a REIT. • The management of the hotels in our portfolio is currently concentrated in one hotel management company. • Our franchisors could cause us to expend additional funds on upgraded operating standards. • Our franchisors may cancel or fail to renew our existing franchise licenses. • Fluctuations in our financial performance, capital expenditure requirements and excess cash flow could adversely affect our ability to make distributions. • Future debt service obligations could adversely affect our overall operating results or cash flow and may require us to liquidate our properties. • If we are unable to repay our debt obligations in the future, we may be forced to refinance debt or dispose of or encumber our assets, which could adversely affect distributions to shareholders. • Interest expense on our debt may limit our cash available to fund growth strategies and shareholder distributions. • Failure to hedge effectively against interest rate changes may adversely affect us. • Joint venture investments that we may make could be adversely affected by our lack of decision-making authority, our reliance on joint venture partners' financial condition and disputes between us and our joint-venture partners. • We may from time to time make distributions to our shareholders in the form of our common shares, which could result in shareholders incurring tax liability without receiving sufficient cash to pay such tax. • Our conflict of interest policy may not be successful in eliminating the influence of future conflicts of interest that may arise between us and our trustees, officers and employees. • There may be conflicts of interest between us and affiliates owned by our Chief Executive Officer. • Hotel development is subject to timing, cost, and other risks. • Inflation and price volatility could impact our business and results of operations.
The impact that terrorist attacks in the U.S. or elsewhere could have on domestic and international travel and our business in particular cannot be determined but any such attacks or the threat of such attacks could have a material adverse effect on our business, financial condition and results of operations and our ability to finance our business, to insure our properties and to make distributions to our shareholders.
The impact that terrorist attacks in the U.S. or elsewhere could have on domestic and international travel and our business in particular cannot be determined but any such attacks, rumors, or the threat of such attacks could have a material adverse effect on our business, financial condition and results of operations and our ability to finance our business, to insure our properties and to make distributions to our shareholders.
In the event of a default under our revolving credit facility or term loan, we would be unable to borrow under our revolving credit facility or term loan and any amounts we have borrowed thereunder could become due and payable. The market price of our equity securities may vary substantially, which may limit your ability to liquidate your investment.
In the event of a default under our credit agreement, we would be unable to borrow under our revolving credit facility or term loan and any amounts we have borrowed thereunder could become due and payable. The market price of our equity securities may vary substantially, which may limit your ability to liquidate your investment.
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.
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, 2025, managed all of our hotels and may manage additional hotels that we acquire or own (wholly or through a joint venture) in the future.
These factors can reduce both occupancy and room rates at hotels and could directly affect us negatively by: 18 19 • reducing the hotel revenue that we recognize with respect to hotels leased to our TRS Lessees; and • correspondingly reducing the profits (or increasing the loss) of hotels leased to our TRS Lessees.
These factors can reduce both occupancy and room rates at hotels and could directly affect us negatively by: • reducing the hotel revenue that we recognize with respect to hotels leased to our TRS Lessees; and • correspondingly reducing the profits (or increasing the loss) of hotels leased to our TRS Lessees.
The ability of our Board of Trustees to change our major policies may not be in our shareholders’ interest. Our Board of Trustees determines our major policies, including policies and guidelines relating to our acquisitions, leverage, financing, growth, operations and distributions to shareholders and our continued qualification as a REIT.
The ability of our Board of Trustees to change our major policies may not be in our shareholders ’ interest. Our Board of Trustees determines our major policies, including policies and guidelines relating to our acquisitions, leverage, financing, growth, operations and distributions to shareholders and our continued qualification as a REIT.
As a result, our investors could lose confidence in our reported financial information, which could harm our business and the value of our shares. • Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments. • We may be subject to adverse legislative or regulatory tax changes. • We may be unable to generate sufficient cash flows from our operations to make distributions to our shareholders at any time in the future. • Our revolving credit facility and term loan may limit our ability to pay dividends on common shares. • The market price of our equity securities may vary substantially. • The number of shares available for future sale could adversely affect the market price of our common shares. • Future offerings of debt or equity securities or incurrence of debt may adversely affect the market price of our common shares. 16 Risks Related to Our Business The COVID-19 pandemic has had, and may continue to have, or a future pandemic could have, adverse effects on our financial condition, results of operations, cash flows and performance.
As a result, our investors could lose confidence in our reported financial information, which could harm our business and the value of our shares. • Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments. • We may be subject to adverse legislative or regulatory tax changes. • We may be unable to generate sufficient cash flows from our operations to make distributions to our shareholders at any time in the future. • Our revolving credit facility and term loan may limit our ability to pay dividends on common shares. • The market price of our equity securities may vary substantially. • The number of shares available for future sale could adversely affect the market price of our common shares. • Future offerings of debt or equity securities or incurrence of debt may adversely affect the market price of our common shares. 15 Table of Contents Risks Related to Our Business The COVID-19 pandemic had, and a future pandemic could have, adverse effects on our financial condition, results of operations, cash flows and performance.
Accordingly, we may be required to borrow or raise capital on terms, or sell assets at prices or at times we regard unfavorable or make taxable distributions of our capital shares or debt securities, to enable us to pay out enough of our REIT taxable income to satisfy the distribution requirement and to avoid federal corporate income tax and the 4% nondeductible excise tax in a particular year. 29 Failure to maintain our qualification as a REIT would subject us to federal income tax and potentially to state and local taxes.
Accordingly, we may be required to borrow or raise capital on terms, or sell assets at prices or at times we regard unfavorable or make taxable distributions of our capital shares or debt securities, to enable us to pay out enough of our REIT taxable income to satisfy the distribution requirement and to avoid federal corporate income tax and the 4% nondeductible excise tax in a particular year. 27 Table of Contents Failure to maintain our qualification as a REIT would subject us to federal income tax and potentially to state and local taxes.
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.
Fisher, our Chairman and Chief Executive Officer, controls IHM, a hotel management company that, as of December 31, 2025, managed all of our hotels and may manage additional hotels that we acquire in the future.
Furthermore, any such hedging agreements would subject us to the risk of incurring significant non-cash losses on our hedges due to declines in interest rates if our hedges were not considered effective under applicable accounting standards. 20 Joint venture investments that we may make could be adversely affected by our lack of decision-making authority, our reliance on joint venture partners' financial condition and disputes between us and our joint-venture partners.
Furthermore, any such hedging agreements would subject us to the risk of incurring significant non-cash losses on our hedges due to declines in interest rates if our hedges were not considered effective under applicable accounting standards. 18 Table of Contents Joint venture investments that we may make could be adversely affected by our lack of decision-making authority, our reliance on joint venture partners' financial condition and disputes between us and our joint-venture partners.
As a result, we and our shareholders may have more limited rights against our trustees and officers than might otherwise exist absent the current provisions in our declaration of trust and bylaws or that might exist with other companies. 28 Provisions of Maryland law may limit the ability of a third party to acquire control of our Company and may result in entrenchment of management and diminish the value of our common shares.
As a result, we and our shareholders may have more limited rights against our trustees and officers than might otherwise exist absent the current provisions in our declaration of trust and bylaws or that might exist with other companies. 26 Table of Contents Provisions of Maryland law may limit the ability of a third party to acquire control of our Company and may result in entrenchment of management and diminish the value of our common shares.
The COVID-19 pandemic has had a severe and negative impact on both the U.S. economy and the global economy. Financial markets have experienced significant volatility as a result of the COVID-19 pandemic.
The COVID-19 pandemic had a severe and negative impact on both the U.S. economy and the global economy. Financial markets experienced significant volatility as a result of the COVID-19 pandemic.
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.
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. 21 Table of Contents Due to our concentration in hotel investments, a downturn in the lodging industry would adversely affect our operations and financial condition.
Sales of substantial amounts of common shares (including shares issued to our trustees and officers), or the perception that these sales could occur, may adversely affect prevailing market prices for our common shares. 34 We also may issue from time to time additional common shares or common units in our Operating Partnership in connection with the acquisition of properties and we may grant demand or piggyback registration rights in connection with these issuances.
Sales of substantial amounts of common shares (including shares issued to our trustees and officers), or the perception that these sales could occur, may adversely affect prevailing market prices for our common shares. 32 Table of Contents We also may issue from time to time additional common shares or common units in our Operating Partnership in connection with the acquisition of properties and we may grant demand or piggyback registration rights in connection with these issuances.
To the extent that such technologies play an increased role in day-to-day business and the necessity for business-related travel decreases, demand for our hotel rooms may decrease and we could be materially and adversely affected. 24 We and our hotel managers rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.
To the extent that such technologies play an increased role in day-to-day business and the necessity for business-related travel decreases, demand for our hotel rooms may decrease and we could be materially and adversely affected. 22 Table of Contents We and our hotel managers rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.
Any such failure could cause investors to lose confidence in our reported financial information and adversely affect the market value of our common shares or limit our access to the capital markets and other sources of liquidity. 32 Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.
Any such failure could cause investors to lose confidence in our reported financial information and adversely affect the market value of our common shares or limit our access to the capital markets and other sources of liquidity. 30 Table of Contents Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.
In the event conditions in the industry do not improve, or deteriorate, our ability to execute our business strategy would be adversely affected, which could adversely affect our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders. 22 Our ability to make distributions to our shareholders may be affected by various operating risks common in the lodging industry.
In the event conditions in the industry do not improve, or deteriorate, our ability to execute our business strategy would be adversely affected, which could adversely affect our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders. 20 Table of Contents Our ability to make distributions to our shareholders may be affected by various operating risks common in the lodging industry.
Under our revolving credit facility and term loan, our distributions may not exceed the greater of (i) 95% of adjusted funds from operations (as defined in our senior unsecured revolving credit facility and term loan) for the preceding four-quarter period or (ii) the amount required for us to maintain our status as a REIT.
Under our credit facility, consisting of an unsecured revolving credit facility and an unsecured term loan facility, our distributions may not exceed the greater of (i) 95% of adjusted funds from operations (as defined in our credit agreement) for the preceding four-quarter period or (ii) the amount required for us to maintain our status as a REIT.
One example is laws that require a business using chemicals to manage them carefully and to notify local officials if regulated spills occur. 26 Although it is our policy to require an acceptable Phase I environmental site assessment for all real property in which we invest prior to our investment, such surveys are limited in scope.
One example is laws that require a business using chemicals to manage them carefully and to notify local officials if regulated spills occur. 24 Table of Contents Although it is our policy to require an acceptable Phase I environmental site assessment for all real property in which we invest prior to our investment, such surveys are limited in scope.
The rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm's-length basis. 30 Our TRS holding company is subject to federal, foreign, state and local income tax on its taxable income, and its after-tax net income is available for distribution to us but is not required to be distributed to us.
The rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm's-length basis. 28 Table of Contents Our TRS holding company is subject to federal, foreign, state and local income tax on its taxable income, and its after-tax net income is available for distribution to us but is not required to be distributed to us.
Fisher as to whether and on what terms new management contracts will be awarded to IHM, whether and on what terms management agreements will be renewed upon expiration of their terms, enforcement of the terms of the management agreements and whether hotels managed by IHM will be sold. 21 Hotel development is subject to timing, cost, and other risks.
Fisher as to whether and on what terms new management contracts will be awarded to IHM, whether and on what terms management agreements will be renewed upon expiration of their terms, enforcement of the terms of the management agreements and whether hotels managed by IHM will be sold. 19 Table of Contents Hotel development is subject to timing, cost, and other risks.
These capital improvements may give rise to the following risks: • possible environmental problems; • construction cost overruns and delays; • possibility that revenues will be reduced temporarily while rooms or restaurants offered are out of service due to capital improvement projects; • a possible shortage of available cash to fund capital improvements and the related possibility that financing for these capital improvements may not be available on affordable terms; • uncertainties as to market demand or a loss of market demand after capital improvements have begun; and • disputes with franchisors/managers regarding compliance with relevant management/franchise agreements.
These capital improvements may give rise to the following risks: • possible environmental problems; • construction cost overruns and delays including those caused by supply chain disruptions and tariffs; • possibility that revenues will be reduced temporarily while rooms or restaurants offered are out of service due to capital improvement projects; • a possible shortage of available cash to fund capital improvements and the related possibility that financing for these capital improvements may not be available on affordable terms; • uncertainties as to market demand or a loss of market demand after capital improvements have begun; and • disputes with franchisors/managers regarding compliance with relevant management/franchise agreements.
Future terrorist attacks or changes in terror alert levels could adversely affect travel and hotel demand. Previous terrorist attacks and subsequent terrorist alerts have adversely affected the U.S. travel and hospitality industries, often disproportionately to the effect on the overall economy.
Future terrorist attacks, rumors or threats of war, or changes in terror alert levels could adversely affect travel and hotel demand. Previous terrorist attacks, rumors or threats of war, and subsequent terrorist alerts have adversely affected the U.S. travel and hospitality industries, often disproportionately to the effect on the overall economy.
As a result, if we do not generate sufficient adjusted funds from operations during the four quarters preceding any common share dividend payment date, we would not be able to pay dividends to our common shareholders consistent with our past practice without causing a default under our revolving credit facility and term loan.
As a result, if we do not generate sufficient adjusted funds from operations during the four quarters preceding any common share dividend payment date, we would not be able to pay dividends to our common shareholders consistent with our past practice without causing a default under our credit agreement.
Our Equity Incentive Plan provides for grants of equity based awards up to an aggregate of 4,600,000 common shares and we may seek to increase shares available under our Equity Incentive Plan in the future.
Our Equity Incentive Plan provides for grants of equity based awards up to an aggregate of 6,750,000 common shares and we may seek to increase shares available under our Equity Incentive Plan in the future.
Risks Related to the Lodging Industry • The lodging industry has experienced significant declines in the past and failure of the lodging industry to exhibit improvement may adversely affect our ability to execute our business strategy. • Our ability to make distributions to our shareholders may be affected by operating risks in the lodging industry. • Competition for acquisitions may reduce the number of properties we can acquire. • Competition for guests may lower our hotels' revenues and profitability. • The cyclical nature of the lodging industry may adversely affect the return on our investments. • Due to our concentration therein, a downturn in the lodging industry would adversely affect our business. • The ongoing need for capital expenditures at our hotel properties may adversely affect our business. 15 • The increasing use by consumers of Internet travel intermediaries and alternative lodging market places may adversely affect our profitability. • The need for business-related travel may be adversely affected by the use of business-related technology. • Risks related to information technology. • Future terrorist attacks or changes in terror alert levels could adversely affect travel and hotel demand. • We may assume liabilities in connection with the acquisition of hotel properties, including unknown liabilities. • Uninsured and underinsured losses could adversely affect our operating results. • We face risks associated with natural disasters and the direct and indirect physical effects of climate change, which may include more frequent and more severe storms, hurricanes, flooding, droughts and wildfires, any of which could have a material adverse effect on our hotel properties, operations, cash flows and financing options. • Noncompliance with environmental laws and governmental regulations could adversely affect our business. • Compliance with the ADA and other changes in governmental rules and regulations could substantially increase our cost of doing business. • The outbreak of widespread contagious disease, such as COVID-19, could reduce travel.
Risks Related to the Lodging Industry • The lodging industry has experienced significant declines in the past and failure of the lodging industry to exhibit improvement may adversely affect our ability to execute our business strategy. • Our ability to make distributions to our shareholders may be affected by operating risks in the lodging industry. • Competition for acquisitions may reduce the number of properties we can acquire. • Competition for guests may lower our hotels' revenues and profitability. • The cyclical nature of the lodging industry may adversely affect the return on our investments. • Due to our concentration therein, a downturn in the lodging industry would adversely affect our business. • The ongoing need for capital expenditures at our hotel properties may adversely affect our business. 14 Table of Contents • The increasing use by consumers of Internet travel intermediaries and alternative lodging market places may adversely affect our profitability. • The need for business-related travel may be adversely affected by the use of business-related technology. • Risks related to information technology. • Risks related to artificial intelligence. • Future terrorist attacks, rumors or threats of war, or changes in terror alert levels could adversely affect travel and hotel demand. • We may assume liabilities in connection with the acquisition of hotel properties, including unknown liabilities. • Uninsured and underinsured losses could adversely affect our operating results. • We face risks associated with natural disasters and the direct and indirect physical effects of climate change, which may include more frequent and more severe storms, hurricanes, flooding, droughts and wildfires, any of which could have a material adverse effect on our hotel properties, operations, cash flows and financing options. • Noncompliance with environmental laws and governmental regulations could adversely affect our business. • Compliance with the ADA and other changes in governmental rules and regulations could substantially increase our cost of doing business. • The outbreak of widespread contagious disease, such as COVID-19, could reduce travel. • A delay in approving a budget and/or continuing appropriation legislation to fund the operations of the federal government, failure to raise the borrowing limit for the federal government, and other legislative changes and governmental disruptions could reduce travel.
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.
See "There may be conflicts of interest between us and affiliates owned by our Chief Executive Officer" below. 16 Table of Contents The management of the hotels in our portfolio is currently concentrated in one hotel management company. As of December 31, 2025, IHM managed all 33 of our hotels.
We may seek to sell hotel properties owned by us in the future. There can be no assurance that we will be able to sell any hotel property on acceptable terms. 27 If financing for hotel properties is not available or is not available on attractive terms, it will adversely impact the ability of third parties to buy our hotels.
There can be no assurance that we will be able to sell any hotel property on acceptable terms. 25 Table of Contents If financing for hotel properties is not available or is not available on attractive terms, it will adversely impact the ability of third parties to buy our hotels.
Complex ownership attribution rules apply for purposes of these 35% thresholds. Although we intend to monitor ownership of our shares by our property managers and their owners, there can be no assurance that these ownership levels will not be exceeded. 31 Our ownership limitations may restrict or prevent you from engaging in certain transfers of our common shares.
Although we intend to monitor ownership of our shares by our property managers and their owners, there can be no assurance that these ownership levels will not be exceeded. 29 Table of Contents Our ownership limitations may restrict or prevent you from engaging in certain transfers of our common shares.
Depending on our access to capital, liquidity and the value of the properties securing the affected loan in relation to the balance of the loan, a default could have a material adverse effect on our results of operations and ability to obtain future financing.
Depending on our access to capital, liquidity and the value of the properties securing the affected loan in relation to the balance of the loan, a default could have a material adverse effect on our results of operations and ability to obtain future financing. 23 Table of Contents In the event of a substantial loss, insurance coverage may not be sufficient to cover the full current market value or replacement cost of the lost investment.
Future debt service obligations could adversely affect our overall operating results or cash flow and may require us to liquidate our properties, which could adversely affect our ability to make distributions to our shareholders and our share price.
We may be unable to reduce many of our expenses in tandem with revenue declines, (or we may choose not to reduce them for competitive reasons), and certain expenses may increase while our revenue declines. 17 Table of Contents Future debt service obligations could adversely affect our overall operating results or cash flow and may require us to liquidate our properties, which could adversely affect our ability to make distributions to our shareholders and our share price.
Further outbreaks, especially in the U.S., could reduce travel and adversely affect the U.S. hotel industry generally and our business in particular. General Risks Related to Real Estate Industry Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our hotel properties.
Further outbreaks, especially in the U.S., could reduce travel and adversely affect the U.S. hotel industry generally and our business in particular.
Removed
The rapid development and fluidity of the COVID-19 pandemic made it extremely difficult to assess the pandemic's full adverse economic impact, and future impact, on our financial condition, results of operations, cash flows and performance.
Added
We may face challenges managing rapidly advancing artificial intelligence in our business which could adversely affect our competitive position. The development and evolution of artificial intelligence is occurring at a rapid pace.
Removed
We may be unable to reduce many of our expenses in tandem with revenue declines, (or we may choose not to reduce them for competitive reasons), and certain expenses may increase while our revenue declines.
Added
Artificial intelligence may present an opportunity to create meaningful efficiencies and improve our business performance, but it could present similar opportunities for our competitors, and the use of artificial intelligence by us or our hotel manager, franchisors or vendors may pose new and more severe cybersecurity challenges.
Removed
In the event of a substantial loss, insurance coverage may not be sufficient to cover the full current market value or 25 replacement cost of the lost investment.
Added
The use of artificial intelligence by hotel guests may change the way they find and purchase lodging or other hotel services.
Removed
As a result, no assurance can be given that we will be able to make distributions to our shareholders or that the level of 33 any distributions we do make to our shareholders will achieve a market yield or increase or even be maintained over time, any of which could materially and adversely affect the market price of our common shares.
Added
If we or our hotel manager, franchisors or vendors are unable to apply artificial intelligence to our business successfully or our competitors gain competitive advantages over us through their application of artificial intelligence, our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders may be adversely affected.
Added
A delay in approving a budget and/or continuing appropriation legislation to fund the operations of the federal government, failure to raise the borrowing limit for the federal government, and other legislative changes and governmental disruptions could affect travel directly and indirectly and may thereby negatively impact our revenues and cash available for distributions.
Added
The delay in approving a budget and continuing appropriation legislation to fund the federal government's operations caused many federal agencies to cease or curtail some activities during the fourth quarter of 2013 and for an even longer period of time beginning in the fourth quarter of 2018 and the third quarter of 2025.
Added
There can be no assurance that similar action or inaction by federal or state government agencies, or other efforts to reduce government expenditures or growth, will not occur again in future periods, resulting in difficulties and discouraging travel or meetings and conferences.
Added
The reduction in income from both businesses and federal government employees and the possibility of another federal government impasse may adversely affect consumer confidence or may discourage both business and leisure travel, resulting in the deferral or cancellation of travel and a negative effect on our group and transient revenues in the future.
Added
Such impacts could have a material adverse impact on our consolidated financial statements. General Risks Related to Real Estate Industry Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our hotel properties.
Added
We may seek to sell hotel properties owned by us in the future.
Added
Complex ownership attribution rules apply for purposes of these 35% thresholds.

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, 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.
Biggest changeProperties The following table sets forth certain operating information for our hotels as of December 31, 2025: Date of Year Number Purchase Purchase Price Mortgage Property Location Acquisition Opened of Rooms Price per Room Debt Balance Homewood Suites by Hilton Hartford-Farmington Farmington, Connecticut 4/23/2010 1999 121 $ 11.5 million $ 95,041 — 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 138 $ 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 — 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 112 $ 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 162 $ 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 136 $ 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 5,021 $ 1,400.9 million $ 279,008 $ 143.2 million We lease our headquarters at 222 Lakeview Avenue, Suite 200, West Palm Beach, FL 33401.
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.
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.
For more information on the leases to which we or our hotels are subject, see "Item 1. Business - Leases". 37
The Home2 Phoenix Downtown hotel is subject to a finance lease with an expiration in 2032; the property will be conveyed to us at no cost at the expiration of this term. For more information on the leases to which we or our hotels are subject, see "Item 1. Business - Leases". 35 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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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”.
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 4. Mine Safety Disclosures Not applicable. 36 Table of Contents Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSale of Unregistered Securities None. 40 Issuer Purchases of Equity Securities We do not currently have a repurchase plan or program in place. However, we do provide employees, who have been issued restricted common shares, the option of forfeiting shares to us to satisfy the minimum statutory tax withholding requirements on the date their shares vest.
Biggest changeAdditionally, we provide employees who have been issued restricted common shares the option of forfeiting shares to us to satisfy the minimum statutory tax withholding requirements on the date their shares vest. During the year ended December 31, 2025, there were 532 common shares surrendered to the Company to satisfy tax withholding obligations associated with the vesting of restricted shares.
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.
The total return values were calculated assuming a $100 investment on December 31, 2020 with reinvestment of all dividends in (i) our common shares, (ii) the Russell 2000, (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 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 below graph provides a comparison of the five-year cumulative total return on our common shares from December 31, 2020 to the NYSE closing price per share on December 31, 2025 with the cumulative total return on the Russell 2000 Index (the “Russell 2000”), the FTSE Nareit All Equity REITs Index (the “FTSE Nareit All Equity REITs”) and the FTSE Nareit Lodging/Resorts Index (the “FTSE Nareit Lodging”).
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.
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, 2025, there were 231 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 — — 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.
Number of Number of Securities Weighted-Average Securities Remaining to be Issued Upon Exercise Price of Available for Future Exercise of Outstanding Outstanding Options, Issuance under Equity Options, Warrants and Rights Warrants and Rights Compensation Plans Equity compensation plans approved by security holders 1 — — 2,271,462 Equity compensation plans not approved by security holders — — — Total — — 2,271,462 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.
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.
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, 2025 and 2024, respectively: 2025 2024 Common shares: Ordinary income $ 0.32764 91.0 % $ 0.21568 77.0 % Unrecaptured Section 1250 gain 0.03236 9.0 % — 0.0 % Return of capital — 0.0 % 0.06432 23.0 % Total $ 0.36 100.0 % $ 0.28 100.0 % Series A preferred shares: Ordinary income $ 1.50736 91.0 % $ 1.65624 100.0 % Unrecaptured Section 1250 gain 0.14888 9.0 % — 0.0 % Return of capital — 0.0 % — 0.0 % Total $ 1.65624 100.0 % $ 1.65624 100.0 % 38 Table of Contents Equity Compensation Plan Information The following table provides information, as of December 31, 2025, 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 plan was amended and restated as of May 24, 2022 by our Board of Trustees to increase the maximum number of shares available under the plan to 4,600,000 shares. The amended and restated plan was approved by our shareholders at our 2022 annual meeting of shareholders.
The plan was amended on May 6, 2025 by our Board of Trustees to increase the maximum number of shares available under the plan to 6,750,000 shares. The amended and restated plan was approved by our shareholders at our 2025 annual meeting of shareholders. Sale of Unregistered Securities None.
Value 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).
Value of initial investment at December 31, 2020 2021 2022 2023 2024 2025 Chatham Lodging Trust $ 100.00 $ 127.04 $ 114.26 $ 102.65 $ 88.41 $ 70.85 Russell 2000 $ 100.00 $ 114.82 $ 91.35 $ 106.82 $ 119.14 $ 134.40 FTSE Nareit All Equity REITs $ 100.00 $ 139.88 $ 104.76 $ 116.79 $ 121.85 $ 123.88 FTSE Nareit Lodging $ 100.00 $ 118.22 $ 100.12 $ 124.07 $ 121.59 $ 115.35 37 Table of Contents 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).
Removed
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
Added
Issuer Purchases of Equity Securities Common Shares In May 2025, our Board of Trustees authorized and approved a $25.0 million share repurchase program of our common shares. Under this program, we may repurchase common shares through open market purchases or other privately negotiated transactions at times and in amounts as we deem appropriate.
Added
The program has no time limit and may be suspended or discontinued at any time. As of September 30, 2025, $23.0 million of common shares remained available for repurchase under this program.
Added
During the year ended December 31, 2025, the Company repurchased 1,313,795 common shares at a weighted-average price per share of $6.83 for an aggregate purchase price, including commissions, of approximately $9.0 million. As of December 31, 2025, there was approximately $16.0 million in common shares available for repurchase under the share repurchase program.
Added
The following is a summary of all share repurchases during the fourth quarter of 2025: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (in thousands) October 1, 2025 - October 31, 2025 229,959 $ 6.47 229,959 $ — November 1, 2025 - November 30, 2025 280,071 $ 6.68 280,071 $ — December 1, 2025 - December 31, 2025 528,072 $ 6.88 528,072 $ — Total 1,038,102 $ 6.73 1,038,102 $ 16,033 (1) Represents $16.0 million in common shares available for repurchase as of December 31, 2025 under the $25.0 million share repurchase program.
Added
Under this program, we may repurchase common shares through open market purchases or other privately negotiated transactions at times and in amounts as we deem appropriate. The program has no time limit and may be suspended or discontinued at any time.

Item 7. Management's Discussion & Analysis

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

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Biggest changeInterest 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.
Biggest changeInterest expense is comprised of the following (dollars in thousands): For the year ended December 31, 2025 December 31, 2024 % Change Mortgage debt interest $ 10,515 $ 16,085 (34.6 )% Credit facility and term loan interest and unused fees 13,641 13,372 2.0 % Interest on finance lease liability 25 14 78.6 % Amortization of deferred financing costs 1,478 1,409 4.9 % Total $ 25,659 $ 30,880 (16.9 )% The decrease in interest expense was due to lower debt balances and lower floating rate borrowing costs during the year ended December 31, 2025 than during the year ended December 31, 2024.
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.
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, 2025, 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.
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.
Same property Occupancy, ADR, and RevPAR reflect results for the hotels owned by the Company as of December 31, 2025 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, 2024, 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, 2025, we had no hotel properties that met the criteria to be presented as held for sale.
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 Company's TRS is expecting the taxable income in 2025 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.
Our revolving credit facility and unsecured delayed-draw term loan contain representations, warranties, covenants, terms and conditions customary for credit facilities of this type, including a maximum leverage ratio, a minimum fixed charge coverage ratio and minimum net worth financial covenants, limitations on (i) liens, (ii) incurrence of debt, (iii) investments, (iv) distributions, and (v) mergers and asset dispositions, covenants to preserve corporate existence and comply with laws, covenants on the use of proceeds of the revolving credit facility and default provisions, including defaults for non-payment, breach of representations and warranties, insolvency, non-performance of covenants, cross-defaults and guarantor defaults.
Our revolving credit facility and term loan contain representations, warranties, covenants, terms and conditions customary for credit facilities of this type, including a maximum leverage ratio, a maximum secured leverage ratio, a maximum unsecured leverage ratio, a minimum fixed charge coverage ratio, a minimum unsecured interest coverage ratio, and minimum net worth financial covenants, limitations on (i) liens, (ii) incurrence of debt, (iii) investments, (iv) distributions, and (v) mergers and asset dispositions, covenants to preserve corporate existence and comply with laws, covenants on the use of proceeds of the revolving credit facility and default provisions, including defaults for non-payment, breach of representations and warranties, insolvency, non-performance of covenants, cross-defaults and guarantor defaults.
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.
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, 2024 for comparative a discussion of our consolidated results of operations between fiscal 2024 and fiscal 2023.
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.
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.
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 Note 12, “Leases” to our consolidated financial statements for additional information relating to our corporate office and ground leases. 50 Table of Contents Related Party Transactions We have entered into transactions and arrangements with related parties that could result in potential conflicts of interest.
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.
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 91.2% and 91.5% of total revenue for the years ended December 31, 2025 and 2024, respectively.
W e believe that the presentation of EBITDA re provides useful information to investors regarding the Company's operating performance and can facilitate comparison of operating performance between periods and between REITs.
We believe that the presentation of EBITDA re provides useful information to investors regarding the Company's operating performance and can facilitate comparison of operating performance between periods and between REITs.
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.
At December 31, 2025, our leverage ratio was approximately 20.1%, which decreased from 23.1% at December 31, 2024 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, 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.
At December 31, 2025, we had total debt of $343.2 million at an average rate of approximately 6.2%. 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.
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.
See “Non-GAAP Financial Measures” for further discussion of FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA and Adjusted Hotel EBITDA. 40 Table of Contents Results of Operations Comparison of the year ended December 31, 2025 to the year ended December 31, 2024 The section below provides a comparative discussion of our consolidated results of operations between fiscal year 2025 and 2024.
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.
At December 31, 2025 and 2024, we had $0 and $110.0 million, respectively, in outstanding borrowings under our revolving credit facility. We had $200.0 million and $140.0 million in outstanding borrowings under our unsecured term loan at December 31, 2025 and 2024, respectively. At December 31, 2025, the maximum remaining borrowing availability under our revolving credit facility was $300.0 million.
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.
We expect to invest approximately $26.5 million on renovations, discretionary and emergency expenditures on our existing hotels in 2026, including improvements required under any brand property improvement plan ("PIP"). Financing Activities Cash Flow s Net cash flows used in financing activities increased $6.1 million to $(106.7) million in 2025 compared to $(100.6) million in 2024.
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 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. 45 Table of Contents The following is a reconciliation of net income (loss) to FFO and Adjusted FFO for the years ended December 31, 2025, 2024 and 2023 (in thousands, except share data): For the year ended December 31, 2025 2024 2023 Funds From Operations (“FFO”): Net income $ 15,313 $ 4,035 $ 2,488 Preferred dividends (7,950 ) (7,950 ) (7,950 ) Net income (loss) attributable to common shares and common units 7,363 (3,915 ) (5,462 ) Gain on sale of hotel properties (14,369 ) (5,713 ) (18 ) Depreciation of hotel properties owned 57,664 59,513 58,040 Impairment loss — 4,256 4,266 FFO attributed to common share and unit holders 50,658 54,141 56,826 Amortization of finance lease assets 1,887 1,010 — Other charges 27 327 2,300 Loss on early extinguishment of debt 174 17 696 Gain from partial lease termination — — (164 ) Adjusted FFO attributed to common share and unit holders $ 52,746 $ 55,495 $ 59,658 Weighted average number of common shares and units Basic 50,522,421 50,757,548 50,374,481 Diluted 51,721,473 51,172,183 50,532,122 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.
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.
Net Income Net income was $15.3 million for the year ended December 31, 2025, compared to net income of $4.0 million for the year ended December 31, 2024. The change in net income primarily was due to the factors discussed above.
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.
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. 46 Table of Contents The following is a reconciliation of net income (loss) to EBITDA, EBITDA re and Adjusted EBITDA for the years ended December 31, 2025, 2024 and 2023 (in thousands): For the year ended December 31, 2025 2024 2023 Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”): Net income $ 15,313 $ 4,035 $ 2,488 Interest expense, including amortization of deferred fees 25,659 30,880 27,128 Depreciation and amortization 59,749 60,741 58,254 EBITDA 100,721 95,656 87,870 Impairment loss — 4,256 4,266 Gain on sale of hotel properties (14,369 ) (5,713 ) (18 ) EBITDAre 86,352 94,199 92,118 Other charges 27 327 2,300 Loss on early extinguishment of debt 174 17 696 Gain from partial lease termination — — (164 ) Share based compensation 6,256 6,398 6,117 Adjusted EBITDA $ 92,809 $ 100,941 $ 101,067 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 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.
The following is a presentation of Adjusted Hotel EBITDA for the years ended December 31, 2025, 2024 and 2023 (in thousands): For the year ended December 31, 2025 2024 2023 Net income $ 15,313 $ 4,035 $ 2,488 Add: Interest expense, including amortization of deferred fees 25,659 30,880 27,128 Depreciation and amortization 59,749 60,741 58,254 Corporate general and administrative 16,589 18,388 17,517 Other charges 27 327 2,300 Impairment loss — 4,256 4,266 Loss on early extinguishment of debt 174 17 696 Less: Interest and other income (270 ) (1,712 ) (1,534 ) Gain on sale of hotel properties (14,369 ) (5,713 ) (18 ) Gain from partial lease termination — — (164 ) Adjusted Hotel EBITDA $ 102,872 $ 111,219 $ 110,933 47 Table of Contents 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.
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.
As of December 31, 2025, there was approximately $16.0 million of common shares available for repurchase under the Share Repurchase 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, 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.
As of December 31, 2025, the Company owned 33 hotels with an aggregate of 5,021 rooms located in 15 states and the District of Columbia. To qualify as a REIT, the Company cannot operate its hotels.
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.
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.
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.
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.
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.
See Note 6, “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 2025 total $1.8 million.
In the table below, we present both actual and same property room revenue metrics. Actual Occupancy, ADR and RevPAR metrics reflect the performance of the hotels for the actual days such hotels were owned by the Company during the periods presented.
Smith Travel Research currently projects industry RevPAR growth of 0.6% in 2026. 41 Table of Contents In the table below, we present both actual and same property room revenue metrics. Actual Occupancy, ADR and RevPAR metrics reflect the performance of the hotels for the actual days such hotels were owned by the Company during the periods presented.
Such an event could materially adversely affect our net income and net cash available for distribution to shareholders. However, we believe we have been organized and that we operate in such a manner as to qualify for treatment as a REIT. 55
Such an event could materially adversely affect our net income and net cash available for distribution to shareholders. However, we believe we have been organized and that we operate in such a manner as to qualify for treatment as a REIT. 52 Table of Contents Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
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.
We declared total dividends of $0.36 per common share and LTIP unit for the year ended December 31, 2025, and $0.28 per common share and LTIP unit for the year ended December 31, 2024. We declared total dividends of $1.65624 and $1.65624 per Series A preferred share for the years ended December 31, 2025 and 2024, respectively.
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).
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, 2025, there were no impairment losses.
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.
Room revenue was $269.2 million and $290.3 million for the years ended December 31, 2025 and 2024, respectively, and the decrease in room revenue primarily was related to the same factors discussed above. Food and beverage revenue was $6.9 million and $7.7 million for the years ended December 31, 2025 and 2024, respectively.
Hotel 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.
Hotel Operating Expenses Hotel operating expenses consisted of the following for the periods indicated (dollars in thousands): For the year ended December 31, 2025 December 31, 2024 % Change Hotel operating expenses: Room $ 59,752 $ 65,311 (8.5 )% Food and beverage expense 5,517 6,218 (11.3 )% Telephone expense 1,172 1,360 (13.8 )% Other expense 4,487 4,127 8.7 % General and administrative 27,010 28,826 (6.3 )% Franchise and marketing fees 23,620 25,355 (6.8 )% Advertising and promotions 6,804 6,229 9.2 % Utilities 12,372 13,161 (6.0 )% Repairs and maintenance 15,272 16,516 (7.5 )% Management fees paid to related parties 9,895 10,733 (7.8 )% Insurance 3,272 3,340 (2.0 )% Total hotel operating expenses $ 169,173 $ 181,176 (6.6 )% Hotel operating expenses decreased $12.0 million, or 6.6%, to $169.2 million for the year ended December 31, 2025 from $181.2 million for the year ended December 31, 2024.
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.
Impairment Loss Impairment loss was zero and $4.3 million for the years ended December 31, 2025 and 2024, respectively. The impairment loss in 2024 was due to the impairment recorded on the CY Houston hotel property which was sold on April 22, 2025.
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.
Revenue Revenue, which 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, 2025 December 31, 2024 % Change Room $ 269,206 $ 290,290 (7.3 )% Food and beverage 6,894 7,737 (10.9 )% Other 17,897 18,077 (1.0 )% Cost reimbursements from related parties 1,078 1,105 (2.4 )% Total revenue $ 295,075 $ 317,209 (7.0 )% Total revenue decreased $22.1 million to $295.1 million for the year ended December 31, 2025 compared to total revenue of $317.2 million for the 2024 period.
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.
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. 44 Table of Contents Non-GAAP Financial Measures We consider the following non-GAAP financial measures useful to investors as key supplemental measures of our operating performance: (1) FFO, (2) Adjusted FFO, (3) EBITDA, (4) EBITDA re , (5) Adjusted EBITDA and (6) Adjusted Hotel EBITDA.
Pricing on the new facilities is based on SOFR plus a spread of 1.50% to 2.25% for the revolving credit facility and a spread of 1.45% to 2.20% for the unsecured delayed-draw term loan facility based on the Company's leverage, and a credit spread adjustment of 0.10%.
Total commitments of $500.0 million under the new Credit Facility can be increased up to $650.0 million through an accordion feature. Pricing on the new facilities is based on SOFR plus a spread of 1.50% to 2.25% for the revolving credit facility and a spread of 1.45% to 2.20% for the unsecured term loan facility based on the Company's leverage.
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.
Total general and administrative expenses (excluding amortization of stock based compensation of $6.3 million and $6.4 million for the years ended December 31, 2025 and 2024, respectively) decreased $1.7 million to $10.3 million in 2025 from $12.0 million in 2024.
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.
Smith Travel Research reported that U.S. lodging industry RevPAR increased 2.2% in the first quarter of 2025, decreased 0.5% in the second quarter of 2025, decreased 1.4% in the third quarter of 2025 and decreased 1.1% in the fourth quarter of 2025.
Investing Activities Cash Flow s Net cash flows used in investing activities increased $1.1 million to $(29.2) million in 2024 compared to $(28.1) million in 2023.
Investing Activities Cash Flow s Net cash flows provided by (used in) investing activities increased $74.6 million to $45.4 million in 2025 compared to $(29.2) million in 2024.
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.
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.
Material Cash Requirements Our material cash requirements include the following contractual obligations: • At December 31, 2024, we had total debt principal and interest obligations of $506.1 million with $181.6 million of principal and interest payable within the next 12 months from December 31, 2024 (excluding available extension options).
Material Cash Requirements Our material cash requirements include the following contractual obligations: • At December 31, 2025, we had total debt principal and interest obligations of $449.5 million with $21.3 million of principal and interest payable within the next 12 months from December 31, 2025.The Company has no debt principal obligations payable during the next 12 months.
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.
Results of operations for the year ended December 31, 2025 include the operating activities of the hotels we owned during the period.
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.
Cash, cash equivalents, and restricted cash totaled $32.6 million as of December 31, 2025, an increase of $2.8 million from December 31, 2024, primarily due to net cash provided by operating activities of $64.1 million, net cash provided by investing activities of $45.4 million, and net cash used in financing activities $106.7 million.
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.
For the year ended December 31, 2024, the Company incurred an impairment loss on one hotel property.
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.
Depreciation and Amortization Depreciation and amortization expense decreased $1.0 million from $60.7 million for the year ended December 31, 2024 to $59.7 million for the year ended December 31, 2025.
For the year ended December 31, 2023, net cash flows used in financing activities of $(7.7) million were comprised of the repayment of our construction loan of $39.3 million, principal payments on mortgage debt of $117.7 million, distributions to common share and unit holders of $14.2 million, distributions on preferred shares of $8.0 million, and payments of deferred financing costs of $1.5 million, partially offset by borrowings on our unsecured term loan of $90.0 million and proceeds from the issuance of five new mortgage loans of $82.9 million.
For the year ended December 31, 2025, net cash flows used in financing activities of $106.7 million were comprised of net repayments on our revolving credit facility of $110.0 million, the repayment of mortgage debt of $16.0 million, payments of financing costs of $6.2 million, repurchases of common shares of $9.0 million, distributions to common share and LTIP unit holders of $17.6 million, and distributions on preferred shares of $8.0 million, partially offset by net borrowings on our unsecured term loan of $60.0 million.
The HGI Denver Tech hotel property was sold on January 9, 2024, the HWS Maitland hotel property was sold on December 6, 2024, and the HWS Bloomington hotel property was sold on December 16, 2024, which resulted in a total gain of $5.7 million.
The HGI Denver Tech hotel property was sold on January 9, 2024, the HWS Maitland hotel property was sold on December 6, 2024, and the HWS Bloomington hotel property was sold on December 16, 2024, which resulted in a total gain of $5.7 million. 43 Table of Contents Interest and Other Income Interest on cash and cash equivalents and other income decreased $1.4 million from $1.7 million for the year ended December 31, 2024 to $0.3 million for the year ended December 31, 2025.
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.
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, 2025 and 2024 decreased 0.3% and increased 1.8%, respectively, as compared to the years ended December 31, 2024 and 2023.
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.
For the year ended December 31, 2023, the Company incurred an impairment loss on one hotel property (See Note 5). 51 Table of Contents 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.
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.
Other Charges Other charges decreased from $0.3 million for the year ended December 31, 2024 to $27 thousand for the year ended December 31, 2025. Reimbursable Costs from Related Parties Reimbursable costs from related parties, comprised of shared office expenses and rent, were $1.1 million and $1.1 million for the years ended December 31, 2025 and 2024, respectively.
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.
Our principal uses of cash include acquisitions, capital expenditures, operating costs, corporate expenditures, interest costs, debt repayments and distributions to equity holders.
We sold one hotel located in Denver, CO on January 9, 2024, sold one hotel located in Maitland, FL on December 6, 2024, and sold one hotel located in Bloomington, MN on December 16, 2024. We acquired one hotel located in Phoenix, AZ on May 30, 2024.
We sold one hotel located in Denver, CO on January 9, 2024, one hotel located in Maitland, FL on December 6, 2024, one hotel located in Bloomington, MN on December 16, 2024, one hotel located in Brentwood, TN on January 30, 2025, one hotel located in Houston, TX on March 17, 2025, one hotel located in Houston, TX on April 22, 2025, and one hotel located in Billerica, MA on December 23, 2025.
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.
Cash from Operations Net cash flows provided by operating activities decreased $9.7 million to $64.1 million in 2025 compared to $73.8 million in 2024. The decrease in cash from operating activities was primarily due to the sale of seven hotels in 2024 and 2025.
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.
The cost reimbursements were offset by the cost reimbursements from related parties included in revenues. Gain on Sale of Hotel Properties Gain on the sale of hotel properties increased $8.7 million to $14.4 million for the year ended December 31, 2025 compared to $5.7 million for the year ended December 31, 2024.
For the year ended December 31, 2024 December 31, 2023 % Change Same Property (36 hotels) Actual (40 hotels) Same Property (36 hotels) Actual (39 hotels) Same Property (36 hotels) Actual (40/39 hotels) Occupancy 76.3 % 76.3 % 74.5 % 74.3 % 2.4 % 2.7 % ADR $ 181.78 $ 178.96 $ 181.13 $ 177.60 0.4 % 0.8 % RevPAR $ 138.71 $ 136.49 $ 134.94 $ 132.01 2.8 % 3.4 % Same property RevPAR increased 2.8% due to an increase in occupancy of 2.4% and an increase in ADR of 0.4%.
For the year ended December 31, 2025 December 31, 2024 % Change Same Property Actual Same Property Actual Same Property Actual (33 hotels) (37 hotels) (33 hotels) (40 hotels) (33 hotels) (37/40 hotels) Occupancy 76.6 % 76.3 % 76.2 % 76.3 % 0.5 % 0.0 % ADR $ 185.78 $ 183.95 $ 187.03 $ 178.96 (0.7 )% 2.8 % RevPAR $ 142.39 $ 140.38 $ 142.56 $ 136.49 (0.1 )% 2.9 % For the year ended December 31, 2025, same property RevPAR decreased 0.1% due to an increase in occupancy of 0.5% and a decrease in ADR of 0.7%.
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.
Loss on Early Extinguishment of Debt Loss on early extinguishment of debt increased $0.2 million from $17 thousand for the year ended December 31, 2024 to $0.2 million for the year ended December 31, 2025.
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.
This was partially offset by the increase in revenue from the acquisition of one hotel that contributed $8.6 million of revenue during the year ended December 31, 2025, up $4.9 million from the $3.7 million that the acquired hotel contributed for the corresponding 2024 period.
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.
Other revenue, comprised of parking, meeting room, gift shop, in-room movie and other ancillary amenities revenue, decreased $0.2 million for the year ended December 31, 2025. Reimbursed costs from related parties were $1.1 million and $1.1 million for the years ended December 31, 2025 and 2024, respectively.
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.
We were in compliance with all financial covenants at December 31, 2025. 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.
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 decrease was due to lower cash balances during the year ended December 31, 2025. Interest Expense, Including Amortization of Deferred Fees Interest expense decreased $5.2 million, or 16.9%, from $30.9 million for the year ended December 31, 2024 to $25.7 million for the year ended December 31, 2025.
Property Taxes, Ground Rent and Insurance Total property taxes, ground rent and insurance expenses increased $0.2 million from $23.5 million for the year ended December 31, 2023 to $23.7 million for the year ended December 31, 2024.
Property Taxes, Ground Rent and Insurance Total property taxes, ground rent and insurance expenses decreased $1.7 million from $23.7 million for the year ended December 31, 2024 to $22.0 million for the year ended December 31, 2025. The decrease was primarily related to the sales of seven hotels partially offset by increases in property tax assessments.
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 acquired one hotel located in Phoenix, AZ on May 30, 2024. The changes in results described below were driven primarily by the sales of seven hotels, the acquisition of one hotel and inflationary cost pressures.
As of December 31, 2024, there was approximately $49.9 million in common shares available for issuance under the DRSPP.
During the year ended December 31, 2025, the Company issued 7,630 common shares under the DRSPP at a weighted average price of $7.10, which generated $54 thousand of proceeds. As of December 31, 2025, there was approximately $49.9 million of common shares available for issuance under the DRSPP.
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.
The decrease in total revenue primarily was related to the decrease in revenue from the sales of seven hotels that contributed $8.9 million in revenue for the year ended December 31, 2025, down $24.6 million from the $33.5 million that the sold hotels contributed for the corresponding 2024 period. Same property RevPAR also decreased by 0.1%.
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.
We also had mortgage debt on individual hotels aggregating $143.2 million and $159.2 million at December 31, 2025 and 2024, respectively. 48 Table of Contents On September 25, 2025, the Company entered into a new credit agreement for a credit facility (the "Credit Facility") consisting of a $300.0 million unsecured revolving credit facility and a $200.0 million unsecured term loan facility which replaced the existing $260.0 million revolving credit facility and the existing $140.0 million unsecured term loan facility.
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.
Room expenses, which are the most significant component of hotel operating expenses, decreased $5.5 million from $65.3 million in 2024 to $59.8 million in 2025.
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.
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.
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.
Under the DRSPP, shareholders may purchase additional common shares by reinvesting some or all of the cash dividends received on common shares. Shareholders may also make optional cash purchases of the Company's common shares subject to certain limitations detailed in the prospectus for the DRSPP.
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.
The decrease in room expenses was related primarily to the decrease in costs from the sales of seven hotels, partially offset by the increase in costs from the acquisition of one hotel and an increase in costs related to an increase in same property occupancies at our hotels. 42 Table of Contents The remaining hotel operating expenses decreased $6.5 million, or 5.6%, from $115.9 million in 2024 to $109.4 million in 2025.
The one hotel acquired during the year ended December 31, 2024, which was not owned during the year ended December 31, 2023, contributed $2.2 million of operating expenses during the year ended December 31, 2024.
This was partially offset by the increase in operating expenses from the acquisition of one hotel that contributed $4.5 million in operating expenses for the year ended December 31, 2025, up $2.3 million from the $2.2 million that the acquired hotel contributed for the corresponding 2024 period. The remaining change in operating expenses was related to inflationary cost pressures.
Removed
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.
Added
The seven sold hotels contributed $6.0 million in operating expenses for the year ended December 31, 2025, down $15.9 million from the $21.9 million that the sold hotels contributed for the corresponding 2024 period.
Removed
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.
Added
The decrease in the remaining operating expenses was related primarily to the decrease in costs from the sales of seven hotels, partially offset by the increase in costs from the acquisition of one hotel and an increase in costs related to inflationary cost pressures.
Removed
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.
Added
The HWS Brentwood hotel property was sold on January 30, 2025, the HI Houston hotel property was sold on March 17, 2025, the CY Houston hotel property was sold on April 22, 2025, and the HWS Billerica hotel property was sold on December 23, 2025, which resulted in a total gain of $14.4 million.
Removed
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.
Added
The loss in 2025 was related to the Company entering into a new unsecured revolving credit facility and the write-off of unamortized deferred financing fees from the prior facility. Income Tax Expense Income tax expense remained unchanged at zero for the years ended December 31, 2025 and 2024.
Removed
The impairment loss in 2023 was due to the impairment recorded on the HGI Denver Tech hotel property which was sold on January 9, 2024.
Added
Proceeds from the new $200.0 million funded term loan were used to repay the $60.0 million of outstanding borrowings under the prior $260.0 million revolving credit facility and the $140.0 million of outstanding borrowings under the prior term loan. The new Credit Facility has an initial maturity date of September 25, 2029 and provides options to extend for one year.
Removed
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.

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