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What changed in Pebblebrook Hotel Trust's 10-K — 2023 vs 2024

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

+224 added−235 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-21)

Top changes in Pebblebrook Hotel Trust's 2024 10-K

224 paragraphs added · 235 removed · 190 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe perform and utilize extensive research to evaluate any target market and property, including a detailed review of the long-term economic outlook, trends in local demand generators, competitive environment, property systems and physical condition and property financial performance.
Biggest changeIn this report, unless the context indicates otherwise, the term "hotels" refers to "hotels and resorts" and the term "hotel properties" refers to "hotel and resort properties." We perform and utilize extensive research to evaluate any target market and property, including a detailed review of the long-term economic outlook, trends in local demand generators, competitive environment, property systems and physical condition and property financial performance.
Therefore, the Operating Partnership and its subsidiaries lease the hotel properties to subsidiaries of Pebblebrook Hotel Lessee, Inc. (collectively with its subsidiaries, "PHL"), our taxable REIT subsidiary ("TRS"), which in turn engage third-party eligible independent contractors to manage the hotels. PHL is consolidated into the Company’s financial statements.
Therefore, our Operating Partnership and its subsidiaries lease the hotel properties to subsidiaries of Pebblebrook Hotel Lessee, Inc. (collectively with its subsidiaries, "PHL"), our taxable REIT subsidiary ("TRS"), which in turn engage third-party eligible independent contractors to manage the hotels. PHL is consolidated into the Company’s financial statements.
When purchasing hotel properties, we may issue limited partnership interests in our Operating Partnership as full or partial consideration to sellers who may desire to take advantage of tax deferral on the sale of a hotel or participate in the potential appreciation in value of our common shares of beneficial interest, or common shares.
When purchasing hotel properties, we may issue limited partnership interests in our Operating Partnership as full or partial consideration to sellers who may desire to take advantage of tax deferral on the sale of a hotel or participate in the potential appreciation in value of our common shares of beneficial interest ("common shares").
However, some employees of the hotel managers at several of our hotels are currently represented by labor unions and are subject to collective bargaining agreements. Available Information Our Internet website is located at www.pebblebrookhotels.com.
However, some employees of the hotel managers of several of our hotels are currently represented by labor unions and are subject to collective bargaining agreements. Available Information Our Internet website is located at www.pebblebrookhotels.com.
Curator's distinct owner-centric platform offers an alternative for independent lifestyle hotels seeking to strengthen their performance, providing its members with best-in-class agreements, services and technology, while allowing members to retain their unique identities. We own a majority of the equity interests in Curator, which is consolidated in our consolidated financial statements.
Curator's distinct owner-centric platform offers an alternative for independent lifestyle hotels and resorts seeking to strengthen their performance, providing its members with best-in-class agreements, services and technology, while allowing members to retain their unique identities. We own a majority of the equity interests in Curator, which is consolidated in our consolidated financial statements.
Furthermore, various court decisions have established that third parties may recover damages for injury caused by property contamination. For instance, a person exposed to asbestos while staying in a hotel may seek to recover damages if they suffer injury from the asbestos. Lastly, some of these environmental laws restrict the use of a property or place conditions on various activities.
Furthermore, various court decisions have established that third parties may recover damages for injury caused by property contamination. For instance, a person exposed to asbestos while staying in a hotel may seek to recover damages if they suffer injury from the asbestos. Some of these environmental laws restrict the use of a property or place conditions on various activities.
We may consider acquiring outstanding debt secured by a hotel or resort property from lenders and investors if we believe the returns will be attractive or if we can foreclose on or acquire ownership of the property in the near-term.
We may consider acquiring outstanding debt secured by a hotel property from lenders and investors if we believe the returns will be attractive or if we can foreclose on or acquire ownership of the property in the near-term.
We may engage in full or partial redevelopment, renovation and repositioning of certain properties, as we seek to maximize the financial performance of our hotels and resorts. In addition, we may acquire properties that require significant capital improvement, renovation or refurbishment.
We may engage in full or partial redevelopment, renovation and repositioning of certain properties, as we seek to maximize the financial performance of our hotels. In addition, we may acquire properties that require significant capital improvement, renovation or refurbishment.
Subject to market conditions, we intend to repay amounts outstanding under our senior unsecured revolving credit facilities from time to time with proceeds from periodic common and preferred equity issuances, long-term debt financings, cash flows from operations and opportunistic or strategic dispositions.
Subject to market conditions, we intend to repay amounts outstanding under our senior unsecured revolving credit facilities or our other indebtedness from time to time with proceeds from periodic common and preferred equity issuances, long-term debt financings, cash flows from operations and opportunistic or strategic dispositions.
We believe that portfolio diversification will allow us to benefit from growth in various customer segments, including business transient, leisure transient and group and convention room-night demand.
We believe that portfolio diversification will allow us to benefit from growth in various customer categories, including business transient, leisure transient and group and convention room-night demand.
We also may acquire hotel and resort properties that we believe would benefit from significant redevelopment or expansion, including, for example, adding guest rooms, meeting facilities or other amenities.
We also may acquire hotel properties that we believe would benefit from significant redevelopment or expansion, including, for example, adding guest rooms, meeting facilities or other amenities.
Competitive factors include, among others, location, convenience, brand affiliation, room rates, range of services, facilities and guest amenities or accommodations offered and quality of guest service. Competition in our hotels' markets includes competition from existing, newly renovated and newly developed hotels in the relevant segments.
Competitive factors include, among others, location, convenience, brand affiliation, room rates, range of services, facilities and guest amenities or accommodations offered and quality of guest service. Competition in our hotels' markets includes competition from existing, newly renovated and newly developed hotels.
As of December 31, 2023, the Company owned interests in 46 hotels with a total of 11,924 guest rooms. Substantially all of the Company’s assets are held by, and all of the Company's operations are conducted through, Pebblebrook Hotel, L.P. (our “Operating Partnership”). The Company is the sole general partner of the Operating Partnership.
As of December 31, 2024, the Company owned interests in 46 hotels with a total of 11,933 guest rooms. Substantially all of the Company’s assets are held by, and all of the Company's operations are conducted through, Pebblebrook Hotel, L.P. (our “Operating Partnership”). The Company is the sole general partner of our Operating Partnership.
Human Capital Our human capital management objectives are to attract, recruit, hire, develop and promote a highly talented, diverse workforce. We maintain strong corporate governance standards. We offer competitive compensation and benefits programs designed to create and maintain shareholder value and not encourage excessive risk-taking. Inclusion, representation and diversity matter to us.
Human Capital Our human capital management objectives are to attract, recruit, hire, develop and promote a highly talented, diverse workforce. We maintain strong corporate governance standards. We offer competitive compensation and benefits programs designed to create and maintain shareholder value and not encourage excessive risk-taking.
At December 31, 2023, the Company owned 99.3% of the common limited partnership units issued by the Operating Partnership ("common units"). The remaining 0.7% of the common units are owned by the other limited partners of the Operating Partnership. For the Company to maintain its qualification as a REIT under the Code, it cannot operate the hotels it owns.
At December 31, 2024, the Company owned 99.2% of the common limited partnership units issued by our Operating Partnership ("common units"). The remaining 0.8% of the common units are owned by the other limited partners of our Operating Partnership. For the Company to maintain its qualification as a REIT under the Code, it cannot operate the hotels it owns.
We believe these markets have barriers-to-entry and provide diverse sources of meeting and room night demand generators. In addition, we also opportunistically target investments in resort properties located near our primary urban target markets and select destination resort markets such as southern Florida and southern California.
We believe these markets have barriers-to-entry and provide diverse sources of meeting and room night demand generators. In addition, we also opportunistically target investments in resort properties located near our primary urban target markets and select destination resort markets such as southern Florida and southern California. We focus on both branded and independent full-service “upper-upscale” hotels.
We focus on both branded and independent full-service hotels in the “upper-upscale” segment of the lodging industry. The full-service hotels on which we focus our investment activity generally have one or more restaurants, lounges, meeting facilities and other amenities, as well as high levels of customer service.
The full-service hotels on which we focus our investment activity generally have one or more restaurants, lounges, meeting facilities and other amenities, as well as high levels of customer service.
We believe that hotel supply growth, following the delivery of current supply construction, will decline from the historical growth rate prior to the pandemic for the foreseeable future. 5 We generally seek to enter into flexible management contracts, when possible, with third-party hotel management companies for the operation of our hotels and resorts that provide us with the ability to replace operators and/or reposition properties, to the extent that we determine to do so and align our operators with our objective of maximizing our return on investment.
We believe that hotel supply growth will be favorable, declining significantly from the historical growth rate prior to the pandemic with minimal new hotel openings in a number of our markets for many years. 5 We generally seek to enter into flexible management contracts, when possible, with third-party hotel management companies for the operation of our hotels and resorts that provide us with the ability to replace operators and/or reposition properties, to the extent that we determine to do so and align our operators with our objective of maximizing our return on investment.
Generally, our hotels have lower revenue, operating income and cash flow in the first quarter of each year and higher revenue, operating income and cash flow in the third quarter of each year. The historical trend was disrupted in 2020 and 2021 as a result of COVID-19, which directly adversely impacted demand, revenue and operating income.
Generally, our hotels have lower revenue, operating income and cash flow in the first quarter of each year and higher revenue, operating income and cash flow in the third quarter of each year. Regulations Our hotel properties are subject to various federal, state and local environmental laws.
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However, the properties in our portfolio returned to normal historical seasonality trends in 2023. Regulations Our hotel properties are subject to various federal, state and local environmental laws.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

76 edited+12 added−21 removed269 unchanged
Biggest changeSummary of Risk Factors Risks Related to Our Business and Properties • Risks related to the potential loss of our executive officers • Risks related to third-party management companies • Risks related to the purchase or sale of hotel properties • Risks related to financing and use of financial institutions 8 • Risks related to financial performance • Risks related to restrictive covenants • Risks related to highly competitive markets and regional downturns • Risks related to our TRS lessee structure • Risks related to joint ventures and franchise agreements • Risks related to investment decisions • Risks related to conflicts of interest Risks Related to Debt and Financing • Risks related to debt service obligations • Risks related to our existing indebtedness • Risks related to “cash trap” provisions • Risks related to refinancing or defaulting on debt • Risks related to acquiring outstanding debt Risks Related to the Lodging Industry • Risks related to COVID-19 or other pandemics • Risks related to hotel profitability • Risks related to operations • Risks related to competition for acquisitions • Risks related to the seasonality and cyclical nature of the lodging industry • Risks related to capital expenditure requirements • Risks related to hotel and resort development • Risks related to changing technology and its effects on the lodging industry and cyber-attacks • Risks related to hotel personnel and unionization • Risks related to terrorist attacks • Risks related to natural disasters, climate change and other environmental factors and regulations • Risks related to underinsurance or lack of insurance • Risks related to unknown or contingent liabilities • Risks related to compliance with federal law and other legislative changes • Risks related to potential litigation General Risks Related to the Real Estate Industry • Risks related to illiquidity of real estate investments • Risks related to changing tax regimes in states and localities in which we own property • Risks related to liabilities under environmental laws Risks Related to Our Organization and Structure • Risks related to change of control • Risks related to ownership limitations in our declaration of trust • Risks related to actions against our trustees and officers • Risks related to changes in major policies • Risks related to further issuances of securities • Risks related to future offerings of debt securities or preferred shares • Risks related to the rights of holders of common shares or preferred shares • Risks related to employment agreements with our executive officers 9 • Risks related to internal controls U.S.
Biggest changeIn connection with the forward-looking statements that appear in this Annual Report on Form 10-K, in these risk factors and elsewhere, you should carefully review the section titled “ Forward-Looking Statements. ” Summary of Risk Factors Risks Related to Our Business and Properties • Risks related to the potential loss of our executive officers • Risks related to third-party management companies • Risks related to the purchase or sale of hotel properties • Risks related to financing and use of financial institutions • Risks related to financial performance 8 • Risks related to restrictive covenants • Risks related to highly competitive markets and regional downturns • Risks related to our TRS lessee structure • Risks related to investment decisions • Risks related to conflicts of interest • Risks related to joint ventures and franchise agreements Risks Related to Debt and Financing • Risks related to debt service obligations • Risks related to our existing indebtedness • Risks related to “cash trap” provisions • Risks related to refinancing or defaulting on debt • Risks related to acquiring outstanding debt Risks Related to the Lodging Industry • Risks related to hotel profitability • Risks related to operations • Risks related to competition for acquisitions • Risks related to the seasonality and cyclical nature of the lodging industry • Risks related to capital expenditure requirements • Risks related to hotel and resort development • Risks related to changing technology and its effects on the lodging industry and cyber-attacks • Risks related to hotel personnel and unionization • Risks related to natural disasters, climate change and other environmental factors and regulations • Risks related to terrorist attacks • Risks related to underinsurance or lack of insurance • Risks related to unknown or contingent liabilities • Risks related to compliance with federal law and other legislative changes • Risks related to potential litigation General Risks Related to the Real Estate Industry • Risks related to illiquidity of real estate investments • Risks related to changing tax regimes in states and localities in which we own property • Risks related to liabilities under environmental laws Risks Related to Our Organization and Structure • Risks related to change of control • Risks related to ownership limitations in our declaration of trust • Risks related to actions against our trustees and officers • Risks related to changes in major policies • Risks related to further issuances of securities • Risks related to future offerings of debt securities or preferred shares • Risks related to the rights of holders of common shares or preferred shares • Risks related to employment agreements with our executive officers • Risks related to internal controls 9 U.S.
To maintain our qualification as a REIT for U.S. federal income tax purposes, we are required to distribute at least 90 percent of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding any net capital gains) each year to our shareholders and we generally expect to make distributions in excess of such amount.
To maintain our qualification as a REIT for U.S. federal income tax purposes, we are required to distribute at least 90 percent of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding any net capital gains) each year to our shareholders and we generally expect to make distributions in excess of such amount.
In addition, our hotel properties are subject to various operating risks common to the lodging industry, many of which are beyond our control, including the following: 15 • competition from other hotel properties and non-hotel properties that provide nightly and short-term rentals in our markets; • over building of new hotels in our markets, which could adversely affect occupancy and revenues at our hotel properties; • dependence on business and commercial travelers, conventions and tourism; • increases in energy costs, airplane fares, government taxes and fees, and other expenses affecting travel, which may affect travel patterns and reduce the number of business and commercial travelers and tourists; • increases in operating costs due to inflation and other factors that may not be offset by increased room rates; • changes in interest rates and in the availability, cost and terms of debt financing; • changes in governmental laws and regulations (including minimum wage increases), fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances; • adverse effects of international, national, regional and local economic and market conditions; • labor strikes or disruptions; • unforeseen events beyond our control, such as terrorist attacks, cyber-attacks, travel-related health concerns and restrictions as a result of pandemics and epidemics such as H1N1 influenza (swine flu), avian bird flu, Zika virus, SARS, MERS and COVID-19 (coronavirus), political instability, regional hostilities, imposition of taxes or surcharges by regulatory authorities, travel-related accidents and unusual weather patterns, including natural disasters such as hurricanes, tsunamis or earthquakes; • strength of the U.S. dollar which may reduce in-bound international travel and encourage out-bound international travel; • adverse effects of a downturn in the lodging industry; and • risks generally associated with the ownership of hotel properties and real estate, as we discuss in more detail below.
In addition, our hotel properties are subject to various operating risks common to the lodging industry, many of which are beyond our control, including the following: • competition from other hotel properties and non-hotel properties that provide nightly and short-term rentals in our markets; • over building of new hotels in our markets, which could adversely affect occupancy and revenues at our hotel properties; • dependence on business and commercial travelers, conventions and tourism; • increases in energy costs, airplane fares, government taxes and fees, and other expenses affecting travel, which may affect travel patterns and reduce the number of business and commercial travelers and tourists; • increases in operating costs due to inflation and other factors that may not be offset by increased room rates; • changes in interest rates and in the availability, cost and terms of debt financing; • changes in governmental laws and regulations (including minimum wage increases), fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances; • adverse effects of international, national, regional and local economic and market conditions; • labor strikes or disruptions; • unforeseen events beyond our control, such as terrorist attacks, cyber-attacks, travel-related health concerns and restrictions as a result of pandemics and epidemics such as COVID-19, H1N1 influenza (swine flu), avian bird flu, Zika virus, SARS and MERS, political instability, regional hostilities, imposition of taxes or surcharges by regulatory authorities, travel-related accidents and unusual weather patterns, including natural disasters such as hurricanes, tsunamis or earthquakes; • strength of the U.S. dollar which may reduce in-bound international travel and encourage out-bound international travel; • adverse effects of a downturn in the lodging industry; and • risks generally associated with the ownership of hotel properties and real estate, as we discuss in more detail below.
The real estate market is affected by many factors beyond our control, including: • adverse changes in international, national, regional and local economic and market conditions; • changes in interest rates and in the availability, cost and terms of debt financing; • changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances; • the ongoing need for capital improvements, particularly in older structures; • changes in operating expenses; and • civil unrest, acts of God, including earthquakes, floods, wildfires and other natural disasters, which may result in uninsured losses, and acts of war or terrorism.
The real estate market is affected by many factors beyond our control, including: • adverse changes in international, national, regional and local economic and market conditions; • changes in interest rates and in the availability, cost and terms of debt financing; • changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances; • the ongoing need for capital improvements, particularly in older structures; • changes in operating expenses; and 20 • civil unrest, acts of God, including earthquakes, floods, wildfires and other natural disasters, which may result in uninsured losses, and acts of war or terrorism.
Hotel development and redevelopment involves a number of risks, including risks associated with: • construction delays or cost overruns that may increase project costs; • the receipt of zoning, occupancy and other required governmental permits and authorizations; • development costs incurred for projects that are not pursued to completion; • acts of God such as earthquakes, hurricanes, floods or fires that could adversely impact a project; • the negative impact of construction on operating performance during and soon after the construction period; • the ability to raise capital; and • governmental restrictions on the nature or size of a project.
Hotel development and redevelopment involves a number of risks, including risks associated with: • construction delays or cost overruns that may increase project costs; • the receipt of zoning, occupancy and other required governmental permits and authorizations; • development costs incurred for projects that are not pursued to completion; • acts of God such as earthquakes, hurricanes, floods or fires that could adversely impact a project; • the negative impact of construction on operating performance during and soon after the construction period; 16 • the ability to raise capital; and • governmental restrictions on the nature or size of a project.
Therefore, a downturn in the lodging industry, in general, and the segments and markets (especially West Coast major gateway metropolitan markets) in which we operate, in particular, would have a material adverse effect on our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders. 10 If we cannot obtain financing, our growth will be limited.
Therefore, a downturn in the lodging industry, in general, and markets (especially West Coast major gateway metropolitan markets) in which we operate, in particular, would have a material adverse effect on our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders. 10 If we cannot obtain financing, our growth will be limited.
Our qualification as a REIT depends on our satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis. Moreover, new tax legislation, administrative guidance or court decisions, in each instance potentially applicable with retroactive effect, could make it more difficult or impossible for us to maintain our qualification as a REIT.
Our qualification as a REIT depends on our satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis. 25 Moreover, new tax legislation, administrative guidance or court decisions, in each instance potentially applicable with retroactive effect, could make it more difficult or impossible for us to maintain our qualification as a REIT.
These factors could reduce the revenues and net operating profits of our TRS lessees, which in turn could adversely affect our financial condition, results of operations, the market price of our common shares, and our ability to make distributions to our shareholders. Competition for acquisitions may reduce the number of properties we can acquire.
These factors could reduce the revenues and net operating profits of our TRS lessees, which in turn could adversely affect our financial condition, results of operations, the market price of our common shares, and our ability to make distributions to our shareholders. 15 Competition for acquisitions may reduce the number of properties we can acquire.
In addition, losses in our TRSs will generally not provide any tax benefit, except for being carried forward against future taxable income in the TRSs. 29 If our subsidiary REITs failed to qualify as REITs, we could be subject to higher taxes and could fail to remain qualified as REITs.
In addition, losses in our TRSs will generally not provide any tax benefit, except for being carried forward against future taxable income in the TRSs. If our subsidiary REITs failed to qualify as REITs, we could be subject to higher taxes and could fail to remain qualified as REITs.
These third-party rights may adversely affect our ability to timely dispose of these properties on favorable terms, or at all. 12 The purchase or sale of properties we put under contract may not be consummated. From time to time, we enter into purchase and sale agreements for hotel properties.
These third-party rights may adversely affect our ability to timely dispose of these properties on favorable terms, or at all. The purchase or sale of properties we put under contract may not be consummated. From time to time, we enter into purchase and sale agreements for hotel properties.
Although we intend to monitor ownership of our shares by our hotel managers and their owners, there can be no assurance that these ownership levels will not be exceeded. Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.
Although we intend to monitor ownership of our shares by our hotel managers and their owners, there can be no assurance that these ownership levels will not be exceeded. 28 Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.
We have placed and may in the future place mortgages on certain of our hotel properties to secure debt. To the extent we cannot meet any of our debt service obligations, we may be required to sell or we will risk losing to foreclosure some or all of our mortgaged hotel properties.
We have placed or assumed, and may in the future place, mortgages on certain of our hotel properties to secure debt. To the extent we cannot meet any of our debt service obligations, we may be required to sell or we will risk losing to foreclosure some or all of our mortgaged hotel properties.
Such issuances could result in dilution of our shareholders' equity interests. 24 Future offerings of debt securities or preferred shares, which would be senior to our common shares upon liquidation and for the purpose of distributions, may cause the market price of our common shares to decline.
Such issuances could result in dilution of our shareholders' equity interests. Future offerings of debt securities or preferred shares, which would be senior to our common shares upon liquidation and for the purpose of distributions, may cause the market price of our common shares to decline.
Failure to meet our financial covenants could result from, among other things, changes in our results of operations, the incurrence of additional debt or changes in general economic conditions.
Failure to meet our covenants could result from, among other things, changes in our results of operations, the incurrence of additional debt or changes in general economic conditions.
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.
We face risks associated with natural disasters, the direct and indirect physical effects of climate change, which may include more frequent and more severe storms, hurricanes, flooding, droughts and wildfires, and contagious diseases, any of which could have a material adverse effect on our hotel properties, operations, cash flows and financing options.
In addition, in periods of weak demand, as may occur during a general economic recession, profitability is adversely affected by the relatively high fixed costs of operating upper-upscale hotels. 11 Our TRS lessee structure subjects us to the risk of increased hotel operating expenses.
In addition, in periods of weak demand, as may occur during a general economic recession, profitability is adversely affected by the relatively high fixed costs of operating upper-upscale hotels and resorts. 11 Our TRS lessee structure subjects us to the risk of increased hotel operating expenses.
Holders of our common shares are not entitled to preemptive rights or other protections against dilution. Preferred shares and debt, if issued, have a preference on liquidating distributions or a preference on dividend or interest payments that could limit our ability to make a distribution to the holders of our common shares.
Holders of our common shares are not entitled to preemptive rights or other protections against dilution. Preferred shares and debt have a preference on liquidating distributions or a preference on dividend or interest payments that could limit our ability to make a distribution to the holders of our common shares.
The credit agreements that govern our existing senior unsecured revolving credit facilities and unsecured term loan facilities contain financial and operating covenants, such as net worth requirements, fixed charge coverage, debt ratios and other limitations that restrict our ability to make distributions or other payments to our stockholders, sell all or substantially all of our assets and engage in mergers, consolidations and certain acquisitions without the consent of the lenders.
The credit agreements that govern our existing senior unsecured revolving credit facilities and unsecured term loan facilities contain financial covenants, such as net worth requirements, fixed charge coverage, debt ratios and other limitations that restrict our ability to make distributions or other payments to our shareholders, sell all or substantially all of our assets and engage in mergers, consolidations and certain acquisitions without the consent of the lenders.
As of December 31, 2023, 4,400,000 shares of our 6.375% Series E Cumulative Redeemable Preferred Shares (the “Series E Preferred Shares”), 6,000,000 shares of our 6.30% Series F Cumulative Redeemable Preferred Shares (the “Series F Preferred Shares”), 9,200,000 shares of our 6.375% Series G Cumulative Redeemable Preferred Shares (the “Series G Preferred Shares”) and 8,000,000 shares of our 5.70% Series H Cumulative Redeemable Preferred Shares (the “Series H Preferred Shares”) were issued and outstanding.
As of December 31, 2024, 4,400,000 shares of our 6.375% Series E Cumulative Redeemable Preferred Shares (the “Series E Preferred Shares”), 6,000,000 shares of our 6.30% Series F Cumulative Redeemable Preferred Shares (the “Series F Preferred Shares”), 9,200,000 shares of our 6.375% Series G Cumulative Redeemable Preferred Shares (the “Series G Preferred Shares”) and 8,000,000 shares of our 5.70% Series H Cumulative Redeemable Preferred Shares (the “Series H Preferred Shares”) were issued and outstanding.
We are subject to the risks associated with the direct and indirect physical effects of climate change, which can include more frequent and more severe storms, hurricanes, flooding, droughts, wildfires and power outages, any of which could have a material adverse effect on our hotels, operating results and cash flows.
We are subject to the risks associated with natural disasters, including the direct and indirect physical effects of climate change, which can include more frequent and more severe storms, hurricanes, flooding, droughts, wildfires and power outages, any of which could have a material adverse effect on our hotels, operating results and cash flows.
To the extent that such technologies play an increased role in day-to-day business and the necessity for business-related travel decreases, hotel room demand may decrease and our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders may be adversely affected.
To the extent that such technology plays an increased role in day-to-day business and the necessity for business-related travel decreases, hotel room demand may decrease and our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders may be adversely affected.
Generally, any of our shares owned by affiliated owners will be added together for purposes of the share ownership limit. 23 If anyone transfers our shares in a way that would violate the share ownership limit or prevent us from qualifying as a REIT under the U.S. federal income tax laws, those shares instead will be transferred to a trust for the benefit of a charitable beneficiary and will be either redeemed by us or sold to a person whose ownership of the shares will not violate the share ownership limit or we will consider the transfer to be null and void from the outset, and the intended transferee of those shares will be deemed never to have owned the shares.
If anyone transfers our shares in a way that would violate the share ownership limit or prevent us from qualifying as a REIT under the U.S. federal income tax laws, those shares instead will be transferred to a trust for the benefit of a charitable beneficiary and will be either redeemed by us or sold to a person whose ownership of the shares will not violate the share ownership limit or we will consider the transfer to be null and void from the outset, and the intended transferee of those shares will be deemed never to have owned the shares.
The aggregate liquidation preference with respect to the outstanding preferred shares is approximately $690.0 million as of December 31, 2023, and aggregate annual dividends on our outstanding preferred shares of approximately $47.2 million. Holders of any of these preferred shares are entitled to cumulative dividends before any dividends may be declared or set aside on our common shares.
The aggregate liquidation preference with respect to the outstanding preferred shares is approximately $690.0 million as of December 31, 2024, and aggregate annual dividends on our outstanding preferred shares of approximately $42.5 million. Holders of any of these preferred shares are entitled to cumulative dividends before any dividends may be declared or set aside on our common shares.
In addition, property-level debt we enter into in the future may contain restrictions (including cash management provisions) that may under circumstances specified in the loan agreements prohibit our subsidiaries that own our hotels from making distributions or paying dividends, repaying loans to us or other subsidiaries or transferring any of their assets to us or another subsidiary which could adversely affect our ability to make distributions to our shareholders.
In addition, our mortgage loan agreements contain restrictions (including cash management provisions) that may under circumstances specified in the loan agreements prohibit our subsidiaries that own our hotels from making distributions or paying dividends, repaying loans to us or other subsidiaries or transferring any of their assets to us or another subsidiary which could adversely affect our ability to make distributions to our shareholders.
If our leases are not respected as true leases for U.S. federal income tax purposes, we would fail to qualify as a REIT. 28 If our Operating Partnership failed to qualify as a partnership for U.S. federal income tax purposes, we would cease to qualify as a REIT and would be subject to higher taxes and have less cash available for distribution to our shareholders and suffer other adverse consequences.
If our Operating Partnership failed to qualify as a partnership for U.S. federal income tax purposes, we would cease to qualify as a REIT and would be subject to higher taxes and have less cash available for distribution to our shareholders and suffer other adverse consequences.
Notwithstanding the opinion of counsel, if the IRS successfully challenged LaSalle’s REIT status prior to the merger, we could face adverse tax consequences, including: • succeeding to LaSalle’s liability for U.S. federal income taxes at regular corporate rates for the periods in which LaSalle failed to qualify as a REIT (without regard to the deduction for dividends paid for such periods); • succeeding to any built-in gain on LaSalle’s assets, for which we could be liable for U.S. federal income tax at regular corporate rates, if we were to recognize such gain in the five-year period following the merger; and • succeeding to LaSalle’s earnings and profits accumulated during the periods in which LaSalle failed to qualify as a REIT, which we would be required to distribute to our shareholders in order to satisfy the REIT distribution requirements and avoid the imposition of any excise tax. 26 As a result, we would have less cash available for operations and distributions to our shareholders, which could require us to raise capital on unfavorable terms or pay deficiency dividends.
Notwithstanding the opinion of counsel, if the IRS successfully challenged LaSalle’s REIT status prior to the merger, we could face adverse tax consequences, including: • succeeding to LaSalle’s liability for U.S. federal income taxes at regular corporate rates for the periods in which LaSalle failed to qualify as a REIT (without regard to the deduction for dividends paid for such periods); • succeeding to any built-in gain on LaSalle’s assets, for which we could be liable for U.S. federal income tax at regular corporate rates, if we were to recognize such gain in the five-year period following the merger; and • succeeding to LaSalle’s earnings and profits accumulated during the periods in which LaSalle failed to qualify as a REIT, which we would be required to distribute to our shareholders in order to satisfy the REIT distribution requirements and avoid the imposition of any excise tax.
If the amount of bookings made through Internet travel intermediaries or the use of alternative lodging marketplaces prove to be more significant than we expect, profitability may be lower than expected, and our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders may be adversely affected. 17 We may be adversely affected by increased use of business-related technology which may reduce the need for business-related travel.
If the amount of bookings made through Internet travel intermediaries or the use of alternative lodging marketplaces prove to be more significant than we expect, profitability may be lower than expected, and our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders may be adversely affected.
We maintain comprehensive property insurance on each of our hotel properties, including liability, fire and extended coverage, of the type and amount we believe are customarily obtained for or by hotel owners. There are no assurances that coverage will remain available at reasonable rates.
Uninsured and underinsured losses could result in a loss of capital. We maintain comprehensive property insurance on each of our hotel properties, including liability, fire and extended coverage, of the type and amount we believe are customarily obtained for or by hotel owners. There are no assurances that coverage will remain available at reasonable rates.
Our hotels may be subject to additional costs to manage consumer expectations for sustainable buildings and hotel operations. There can be no assurance that climate change will not have a material adverse effect on our hotels, operating results or cash flows. Uninsured and underinsured losses could result in a loss of capital.
Our hotels may be subject to additional costs to manage consumer expectations for sustainable buildings and hotel operations. There can be no assurance that climate change will not have a material adverse effect on our hotels, operating results or cash flows.
Our conflicts of interest policy may not adequately address all of the conflicts of interest that may arise with respect to our activities. In order to avoid any actual or perceived conflicts of interest with our trustees, officers or employees, we have adopted a conflicts of interest policy to specifically address some of the potential conflicts relating to our activities.
In order to avoid any actual or perceived conflicts of interest with our trustees, officers or employees, we have adopted a conflicts of interest policy to specifically address some of the potential conflicts relating to our activities.
Differences in timing between the recognition of income and the related cash receipts or the effect of required debt amortization payments could require us to borrow or raise capital on terms or sell properties at prices or at times that we regard as unfavorable in order to distribute enough of our REIT taxable income to satisfy the distribution requirement and to avoid corporate income tax and the 4 percent nondeductible excise tax in a particular year. 27 We may pay taxable dividends partly in shares and partly in cash, in which case shareholders may sell our shares to pay tax on such dividends, placing downward pressure on the market price of our shares.
Differences in timing between the recognition of income and the related cash receipts or the effect of required debt amortization payments could require us to borrow or raise capital on terms or sell properties at prices or at times that we regard as unfavorable in order to distribute enough of our REIT taxable income to satisfy the distribution requirement and to avoid corporate income tax and the 4 percent nondeductible excise tax in a particular year.
We can make no assurances that future laws or regulations will not impose material environmental liabilities or that the current environmental condition of our hotel properties will not be affected by the condition of the properties in the vicinity of our hotel properties (such as the presence of leaking underground storage tanks) or by third parties unrelated to us.
We can make no assurances that future laws or regulations will not impose material environmental liabilities or that the current environmental condition of our hotel properties will not be affected by the condition of the properties in the vicinity of our hotel properties (such as the presence of leaking underground storage tanks) or by third parties unrelated to us. 19 Compliance with the Americans with Disabilities Act could require us to incur substantial costs.
To maintain our qualification as a REIT and avoid corporate income tax and excise tax, we must distribute annually a certain percentage of our REIT taxable income, which could require us to raise capital on terms or sell properties at prices or at times that are unfavorable.
These actions could have the effect of reducing our income and amounts available for distribution to our shareholders. 26 To maintain our qualification as a REIT and avoid corporate income tax and excise tax, we must distribute annually a certain percentage of our REIT taxable income, which could require us to raise capital on terms or sell properties at prices or at times that are unfavorable.
Previous terrorist attacks and subsequent terrorist alerts have adversely affected the U.S. travel and hospitality industries over the past several years, often disproportionately to the effect on the overall economy.
Terrorist attacks and terror alerts have adversely affected the U.S. travel and hospitality industries in the past several, often disproportionately to their effect on the overall economy.
If we are required to make substantial modifications to our hotel properties, whether to comply with the ADA or other changes in governmental rules and regulations, our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders could be adversely affected. 20 The nature of the operations of our hotels exposes us to the risk of claims and litigation that may arise in the normal course of business.
If we are required to make substantial modifications to our hotel properties, whether to comply with the ADA or other changes in governmental rules and regulations, our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders could be adversely affected.
While we believe that our hotels substantially comply with these requirements, a determination to the contrary could require removal of access barriers and non-compliance could result in litigation costs, costs to remediate deficiencies, U.S. government fines or damages to private litigants.
Under the ADA, all public accommodations must meet various federal requirements related to access and use by disabled persons. While we believe that our hotels substantially comply with these requirements, a determination to the contrary could require removal of access barriers and non-compliance could result in litigation costs, costs to remediate deficiencies, U.S. government fines or damages to private litigants.
We have issued eight series of preferred shares, of which we have repurchased four and four remain outstanding, and three series of senior unsecured notes. In the future, we may increase our capital resources by making debt or equity securities offerings, including senior or subordinated notes, additional series of preferred shares and common shares.
In the future, we may increase our capital resources by making debt or equity securities offerings, including senior or subordinated notes, additional series of preferred shares and common shares.
These requirements prevent shareholders from removing trustees except for cause and with a substantial affirmative vote and from replacing trustees with their own nominees and may prevent a change in control of our company that is in the best interests of our shareholders.
These requirements prevent shareholders from removing trustees except for cause and with a substantial affirmative vote and from replacing trustees with their own nominees and may prevent a change in control of our company that is in the best interests of our shareholders. 23 The ability of our board of trustees to change our major policies without the consent of shareholders may not be in our shareholders' interest.
Such discretion could result in investments that may not yield returns consistent with expectations. Some of our hotels are subject to rights of first offer which may adversely affect our ability to sell those properties on favorable terms or at all. We are subject to a franchisor’s or operator’s right of first offer, in some instances.
Some of our hotels are subject to rights of first offer which may adversely affect our ability to sell those properties on favorable terms or at all. We are subject to a franchisor’s or operator’s right of first offer, in some instances.
Under the Code, a foreclosure would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage.
In addition to causing us to lose the property, a foreclosure may result in taxable income. Under the Code, a foreclosure would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage.
In addition, those features of the Series E Preferred Shares, Series F Preferred Shares, Series G Preferred Shares and Series H Preferred Shares may have the effect of inhibiting a third party from making an acquisition proposal for our company or of delaying, deferring or preventing a change of control of our company under circumstances that otherwise could provide the holders of our common shares, Series E Preferred Shares, Series F Preferred Shares, Series G Preferred Shares or Series H Preferred Shares with the opportunity to realize a premium over the then-current market price or that shareholders may otherwise believe is in their best interests. 25 We have entered into an agreement with each of our executive officers that requires us to make payments in the event the officer's employment is terminated by us without cause, by the officer for good reason or under certain circumstances following a change of control of our company.
In addition, those features of the Series E Preferred Shares, Series F Preferred Shares, Series G Preferred Shares and Series H Preferred Shares may have the effect of inhibiting a third party from making an acquisition proposal for our company or of delaying, deferring or preventing a change of control of our company under circumstances that otherwise could provide the holders of our common shares, Series E Preferred Shares, Series F Preferred Shares, Series G Preferred Shares or Series H Preferred Shares with the opportunity to realize a premium over the then-current market price or that shareholders may otherwise believe is in their best interests.
Regardless of their outcomes, such claims and legal proceedings can adversely impact us because of the legal and other costs, diversion of management time and resources and other factors.
These claims and proceedings are inherently uncertain and their costs and outcomes cannot be predicted with certainty. Regardless of their outcomes, such claims and legal proceedings can adversely impact us because of the legal and other costs, diversion of management time and resources and other factors.
Attribution rules in the Code determine if any individual or entity actually or constructively owns our shares under this requirement. Additionally, at least 100 persons must beneficially own our shares during at least 335 days of each taxable year. To help insure that we meet these tests, our declaration of trust restricts the acquisition and ownership of our shares.
Attribution rules in the Code determine if any individual or entity actually or constructively owns our shares under this requirement. Additionally, at least 100 persons must beneficially own our shares during at least 335 days of each taxable year.
A decline in lodging demand, or a continued growth in lodging supply, could result in continued deterioration in lodging industry fundamentals and returns that are substantially below expectations, or result in losses, which could adversely affect our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders. 16 Capital expenditure requirements at our properties may be costly and require us to incur debt, postpone improvements, reduce distributions or otherwise adversely affect the results of our operations and the market price of our common shares.
A decline in lodging demand, or a continued growth in lodging supply, could result in continued deterioration in lodging industry fundamentals and returns that are substantially below expectations, or result in losses, which could adversely affect our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders.
Additionally, Title 8, Subtitle 3 of the MGCL permits our board of trustees, without shareholder approval and regardless of what is currently provided in our declaration of trust or bylaws, to implement certain takeover defenses, such as a classified board.
However, our board of trustees may by resolution elect to opt in to the business combination provisions of the MGCL and we may, by amendment to our bylaws, opt in to the control share provisions of the MGCL in the future. 22 Additionally, Title 8, Subtitle 3 of the MGCL permits our board of trustees, without shareholder approval and regardless of what is currently provided in our declaration of trust or bylaws, to implement certain takeover defenses, such as a classified board.
Inflation, changes in building codes and ordinances, environmental considerations and other factors might also keep us from using insurance proceeds to replace or renovate a hotel after it has been damaged or destroyed.
Inflation, changes in building codes and ordinances, environmental considerations and other factors might also keep us from using insurance proceeds to replace or renovate a hotel after it has been damaged or destroyed. Under those circumstances, the insurance proceeds we receive might be inadequate to restore our economic position on the damaged or destroyed property.
Our board of trustees may amend or revise these and other policies and guidelines from time to time without the vote or consent of our shareholders.
Our board of trustees determines our major policies, including policies and guidelines relating to our acquisitions, leverage, financing, growth, operations and distributions to shareholders. Our board of trustees may amend or revise these and other policies and guidelines from time to time without the vote or consent of our shareholders.
Consequently, we may choose not to engage in certain sales of real property or may conduct such sales through a TRS. 30 We may be subject to adverse legislative or regulatory tax changes that could increase our tax liability, reduce the tax benefits of our REIT structure compared to non-REIT corporations, reduce our operating flexibility and reduce the market price of our shares.
We may be subject to adverse legislative or regulatory tax changes that could increase our tax liability, reduce the tax benefits of our REIT structure compared to non-REIT corporations, reduce our operating flexibility and reduce the market price of our shares.
These factors and any others that would impede our ability to respond to adverse changes in the performance of the hotel properties or a need for liquidity could adversely affect our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders. 21 If states and localities in which we own material amounts of property or conduct material amounts of business raise their income and property tax rates or amend their tax regimes in a manner that increases our state and local tax liabilities, we would have less cash available for distribution to our shareholders and the market price of our shares could be adversely affected.
If states and localities in which we own material amounts of property or conduct material amounts of business raise their income and property tax rates or amend their tax regimes in a manner that increases our state and local tax liabilities, we would have less cash available for distribution to our shareholders and the market price of our shares could be adversely affected.
We have obtained Phase I ESAs on our hotel properties and expect to do so for hotel properties we acquire in the future. ESAs are intended to evaluate information regarding the environmental condition of the surveyed property and surrounding properties based generally on visual observations, interviews and certain publicly available databases.
ESAs are intended to evaluate information regarding the environmental condition of the surveyed property and surrounding properties based generally on visual observations, interviews and certain publicly available databases.
Our declaration of trust, with certain exceptions, authorizes our board of trustees to take such actions as are necessary and desirable to preserve our qualification as a REIT.
To help insure that we meet these tests, our declaration of trust restricts the acquisition and ownership of our shares. 29 Our declaration of trust, with certain exceptions, authorizes our board of trustees to take such actions as are necessary and desirable to preserve our qualification as a REIT.
The change of control conversion and redemption features of the Series E Preferred Shares, the Series F Preferred Shares, the Series G Preferred Shares and the Series H Preferred Shares may make it more difficult for a party to take over our company or discourage a party from taking over our company.
In addition, holders of these preferred shares have the right to elect two additional trustees to our board of trustees whenever dividends on the preferred shares are in arrears for six or more quarterly dividends, whether or not consecutive. 24 The change of control conversion and redemption features of the Series E Preferred Shares, the Series F Preferred Shares, the Series G Preferred Shares and the Series H Preferred Shares may make it more difficult for a party to take over our company or discourage a party from taking over our company.
We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor. Our third-party hotel managers are responsible for hiring and maintaining the labor force at our hotels.
For more information regarding cybersecurity risk and our management of it, see Part I, Item 1C of this Annual Report on Form 10-K. 17 We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor. Our third-party hotel managers are responsible for hiring and maintaining the labor force at our hotels.
These operations create a potential for the release of petroleum products or other hazardous or toxic substances. Third parties may be permitted by law to seek recovery from owners or operators for property damage and/or personal injury associated with exposure to contaminants, including, but not limited to, petroleum products, hazardous or toxic substances and asbestos fibers.
Third parties may be permitted by law to seek recovery from owners or operators for property damage and/or personal injury associated with exposure to contaminants, including, but not limited to, petroleum products, hazardous or toxic substances and asbestos fibers. 21 We have obtained Phase I ESAs on our hotel properties and expect to do so for hotel properties we acquire in the future.
Our TRSs are subject to applicable U.S. federal, state and local income tax on their taxable income, and their after-tax net income will be available for distribution to us, but is not required to be distributed to us.
The rules also impose a 100 percent excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm's-length basis. 27 Our TRSs are subject to applicable U.S. federal, state and local income tax on their taxable income, and their after-tax net income will be available for distribution to us, but is not required to be distributed to us.
Potential labor activities at these hotels could significantly increase the administrative, labor and legal expenses of the third-party management companies operating these hotels and reduce our profits.
Potential labor activities at these hotels could significantly increase the administrative, labor and legal expenses of the third-party management companies operating these hotels and reduce our profits. The unionization of additional employees at our hotels or increased labor shortages could have a material adverse effect on our business, financial condition and results of operations.
Our hotel properties compete on the basis of location, room rates, quality, service levels, reputation and reservations systems, among many factors. There are many competitors in the upper-upscale segment, and many of these competitors may have substantially greater marketing and financial resources than we have. This competition could reduce occupancy levels and RevPAR at our hotels.
There are many competitors who own upper-upscale hotels and resorts, and many of these competitors may have substantially greater marketing and financial resources than we have. This competition could reduce occupancy levels and RevPAR at our hotels.
The presence of hazardous substances on a property may limit our ability to sell the property on favorable terms or at all, and we may incur substantial remediation costs.
The presence of hazardous substances on a property may limit our ability to sell the property on favorable terms or at all, and we may incur substantial remediation costs. The discovery of material environmental liabilities at our properties could subject us to unanticipated significant costs, which could significantly reduce our profitability and the cash available for distribution to our shareholders.
Pursuant to a provision in our bylaws, we have opted out of the control share provisions of the MGCL. However, our board of trustees may by resolution elect to opt in to the business combination provisions of the MGCL and we may, by amendment to our bylaws, opt in to the control share provisions of the MGCL in the future.
Pursuant to a provision in our bylaws, we have opted out of the control share provisions of the MGCL.
We maintain cash balances in a limited number of financial institutions. Our cash balances are generally in excess of federally insured limits. The failure or collapse of one or more of these financial institutions may materially adversely affect our ability to recover our cash balances.
We maintain cash balances in a limited number of financial institutions. Our cash balances are generally in excess of federally insured limits.
The COVID-19 pandemic and federal, state and local government responses and restrictions thereto have significantly disrupted, and are expected to continue to significantly disrupt, our business. As a result of this pandemic and subsequent government mandates and health official recommendations and restrictions, hotel demand was nearly eliminated during the second quarter of 2020 and occupancy levels reached historic lows.
For example, as a result of the COVID-19 pandemic and subsequent government mandates and health official recommendations and restrictions such as quarantines, restrictions on travel, “shelter in place” rules and restrictions on the types of business that could continue to operate, hotel demand was nearly eliminated during the second quarter of 2020 and occupancy levels reached historic lows.
To assist us in maintaining our qualification as a REIT, our declaration of trust contains a share ownership limit.
To assist us in maintaining our qualification as a REIT, our declaration of trust contains a share ownership limit. Generally, any of our shares owned by affiliated owners will be added together for purposes of the share ownership limit.
Our senior executive officers have broad discretion, within the general investment criteria established by our board of trustees, to invest our capital and to determine the timing of such investments. In addition, our investment policies may be revised from time to time at the discretion of our board of trustees, without a vote of our shareholders.
Our senior executive officers have broad discretion to make investments, and they may make investments where the returns are substantially below expectations or which result in net operating losses. Our senior executive officers have broad discretion, within the general investment criteria established by our board of trustees, to invest our capital and to determine the timing of such investments.
We invest primarily in the upper-upscale segment of the lodging market, which is highly competitive and generally subject to greater volatility than most other market segments and could negatively affect our profitability. The upper-upscale segment of the hotel business is highly competitive.
We invest primarily in upper-upscale hotel properties, which, as a highly competitive sector and generally subject to greater volatility than most other lodging sectors, could negatively affect our profitability. The business of owning upper-upscale hotels and resorts is highly competitive. Ours compete on the basis of location, room rates, quality, service levels, reputation and reservations systems, among many factors.
The hotel properties that we own or may acquire are or may be subject to unknown or contingent liabilities for which we may have no recourse, or only limited recourse, against the sellers. In general, the representations and warranties provided under the transaction agreements related to the sales of the hotel properties may not survive the closing of the transactions.
In general, the representations and warranties provided under the transaction agreements related to the sales of the hotel properties may not survive the closing of the transactions.
The discovery of material environmental liabilities at our properties could subject us to unanticipated significant costs, which could significantly reduce our profitability and the cash available for distribution to our shareholders. 22 Risks Related to Our Organization and Structure Provisions of our declaration of trust may limit the ability of a third party to acquire control of us by authorizing our board of trustees to authorize issuances of additional securities.
Risks Related to Our Organization and Structure Provisions of our declaration of trust may limit the ability of a third party to acquire control of us by authorizing our board of trustees to authorize issuances of additional securities. Our declaration of trust authorizes our board of trustees to issue up to 500,000,000 common shares and up to 100,000,000 preferred shares.
In addition, we may not earn a current return on such investments particularly if the loan that we acquire is in default. 14 Risks Related to the Lodging Industry The COVID-19 pandemic has had, and is expected to continue to have, a material adverse impact on our financial condition, results of operations, cash flows, liquidity and prospects.
In addition, we may not earn a current return on such investments particularly if the loan that we acquire is in default. 14 Risks Related to the Lodging Industry Economic conditions may reduce demand for hotel properties and adversely affect hotel profitability.
In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers. Our senior executive officers have broad discretion to make investments, and they may make investments where the returns are substantially below expectations or which result in net operating losses.
In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers.
The increased use of teleconference and video-conference technology by businesses, particularly given its widespread use and increased acceptance during the COVID-19 pandemic, could result in decreased business travel as companies increase the use of technologies that allow multiple parties from different locations to participate at meetings without traveling to a centralized meeting location.
We may be adversely affected by the increased use of technology that reduces the need for business-related travel. The increased use of technology that allows multiple parties from different locations to participate in meetings without traveling to a centralized location could result in decreased business travel.
The unionization of additional employees at our hotels or increased labor shortages could have a material adverse effect on our business, financial condition and results of operations. 18 Terrorist attacks or changes in terror alert levels could adversely affect travel and hotel demand.
While our operations have significantly improved, and COVID-19 is now endemic, future pandemics of other diseases (whether due to novel sources or the re-emergent of previous sources) could occur, which could have a material adverse effect on our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders. 18 Terrorist attacks or changes in terror alert levels could adversely affect travel and hotel demand.
As owners of hotel properties, we face potential claims, litigation and threatened litigation from guests, visitors to our properties, contractors, sub-contractors and others. These claims and proceedings are inherently uncertain and their costs and outcomes cannot be predicted with certainty.
The nature of the operations of our hotels exposes us to the risk of claims and litigation that may arise in the normal course of business. As owners of hotel properties, we face potential claims, litigation and threatened litigation from guests, visitors to our properties, contractors, sub-contractors and others.
This will reduce the remaining amount of our assets, if any, available to distribute to holders of our common shares. In addition, holders of these preferred shares have the right to elect two additional trustees to our board of trustees whenever dividends on the preferred shares are in arrears for six or more quarterly dividends, whether or not consecutive.
This will reduce the remaining amount of our assets, if any, available to distribute to holders of our common shares.
If we default on any of the secured loans, the applicable lender will be able to foreclose on the property pledged to secure the loan. In addition to causing us to lose the property, a foreclosure may result in taxable income.
Our mortgage loans are secured by either single property first mortgage liens or leasehold interests under the ground leases on the applicable hotel. If we default on a secured loan, the applicable lender will be able to foreclose on the property pledged to secure the loan.
Under those circumstances, the insurance proceeds we receive might be inadequate to restore our economic position on the damaged or destroyed property. 19 Our hotels may be subject to unknown or contingent liabilities which could cause us to incur substantial costs.
Our hotels may be subject to unknown or contingent liabilities which could cause us to incur substantial costs. The hotel properties that we own or may acquire are or may be subject to unknown or contingent liabilities for which we may have no recourse, or only limited recourse, against the sellers.
We may pay taxable dividends partly in shares and partly in cash.
We may pay taxable dividends partly in shares and partly in cash, in which case shareholders may sell our shares to pay tax on such dividends, placing downward pressure on the market price of our shares. We may pay taxable dividends partly in shares and partly in cash.
Complying with REIT requirements may cause us to forego otherwise attractive business opportunities or liquidate otherwise attractive investments.
As a result, we would have less cash available for operations and distributions to our shareholders, which could require us to raise capital on unfavorable terms or pay deficiency dividends. Complying with REIT requirements may cause us to forego otherwise attractive business opportunities or liquidate otherwise attractive investments.
Removed
In connection with the forward-looking statements that appear in this Annual Report on Form 10-K, in these risk factors and elsewhere, you should carefully review the section titled “ Forward-Looking Statements ”.
Added
In addition, our investment policies may be revised from time to time at the discretion of our board of trustees, without a vote of our shareholders. Such discretion could result in investments that may not yield returns consistent with expectations.
Removed
All of our indebtedness for borrowed money, except our senior unsecured revolving credit facility, term loans and senior unsecured notes, is secured by either single property first mortgage liens or leasehold interests under the ground leases on the applicable hotel.
Added
The failure or collapse of one or more of these financial institutions may materially adversely affect our ability to recover our cash balances. 12 Our conflicts of interest policy may not adequately address all of the conflicts of interest that may arise with respect to our activities.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAlthough we set clear expectations of our hotel managers and franchisors, we rely on our hotel managers and franchisors for managing their cybersecurity risk. We conduct surveys of our hotel managers and franchisors to assess their cybersecurity risk management programs and procedures, to identify gaps and request remediation and to understand our risk exposure.
Biggest changeWe set clear expectations of our hotel managers and franchisors regarding cybersecurity, but we rely on our hotel managers and franchisors for managing their cybersecurity risk. We conduct surveys of our hotel managers and franchisors to assess their cybersecurity risk management programs and procedures, to identify gaps and request remediation and to understand our risk exposure.
The MSP and we developed a cybersecurity incident response plan that sets forth roles and responsibilities for the identification, assessment, triage, communication and resolution of cybersecurity incidents. In addition, the MSP performs facility and system penetration tests, compromise assessments and security maturity assessments of our corporate and operational networks.
The MSP and we developed a cybersecurity incident response plan that sets forth roles and responsibilities for the identification, assessment, triage, communication and resolution of cybersecurity incidents. 30 In addition, the MSP performs facility and system penetration tests, compromise assessments and security maturity assessments of our corporate and operational networks.
Risk Factors—Our hotel managers and we rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.” 31
Risk Factors—Our hotel managers and we rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.”
We maintain cybersecurity insurance coverage to mitigate our financial exposure to certain incidents, and we consult with external advisors regarding opportunities and enhancements to strengthen our policies and practices. We have elected to outsource our information technology function to a third-party managed service provider, or the MSP, that specializes in fully managed information technology services and fully managed cybersecurity.
We maintain cybersecurity insurance coverage to mitigate our financial exposure to certain incidents, and we consult with external advisors regarding opportunities and enhancements to strengthen our policies and practices. We have elected to outsource our information technology function to a third-party managed service provider, ("MSP") that specializes in fully managed information technology services and fully managed cybersecurity.
The Audit Committee reviews and discusses all of our key enterprise risks, including cybersecurity risk, and the enterprise risk management program itself. The chair of the Audit Committee may, at their discretion, report to the Chairman of the Board or the full Board of Trustees regarding any aspect of the program or risks.
The Audit Committee reviews and discusses all of our key enterprise risks, including cybersecurity risk, and the enterprise risk management program itself. The chair of the Audit Committee may, at his discretion, report to the Chairman of the Board or the full board of trustees regarding any aspect of the program or risks.
As of December 31, 2023, no risk from cybersecurity threats, including as a result of any previous cybersecurity incident, has materially affected our business, results of operations or financial condition.
As of December 31, 2024, no risk from cybersecurity threats, including as a result of any previous cybersecurity incident, has materially affected our business, results of operations or financial condition.
Item 1C. Cybersecurity. We have identified cybersecurity risk as one of our key enterprise risks. One of our Co-Presidents is responsible for managing cybersecurity risk. They develop mitigation strategies and implement controls to reduce the likelihood of a cybersecurity incident occurring and to reduce the impact of such an incident should it occur.
Item 1C. Cybersecurity. We have identified cybersecurity risk as one of our key enterprise risks. One of our Co-Presidents is responsible for managing cybersecurity risk. He develops mitigation strategies and implements controls to reduce the likelihood of a cybersecurity incident occurring and to reduce the impact of such an incident should it occur.
At least annually, they report on this risk and their mitigation work to the Audit Committee of our Board of Trustees, which is the committee that has primary responsibility for overseeing our enterprise risk management program and is composed solely of independent trustees.
At least annually, he reports on this risk and related mitigation work to the Audit Committee of our board of trustees, which is the committee that has primary responsibility for overseeing our enterprise risk management program and is composed solely of independent trustees.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeChaminade Resort & Spa November 30, 2018 Santa Cruz, CA 156 26. George Hotel November 30, 2018 Washington, DC 139 27. Hotel Monaco Washington DC (1) September 9, 2010 Washington, DC 184 28. Hotel Zena Washington DC November 30, 2018 Washington, DC 191 29. Viceroy Washington DC November 30, 2018 Washington, DC 178 30.
Biggest changeHotel Zeppelin San Francisco (1) May 22, 2014 San Francisco, CA 196 24. Hotel Zetta San Francisco April 4, 2012 San Francisco, CA 116 25. Chaminade Resort & Spa November 30, 2018 Santa Cruz, CA 156 26. George Hotel November 30, 2018 Washington, DC 139 27. Hotel Monaco Washington DC (1) September 9, 2010 Washington, DC 184 28.
To fund the furniture, fixtures and equipment replacements, a specified percentage of the gross revenues of each hotel (typically 4.0%) is either deposited by the manager with our funds or out of the property's cash flow in an escrow account or held by us, as owner. • Building Alterations, Improvements and Renewals.
To fund the furniture, fixtures and equipment replacements, a specified percentage of the gross revenues of each hotel (typically 4.0%) is either deposited by the manager with our funds or out of the property's cash flow in an escrow account or held by us, as owner. 33 • Building Alterations, Improvements and Renewals.
In addition to the foregoing, the management agreements generally provide that the managers may propose such changes, alterations and improvements to the hotels as are required by reason of laws or regulations or, in the manager's reasonable judgment, to keep the hotels in a safe, competitive and efficient operating condition. 33 • Sale of a Hotel.
In addition to the foregoing, the management agreements generally provide that the managers may propose such changes, alterations and improvements to the hotels as are required by reason of laws or regulations or, in the manager's reasonable judgment, to keep the hotels in a safe, competitive and efficient operating condition. • Sale of a Hotel.
(4) This property is subject to mortgage debt. Hotel Managers and Hotel Management Agreements We are a party to hotel management agreements with Davidson Hospitality Group, HEI Hotels and Resorts, Highgate, Kimpton Hotels and Restaurants, Marriott International, Noble House Hotels & Resorts, Pyramid Global Hospitality, Sage Hospitality, sbe Hotel Group, SH Hotels & Resorts, Springboard Hospitality and Viceroy Hotel Group.
(4) This property is subject to mortgage debt. 32 Hotel Managers and Hotel Management Agreements We are a party to hotel management agreements with Davidson Hospitality Group, HEI Hotels and Resorts, Highgate, Kimpton Hotels and Restaurants, Marriott International, Noble House Hotels & Resorts, Pyramid Global Hospitality, Sage Hospitality, sbe Hotel Group, SH Hotels & Resorts, Springboard Hospitality and Viceroy Hotel Group.
W Boston June 8, 2011 Boston, MA 238 43. The Hotel Zags August 28, 2013 Portland, OR 174 44. The Nines, a Luxury Collection Hotel, Portland July 17, 2014 Portland, OR 331 45. Newport Harbor Island Resort June 23, 2022 Newport, RI 257 46.
W Boston June 8, 2011 Boston, MA 238 43. The Hotel Zags August 28, 2013 Portland, OR 174 44. The Nines, a Luxury Collection Hotel, Portland July 17, 2014 Portland, OR 331 45. Newport Harbor Island Resort June 23, 2022 Newport, RI 258 46.
Termination fees range from zero to up to three times the annual base management and incentive management fees, depending on the agreement and the reason for termination. • Operational Services.
Termination fees range from zero to up to three times the annual base management and incentive management fees, depending on the agreement and the reason for termination.
The agreements for the respective hotels expire as follows: Property Expiration Date Embassy Suites San Diego Bay - Downtown January 2028 Margaritaville Hollywood Beach Resort July 2028 Le Méridien Delfina Santa Monica September 2033 The Nines, a Luxury Collection Hotel, Portland October 2033 Hotel Chicago Downtown, Autograph Collection February 2034 The Liberty, a Luxury Collection Hotel, Boston January 2036 Margaritaville Hotel San Diego Gaslamp Quarter August 2038 Hilton San Diego Gaslamp Quarter June 2041 Hyatt Regency Boston Harbor December 2042 Paradise Point Resort & Spa 15th anniversary after hotel is re-branded as a Margaritaville
The agreements for the respective hotels expire as follows: Property Expiration Date Embassy Suites San Diego Bay - Downtown January 2028 Margaritaville Hollywood Beach Resort July 2028 Hotel Chicago Downtown, Autograph Collection February 2034 The Liberty, a Luxury Collection Hotel, Boston January 2036 Margaritaville Hotel San Diego Gaslamp Quarter August 2038 Hilton San Diego Gaslamp Quarter June 2041 Hyatt Regency Boston Harbor December 2042 The Nines, a Luxury Collection Hotel, Portland October 2043 Hyatt Centric Delfina Santa Monica September 2049 Paradise Point Resort & Spa 15th anniversary after hotel is re-branded as a Margaritaville
Skamania Lodge November 3, 2010 Stevenson, WA 263 Total number of guest rooms 11,924 ______________________ 32 (1) This property is subject to a long-term ground, air rights or hotel lease. (2) The restaurant facility at this property is subject to a ground lease . (3) We own a 99.99% controlling interest in this property.
Skamania Lodge November 3, 2010 Stevenson, WA 271 Total number of guest rooms 11,933 ______________________ (1) This property is subject to a long-term ground, air rights or hotel lease. (2) The restaurant facility at this property is subject to a ground lease . (3) We own a 99.99% controlling interest in this property.
Some of our management agreements have a maximum incentive fee of 2% of revenue. • Terms. The remaining terms of our management agreements are up to 10 years, not including renewals, and up to 29 years, including renewals. • Ability to Terminate.
Some of our management agreements have a maximum incentive fee of 2% of revenue. • Terms. The remaining terms of our management agreements are up to 9 years, not including renewals, and up to 28 years, including renewals. • Ability to Terminate.
LaPlaya Beach Resort & Club May 21, 2015 Naples, FL 189 35. Jekyll Island Club Resort (1) July 22, 2021 Jekyll Island, GA 200 36. Hotel Chicago Downtown, Autograph Collection November 30, 2018 Chicago, IL 354 37. The Westin Michigan Avenue Chicago November 30, 2018 Chicago, IL 752 38.
Inn on Fifth May 11, 2022 Naples, FL 119 34. LaPlaya Beach Resort & Club May 21, 2015 Naples, FL 189 35. Jekyll Island Club Resort (1) July 22, 2021 Jekyll Island, GA 200 36. Hotel Chicago Downtown, Autograph Collection November 30, 2018 Chicago, IL 354 37. The Westin Michigan Avenue Chicago November 30, 2018 Chicago, IL 752 38.
Item 2. Properties. We lease office space to use as our headquarters located at 4747 Bethesda Avenue, Suite 1100, Bethesda, Maryland 20814. As of December 31, 2023, we owned interests in 46 hotels with a total of 11,924 guest rooms, all of which are consolidated in our financial statements. The following table sets forth certain information about our hotels.
Item 2. Properties. We lease office space to use as our headquarters located at 4747 Bethesda Avenue, Suite 1100, Bethesda, Maryland 20814. As of December 31, 2024, we owned interests in 46 hotels with a total of 11,933 guest rooms, all of which are consolidated in our financial statements.
Chamberlain West Hollywood Hotel November 30, 2018 West Hollywood, CA 115 5. Hotel Ziggy November 30, 2018 West Hollywood, CA 108 6. Le Parc at Melrose November 30, 2018 West Hollywood, CA 154 7. Mondrian Los Angeles May 3, 2011 West Hollywood, CA 236 8. Montrose at Beverly Hills November 30, 2018 West Hollywood, CA 133 9.
W Los Angeles - West Beverly Hills August 23, 2012 Los Angeles, CA 297 4. Chamberlain West Hollywood November 30, 2018 West Hollywood, CA 115 5. Hotel Ziggy November 30, 2018 West Hollywood, CA 108 6. Le Parc at Melrose November 30, 2018 West Hollywood, CA 154 7. Mondrian Los Angeles May 3, 2011 West Hollywood, CA 236 8.
Paradise Point Resort & Spa (1) November 30, 2018 San Diego, CA 462 14. San Diego Mission Bay Resort (1) November 30, 2018 San Diego, CA 357 15. Margaritaville Hotel San Diego Gaslamp Quarter November 30, 2018 San Diego, CA 235 16. The Westin San Diego Gaslamp Quarter April 6, 2011 San Diego, CA 450 17.
Hilton San Diego Gaslamp Quarter November 30, 2018 San Diego, CA 286 13. Paradise Point Resort & Spa (1) November 30, 2018 San Diego, CA 462 14. San Diego Mission Bay Resort (1) November 30, 2018 San Diego, CA 357 15. Margaritaville Hotel San Diego Gaslamp Quarter November 30, 2018 San Diego, CA 235 16.
Property Date Acquired Location Number of Guest Rooms 1. L'Auberge Del Mar November 30, 2018 Del Mar, CA 121 2. Hotel Palomar Los Angeles Beverly Hills (1) November 20, 2014 Los Angeles, CA 264 3. W Los Angeles - West Beverly Hills August 23, 2012 Los Angeles, CA 297 4.
The following table sets forth certain information about our hotels. 31 Property Date Acquired Location Number of Guest Rooms 1. L'Auberge Del Mar November 30, 2018 Del Mar, CA 121 2. Hotel Palomar Los Angeles Beverly Hills (1) November 20, 2014 Los Angeles, CA 264 3.
Southernmost Beach Resort (2) November 30, 2018 Key West, FL 296 31. The Marker Key West Harbor Resort November 30, 2018 Key West, FL 96 32. Margaritaville Hollywood Beach Resort (1) (4) September 23, 2021 Hollywood, FL 369 33. Inn on Fifth May 11, 2022 Naples, FL 119 34.
Hotel Zena Washington DC November 30, 2018 Washington, DC 191 29. Viceroy Washington DC November 30, 2018 Washington, DC 178 30. Southernmost Beach Resort (2) November 30, 2018 Key West, FL 296 31. The Marker Key West Harbor Resort November 30, 2018 Key West, FL 96 32. Margaritaville Hollywood Beach Resort (1) (4) September 23, 2021 Hollywood, FL 369 33.
Le Méridien Delfina Santa Monica November 19, 2010 Santa Monica, CA 315 10. Viceroy Santa Monica Hotel (1) November 30, 2018 Santa Monica, CA 169 11. Embassy Suites San Diego Bay - Downtown January 29, 2013 San Diego, CA 341 12. Hilton San Diego Gaslamp Quarter November 30, 2018 San Diego, CA 286 13.
Montrose at Beverly Hills November 30, 2018 West Hollywood, CA 133 9. Hyatt Centric Delfina Santa Monica November 19, 2010 Santa Monica, CA 315 10. Viceroy Santa Monica Hotel (1) November 30, 2018 Santa Monica, CA 169 11. Embassy Suites San Diego Bay - Downtown January 29, 2013 San Diego, CA 341 12.
Estancia La Jolla Hotel & Spa (1) (4) December 1, 2021 La Jolla, CA 210 18. Argonaut Hotel (1) February 16, 2011 San Francisco, CA 252 19. Harbor Court Hotel San Francisco (1) November 30, 2018 San Francisco, CA 131 20. 1 Hotel San Francisco (1) November 30, 2018 San Francisco, CA 200 21.
The Westin San Diego Gaslamp Quarter April 6, 2011 San Diego, CA 450 17. Estancia La Jolla Hotel & Spa (1) (4) December 1, 2021 La Jolla, CA 210 18. Argonaut Hotel (1) February 16, 2011 San Francisco, CA 252 19.
Hotel Zelos San Francisco (1) October 25, 2012 San Francisco, CA 202 22. Hotel Zephyr Fisherman's Wharf (1) December 9, 2013 San Francisco, CA 361 23. Hotel Zeppelin San Francisco (1) May 22, 2014 San Francisco, CA 196 24. Hotel Zetta San Francisco April 4, 2012 San Francisco, CA 116 25.
Harbor Court Hotel San Francisco (1) November 30, 2018 San Francisco, CA 131 20. 1 Hotel San Francisco (1) November 30, 2018 San Francisco, CA 200 21. Hotel Zelos San Francisco (1) October 25, 2012 San Francisco, CA 202 22. Hotel Zephyr Fisherman's Wharf (1) December 9, 2013 San Francisco, CA 361 23.
Added
The hotels with non-terminable management agreements and their respective expiration dates (assuming contracts with unilateral extension options of the management company are exercised) are as follows: Property Expiration Date The Westin Michigan Avenue Chicago December 2026 The Westin Copley Place, Boston December 2028 Mondrian Los Angeles May 2041 The Westin San Diego Gaslamp Quarter April 2051 W Los Angeles - West Beverly Hills August 2052 • Operational Services.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe actual returns shown on the graph above are as follows: Value of Initial Investment at December 31, Name 2018 2019 2020 2021 2022 2023 Pebblebrook Hotel Trust $ 100.00 $ 99.89 $ 70.26 $ 83.74 $ 50.25 $ 60.14 Russell 2000 $ 100.00 $ 125.49 $ 150.50 $ 172.75 $ 137.40 $ 160.60 FTSE Nareit Equity REITs $ 100.00 $ 128.65 $ 122.12 $ 172.52 $ 129.53 $ 144.14 35 Distributions Distributions to the extent of our current and accumulated earnings and profits for federal income tax purposes generally will be taxable to a shareholder as ordinary income.
Biggest changeThe actual returns shown on the graph above are as follows: Value of Initial Investment at December 31, Name 2019 2020 2021 2022 2023 2024 Pebblebrook Hotel Trust $ 100.00 $ 70.33 $ 83.83 $ 50.30 $ 60.20 $ 51.19 Russell 2000 $ 100.00 $ 119.93 $ 137.67 $ 109.50 $ 127.98 $ 142.73 FTSE Nareit All Equity REITs $ 100.00 $ 94.92 $ 134.14 $ 100.79 $ 112.22 $ 117.73 35 Distributions Distributions to the extent of our current and accumulated earnings and profits for federal income tax purposes generally will be taxable to a shareholder as ordinary income.
Total return values were calculated assuming a $100 investment on December 31, 2018 with reinvestment of all dividends in (i) our common shares, (ii) the Russell 2000 and (iii) the FTSE Nareit Equity REITs. The total return values do not include any dividends declared, but not paid, during the period.
Total return values were calculated assuming a $100 investment on December 31, 2019 with reinvestment of all dividends in (i) our common shares, (ii) the Russell 2000 and (iii) the FTSE Nareit All Equity REITs. The total return values do not include any dividends declared, but not paid, during the period.
Issuer Purchases of Equity Securities Common Shares Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (in millions) October 1, 2023 - October 31, 2023 — $ — — $ — November 1, 2023 - November 30, 2023 — $ — — $ — December 1, 2023 - December 31, 2023 — $ — — $ — Total — $ — — $ 146.0 ______________________ (1) On February 17, 2023, our Board of Trustees authorized a share repurchase program of up to $150.0 million of our outstanding common shares.
Issuer Purchases of Equity Securities Common Shares Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (in millions) October 1, 2024 - October 31, 2024 — $ — — $ — November 1, 2024 - November 30, 2024 — $ — — $ — December 1, 2024 - December 31, 2024 — $ — — $ — Total — $ — — $ 131.0 ______________________ (1) On February 17, 2023, our board of trustees authorized a share repurchase program of up to $150.0 million of our outstanding common shares.
Securities Authorized for Issuance Under Equity Compensation Plan The following table sets forth information regarding securities authorized for issuance under our equity compensation plan, our 2009 Equity Incentive Plan, as amended and restated, as of December 31, 2023. See Note 8.
Securities Authorized for Issuance Under Equity Compensation Plan The following table sets forth information regarding securities authorized for issuance under our equity compensation plan, our 2009 Equity Incentive Plan, as amended and restated, as of December 31, 2024. See Note 8.
We may suspend or discontinue this program at any time. As of December 31, 2023, $84.2 million of preferred shares remained available for repurchase under this program.
We may suspend or discontinue this program at any time. As of December 31, 2024, $84.2 million of preferred shares remained available for repurchase under this program.
As of December 31, 2023, $146.0 million of common shares remained available for repurchase under this program. 36 Preferred Shares Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (in millions) October 1, 2023 - October 31, 2023 — $ — — $ — November 1, 2023 - November 30, 2023 1,000,000 $ 15.79 1,000,000 $ — December 1, 2023 - December 31, 2023 — $ — — $ — Total 1,000,000 $ 15.79 1,000,000 $ 84.2 ______________________ (1) On February 17, 2023, our Board of Trustees authorized a share repurchase program of up to $100.0 million of our outstanding preferred shares.
As of December 31, 2024, $131.0 million of common shares remained available for repurchase under this program. 36 Preferred Shares Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (in millions) October 1, 2024 - October 31, 2024 — $ — — $ — November 1, 2024 - November 30, 2024 — $ — — $ — December 1, 2024 - December 31, 2024 — $ — — $ — Total — $ — — $ 84.2 ______________________ (1) On February 17, 2023, our board of trustees authorized a share repurchase program of up to $100.0 million of our outstanding preferred shares.
The following graph provides a comparison of the cumulative total return on our common shares from December 31, 2018, to the NYSE closing price per share on December 31, 2023, with the cumulative total return on the Russell 2000 Index (the “Russell 2000”) and the FTSE Nareit Equity REITs Index (the “FTSE Nareit Equity REITs”) for the same period.
The following graph provides a comparison of the cumulative total return on our common shares from December 31, 2019, to the NYSE closing price per share on December 31, 2024, with the cumulative total return on the Russell 2000 Index (the “Russell 2000”) and the FTSE Nareit All Equity REITs Index (the “FTSE Nareit All Equity REITs”) for the same period.
Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans Equity compensation plans approved by security holders — — 1,499,388 Equity compensation plans not approved by security holders — — — Total — — 1,499,388 During the year ended December 31, 2023, certain of our employees chose to have us acquire from such employees an aggregate of 122,140 common shares to pay taxes due upon vesting of restricted common shares granted pursuant to share award agreements.
Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans Equity compensation plans approved by security holders — — 1,177,236 Equity compensation plans not approved by security holders — — — Total — — 1,177,236 During the year ended December 31, 2024, certain of our employees chose to have us acquire from such employees an aggregate of 115,389 common shares to pay taxes due upon vesting of restricted common shares granted pursuant to share award agreements.
Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. Market Information Our common shares began trading on the NYSE on December 9, 2009 under the symbol “PEB”. Shareholder Information On February 14, 2024, there were 72 holders of record of our common shares.
Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. Market Information Our common shares began trading on the NYSE on December 9, 2009 under the symbol “PEB.” Shareholder Information On February 21, 2025, there were 73 holders of record of our common shares.
The average price paid by the Company for these shares was $13.96 per share.
The average price paid by the Company for these shares was $16.03 per share.

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe following table reconciles net income (loss) to EBITDA and EBITDA re for the years ended December 31, 2023, 2022 and 2021 (in thousands): For the year ended December 31, 2023 2022 2021 Net income (loss) $ (74,276) $ (84,981) $ (186,372) Adjustments: Interest expense 115,660 99,988 96,633 Income tax expense (benefit) 655 277 61 Depreciation and amortization 240,645 239,583 224,251 EBITDA $ 282,684 $ 254,867 $ 134,573 (Gain) loss on sale of hotel properties (30,375) (6,194) (64,729) Impairment loss 81,788 89,633 14,856 EBITDA re $ 334,097 $ 338,306 $ 84,700 FFO, EBITDA and EBITDA re do not represent cash generated from operating activities as determined by U.S.
Biggest changeWe believe that EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA provide investors useful financial measures to evaluate our operating performance, excluding the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization). 40 The following table reconciles net income (loss) to EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA for the years ended December 31, 2024, 2023 and 2022 (in thousands): For the year ended December 31, 2024 2023 2022 Net income (loss) $ 16 $ (74,276) $ (84,981) Adjustments: Interest expense 112,432 115,660 99,988 Income tax expense (benefit) (25,628) 655 277 Depreciation and amortization 229,531 240,645 239,583 EBITDA $ 316,351 $ 282,684 $ 254,867 Gain on sale of hotel properties — (30,375) (6,194) Impairment 48,146 81,788 89,633 EBITDA re $ 364,497 $ 334,097 $ 338,306 Transaction costs 44 688 430 Non-cash ground rent 7,476 7,608 7,737 Management/franchise contract transition costs 163 359 817 Non-cash amortization of acquired intangibles (1,927) (5,494) (2,149) Gain on insurance settlement (24,824) — — Amortization of share-based compensation expense 13,602 12,545 11,349 Hurricane-related costs 183 6,598 249 Adjusted EBITDA re $ 359,214 $ 356,401 $ 356,739 Business interruption insurance income (23,751) (32,985) — Corporate general and administrative and other 33,706 27,871 27,686 Hotel EBITDA $ 369,169 $ 351,287 $ 384,425 FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA do not represent cash generated from operating activities as determined by U.S.
As such, we expect to continue to raise capital through equity and debt offerings to fund our growth. Our material cash requirements include the following contractual and other obligations. 41 Debt Our outstanding debt consisted of floating- and fixed-rate unsecured term loans, convertible senior notes, senior unsecured notes and mortgage loans with varying maturities.
As such, we expect to continue to raise capital through equity and debt offerings to fund our growth. Our material cash requirements include the following contractual and other obligations. Debt Our outstanding debt consisted of floating- and fixed-rate unsecured term loans, convertible senior notes, senior unsecured notes and mortgage loans with varying maturities.
We report FFO, EBITDA and EBITDA re , which are non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance. 39 We calculate FFO in accordance with standards established by Nareit, formerly known as the National Association of Real Estate Investment Trusts, which defines FFO as net income (calculated in accordance with U.S.
We report FFO, Adjusted FFO, EBITDA, EBITDA re , Adjusted EBITDA re and Hotel EBITDA, which are non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance. 39 We calculate FFO in accordance with standards established by Nareit, formerly known as the National Association of Real Estate Investment Trusts, which defines FFO as net income (calculated in accordance with U.S.
We evaluate individual hotel and company-wide performance with comparisons to budgets, prior periods and competing properties. ADR, occupancy and RevPAR may be impacted by macroeconomic factors as well as regional and local economies and events. See Non-GAAP Financial Measures for further discussion of FFO, EBITDA and EBIDTA re .
We evaluate individual hotel and company-wide performance with comparisons to budgets, prior periods and competing properties. ADR, occupancy and RevPAR may be impacted by macroeconomic factors as well as regional and local economies and events. See Non-GAAP Financial Measures for further discussion of FFO, Adjusted FFO, EBITDA, EBITDA re, Adjusted EBITDA re and Hotel EBITDA.
Preferred dividends and Series Z preferred operating partnership units We expect to pay aggregate annual dividends and distributions of approximately $47.2 million on our outstanding Series E, Series F, Series G and Series H Cumulative Redeemable Preferred Shares and Series Z Cumulative Perpetual Preferred Units on or before December 31, 2024 and in future years until the shares/units are redeemed.
Preferred dividends and Series Z preferred operating partnership units We expect to pay aggregate annual dividends and distributions of approximately $47.2 million on our outstanding Series E, Series F, Series G and Series H Cumulative Redeemable Preferred Shares and Series Z Cumulative Perpetual Preferred Units on or before December 31, 2025 and in future years until the shares/units are redeemed.
In order to maintain our qualification as a REIT, we must pay dividends to our shareholders of at least 90% of our taxable income. As a result of this requirement, we cannot rely on retained earnings to fund long-term liquidity requirements such as hotel property acquisitions, redevelopements and repayments of long-term debt.
In order to maintain our qualification as a REIT, we must pay dividends to our shareholders of at least 90% of our taxable income. As a result of this requirement, we cannot rely on retained earnings to fund long-term liquidity requirements such as hotel property acquisitions, redevelopments and repayments of long-term debt.
Results of Operations This section includes comparisons of certain 2023 financial information to the same information for 2022. Year-to-year comparisons of the 2022 financial information to the same information for 2021 are contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 21, 2023.
Results of Operations This section includes comparisons of certain 2024 financial information to the same information for 2023. Year-to-year comparisons of the 2023 financial information to the same information for 2022 are contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 21, 2024.
Our primary cash requirements in the short term (i.e., those requiring cash on or before December 31, 2024) will be to fund property lease obligations, interest and current principal on debt, capital improvements, dividends on common and preferred shares, and working capital of our property operations.
Our primary cash requirements in the short term (i.e., those requiring cash on or before December 31, 2025) will be to fund property lease obligations, interest and current principal on debt, capital improvements, dividends on common and preferred shares, and working capital of our property operations.
Common Share Repurchase Programs, Preferred Share Repurchase Program and ATM Program Common Share Repurchase Programs On July 27, 2017, our Board of Trustees authorized a share repurchase program of up to $100.0 million of our outstanding common shares. Under this program, we could repurchase common shares from time to time in transactions on the open market or by private agreement.
Common Share Repurchase Programs and Preferred Share Repurchase Program Common Share Repurchase Programs On July 27, 2017, our board of trustees authorized a share repurchase program of up to $100.0 million of common shares. Under this program, we could repurchase common shares from time to time in transactions on the open market or by private agreement.
GAAP), excluding real estate related depreciation and amortization, gains (losses) from sales of real estate, impairments of real estate assets (including impairment of real estate related joint ventures), the cumulative effect of changes in accounting principles and adjustments for unconsolidated partnerships and joint ventures.
GAAP), excluding real estate related depreciation and amortization, gains (losses) from sales of real estate, impairments of real estate assets (including impairment of real estate related joint ventures), the cumulative effect of changes in accounting principles and adjustments for unconsolidated affiliates.
Based on when a property was acquired or disposed, operating results for certain properties are not comparable for the years ended December 31, 2023 and 2022.
Based on when a property was acquired or disposed, operating results for certain properties are not comparable for the years ended December 31, 2024 and 2023.
At December 31, 2023 and 2022, our consolidated financial statements included the operations of 46 and 51 hotel properties, respectively, which have been included in our results of operations during the respective periods since their dates of acquisition or through their dates of disposition.
At December 31, 2024 and 2023, our consolidated financial statements included the operations of 46 hotel properties, which have been included in our results of operations during the respective periods since their dates of acquisition or through their dates of disposition.
We believe our cash and cash equivalents, restricted cash and the amount available on our senior unsecured revolving credit facility, which totaled $830.0 million as of December 31, 2023, along with cash generated from ongoing operations will be sufficient to satisfy our short-term cash requirements. As of December 31, 2023 we had no off-balance sheet arrangements.
We believe our cash and cash equivalents, restricted cash and the amount available on our senior unsecured revolving credit facility, which totaled $860.2 million as of December 31, 2024, along with cash generated from ongoing operations will be sufficient to satisfy our short-term cash requirements. As of December 31, 2024 we had no off-balance sheet arrangements.
Minimum fixed rent may be adjusted annually by increases in consumer price index ("CPI") and may be subject to minimum and maximum increases. Future fixed minimum payments associated with our hotel, ground and finance leases total $1.8 billion as of December 31, 2023, with $21.5 million payable on or before December 31, 2024.
Minimum fixed rent may be adjusted annually by increases in consumer price index ("CPI") and may be subject to minimum and maximum increases. Future fixed minimum payments associated with our hotel, ground and finance leases total $1.8 billion as of December 31, 2024, with $23.0 million payable on or before December 31, 2025.
Purchase commitments As of December 31, 2023, we had $15.4 million of outstanding purchase commitments, all of which will be paid on or before December 31, 2024. These purchase commitments represent outstanding purchase orders and contracts that have been executed for capital and renovation projects at our properties. See Capital Investments for discussion on planned capital investments.
Purchase commitments As of December 31, 2024, we had $9.1 million of outstanding purchase commitments, all of which will be paid on or before December 31, 2025. These purchase commitments represent outstanding purchase orders and contracts that have been executed for capital and renovation projects at our properties. See Capital Investments for discussion on planned capital investments.
Distributions to preferred shareholders — Distributions to preferred shareholders decreased by $1.4 million as result of the redemption of one million of our 5.70% Series H Cumulative Redeemable Preferred Shares in December 2022 and the redemption of one million of our 5.70% Series H Cumulative Redeemable Preferred Shares in November 2023.
Distributions to preferred shareholders — Distributions to preferred shareholders decreased by $1.1 million as result of the redemption of one million of our 5.70% Series H Cumulative Redeemable Preferred Shares in November 2023.
As of December 31, 2023, we have interest rate swap agreements with an aggregate notional amount of $1.2 billion to hedge variable interest rates on our unsecured term loans and a mortgage loan. We have designated these pay-fixed, receive-floating interest rate swap derivatives as cash flow hedges. For a further discussion of our derivative instruments see Note 5.
As of December 31, 2024, we have interest rate swap agreements with an aggregate notional amount of $855.0 million to hedge variable interest rates on our unsecured term loans and a mortgage loan. We have designated these pay-fixed, receive-floating interest rate swap derivatives as cash flow hedges. For a further discussion of our derivative instruments see Note 5.
Fluctuations in our net cash provided by (used in) investing activities are primarily the result of acquisition and disposition activities, as well as capital improvements and additions to our properties. • During the year ended December 31, 2023, we invested $200.6 million in improvements to our hotel properties, received $314.9 million from the sale of five hotel properties and two retail components of our hotel properties and received $30.2 million in property insurance proceeds. • During the year ended December 31, 2022, we invested $116.7 million in improvements to our hotel properties, received $248.9 million from the sale of four hotel properties and purchased two hotel properties using cash of $247.2 million.
Fluctuations in our net cash provided by (used in) investing activities are primarily the result of acquisition and disposition activities, as well as capital improvements and additions to our properties. • During the year ended December 31, 2024, we invested $128.8 million in improvements to our hotel properties and received $36.8 million in property insurance proceeds. • During the year ended December 31, 2023, we invested $200.6 million in improvements to our hotel properties, received $314.9 million from the sale of five hotel properties and two retail components of our hotel properties and received $30.2 million in property insurance proceeds. 43 Financing Activities.
The program does not have an expiration date and may be suspended, modified or discontinued at any time. Preferred Share Repurchase Program On February 17, 2023, our Board of Trustees approved a repurchase program of up to $100.0 million of our outstanding preferred shares (the “Preferred Share Repurchase Program”).
The program does not require us to repurchase any specific number of common shares. The program does not have an expiration date and may be suspended, modified or discontinued at any time. Preferred Share Repurchase Program On February 17, 2023, our board of trustees authorized a share repurchase program of up to $100.0 million of preferred shares.
Financing Activities. Our net cash used in financing activities was $236.8 million for the year ended December 31, 2023 and $209.3 million for the year ended December 31, 2022.
Our net cash used in financing activities was $158.2 million for the year ended December 31, 2024 and $236.8 million for the year ended December 31, 2023.
Cash trap provisions may be triggered if the hotel's performance is below a certain threshold. Once triggered, all of the cash flow generated by the hotel is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our lender. As of December 31, 2023, none of the mortgage loans were in a cash trap.
Once triggered, all of the cash flow generated by the hotel is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our lender. As of December 31, 2024, none of the mortgage loans were in a cash trap.
Our total debt had an aggregate face value of $2.3 billion as of December 31, 2023, as summarized below: December 31, 2023 (in thousands) Revolving credit facilities $ — Term loans 1,380,000 Convertible senior notes 750,000 Senior unsecured notes 2,400 Mortgage loans 197,497 Total debt at face value $ 2,329,897 For further discussion on the components of our debt, see Note 5.
Our total debt had an aggregate face value of $2.3 billion as of December 31, 2024, as summarized below: December 31, 2024 (in thousands) Revolving credit facilities $ — Term loans 916,652 Convertible senior notes 750,000 Senior unsecured notes 402,400 Mortgage loans 195,413 Total debt at face value $ 2,264,465 For further discussion on the components of our debt, see Note 5.
Seasonality For discussion on the seasonality of our hotels' operations, see Part I, Item 1 of this Annual Report on Form 10-K. 44 Derivative Instruments In the normal course of business, we are exposed to the effects of interest rate changes.
Seasonality For discussion on the seasonality of our hotels' operations, see Part I, Item 1 of this Annual Report on Form 10-K. Derivative Instruments In the normal course of business, we are exposed to the effects of interest rate changes. We may enter into derivative instruments including interest rate swaps, caps and collars to manage or hedge interest rate risk.
We may enter into derivative instruments including interest rate swaps, caps and collars to manage or hedge interest rate risk. Derivative instruments are subject to fair value reporting at each reporting date and the increase or decrease in fair value is recorded in net income (loss) or accumulated other comprehensive income (loss), based on the applicable hedge accounting guidance.
Derivative instruments are subject to fair value reporting at each reporting date and the increase or decrease in fair value is recorded in net income (loss) or accumulated other comprehensive income (loss), based on the applicable hedge accounting guidance.
Assuming we exercise all extension options available in our debt agreements and after adjusting for the aforementioned January 2024 term loan extension and repayments, we expect that future principal and interest payments associated with our remaining debt obligations outstanding as of December 31, 2023 will be $2.6 billion through their maturity, with $45.2 million of principal and $102.4 million of interest payable on or before December 31, 2024.
Assuming we exercise all extension options available in our debt agreements, we expect that future principal and interest payments associated with our remaining debt obligations outstanding as of December 31, 2024 will be $2.6 billion through their maturity, with $19.2 million of principal and $95.3 million of interest payable on or before December 31, 2025.
Through these efforts, we seek to improve property efficiencies, lower costs, maximize revenues and enhance property operating margins, which we expect will enhance returns to our shareholders. 37 Key Indicators of Financial Condition and Operating Performance We measure hotel results of operations and the operating performance of our business by evaluating financial and non-financial metrics such as room revenue per available room ("RevPAR"); total revenue per available room ("Total RevPAR"); average daily rate ("ADR"); occupancy rate ("Occupancy"); funds from operations ("FFO"); earnings before interest, income taxes, depreciation and amortization ("EBITDA"); and EBITDA for real estate ("EBITDA re " ) .
Key Indicators of Financial Condition and Operating Performance We measure hotel results of operations and the operating performance of our business by evaluating financial and non-financial metrics such as room revenue per available room ("RevPAR"); total revenue per available room ("Total RevPAR"); average daily rate ("ADR"); occupancy rate ("Occupancy"); funds from operations ("FFO"); Adjusted FFO; earnings before interest, income taxes, depreciation and amortization ("EBITDA"); and EBITDA for real estate ("EBITDA re " ); Adjusted EBITDA re ; and hotel-level EBITDA (“Hotel EBITDA”).
Gain on sale of hotel properties — We recognized a gain on sale of $30.4 million primarily due to the sales of five hotels and two retail components of our hotels in 2023. We recognized a gain on sale of $6.2 million primarily due to the sales of four hotels in 2022.
In 2023 we recognized an impairment loss of $81.8 million on three hotels and one retail component of a hotel property. Gain on sale of hotel properties — We recognized a gain on sale of $30.4 million primarily due to the sales of five hotels and two retail components of our hotels in 2023.
Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. Transaction costs are expensed for acquisitions that are considered business combinations and capitalized for asset acquisitions.
Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions.
Impairment We review our investments in hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable.
Transaction costs are expensed for acquisitions that are considered business combinations and capitalized for asset acquisitions. 41 Impairment We review our investments in hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable.
Fluctuations in our net cash used in financing activities are primarily the result of our issuance and repurchase of debt and equity securities and distributions paid on our preferred and common shares. • During the year ended December 31, 2023, we borrowed and repaid $10.0 million of revolving credit facility borrowings, borrowed $140.0 million and repaid $211.1 million in other debt, repurchased $92.8 million and $15.8 million of common shares and preferred shares, respectively, through our common and preferred share repurchase programs, and paid $53.6 million in preferred and common distributions. • During the year ended December 31, 2022, we borrowed and repaid $190.2 million of revolving credit facility borrowings, borrowed and repaid $1.4 billion in other debt, repurchased $70.7 million of common shares through our common share repurchase program, paid $52.7 million in preferred and common distributions, used $16.0 million to redeem one million Series H Preferred Shares and paid $12.4 million in financing fees.
Fluctuations in our net cash used in financing activities are primarily the result of our issuance and repurchase of debt and equity securities and distributions paid on our preferred and common shares. • During the year ended December 31, 2024, we borrowed $400.0 million and repaid $465.4 million in other debt, repurchased $16.9 million of common shares through our common share repurchase program and for tax withholding purposes in connection with vestings of share-based equity awards, paid $52.0 million in preferred and common distributions and paid $22.1 million in financing costs. • During the year ended December 31, 2023, we borrowed and repaid $10.0 million of revolving credit facility borrowings, borrowed $140.0 million and repaid $211.1 million in other debt, repurchased $92.8 million of common shares through our common share repurchase program and for tax withholding purposes in connection with vestings of share-based equity awards, repurchased $15.8 million of preferred shares through our preferred share repurchase program and paid $53.6 million in common and preferred distributions.
We intend to pay amounts due with available cash, borrowings under our revolving credit facility, proceeds from property sales and/or refinance with long-term debt. We are in compliance with all of our debt covenants. Our mortgage loans contain customary provisions regarding events of default, as well as customary cash management, cash trap and lockbox provisions.
We intend to pay amounts due with available cash, borrowings under our revolving credit facility or proceeds from property sales or to refinance amounts due with long-term debt. We are in compliance with all covenants governing our existing credit facilities, term loans, senior note facilities and mortgage loans.
The timing, manner, price and amount of any repurchases under the 2023 program will be determined by us in our discretion and will depend on a variety of factors, including legal requirements, price, liquidity and economic considerations, and market conditions. The program does not require us to repurchase any specific number of common shares.
As of December 31, 2024, $131.0 million of common shares remained available for repurchase under this program. 44 The timing, manner, price and amount of any repurchases will be determined by us in our discretion and will depend on a variety of factors, including legal requirements, price, liquidity and economic considerations and market conditions.
In addition, FFO, EBITDA and EBITDA re are not indicative of funds available to fund cash needs, including the ability to make cash distributions. 40 Critical Accounting Policies We consider these policies critical because they require estimates about matters that are inherently uncertain, involve various assumptions and require significant management judgment, and because they are important for understanding and evaluating our reported financial results.
Critical Accounting Policies We consider these policies critical because they require estimates about matters that are inherently uncertain, involve various assumptions and require significant management judgment, and because they are important for understanding and evaluating our reported financial results.
Depending on market conditions, and in some instances subject to approval from governmental authorities, we expect to invest an additional $85.0 million to $90.0 million in capital investments in 2024, which includes normal hotel capital refurbishments, return of investment projects and major capital projects.
Depending on market conditions, and in some instances subject to approval from governmental authorities, we expect to invest an additional $65.0 million to $75.0 million in capital investments in 2025, which includes normal hotel capital refurbishments and repositioning projects and excludes capital expenditures related to the repair and remediation of LaPlaya Beach Resort & Club.
During the year ended December 31, 2023, we repurchased $4.0 million of common shares under this program, and as of December 31, 2023, $146.0 million of common shares remained available for repurchase under this program.
During the year ended December 31, 2024, no preferred shares were repurchased under this program. As of December 31, 2024, $84.2 million of preferred shares remained available for repurchase under this program.
The properties listed in the table below are hereinafter referred to as "non-comparable properties" for the periods indicated and all other properties are referred to as "comparable properties": Property Location Disposition Date The Marker San Francisco San Francisco, CA June 28, 2022 Sofitel Philadelphia at Rittenhouse Square Philadelphia, PA August 2, 2022 Hotel Spero San Francisco, CA August 25, 2022 Hotel Vintage Portland Portland, OR September 14, 2022 The Heathman Hotel Portland, OR February 22, 2023 Retail at The Westin Michigan Avenue Chicago Chicago, IL March 17, 2023 Hotel Colonnade Coral Gables Coral Gables, FL March 28, 2023 Hotel Monaco Seattle Seattle, WA May 9, 2023 Hotel Vintage Seattle Seattle, WA May 24, 2023 Hotel Zoe Fisherman’s Wharf San Francisco, CA November 14, 2023 Marina City Retail at Hotel Chicago Downtown, Autograph Collection Chicago, IL December 21, 2023 Property Location Acquisition Date Inn on Fifth Naples, FL May 11, 2022 Newport Harbor Island Resort Newport, RI June 23, 2022 38 Comparison of the year ended December 31, 2023 to the year ended December 31, 2022 Revenues — Total revenues increased by $28.1 million, which includes a $63.3 million increase at our comparable properties primarily due to an increase in leisure and business travel as well as a significant increase in revenue at 1 Hotel San Francisco, which was under renovation through June 2022 and began ramping up operations in the third quarter of 2022.
The properties listed in the table below are hereinafter referred to as "non-comparable properties" for the periods indicated and all other properties are referred to as "comparable properties": Property Location Disposition Date The Heathman Hotel Portland, OR February 22, 2023 Retail at The Westin Michigan Avenue Chicago Chicago, IL March 17, 2023 Hotel Colonnade Coral Gables Coral Gables, FL March 28, 2023 Hotel Monaco Seattle Seattle, WA May 9, 2023 Hotel Vintage Seattle Seattle, WA May 24, 2023 Hotel Zoe Fisherman’s Wharf San Francisco, CA November 14, 2023 Marina City Retail at Hotel Chicago Downtown, Autograph Collection Chicago, IL December 21, 2023 Comparison of the year ended December 31, 2024 to the year ended December 31, 2023 Revenues — Total revenues increased by $33.4 million primarily due to increases at LaPlaya Beach Resort & Club, which was partially closed in 2023 due to Hurricane Ian, at Margaritaville Hotel San Diego Gaslamp Quarter and Hilton San Diego Gaslamp Quarter, which were both under renovation in 2023, and at The Westin Michigan Avenue Chicago.
During the year ended December 31, 2023, we repurchased $87.0 million of common shares under this program, and as of December 31, 2023, no common shares remained available for repurchase under this program. On February 17, 2023, our Board of Trustees authorized a share repurchase program of up to $150.0 million of our outstanding common shares.
As of June 30, 2023, no common shares remained available for repurchase under this program. On February 17, 2023, our board of trustees authorized a share repurchase program of up to $150.0 million of common shares. Under this program, we may repurchase common shares from time to time in transactions on the open market or by private agreement.
Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent decreased by $1.5 million primarily due to a $9.3 million decrease in real estate taxes as a result of tax appeals and lower tax assessments.
Real estate taxes, personal property taxes, property insurance and ground rent — Real estate taxes, personal property taxes, property insurance and ground rent increased by $1.6 million primarily due to a $3.9 million increase in property insurance due to higher insurance premiums.
For the year ended December 31, 2023, we invested $200.6 million in capital investments to reposition and improve our properties, including the renovations of Newport Harbor Island Resort, Margaritaville Hotel San Diego Gaslamp Quarter, Estancia La Jolla Hotel & Spa, Jekyll Island Club Resort, Hilton San Diego Gaslamp Quarter and Skamania Lodge, as well as capital expenditures related to the repair and remediation of LaPlaya Beach Resort & Club and Southernmost Beach Resort, which were damaged by Hurricane Ian.
For the year ended December 31, 2024, we invested $128.8 million in capital investments (or $104.0 million excluding the repair and remediation of LaPlaya Beach Resort & Club) to reposition and/or improve our properties, including the renovations of Newport Harbor Island Resort, Skamania Lodge, Estancia La Jolla Hotel & Spa, Southernmost Beach Resort and Hyatt Centric Delfina Santa Monica.
Hotel Operating Statistics The following table represents the key same-property hotel operating statistics for our hotels for the years ended December 31, 2023 and 2022: For the year ended December 31, 2023 2022 Same-Property Occupancy 67.7 % 63.1 % Same-Property ADR $ 302.96 $ 312.01 Same-Property RevPAR $ 205.24 $ 196.96 Same-Property Total RevPAR $ 316.02 $ 298.38 The above table of hotel operating statistics includes information from all hotels owned as of December 31, 2023, except for LaPlaya Beach Resort & Club due to its closure following Hurricane Ian, 1 Hotel San Francisco for the first and second quarters only due to its closure for redevelopment and Newport Harbor Island Resort for the fourth quarter only due to its ongoing redevelopment.
Hotel Operating Statistics The following table represents the key same-property hotel operating statistics for our hotels for the years ended December 31, 2024 and 2023: For the year ended December 31, 2024 2023 Same-Property Occupancy 71.0 % 68.3 % Same-Property ADR $ 299.22 $ 306.14 Same-Property RevPAR $ 212.41 $ 209.04 Same-Property Total RevPAR $ 327.27 $ 320.61 The above table of hotel operating statistics includes information from all hotels owned as of December 31, 2024, except for LaPlaya Beach Resort & Club which was excluded for both years due to disruption from Hurricane Ian and Newport Harbor Island Resort which was excluded for the first, second and fourth quarters only due to its redevelopment.
Other — Other increased by $3.7 million due to an increase in interest income earned on excess cash. Non-controlling interests — Non-controlling interests represent the allocation of income or loss of the Operating Partnership to third-party common OP unit holders and to the preferred OP unit holders.
Income tax (expense) benefit — In 2024, we recognized an income tax benefit due to a $31.7 million reduction in the valuation allowance, offset by $6.1 million of income tax expense. Non-controlling interests — Non-controlling interests represent the allocation of income or loss of our Operating Partnership to third-party common OP unit holders and to the preferred OP unit holders.
Our principal uses of cash are asset acquisitions, debt service payments, the redemption of equity securities, capital investments, operating costs, corporate expenses and dividends. Operating Activities. Our net cash provided by operating activities was $236.2 million for the year ended December 31, 2023 and $278.7 million for the year ended December 31, 2022.
Sources and Uses of Cash Our principal sources of cash are cash from operations, draws on our credit facilities, net proceeds from equity and debt offerings, and net proceeds from property sales. Our principal uses of cash are asset acquisitions, debt service payments, the redemption of equity securities, capital investments, operating costs, corporate expenses and dividends. Operating Activities.
Business interruption insurance income — We recognized business interruption insurance income of $33.0 million in 2023 related to a partial settlement with the insurance carriers for lost income at LaPlaya Beach Resort & Club.
Business interruption insurance income and gain on insurance settlement — We recognized business interruption insurance income and gain on insurance settlement in 2024 and 2023 of $48.6 million and $33.0 million, respectively, related to the settlement of property damage, business interruption and other costs sustained at LaPlaya Beach Resort & Club resulting from Hurricane Ian.
Our net cash provided by (used in) investing activities was $142.0 million for the year ended December 31, 2023 and $(109.4) million for the year ended December 31, 2022.
The increase in cash provided by operating activities in 2024 is primarily due to an increase in operations at our hotel properties that had been under renovation in 2023. Investing Activities. Our net cash provided by (used in) investing activities was $(92.8) million for the year ended December 31, 2024 and $142.0 million for the year ended December 31, 2023.
The following table reconciles net income (loss) to FFO and FFO available to common share and unit holders for the years ended December 31, 2023, 2022 and 2021 (in thousands): For the year ended December 31, 2023 2022 2021 Net income (loss) $ (74,276) $ (84,981) $ (186,372) Adjustments: Real estate depreciation and amortization 240,304 239,231 223,813 Gain on sale of hotel properties (30,375) (6,194) (64,729) Impairment loss 81,788 89,633 14,856 FFO $ 217,441 $ 237,689 $ (12,432) Distribution to preferred shareholders and unit holders (48,306) (48,049) (42,105) Redemption of preferred shares 8,396 8,186 (8,055) FFO available to common share and unit holders $ 177,531 $ 197,826 $ (62,592) EBITDA is defined as earnings before interest, income taxes, depreciation and amortization.
The following table reconciles net income (loss) to FFO, FFO available to common share and unit holders and Adjusted FFO available to common share and unit holders for the years ended December 31, 2024, 2023 and 2022 (in thousands): For the year ended December 31, 2024 2023 2022 Net income (loss) $ 16 $ (74,276) $ (84,981) Adjustments: Real estate depreciation and amortization 229,230 240,304 239,231 Gain on sale of hotel properties — (30,375) (6,194) Impairment 48,146 81,788 89,633 FFO $ 277,392 $ 217,441 $ 237,689 Distribution to preferred shareholders and unit holders (47,182) (48,306) (48,049) Redemption of preferred shares — 8,396 8,186 FFO available to common share and unit holders $ 230,210 $ 177,531 $ 197,826 Transaction costs 44 688 430 Non-cash ground rent 7,476 7,608 7,737 Management/franchise contract transition costs 163 359 817 Interest expense adjustment for acquired liabilities 1,110 1,672 2,549 Finance lease adjustment 2,995 2,952 2,906 Non-cash amortization of acquired intangibles (1,927) (5,494) (2,149) Gain on insurance settlement (24,824) — — Early extinguishment of debt 3,781 1,035 7,995 Amortization of share-based compensation expense 13,602 12,545 11,349 Redemption of preferred shares — (8,396) (8,186) Hurricane-related costs 183 6,598 249 Non-cash interest expense — — 49 Deferred tax provision (benefit) (28,483) — — Adjusted FFO available to common share and unit holders $ 204,330 $ 197,098 $ 221,572 EBITDA is defined as earnings before interest, income taxes, depreciation and amortization.
Fluctuations in our net cash provided by operating activities are primarily the result of changes in hotel revenues, operating cash requirements and corporate expenses. The decrease in cash provided by operations in 2023 as compared to 2022 is primarily due to the disposition of five hotel properties and two retail components of our hotel properties in 2023. Investing Activities.
Our net cash provided by operating activities was $275.0 million for the year ended December 31, 2024 and $236.2 million for the year ended December 31, 2023. Fluctuations in our net cash provided by operating activities are primarily the result of changes in hotel revenues, operating cash requirements and corporate expenses.
Equity to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. 42 Sources and Uses of Cash Our principal sources of cash are cash from operations, draws on our credit facilities, net proceeds from equity and debt offerings, and net proceeds from property sales.
For further discussion on our preferred shares and preferred units, see Note 7. Equity to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
The program does not have an expiration date and may be suspended, modified or discontinued at any time. ATM Program On April 29, 2021, we filed a prospectus supplement with the SEC to sell up to $200.0 million of common shares under an "at the market" offering program (the "ATM program"). On February 21, 2023, the ATM program expired.
The program does not have an expiration date and may be suspended, modified or discontinued at any time. Inflation We rely on the performance of the hotels to increase revenues to keep pace with inflation.
Other operating expenses — Other operating expenses increased by $7.3 million primarily due to payroll and claims administration costs at LaPlaya Beach Resort & Club for which reimbursement from insurance policies is uncertain. Interest expense — Interest expense increased by $15.7 million as a result of higher interest rates on floating rate debt.
Other operating expenses — Other operating expenses decreased by $7.7 million primarily due to a decrease in hurricane related payroll costs and claims administration costs at LaPlaya Beach Resort & Club.
During the year ended December 31, 2023, we repurchased 6,498,901 common shares under the 2017 and 2023 repurchase programs, for an aggregate purchase price of $91.0 million, or an average of approximately $14.01 per share.
We may suspend or discontinue this program at any time. Repurchased common shares cease to be outstanding and become authorized but unissued common shares. During the year ended December 31, 2024, we repurchased 1,127,255 common shares for an aggregate purchase price of $15.0 million, or an average of approximately $13.31 per share.
General and administrative — General and administrative expense increased by $5.6 million primarily due to an increase in professional fees and employee compensation expense. General and administrative expenses consist of employee compensation costs, legal and professional fees, insurance and other expenses.
General and administrative expenses consist of employee compensation costs, legal and professional fees, insurance and other expenses. Impairment — In 2024, we recognized a loss of $10.0 million related to damage caused by Hurricane Helene and Hurricane Milton at LaPlaya Beach Resort & Club and an impairment loss of $38.1 million related to one hotel property.
While we do not operate our hotel properties, both our asset management team and our executive management team monitor and work cooperatively with our hotel managers by advising and making recommendations in all aspects of our hotels’ operations, including property positioning and repositioning, revenue and expense management, operations analysis, physical design, renovation and capital improvements, guest experience and overall strategic direction.
During 2024, we had the following transactions and events: • We finalized a settlement agreement with our insurance carriers for damage caused by Hurricane Ian in 2022 totaling $146.5 million and recognized business interruption insurance income of $23.8 million and a gain on insurance settlement of $24.8 million. • We repurchased 1,127,255 common shares for an aggregate purchase price of $15.0 million, or an average of $13.31 per share, under our common share repurchase program. • We paid down $463.3 million of our term loans. • We extended the maturity of $356.7 million of our Term Loan 2024 to January 2028 and extended $185.2 million of our Term Loan 2025 to January 2029. • We issued $400.0 million aggregate principal amount of 6.375% senior notes due October 2029. 37 While we do not operate our hotel properties, both our asset management team and our executive management team monitor and work cooperatively with our hotel managers by advising and making recommendations in all aspects of our hotels’ operations, including property positioning and repositioning, revenue and expense management, operations analysis, physical design, renovation and capital improvements, guest experience and overall strategic direction.
Debt to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. On January 3, 2024, the Company entered into the First Amendment to the Fifth Amended and Restated Credit Agreement ("Credit Agreement") which extended the maturity date of $356.7 million borrowed under Term Loan 2024 to January 2028.
Debt to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. 42 We have the option to extend certain of our current debt maturities with the payment of extension fees.
These increases were partially offset by a $35.2 million decrease due to our non-comparable properties as well as a significant decrease in revenue at LaPlaya Beach Resort & Club, which was closed in September 2022 as a result of Hurricane Ian and was partially reopened in 2023.
This increase was partially offset by a $18.0 million decrease due to the sales of our non-comparable properties in 2023.
Removed
Overview Our hotel portfolio continued to recover in 2023 with strong growth in occupancy at many of our urban properties, especially our properties in Washington, D.C. and San Francisco, which had trailed the recovery in other markets and our resort properties. We have observed continued stable demand from both the business and leisure segments.
Added
Overview Our 2024 operating results showed continued improvement in group and business transient demand. Leisure demand remained healthy and was boosted by customers returning to the cities for cultural, sporting and entertainment events. Our recently redeveloped properties performed well, gaining market share versus the prior year.
Removed
We believe 2024 will continue this trend and anticipate positive benefits from a robust convention calendar in many urban markets, including San Diego, Washington, D.C., Boston and Chicago. International inbound travel is expected to continue to recover. Our LaPlaya Beach Resort & Club, which was closed in 2022 due to Hurricane Ian, has been substantially restored.
Added
Our properties in San Francisco, Los Angeles and Portland muted our overall performance, but strong markets such as San Diego, Boston, and Chicago helped to offset the weaker results.
Removed
Two of the resort buildings were fully operational for most of 2023 and the final resort building, the Beach House, is expected to be substantially completed by the end of this month.
Added
Certain of our properties experienced demand headwinds in 2024, including our Los Angeles properties, which were affected by the entertainment industry strikes in 2023, which slowed production into 2024, and our LaPlaya Beach Resort & Club ("LaPlaya"), which was impacted by Hurricane Helene on September 26, 2024 and Hurricane Milton on October 9, 2024.
Removed
We have agreed to a partial business interruption insurance settlement with our insurance company during 2023 and will continue to work with our insurance company through full completion of our insurance claim. During 2023, we sold five hotels and two retail components of our hotels in separate transactions for an aggregate sales price of $330.8 million.
Added
The damage to LaPlaya primarily impacted the ground floor of the Beach House, pool complex, landscaping and parking garage. LaPlaya closed following Hurricane Milton to facilitate clean-up, repairs and a full assessment of damage. The property's Bay Tower and Gulf Tower reopened November 1, 2024 and the upper floors of the Beach House reopened in January 2025.
Removed
During 2023, we repurchased 6,498,901 common shares for an aggregate purchase price of $91.0 million, or an average of $14.01 per share, and 1,000,000 preferred shares for an aggregate purchase price of $15.8 million, or an average of $15.79 per share, under our existing common and preferred share repurchase programs.
Added
The ground floor of the Beach House is expected to open in the second quarter of 2025.
Removed
During 2023, we repaid $71.1 million of debt, which includes of $47.6 million of senior unsecured notes and $23.5 million of mortgage loans. In January 2024, we extended the maturity date of $356.7 million borrowed under Term Loan 2024 to January 2028.
Added
In 2024, we recorded a loss of $10.0 million related to the damage from Hurricanes Helene and Milton, and we expect our property and flood insurance proceeds to cover the physical damage and business interruption losses from the hurricanes in excess of the applicable deductibles.
Removed
We also repaid $60.0 million outstanding on Term Loan 2024 and $50.0 million outstanding on the Term Loan 2025 with available cash. The remaining $43.3 million of Term Loan 2024 that was not extended will continue to mature in October 2024.
Added
Through these efforts, we seek to improve property efficiencies, lower costs, maximize revenues and enhance property operating margins, which we expect will enhance returns to our shareholders.
Removed
The above table of hotel operating statistics also includes Hotel Monaco Seattle and Hotel Vintage Seattle for the first quarter only due to their sales in May 2023, Retail at The Westin Michigan Avenue Chicago for the first quarter only due to its sale in March 2023, Hotel Zoe Fisherman’s Wharf for the first, second and third quarters only due to its sale in November 2023, and Marina City Retail at Hotel Chicago Downtown, Autograph Collection for the first, second and third quarters only due to its sale in December 2023.
Added
This increase was partially offset by a $23.7 million decrease due to the sales of our non-comparable properties in 2023 and the decrease at Hyatt Centric Delfina Santa Monica as a result of disruption from the brand conversion in 2024. 38 Hotel operating expenses — Total hotel operating expenses increased by $19.9 million primarily due to increased operations at LaPlaya Beach Resort & Club, Margaritaville Hotel San Diego Gaslamp Quarter, The Westin Michigan Avenue Chicago and Hilton San Diego Gaslamp Quarter, as well as an increase in staffing, wage rates and benefits at our comparable properties due to higher demand levels.
Removed
Hotel operating expenses — Total hotel operating expenses increased by $57.6 million as a result of an increase in staffing, wages and benefits to accommodate occupancy increases, particularly at our urban properties, as well as an increase in hotel operating expenses at 1 Hotel San Francisco, which was closed most of the first and second quarters of 2022 for renovations.
Added
Depreciation and amortization — Depreciation and amortization expense decreased by $11.1 million due to Newport Harbor Island Resort's useful life reduction of its furniture, fixtures and equipment in 2023 due to its scheduled renovation in November 2023, as well as the sales of our non-comparable properties in 2023.
Removed
Our overall increase in hotel operating expenses was partially offset by a $27.1 million decrease due to our non-comparable properties. Depreciation and amortization — Depreciation and amortization expense increased by $1.1 million primarily due to redevelopment and renovation activities at Margaritaville Hotel San Diego Gaslamp Quarter and Estancia La Jolla Hotel & Spa which commenced in 2022.
Added
This increase was partially offset by a $2.1 million decrease in real estate taxes as a result of tax appeals and lower tax assessments. General and administrative — General and administrative expense increased by $3.3 million primarily due to an increase in employee compensation expense.
Removed
This decrease was partially offset by a $5.9 million increase in property insurance due to higher insurance premium assessments and a $1.9 million increase in ground rent on ground leases whose rent is based on a percentage of revenues.
Added
Interest expense — Interest expense decreased by $3.2 million due to pay-downs on our term loans during the first quarter of 2024, pay-downs of our senior notes during the fourth quarter of 2023 and interest being capitalized related to our Newport Harbor Island Resort redevelopment.
Removed
Impairment — We recognized an impairment loss of $81.8 million in 2023 related to three hotels and one retail component of a hotel property.
Added
This decrease was partially offset by an increase resulting from costs associated with the extensions of the revolver and term loans and higher interest rates on our unhedged floating rate debt. Other — Other decreased by $1.4 million due to a decrease in interest income earned as a result of lower excess cash balances in 2024.
Removed
We recognized an impairment loss of $89.6 million in 2022 related to three hotels as well as an impairment related to damage caused by Hurricane Ian at LaPlaya Beach Resort & Club in Naples, Florida and Southernmost Beach Resort in Key West, Florida.
Added
Issuance costs of redeemed preferred shares — Issuance costs of redeemed preferred shares decreased due to the redemption of one million of our 5.70% Series H Cumulative Redeemable Preferred Shares in November 2023. These costs are included in the determination of net income (loss) attributable to common shareholders.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFor debt obligations, the table presents scheduled maturities, including annual amortization of principal, and related weighted-average interest rates for the debt maturing in each specified period (dollars in thousands). 2024 2025 2026 2027 2028 Thereafter Total Liabilities Fixed rate debt (1) $ 1,910 $ 4,592 $ 752,308 $ 2,429 $ 48,658 $ — $ 809,897 Average interest rate 5.07 % 5.00 % 1.76 % 5.07 % 5.07 % — % 1.99 % Variable rate debt (1) $ 460,000 $ 460,000 $ — $ 460,000 $ 140,000 $ — $ 1,520,000 Average interest rate 7.66 % 7.66 % — % 7.61 % 9.06 % — % 7.77 % Total $ 461,910 $ 464,592 $ 752,308 $ 462,429 $ 188,658 $ — $ 2,329,897 ______________________ (1) Scheduled maturities assume we exercise all extension options available in our debt agreements.
Biggest changeFor debt obligations, the table presents scheduled maturities, including annual amortization of principal, and related weighted-average interest rates for the debt maturing in each specified period (dollars in thousands). 2025 2026 2027 2028 2029 Total Liabilities Fixed rate debt (1) $ 4,418 $ 752,308 $ 2,429 $ 48,658 $ 400,000 $ 1,207,813 Average interest rate 4.99 % 1.76 % 5.07 % 5.07 % 6.38 % 3.44 % Variable rate debt (1) $ 14,783 $ — $ 360,000 $ 496,652 $ 185,217 $ 1,056,652 Average interest rate 6.44 % — % 6.44 % 6.91 % 6.44 % 6.66 % Total $ 19,201 $ 752,308 $ 362,429 $ 545,310 $ 585,217 $ 2,264,465 ______________________ (1) Scheduled maturities assume we exercise all extension options available in our debt agreements.
While these agreements are intended to lessen the impact of rising interest rates, they also expose us to the risks that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly effective cash flow hedges under guidance included in ASC 815 "Derivatives and Hedging." The table below provides information about financial instruments that are sensitive to changes in interest rates, including senior notes, term loans, mortgage loans and credit facilities.
While these agreements are intended to lessen the impact of rising interest rates, they also expose us to the risks that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly effective cash flow hedges under guidance included in ASC 815 "Derivatives and Hedging." 45 The table below provides information about financial instruments that are sensitive to changes in interest rates, including senior notes, term loans, mortgage loans and credit facilities.
For a discussion of our debt, see Note 5. Debt , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. This table reflects indebtedness outstanding as of December 31, 2023 and does not reflect indebtedness, if any, incurred after that date.
For a discussion of our debt, see Note 5. Debt , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. This table reflects indebtedness outstanding as of December 31, 2024 and does not reflect indebtedness, if any, incurred after that date.
If interest rates on our unhedged variable rate debt increase or decrease by 0.1 percent, our annual interest expense will increase or decrease by approximately $0.4 million, respectively.
If interest rates on our unhedged variable rate debt increase or decrease by 0.1 percent, our annual interest expense will increase or decrease by approximately $0.2 million, respectively.
As of December 31, 2023, the estimated fair value of our fixed rate debt was $686.3 million. As of December 31, 2023, $365.0 million of the Company's aggregate indebtedness (15.7% of total indebtedness) was subject to variable interest rates, excluding amounts outstanding under the term loan facilities that have been effectively swapped into fixed rates.
As of December 31, 2024, the estimated fair value of our fixed rate debt was $1.1 billion. As of December 31, 2024, $201.7 million of the Company's aggregate indebtedness (8.9% of total indebtedness) was subject to variable interest rates, excluding amounts outstanding under the term loan facilities that have been effectively swapped into fixed rates.

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