Apple Hospitality REIT (NYSE: APLE) grows Q2 RevPAR and updates debt
Apple Hospitality REIT, Inc. reported solid operating results for the quarter ended June 30, 2026. Total revenue rose to $402.6 million, up 4.7% year over year, driven by higher room demand and pricing. Comparable Hotels achieved RevPAR of $136.17, up 5.3%, with ADR of $169.90 and occupancy of 80.1%. Adjusted Hotel EBITDA increased 8.7% to $153.3 million. Net income per share was $0.28 for the quarter and $0.40 for the first half of 2026, with six‑month net income of $94.8 million, similar to 2025.
At June 30, 2026, the company owned 216 hotels with 29,459 rooms and total assets of about $4.9 billion, funded by approximately $1.5 billion of debt and $3.14 billion of shareholders’ equity. About 59% of total debt was effectively fixed-rate via interest rate swaps, with a weighted‑average interest rate of 4.76%. The unsecured revolving credit facility had $46 million drawn and roughly $602 million available. The company paid $0.48 per share in common distributions in the first half of 2026 and continues to maintain a $500 million at‑the‑market equity program and a $242.5 million share repurchase authorization. Growth initiatives include a $65.5 million contract to acquire an under‑development AC Hotel in Anchorage and a $143.7 million dual‑branded AC Hotel/Residence Inn development in Las Vegas.
Positive
- None.
Negative
- None.
Filing Explained
July debt amendments extended maturities and added $30 million borrowing; the $500 million ATM capacity remained unused.
This Form 10-Q reports the quarter ended
A Form 10-Q is an unaudited quarterly report covering interim financial statements and updates to risks and liquidity. On
On
The company reports no common-share sales under its at-the-market program during the quarter, leaving
Key Figures
Key Terms
Adjusted Hotel EBITDA financial
RevPAR financial
1031 Exchange financial
SOFR financial
cash flow hedges financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Apple Hospitality REIT (APLE) perform financially in Q2 2026?
What were APLE’s RevPAR, ADR and occupancy trends for Q2 2026?
What is Apple Hospitality REIT’s (APLE) debt and interest-rate profile?
What distributions has APLE paid to shareholders in 2026?
What is Apple Hospitality REIT’s hotel portfolio and development pipeline?
How did APLE’s operating expenses and margins change in Q2 2026?
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______ |
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Number of registrant’s common shares outstanding as of July 27, 2026:
Index
Apple Hospitality REIT, Inc.
Form 10-Q
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PART I. FINANCIAL INFORMATION |
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Item 1. |
Financial Statements |
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Consolidated Balance Sheets – June 30, 2026 and December 31, 2025 |
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Consolidated Statements of Operations and Comprehensive Income – three and six months ended June 30, 2026 and 2025 |
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Consolidated Statements of Shareholders’ Equity – three and six months ended June 30, 2026 and 2025 |
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Consolidated Statements of Cash Flows – six months ended June 30, 2026 and 2025 |
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Notes to Consolidated Financial Statements |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. |
Controls and Procedures |
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PART II. OTHER INFORMATION |
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Item 1. |
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Other Information |
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Exhibits |
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Signatures |
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This Form 10-Q includes references to certain trademarks or service marks. The AC Hotels by Marriott®, Aloft Hotels®, Courtyard by Marriott®, Fairfield by Marriott®, Marriott® Hotels, Residence Inn by Marriott®, SpringHill Suites by Marriott® and TownePlace Suites by Marriott® trademarks are the property of Marriott International, Inc. or one of its affiliates. The Embassy Suites by Hilton®, Hampton by Hilton®, Hilton Garden Inn®, Home2 Suites by Hilton®, Homewood Suites by Hilton® and Motto by Hilton® trademarks are the property of Hilton Worldwide Holdings Inc. or one of its affiliates. The Hyatt®, Hyatt House® and Hyatt Place® trademarks are the property of Hyatt Hotels Corporation or one of its affiliates. For convenience, the applicable trademark or service mark symbol has been omitted but will be deemed to be included wherever the above referenced terms are used.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Apple Hospitality REIT, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
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June 30, |
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December 31, |
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2026 |
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Assets |
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Investment in real estate, net of accumulated depreciation and amortization of |
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Restricted cash-furniture, fixtures and other escrows |
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Due from third-party managers, net |
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Other assets, net |
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Total Assets |
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Liabilities |
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Debt, net |
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Accounts payable and other liabilities |
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Total Liabilities |
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Shareholders’ Equity |
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Preferred stock, authorized |
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Common stock, no par value, authorized |
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Accumulated other comprehensive income |
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Accumulated distributions greater than net income |
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Total Liabilities and Shareholders’ Equity |
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See notes to consolidated financial statements.
3
Apple Hospitality REIT, Inc.
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
(in thousands, except per share data)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Revenues: |
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Room |
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$ |
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Food and beverage |
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Other |
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Total revenue |
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Expenses: |
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Hotel operating expense: |
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Operating |
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Hotel administrative |
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Sales and marketing |
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Utilities |
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Repair and maintenance |
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Franchise fees |
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Management fees |
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Total hotel operating expense |
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Property taxes, insurance and other |
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General and administrative |
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Impairment of depreciable real estate |
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Depreciation and amortization |
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Total expense |
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Gain on sale of real estate |
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Operating income |
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Interest and other expense, net |
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Income before income taxes |
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Income tax expense |
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Net income |
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$ |
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$ |
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Other comprehensive income (loss): |
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Interest rate derivatives |
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Comprehensive income |
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$ |
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$ |
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$ |
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Basic and diluted net income per common share |
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Weighted average common shares outstanding - basic and diluted |
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See notes to consolidated financial statements.
4
Apple Hospitality REIT, Inc.
Consolidated Statements of Shareholders' Equity
(Unaudited)
(in thousands, except per share data)
Three Months Ended June 30, 2026 and 2025 |
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Common Stock |
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Accumulated |
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Accumulated Distributions |
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Number |
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Amount |
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Comprehensive |
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Greater Than |
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Total |
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Balance at March 31, 2026 |
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Share-based compensation, net of common |
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Equity issuance costs |
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Interest rate derivatives |
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Net income |
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Distributions declared to shareholders ($ |
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Balance at June 30, 2026 |
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$ |
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$ |
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Balance at March 31, 2025 |
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$ |
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$ |
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Share-based compensation, net of common |
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Equity issuance costs |
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Common shares repurchased |
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- |
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( |
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Interest rate derivatives |
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- |
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- |
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Net income |
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Distributions declared to shareholders ($ |
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Balance at June 30, 2025 |
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$ |
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$ |
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$ |
( |
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$ |
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Six Months Ended June 30, 2026 and 2025 |
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Common Stock |
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Accumulated |
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Accumulated Distributions |
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Number |
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Amount |
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Comprehensive |
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Greater Than |
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Total |
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Balance at December 31, 2025 |
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$ |
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$ |
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$ |
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Share-based compensation, net of common |
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- |
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Issuance of common shares, net |
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- |
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Interest rate derivatives |
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Net income |
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Distributions declared to shareholders ($ |
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( |
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( |
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Balance at June 30, 2026 |
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$ |
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$ |
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$ |
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Balance at December 31, 2024 |
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$ |
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Share-based compensation, net of common |
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Equity issuance costs |
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- |
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( |
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Common shares repurchased |
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( |
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( |
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- |
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- |
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( |
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Interest rate derivatives |
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( |
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- |
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( |
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Net income |
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- |
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Distributions declared to shareholders ($ |
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Balance at June 30, 2025 |
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$ |
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$ |
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$ |
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$ |
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See notes to consolidated financial statements.
5
Apple Hospitality REIT, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
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Six Months Ended |
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June 30, |
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2026 |
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2025 |
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Cash flows from operating activities: |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
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Impairment of depreciable real estate |
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Gain on sale of real estate |
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( |
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Other non-cash expenses, net |
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||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Increase in due from third-party managers, net |
|
|
( |
) |
|
|
( |
) |
Increase in other assets, net |
|
|
( |
) |
|
|
( |
) |
Increase in accounts payable and other liabilities |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Acquisition of hotel properties, net |
|
|
|
|
|
( |
) |
|
Disbursements for potential acquisitions, net |
|
|
( |
) |
|
|
( |
) |
Capital improvements |
|
|
( |
) |
|
|
( |
) |
Net proceeds from sale of real estate |
|
|
|
|
|
|
||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Net proceeds (disbursements) related to issuance of common shares |
|
|
|
|
|
( |
) |
|
Repurchases of common shares |
|
|
|
|
|
( |
) |
|
Common shares surrendered to satisfy employee withholding requirements |
|
|
( |
) |
|
|
( |
) |
Distributions paid to common shareholders |
|
|
( |
) |
|
|
( |
) |
Proceeds from revolving credit facility |
|
|
|
|
|
|
||
Payments on revolving credit facility |
|
|
( |
) |
|
|
( |
) |
Payments of mortgage debt and other loans |
|
|
( |
) |
|
|
( |
) |
Principal payments on finance leases |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Net change in cash, cash equivalents and restricted cash |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash, beginning of period |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash, end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental cash flow information: |
|
|
|
|
|
|
||
Interest paid, net |
|
$ |
|
|
$ |
|
||
Income taxes paid |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental disclosure of noncash investing and financing activities: |
|
|
|
|
|
|
||
Accrued distribution to common shareholders |
|
$ |
|
|
$ |
|
||
Accrued capital expenditures |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Reconciliation of cash, cash equivalents and restricted cash: |
|
|
|
|
|
|
||
Cash and cash equivalents, beginning of period |
|
$ |
|
|
$ |
|
||
Restricted cash-furniture, fixtures and other escrows, beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash, beginning of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Cash and cash equivalents, end of period |
|
$ |
|
|
$ |
|
||
Restricted cash-furniture, fixtures and other escrows, end of period |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash, end of period |
|
$ |
|
|
$ |
|
||
See notes to consolidated financial statements.
6
Apple Hospitality REIT, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
1. Organization and Summary of Significant Accounting Policies
Organization
Apple Hospitality REIT, Inc., formed in November 2007 as a Virginia corporation, together with its wholly-owned subsidiaries (the “Company”), is a self-advised real estate investment trust (“REIT”) that invests in income-producing real estate, primarily in the lodging sector, in the United States (“U.S.”). The Company’s fiscal year end is December 31. The Company has no foreign operations or assets, and its operating structure includes only
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include all of the information required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These unaudited financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the twelve-month period ending December 31, 2026.
Use of Estimates
The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Net Income Per Common Share
Accounting Standards Recently Issued
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which focuses on improving the disclosures about a public business entity’s amounts and types of expenses. The update mandates that an entity disclose the amounts of specific natural expense categories—such as purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion—within relevant expense captions presented on the face of the income statement. Additionally, an entity must disclose qualitative descriptions of the composition of any remaining expense not separately disaggregated and disclose the total amount of selling expenses, and in annual reporting periods, its definition of selling expenses. The new standard is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments in this ASU may be applied prospectively by providing the revised disclosures for the period ending December 31, 2027 and continuing to provide the pre-ASU disclosures for the prior periods, or the amendments may be applied retrospectively by providing the revised disclosures for all periods presented. As of June 30, 2026, the Company has not adopted this ASU and is currently evaluating the impact of this ASU on the Company’s consolidated financial statements and related disclosures.
7
2. Investment in Real Estate
The Company’s investment in real estate consisted of the following (in thousands):
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Land |
|
$ |
|
|
$ |
|
||
Building and improvements |
|
|
|
|
|
|
||
Furniture, fixtures and equipment |
|
|
|
|
|
|
||
Finance ground lease assets |
|
|
|
|
|
|
||
Franchise fees |
|
|
|
|
|
|
||
Construction in Progress |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Less accumulated depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
Investment in real estate, net |
|
$ |
|
|
$ |
|
||
As of June 30, 2026, the Company owned
The Company leases all of its
Acquisitions
The Company did
City |
|
State |
|
Brand |
|
Manager |
|
Date |
|
Guest Rooms |
|
|
Gross |
|
||
Tampa |
|
FL |
|
Homewood Suites |
|
|
|
|
|
|
$ |
|
||||
Nashville |
|
TN |
|
Motto |
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
||
During 2025, the Company utilized available cash, proceeds from the sales of properties, which included proceeds from two separate like-kind exchanges, in accordance with Section 1031 of the Internal Revenue Code of 1986, as amended (“1031 Exchange”), and borrowings under its unsecured credit facilities to purchase the Tampa, Florida and Nashville, Tennessee hotels. The acquisitions of these properties were accounted for as acquisitions of asset groups, whereby costs incurred to effect the acquisitions (which were not significant) were capitalized as part of the cost of the assets acquired.
3. Dispositions
The Company sold
8
Company’s consolidated statement of operations for the year ended December 31, 2025. The
City |
|
State |
|
Brand |
|
Date Sold |
|
Guest Rooms |
|
|
Chattanooga |
|
TN |
|
Homewood Suites |
|
|
|
|
||
Indianapolis |
|
IN |
|
SpringHill Suites |
|
|
|
|
||
Houston |
|
TX |
|
Marriott |
|
|
|
|
||
Clovis |
|
CA |
|
Hampton |
|
|
|
|
||
Clovis |
|
CA |
|
Homewood Suites |
|
|
|
|
||
Cedar Rapids |
|
IA |
|
Hampton |
|
|
|
|
||
Cedar Rapids |
|
IA |
|
Homewood Suites |
|
|
|
|
||
Total |
|
|
|
|
|
|
|
|
|
|
Excluding gains on sale of real estate, the Company’s consolidated statements of operations include operating income (loss) of approximately $(
Hotel Sale Contracts and Impairment of Depreciable Real Estate
During the second quarter of 2026, the Company identified indicators of impairment at one property that was identified for potential sale. As a result, the Company recognized an impairment loss of approximately $
4. Debt
Summary
As of June 30, 2026 and December 31, 2025, the Company’s debt consisted of the following (in thousands):
|
|
June 30, |
|
|
December 31, |
|
||
Revolving credit facility |
|
$ |
|
|
$ |
|
||
Term loans and senior notes, net |
|
|
|
|
|
|
||
Mortgage debt, net |
|
|
|
|
|
|
||
Debt, net |
|
$ |
|
|
$ |
|
||
9
The aggregate amounts of principal payable under the Company’s total debt obligations as of June 30, 2026 (including the Revolving Credit Facility (if any) (as defined below), term loans, senior notes and mortgage debt), for the remainder of this fiscal year, each of the next four fiscal years and thereafter are as follows (in thousands):
2026 (July - December) |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
|
|
|
|
|
Unamortized debt issuance costs |
|
|
( |
) |
Total |
|
$ |
|
The Company uses interest rate swaps to manage its interest rate risk on a portion of its variable-rate debt. Throughout the terms of these interest rate swaps, the Company pays a fixed rate of interest and receives a floating rate of interest equal to the annual Secured Overnight Financing Rate (“SOFR”) for a one-month term (“one-month SOFR”). Prior to March 2026, nine out of the eleven swaps then outstanding also included
|
|
June 30, |
|
|
Percentage |
|
|
December 31, |
|
|
Percentage |
|
||||
Fixed-rate debt (1) |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Variable-rate debt |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
Weighted-average interest rate of debt |
|
|
% |
|
|
|
|
|
% |
|
|
|
||||
10
Credit Facilities
$1.2 Billion Credit Facility
Prior to the Company’s debt refinancing in July 2026 (as discussed below), the Company utilized an unsecured credit facility, entered into on July 25, 2022 (the “$
As of June 30, 2026 and December 31, 2025, the details of the Company’s unsecured credit facilities were as set forth in the table below. All dollar amounts are in thousands.
|
|
|
|
|
|
|
|
Outstanding Balance |
|
|||||
|
|
Interest Rate |
|
Maturity |
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||||
Revolving credit facility (1) |
|
(2) |
|
(3) |
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Term loans and senior notes |
|
|
|
|
|
|
|
|
|
|
|
|
||
$275 million term loan |
|
(2) |
|
(3) |
|
|
|
|
|
|
||||
$300 million term loan |
|
(2) |
|
(3) |
|
|
|
|
|
|
||||
$385 million term loan |
|
|
|
|
|
|
|
|
|
|
||||
$130 million term loan |
|
(2) |
|
(4) |
|
|
|
|
|
|
||||
$85 million term loan |
|
(2) |
|
|
|
|
|
|
|
|
||||
$50 million senior notes |
|
|
|
|
|
|
|
|
|
|
||||
$75 million senior notes |
|
|
|
|
|
|
|
|
|
|
||||
Term loans and senior notes at stated value |
|
|
|
|
|
|
|
|
|
|
||||
Unamortized debt issuance costs |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
Term loans and senior notes, net |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Credit facilities, net (1) |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||
Weighted-average interest rate (5) |
|
|
|
|
|
|
|
|
% |
|
|
% |
||
11
For the unsecured credit facilities noted in the table above, the Company may make voluntary prepayments, in whole or in part, at any time, subject to certain conditions. Interest on the Revolving Credit Facility and the unsecured term loans, subject to certain exceptions, is generally payable monthly, with interest rates that have historically been equal to the
Credit Facilities Covenants
The Company was in compliance with the applicable covenants at June 30, 2026.
2026 Debt Refinancing
On July 23, 2026, the Company amended and restated the credit agreement for its existing $
The credit agreement for the $
12
In addition, in July 2026, the Company amended all of the other unsecured credit facilities to align the financial covenants, other affirmative and negative covenants and events of default with the amended $
On July 28, 2026, the Company entered into an amendment to its existing $
On July 24, 2026, the Company amended and restated the credit agreement for its existing $
On July 24, 2026, the Company entered into an amendment to its existing $
Mortgage Debt
As of June 30, 2026, the Company had approximately $
Location |
|
Brand |
|
Interest Rate |
|
|
Loan Assumption or Origination Date |
|
Maturity Date |
|
Principal Assumed or Originated |
|
|
Outstanding balance as of |
|
|
Outstanding balance as of |
|
|||||
Boise, ID |
|
Hampton |
|
|
% |
|
|
(1) |
|
|
|
|
$ |
|
|
$ |
|
||||||
Burbank, CA |
|
Courtyard |
|
|
% |
|
|
(2) |
|
|
|
|
|
|
|
|
|
||||||
San Diego, CA |
|
Courtyard |
|
|
% |
|
|
(2) |
|
|
|
|
|
|
|
|
|
||||||
San Diego, CA |
|
Hampton |
|
|
% |
|
|
(2) |
|
|
|
|
|
|
|
|
|
||||||
Burbank, CA |
|
SpringHill Suites |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Santa Ana, CA |
|
Courtyard |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Richmond, VA |
|
Courtyard |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Richmond, VA |
|
Residence Inn |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Portland, ME |
|
Residence Inn |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
San Jose, CA |
|
Homewood Suites |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Unamortized debt issuance costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||
13
5. Fair Value of Financial Instruments
Except as described below, the carrying value of the Company’s financial instruments approximates fair value due to the short-term nature of these financial instruments.
Debt
The Company estimates the fair value of its debt by discounting the future cash flows of each instrument at estimated market rates consistent with the maturity of a debt obligation with similar credit terms and credit characteristics, which are Level 3 inputs under the fair value hierarchy. Market rates take into consideration general market conditions and maturity. As of June 30, 2026, both the carrying value and the estimated fair value of the Company’s debt were approximately $
Derivative Instruments
Currently, the Company uses interest rate swaps to manage its interest rate risk on variable-rate debt. Throughout the terms of these interest rate swaps, the Company pays a fixed rate of interest and receives a floating rate of interest equal to the
|
|
|
|
|
|
|
|
|
|
|
Fair Value Asset (Liability) |
|
||||||
Notional Amount at |
|
|
Origination |
|
Effective |
|
Maturity |
|
Swap Fixed |
|
June 30, |
|
|
December 31, |
|
|||
Active interest rate swaps designated as cash flow hedges at June 30, 2026: |
|
|
|
|
|
|
||||||||||||
$ |
|
|
|
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|||||
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Matured interest rate swaps at June 30, 2026: |
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
$ |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|||
The Company assesses, both at inception and on an ongoing basis, the effectiveness of its qualifying cash flow hedges. As of June 30, 2026, all
Amounts reported in accumulated other comprehensive income will be reclassified to interest and other expense, net, as interest payments are made or received on the Company’s variable-rate derivatives. The Company estimates that approximately $
14
of net unrealized gains included in accumulated other comprehensive income at June 30, 2026 will be reclassified as a decrease to interest and other expense, net within the next 12 months.
The following table presents the effect of derivative instruments in cash flow hedging relationships in the Company’s consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2026 and 2025 (in thousands):
|
|
Net Unrealized Gain (Loss) |
|
|
Net Unrealized Gain Reclassified |
|
||||||||||
|
|
Three Months Ended June 30, |
|
|
Three Months Ended June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Interest rate derivatives in cash flow |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Net Unrealized Gain (Loss) |
|
|
Net Unrealized Gain Reclassified |
|
||||||||||
|
|
Six Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Interest rate derivatives in cash flow |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
6. Related Parties
The Company has engaged in, and is expected to continue to engage in, transactions with related parties. These transactions cannot be construed as being at arm’s length, and the results of the Company’s operations may have been different if these transactions were conducted with non-related parties. There have been no changes to the contracts and relationships discussed in the 2025 Form 10-K. Below is a summary of the significant related party relationships in effect during the six months ended June 30, 2026 and 2025.
Glade M. Knight, Executive Chairman of the Company, owns Apple Realty Group, Inc. (“ARG”), which receives support services from the Company and reimburses the Company for the cost of these services as discussed below. Mr. Knight is also currently a partner and Chief Executive Officer of Energy 11 GP, LLC and Energy Resources 12 GP, LLC, which are the respective general partners of Energy 11, L.P. and Energy Resources 12, L.P., each of which receives support services from ARG.
The Company provides support services, including the use of the Company’s employees and corporate office, to ARG and is reimbursed by ARG for the cost of these services. Under this cost sharing structure, amounts reimbursed to the Company include both compensation for personnel and office related costs (including office rent, utilities, office supplies, etc.) used by ARG. The amounts reimbursed to the Company are based on the actual costs of the services and a good faith estimate of the proportionate amount of time incurred by the Company’s employees on behalf of ARG. Total reimbursed costs allocated by the Company to ARG for the six months ended June 30, 2026 and 2025 totaled approximately $
As part of the cost sharing arrangement, certain day-to-day transactions may result in amounts due to or from the Company and ARG.
The Company, through its wholly-owned subsidiary, Apple Air Holding, LLC, owns an aircraft used primarily for acquisition, asset management, renovation, investor, corporate and public relations and other business purposes. The aircraft may from time to time be leased to affiliates of the Company based on third-party rates. Lease activity was not significant during the reporting periods.
From time to time, the Company utilizes aircraft, owned by an entity that is owned by the Company’s Executive Chairman, for acquisition, asset management, renovation, investor, corporate and public relations and other business purposes, and reimburses this entity at third-party rates. Total costs incurred for the use of the aircraft during the six months ended June 30, 2026 and 2025 were less
15
than $
7. Shareholders’ Equity
Distributions
For the three and six months ended June 30, 2026, the Company paid distributions of $
Issuance of Shares
On February 23, 2024, the Company entered into an equity distribution agreement pursuant to which the Company may sell, from time to time, up to an aggregate of $
Share Repurchases
In May 2026, the Company’s Board of Directors approved a
8. Compensation Plans
The Company annually establishes an incentive compensation plan for its executive management team, which is approved by the Compensation Committee. Under the incentive compensation plan for 2026 (the “2026 Incentive Plan”), participants are eligible to receive incentive compensation based on the achievement of certain 2026 performance measures, with
16
payments under the 2026 Incentive Plan, which is included in accounts payable and other liabilities in the Company’s consolidated balance sheet as of June 30, 2026. Compensation expense recognized by the Company related to executive incentive compensation under the 2026 Incentive Plan is included in general and administrative expenses in the Company’s consolidated statement of operations and totaled approximately $
Under the incentive compensation plan for 2025 (the “2025 Incentive Plan”), the Company recorded approximately $
Share-Based Compensation Awards
The following table sets forth information pertaining to the executive share-based compensation issued under the 2025 Incentive Plan and the incentive plan for 2024 (the “2024 Incentive Plan”).
|
|
2025 Incentive |
|
|
2024 Incentive |
|
Period common shares issued |
|
First Quarter 2026 |
|
|
First Quarter 2025 |
|
|
|
|
|
|
|
|
Common shares earned under each incentive plan |
|
|
|
|
||
Common shares surrendered on issuance date to |
|
|
|
|
||
Common shares earned and issued under each |
|
|
|
|
||
Average of the high and low stock price on issuance date |
|
$ |
|
|
$ |
|
Total share-based compensation earned, including the |
|
$ |
(1) |
|
$ |
(2) |
Of the total common shares earned and issued, total |
|
|
|
|
||
Of the total common shares earned and issued, total |
|
|
|
|
||
|
|
|
|
|
|
|
Restricted common shares vesting date |
|
(3) |
|
|
||
Common shares surrendered on vesting date to satisfy |
|
(3) |
|
|
17
9. Reportable Segments
The Company owns hotel properties throughout the U.S. that generate guest room rental, food and beverage, and other property-related income. There are no foreign operations from which the Company derives revenues and no assets are held in a foreign country. There are no material concentrations of 10% or more of total revenues allocated to a single customer for the reporting periods presented. The Chief Operating Decision Maker (“CODM”) separately evaluates the performance, allocates capital resources and manages the overall operating and investing strategy of each of its hotel properties individually; therefore, the Company considers each hotel to be an operating segment. However, because each hotel is not individually significant, serves a similar class and mix of business and leisure customers, has similar economic characteristics and risks, facilities, and services, utilizes similar methods to distribute its products and services through third-party management companies, and is subject to similar regulatory environments, the properties have been combined into a single operating segment for reporting purposes.
Adjusted Hotel EBITDA, presented herein, is calculated as EBITDA from hotel operations with further exclusions as noted below. EBITDA is a commonly used measure of performance in many industries and is defined as net income (loss) excluding interest, income taxes, depreciation and amortization. The Company believes EBITDA is useful to investors because it helps the Company and its investors evaluate the ongoing operating performance of the Company by removing the impact of its capital structure (primarily interest expense) and its asset base (primarily depreciation and amortization). In addition, certain covenants included in the agreements governing the Company’s indebtedness use EBITDA, as defined in the specific credit agreement, as a measure of financial compliance. The Company further excludes the following items that are not reflective of its ongoing operating performance or not incurred in the normal course of business, and thus not utilized in the CODM’s analysis to allocate resources and assess operating performance of the Company’s business:
The Company believes Adjusted Hotel EBITDA provides useful supplemental information to investors regarding operating performance, and it is used by management to measure the performance of the Company’s hotels and the effectiveness of the operators of the hotels.
18
The following table reconciles the Company’s single reportable segment Adjusted Hotel EBITDA to GAAP net income for the three and six months ended June 30, 2026 and 2025:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Significant hotel operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hotel administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Utilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Repair and maintenance |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Franchise fees |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Management fees |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total significant hotel operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property taxes, insurance & other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other segment items (1) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted Hotel EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Impairment of depreciable real estate |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Gain on sale of real estate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other segment items (1) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest expense, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income tax expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Disclosure of the reportable segment’s revenue and profit or loss is included in the Company’s consolidated statements of operations and comprehensive income; its assets are presented in the consolidated balance sheets; and its significant noncash items are provided in its consolidated statements of cash flows, all within this Quarterly Report on Form 10-Q. For the six months ended June 30, 2026 and 2025, the Company invested approximately $
19
10. Contract Commitments
Purchase Contract Commitments
As of June 30, 2026, the Company had
Development Project
During the third quarter of 2025, the Company entered into a fixed-price contract with a third party to develop a dual-branded property, consisting of an AC Hotel and a Residence Inn, on Company-owned land in Las Vegas, Nevada, adjacent to its existing SpringHill Suites. The Company expects to spend a total of approximately $
11. Subsequent Events
On
On
In July 2026, the Company entered into separate agreements amending its Revolving Credit Facility and each of its term loans as follows: an amendment and restatement of its $
20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are typically identified by use of statements that include phrases such as “may,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “target,” “goal,” “plan,” “should,” “will,” “predict,” “potential,” “outlook,” “strategy,” and similar expressions that convey the uncertainty of future events or outcomes. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of Apple Hospitality REIT, Inc. and its wholly-owned subsidiaries (the “Company”) to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.
Such factors include, but are not limited to, the ability of the Company to effectively acquire and dispose of properties and redeploy proceeds; the anticipated timing and frequency of shareholder distributions; the ability of the Company to fund capital obligations; the ability of the Company to successfully integrate pending transactions and implement its operating strategy; changes in general political, economic and competitive conditions and specific market conditions (including the potential effects of tariffs, inflation or a recessionary environment); reduced business and leisure travel due to geopolitical uncertainty, including terrorism and acts of war; travel-related health concerns, including widespread outbreaks of infectious or contagious diseases in the U.S.; inclement weather conditions, including natural disasters such as hurricanes, earthquakes and wildfires; government shutdowns, airline strikes or equipment failures, or other disruptions; adverse changes in the real estate and real estate capital markets; financing risks; changes in interest rates; litigation risks; regulatory proceedings or inquiries; and changes in laws or regulations or interpretations of current laws and regulations that impact the Company’s business, assets or classification as a real estate investment trust (“REIT”). Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the results or conditions described in such statements or the objectives and plans of the Company will be achieved. In addition, the Company’s qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, as amended (the “Code”). Readers should carefully review the risk factors described in the Company’s filings with the Securities and Exchange Commission (“SEC”), including but not limited to those discussed in the section titled “Risk Factors” in the 2025 Form 10-K. Any forward-looking statement that the Company makes speaks only as of the date of this Quarterly Report. The Company undertakes no obligation to publicly update or revise any forward-looking statements or cautionary factors, as a result of new information, future events, or otherwise, except as required by law.
The following discussion and analysis should be read in conjunction with the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, as well as the information contained in the 2025 Form 10-K.
Overview
The Company is a Virginia corporation that has elected to be treated as a REIT for U.S. federal income tax purposes. The Company is self-advised and invests in income-producing real estate, primarily in the lodging sector, in the U.S. As of June 30, 2026, the Company owned 216 hotels with an aggregate of 29,459 guest rooms located in urban, high-end suburban and developing markets throughout 37 states and the District of Columbia. Substantially all of the Company’s hotels operate under Marriott or Hilton brands. The hotels are operated and managed under separate management agreements with 15 hotel management companies, none of which are affiliated with the Company. The Company’s common shares are listed on the NYSE under the ticker symbol “APLE.”
Recent Hotel Portfolio Activities
The Company continually monitors market conditions and attempts to maximize shareholder value by investing in properties that it believes provide superior value over the long term. Consistent with this strategy and the Company’s focus on investing in rooms-focused hotels, as of June 30, 2026, the Company had one outstanding contract, which was entered into during the third quarter of 2025, for the potential purchase of a hotel in Anchorage, Alaska for an expected fixed purchase price of approximately $65.5 million. The hotel is under development as a 160-guest-room AC Hotel and is currently planned to be completed and opened for business in the fourth quarter of 2027. As of June 30, 2026, a $2.0 million contract deposit (refundable if the seller does not meet its obligations under the contract) had been paid. If the closing occurs, the Company plans to utilize its available cash or borrowings, including borrowings under its unsecured credit facilities available at closing, to purchase the hotel under contract. Although the Company is working towards acquiring this hotel, there are a number of conditions to closing that have not yet been satisfied, and there can be no assurance that closing on this hotel will occur under the outstanding purchase contract. If the seller meets all of the
21
conditions to closing, the Company is obligated to specifically perform under the purchase contract and acquire this hotel. As this hotel is under development, at this time, the seller has not met all of the conditions to closing.
As of June 30, 2026, the Company had one outstanding development project. During the third quarter of 2025, the Company entered into a fixed-price contract with a third party to develop a dual-branded property, consisting of an AC Hotel and a Residence Inn, on Company-owned land in Las Vegas, Nevada, adjacent to its existing SpringHill Suites. The Company expects to spend a total of approximately $143.7 million to develop the AC Hotel and Residence Inn, which are currently planned to be completed and opened for business in the second quarter of 2028. Upon completion, the AC Hotel and Residence Inn are expected to contain approximately 237 and 160 guest rooms, respectively. As of June 30, 2026, the Company has capitalized $9.9 million related to the construction of the AC Hotel and Residence Inn.
For its existing portfolio, the Company monitors each property’s profitability, market conditions and capital requirements and attempts to maximize shareholder value by disposing of properties when it believes that superior value can be provided from the sale of the property. As a result, during the six months ended June 30, 2026, the Company sold one hotel to an unrelated party for a gross sales price of approximately $8.7 million, resulting in a gain on the sale of approximately $0.2 million, net of transaction costs. The Company used the net proceeds from the sale to repay amounts outstanding under the Revolving Credit Facility.
See Note 3 titled “Dispositions” and Note 10 titled “Contract Commitments” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for additional information concerning these transactions.
As of June 30, 2026, the Company’s New York Property was included in the Company’s hotel and guest room counts. On April 4, 2025, the Company recovered possession of this property and reinstated operations of the hotel's 209 guest rooms through a third-party manager engaged by the Company. Therefore, starting in April 2025, the New York Property was included in the Company’s hotel and guest room counts. From May 2023 through March 2025, the Company classified the property as a “non-hotel property” and excluded it from hotel and guest room counts, as it was leased to a third-party hotel operator.
Hotel Operations
As of June 30, 2026, the Company owned 216 hotels with a total of 29,459 guest rooms as compared to 221 hotels with a total of 29,893 guest rooms as of June 30, 2025. Results of operations are included only for the period of ownership for hotels acquired or disposed of during the current reporting period and the prior year. During the six months ended June 30, 2026, the Company did not acquire any properties and sold one property on April 15, 2026. During the six months ended June 30, 2025, the Company acquired one existing hotel on June 10, 2025, and sold two properties, including one property sold on February 12, 2025 and one property sold on March 19, 2025. On April 4, 2025, the Company recovered possession from a third-party hotel operator and reinstated operations of its 209-guest-room New York Property through a third-party manager engaged by the Company.
Management Company Transitions
The Company continually evaluates the performance of each property and may transfer management responsibilities to a different third-party manager to improve operational efficiency and maximize asset value. In markets or regions where the Company owns multiple properties, it may consolidate hotels under specific third-party managers to leverage regional expertise, gain operating efficiencies, and enhance overall portfolio performance. In January 2026, the Company transitioned the remaining nine hotels managed by affiliates of Marriott, as of December 31, 2025, to separate management companies that are not affiliated with Marriott, Hilton or Hyatt. In 2025, the Company transitioned the management responsibilities for nine other hotels to different third-party management companies with which it already had existing management agreements for other properties, a portion of which involved transitions from hotels previously managed by affiliates of Marriott to management companies unaffiliated with Marriott, Hilton, or Hyatt.
Operating Results
In evaluating financial condition and operating performance, the most important indicators on which the Company focuses are revenue measurements, such as average occupancy, average daily rate (“ADR”) and revenue per available room (“RevPAR”), and expenses, such as hotel operating expenses, general and administrative expenses and other expenses described below. RevPAR and operating results may be impacted by regional and local economies and local regulations as well as changes in lodging demand due to macroeconomic factors including inflationary or deflationary pressures, changes in energy costs, economic expansion or a recessionary environment.
22
The following is a summary of the results from operations of the Company’s hotels for their respective periods of ownership by the Company:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||||||||||||
(in thousands, |
|
2026 |
|
Percent |
|
|
2025 |
|
Percent |
|
Percent |
|
|
2026 |
|
Percent |
|
|
2025 |
|
Percent |
|
Percent |
|
||||||||||
Total revenue |
|
$ |
402,553 |
|
|
100.0 |
% |
|
$ |
384,370 |
|
|
100.0 |
% |
|
4.7 |
% |
|
$ |
740,294 |
|
|
100.0 |
% |
|
$ |
712,072 |
|
|
100.0 |
% |
|
4.0 |
% |
Hotel operating |
|
|
227,582 |
|
|
56.5 |
% |
|
|
220,564 |
|
|
57.4 |
% |
|
3.2 |
% |
|
|
434,519 |
|
|
58.7 |
% |
|
|
420,434 |
|
|
59.0 |
% |
|
3.4 |
% |
Property taxes, |
|
|
21,799 |
|
|
5.4 |
% |
|
|
22,869 |
|
|
5.9 |
% |
|
-4.7 |
% |
|
|
44,257 |
|
|
6.0 |
% |
|
|
46,230 |
|
|
6.5 |
% |
|
-4.3 |
% |
General and |
|
|
13,159 |
|
|
3.3 |
% |
|
|
8,064 |
|
|
2.1 |
% |
|
63.2 |
% |
|
|
23,955 |
|
|
3.2 |
% |
|
|
17,292 |
|
|
2.4 |
% |
|
38.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment of |
|
|
2,319 |
|
|
|
|
|
- |
|
|
|
n/a |
|
|
|
2,319 |
|
|
|
|
|
- |
|
|
|
n/a |
|
||||||
Depreciation and |
|
|
49,652 |
|
|
|
|
|
48,022 |
|
|
|
|
3.4 |
% |
|
|
99,189 |
|
|
|
|
|
95,963 |
|
|
|
|
3.4 |
% |
||||
Gain on sale of real |
|
|
112 |
|
|
|
|
|
- |
|
|
|
n/a |
|
|
|
112 |
|
|
|
|
|
3,557 |
|
|
|
|
-96.9 |
% |
|||||
Interest and other |
|
|
20,817 |
|
|
|
|
|
20,963 |
|
|
|
|
-0.7 |
% |
|
|
40,889 |
|
|
|
|
|
40,360 |
|
|
|
|
1.3 |
% |
||||
Income tax expense |
|
|
260 |
|
|
|
|
|
240 |
|
|
|
|
8.3 |
% |
|
|
502 |
|
|
|
|
|
481 |
|
|
|
|
4.4 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income |
|
|
67,077 |
|
|
|
|
|
63,648 |
|
|
|
|
5.4 |
% |
|
|
94,776 |
|
|
|
|
|
94,869 |
|
|
|
|
-0.1 |
% |
||||
Adjusted Hotel |
|
|
153,302 |
|
|
|
|
|
141,070 |
|
|
|
|
8.7 |
% |
|
|
261,781 |
|
|
|
|
|
246,335 |
|
|
|
|
6.3 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of hotels |
|
|
216 |
|
|
|
|
|
221 |
|
|
|
|
-2.3 |
% |
|
|
216 |
|
|
|
|
|
221 |
|
|
|
|
-2.3 |
% |
||||
ADR |
|
$ |
169.87 |
|
|
|
|
$ |
163.56 |
|
|
|
|
3.9 |
% |
|
$ |
163.86 |
|
|
|
|
$ |
160.11 |
|
|
|
|
2.3 |
% |
||||
Occupancy |
|
|
80.1 |
% |
|
|
|
|
78.6 |
% |
|
|
|
1.9 |
% |
|
|
76.5 |
% |
|
|
|
|
74.9 |
% |
|
|
|
2.1 |
% |
||||
RevPAR |
|
$ |
136.13 |
|
|
|
|
$ |
128.59 |
|
|
|
|
5.9 |
% |
|
$ |
125.32 |
|
|
|
|
$ |
119.88 |
|
|
|
|
4.5 |
% |
||||
Comparable Hotels Operating Results
The following table reflects certain operating statistics for the Company’s 216 hotels owned as of June 30, 2026 (“Comparable Hotels”). The Company defines metrics from Comparable Hotels as results generated by the 216 hotels owned as of the end of the reporting period. For the hotels acquired during the reporting periods shown, the Company has included, as applicable, results of those hotels for periods prior to the Company’s ownership using information provided by the properties’ prior owners at the time of acquisition and not adjusted by the Company. For dispositions, results have been excluded for the Company’s period of ownership.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
Percent Change |
|
|
2026 |
|
|
2025 |
|
|
Percent Change |
|
||||||
ADR |
|
$ |
169.90 |
|
|
$ |
164.19 |
|
|
|
3.5 |
% |
|
$ |
163.96 |
|
|
$ |
160.93 |
|
|
|
1.9 |
% |
Occupancy |
|
|
80.1 |
% |
|
|
78.8 |
% |
|
|
1.6 |
% |
|
|
76.5 |
% |
|
|
75.1 |
% |
|
|
1.9 |
% |
RevPAR |
|
$ |
136.17 |
|
|
$ |
129.30 |
|
|
|
5.3 |
% |
|
$ |
125.45 |
|
|
$ |
120.80 |
|
|
|
3.8 |
% |
23
Same Store Operating Results
The following table reflects certain operating statistics for the 213 hotels owned by the Company as of January 1, 2025 and during the entirety of the reporting periods being compared, excluding the New York Property (“Same Store Hotels”).
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
Percent Change |
|
|
2026 |
|
|
2025 |
|
|
Percent Change |
|
||||||
ADR |
|
$ |
168.87 |
|
|
$ |
164.09 |
|
|
|
2.9 |
% |
|
$ |
163.36 |
|
|
$ |
160.77 |
|
|
|
1.6 |
% |
Occupancy |
|
|
80.2 |
% |
|
|
78.7 |
% |
|
|
1.9 |
% |
|
|
76.7 |
% |
|
|
75.0 |
% |
|
|
2.3 |
% |
RevPAR |
|
$ |
135.50 |
|
|
$ |
129.19 |
|
|
|
4.9 |
% |
|
$ |
125.33 |
|
|
$ |
120.60 |
|
|
|
3.9 |
% |
As discussed above, hotel performance is impacted by many factors, including the economic conditions in the U.S. as well as each individual locality. The Company’s Comparable Hotels and Same Store Hotels revenue and operating results increased for the three and six months ended June 30, 2026, compared to the same periods in 2025, reflecting broad-based improvement in both business and leisure travel demand beyond the impact of prior-year headwinds, including reduced government travel following the current administration's efforts to curtail government spending and broader U.S. macroeconomic uncertainty in 2025. Additionally, the 2026 FIFA World Cup events hosted in the U.S. drove incremental short-term demand and average daily rates across a number of markets during the month of June. The Company expects RevPAR to continue to show improvement as compared to 2025 for the remainder of the year. Based on performance through the second quarter, the Company currently expects full-year 2026 RevPAR to exceed 2025 levels, assuming no material changes in the macroeconomic environment.
Revenues
The Company’s principal source of revenue is hotel revenue consisting of room, food and beverage, and other related revenue. For the three months ended June 30, 2026 and 2025, the Company had total revenue of $402.6 million and $384.4 million, respectively. For the six months ended June 30, 2026 and 2025, the Company had total revenue of $740.3 million and $712.1 million, respectively. For the three months ended June 30, 2026 and 2025, respectively, Comparable Hotels achieved combined average occupancy of 80.1% and 78.8%, ADR of $169.90 and $164.19 and RevPAR of $136.17 and $129.30. For the six months ended June 30, 2026 and 2025, respectively, Comparable Hotels achieved combined average occupancy of 76.5% and 75.1%, ADR of $163.96 and $160.93 and RevPAR of $125.45 and $120.80. ADR is calculated as room revenue divided by the number of rooms sold, and RevPAR is calculated as occupancy multiplied by ADR.
Compared to the same periods in 2025, during the three and six months ended June 30, 2026, respectively, the Company’s Comparable Hotels ADR increased by 3.5% and 1.9%, while occupancy increased by 1.6% and 1.9%, resulting in an increase in RevPAR of 5.3% and 3.8%. Revenue increased for the three and six months ended June 30, 2026 compared to the same periods in 2025, reflecting improved demand beyond the impact of prior-year headwinds, including reduced government travel following the current administration’s efforts to curtail government spending and broader U.S. macroeconomic uncertainty in 2025. Revenue growth for the second quarter of 2026 was further driven by increased demand in markets that hosted FIFA World Cup events, as well as broad-based RevPAR improvement across the portfolio, including markets outside those hosting FIFA World Cup events, reflecting growth in both business and leisure travel demand. Markets with significantly above-average growth in the second quarter of 2026, compared to the same period in 2025, for the Company included Atlanta, Anchorage, Chicago, Fort Worth, Houston, Kansas City, Philadelphia, South Bend and St. Louis. For the remainder of 2026, the Company expects RevPAR to exceed 2025 levels for its Comparable Hotels, which is consistent with broader expectations for applicable industry chain scale averages assuming the current macroeconomic environment continues. Future revenues could be negatively impacted by, among other things, historical seasonal trends, deterioration of consumer sentiment, a recessionary macroeconomic environment, inflationary pressures, reduced government travel or continued geopolitical uncertainty.
Hotel Operating Expense
Hotel operating expense consists of direct room operating expense, hotel administrative expense, sales and marketing expense, utilities expense, repair and maintenance expense, franchise fees and management fees. Hotel operating expense for the three months ended June 30, 2026 and 2025 totaled $227.6 million and $220.6 million, respectively, or 56.5% and 57.4% of total revenue for the respective periods. For the six months ended June 30, 2026 and 2025, hotel operating expense totaled $434.5 million and $420.4 million, respectively, or 58.7% and 59.0% of total revenue for the respective periods. The increases in hotel operating expense for the three and six months ended June 30, 2026, as compared to the same periods in 2025, were primarily driven by higher occupancy levels, which resulted in increased variable operating expenses, including labor and administrative costs. Utilities expense increased due to a combination of increased occupancy and increases in overall utility rates. Additionally, ongoing inflationary pressures across the broader economy contributed to the increase in operational costs for the period. While total payroll costs reflect a competitive labor market, wage growth has moderated. For the remainder of 2026, the Company anticipates a similar operating expense
24
environment. The Company continues to monitor and support its management companies’ efforts to realize operational efficiencies and mitigate the impact of various cost pressures while responding effectively to changes in guest preferences and the overall operating environment to maximize operational efficiency.
Property Taxes, Insurance and Other Expense
Property taxes, insurance and other expense for the three months ended June 30, 2026 and 2025 was $21.8 million and $22.9 million, respectively, or 5.4% and 5.9% of total revenue for the respective periods. For the six months ended June 30, 2026 and 2025, property taxes, insurance and other expense totaled $44.3 million and $46.2 million, respectively, or 6.0% and 6.5% of total revenue for the respective periods. The decreases in property taxes, insurance and other expense for the three and six months ended June 30, 2026, as compared to the same periods in 2025, were primarily due to decreases in property insurance premiums and successful appeals of real estate tax assessments from prior periods in certain jurisdictions. The Company will continue to proactively pursue tax assessment appeals in certain jurisdictions in an attempt to minimize tax increases, as warranted.
General and Administrative Expense
General and administrative expense for the three months ended June 30, 2026 and 2025 was $13.2 million and $8.1 million, respectively, or 3.3% and 2.1% of total revenue for the respective periods. For the six months ended June 30, 2026 and 2025, general and administrative expense was $24.0 million and $17.3 million, respectively, or 3.2% and 2.4% of total revenue for the respective periods. The principal components of general and administrative expense are corporate payroll and related benefit costs, executive incentive compensation, legal fees, accounting fees and reporting expenses. The increases in general and administrative expense for the three and six months ended June 30, 2026, as compared to the same periods in 2025, were primarily due to increased accruals based on anticipated operating performance under the Company’s executive incentive compensation plan.
Impairment of Depreciable Real Estate
Impairment of depreciable real estate expense was approximately $2.3 million for the three and six months ended June 30, 2026 due to one property identified by the Company in the second quarter of 2026 for potential sale. See Note 3 titled “Dispositions” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for additional information concerning this impairment loss.
Depreciation and Amortization Expense
Depreciation and amortization expense for the three months ended June 30, 2026 and 2025 was $49.7 million and $48.0 million, respectively. For the six months ended June 30, 2026 and 2025, depreciation and amortization expense was $99.2 million and $96.0 million, respectively. Depreciation and amortization expense primarily represents expense of the Company’s hotel buildings and related improvements, and associated personal property (furniture, fixtures, and equipment) for the respective periods of ownership. The increases of approximately $1.6 million and $3.2 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, were primarily due to the acquisitions of two hotels in the second and fourth quarters of 2025, which had higher purchase prices compared to the carrying values of the eight hotels disposed of in 2025 and 2026, as well as renovations completed throughout 2025 and the first half of 2026.
Interest and Other Expense, net
Interest and other expense, net, for the three months ended June 30, 2026 and 2025 was $20.8 million and $21.0 million, respectively. For the six months ended June 30, 2026 and 2025, interest and other expense, net was $40.9 million and $40.4 million, respectively, and was net of approximately $0.9 million and $0.8 million, respectively, of interest capitalized associated with renovation projects.
Interest expense related to the Company’s debt instruments for the three and six months ended June 30, 2026 remained relatively unchanged compared to the same periods of 2025 as a result of higher average borrowings associated with variable-rate debt, offset by lower average interest rates on the Company's fixed and variable-rate debt and lower average borrowings associated with fixed-rate debt. The Company anticipates interest expense for the remainder of 2026 will be relatively similar to the interest expense for the same period of 2025 as the benefit of expected lower average interest rates is offset by a reduced benefit from interest rate swaps. The proportion of variable-rate debt that is fixed by interest rate swaps was lower over the six months ended June 30, 2026 compared to the same period of 2025, as the Company had one interest rate swap in effect on $75.0 million of variable-rate debt mature during the first half of 2026 and three interest rate swaps in effect on $150.0 million of variable-rate debt mature during 2025. However, this was partially offset as the Company entered into two new interest rate swaps in effect on $100.0 million of variable-rate debt during the third quarter of 2025, but at higher fixed rates than the swap agreements that expired.
25
Non-GAAP Financial Measures
The Company considers the following non-GAAP financial measures useful to investors as key supplemental measures of its operating performance: Funds from Operations (“FFO”), Modified Funds from Operations (“MFFO”), Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”), Earnings Before Interest, Income Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”), Adjusted EBITDAre (“Adjusted EBITDAre”) and Adjusted Hotel EBITDA. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss), cash flow from operations or any other operating GAAP measure. FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA are not necessarily indicative of funds available to fund the Company’s cash needs, including its ability to make cash distributions. Although FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA, as calculated by the Company, may not be comparable to FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA, as reported by other companies that do not define such terms exactly as the Company defines such terms, the Company believes these supplemental measures are useful to investors when comparing the Company’s results between periods and with other REITs.
FFO and MFFO
The Company calculates and presents FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”), which defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains and losses from the sale of certain real estate assets (including gains and losses from change in control), extraordinary items as defined by GAAP, and the cumulative effect of changes in accounting principles, plus real estate related depreciation, amortization and impairments, and adjustments for unconsolidated affiliates. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most real estate industry investors consider FFO to be helpful in evaluating a real estate company’s operations. The Company further believes that by excluding the effects of these items, FFO is useful to investors in comparing its operating performance between periods and between REITs that report FFO using the Nareit definition. FFO as presented by the Company is applicable only to its common shareholders, but does not represent an amount that accrues directly to common shareholders.
The Company calculates MFFO by further adjusting FFO for the exclusion of amortization of finance ground lease assets, amortization of favorable and unfavorable operating leases, net, non-cash straight-line operating ground lease expense and share-based compensation expense, as these expenses do not reflect the underlying performance of the related hotels. The Company presents MFFO when evaluating its performance because it believes that it provides further useful supplemental information to investors regarding its ongoing operating performance. In addition, MFFO is a component of a key compensation measure of operational performance within the 2026 Incentive Plan.
The following table reconciles the Company’s GAAP net income to FFO and MFFO for the three and six months ended June 30, 2026 and 2025 (in thousands):
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net income |
|
$ |
67,077 |
|
|
$ |
63,648 |
|
|
$ |
94,776 |
|
|
$ |
94,869 |
|
Depreciation of real estate owned |
|
|
48,831 |
|
|
|
47,262 |
|
|
|
97,609 |
|
|
|
94,443 |
|
Gain on sale of real estate |
|
|
(112 |
) |
|
|
- |
|
|
|
(112 |
) |
|
|
(3,557 |
) |
Impairment of depreciable real estate |
|
|
2,319 |
|
|
|
- |
|
|
|
2,319 |
|
|
|
- |
|
Funds from operations |
|
|
118,115 |
|
|
|
110,910 |
|
|
|
194,592 |
|
|
|
185,755 |
|
Amortization of finance ground lease assets |
|
|
760 |
|
|
|
760 |
|
|
|
1,519 |
|
|
|
1,519 |
|
Amortization of favorable and unfavorable operating |
|
|
102 |
|
|
|
102 |
|
|
|
204 |
|
|
|
204 |
|
Non-cash straight-line operating ground lease expense |
|
|
28 |
|
|
|
31 |
|
|
|
59 |
|
|
|
64 |
|
Share-based compensation expense (1) |
|
|
4,365 |
|
|
|
1,404 |
|
|
|
7,279 |
|
|
|
4,472 |
|
Modified funds from operations |
|
$ |
123,370 |
|
|
$ |
113,207 |
|
|
$ |
203,653 |
|
|
$ |
192,014 |
|
EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA
EBITDA is a commonly used measure of performance in many industries and is defined as net income (loss) excluding interest, income taxes, depreciation and amortization. The Company believes EBITDA is useful to investors because it helps the Company and
26
its investors evaluate the ongoing operating performance of the Company by removing the impact of its capital structure (primarily interest expense) and its asset base (primarily depreciation and amortization). In addition, certain covenants included in the agreements governing the Company’s indebtedness use EBITDA, as defined in the specific credit agreement, as a measure of financial compliance.
In addition to EBITDA, the Company also calculates and presents EBITDAre in accordance with standards established by Nareit, which defines EBITDAre as EBITDA, excluding gains and losses from the sale of certain real estate assets (including gains and losses from change in control), plus real estate related impairments, and adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates. The Company presents EBITDAre because it believes that it provides further useful information to investors in comparing its operating performance between periods and between REITs that report EBITDAre using the Nareit definition.
The Company also considers the exclusion of non-cash straight-line operating ground lease expense and share-based compensation expense from EBITDAre useful, as these expenses do not reflect the underlying performance of the related hotels (Adjusted EBITDAre).
The Company further excludes corporate expense, defined as actual corporate-level general and administrative expense, excluding share-based compensation expense, for the Company as well as Adjusted EBITDAre from the non-hotel property (the New York Property) from Adjusted EBITDAre (Adjusted Hotel EBITDA) to isolate property-level operational performance over which the Company’s hotel operators have direct control. The Company believes Adjusted Hotel EBITDA provides useful supplemental information to investors regarding operating performance and it is used by management to measure the performance of the Company’s hotels and the effectiveness of the operators of the hotels. In addition, Adjusted EBITDAre and Adjusted Hotel EBITDA are both components of key compensation measures of operational performance within the 2026 Incentive Plan.
The following table reconciles the Company’s GAAP net income to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA for the three and six months ended June 30, 2026 and 2025 (in thousands):
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net income |
|
$ |
67,077 |
|
|
$ |
63,648 |
|
|
$ |
94,776 |
|
|
$ |
94,869 |
|
Depreciation and amortization |
|
|
49,652 |
|
|
|
48,022 |
|
|
|
99,189 |
|
|
|
95,963 |
|
Amortization of favorable and unfavorable operating |
|
|
102 |
|
|
|
102 |
|
|
|
204 |
|
|
|
204 |
|
Interest and other expense, net |
|
|
20,817 |
|
|
|
20,963 |
|
|
|
40,889 |
|
|
|
40,360 |
|
Income tax expense |
|
|
260 |
|
|
|
240 |
|
|
|
502 |
|
|
|
481 |
|
EBITDA |
|
|
137,908 |
|
|
|
132,975 |
|
|
|
235,560 |
|
|
|
231,877 |
|
Gain on sale of real estate |
|
|
(112 |
) |
|
|
- |
|
|
|
(112 |
) |
|
|
(3,557 |
) |
Impairment of depreciable real estate |
|
|
2,319 |
|
|
|
- |
|
|
|
2,319 |
|
|
|
- |
|
EBITDAre |
|
|
140,115 |
|
|
|
132,975 |
|
|
|
237,767 |
|
|
|
228,320 |
|
Non-cash straight-line operating ground lease expense |
|
|
28 |
|
|
|
31 |
|
|
|
59 |
|
|
|
64 |
|
Share-based compensation expense (1) |
|
|
4,365 |
|
|
|
1,404 |
|
|
|
7,279 |
|
|
|
4,472 |
|
Adjusted EBITDAre |
|
|
144,508 |
|
|
|
134,410 |
|
|
|
245,105 |
|
|
|
232,856 |
|
Corporate expense |
|
|
8,794 |
|
|
|
6,660 |
|
|
|
16,676 |
|
|
|
12,820 |
|
Adjusted EBITDAre from non-hotel property (2) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
659 |
|
Adjusted Hotel EBITDA |
|
$ |
153,302 |
|
|
$ |
141,070 |
|
|
$ |
261,781 |
|
|
$ |
246,335 |
|
27
Hotels Owned
As of June 30, 2026, the Company owned 216 hotels with an aggregate of 29,459 guest rooms located in 37 states and the District of Columbia. The following tables summarize the number of hotels and guest rooms by brand and by state:
Number of Hotels and Guest Rooms by Brand |
|
|||||||
|
|
Number of |
|
|
Number of |
|
||
Brand |
|
Hotels |
|
|
Guest Rooms |
|
||
Hilton Garden Inn |
|
|
39 |
|
|
|
5,476 |
|
Courtyard |
|
|
34 |
|
|
|
4,892 |
|
Hampton |
|
|
33 |
|
|
|
4,518 |
|
Residence Inn |
|
|
30 |
|
|
|
3,695 |
|
Homewood Suites |
|
|
27 |
|
|
|
3,163 |
|
Fairfield |
|
|
10 |
|
|
|
1,213 |
|
Home2 Suites |
|
|
10 |
|
|
|
1,146 |
|
SpringHill Suites |
|
|
8 |
|
|
|
1,333 |
|
TownePlace Suites |
|
|
8 |
|
|
|
834 |
|
Embassy Suites |
|
|
4 |
|
|
|
770 |
|
AC Hotels |
|
|
4 |
|
|
|
702 |
|
Hyatt Place |
|
|
3 |
|
|
|
411 |
|
Hyatt House |
|
|
2 |
|
|
|
264 |
|
Marriott |
|
|
1 |
|
|
|
413 |
|
Motto |
|
|
1 |
|
|
|
260 |
|
Independent |
|
|
1 |
|
|
|
212 |
|
Aloft Hotels |
|
|
1 |
|
|
|
157 |
|
Total |
|
|
216 |
|
|
|
29,459 |
|
28
Number of Hotels and Guest Rooms by State |
|
|||||||
|
|
Number of |
|
|
Number of |
|
||
State |
|
Hotels |
|
|
Guest Rooms |
|
||
Alabama |
|
|
13 |
|
|
|
1,246 |
|
Alaska |
|
|
2 |
|
|
|
304 |
|
Arizona |
|
|
13 |
|
|
|
1,776 |
|
California |
|
|
24 |
|
|
|
3,553 |
|
Colorado |
|
|
4 |
|
|
|
567 |
|
Florida |
|
|
23 |
|
|
|
2,970 |
|
Georgia |
|
|
5 |
|
|
|
585 |
|
Idaho |
|
|
1 |
|
|
|
186 |
|
Illinois |
|
|
7 |
|
|
|
1,255 |
|
Indiana |
|
|
3 |
|
|
|
349 |
|
Iowa |
|
|
1 |
|
|
|
103 |
|
Kansas |
|
|
2 |
|
|
|
230 |
|
Kentucky |
|
|
1 |
|
|
|
156 |
|
Louisiana |
|
|
3 |
|
|
|
422 |
|
Maine |
|
|
3 |
|
|
|
514 |
|
Maryland |
|
|
2 |
|
|
|
233 |
|
Massachusetts |
|
|
3 |
|
|
|
330 |
|
Michigan |
|
|
1 |
|
|
|
148 |
|
Minnesota |
|
|
2 |
|
|
|
281 |
|
Mississippi |
|
|
2 |
|
|
|
168 |
|
Missouri |
|
|
4 |
|
|
|
544 |
|
Nebraska |
|
|
4 |
|
|
|
621 |
|
Nevada |
|
|
1 |
|
|
|
300 |
|
New Jersey |
|
|
5 |
|
|
|
629 |
|
New York |
|
|
4 |
|
|
|
558 |
|
North Carolina |
|
|
7 |
|
|
|
799 |
|
Ohio |
|
|
3 |
|
|
|
406 |
|
Oklahoma |
|
|
4 |
|
|
|
545 |
|
Oregon |
|
|
1 |
|
|
|
243 |
|
Pennsylvania |
|
|
4 |
|
|
|
525 |
|
South Carolina |
|
|
5 |
|
|
|
590 |
|
Tennessee |
|
|
10 |
|
|
|
1,424 |
|
Texas |
|
|
25 |
|
|
|
3,005 |
|
Utah |
|
|
6 |
|
|
|
919 |
|
Virginia |
|
|
11 |
|
|
|
1,667 |
|
Washington |
|
|
4 |
|
|
|
636 |
|
Wisconsin |
|
|
2 |
|
|
|
438 |
|
Washington, D.C. |
|
|
1 |
|
|
|
234 |
|
Total |
|
|
216 |
|
|
|
29,459 |
|
|
|
|
|
|
|
|
||
29
The following table summarizes the location, brand, manager, date acquired or completed and number of guest rooms for each of the 216 hotels that the Company owned as of June 30, 2026. As noted below, as of June 30, 2026, 14 of the Company’s properties are subject to ground leases and nine of its hotels are encumbered by mortgage debt.
City |
|
State |
|
Brand |
|
Manager |
|
Date |
|
Guest Rooms |
|
|
|
Anchorage |
|
AK |
|
Embassy Suites |
|
InnVentures |
|
4/30/2010 |
|
|
169 |
|
|
Anchorage |
|
AK |
|
Home2 Suites |
|
InnVentures |
|
12/1/2017 |
|
|
135 |
|
|
Auburn |
|
AL |
|
Hilton Garden Inn |
|
LBA |
|
3/1/2014 |
|
|
101 |
|
|
Birmingham |
|
AL |
|
Courtyard |
|
LBA |
|
3/1/2014 |
|
|
84 |
|
|
Birmingham |
|
AL |
|
Hilton Garden Inn |
|
LBA |
|
9/12/2017 |
|
|
104 |
|
|
Birmingham |
|
AL |
|
Home2 Suites |
|
LBA |
|
9/12/2017 |
|
|
106 |
|
|
Birmingham |
|
AL |
|
Homewood Suites |
|
McKibbon |
|
3/1/2014 |
|
|
95 |
|
|
Dothan |
|
AL |
|
Hilton Garden Inn |
|
LBA |
|
6/1/2009 |
|
|
104 |
|
|
Dothan |
|
AL |
|
Residence Inn |
|
LBA |
|
3/1/2014 |
|
|
84 |
|
|
Huntsville |
|
AL |
|
Hampton |
|
LBA |
|
9/1/2016 |
|
|
98 |
|
|
Huntsville |
|
AL |
|
Hilton Garden Inn |
|
LBA |
|
3/1/2014 |
|
|
101 |
|
|
Huntsville |
|
AL |
|
Home2 Suites |
|
LBA |
|
9/1/2016 |
|
|
77 |
|
|
Huntsville |
|
AL |
|
Homewood Suites |
|
LBA |
|
3/1/2014 |
|
|
107 |
|
|
Mobile |
|
AL |
|
Hampton |
|
McKibbon |
|
9/1/2016 |
|
|
101 |
|
(1) |
Prattville |
|
AL |
|
Courtyard |
|
LBA |
|
3/1/2014 |
|
|
84 |
|
|
Chandler |
|
AZ |
|
Courtyard |
|
North Central |
|
11/2/2010 |
|
|
150 |
|
|
Chandler |
|
AZ |
|
Fairfield |
|
North Central |
|
11/2/2010 |
|
|
110 |
|
|
Phoenix |
|
AZ |
|
Courtyard |
|
North Central |
|
11/2/2010 |
|
|
164 |
|
|
Phoenix |
|
AZ |
|
Hampton |
|
North Central |
|
9/1/2016 |
|
|
125 |
|
(1) |
Phoenix |
|
AZ |
|
Hampton |
|
North Central |
|
5/2/2018 |
|
|
210 |
|
|
Phoenix |
|
AZ |
|
Homewood Suites |
|
North Central |
|
9/1/2016 |
|
|
134 |
|
(1) |
Phoenix |
|
AZ |
|
Residence Inn |
|
North Central |
|
11/2/2010 |
|
|
129 |
|
|
Scottsdale |
|
AZ |
|
Hilton Garden Inn |
|
North Central |
|
9/1/2016 |
|
|
122 |
|
|
Tempe |
|
AZ |
|
Hyatt House |
|
Crestline |
|
8/13/2020 |
|
|
105 |
|
(1) |
Tempe |
|
AZ |
|
Hyatt Place |
|
Crestline |
|
8/13/2020 |
|
|
154 |
|
(1) |
Tucson |
|
AZ |
|
Hilton Garden Inn |
|
Western |
|
7/31/2008 |
|
|
125 |
|
|
Tucson |
|
AZ |
|
Residence Inn |
|
Western |
|
3/1/2014 |
|
|
124 |
|
|
Tucson |
|
AZ |
|
TownePlace Suites |
|
Western |
|
10/6/2011 |
|
|
124 |
|
|
Agoura Hills |
|
CA |
|
Homewood Suites |
|
Dimension |
|
3/1/2014 |
|
|
125 |
|
|
Burbank |
|
CA |
|
Courtyard |
|
Huntington |
|
8/11/2015 |
|
|
190 |
|
(2) |
Burbank |
|
CA |
|
Residence Inn |
|
Huntington |
|
3/1/2014 |
|
|
166 |
|
|
Burbank |
|
CA |
|
SpringHill Suites |
|
Huntington |
|
7/13/2015 |
|
|
170 |
|
(2) |
Cypress |
|
CA |
|
Courtyard |
|
Dimension |
|
3/1/2014 |
|
|
180 |
|
|
Cypress |
|
CA |
|
Hampton |
|
Dimension |
|
6/29/2015 |
|
|
110 |
|
|
Oceanside |
|
CA |
|
Courtyard |
|
Huntington |
|
9/1/2016 |
|
|
142 |
|
|
Oceanside |
|
CA |
|
Residence Inn |
|
Huntington |
|
3/1/2014 |
|
|
125 |
|
|
Rancho Bernardo/San Diego |
|
CA |
|
Courtyard |
|
InnVentures |
|
3/1/2014 |
|
|
210 |
|
|
Sacramento |
|
CA |
|
Hilton Garden Inn |
|
Dimension |
|
3/1/2014 |
|
|
153 |
|
|
San Bernardino |
|
CA |
|
Residence Inn |
|
InnVentures |
|
2/16/2011 |
|
|
95 |
|
|
San Diego |
|
CA |
|
Courtyard |
|
Huntington |
|
9/1/2015 |
|
|
245 |
|
(2) |
San Diego |
|
CA |
|
Hampton |
|
Dimension |
|
3/1/2014 |
|
|
177 |
|
(2) |
San Diego |
|
CA |
|
Hilton Garden Inn |
|
InnVentures |
|
3/1/2014 |
|
|
200 |
|
|
San Diego |
|
CA |
|
Residence Inn |
|
Dimension |
|
3/1/2014 |
|
|
122 |
|
|
San Jose |
|
CA |
|
Homewood Suites |
|
Dimension |
|
3/1/2014 |
|
|
140 |
|
(2) |
San Juan Capistrano |
|
CA |
|
Residence Inn |
|
Dimension |
|
9/1/2016 |
|
|
130 |
|
(1) |
Santa Ana |
|
CA |
|
Courtyard |
|
Dimension |
|
5/23/2011 |
|
|
155 |
|
(2) |
30
City |
|
State |
|
Brand |
|
Manager |
|
Date |
|
Guest Rooms |
|
|
|
Santa Clarita |
|
CA |
|
Courtyard |
|
Dimension |
|
9/24/2008 |
|
|
140 |
|
|
Santa Clarita |
|
CA |
|
Fairfield |
|
Dimension |
|
10/29/2008 |
|
|
66 |
|
|
Santa Clarita |
|
CA |
|
Hampton |
|
Dimension |
|
10/29/2008 |
|
|
128 |
|
|
Santa Clarita |
|
CA |
|
Residence Inn |
|
Dimension |
|
10/29/2008 |
|
|
90 |
|
|
Tustin |
|
CA |
|
Fairfield |
|
Huntington |
|
9/1/2016 |
|
|
145 |
|
|
Tustin |
|
CA |
|
Residence Inn |
|
Huntington |
|
9/1/2016 |
|
|
149 |
|
|
Colorado Springs |
|
CO |
|
Hampton |
|
Chartwell |
|
9/1/2016 |
|
|
101 |
|
|
Denver |
|
CO |
|
Hilton Garden Inn |
|
InnVentures |
|
9/1/2016 |
|
|
221 |
|
|
Highlands Ranch |
|
CO |
|
Hilton Garden Inn |
|
Dimension |
|
3/1/2014 |
|
|
128 |
|
|
Highlands Ranch |
|
CO |
|
Residence Inn |
|
Dimension |
|
3/1/2014 |
|
|
117 |
|
|
Boca Raton |
|
FL |
|
Hilton Garden Inn |
|
Dimension |
|
9/1/2016 |
|
|
149 |
|
|
Cape Canaveral |
|
FL |
|
Hampton |
|
LBA |
|
4/30/2020 |
|
|
116 |
|
|
Cape Canaveral |
|
FL |
|
Homewood Suites |
|
LBA |
|
9/1/2016 |
|
|
153 |
|
|
Cape Canaveral |
|
FL |
|
Home2 Suites |
|
LBA |
|
4/30/2020 |
|
|
108 |
|
|
Fort Lauderdale |
|
FL |
|
Hampton |
|
Dimension |
|
6/23/2015 |
|
|
156 |
|
|
Fort Lauderdale |
|
FL |
|
Residence Inn |
|
LBA |
|
9/1/2016 |
|
|
156 |
|
|
Gainesville |
|
FL |
|
Hilton Garden Inn |
|
McKibbon |
|
9/1/2016 |
|
|
104 |
|
|
Gainesville |
|
FL |
|
Homewood Suites |
|
McKibbon |
|
9/1/2016 |
|
|
103 |
|
|
Jacksonville |
|
FL |
|
Homewood Suites |
|
McKibbon |
|
3/1/2014 |
|
|
119 |
|
|
Jacksonville |
|
FL |
|
Hyatt Place |
|
Crestline |
|
12/7/2018 |
|
|
127 |
|
|
Miami |
|
FL |
|
Courtyard |
|
Dimension |
|
3/1/2014 |
|
|
118 |
|
(1) |
Miami |
|
FL |
|
Hampton |
|
HHM |
|
4/9/2010 |
|
|
121 |
|
|
Miami |
|
FL |
|
Homewood Suites |
|
Dimension |
|
3/1/2014 |
|
|
162 |
|
|
Orlando |
|
FL |
|
Fairfield |
|
Crestline |
|
7/1/2009 |
|
|
200 |
|
|
Orlando |
|
FL |
|
Home2 Suites |
|
LBA |
|
3/19/2019 |
|
|
128 |
|
|
Orlando |
|
FL |
|
SpringHill Suites |
|
Crestline |
|
7/1/2009 |
|
|
200 |
|
|
Panama City |
|
FL |
|
Hampton |
|
LBA |
|
3/12/2009 |
|
|
95 |
|
|
Panama City |
|
FL |
|
TownePlace Suites |
|
LBA |
|
1/19/2010 |
|
|
103 |
|
|
Pensacola |
|
FL |
|
TownePlace Suites |
|
McKibbon |
|
9/1/2016 |
|
|
97 |
|
|
Tallahassee |
|
FL |
|
Fairfield |
|
LBA |
|
9/1/2016 |
|
|
97 |
|
|
Tallahassee |
|
FL |
|
Hilton Garden Inn |
|
LBA |
|
3/1/2014 |
|
|
85 |
|
(1) |
Tampa |
|
FL |
|
Embassy Suites |
|
HHM |
|
11/2/2010 |
|
|
147 |
|
|
Tampa |
|
FL |
|
Homewood Suites |
|
HHM |
|
6/10/2025 |
|
|
126 |
|
|
Atlanta/Downtown |
|
GA |
|
Hampton |
|
McKibbon |
|
2/5/2018 |
|
|
119 |
|
|
Atlanta/Perimeter Dunwoody |
|
GA |
|
Hampton |
|
LBA |
|
6/28/2018 |
|
|
132 |
|
|
Atlanta |
|
GA |
|
Home2 Suites |
|
McKibbon |
|
7/1/2016 |
|
|
128 |
|
|
Macon |
|
GA |
|
Hilton Garden Inn |
|
LBA |
|
3/1/2014 |
|
|
101 |
|
(1) |
Savannah |
|
GA |
|
Hilton Garden Inn |
|
Newport |
|
3/1/2014 |
|
|
105 |
|
(1) |
Davenport |
|
IA |
|
Hampton |
|
Chartwell |
|
9/1/2016 |
|
|
103 |
|
|
Boise |
|
ID |
|
Hampton |
|
Raymond |
|
4/30/2010 |
|
|
186 |
|
|
Des Plaines |
|
IL |
|
Hilton Garden Inn |
|
Raymond |
|
9/1/2016 |
|
|
253 |
|
|
Hoffman Estates |
|
IL |
|
Hilton Garden Inn |
|
HHM |
|
9/1/2016 |
|
|
184 |
|
|
Mettawa |
|
IL |
|
Hilton Garden Inn |
|
HHM |
|
11/2/2010 |
|
|
170 |
|
|
Mettawa |
|
IL |
|
Residence Inn |
|
HHM |
|
11/2/2010 |
|
|
130 |
|
|
Rosemont |
|
IL |
|
Hampton |
|
Raymond |
|
9/1/2016 |
|
|
158 |
|
|
Skokie |
|
IL |
|
Hampton |
|
Raymond |
|
9/1/2016 |
|
|
225 |
|
|
Warrenville |
|
IL |
|
Hilton Garden Inn |
|
HHM |
|
11/2/2010 |
|
|
135 |
|
|
Merrillville |
|
IN |
|
Hilton Garden Inn |
|
HHM |
|
9/1/2016 |
|
|
124 |
|
|
31
City |
|
State |
|
Brand |
|
Manager |
|
Date |
|
Guest Rooms |
|
|
|
Mishawaka |
|
IN |
|
Residence Inn |
|
HHM |
|
11/2/2010 |
|
|
106 |
|
|
South Bend |
|
IN |
|
Fairfield |
|
HHM |
|
9/1/2016 |
|
|
119 |
|
|
Overland Park |
|
KS |
|
Fairfield |
|
Raymond |
|
3/1/2014 |
|
|
110 |
|
|
Overland Park |
|
KS |
|
Residence Inn |
|
Raymond |
|
3/1/2014 |
|
|
120 |
|
|
Louisville |
|
KY |
|
AC Hotels |
|
Concord |
|
10/25/2022 |
|
|
156 |
|
|
Lafayette |
|
LA |
|
Hilton Garden Inn |
|
LBA |
|
7/30/2010 |
|
|
153 |
|
(1) |
Lafayette |
|
LA |
|
SpringHill Suites |
|
LBA |
|
6/23/2011 |
|
|
103 |
|
|
New Orleans |
|
LA |
|
Homewood Suites |
|
Dimension |
|
3/1/2014 |
|
|
166 |
|
|
Marlborough |
|
MA |
|
Residence Inn |
|
Crestline |
|
3/1/2014 |
|
|
112 |
|
|
Westford |
|
MA |
|
Hampton |
|
Crestline |
|
3/1/2014 |
|
|
110 |
|
|
Westford |
|
MA |
|
Residence Inn |
|
Crestline |
|
3/1/2014 |
|
|
108 |
|
|
Annapolis |
|
MD |
|
Hilton Garden Inn |
|
Crestline |
|
3/1/2014 |
|
|
126 |
|
|
Silver Spring |
|
MD |
|
Hilton Garden Inn |
|
Crestline |
|
7/30/2010 |
|
|
107 |
|
|
Portland |
|
ME |
|
AC Hotels |
|
Crestline |
|
8/20/2021 |
|
|
178 |
|
|
Portland |
|
ME |
|
Aloft Hotels |
|
Crestline |
|
9/10/2021 |
|
|
157 |
|
|
Portland |
|
ME |
|
Residence Inn |
|
Crestline |
|
10/13/2017 |
|
|
179 |
|
(2) |
Novi |
|
MI |
|
Hilton Garden Inn |
|
HHM |
|
11/2/2010 |
|
|
148 |
|
|
Maple Grove |
|
MN |
|
Hilton Garden Inn |
|
North Central |
|
9/1/2016 |
|
|
121 |
|
|
St. Paul |
|
MN |
|
Hampton |
|
Raymond |
|
3/4/2019 |
|
|
160 |
|
|
Kansas City |
|
MO |
|
Hampton |
|
Raymond |
|
8/31/2010 |
|
|
122 |
|
|
Kansas City |
|
MO |
|
Residence Inn |
|
Raymond |
|
3/1/2014 |
|
|
106 |
|
|
St. Louis |
|
MO |
|
Hampton |
|
Raymond |
|
8/31/2010 |
|
|
190 |
|
|
St. Louis |
|
MO |
|
Hampton |
|
Raymond |
|
4/30/2010 |
|
|
126 |
|
|
Hattiesburg |
|
MS |
|
Courtyard |
|
LBA |
|
3/1/2014 |
|
|
84 |
|
|
Hattiesburg |
|
MS |
|
Residence Inn |
|
LBA |
|
12/11/2008 |
|
|
84 |
|
|
Carolina Beach |
|
NC |
|
Courtyard |
|
Crestline |
|
3/1/2014 |
|
|
144 |
|
|
Charlotte |
|
NC |
|
Fairfield |
|
Newport |
|
9/1/2016 |
|
|
94 |
|
|
Durham |
|
NC |
|
Homewood Suites |
|
McKibbon |
|
12/4/2008 |
|
|
122 |
|
|
Fayetteville |
|
NC |
|
Home2 Suites |
|
LBA |
|
2/3/2011 |
|
|
118 |
|
|
Jacksonville |
|
NC |
|
Home2 Suites |
|
LBA |
|
9/1/2016 |
|
|
105 |
|
|
Wilmington |
|
NC |
|
Fairfield |
|
Crestline |
|
3/1/2014 |
|
|
122 |
|
|
Winston-Salem |
|
NC |
|
Hampton |
|
McKibbon |
|
9/1/2016 |
|
|
94 |
|
|
Omaha |
|
NE |
|
Courtyard |
|
HHM |
|
3/1/2014 |
|
|
181 |
|
|
Omaha |
|
NE |
|
Hampton |
|
HHM |
|
9/1/2016 |
|
|
139 |
|
|
Omaha |
|
NE |
|
Hilton Garden Inn |
|
HHM |
|
9/1/2016 |
|
|
178 |
|
|
Omaha |
|
NE |
|
Homewood Suites |
|
HHM |
|
9/1/2016 |
|
|
123 |
|
|
Cranford |
|
NJ |
|
Homewood Suites |
|
Dimension |
|
3/1/2014 |
|
|
108 |
|
|
Mahwah |
|
NJ |
|
Homewood Suites |
|
Dimension |
|
3/1/2014 |
|
|
110 |
|
|
Mount Laurel |
|
NJ |
|
Homewood Suites |
|
Newport |
|
1/11/2011 |
|
|
118 |
|
|
Somerset |
|
NJ |
|
Courtyard |
|
Newport |
|
3/1/2014 |
|
|
162 |
|
(1) |
West Orange |
|
NJ |
|
Courtyard |
|
Newport |
|
1/11/2011 |
|
|
131 |
|
|
Las Vegas |
|
NV |
|
SpringHill Suites |
|
Highgate |
|
12/27/2023 |
|
|
300 |
|
|
Islip/Ronkonkoma |
|
NY |
|
Hilton Garden Inn |
|
Crestline |
|
3/1/2014 |
|
|
166 |
|
|
New York |
|
NY |
|
Independent |
|
Highgate |
|
3/1/2014 |
|
|
212 |
|
(1) |
Syracuse |
|
NY |
|
Courtyard |
|
Crestline |
|
10/16/2015 |
|
|
102 |
|
|
Syracuse |
|
NY |
|
Residence Inn |
|
Crestline |
|
10/16/2015 |
|
|
78 |
|
|
Cleveland |
|
OH |
|
Courtyard |
|
Concord |
|
6/30/2023 |
|
|
154 |
|
|
32
City |
|
State |
|
Brand |
|
Manager |
|
Date |
|
Guest Rooms |
|
|
|
Mason |
|
OH |
|
Hilton Garden Inn |
|
Raymond |
|
9/1/2016 |
|
|
110 |
|
|
Twinsburg |
|
OH |
|
Hilton Garden Inn |
|
Concord |
|
10/7/2008 |
|
|
142 |
|
|
Oklahoma City |
|
OK |
|
Hampton |
|
Raymond |
|
5/28/2010 |
|
|
200 |
|
|
Oklahoma City |
|
OK |
|
Hilton Garden Inn |
|
Raymond |
|
9/1/2016 |
|
|
155 |
|
|
Oklahoma City |
|
OK |
|
Homewood Suites |
|
Raymond |
|
9/1/2016 |
|
|
100 |
|
|
Oklahoma City (West) |
|
OK |
|
Homewood Suites |
|
Chartwell |
|
9/1/2016 |
|
|
90 |
|
|
Portland |
|
OR |
|
Hampton |
|
Raymond |
|
11/17/2021 |
|
|
243 |
|
|
Collegeville/Philadelphia |
|
PA |
|
Courtyard |
|
Newport |
|
11/15/2010 |
|
|
132 |
|
|
Malvern/Philadelphia |
|
PA |
|
Courtyard |
|
Newport |
|
11/30/2010 |
|
|
127 |
|
|
Pittsburgh |
|
PA |
|
AC Hotels |
|
Concord |
|
10/25/2022 |
|
|
134 |
|
|
Pittsburgh |
|
PA |
|
Hampton |
|
Newport |
|
12/31/2008 |
|
|
132 |
|
|
Charleston |
|
SC |
|
Home2 Suites |
|
LBA |
|
9/1/2016 |
|
|
122 |
|
|
Columbia |
|
SC |
|
Hilton Garden Inn |
|
Newport |
|
3/1/2014 |
|
|
143 |
|
|
Columbia |
|
SC |
|
TownePlace Suites |
|
Newport |
|
9/1/2016 |
|
|
91 |
|
|
Greenville |
|
SC |
|
Hyatt Place |
|
Crestline |
|
9/1/2021 |
|
|
130 |
|
|
Hilton Head |
|
SC |
|
Hilton Garden Inn |
|
McKibbon |
|
3/1/2014 |
|
|
104 |
|
|
Franklin |
|
TN |
|
Courtyard |
|
Chartwell |
|
9/1/2016 |
|
|
126 |
|
|
Franklin |
|
TN |
|
Residence Inn |
|
Chartwell |
|
9/1/2016 |
|
|
124 |
|
|
Knoxville |
|
TN |
|
Homewood Suites |
|
McKibbon |
|
9/1/2016 |
|
|
103 |
|
|
Knoxville |
|
TN |
|
SpringHill Suites |
|
McKibbon |
|
9/1/2016 |
|
|
103 |
|
|
Memphis |
|
TN |
|
Hampton |
|
Crestline |
|
2/5/2018 |
|
|
144 |
|
|
Memphis |
|
TN |
|
Hilton Garden Inn |
|
Crestline |
|
10/28/2021 |
|
|
150 |
|
|
Nashville |
|
TN |
|
Motto |
|
Chartwell |
|
12/19/2025 |
|
|
260 |
|
|
Nashville |
|
TN |
|
Hilton Garden Inn |
|
Dimension |
|
9/30/2010 |
|
|
194 |
|
|
Nashville |
|
TN |
|
Home2 Suites |
|
Dimension |
|
5/31/2012 |
|
|
119 |
|
|
Nashville |
|
TN |
|
TownePlace Suites |
|
Chartwell |
|
9/1/2016 |
|
|
101 |
|
|
Addison |
|
TX |
|
SpringHill Suites |
|
Western |
|
3/1/2014 |
|
|
159 |
|
|
Arlington |
|
TX |
|
Hampton |
|
Western |
|
12/1/2010 |
|
|
98 |
|
|
Austin |
|
TX |
|
Courtyard |
|
Dimension |
|
11/2/2010 |
|
|
145 |
|
|
Austin |
|
TX |
|
Fairfield |
|
Dimension |
|
11/2/2010 |
|
|
150 |
|
|
Austin |
|
TX |
|
Hampton |
|
Dimension |
|
4/14/2009 |
|
|
124 |
|
|
Austin |
|
TX |
|
Homewood Suites |
|
Dimension |
|
4/14/2009 |
|
|
97 |
|
|
Austin/Round Rock |
|
TX |
|
Hampton |
|
Dimension |
|
3/6/2009 |
|
|
94 |
|
|
Austin/Round Rock |
|
TX |
|
Homewood Suites |
|
Dimension |
|
9/1/2016 |
|
|
115 |
|
|
Dallas |
|
TX |
|
Homewood Suites |
|
Western |
|
9/1/2016 |
|
|
130 |
|
|
Denton |
|
TX |
|
Homewood Suites |
|
Chartwell |
|
9/1/2016 |
|
|
107 |
|
|
El Paso |
|
TX |
|
Homewood Suites |
|
Western |
|
3/1/2014 |
|
|
114 |
|
|
Fort Worth |
|
TX |
|
Courtyard |
|
LBA |
|
2/2/2017 |
|
|
124 |
|
|
Fort Worth |
|
TX |
|
Hilton Garden Inn |
|
Raymond |
|
11/17/2021 |
|
|
157 |
|
|
Fort Worth |
|
TX |
|
Homewood Suites |
|
Raymond |
|
11/17/2021 |
|
|
112 |
|
|
Fort Worth |
|
TX |
|
TownePlace Suites |
|
Western |
|
7/19/2010 |
|
|
140 |
|
|
Frisco |
|
TX |
|
Hilton Garden Inn |
|
Western |
|
12/31/2008 |
|
|
102 |
|
|
Grapevine |
|
TX |
|
Hilton Garden Inn |
|
Western |
|
9/24/2010 |
|
|
110 |
|
|
Houston |
|
TX |
|
Courtyard |
|
LBA |
|
9/1/2016 |
|
|
124 |
|
|
Houston |
|
TX |
|
Residence Inn |
|
Western |
|
3/1/2014 |
|
|
129 |
|
|
Houston |
|
TX |
|
Residence Inn |
|
Western |
|
9/1/2016 |
|
|
120 |
|
|
Lewisville |
|
TX |
|
Hilton Garden Inn |
|
Western |
|
10/16/2008 |
|
|
165 |
|
|
San Antonio |
|
TX |
|
TownePlace Suites |
|
Western |
|
3/1/2014 |
|
|
106 |
|
|
33
City |
|
State |
|
Brand |
|
Manager |
|
Date |
|
Guest Rooms |
|
|
|
Shenandoah |
|
TX |
|
Courtyard |
|
LBA |
|
9/1/2016 |
|
|
124 |
|
|
Stafford |
|
TX |
|
Homewood Suites |
|
Western |
|
3/1/2014 |
|
|
78 |
|
|
Texarkana |
|
TX |
|
Hampton |
|
Western |
|
1/31/2011 |
|
|
81 |
|
|
Provo |
|
UT |
|
Residence Inn |
|
North Central |
|
3/1/2014 |
|
|
114 |
|
|
Salt Lake City |
|
UT |
|
Courtyard |
|
North Central |
|
10/11/2023 |
|
|
175 |
|
|
Salt Lake City |
|
UT |
|
Hyatt House |
|
North Central |
|
10/11/2023 |
|
|
159 |
|
|
Salt Lake City |
|
UT |
|
Residence Inn |
|
North Central |
|
10/20/2017 |
|
|
136 |
|
|
Salt Lake City |
|
UT |
|
SpringHill Suites |
|
North Central |
|
11/2/2010 |
|
|
143 |
|
|
South Jordan |
|
UT |
|
Embassy Suites |
|
HHM |
|
11/21/2023 |
|
|
192 |
|
|
Alexandria |
|
VA |
|
Courtyard |
|
HHM |
|
3/1/2014 |
|
|
178 |
|
|
Alexandria |
|
VA |
|
SpringHill Suites |
|
HHM |
|
3/28/2011 |
|
|
155 |
|
|
Charlottesville |
|
VA |
|
Courtyard |
|
Crestline |
|
3/1/2014 |
|
|
139 |
|
|
Manassas |
|
VA |
|
Residence Inn |
|
Crestline |
|
2/16/2011 |
|
|
107 |
|
|
Richmond |
|
VA |
|
Courtyard |
|
White Lodging |
|
12/8/2014 |
|
|
135 |
|
(2) |
Richmond |
|
VA |
|
Marriott |
|
White Lodging |
|
3/1/2014 |
|
|
413 |
|
(1) |
Richmond |
|
VA |
|
Residence Inn |
|
White Lodging |
|
12/8/2014 |
|
|
75 |
|
(2) |
Suffolk |
|
VA |
|
Courtyard |
|
Crestline |
|
3/1/2014 |
|
|
92 |
|
|
Suffolk |
|
VA |
|
TownePlace Suites |
|
Crestline |
|
3/1/2014 |
|
|
72 |
|
|
Virginia Beach |
|
VA |
|
Courtyard |
|
Crestline |
|
3/1/2014 |
|
|
141 |
|
|
Virginia Beach |
|
VA |
|
Courtyard |
|
Crestline |
|
3/1/2014 |
|
|
160 |
|
|
Kirkland |
|
WA |
|
Courtyard |
|
InnVentures |
|
3/1/2014 |
|
|
150 |
|
|
Renton |
|
WA |
|
Residence Inn |
|
InnVentures |
|
10/18/2023 |
|
|
146 |
|
|
Seattle |
|
WA |
|
Residence Inn |
|
InnVentures |
|
3/1/2014 |
|
|
234 |
|
|
Tukwila |
|
WA |
|
Homewood Suites |
|
Dimension |
|
3/1/2014 |
|
|
106 |
|
|
Madison |
|
WI |
|
Hilton Garden Inn |
|
Raymond |
|
2/18/2021 |
|
|
176 |
|
|
Madison |
|
WI |
|
Embassy Suites |
|
Raymond |
|
6/20/2024 |
|
|
262 |
|
|
Washington, D.C. |
|
- |
|
AC Hotels |
|
HHM |
|
3/25/2024 |
|
|
234 |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
29,459 |
|
|
Related Parties
The Company has engaged in, and is expected to continue to engage in, transactions with related parties. These transactions cannot be construed as being at arm’s length, and the results of the Company’s operations may have been different if these transactions were conducted with non-related parties. See Note 6 titled “Related Parties” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for additional information concerning the Company’s related party transactions.
Liquidity and Capital Resources
Capital Resources
The Company’s principal short-term sources of liquidity are the operating cash flows generated from the Company’s properties and availability under its Revolving Credit Facility. Over the long term, the Company may receive proceeds from strategic additional secured and unsecured debt financing, dispositions of its hotel properties and offerings of the Company’s common shares, including pursuant to the ATM Program. Macroeconomic pressures, including inflation, increases in interest rates and general market uncertainty, could impact the Company’s ability to raise debt or equity capital to fund long-term liquidity requirements in a cost-effective manner.
34
As of June 30, 2026, the Company had $1.5 billion of total outstanding debt consisting of $161.7 million of mortgage debt and $1.3 billion outstanding under its unsecured credit facilities, excluding unamortized debt issuance costs. As of June 30, 2026, the Company had available corporate cash on hand of approximately $10.2 million, and unused borrowing capacity under its Revolving Credit Facility of approximately $602.0 million after taking into account outstanding letters of credit of approximately $2.0 million.
The credit agreements governing the unsecured credit facilities contain customary affirmative and negative covenants and events of default. As of June 30, 2026, the covenants included, among others, a minimum tangible net worth, maximum debt limits, minimum interest and fixed charge coverage ratios, and restrictions on certain investments. The Company was in compliance with the applicable covenants as of June 30, 2026.
On July 23, 2026, the Company amended and restated the credit agreement for its existing $1.2 billion credit facility, extending the maturity dates and increasing the borrowing capacity of the Revolving Credit Facility by $50 million to $700 million, resulting in a total borrowing capacity of approximately $1.3 billion. The amended and restated credit agreement extended the maturity dates, modified certain financial covenants and changed the interest rate margin range to 1.35% to 2.30% as compared to a range of 1.35% to 2.25% prior to the amendment. The Company also entered into conforming amendments for its other unsecured credit facilities to align with the revised financial covenants.
On July 28, 2026, the Company entered into an amendment to its existing $385 million term loan facility which updated the interest rate margin to a range of 1.35% to 2.25% as compared to a range of 1.35% to 2.20% prior to the amendment.
On July 24, 2026, the Company amended and restated the credit agreement for its existing $130 million term loan facility which increased the amount of the term loan facility to $160 million, with the additional $30 million funded at closing, extended the maturity date and changed the interest rate margin range to 1.70% to 2.65% as compared to a range of 1.35% to 2.20% prior to the amendment.
On July 24, 2026, the Company entered into an amendment to its existing $85 million term loan facility which updated the interest rate margin to a range of 1.35% to 2.25% as compared to a range of 1.70% to 2.55% prior to the amendment.
See Note 4, titled “Debt” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for details regarding the Company’s debt agreements as of June 30, 2026 and amendments to those agreements subsequent to that date.
The Company has a universal shelf registration statement on Form S-3 (No. 333-285184) that was automatically effective upon filing on February 25, 2025. The Company may offer an indeterminate number or amount, as the case may be, of (1) common shares, no par value per share; (2) preferred shares, no par value per share; (3) depository shares representing the Company’s preferred shares; (4) warrants exercisable for the Company’s common shares, preferred shares or depository shares representing preferred shares; (5) rights to purchase common shares; and (6) unsecured senior or subordinate debt securities, all of which may be issued from time to time on a delayed or continuous basis pursuant to Rule 415 under the Securities Act.
On February 23, 2024, the Company entered into an equity distribution agreement pursuant to which the Company may sell, from time to time, up to an aggregate of $500 million of its common shares under the ATM Program. No common shares were sold under the Company’s ATM Program during the three and six months ended June 30, 2026 or during the year ended December 31, 2025. As of June 30, 2026, $500 million remained available for issuance under the ATM Program. The Company plans to use future net proceeds from the sale of shares under the ATM Program, or under a similar successor program, for general corporate purposes, which may include, among other things, acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures, improvement of properties in its portfolio and working capital. The Company may also use the future net proceeds to acquire another REIT or other company that invests in income-producing properties. Future offerings will depend on a variety of factors to be determined by the Company, including market conditions, the trading price of the Company’s common shares and opportunities for uses of any proceeds.
Capital Uses
The Company anticipates that cash flow from operations, availability under its Revolving Credit Facility, additional borrowings, and proceeds from hotel dispositions and equity offerings will be adequate to meet its anticipated liquidity requirements, including required distributions to shareholders, share repurchases, capital improvements, debt service, hotel acquisitions, lease commitments, and cash management activities.
Distributions
The Company generally must distribute annually at least 90% of its REIT taxable income, subject to certain adjustments and excluding any net capital gain, in order to maintain its REIT status. On June 18, 2026, the Company declared a monthly cash distribution of $0.08 per common share, paid on July 15, 2026, to shareholders of record as of June 30, 2026. For the three and six months ended June 30, 2026, the Company paid distributions of $0.24 and $0.48 per common share, respectively, for a total of $56.6
35
million and $113.2 million, respectively. Subsequent to quarter end, on July 17, 2026, the Company declared a monthly cash distribution of $0.08 per common share, payable on August 17, 2026, to shareholders of record as of July 31, 2026.
The Company’s current annual distribution rate, payable monthly, is $0.96 per common share. As it has done historically, due to seasonality, the Company may use its Revolving Credit Facility to maintain the consistency of the monthly distribution rate, taking into consideration any acquisitions, dispositions, capital improvements and economic cycles. While management currently expects monthly cash distributions to continue at $0.08 per common share, any distribution will be subject to approval of the Company’s Board of Directors, and there can be no assurance of the classification, timing or duration of distributions at any particular distribution rate. The Board of Directors monitors the Company’s distribution rate relative to the performance of its hotels on an ongoing basis and may make adjustments to the distribution rate as determined to be prudent in relation to other cash requirements of the Company or to the extent required to maintain the Company’s REIT status. If cash flows from operations and the Revolving Credit Facility are not adequate to meet liquidity requirements, the Company may utilize additional financing sources to make distributions. Although the Company has relatively low levels of debt, there can be no assurance it will be successful with this strategy, and it may need to reduce its distributions to minimum levels required to maintain its qualification as a REIT. If the Company were unable to extend its maturing debt in future periods or if it were to default on its debt, it may be unable to make distributions.
Share Repurchases
In May 2026, the Company’s Board of Directors approved a one-year extension of its existing Share Repurchase Program, authorizing share repurchases up to an aggregate of $242.5 million. The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2027 if not terminated or extended earlier. The Company previously entered into, and expects to continue to enter into, written trading plans as part of the Share Repurchase Program that provide for share repurchases in open market transactions that are intended to comply with Rule 10b5-1 under the Exchange Act. The Company did not repurchase any common shares under the Share Repurchase Program during the three and six months ended June 30, 2026. During the six months ended June 30, 2025, the Company purchased, under its Share Repurchase Program, approximately 3.4 million of its common shares at a weighted-average market purchase price of approximately $12.83 per common share for an aggregate purchase price, including commissions, of approximately $43.2 million. Past purchases under the Share Repurchase Program have been funded, and the Company intends to fund future share repurchases with cash on hand, proceeds from dispositions or availability under its unsecured credit facilities, subject to applicable restrictions under the Company’s unsecured credit facilities (if any). The timing of share repurchases and the number of common shares to be purchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of June 30, 2026, approximately $242.5 million remained available for purchase under the Share Repurchase Program.
Capital Improvements
Management routinely monitors the condition and operations of its hotels and plans renovations and other improvements as it deems prudent. The Company is committed to maintaining and enhancing each property’s competitive position in its market. The Company has invested in and plans to continue to reinvest in its hotels. Under certain loan agreements, the Company is required to place in escrow funds for the repair, replacement and refurbishment of furniture, fixtures, and equipment at the applicable hotels, based on a percentage of the hotel’s gross revenues, to be used for capital expenditures with respect to those hotels. As of June 30, 2026, the Company held approximately $5.3 million in reserves related to these properties. During the six months ended June 30, 2026, the Company invested approximately $39.8 million in capital expenditures. The Company anticipates spending approximately $85 million to $95 million during 2026, which includes various comprehensive renovation projects for approximately 18 properties. The increase of $5.0 million from the Company’s previous estimate and the change in the number of comprehensive renovation projects are primarily a result of prioritizing two larger projects: the renovation of its Embassy Suites in Anchorage, Alaska and the rebranding of the Residence Inn in Seattle, Washington. The Company’s expectations reflect its ongoing prioritization and management of its overall capital spending to keep its hotels competitive, while weighing larger investments toward the highest return opportunities. Estimates of future capital expenditures are subject to change, and inflationary pressures, supply chain disruptions, tariffs, or other factors could result in additional cost increases or delays to anticipated projects.
As of June 30, 2026, the Company had one outstanding development project. During the third quarter of 2025, the Company entered into a fixed-price contract with a third party to develop a dual-branded property, consisting of an AC Hotel and a Residence Inn, on Company-owned land in Las Vegas, Nevada, adjacent to its existing SpringHill Suites. The Company expects to spend a total of approximately $143.7 million to develop the AC Hotel and Residence Inn, which are currently planned to be completed and opened for business in the second quarter of 2028. As of June 30, 2026, the Company has capitalized $9.9 million related to the construction of the AC Hotel and Residence Inn.
Upcoming Debt Maturities and Debt Service Payments
As of June 30, 2026, the Company had approximately $292.6 million of principal and interest payments due on its debt over the next 12 months. This amount includes payments totaling $51.3 million on a loan secured by three properties that matures in the fourth
36
quarter of 2026, as well as $46.0 million outstanding under the Revolving Credit Facility, which was scheduled to mature on July 25, 2026, but was amended and restated on July 23, 2026, extending the maturity date to July 24, 2030. Also included in the total above is a $130.0 million unsecured term loan which was scheduled to mature on July 25, 2026, but was amended and restated on July 24, 2026, to increase the amount of the term loan facility to $160 million and to extend the maturity date to July 24, 2033. The Company plans to pay outstanding amounts and service payments due upon the upcoming debt maturity dates using one or a combination of any of the following: funds from operations, borrowings under its Revolving Credit Facility, proceeds from new financing, available credit extensions under its unsecured credit facilities or by refinancing the maturing debt. The Company may also pursue amendments with its lenders to extend the maturity date of any expiring loans.
Interest expense related to the Company’s unsecured credit facilities over the next 12 months is expected to be similar to the previous 12 months, with comparable borrowings and average interest rates. The average proportion of variable-rate debt that is fixed by interest rate swaps is expected to be lower over the next 12 months compared to the six months ended June 30, 2026. The Company had one interest rate swap in effect on $75.0 million of variable-rate debt mature in the second quarter of 2026 and has one interest rate swap in effect on $125.0 million of variable-rate debt that will mature in the second half of 2026. If the Company replaces expiring interest rate swaps in the current interest rate environment with new agreements, the Company anticipates those new agreements to generally be at higher rates than the expiring swap agreements. See Note 4 titled “Debt” and Note 5 titled “Fair Value of Financial Instruments” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q for more detail regarding future maturities of the Company’s debt instruments and interest rate swap agreements as of June 30, 2026.
Purchase Contract Commitments
As of June 30, 2026, the Company had one outstanding contract, which was entered into during the third quarter of 2025, for the potential purchase of a hotel in Anchorage, Alaska for an expected fixed purchase price of approximately $65.5 million. The hotel is under development as a 160-guest-room AC Hotel and is currently planned to be completed and opened for business in the fourth quarter of 2027. As of June 30, 2026, a $2.0 million contract deposit (refundable if the seller does not meet its obligations under the contract) had been paid. If the closing occurs, the Company plans to utilize its available cash or borrowings, including borrowings under its unsecured credit facilities available at closing, to purchase the hotel under contract. Although the Company is working towards acquiring this hotel, there are a number of conditions to closing that have not yet been satisfied, and there can be no assurance that closing on this hotel will occur under the outstanding purchase contract. If the seller meets all of the conditions to closing, the Company is obligated to specifically perform under the purchase contract and acquire this hotel. As this hotel is under development, at this time, the seller has not met all of the conditions to closing.
As mentioned in the “Capital Improvements” section above, during the third quarter of 2025, the Company entered into a fixed-price contract with a third party to develop a dual-branded property, consisting of an AC Hotel and a Residence Inn, on Company-owned land in Las Vegas, Nevada, adjacent to its existing SpringHill Suites. See Note 10 titled “Contract Commitments” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q for more detail regarding this development project.
Cash Management Activities
As part of the cost sharing arrangements discussed in Note 6, titled “Related Parties” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, certain day-to-day transactions may result in amounts due to or from the Company and ARG. To efficiently manage cash disbursements, the Company or ARG may make payments for the other company. Under the cash management process, each company may advance or defer up to $1 million at any time. Each quarter, any outstanding amounts are settled between the companies. This process allows each company to minimize its cash on hand and reduces the cost for each company. The amounts outstanding at any point in time are not significant to either of the companies.
Impact of Inflation
The Company relies on the performance of its hotels and the ability of its hotel operators to increase revenue to keep pace with inflation. Hotel operators, in general, possess the ability to adjust room rates daily to reflect the effects of inflation on the Company’s operating expenses. However, competitive pressures and other factors could limit the operators’ ability to raise room rates and, as a result, the Company may not be able to offset such increased operating expenses with increases in revenue. Additionally, tariff-induced inflation could increase certain operating and renovation costs, as some supplies, furniture, fixtures and equipment and construction materials are imported, as well as negatively impact leisure travel by reducing the discretionary income of consumers.
37
Business Interruption
Being in the real estate industry, the Company is exposed to natural disasters on both a local and regional scale. Although management believes the Company has adequate insurance to cover this exposure, there can be no assurance that such events will not have a material adverse effect on the Company’s financial position or results of operations.
Seasonality
The hotel industry historically has been seasonal in nature. Seasonal variations in occupancy at the Company’s hotels may cause quarterly fluctuations in its revenues. Generally, occupancy rates and hotel revenues for the Company’s hotels are greater in the second and third quarters than in the first and fourth quarters. To the extent that cash flow from operations is insufficient during any quarter due to temporary or seasonal fluctuations in revenue, the Company expects to utilize cash on hand or available financing sources to meet cash requirements.
Critical Accounting Policies and Estimates
The preparation of the Company’s financial statements in accordance with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Company’s financial statements, the reported amounts of revenues and expenses during the reporting periods and the related disclosures in the Company’s Unaudited Consolidated Financial Statements and Notes thereto. The Company has discussed those policies and estimates that it believes are critical and require the use of complex judgment in their application in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on February 23, 2026. There have been no material changes to the Company’s critical accounting policies or the methods or assumptions applied.
Subsequent Events
On July 15, 2026, the Company paid approximately $18.9 million, or $0.08 per common share, in distributions to shareholders of record as of June 30, 2026.
On July 17, 2026, the Company declared a monthly cash distribution of $0.08 per common share. The distribution is payable on August 17, 2026, to shareholders of record as of July 31, 2026.
In July 2026, the Company entered into separate agreements amending its Revolving Credit Facility and each of its term loans as follows: an amended and restated credit agreement for its $1.2 billion credit facility, an amendment to its $385 million term loan facility, an amended and restated credit agreement for its $130 million credit facility and an amendment to its $85 million credit facility. See Note 4, titled “Debt” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for additional information regarding these amendments.
38
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of June 30, 2026, the Company’s financial instruments were not exposed to significant market risk due to foreign currency exchange risk, commodity price risk or equity price risk. However, the Company is exposed to interest rate risk due to possible changes in short-term interest rates as it invests its cash or borrows on its Revolving Credit Facility and due to the portion of its variable-rate debt that is not fixed by interest rate swaps. As of June 30, 2026, after giving effect to interest rate swaps, as described below, approximately $611.0 million, or approximately 41% of the Company’s total debt outstanding, was subject to variable interest rates. Based on the Company’s variable-rate debt outstanding as of June 30, 2026, every 100 basis point change in interest rates will impact the Company’s annual net income by approximately $6.1 million, all other factors remaining the same. With the exception of interest rate swap transactions, the Company has not engaged in transactions in derivative financial instruments or derivative commodity instruments.
As of June 30, 2026, the Company’s variable-rate debt consisted of its unsecured credit facilities, including $46.0 million in borrowings outstanding under its Revolving Credit Facility and $1.2 billion of term loans. Currently, the Company uses interest rate swaps to manage its interest rate risk on a portion of its variable-rate debt. As of June 30, 2026, the Company had 10 interest rate swap agreements that effectively fix the interest payments on approximately $610.0 million of the Company’s variable-rate debt outstanding with swap maturity dates ranging from November 2026 to December 2029. Under the terms of the Company’s interest rate swaps, the Company pays a fixed rate of interest and receives a floating rate of interest equal to the annual rate of the one-month SOFR. See Note 5 titled “Fair Value of Financial Instruments” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for a description of the Company’s interest rate swaps as of June 30, 2026.
In addition to its variable-rate debt and interest rate swaps discussed above, the Company has assumed or originated fixed interest rate mortgages payable to lenders under permanent financing arrangements as well as two fixed-rate senior notes facilities totaling $125 million. The following table summarizes the annual maturities and average interest rates of the Company’s mortgage debt and borrowings outstanding under its unsecured credit facilities at June 30, 2026. All dollar amounts are in thousands.
|
|
July 1 - December 31, 2026 |
|
|
2027 |
|
|
2028 |
|
|
2029 |
|
|
2030 |
|
|
Thereafter |
|
|
Total |
|
|
Fair |
|
||||||||
Total debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Maturities |
|
$ |
228,126 |
|
|
$ |
278,602 |
|
|
$ |
334,066 |
|
|
$ |
162,294 |
|
|
$ |
460,016 |
|
|
$ |
44,638 |
|
|
$ |
1,507,742 |
|
|
$ |
1,488,012 |
|
Average interest rates (1) |
|
|
4.7 |
% |
|
|
4.7 |
% |
|
|
4.6 |
% |
|
|
4.6 |
% |
|
|
4.6 |
% |
|
|
3.7 |
% |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Variable-rate debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Maturities |
|
$ |
176,000 |
|
|
$ |
275,000 |
|
|
$ |
300,000 |
|
|
$ |
85,000 |
|
|
$ |
385,000 |
|
|
$ |
- |
|
|
$ |
1,221,000 |
|
|
$ |
1,220,797 |
|
Average interest rates (1) |
|
|
4.9 |
% |
|
|
4.8 |
% |
|
|
4.8 |
% |
|
|
4.9 |
% |
|
|
5.0 |
% |
|
n/a |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed-rate debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Maturities |
|
$ |
52,126 |
|
|
$ |
3,602 |
|
|
$ |
34,066 |
|
|
$ |
77,294 |
|
|
$ |
75,016 |
|
|
$ |
44,638 |
|
|
$ |
286,742 |
|
|
$ |
267,215 |
|
Average interest rates |
|
|
4.0 |
% |
|
|
4.1 |
% |
|
|
4.1 |
% |
|
|
3.9 |
% |
|
|
3.6 |
% |
|
|
3.7 |
% |
|
|
|
|
|
|
||
Item 4. Controls and Procedures
The Company’s senior management evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation process, the Company’s senior management has concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2026. There have been no changes in the Company’s internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
39
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is or may be a party to various legal proceedings that arise in the ordinary course of business. The Company is not currently involved in any litigation nor, to management’s knowledge, is any litigation threatened against the Company where the outcome would, in management’s judgment based on information currently available to the Company, have a material adverse effect on the Company’s consolidated financial position or results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following is a summary of all share repurchases during the second quarter of 2026.
Issuer Purchases of Equity Securities |
|
|||||||||||||||
|
|
(a) |
|
|
(b) |
|
|
(c) |
|
|
(d) |
|
||||
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 (in thousands) (1) |
|
||||
April 1 - April 30, 2026 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
$ |
242,507 |
|
May 1 - May 31, 2026 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
$ |
242,507 |
|
June 1 - June 30, 2026 (2) |
|
|
17,965 |
|
|
|
16.27 |
|
|
|
- |
|
|
$ |
242,507 |
|
Total |
|
|
17,965 |
|
|
|
|
|
|
- |
|
|
|
|
||
Item 5. Other Information.
Trading Arrangements
No director or officer of the Company
40
Item 6. Exhibits
Exhibit Number |
|
Description of Documents |
3.1 |
|
Amended and Restated Articles of Incorporation of the Company, as amended (Incorporated by reference to Exhibit 3.1 to the Company’s quarterly report on Form 10-Q (SEC File No. 001-37389) filed August 6, 2018) |
|
|
|
3.2 |
|
Third Amended and Restated Bylaws of the Company (Incorporated by reference to Exhibit 3.2 to the Company’s quarterly report on Form 10-Q (SEC File No. 001-37389) filed May 18, 2020) |
|
|
|
10.1 |
|
Fourth Amended and Restated Credit Agreement dated as of July 23, 2026, by and among the Company, as borrower, certain subsidiaries of the Company, as guarantors, Bank of America, N.A., as Administrative Agent and the lenders party thereto (Incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K (SEC File No. 001-37389) filed July 28, 2026) |
|
|
|
31.1 |
|
Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (FILED HEREWITH) |
|
|
|
31.2 |
|
Certification of the Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (FILED HEREWITH) |
|
|
|
32.1 |
|
Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (FURNISHED HEREWITH) |
|
|
|
101 |
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income, (iii) the Consolidated Statements of Shareholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (v) related notes to these financial statements, tagged as blocks of text and in detail (FILED HEREWITH) |
|
|
|
104 |
|
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted as Inline XBRL and contained in Exhibit 101 |
41
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Apple Hospitality REIT, Inc. |
|
||
|
|
|
|
By: |
/s/ Justin G. Knight |
|
Date: August 5, 2026 |
|
Justin G. Knight, |
|
|
|
Chief Executive Officer (Principal Executive Officer) |
|
|
|
|
|
|
By: |
/s/ Elizabeth S. Perkins |
|
Date: August 5, 2026 |
|
Elizabeth S. Perkins, |
|
|
|
Chief Financial Officer (Principal Financial and Principal Accounting Officer) |
|
|
42