What changed in this filing

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Item 1A. Risk Factors

2026-02-25 compared with 2025-02-26 · 59 added, 55 removed, 639 unchanged (15% of the section changed)

17 unchanged sentences

• Risks related to joint ventures and franchise agreements

Risks Related to Debt and Financing

Risks Related to Debt, Financing and Future Securities Issuances

• Risks related to debt service obligations

• Risks related to our existing indebtedness

• Risks related to financial covenants

• Risks related to "cash trap" provisions

1 unchanged sentence

• Risks related to acquiring outstanding debt

• Risks related to our capped call transactions

• Risks related to further issuances of securities

• Risks related to future offerings of debt securities or preferred shares

Risks Related to the Lodging Industry

5 unchanged sentences

• Risks related to hotel and resort development

• Risks related to changing technology and its effects on the lodging industry and cyber-attacks

• Risks related to changing technology, including artificial intelligence, and cyber-attacks

• Risks related to hotel personnel and unionization

• Risks related to natural disasters, climate change and other environmental factors and regulations

• Risks related to terrorist attacks

• Risks related to terrorism and disruptive geopolitical activity

• Risks related to underinsurance or lack of insurance

• Risks related to unknown or contingent liabilities

• Risks related to compliance with federal law and other legislative changes

• Risks related to compliance with federal, state and local environmental laws and other legislative changes

• Risks related to potential litigation

8 unchanged sentences

• Risks related to changes in major policies

• Risks related to further issuances of securities

• Risks related to future offerings of debt securities or preferred shares

• Risks related to the rights of holders of common shares or preferred shares

2 unchanged sentences

Federal Income Tax Risk Factors

• Risks related to potential failures to qualify as a REIT, whether by us or by LaSalle prior to the merger

• Risks related to potential failures to qualify as a REIT

• Risks related to REIT requirements

26 unchanged sentences

Our primary business is hotel-related.

Therefore, a downturn in the lodging industry, in general, and markets (especially West Coast major gateway metropolitan markets) in which we operate, in particular, would have a material adverse effect on our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders.

Therefore, a downturn in the lodging industry, in general, and markets in which we operate, in particular, would have a material adverse effect on our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders.

If we cannot obtain financing, our growth will be limited.

76 unchanged sentences

In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers.

Risks Related to Debt and Financing

Risks Related to Debt, Financing and Future Securities Issuances

Debt service obligations could adversely affect our overall operating results, may require us to sell hotel properties, may jeopardize our qualification as a REIT and could adversely affect our ability to make distributions to our shareholders and the market price of our common shares.

21 unchanged sentences

or merge, consolidate or transfer all or substantially all of its assets.

In addition, our mortgage loan agreements contain restrictions (including cash management provisions) that may under circumstances specified in the loan agreements prohibit our subsidiaries that own our hotels from making distributions or paying dividends, repaying loans to us or other subsidiaries or transferring any of their assets to us or another subsidiary which could adversely affect our ability to make distributions to our shareholders.

In addition, our mortgage loan agreement contains restrictions (including cash management provisions) that may under circumstances specified in the loan agreement prohibit our subsidiaries that own our hotels from making distributions or paying dividends, repaying loans to us or other subsidiaries or transferring any of their assets to us or another subsidiary which could adversely affect our ability to make distributions to our shareholders.

Failure to meet our covenants could result from, among other things, changes in our results of operations, the incurrence of additional debt or changes in general economic conditions.

1 unchanged sentence

The terms of our debt may restrict our ability to engage in transactions that we believe would otherwise be in the best interests of our shareholders.

Our existing mortgage loan agreements contain, and mortgage loan agreements we may enter into in the future may contain, “cash trap” provisions that could limit our ability to make distributions to our shareholders.

Our existing mortgage loan agreements contain, and mortgage loan agreements we may enter into in the future may contain, cash trap provisions that may be triggered if the performance of the hotels securing the loans declines below a threshold.

Our existing mortgage loan agreement contains, and mortgage loan agreements we may enter into in the future may contain, "cash trap" provisions that could limit our ability to make distributions to our shareholders.

Our existing mortgage loan agreement contains, and mortgage loan agreements we may enter into in the future may contain, cash trap provisions that may be triggered if the performance of the hotels securing the loans declines below a threshold.

If these provisions are triggered, substantially all of the profit generated by the hotel will be deposited directly into a lockbox account and then swept into a cash management account for the benefit of the lender.

9 unchanged sentences

If we default on our secured debt, the lenders may foreclose on our hotels.

Our mortgage loans are secured by either single property first mortgage liens or leasehold interests under the ground leases on the applicable hotel.

Our mortgage loan is, and mortgage loans we may have in the future may be, secured by either single property first mortgage liens or leasehold interests under the ground leases on the applicable hotel.

If we default on a secured loan, the applicable lender will be able to foreclose on the property pledged to secure the loan.

8 unchanged sentences

In addition, we may not earn a current return on such investments particularly if the loan that we acquire is in default.

We are subject to counterparty risk with respect to our capped calls.

In connection with our offering in September 2025 of 1.625% Convertible Senior Notes due 2030, we have entered into capped call transactions with certain option counterparties.

The option counterparties are financial institutions, and we are subject to the risk that any or all of them might default under the capped call transactions.

Our exposure to the credit risk of the option counterparties is not secured by any collateral.

Past global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions.

If an option counterparty becomes subject to insolvency proceedings, then we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transaction with such option counterparty or the capped call transaction may be transferred to another financial institution.

Our exposure will depend on many factors, but, generally, an increase in our exposure will be correlated to an increase in the market price and volatility of our common shares.

In addition, upon a default by an option counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common shares.

We can provide no assurance as to the financial stability or viability of the option counterparties.

Further issuances of equity securities or debt securities convertible into our common shares, including in connection with conversions of notes, may be dilutive to current shareholders and convertible noteholders or materially and adversely affect the price of our common shares.

We expect to issue additional common shares or preferred shares or issue additional debt securities convertible into our common shares to raise the capital necessary to finance hotel acquisitions or improvements, refinance debt or pay portions of future dividends.

In addition, we may issue units in our Operating Partnership, which are redeemable on a one-for-one basis for our common shares, to acquire hotels.

Such issuances could result in dilution of our shareholders' equity interests.

Furthermore, the anticipated issuance and sale of substantial amounts of our common shares or the anticipated or actual conversion of securities into our common shares could adversely affect the market price of our common shares.

Future offerings of debt securities or preferred shares, which would be senior to our common shares upon liquidation and for the purpose of distributions, may cause the market price of our common shares to decline.

In the future, we may increase our capital resources by making debt or equity securities offerings, including senior or subordinated notes, additional series of preferred shares and common shares.

We will be able to issue additional common shares or preferred shares without shareholder approval, unless shareholder approval is required by applicable law or the rules of any stock exchange or automated quotation system on which our securities may be listed or traded.

Upon liquidation, holders of our debt securities and preferred shares and lenders with respect to other borrowings will receive a distribution of our available assets prior to the holders of our common shares.

Additional equity offerings could significantly dilute the holdings of our existing shareholders or reduce the market price of our common shares, or both.

Holders of our common shares are not entitled to preemptive rights or other protections against dilution.

Preferred shares and debt have a preference on liquidating distributions or a preference on dividend or interest payments that could limit our ability to make a distribution to the holders of our common shares.

Because our decision to issue securities will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings.

Thus, our shareholders bear the risk of our future securities issuances reducing the market price of our common shares and diluting their interest.

Risks Related to the Lodging Industry

24 unchanged sentences

• labor strikes or disruptions;

• unforeseen events beyond our control, such as terrorist attacks, cyber-attacks, travel-related health concerns and restrictions as a result of pandemics and epidemics such as COVID-19, H1N1 influenza (swine flu), avian bird flu, Zika virus, SARS and MERS, political instability, regional hostilities, imposition of taxes or surcharges by regulatory authorities, travel-related accidents and unusual weather patterns, including natural disasters such as hurricanes, tsunamis or earthquakes;

• unforeseen events beyond our control, such as terrorist attacks, rumors or threats of war, cyber-attacks, travel-related health concerns and restrictions as a result of pandemics and epidemics such as, without limitation, COVID-19, H1N1 influenza (swine flu), avian bird flu, Zika virus, SARS and MERS, political instability, regional hostilities, imposition of taxes or surcharges by regulatory authorities, travel-related accidents and unusual weather patterns, including natural disasters such as hurricanes, tsunamis and earthquakes;

• strength of the U.S.

25 unchanged sentences

• possible environmental problems;

• construction cost overruns and delays, including those caused by supply chain disruptions;

• construction cost overruns and delays, including those caused by supply chain disruptions and tariffs;

• the possibility that revenues will be reduced while rooms or restaurants are out of service due to capital improvement projects;

35 unchanged sentences

For more information regarding cybersecurity risk and our management of it, see Part I, Item 1C of this Annual Report on Form 10-K.

We may face challenges managing rapidly advancing artificial intelligence in our business which could adversely affect our competitive position.

The development and evolution of artificial intelligence is occurring at a rapid pace.

Artificial intelligence may present an opportunity to create meaningful efficiencies and improve our business performance, but it could present similar opportunities for our competitors, and the use of artificial intelligence by us or our hotel managers, franchisors or vendors may pose new and more severe cybersecurity challenges.

The use of artificial intelligence by hotel guests may change the way they find and purchase lodging or other hotel services.

If we or our hotel managers, franchisors or vendors are unable to apply artificial intelligence to our business successfully or our competitors gain competitive advantages over us through their application of artificial intelligence, our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders may be adversely affected.

We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor.

19 unchanged sentences

We are subject to operational risks associated with complying with increased environmental-related regulations, aligning with investor requirements concerning environmental issues and meeting shifting consumer preferences with regard to the environment.

In an effort to mitigate the impact of climate change, our hotels could become subject to increased governmental regulations mandating energy efficiency standards, the usage of sustainable energy sources and updated equipment specifications, which may require additional capital investments or increased operating costs.

In an effort to mitigate the impact of climate change, our hotels could become subject to increased governmental regulations (whether federal, state, county or local) mandating energy efficiency standards, the usage of sustainable energy sources, updated equipment specifications, additional disclosure requirements (and potentially additional monitoring systems) and limits on carbon emissions, which may require additional capital investments or increased operating costs.

Climate change may also affect our business by causing a shift in consumer preferences for sustainable travel.

4 unchanged sentences

While our operations have significantly improved, and COVID-19 is now endemic, future pandemics of other diseases (whether due to novel sources or the re-emergent of previous sources) could occur, which could have a material adverse effect on our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders.

Terrorist attacks or changes in terror alert levels could adversely affect travel and hotel demand.

Terrorist attacks and terror alerts have adversely affected the U.S.

travel and hospitality industries in the past several, often disproportionately to their effect on the overall economy.

The impact that terrorist attacks in the U.S.

or elsewhere could have on domestic and international travel and our business in particular cannot be definitively determined, but any such attacks or the threat of such attacks could have a material adverse effect on our business, our ability to finance our business, our ability to insure our properties and our results of operations and financial condition.

Terrorism, terror alerts, rumors or threats of war and other disruptive geopolitical activity could adversely affect travel and hotel demand.

Terrorism, terror alerts, rumors or threats of war and other disruptive geopolitical activity have adversely affected the U.S.

travel and hospitality industries in the last several years, often disproportionately to their effect on the overall economy.

The impact that increases in such events could have on domestic and international travel and our business in particular cannot be definitively determined.

The occurrence of any such events could have a material adverse effect on our business, our ability to finance our business, our ability to insure our properties and our results of operations and financial condition.

Uninsured and underinsured losses could result in a loss of capital.

46 unchanged sentences

A delay in approving a budget and/or continuing appropriation legislation to fund the operations of the federal government, failure to raise the borrowing limit for the federal government, and other legislative changes and governmental disruptions could affect travel directly and indirectly and may thereby negatively impact our revenues and cash available for distributions .

The delay in approving a budget and continuing appropriation legislation to fund the federal government's operations caused many federal agencies to cease or curtail some activities during the fourth quarter of 2013 and for an even longer period of time beginning in the fourth quarter of 2018.

There can be no assurance that similar action or inaction by federal or state government agencies, or other efforts to reduce government expenditures or growth, will not occur again in future periods, resulting in difficulties and discouraging travel or meetings and conferences.

21 unchanged sentences

These factors and any others that would impede our ability to respond to adverse changes in the performance of the hotel properties or a need for liquidity could adversely affect our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders.

If states and localities in which we own material amounts of property or conduct material amounts of business raise their income and property tax rates or amend their tax regimes in a manner that increases our state and local tax liabilities, we would have less cash available for distribution to our shareholders and the market price of our shares could be adversely affected.

If states and localities in which we own material amounts of property or conduct material amounts of business raise their transfer taxes, income or property tax rates or amend their tax regimes in a manner that increases our state and local tax liabilities, we would have less cash available for distribution to our shareholders and the market price of our shares could be adversely affected.

We and our subsidiaries are subject to income tax and other taxes by states and localities in which we conduct business.

Additionally, we are and will continue to be subject to property taxes in states and localities in which we own property, and our TRS lessees are and will continue to be subject to federal, state and local corporate income tax.

States and localities may seek additional sources of revenue to reduce budget deficits and otherwise improve their financial condition or provide more services, they may, among other steps, raise income and property tax rates and/or amend their tax regimes to eliminate for state income tax purposes the favorable tax treatment REITs enjoy for U.S.

States and localities may seek additional sources of revenue to reduce budget deficits and otherwise improve their financial condition or provide more services, they may, among other steps, increase transfer taxes, raise income and property tax rates and/or amend their tax regimes to eliminate for state income tax purposes the favorable tax treatment REITs enjoy for U.S.

federal income tax purposes.

39 unchanged sentences

Additionally, Title 8, Subtitle 3 of the MGCL permits our board of trustees, without shareholder approval and regardless of what is currently provided in our declaration of trust or bylaws, to implement certain takeover defenses, such as a classified board.

These provisions may have the effect of inhibiting a third party from making an acquisition proposal for us or of delaying, deferring or preventing a change in control of us under the circumstances that otherwise could provide our common shareholders with the opportunity to realize a premium over the then current market price.

These provisions may have the effect of inhibiting a third party from making an acquisition proposal for us or of delaying, deferring or preventing a change of control of us under the circumstances that otherwise could provide our common shareholders with the opportunity to realize a premium over the then current market price.

In October 2015, we opted out of the classified board provision of Title 8, Subtitle 3 of the MGCL and prohibited ourselves from opting back into that provision without prior approval of our shareholders.

21 unchanged sentences

Our declaration of trust also provides that vacancies on our board of trustees may be filled only by a majority of the remaining trustees in office, even if less than a quorum.

These requirements prevent shareholders from removing trustees except for cause and with a substantial affirmative vote and from replacing trustees with their own nominees and may prevent a change in control of our company that is in the best interests of our shareholders.

These requirements prevent shareholders from removing trustees except for cause and with a substantial affirmative vote and from replacing trustees with their own nominees and may prevent a change of control of our company that is in the best interests of our shareholders.

The ability of our board of trustees to change our major policies without the consent of shareholders may not be in our shareholders' interest.

2 unchanged sentences

Accordingly, our shareholders will have limited control over changes in our policies and those changes could adversely affect our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders.

Further issuances of equity securities may be dilutive to current shareholders.

We expect to issue additional common shares or preferred shares to raise the capital necessary to finance hotel acquisitions or improvements, refinance debt or pay portions of future dividends.

In addition, we may issue units in our Operating Partnership, which are redeemable on a one-for-one basis for our common shares, to acquire hotels.

Such issuances could result in dilution of our shareholders' equity interests.

We have issued eight series of preferred shares, of which we repurchased four and four remain outstanding, three series of senior unsecured notes, of which we repaid one and two remain outstanding, and one series of convertible senior notes.

In the future, we may increase our capital resources by making debt or equity securities offerings, including senior or subordinated notes, additional series of preferred shares and common shares.

Additional equity offerings could significantly dilute the holdings of our existing shareholders or reduce the market price of our common shares, or both.

Holders of our common shares are not entitled to preemptive rights or other protections against dilution.

Because our decision to issue securities will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings.

Thus, our shareholders bear the risk of our future securities issuances reducing the market price of our common shares and diluting their interest.

Holders of our outstanding preferred shares have dividend, liquidation and other rights that are senior to the rights of the holders of our common shares.

35 unchanged sentences

As a result of all these factors, our failure to maintain our qualification as a REIT could impair our ability to execute our business and growth strategies, as well as make it more difficult for us to raise capital and service our indebtedness.

We could face adverse tax consequences if LaSalle failed to qualify as a REIT prior to the merger.

In connection with the closing of the merger, we received an opinion of counsel to the effect that LaSalle qualified as a REIT for U.S.

federal income tax purposes through the time of the merger.

However, we did not request a ruling from the IRS that LaSalle qualified as a REIT.

Notwithstanding the opinion of counsel, if the IRS successfully challenged LaSalle’s REIT status prior to the merger, we could face adverse tax consequences, including:

• succeeding to LaSalle’s liability for U.S.

federal income taxes at regular corporate rates for the periods in which LaSalle failed to qualify as a REIT (without regard to the deduction for dividends paid for such periods);

• succeeding to any built-in gain on LaSalle’s assets, for which we could be liable for U.S.

federal income tax at regular corporate rates, if we were to recognize such gain in the five-year period following the merger;

• succeeding to LaSalle’s earnings and profits accumulated during the periods in which LaSalle failed to qualify as a REIT, which we would be required to distribute to our shareholders in order to satisfy the REIT distribution requirements and avoid the imposition of any excise tax.

As a result, we would have less cash available for operations and distributions to our shareholders, which could require us to raise capital on unfavorable terms or pay deficiency dividends.

Complying with REIT requirements may cause us to forego otherwise attractive business opportunities or liquidate otherwise attractive investments.

5 unchanged sentences

The remainder of our investment in securities (other than government securities and qualified real estate assets) generally cannot include more than 10 percent of the outstanding voting securities of any one issuer or more than 10 percent of the total value of the outstanding securities of any one issuer.

In addition, in general, no more than 5 percent of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, no more than 20 percent of the value of our total assets can be represented by the securities of one or more TRSs and no more than 25 percent of our assets can be represented by debt of "publicly offered REITs" (i.e., REITs that are required to file annual and periodic reports with the SEC under the Exchange Act) that is not secured by real property or interests in real property.

In addition, in general, no more than 5 percent of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, no more than 25 percent (20 percent for taxable years beginning before January 1, 2026) of the value of our total assets can be represented by the securities of one or more TRSs and no more than 25 percent of our assets can be represented by debt of "publicly offered REITs" (i.e., REITs that are required to file annual and periodic reports with the SEC under the Exchange Act) that is not secured by real property or interests in real property.

The Code provides that temporary investments of new capital in stock or debt instruments for the one-year period beginning on the date on which we receive the new capital will be considered qualified real estate assets for purposes of the above requirements.

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Dividends payable by REITs, however, generally are not eligible for the reduced qualified dividend rates.

For taxable years beginning before January 1, 2026, non-corporate taxpayers may deduct up to 20 percent of certain pass-through business income, including “qualified REIT dividends” (generally, dividends received by a REIT shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S.

Non-corporate taxpayers may deduct up to 20 percent of certain pass-through business income, including "qualified REIT dividends" (generally, dividends received by a REIT shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S.

federal income tax rate of 29.6 percent on such income.

33 unchanged sentences

These restrictions on transferability and ownership will not apply, however, if our board of trustees determines that it is no longer in our best interest to continue to qualify as a REIT.

These ownership limits could delay or prevent a transaction or a change in control that might involve a premium price for our shares or otherwise be in the best interest of the shareholders.

These ownership limits could delay or prevent a transaction or a change of control that might involve a premium price for our shares or otherwise be in the best interest of the shareholders.

The prohibited transactions tax may limit our ability to engage in transactions, including dispositions of assets that would be treated as sales for U.S.

14 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors