11 unchanged sentences
Based on this assessment, we believe that, as of December 31, 2020, our internal control over financial reporting is effective.
−Removed: Ernst & Young LLP, the independent registered public accounting firm that audited our 2019 consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on our internal control over financial reporting.
+Added: Deloitte & Touche LLP, the independent registered public accounting firm that audited our 2020 consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on our internal control over financial reporting.
The report appears elsewhere herein.
Other Information
−Removed: Restructuring of our existing business arrangements with Sonesta
−Removed: On February 27, 2020, we entered into a transaction agreement with Sonesta and its newly formed parent company, Holdco, pursuant to which we restructured our business agreements as follows:
−Removed: We amended and restated our existing management agreements with Sonesta for each of our hotels currently managed by Sonesta, which we refer to collectively as our Sonesta agreement, and our existing pooling agreement with Sonesta, which combines our management agreements with Sonesta for purposes of calculating gross revenues, payment of hotel operating expenses, payment of fees and distributions and minimum returns due to us, as further described below;
−Removed: We and Sonesta agreed to sell, rebrand or repurpose our 39 extended stay hotels managed by Sonesta with an aggregate carrying value of $480,547 and which currently require aggregate annual minimum returns of $49,467 .
−Removed: As the hotels are sold, rebranded or repurposed, the management agreement for the applicable hotel(s) will terminate without our being required to pay Sonesta a termination fee and our annual minimum returns due to us under our Sonesta agreement will decrease by the amount allocated to the applicable hotel(s);
−Removed: Sonesta will continue to manage 14 of our full-service hotels and the annual minimum returns due for these hotels will be reduced from $99,013 to $69,013 ;
−Removed: Holdco issued to us a number of its shares of common stock representing approximately (but not more than) 34% of its outstanding share of common stock (post-issuance);
−Removed: We modified our Sonesta agreement and pooling agreement so that up to 5% of the gross revenues of each of our 14 full-service hotels managed by Sonesta will be escrowed for future capital expenditures as “FF&E reserves,” subject to available cash flow after payment of the annual minimum returns due to us under our Sonesta agreement;
−Removed: We modified our Sonesta agreement and pooling agreement so that (1) our termination rights under those agreements for our 14 full service hotels managed by Sonesta are generally limited to performance and for “cause,” casualty and condemnation events, (2) a portfolio wide performance test now applies for determining whether the management agreement for any of our full-service hotels managed by Sonesta may be terminated for performance reasons, and (3) the provisions included in our historical pooling agreement that allowed either us or Sonesta to require the marketing for sale of non-economic hotels were removed;
−Removed: We extended the initial expiration date of the management agreements for our full-service hotels located in Chicago, IL and Irvine, CA that are managed by Sonesta to expire in January 2037 to align with the initial expiration date for our other full-service hotels managed by Sonesta.
−Removed: Except as described above, the economic terms of our amended and restated Sonesta agreement and amended and restated pooling agreement are consistent with the historical Sonesta agreement and pooling agreement.
−Removed: The Holdco shares we acquired in the transaction are unregistered.
−Removed: Concurrently with entering into, and pursuant to, the transaction agreement, we entered into a stockholders agreement with Holdco, Adam Portnoy and the other stockholder of Holdco, as described below, and a registration rights agreement with Holdco with respect to our Holdco shares pursuant to which we received customary piggy-back registration rights.
−Removed: Pursuant to the stockholders agreement, among other things:
−Removed: (1) we received consent rights with respect to certain amendments to Holdco’s and its subsidiaries’ organizational documents and other stockholders agreements and certain related party transactions;
−Removed: (2) we are subject to transfer restrictions with respect to our Holdco shares, with certain exceptions;
−Removed: (3) Holdco has a right of first offer before we may sell our Holdco shares to a third party;
−Removed: (4) pursuant to their drag-along right, the other Holdco stockholders may require us to sell our Holdco shares to a third party in a change of control transaction, as defined;
−Removed: (5) pursuant to our tag-along rights, we may participate equally with the other Holdco stockholders in the sale of their Holdco shares to a third party;
−Removed: (6) Holdco has a call right to purchase our Holdco shares in the event that we terminate our Sonesta agreement, which right is exercisable within a year following such termination, subject in certain circumstances to our right to sell to a third party through the right of first offer process;
−Removed: (7) we have a preemptive right to participate equally in any future issuance of Holdco stock;
−Removed: and (8) we have certain financial information and access rights.
−Removed: Also pursuant to the stockholders agreement, Holdco and the other Holdco stockholders agreed to certain covenants related to our ability to maintain our qualification for taxation as a REIT under the IRC, including not taking any action that would cause us to constructively own more than 34% of Holdco’s outstanding shares, and, in the event this covenant is breached, we can require Holdco to purchase the number of Holdco shares which caused us to exceed the 34% limitation.
−Removed: The stockholders agreement provides a valuation process to determine the purchase price of the Holdco shares in connection with the right of first refusal, call right and put right, which includes independent third party valuations.
−Removed: The stockholders agreement terminates under certain circumstances, including the earlier of such time as we or our permitted transferees no longer own any Holdco shares or a change in control or an initial public offering of Holdco.
−Removed: The foregoing descriptions of the transaction agreement, the amended and restated Sonesta agreement and amended and restated pooling agreement, the stockholders agreement and the registration rights agreement are qualified in their entirety by reference to the full text of the transaction agreement (including the forms of amended and restated management agreement, amended and restated pooling agreement, stockholders agreement and registration rights agreement attached as exhibits thereto), a copy of which is filed as Exhibit 10.11 to this Annual Report on Form 10-K and is incorporated herein by reference.
−Removed: We have relationships and historical and continuing transactions with Sonesta and Adam Portnoy.
−Removed: Please see Notes 4, 5, 8 and 9 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K, which are incorporated herein by reference, for further information regarding our relationships with Sonesta and Adam Portnoy.
−Removed: Because of these continuing relationships, the transactions contemplated by the transaction agreement and the terms thereof were evaluated, negotiated and recommended to our Board of Trustees for approval by a special committee of our Board of Trustees, comprised solely of our Independent Trustees, and were separately approved and adopted by our Independent Trustees and our Board of Trustees.
−Removed: Citigroup Global Markets Inc.
−Removed: acted as financial advisor to the special committee of our Board of Trustees.
−Removed: Board expansion
−Removed: On February 27, 2020, our Board of Trustees pursuant to a recommendation of the Nominating and Governance Committee of our Board of Trustees, increased its size from five to seven members, with one new Trustee to be in Class II of our Board of Trustees with a term expiring at our 2021 annual meeting of shareholders and the other new Trustee to be in Class III of our Board of Trustees with a term expiring at our 2022 annual meeting of shareholders, and in order to fill the vacancies created by such increase, elected Laurie B.
−Removed: Burns and Robert E.
−Removed: Cramer, as Independent Trustees in Class II and Class III of our Board of Trustees, respectively.
−Removed: Burns and Mr.
−Removed: Cramer were also each elected as a member of the Audit Committee, Compensation Committee and the Nominating and Governance Committee of our Board of Trustees.
−Removed: Burns, age 57, has been the founder and chief executive officer of LBB Growth Partners, a real estate advisory firm focusing on restaurant and hospitality businesses, since 2017, or LBB.
−Removed: Prior to founding LBB, since 1999, Ms.
−Removed: Burns held various positions at Darden Restaurants, Inc., an owner and operator of full-service restaurants in the United States and Canada, or Darden, including, senior vice president and chief development officer, from 2014 to 2016, senior vice president, specialty restaurant group strategic platform and development, from 2012 to 2014, and president of Bahama Breeze Island Grille from 2003 to 2012.
−Removed: Prior to joining Darden, Ms.
−Removed: Burns held various real estate development positions in the hospitality industry.
−Removed: Cramer, age 62, has been managing partner of Riparian Partners, LLC, a mergers and acquisitions advisory firm that provides investment banking services to privately held middle market companies, or Riparian, since 2019.
−Removed: Prior to joining Riparian, Mr.
−Removed: Cramer served as managing director and head of the financial institutions and real estate group of Oppenheimer and Co.
−Removed: Inc., a financial services firm, from 2013 to 2018.
−Removed: Prior to that, Mr.
−Removed: Cramer served as managing director, financial services group, of RBC Capital Markets, LLC, an investment banking firm, or RBC, from 2001 to 2013.
−Removed: Prior to joining RBC, Mr.
−Removed: Cramer held various positions in financial services.
−Removed: Cramer is also currently an adjunct professor of finance at Boston College Carroll School of Management.
−Removed: There is no arrangement or understanding between Ms.
−Removed: Cramer and any other person pursuant to which Ms.
−Removed: Cramer, respectively, was selected as a Trustee.
−Removed: There are no transactions, relationships or agreements between Ms.
−Removed: Cramer and us that would require disclosure pursuant to Item 404(a) of Regulation S-K promulgated under the Exchange Act.
−Removed: Our Board of Trustees concluded that each of Ms.
−Removed: Burns and Mr.
−Removed: Cramer is qualified to serve as our Independent Trustee in accordance with the requirements of The Nasdaq Stock Market LLC, the Securities and Exchange Commission and our bylaws.
−Removed: For their service as Trustees, Ms.
−Removed: Burns and Mr.
−Removed: Cramer will be entitled to the compensation we generally provide to our Independent Trustees, with the annual cash fees prorated.
−Removed: A summary of our currently effective Trustee compensation is filed as Exhibit 10.3 to this Annual Report on Form 10-K and is incorporated herein by reference.
−Removed: Consistent with those compensation arrangements, on February 27, 2020, we awarded to each of Ms.
−Removed: Burns and Mr.
−Removed: Cramer 3,000 of our common shares in connection with their election, all of which vested on the award date.
−Removed: In connection with their elections, we entered into an indemnification agreement with each of Ms.
−Removed: Burns and Mr.
−Removed: Cramer, effective as of February 27, 2020, on substantially the same terms as the agreements previously entered into between us and each of our other Trustees.
−Removed: The form of indemnification agreement entered into between us and our Trustees is filed as Exhibit 10.8 to this Annual Report on Form 10-K and is incorporated herein by reference.
Directors, Executive Officers and Corporate Governance
15 unchanged sentences
The following table is as of December 31, 2020.
−Removed: Plan category
−Removed: Number of securities to
+Added: Plan category Number of securities to
be issued upon exercise
of outstanding options,
−Removed: warrants and rights
−Removed: Weighted-average
+Added: warrants and rights Weighted-average
exercise price of
outstanding options,
−Removed: warrants and rights
−Removed: Number of securities
+Added: warrants and rights Number of securities
remaining available for
3 unchanged sentences
2,029,893 (1)
−Removed: Equity compensation plans not approved by securityholders
+Added: Equity compensation plans not approved by securityholders None.
2,029,893 (1)
8 unchanged sentences
Exhibits, Financial Statement Schedules
−Removed: Index to Financial Statements and Financial Statement Schedules
−Removed: Reports of Ernst & Young LLP, Independent Registered Public Accounting Firm
+Added: (a) Index to Financial Statements and Financial Statement Schedules
+Added: Reports of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
+Added: Report of Ernst & Young LLP, Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 20 20 and 201 9
−Removed: Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 2019
+Added: Consolidated Statements of Comprehensive Income (Loss) for each of the three years in the period ended December 31, 20 20
Consolidated Statements of Shareholders' Equity for each of the three years in the period ended December 31, 20 20
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 20 20
−Removed: Notes to Financial Statements
+Added: Notes to Consolidated Financial Statements
Schedule III - Real Estate and Accumulated Depreciation as of December 31, 20 20
7 unchanged sentences
See Notes 4, 5 and 9 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K for further information relating to our leases with TA.
−Removed: Exhibit Number
−Removed: Equity Purchase Agreement, dated as of June 2, 2019, by and among the Company, Spirit MTA REIT, SMTA Financing JV, LLC and Banner NewCo LLC.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 2, 2019.)
+Added: Exhibit Number Description
3.1 Composite Copy of Amended and Restated Declaration of Trust, dated as of August 21, 1995, as amended to date.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated September 20, 2019.)
+Added: (Incorporated by reference to the Company’s Post-Effective Amendment No.
+Added: 2 to Registration Statement on Form S-3, filed on July 15, 2020, File No.
+Added: 3.2 Articles Supplementary to the Declaration of Trust of the Company , dated June 10, 2020 .
+Added: (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 10, 2020 .)
3.3 Amended and Restated Bylaws of the Company, adopted effective September 23, 2019.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated September 20, 2019.)
+Added: (Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 2 3 , 2019.)
4.1 Form of Common Share Certificate.
−Removed: (Filed herewith.)
+Added: ( Incorporated by reference to the Company ’ s Annual Report on Form 10-K for the year ended December 31, 2019 .)
4.2 Indenture, dated as of February 25, 1998, between the Company and State Street Bank and Trust Company.
21 unchanged sentences
Bank National Association.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated February 1, 2016.)
−Removed: First Supplemental Indenture, dated as of February 3, 2016, between the Company and U.S.
−Removed: Bank National Association, relating to the Company’s 4.25% Senior Notes due 2021, including form thereof.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated February 1, 2016.)
+Added: (Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 4 , 2016.)
4.9 Second Supplemental Indenture, dated as of February 3, 2016, between the Company and U.S.
Bank National Association, relating to the Company’s 5.25% Senior Notes due 2026, including form thereof.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated February 1, 2016.)
+Added: (Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 4 , 2016.)
4.10 Third Supplemental Indenture, dated as of January 13, 2017, between the Company and U.S.
9 unchanged sentences
Bank National Association, relating to the Company’s 4.350% Senior Notes due 2024, including form thereof.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated September 18, 2019.)
+Added: (Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 18, 2019.)
4.14 Seventh Supplemental Indenture, dated as of September 18, 2019, between the Company and U.S.
Bank National Association, relating to the Company’s 4.750% Senior Notes due 2026, including form thereof.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated September 18, 2019.)
+Added: (Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 18, 2019.)
4.15 Eighth Supplemental Indenture, dated as of September 18, 2019, between the Company and U.S.
Bank National Association, relating to the Company’s 4.950% Senior Notes due 2029, including form thereof.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated September 18, 2019.)
+Added: (Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 18, 2019.)
+Added: 4.16 Ninth Supplemental Indenture, dated as of June 17, 2020, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S.
+Added: Bank National Association, relating to the Company’s 7.50% Senior Notes due 2025, including form thereof.
+Added: (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 18, 2020.)
+Added: 4.17 Supplemental Indenture, dated as of July 15, 2020, among the Company, Highway Ventures Properties Trust, HPTWN Properties Trust, HPT Suite Properties Trust, SVCN 2 LLC and U.S.
+Added: Bank National Association, relating to the Company’s 7.50% Senior Notes due 2025.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.)
+Added: 4.18 Supplemental Indenture, dated as of October 9, 2020, among the Company, Banner NewCo LLC, SVCN 3 LLC and U.S.
+Added: Bank National Association, relating to the Company’s 7.50% Senior Notes due 2025.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.)
+Added: 4.19 Tenth Supplemental Indenture, dated as of November 20, 2020, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S.
+Added: Bank National Association, relating to the Company’s 5.50% Senior Notes due 2027, including form thereof.
+Added: (Filed herewith.)
+Added: 4.20 Supplemental Indenture, dated as of November 13, 2020, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S.
+Added: Bank National Association, relating to the Company’s 7.50% Senior Notes due 2025.
+Added: (Incorporated by reference to the Company’s Current Report on Form 8-K filed on November 17, 2020.)
4.21 Registration Rights and Lock-Up Agreement, dated as of June 5, 2015, among the Company, ABP Trust (f/k/a Reit Management & Research Trust) and Adam D.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 5, 2015.)
+Added: (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 8 , 2015.)
4.22 Description of Securities.
3 unchanged sentences
10.1 Second Amended and Restated Business Management Agreement, dated as of June 5, 2015, between the Company and The RMR Group LLC.
−Removed: (+) (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 5, 2015.)
+Added: (+) (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 8 , 2015.)
10.2 Second Amended and Restated Property Management Agreement, dated as of June 5, 2015, between the Company and The RMR Group LLC.
−Removed: (+) (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 5, 2015.)
+Added: (+) (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 8 , 2015.)
10.3 Summary of Trustee Compensation.
−Removed: (+) (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 13, 2019.)
+Added: (+) (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 10 , 20 20 .)
10.4 2012 Equity Compensation Plan.
−Removed: (+) (Incorporated by reference to the Company’s Current Report on Form 8-K dated May 9, 2012.)
+Added: (+) (Incorporated by reference to the Company’s Current Report on Form 8-K filed on May 14 , 2012.)
10.5 First Amendment to 2012 Equity Compensation Plan.
4 unchanged sentences
(+) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016.)
+Added: 10.8 Form of Share Award Agreement.
+Added: (+) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.)
10.9 Form of Indemnification Agreement.
−Removed: (+) (Filed herewith.)
+Added: (+) (Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.)
10.10 Second Amended and Restated Credit Agreement, dated as of May 10, 2018, among the Company, Wells Fargo Bank, National Association, as Administrative Agent, and each of the other financial institutions initially a signatory thereto.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated May 10, 2018.)
+Added: (Incorporated by reference to the Company’s Current Report on Form 8-K filed on May 1 5 , 2018.)
10.11 First Amendment to Second Amended and Restated Credit Agreement, dated as of September 17, 2019, among the Company, Wells Fargo Bank, National Association, as Administrative Agent, and each of the other financial institutions signatory thereto.
−Removed: (Filed herewith.)
+Added: ( Incorporated by reference to the Company ’ s Annual Report on Form 10-K for the year ended December 31 , 2019 .)
+Added: 10.12 Second Amendment to Second Amended and Restated Credit Agreement, dated as of May 8, 2020, among the Company, Wells Fargo Bank, National Association, as Administrative Agent, and each of the other financial institutions signatory thereto.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.)
+Added: 10.13 Pledge Agreement, dated as of May 8, 2020, between the Company, certain of its direct and indirect Subsidiaries and Wells Fargo Bank, National Association.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.)
+Added: 10.14 Pledge Amendment, dated as of May 22, 2020, among the Company, Banner NewCo LLC, Highway Ventures Borrower LLC and Highway Ventures Properties Trust.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.)
+Added: 10.15 Pledge Amendment, dated as of June 15, 2020, by Banner NewCo LLC.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.)
+Added: 10.16 Pledge Supplement No.
+Added: 1, dated as of June 15, 2020, between HPT TA Properties Trust and Wells Fargo Bank, National Association.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.)
+Added: 10.17 Pledged Interest Release Letter, dated as of June 17, 2020, between the Company and Wells Fargo Bank, National Association.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.)
+Added: 10.18 Pledge Amendment, dated as of September 14, 2020, by Banner NewCo LLC.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.)
+Added: 10.19 Pledged Interest Release Request Letter, dated as of September 14, 2020, between the Company and Wells Fargo Bank, National Association.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.)
+Added: 10.20 Release of Certain Guarantors, dated as of October 1, 2020, by U.S.
+Added: Bank National Association.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.)
+Added: 10.21 Third Amendment to Second Amended and Restated Credit Agreement, dated as of November 5, 2020, between the Company, Wells Fargo Bank, National Association, as Administrative Agent, and each of the other financial institutions signatory thereto.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.)
+Added: 10.22 Pledge Supplement No.
+Added: 2, dated as of November 5, 2020, between the Company, Highway Ventures Borrower LLC, HPT SN Holding, Inc.
+Added: and Wells Fargo Bank, National Association.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.)
+Added: 10.23 Release of Certain Guarantors, dated as of November 13, 2020, among the Company, certain subsidiaries of the Company named therein and U.S.
+Added: Bank National Association.
+Added: (Incorporated by reference to the Company’s Current Report on Form 8-K filed on November 17, 2020.)
10.24 Transaction Agreement, dated as of February 27, 2020, between Sonesta Holdco Corporation and the Company.
−Removed: (Filed herewith.)
+Added: (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.)
+Added: 10.25 Representative Form of Amended and Restated Management Agreement between Sonesta International Hotels Corporation and Cambridge TRS, Inc.
+Added: (Non-Sale Properties).
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.) (Schedule of applicable agreements incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.)
+Added: 10.26 Representative Form of Amended and Restated Management Agreement between Sonesta International Hotels Corporation and Cambridge TRS, Inc.
+Added: (Sale Properties).
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.) (Schedule of applicable agreements incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.)
+Added: 10.27 Amended and Restated Pooling Agreement, dated February 27, 2020, among Sonesta International Hotels Corporation, Sonesta Clift LLC, Sonesta Chicago LLC, Cambridge TRS, Inc., HPT Clift TRS LLC and HPT Wacker Drive TRS LLC.
+Added: (Legacy Hotels) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.)
+Added: 10.28 Stockholders Agreement, dated as of February 27, 2020, by and among Sonesta Holdco Corporation, the Company, SVC Holdings LLC, Adam D.
+Added: Portnoy and Diane Portnoy, as trustee of the Diane Portnoy 2019 Revocable Trust under agreement dated May 28, 2019.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.)
+Added: 10.29 Representative Form of Management Agreement between Sonesta International Hotels Corporation and Cambridge TRS, Inc.
+Added: (Conversion Hotels) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.) (Schedule of applicable agreements filed herewith.)
+Added: 10.30 Pooling Agreement, dated as of December 15, 2020, among Sonesta International Hotels Corporation, certain subsidiaries of the Company named therein as owners and certain subsidiaries of Sonesta International Hotels Corporation named therein as managers.
+Added: (Conversion Hotels) (Filed herewith.)
10.31 Second Amended and Restated Lease Agreement No.
28 unchanged sentences
(Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.)
−Removed: Second Amended and Restated Management Agreement, dated as of December 31, 2019, between Marriott Hotel Services, Inc.
−Removed: and HPT TRS MRP, Inc.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated December 31, 2019.)
−Removed: Second Amended and Restated Management Agreement, dated as of December 31, 2019, among Courtyard Management Corporation, HPT TRS MRP, Inc.
−Removed: and HPT CY TRS, Inc.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated December 31, 2019.)
−Removed: Second Amended and Restated Management Agreement, dated as of December 31, 2019, between Residence Inn By Marriott, LLC and HPT TRS MRP, Inc.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated December 31, 2019.)
−Removed: Second Amended and Restated Management Agreement, dated as of December 31, 2019, between SpringHill SMC, LLC and HPT TRS MRP, Inc.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated December 31, 2019.)
−Removed: Second Amended and Restated Management Agreement, dated as of December 31, 2019, between TownePlace Management, LLC and HPT TRS MRP, Inc.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated December 31, 2019.)
−Removed: Management Agreement, dated as of December 31, 2019, between Essex House Condominium Corporation and HPT TRS MRP, Inc.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated December 31, 2019.)
−Removed: Amended and Restated Pooling Agreement, dated as of December 31, 2019, among Marriott International, Inc., Marriott Hotel Services, Inc., Residence Inn By Marriott, LLC, Courtyard Management Corporation, SpringHill SMC, LLC, TownePlace Management, LLC, Essex House Condominium Corporation, HPT TRS MRP, Inc.
−Removed: and HPT CY TRS, Inc.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated December 31, 2019.)
−Removed: Letter Agreement, dated as of December 31, 2019, among Marriott International, Inc., Marriott Hotel Services, Inc., Residence Inn By Marriott, LLC, Courtyard Management Corporation, SpringHill SMC, LLC, TownePlace Management, LLC, Essex House Condominium Corporation, HPT TRS MRP, Inc.
−Removed: and HPT CY TRS, Inc.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated December 31, 2019.)
−Removed: Management Agreement, dated as of July 1, 2011, among HPT TRS IHG-1, Inc., HPT TRS IHG-2, Inc., HPT TRS IHG-3, Inc., InterContinental Hotels Group Resources, Inc., IHG Management (Maryland) LLC, and InterContinental Hotels Group (Canada), Inc.
−Removed: (Incorporated by reference to the Company’s Current Report on Form 8-K dated July 25, 2011.)
−Removed: Amendment to Management Agreement, dated as of March 16, 2015, among HPT TRS IHG-2, Inc., InterContinental Hotels Group Resources, Inc., IHG Management (Maryland) LLC and InterContinental Hotels Group (Canada), Inc.
−Removed: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.)
−Removed: Second Amendment to Management Agreement, dated as of February 11, 2016, among HPT TRS IHG-2, Inc., InterContinental Hotels Group Resources, Inc., IHG Management (Maryland) LLC and InterContinental Hotels Group (Canada), Inc.
−Removed: (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.)
−Removed: Third Amendment to Management Agreement, dated as of February 1, 2017, among HPT TRS IHG-2, Inc., InterContinental Hotels Group Resources, Inc., IHG Management (Maryland) LLC and InterContinental Hotels Group (Canada), Inc.
−Removed: (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.)
−Removed: Fourth Amendment to Management Agreement, dated as of March 24, 2017, among HPT TRS IHG-2, Inc., InterContinental Hotels Group Resources, Inc., IHG Management (Maryland) LLC and InterContinental Hotels Group (Canada), Inc.
−Removed: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.)
−Removed: Fifth Amendment to Management Agreement, dated as of June 28, 2017, among HPT TRS IHG-2, Inc., InterContinental Hotels Group Resources, Inc., IHG Management (Maryland) LLC and InterContinental Hotels Group (Canada), Inc.
−Removed: (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.)
−Removed: Sixth Amendment to Management Agreement, dated as of May 11, 2018, among HPT TRS IHG-2, Inc., InterContinental Hotels Group Resources, Inc., IHG Management (Maryland) LLC and InterContinental Hotels Group (Canada), Inc.
−Removed: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018.)
−Removed: Seventh Amendment to Management Agreement, dated as of October 9, 2019, among HPT TRS IHG-2, Inc., InterContinental Hotels Group Resources, Inc., IHG Management (Maryland) LLC and InterContinental Hotels Group (Canada), Inc.
−Removed: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.)
21.1 Subsidiaries of the Company.
(Filed herewith.)
+Added: 22.1 List of Subsidiary Guarantors.
+Added: (Filed herewith.)
+Added: 23.1 Consent of Deloitte & Touche LLP.
+Added: (Filed herewith.)
23.2 Consent of Ernst & Young LLP.
8 unchanged sentences
(Furnished herewith.)
−Removed: XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
−Removed: XBRL Taxonomy Extension Schema Document.
+Added: 99.1 Registration Rights Agreement, dated as of February 27, 2020, among Sonesta Holdco Corporation, the Company and SVC Holdings LLC.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.)
+Added: 99.2 Purchase Agreement, dated as of June 28, 2020, between the Company and TravelCenters of America Inc.
+Added: (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.)
+Added: 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
+Added: 101.SCH XBRL Taxonomy Extension Schema Document.
(Filed herewith.)
−Removed: XBRL Taxonomy Extension Calculation Linkbase Document.
+Added: 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.
(Filed herewith.)
−Removed: XBRL Taxonomy Extension Definition Linkbase Document.
+Added: 101.DEF XBRL Taxonomy Extension Definition Linkbase Document.
(Filed herewith.)
−Removed: XBRL Taxonomy Extension Label Linkbase Document.
+Added: 101.LAB XBRL Taxonomy Extension Label Linkbase Document.
(Filed herewith.)
−Removed: XBRL Taxonomy Extension Presentation Linkbase Document.
+Added: 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.
(Filed herewith.)
5 unchanged sentences
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheets of Service Properties Trust (the “Company”) as of December 31, 2019 and 2018, the related consolidated statements of comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and the financial statement schedule listed in the Index at item 15(a) (collectively referred to as the “consolidated financial statements”).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S.
−Removed: generally accepted accounting principles.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2020 expressed an unqualified opinion thereon.
+Added: We have audited the accompanying consolidated balance sheet of Service Properties Trust (the "Company") as of December 31, 2020, the related consolidated statements of comprehensive income (loss), shareholders' equity, and cash flows for the year then ended, and the related notes and the schedule listed in the Index at Item 15(a) (collectively referred to as the "financial statements").
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
+Added: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 1, 2021, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management.
−Removed: Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
+Added: Our responsibility is to express an opinion on the Company's financial statements based on our audit.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audits in accordance with the standards of the PCAOB.
+Added: We conducted our audit in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
−Removed: Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
−Removed: Such procedures included examining, on a test basis, evidence regarding the amounts and disclos ures in the financial statements.
−Removed: Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
−Removed: We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
−Removed: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
−Removed: Accounting for Transactions with TA
−Removed: Description of the Matter
−Removed: As discussed in Note 5 to the consolidated financial statements, in January 2019, the Company entered into agreements with TravelCenters of America Inc.
−Removed: (“TA”), a related party and the Company’s largest tenant, to modify the terms of existing lease agreements with TA and to sell 20 travel center properties to TA.
−Removed: The Company recognized a $159.5 million gain on sale of the real estate.
−Removed: Auditing the Company’s accounting for the transactions with TA involved a high degree of subjectivity due to significant estimation required in allocating consideration to the lease agreements and the sales of real estate.
−Removed: The allocation involved estimating the standalone prices of the lease agreements and the real estate properties, which are affected by economic, market and industry factors.
−Removed: The estimated standalone prices of the lease agreements were based on the stated lease terms and assumptions about market rent coverage ratios.
−Removed: The estimated standalone prices of the real estate properties were based primarily on assumptions about replacement cost and comparable sales.
−Removed: How We Addressed the Matter in Our Audit
−Removed: We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s process to allocate consideration to the lease agreements and real estate properties.
−Removed: This included controls over management’s review of the significant assumptions underlying the standalone price determinations.
−Removed: To test the allocation of consideration to lease agreements and real estate properties, our audit procedures included, among others, with the assistance of our valuation specialists, evaluating the valuation methodologies applied by the Company to estimate the standalone prices and testing the significant assumptions used.
−Removed: We compared the rent coverage ratios for the Company’s lease agreements to current industry rent coverage ratios supported by third party data.
−Removed: We evaluated the replacement cost estimates by comparing the inputs used to third party published cost data and corroborated comparable land sales to third party sources.
−Removed: In addition, we compared the total standalone prices of the real estate properties to sales of comparable properties.
−Removed: We also performed sensitivity analyses to evaluate the changes in standalone prices that would result from changes in significant assumptions.
−Removed: Accounting for SMTA Transaction
−Removed: Description of the Matter
−Removed: As discussed in Note 4 to the consolidated financial statements, in September 2019, the Company acquired a portfolio of 767 net leased retail properties located in 45 states from Spirit MTA REIT, or SMTA, for $2.5 billion, or the SMTA Transaction.
−Removed: The transaction was accounted for as an asset acquisition.
−Removed: Auditing the Company’s accounting for the acquisition of the SMTA portfolio involved a high degree of subjectivity due to the significant estimation required to determine the fair value of the acquired assets used to allocate the cost of the acquisition on a relative fair value basis.
−Removed: The fair value estimates were sensitive to significant assumptions, such as market rents, terminal capital rates, and discount rates, which are affected by expectations about future market and economic conditions in the geographic markets where the properties are located, as well as expectations about future market and economic conditions relevant to the industries of the properties’ tenants.
−Removed: How We Addressed the Matter in Our Audit
−Removed: We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s acquisition accounting, including the allocation of costs to acquired assets.
−Removed: For example, we tested controls over management’s review of the significant assumptions underlying the fair value estimates.
−Removed: Among other procedures performed, we tested the estimated fair values of the acquired assets.
−Removed: With the assistance of our valuation specialist, we evaluated the valuation methodologies applied by the Company and tested the significant assumptions and inputs to the valuation models.
−Removed: For example, we compared market rent, terminal capital rates, and discount rates to current industry, market and economic trends and other relevant factors.
−Removed: We also compared the concluded fair value for each property acquired to sales of comparable properties using third party data.
−Removed: Further, we tested the completeness and accuracy of the underlying data by, among other things, testing the replacement cost calculations and agreeing inputs to leases and other third-party sources on a test basis.
−Removed: In addition, we performed sensitivity analyses to evaluate the changes in fair value that would result from changes in the Company’s significant assumptions.
−Removed: Impairment of Real Estate Properties
−Removed: Description of the Matter
−Removed: The Company’s net real estate properties totaled $8.3 billion as of December 31, 2019.
−Removed: As discussed in Note 2 and Note 14 to the consolidated financial statements, the Company periodically evaluates real estate properties for impairment.
−Removed: Auditing management’s property impairment analysis was complex and involved a high degree of subjectivity due to the significant estimation required in determining the estimated undiscounted net cash flows expected to be generated from those assets with indicators of impairment.
−Removed: The estimated undiscounted net cash flows are sensitive to significant assumptions, such as hold periods, property cash flows, and estimated sales proceeds, which are forward-looking and could be affected by future economic and market conditions.
−Removed: How We Addressed the Matter in Our Audit
−Removed: We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process for assessing impairment of real estate properties.
−Removed: For example, we tested controls over management’s review of the estimated undiscounted net cash flows calculations, including the significant assumptions and data inputs used to develop the cash flows.
−Removed: Our testing of the Company’s impairment assessment included, among other procedures, evaluating the assumptions used to develop the estimated undiscounted net cash flows to assess the recoverability of real estate properties.
−Removed: Specifically, we evaluated the significant assumptions used to estimate the property cash flows and estimated sales proceeds and assessed the completeness and accuracy of the underlying data.
−Removed: We compared estimates to historical performance and available market data.
−Removed: We also held discussions with management about the current status of potential transactions and about management’s judgments to understand the probability of future events that could affect the hold period and other cash flow assumptions for the properties including estimated sales proceeds upon disposition.
−Removed: We searched for and evaluated information that corroborated or contradicted the Company’s assumptions.
−Removed: /s/ Ernst & Young LLP
−Removed: We have served as the Company’s auditor since 2002.
+Added: Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
+Added: Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
+Added: Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
+Added: We believe that our audit provides a reasonable basis for our opinion.
+Added: Critical Audit Matter
+Added: The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: Impairment of Real Estate Properties — Refer to Notes 2 and 4 to the financial statements
+Added: The Company’s investments in real estate assets are evaluated for impairment periodically or when events or changes in circumstances indicate that the carrying amount of a real estate asset may not be recoverable.
+Added: The Company’s evaluation of the recoverability of real estate assets involves the comparison of undiscounted future cash flows expected to be generated by each real estate asset over the Company’s estimated holding period to the respective carrying amount.
+Added: The Company’s undiscounted future cash flows analysis and the assessment of expected remaining holding period requires management to make significant estimates and assumptions related to future occupancy levels, rental rates, estimated sale proceeds, and capitalization rates.
+Added: In the event that a real estate asset is not recoverable, the Company will adjust the real estate asset to its fair value based on third-party appraisals, broker selling estimates, sale agreements under negotiation, and/or final selling prices, when available, and recognize an impairment loss for the carrying amount in excess of fair value.
+Added: We identified the impairment of real estate assets as a critical audit matter because of the significant estimates and assumptions management makes to evaluate the recoverability of real estate assets.
+Added: This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s undiscounted future cash flows analysis and assessment of expected remaining holding period.
+Added: How the Critical Audit Matter Was Addressed in the Audit
+Added: Our audit procedures related to the undiscounted cash flows analysis and the assessment of the expected remaining hold period included the following, among others:
+Added: • We tested the effectiveness of controls over management’s evaluation of the recoverability of real estate property assets, including the key inputs utilized in estimating the undiscounted future cash flows.
+Added: • We evaluated the undiscounted cash flow analysis including estimates of future occupancy levels, rental rates, estimated sale proceeds, and capitalization rates for each real estate asset or group of assets with possible impairment indicators by (1) evaluating the source information and assumptions used by management and (2) testing the mathematical accuracy of the undiscounted future cash flows analysis.
+Added: • We evaluated the reasonableness of management’s undiscounted future cash flows analysis by comparing management’s projections to external market sources and evidence obtained in other areas of our audit.
+Added: • We made inquiries of management regarding the current status of potential transactions and about management’s judgments to understand the probability of future events that could affect the hold period and other cash flow assumptions for the properties.
+Added: /s/ Deloitte & Touche LLP
Boston, Massachusetts
−Removed: February 28, 2020
+Added: March 1, 2021
+Added: We have served as the Company’s auditor since 2020.
Report of Independent Registered Public Accounting Firm
1 unchanged sentence
Opinion on Internal Control over Financial Reporting
−Removed: We have audited Service Properties Trust’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO criteria).
−Removed: In our opinion, Service Properties Trust (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on the COSO criteria.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidated statements of comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and the financial statement schedule listed in the Index at item 15(a), and our report dated February 28, 2020, expressed an unqualified opinion thereon.
+Added: We have audited the internal control over financial reporting of Service Properties Trust (the “Company”) as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
+Added: In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
+Added: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020, of the Company and our report dated March 1, 2021, expressed an unqualified opinion on those financial statements.
Basis for Opinion
14 unchanged sentences
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
+Added: /s/ Deloitte & Touche LLP
+Added: Boston, Massachusetts
+Added: March 1, 2021
+Added: Report of Independent Registered Public Accounting Firm
+Added: To the Trustees and Shareholders of Service Properties Trust
+Added: Opinion on the Financial Statements
+Added: We have audited the accompanying consolidated balance sheet of Service Properties Trust (the “Company”) as of December 31, 2019, the related consolidated statements of comprehensive income, shareholders' equity and cash flows for each of the two years in the period ended December 31, 2019, and the related notes and the financial statement schedule listed in the Index at item 15(a) (collectively referred to as the “consolidated financial statements”).
+Added: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019, in conformity with U.S.
+Added: generally accepted accounting principles.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2020 expressed an unqualified opinion thereon.
+Added: Basis for Opinion
+Added: These financial statements are the responsibility of the Company's management.
+Added: Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
+Added: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
+Added: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
+Added: We conducted our audits in accordance with the standards of the PCAOB.
+Added: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
+Added: Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
+Added: Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
+Added: Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
+Added: We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young LLP
+Added: We served as the Company’s auditor from 2002 to 2020.
Boston, Massachusetts
5 unchanged sentences
Real estate properties:
+Added: Land $ 2,030,440 $ 2,066,602
Buildings, improvements and equipment 9,131,832 9,318,434
2 unchanged sentences
Total real estate properties, net 7,882,162 8,264,275
−Removed: Acquired real estate leases and other intangibles
+Added: Acquired real estate leases and other intangibles, net 325,845 378,218
Assets held for sale 13,543 87,493
3 unchanged sentences
Other assets, net 318,783 154,069
+Added: Total assets $ 8,687,319 $ 9,033,967
LIABILITIES AND SHAREHOLDERS’ EQUITY
−Removed: Unsecured revolving credit facility
−Removed: Unsecured term loan, net
+Added: Revolving credit facility $ 78,424 $ 377,000
+Added: Term loan, net — 397,889
Senior unsecured notes, net 6,130,166 5,287,658
9 unchanged sentences
Additional paid in capital 4,550,385 4,547,529
−Removed: Cumulative other comprehensive income (loss)
+Added: Cumulative other comprehensive loss ( 760 ) —
Cumulative net income available for common shareholders 3,180,263 3,491,645
2 unchanged sentences
Total liabilities and shareholders’ equity $ 8,687,319 $ 9,033,967
−Removed: The accompanying notes are an integral part of these financial statements.
+Added: The accompanying notes are an integral part of these consolidated financial statements.
SERVICE PROPERTIES TRUST
−Removed: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
−Removed: (in thousands, except share data)
+Added: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
+Added: (in thousands, except per share data)
Year Ended December 31,
+Added: 2020 2019 2018
Hotel operating revenues $ 875,098 $ 1,989,173 $ 1,958,598
6 unchanged sentences
General and administrative 50,668 54,639 104,862
−Removed: Acquisition and transaction related costs
+Added: Transaction related costs — 1,795 —
Loss on asset impairment 55,756 39,296 —
Total expenses 1,318,444 1,943,462 1,900,294
−Removed: Gain on sale of real estate
+Added: Gain on sale of real estate, net 2,261 159,535 —
Dividend income — 1,752 2,754
−Removed: Unrealized losses on equity securities
+Added: Gain on insurance settlement 62,386 — —
+Added: Unrealized gains (losses) on equity securities, net 19,882 ( 40,461 ) ( 16,737 )
Interest income 284 2,215 1,528
Interest expense (including amortization of debt issuance costs and debt discounts and premiums of $ 14,870 , $ 11,117 and $ 10,177 , respectively)
+Added: ( 306,490 ) ( 225,126 ) ( 195,213 )
Loss on early extinguishment of debt ( 9,394 ) ( 8,451 ) ( 160 )
−Removed: Income before income taxes and equity in earnings of an investee
−Removed: Income tax benefit (expense)
−Removed: Equity in earnings of an investee
+Added: Income (loss) before income taxes and equity in earnings (losses) of an investee ( 284,261 ) 262,150 186,414
+Added: Income tax expense ( 17,211 ) ( 2,793 ) ( 1,195 )
+Added: Equity in earnings (losses) of an investee ( 9,910 ) 393 515
+Added: Net income (loss) ( 311,382 ) 259,750 185,734
Other comprehensive income (loss):
−Removed: Unrealized gain on investment in available for sale securities
Equity interest in investee’s unrealized gains (losses) ( 760 ) 91 ( 68 )
Other comprehensive income (loss) ( 760 ) 91 ( 68 )
−Removed: Comprehensive income
−Removed: Preferred distributions
−Removed: Excess of liquidation preference over carrying value of preferred shares redeemed
−Removed: Net income available for common shareholders
+Added: Comprehensive income (loss) $ ( 312,142 ) $ 259,841 $ 185,666
Weighted average common shares outstanding (basic) 164,422 164,312 164,229
Weighted average common shares outstanding (diluted) 164,422 164,340 164,258
−Removed: Net income available for common shareholders per common share:
−Removed: Basic and diluted
−Removed: The accompanying notes are an integral part of these financial statements
+Added: Net income (loss) available for common shareholders per common share (basic and diluted) $ ( 1.89 ) $ 1.58 $ 1.13
+Added: The accompanying notes are an integral part of these consolidated financial statements.
SERVICE PROPERTIES TRUST
1 unchanged sentence
(in thousands, except share data)
−Removed: Series D Preferred Shares
−Removed: Common Shares
+Added: Common Shares Additional
+Added: Capital Cumulative
+Added: Income Cumulative
Comprehensive
Income (Loss)
−Removed: Cumulative Preferred
−Removed: Distributions
+Added: Shares Common
+Added: Shares Cumulative
Distributions
Balance at December 31, 2017 164,349,141 $ 1,643 $ ( 4,834,491 ) $ 4,542,307 $ 2,966,605 $ 79,358 $ 2,755,422
−Removed: Unrealized gain on investment in available for sale securities
−Removed: Equity in unrealized gains of investees
−Removed: Redemption of preferred shares, net
+Added: ASU 2016-01 cumulative effect adjustment — — — — 79,556 ( 79,556 ) —
+Added: Net income — — — — 185,734 — 185,734
+Added: Equity in unrealized losses of investees — — — — — ( 68 ) ( 68 )
Common share grants 115,000 1 — 3,780 — — 3,781
Common share repurchases ( 22,432 ) — — ( 606 ) — — ( 606 )
−Removed: Excess of liquidation preference over carrying value of preferred shares redeemed
Distributions — — ( 346,832 ) — — — ( 346,832 )
Balance at December 31, 2018 164,441,709 1,644 ( 5,181,323 ) 4,545,481 3,231,895 ( 266 ) 2,597,431
−Removed: Cumulative effect of an accounting change
−Removed: Equity in unrealized losses of investees
+Added: Net income — — — — 259,750 — 259,750
+Added: Amounts reclassified from cumulative other comprehensive income to net income — — — — — 175 175
+Added: Equity in unrealized gains of investees — — — — — 91 91
Common share grants 155,100 2 — 2,855 — — 2,857
2 unchanged sentences
Balance at December 31, 2019 164,563,034 1,646 ( 5,534,942 ) 4,547,529 3,491,645 — 2,505,878
−Removed: Amounts reclassified from cumulative other comprehensive income to net income
−Removed: Equity in unrealized gains of investees
+Added: Net loss — — — — ( 311,382 ) — ( 311,382 )
+Added: Equity in unrealized losses of investees — — — — — ( 760 ) ( 760 )
Common share grants 305,400 2 — 3,209 — — 3,211
2 unchanged sentences
Balance at December 31, 2020 164,823,833 $ 1,648 $ ( 5,628,746 ) $ 4,550,385 $ 3,180,263 $ ( 760 ) $ 2,102,790
−Removed: The accompanying notes are an integral part of these financial statements.
+Added: The accompanying notes are an integral part of these consolidated financial statements.
SERVICE PROPERTIES TRUST
1 unchanged sentence
(in thousands)
−Removed: For the Year Ended December 31,
+Added: Year Ended December 31,
+Added: 2020 2019 2018
Cash flows from operating activities:
−Removed: Adjustments to reconcile net income to cash provided by operating activities:
+Added: Net income (loss) $ ( 311,382 ) $ 259,750 $ 185,734
+Added: Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 498,908 428,448 403,077
1 unchanged sentence
Straight line rental income 714 10,719 ( 12,509 )
−Removed: Security deposits received or replenished
+Added: Security deposits utilized or replenished ( 109,162 ) ( 23,549 ) 6,740
Loss on early extinguishment of debt 9,394 8,451 160
Loss on asset impairment 55,756 39,296 —
−Removed: Unrealized losses on equity securities
−Removed: Equity in earnings of an investee
+Added: Unrealized (gains) losses on equity securities, net ( 19,882 ) 40,461 16,737
+Added: Equity in losses (earnings) of an investee 9,910 ( 393 ) ( 515 )
Distribution of earnings from Affiliates Insurance Company — 2,423 —
−Removed: Gain on sale of real estate
+Added: Gain on sale of real estate, net ( 2,261 ) ( 159,535 ) —
+Added: Gain on insurance settlement ( 62,386 ) — —
Deferred income taxes 13,850 ( 127 ) ( 1,047 )
2 unchanged sentences
Due from related persons ( 33 ) 3,272 ( 572 )
+Added: Other assets ( 78,340 ) ( 11,385 ) 6,200
Accounts payable and other liabilities 2,296 60,484 5,824
8 unchanged sentences
Net proceeds from sale of equity securities — 93,892 —
+Added: Investment in Sonesta ( 5,314 ) — —
+Added: Investment in TA ( 7,011 ) — —
Distributions in excess of earnings from Affiliates Insurance Company 286 6,577 —
1 unchanged sentence
Cash flows from financing activities:
−Removed: Proceeds from issuance of senior unsecured notes, after discounts and premiums
+Added: Proceeds from issuance of senior unsecured notes, net of discounts and premiums 1,250,000 1,693,879 389,976
Repayment of senior unsecured notes ( 405,971 ) — —
−Removed: Redemption of preferred shares
−Removed: Repurchase of convertible senior notes
−Removed: Borrowings under unsecured revolving credit facility
−Removed: Repayments of unsecured revolving credit facility
−Removed: Deferred financing costs
+Added: Repayment of term loan ( 400,000 ) — —
+Added: Borrowings under revolving credit facility 1,189,094 1,124,000 517,000
+Added: Repayments of revolving credit facility ( 1,487,670 ) ( 924,000 ) ( 738,000 )
+Added: Debt issuance costs ( 26,903 ) ( 21,882 ) ( 12,242 )
Repurchase of common shares ( 346 ) ( 800 ) ( 606 )
−Removed: Distributions to preferred shareholders
Distributions to common shareholders ( 93,804 ) ( 353,619 ) ( 346,832 )
3 unchanged sentences
Cash and cash equivalents and restricted cash at end of year $ 91,456 $ 81,259 $ 76,003
−Removed: For the Year Ended December 31,
+Added: Year Ended December 31,
+Added: 2020 2019 2018
Supplemental disclosure of cash and cash equivalents and restricted cash:
−Removed: The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the amount shown in the consolidated statements of cash flows:
+Added: The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows:
Cash and cash equivalents $ 73,332 $ 27,633 $ 25,966
4 unchanged sentences
Cash paid for income taxes 2,117 2,927 3,218
−Removed: The accompanying notes are an integral part of these financial statements.
+Added: Non-cash investing activities:
+Added: Real estate improvements accrued, not paid $ 5,684 $ 13,595 $ 5,549
+Added: Investment in Sonesta 42,000 — —
+Added: The accompanying notes are an integral part of these consolidated financial statements.
SERVICE PROPERTIES TRUST
−Removed: NOTES TO FINANCIAL STATEMENTS
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
(dollars in thousands, except share data)
−Removed: Service Properties Trust (formerly known as Hospitality Properties Trust), or we, us or our, is a real estate investment trust, or REIT, organized on February 7, 1995 under the laws of the State of Maryland, which invests in hotels and net lease service-oriented retail properties.
+Added: Service Properties Trust, or we, us or our, is a real estate investment trust, or REIT, organized on February 7, 1995 under the laws of the State of Maryland, which invests in hotels and net lease service-oriented retail properties.
At December 31, 2020, we owned, directly and through subsidiaries, 310 hotels and 799 net lease properties.
−Removed: At December 31, 2019 , our 329 hotels were leased, managed or operated by subsidiaries of the following companies:
−Removed: InterContinental Hotels Group, plc, or IHG, Marriott International, Inc., or Marriott, Sonesta International Hotels Corporation, or Sonesta (used to refer to subsidiaries of Sonesta Holdco Corporation as of February 27, 2020), Hyatt Hotels Corporation, or Hyatt, Radisson Hospitality, Inc., or Radisson, and Wyndham Hotels & Resorts, Inc., or Wyndham.
−Removed: We also owned, as of December 31, 2019 , 816 net lease properties with 194 tenants, including 179 travel centers leased to TravelCenters of America Inc., or TA, our largest tenant.
+Added: At December 31, 2020, 305 of our 310 hotels were managed or operated by subsidiaries of the following companies:
+Added: Sonesta Holdco Corporation, or Sonesta, ( 168 hotels), Marriott International, Inc., or Marriott ( 105 hotels), Hyatt Hotels Corporation, or Hyatt ( 22 hotels), Radisson Hospitality, Inc., or Radisson ( nine hotels) and InterContinental Hotels Group, plc, or IHG ( one hotel).
+Added: We have entered into an agreement to sell five hotels and we have entered into a short term lease with the buyer in anticipation of the sale.
+Added: At December 31, 2020, we owned 799 net lease properties with 170 tenants, including 179 travel centers leased to TravelCenters of America Inc., or TA, our largest tenant.
Hereinafter, these companies are sometimes referred to as managers and/or tenants, or collectively, operators.
+Added: Recent Events
+Added: The novel coronavirus, or COVID-19, global pandemic, along with federal, state and local government mandates have disrupted and are expected to continue to have a significant negative impact on our results of operations, financial position and cash flow.
+Added: In the United States, individuals are being encouraged to practice social distancing, are restricted from gathering in large groups, and in some areas, either have been or are subject to mandatory stay-at-home restrictions, which have restricted or prohibited large social gatherings, travel and non-essential activities outside of their homes.
+Added: As a result, the lodging industry and other industries in which our managers and tenants operate have been adversely impacted.
+Added: Our results of operations and cash flows from our hotels are heavily dependent on our operators’ ability to generate returns to us and their willingness to fund shortfalls in our minimum returns from their own resources.
+Added: IHG defaulted on its agreement with us and Marriott did not fund shortfalls in the payment of our minimum returns in accordance with its agreement with us.
+Added: We have terminated our agreements with both IHG and Marriott and have transitioned the branding and managem ent of 193 hotels previously managed by IHG, Marriott and Wyndham to Sonesta between September 2020 and February 2021.
+Added: As a result of the disruption caused by the COVID-19 pandemic, we have taken steps to preserve liquidity by reducing our quarterly distribution to our shareholders beginning in the second quarter of 2020 to $ 0.01 per share and we expect our quarterly distribution to continue at that rate for the foreseeable future, subject to applicable REIT tax requirements, by reducing expected capital expenditures, and by working with our hotel operators to reduce hotel operating expenses, raising $ 1,229,950 of debt proceeds, repaying $ 800,000 of debt, selling assets for an aggregate sales price of $ 174,172 , excluding closing costs, and entering into an agreement to sell additional properties for an aggregate sales price of $ 24,313 , excluding sales costs.
+Added: We and our lenders amended our credit agreement governing our $ 1,000,000 revolving credit facility and $ 400,000 term loan on May 8, 2020.
+Added: Among other things, the amendment waived certain existing financial covenants through the end of the first quarter of 2021.
+Added: Based on the prolonged effect of the pandemic and our expectations of not being able to meet the financial covenants under our amended credit agreement, we entered into an additional amendment on November 5, 2020.
+Added: Among other things, the amendment waives all of the existing financial covenants through the end of the agreement term, or July 15, 2022, or the New Waiver Period.
+Added: On January 19, 2021, we borrowed $ 972,793 under our revolving credit facility as a precautionary measure to preserve financial flexibility.
+Added: As of February 26, 2021, we are fully drawn under our revolving credit facility.
+Added: Based on these actions, the cash flows we receive from our net lease portfolio, the financing activities we have completed, and asset dispositions we have completed or expect to complete, we believe we will have sufficient liquidity to meet our obligations for at least the next twelve months.
+Added: See Notes 5 and 6 for additional information regarding the transactions and other actions described above.
Summary of Significant Accounting Policies
2 unchanged sentences
All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated.
−Removed: Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation.
We have determined that each of our wholly owned taxable REIT subsidiaries, or TRSs, is a variable interest entity, or VIE, as defined under the Consolidation Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification ™ , or the Codification.
1 unchanged sentence
The assets of our TRSs were $ 118,862 and $ 31,920 as of December 31, 2020 and 2019, respectively, and consist primarily of amounts due from and working capital advances to certain of our hotel managers.
−Removed: The liabilities of our TRSs were $ 138,708 and $ 148,459 as of December 31, 2019 and 2018 , respectively, and consist primarily of security deposits they hold and amounts payable to certain of our hotel managers.
+Added: The liabilities of our TRSs were $ 70,240 and $ 138,708 as of December 31, 2020 and 2019, respectively, and consist primarily of amounts payable to certain of our hotel managers.
The assets of our TRSs are available to satisfy our TRSs’ obligations and we have guaranteed certain obligations of our TRSs.
14 unchanged sentences
If we change estimated lives, we depreciate or amortize the carrying values of affected assets over the revised remaining lives.
+Added: During the years ended December 31, 2020 and 2019, we recorded $ 55,756 and $ 39,296 , respectively, of losses on asset impairment to reduce the carrying value of certain of our properties to their estimated fair values less costs to sell.
Intangible Assets and Liabilities.
5 unchanged sentences
Tradenames and trademarks $ 89,375 $ 89,375
−Removed: Above market operating leases, net of accumulated amortization of $15,748
+Added: Above market operating leases, net of accumulated amortization of $ 55,220 and $ 15,748 , respectively
+Added: 224,510 275,814
Below market ground leases, net of accumulated amortization of $ 16,226 and $ 21,125 , respectively
Other, net of accumulated amortization of $ 1,188 and $ 1,803 , respectively
−Removed: Below market operating leases, net of accumulated amortization of $367
+Added: $ 325,845 $ 378,546
+Added: Below market operating leases, net of accumulated amortization of $ 559 and $ 367 , respectively
+Added: $ 1,691 $ 3,653
Above market ground leases, net of accumulated amortization of $ 6,180 and $ 5,886 , respectively
+Added: $ 2,107 $ 4,509
We amortize above and below market leases on a straight line basis over the term of the associated lease ( three and six years on a weighted average basis for intangible liabilities and assets, respectively).
−Removed: For the years ended December 31, 2019 , 2018 and 2017 amortization relating to intangible assets was $ 1,757 , $ 2,542 and $ 2,814 , respectively, and amortization relating to intangible liabilities was $ 441 for the year ended December 31, 2019 and $ 455 for each of the years ended December 31, 2018 and 2017 .
+Added: For the years ended December 31, 2020, 2019 and 2018, amortization relating to intangible assets was $ 52,264 , $ 1,757 and $ 2,542 , respectively, and amortization relating to intangible liabilities was $ 2,403 , $ 441 and $ 455 for the years ended December 31, 2020, 2019 and 2018, respectively.
As of December 31, 2020, the weighted average amortization period for capitalized above market leases and below market lease values were 7.0 years and 5.1 years, respectively.
As of December 31, 2020, we estimate future amortization relating to intangible assets and liabilities as follows:
−Removed: Above Market Operating Leases
−Removed: Below Market Ground Leases & Other
−Removed: Below Market Operating Leases
−Removed: Above Market Ground Leases & Other
+Added: Above Market Operating Leases Below Market Ground Leases & Other Below Market Operating Leases Above Market Ground Leases & Other
+Added: 2021 $ 41,196 $ 1,375 $ ( 458 ) $ ( 369 )
+Added: 2022 30,272 1,367 ( 309 ) ( 21 )
+Added: 2023 27,120 1,355 ( 193 ) ( 18 )
+Added: 2024 24,637 1,137 ( 186 ) ( 8 )
+Added: 2025 21,311 983 ( 130 ) —
+Added: Thereafter 79,974 5,743 ( 415 ) —
+Added: $ 224,510 $ 11,960 $ ( 1,691 ) $ ( 416 )
We do not amortize our indefinite lived trademarks and tradenames, but we review the assets at least annually for impairment and reassess their classification as indefinite lived assets.
9 unchanged sentences
As of December 31, 2020 and 2019, debt issuance costs for our revolving credit facility were $ 8,163 and $ 4,212 , respectively, and accumulated amortization of debt issuance costs for our revolving credit facility were $ 722 and $ 2,610 , respectively.
−Removed: Debt issuance costs, net of accumulated amortization, for our term loan and senior notes are presented as a direct deduction from the associated debt liability in our consolidated balance sheets.
−Removed: As of December 31, 2019 and 2018 , debt issuance costs, net of accumulated amortization, for our term loan and senior notes were $ 31,065 and $ 22,243 , respectively.
−Removed: Future amortization of debt issuance costs to be recognized with respect to our revolving credit facility, term loan and senior notes as of December 31, 2019 , are as follows:
−Removed: Future Amortization of Deferred Finance Fees
+Added: Debt issuance costs, net of accumulated amortization, for our senior notes, and our historical term loan, are presented as a direct deduction from the associated debt liability in our consolidated balance sheets.
+Added: As of December 31, 2020 and 2019, debt issuance costs, net of accumulated amortization, for our senior notes were $ 41,974 and $ 31,065 , respectively.
+Added: Future amortization of debt issuance costs to be recognized with respect to our revolving credit facility and senior notes as of December 31, 2020, are as follows:
+Added: Future Amortization of Debt Issuance Costs
+Added: 2021 $ 12,933
+Added: Thereafter 6,056
Equity Method Investments.
−Removed: We account for our investment in Affiliates Insurance Company, or AIC, using the equity method of accounting.
−Removed: Significant influence is present through common representation on the boards of trustees or directors of us and AIC.
−Removed: One of our Managing Trustees, Adam D.
−Removed: Portnoy, is the sole trustee of ABP Trust, which is the controlling shareholder of The RMR Group Inc., or RMR Inc.
−Removed: Portnoy is also a managing director and president and chief executive officer of RMR Inc.
−Removed: and an officer and employee of The RMR Group LLC, or RMR LLC.
−Removed: Murray, our other Managing Trustee and our President and Chief Executive Officer, is also an officer and employee of RMR LLC.
−Removed: RMR LLC also provides management and administrative services to AIC, and each of our Trustees (other than Mr.
−Removed: Murray) is a director of AIC.
−Removed: In 2019, AIC began the process of dissolving, pursuant to which we received a distribution of $ 9,000 on December 27, 2019 .
−Removed: See Note 9 for a further discussion of our relationships and transactions with RMR Inc.
−Removed: and RMR LLC and our investment in AIC.
+Added: We account for our 34 % non-controlling interest in Sonesta under the equity method of accounting.
+Added: Sonesta is a private company and Adam D.
+Added: Portnoy, one of our Managing Trustees who also serves as one of Sonesta’s directors, is the controlling shareholder.
+Added: One of Sonesta’s other directors is our other Managing Trustee, President and Chief Executive Officer and Sonesta’s other director serves as The RMR Group LLC, or RMR LLC’s, and The RMR Group Inc., or RMR Inc.’s, executive vice president, general counsel and secretary and as our Secretary.
+Added: Sonesta’s chief executive officer and chief financial officer are officers of RMR LLC.
+Added: Certain other officers and employees of Sonesta are former employees of RMR LLC.
+Added: RMR LLC also provides certain services to Sonesta.
+Added: See Notes 5 and 9 for a further discussion of our investment in and relationships with Sonesta.
Equity Securities.
We record our equity securities at fair value based on their quoted market price at the end of each reporting period.
−Removed: Changes in the fair value of our equity securities are recorded through earnings in accordance with the Financial Accounting Standards Board, or FASB, Accounting Standards Update, or ASU, No.
+Added: Changes in the fair value of our equity securities are recorded through earnings in accordance with FASB Accounting Standards Update, or ASU, No.
2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities .
−Removed: Prior to January 1, 2018, unrealized gains and losses on equity securities were recorded as a component of cumulative comprehensive income (loss) in shareholders’ equity.
As of December 31, 2020, we owned 1,184,797 common shares of TA.
3 unchanged sentences
Revenue Recognition.
−Removed: We report hotel operating revenues for managed hotels in our consolidated statements of comprehensive income.
+Added: We report hotel operating revenues for managed hotels in our consolidated statements of comprehensive income (loss).
We generally recognize hotel operating revenues, consisting primarily of room and food and beverage sales, when goods and services are provided.
−Removed: We report rental income for leased properties in our consolidated statements of comprehensive income.
+Added: We report rental income for leased properties in our consolidated statements of comprehensive income (loss).
We recognize rental income from operating leases on a straight line basis over the term of the lease agreements.
−Removed: We reduced rental income during the year ended December 31, 2019 by $ 10,719 and increased rental income by $ 12,509 , and $ 12,378 during the years ended December 31, 2018 and 2017 , respectively, to record scheduled rent changes under certain of our leases, the deferred rent obligations payable to us under our leases with TA and the estimated future payments to us under our TA leases for the cost of removing underground storage tanks at our travel centers on a straight line basis.
+Added: We reduced rental income by $ 714 and $ 10,719 during the years ended December 31, 2020 and 2019, respectively, and increased rental income by $ 12,509 during the year ended December 31, 2018, to record scheduled rent changes under certain of our leases, the deferred rent obligations payable to us under our leases with TA and the estimated future payments to us under our TA leases for the cost of removing underground storage tanks at our travel centers on a straight line basis.
See Notes 4, 5 and 9 for further information regarding our TA leases.
2 unchanged sentences
We may determine percentage rent due to us under our leases monthly, quarterly or annually, depending on the specific lease terms, and recognize it when all contingencies are met and the rent is earned.
−Removed: We earned percentage rental income of $ 4,238 , $ 3,695 and $ 2,106 in 2019 , 2018 and 2017 , respectively.
+Added: We earned percentage rental income of $ 3,277 , $ 4,238 and $ 3,695 during the years ended December 31, 2020, 2019 and 2018, respectively.
We own all the FF&E reserve escrows for our hotels.
14 unchanged sentences
Income Taxes.
−Removed: We have elected to be taxed as a REIT under the United States Internal Revenue Code of 1986, as amended, or the IRC, and, as such, are generally not subject to federal and most state income taxation on our operating income provided we distribute our taxable income to our shareholders and meet certain organization and operating requirements.
+Added: We have elected to be taxed as a REIT under the United States Internal Revenue Code of 1986, as amended, and, as such, are generally not subject to federal and most state income taxation on our operating income provided we distribute our taxable income to our shareholders and meet certain organization and operating requirements.
We are subject to income tax in Canada, Puerto Rico and certain states despite our qualification for taxation as a REIT.
5 unchanged sentences
Our tax returns filed for the 2017 through 2020 tax years are subject to examination by taxing authorities.
−Removed: We classify interest and penalties related to uncertain tax positions, if any, in our consolidated statements of comprehensive income as a component of general and administrative expense.
+Added: We classify interest and penalties related to uncertain tax positions, if any, in our consolidated statements of comprehensive income (loss) as a component of general and administrative expense.
New Accounting Pronouncements.
−Removed: In February 2016, the FASB issued ASU No.
−Removed: 2016-02, Leases .
−Removed: Additional guidance and targeted improvements to ASU No.
−Removed: 2016-02 were made through the issuance of supplemental ASUs in July 2018, December 2018 and March 2019, or collectively with ASU No.
−Removed: 2016-02, the Lease Standard.
−Removed: We adopted the Lease Standard on January 1, 2019.
−Removed: The Lease Standard sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors).
−Removed: The Lease Standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee.
−Removed: This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease.
−Removed: Upon adoption, we applied the package of practical expedients that allowed us not to reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases, (iii) initial direct costs for any expired or existing leases and (iv) the option to initially apply the Lease Standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption, although we did not have such an adjustment.
−Removed: Additionally, our leases met the criteria not to separate non-lease components from the related lease component.
−Removed: As a lessor .
−Removed: We are required to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases.
−Removed: Adoption of the Lease Standard did not have a material impact in our consolidated financial statements for our leases where we are the lessor.
−Removed: As a lessee .
−Removed: We are required to record right of use assets and lease liabilities in our consolidated balance sheets for leases with terms greater than 12 months, where we are the lessee.
−Removed: We recorded right of use assets and related lease liabilities of $ 77,010 upon implementation of the Lease Standard.
−Removed: Adoption of the Lease Standard did not have a material effect in our consolidated statements of comprehensive income or consolidated statements of cash flows for our leases where we are the lessee.
−Removed: See Note 5 for further information regarding our leases and the adoption of the Lease Standard.
−Removed: In June 2016, the FASB issued ASU No.
+Added: On January 1, 2020, we adopted FASB ASU No.
2016-13, Financial Instruments - Credit Losses (Topic 326):
1 unchanged sentence
The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount.
−Removed: 2016-13 will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.
−Removed: Lease related receivables are governed by the Lease Standard referred to above and are not subject to ASU No.
−Removed: We have adopted ASU No.
−Removed: 2016-13 using the modified retrospective approach and this standard did not have a material impact in our consolidated financial statements.
+Added: Lease related receivables are governed by the lease accounting under GAAP and are not subject to ASU No.
+Added: We adopted this standard using the modified retrospective approach.
+Added: The implementation of this standard did not have a material impact in our consolidated financial statements.
Weighted Average Common Shares
1 unchanged sentence
For the Year Ended December 31,
+Added: 2020 2019 2018
(in thousands)
4 unchanged sentences
Real Estate Properties
−Removed: As of December 31, 2019 , we owned 329 hotels with 51,349 rooms or suites and 816 service-oriented retail properties with approximately 14.9 million square feet that are primarily subject to “triple net” leases, or net leases where the tenant is generally responsible for payment of operating expenses and capital expenditures of the property during the lease term.
+Added: As of December 31, 2020, we owned 310 hotels with 49,014 rooms or suites and 799 service-oriented retail properties with 13,455,405 square feet that are primarily subject to “triple net” leases, or net leases where the tenant is generally responsible for payment of operating expenses and capital expenditures of the property during the lease term.
Our properties had an aggregate undepreciated carrying value of $ 11,175,815 , including $ 13,543 classified as held for sale as of December 31, 2020.
1 unchanged sentence
and land of $ 2,066,602 , buildings and improvements of $ 8,731,002 and furniture, fixtures and equipment of $ 587,432 , as of December 31, 2019.
−Removed: During 2019 , 2018 and 2017 , we funded $ 242,571 , $ 200,044 and $ 162,482 , respectively, for improvements to certain of our properties, which, pursuant to the terms of our management and lease agreements with our managers and tenants, resulted in increases in our contractual annual minimum returns and rents of $ 18,432 , $ 14,888 and $ 10,274 in 2019 , 2018 and 2017 , respectively.
−Removed: See Note 5 for further information about our management and lease agreements and our fundings of improvements to certain of our properties.
+Added: During 2020, 2019 and 2018, we funded $ 136,155 , $ 242,571 and $ 200,044 , respectively, for improvements to certain of our properties.
+Added: During 2020, we completed a comprehensive rebuilding project of our San Juan, PR hotel as a result of damage sustained during Hurricane Maria in 2017.
+Added: We recorded a $ 62,386 gain on insurance settlement during the year ended December 31, 2020 for insurance proceeds received for this damage.
+Added: Under GAAP, we were required to increase the building basis of our San Juan hotel for the amount of the insurance proceeds.
At December 31, 2020, 14 of our hotels were on land we leased partially or entirely from unrelated third parties.
9 unchanged sentences
Our allocation of the purchase price of each of our acquisitions based on the estimated fair value of the acquired assets and assumed liabilities is presented in the table below.
+Added: We accounted for these transactions as acquisitions of assets.
+Added: Acquisition Date Location Type Rooms or Square feet Purchase Price (1)
+Added: Land Land Improvements Building and Improvements Furniture, Fixtures and Equipment Held For Sale Intangible Assets
Properties acquired during the year ended December 31, 2020
−Removed: Acquisition Date
−Removed: Purchase Price
−Removed: Land Improvements
−Removed: Building and Improvements
−Removed: Furniture, Fixtures and Equipment
−Removed: Held For Sale
−Removed: Intangible Assets
−Removed: Washington, D.C.
−Removed: Milwaukee, WI (3)
−Removed: Southington, CT (4)
−Removed: Chicago, IL (6)
+Added: 3/12/2020 Two states Net Lease 6,696 $ 7,071 $ 880 $ — $ 5,363 $ — $ — $ 828
Properties acquired during the year ended December 31, 2019
−Removed: Minneapolis, MN (7)
−Removed: Baton Rouge, LA (8)
−Removed: Scottsdale, AZ (9)
+Added: 2/22/2019 Washington, D.C.
+Added: Hotel 335 $ 143,742 $ 44,972 $ 151 $ 93,412 $ 5,207 $ — $ —
+Added: 5/7/2019 Milwaukee, WI Hotel 198 30,235 3,442 1,053 25,132 608 — —
+Added: 8/1/2019 Southington, CT Land N.A.
+Added: 66 66 — — — — —
+Added: 9/20/2019 Various (2)
+Added: Net Lease 12,372,762 2,482,382 388,057 — 1,201,922 — 604,989 287,414
+Added: 10/9/2019 Chicago, IL Hotel 261 55,560 7,723 — 45,059 2,778 — —
+Added: $ 2,711,985 $ 444,260 $ 1,204 $ 1,365,525 $ 8,593 $ 604,989 $ 287,414
Properties acquired during the year ended December 31, 2018
−Removed: Chicago, IL (10)
−Removed: Seattle, WA (11)
−Removed: Columbia, SC (12)
−Removed: Louis, MO (13)
−Removed: Atlanta, GA (14)
−Removed: Columbus, OH (15)
−Removed: Charlotte, NC (16)
−Removed: Atlanta, GA (17)
−Removed: Sayre, OK (19)
−Removed: We accounted for these transactions as acquisitions of assets.
−Removed: On February 22, 2019 , we acquired the 335 room Hotel Palomar located in Washington, D.C.
−Removed: for a purchase price of $ 143,742 , including capitalized acquisition costs of $ 2,292 .
−Removed: We added this Kimpton ® branded hotel to our management agreement with IHG.
−Removed: On May 7, 2019 , we acquired the 198 room Crowne Plaza Milwaukee West hotel in Milwaukee, WI for a purchase price of $ 30,235 , including capitalized acquisition costs of $ 235 .
−Removed: We added this Crowne Plaza ® branded hotel to our management agreement with IHG.
−Removed: On August 1, 2019 , we acquired a land parcel adjacent to our travel center located in Southington, CT for a purchase price of $ 66 , including capitalized acquisition costs of $ 6 .
−Removed: This land parcel has been added to the TA lease for that travel center.
−Removed: On September 20, 2019 , we completed the SMTA Transaction for total consideration of $ 2,482,382 .
−Removed: See below for further information regarding the SMTA Transaction.
−Removed: On October 9, 2019 , we acquired the 261 -room Kimpton Palomar Hotel located in Chicago, IL for a purchase price of $ 55,560 , including acquisition related costs of $ 560 .
−Removed: We added this Kimpton® branded hotel to our management agreement with IHG.
−Removed: On June 15, 2018 , we acquired the 360 room Radisson Blu ® hotel in Minneapolis, MN for a purchase price of $ 75,576 , including capitalized acquisition costs of $ 576 .
−Removed: We added this hotel to our management agreement with Radisson.
−Removed: On June 15, 2018 , we acquired the 117 suite Staybridge Suites ® at Louisiana State University in Baton Rouge, LA for a purchase price of $ 16,022 , including capitalized acquisition costs of $ 272 .
−Removed: We added this hotel to our management agreement with IHG.
−Removed: On October 30, 2018 , we acquired a hotel with 164 suites in Scottsdale, AZ for a purchase price of $ 35,999 , including capitalized acquisition costs of $ 114 .
−Removed: We converted this hotel to the Sonesta Suites ® brand and entered into a management agreement for this hotel with Sonesta.
−Removed: On February 1, 2017 , we acquired the 483 room Hotel Allegro in Chicago, IL for a purchase price of $ 86,201 , including capitalized acquisition costs of $ 707 .
−Removed: We added this Kimpton ® branded hotel to our management agreement with IHG.
−Removed: On March 31, 2017 , we acquired the 121 room Hotel Alexis in Seattle, WA for a purchase price of $ 73,041 , including capitalized acquisition costs of $ 1,416 .
−Removed: We added this Kimpton ® branded hotel to our management agreement with IHG.
−Removed: On May 3, 2017 , we acquired a travel center from TA for $ 27,604 pursuant to a transaction agreement we entered with TA in 2015.
−Removed: Simultaneously with this acquisition, we leased the travel center back to TA.
−Removed: On June 2, 2017 , we acquired the 389 room Chase Park Plaza Hotel in St.
−Removed: Louis, MO for a purchase price of $ 88,080 , including capitalized acquisition costs of $ 466 .
−Removed: We converted this hotel to the Royal Sonesta ® hotel brand and entered into a management agreement for this hotel with Sonesta.
−Removed: On June 29, 2017 , we acquired the 495 room Crowne Plaza Ravinia hotel located in Atlanta, GA for a purchase price of $ 88,748 , including capitalized acquisition costs of $ 144 .
−Removed: We added this Crowne Plaza ® branded hotel to our management agreement with IHG.
−Removed: On August 1, 2017 , we acquired the 419 room Crowne Plaza & Lofts hotel in Columbus, OH for a purchase price of $ 49,188 , including capitalized acquisition costs of $ 198 .
−Removed: We added this Crowne Plaza ® branded hotel to our management agreement with IHG.
−Removed: On August 23, 2017 , we acquired the 300 room Crowne Plaza hotel in Charlotte, NC for a purchase price of $ 44,000 , including capitalized acquisition costs of $ 143 .
−Removed: We added this Crowne Plaza ® branded hotel to our management agreement with IHG.
−Removed: On September 8, 2017 , we acquired a land parcel adjacent to our Crowne Plaza hotel located in Atlanta, GA for a purchase price of $ 940 , including capitalized acquisition costs of $ 40 .
−Removed: On September 26, 2017 , we acquired 14 extended stay hotels with 1,653 suites located in 12 states for a purchase price of $ 139,923 , including capitalized acquisition costs of $ 1,923 .
−Removed: In connection with this acquisition, we converted these hotels to the Sonesta ES Suites ® brand and entered into management agreements for these hotels with Sonesta.
−Removed: On September 28, 2017 , we acquired land and certain improvements at a travel center located in Sayre, OK that we previously leased from a third party and subleased to TA for a purchase price of $ 8,672 , including capitalized acquisition costs of $ 72 .
−Removed: We now directly lease this land and these improvements to TA under our TA No.
−Removed: See Note 5 for further information regarding our IHG and Radisson agreements.
−Removed: See Note 5 and 9 for further information regarding our relationship, agreements and transactions with Sonesta and TA.
−Removed: SMTA Transaction
+Added: 6/15/2018 Minneapolis, MN Hotel 360 $ 75,576 $ 2,196 $ — $ 68,388 $ 4,992 $ — $ —
+Added: 6/15/2018 Baton Rouge, LA Hotel 117 16,022 2,242 173 12,842 765 — —
+Added: 10/30/2018 Scottsdale, AZ Hotel 164 35,999 6,450 833 25,898 2,818 — —
+Added: $ 127,597 $ 10,888 $ 1,006 $ 107,128 $ 8,575 $ — $ —
+Added: (1) Includes acquisition related costs.
(2) On September 20, 2019, we acquired a 767 property net lease portfolio with 12.4 million rentable square feet from Spirit MTA REIT, a Maryland REIT, (NYSE:
1 unchanged sentence
The aggregate transaction value of the SMTA Transaction was $ 2,482,382 , including $ 2,384,577 in cash consideration, $ 82,069 of prepayment penalties related to SMTA’s extinguishment of the mortgage debt on the portfolio and $ 15,736 of other capitalized acquisition costs.
−Removed: The properties included in the portfolio were net leased to 279 tenants operating in 23 distinct industries and 163 brands that include quick service and casual dining restaurants, movie theaters, health and fitness, automotive parts and services and other service-oriented and necessity-based industries across 45 states.
+Added: The properties included in the portfolio were net leased to 279 tenants operating in 23 distinct industries and 163 brands that include quick service and casual dining restaurants, movie theaters, health and fitness, grocery, automotive parts and services and other service-oriented and necessity-based industries across 45 states.
We financed the SMTA Transaction with borrowings under our revolving credit facility and with cash on hand, including net proceeds from our public offerings of senior unsecured notes, as described further in Note 6.
As of December 31, 2020, we had $ 4,399 of unspent leasing related obligations assumed as a part of the SMTA Transaction.
−Removed: Other Acquisition Agreements
−Removed: In February 2020, we entered into an agreement to acquire three net lease properties with approximately 6,696 square feet in two states with leases requiring an aggregate of $ 387 of annual minimum rent for an aggregate sales price of $ 7,000 , excluding closing costs.
−Removed: During the year ended December 31, 2019 , we sold 150 net lease properties with an aggregate of 3,314,724 rentable square feet for an aggregate purchase price of $ 821,212 , excluding closing costs, in eight separate transactions.
−Removed: The sales of these properties, as presented in the table below, do not represent significant dispositions individually or in the aggregate nor do they represent a strategic shift.
−Removed: As a result, the results of operations of these properties are included in continuing operations through the date of sale in our consolidated statements of income.
−Removed: Number of Properties
−Removed: Gross Sales Price
−Removed: TravelCenters
−Removed: 4726 Mall Drive, Hermantown, MN (2)
−Removed: HOM Furniture
−Removed: 1505 South Pavilion Center Drive Las Vegas, NV (2)
+Added: In January 2021, we entered into an agreement to acquire a property adjacent to one of our travel centers in Nashville, TN for $ 7,600 , excluding closing costs.
+Added: We expect to complete this transaction in the first quarter of 2021.
+Added: During the years ended December 31, 2020 and 2019, we sold 39 and 150 properties, respectively, for an aggregate sales price of $ 174,172 and $ 821,212 , respectively, excluding closing costs, as presented in the table below.
+Added: The sales of these properties do not represent significant dispositions individually or in the aggregate nor do they represent a strategic shift.
+Added: As a result, the results of the operations of these properties are included in continuing operations through the date of sale in our consolidated statements of comprehensive income (loss).
+Added: Date of Sale Number of Properties Location Tenant/Operator Rooms or Suites/Square Feet Gross Sales Price Gain/ (Loss) on Sale
+Added: Properties sold during the year ended December 31, 2020
+Added: 01/28/2020 1 Gothenburg, NE Vacant 31,978 $ 585 $ 7
+Added: 02/06/2020 1 Rochester, MN Vacant 90,503 2,600 ( 68 )
+Added: 02/13/2020 1 Ainsworth, NE Vacant 32,901 775 7
+Added: 02/14/2020 1 Dekalb, IL Vacant 5,052 1,050 21
+Added: 03/02/2020 1 Eau Claire, MI HOM Furniture, Inc.
+Added: 98,824 2,600 ( 6,947 )
+Added: 03/28/2020 1 Stillwater, OK Vacant 33,018 400 70
+Added: 05/26/2020 1 Pawtucket, RI Vacant 22,027 1,610 ( 1,751 )
+Added: 05/28/2020 1 Canton, MA Destination XL Group, Inc.
+Added: 755,992 51,000 ( 1,049 )
+Added: 05/28/2020 1 Phoenix, AZ Vacant 29,434 2,900 ( 81 )
+Added: 06/25/2020 1 Bellefontaine, OH Vacant 2,267 440 20
+Added: 07/17/2020 1 Clinton, MD ADF Midatlantic LLC 2,935 700 ( 5 )
+Added: 08/20/2020 1 Lancaster, PA Chaac Pizza Northeast, LLC 3,014 775 74
+Added: 08/26/2020 1 Baton Rouge, LA Vacant 2,334 750 39
+Added: 08/26/2020 1 Winston-Salem, NC Vacant 32,816 1,300 23
+Added: 09/17/2020 1 Hillard, OH Vacant 5,316 2,350 5
+Added: 10/6/2020 1 Cabot, AR Vacant 18,165 550 25
+Added: 10/8/2020 1 Lander, WY The Forge Bar and Grill 8,900 350 2
+Added: 11/2/2020 1 Raleigh, NC Vacant 55,558 3,900 41
+Added: 11/18/2020 8 8 states Marriott 834 44,800 8,375
+Added: 12/15/2020 1 Fredrick, MD Chaac Pizza 3,000 800 18
+Added: 12/22/2020 1 O'Neill, NE Vacant 31,374 850 ( 136 )
+Added: 12/29/2020 10 10 states Wyndham 1,212 40,987 9,175
+Added: 12/30/2020 1 Morrisville, PA Vacant 110,075 12,100 ( 5,604 )
+Added: 39 2,046 / 1,375,483
+Added: $ 174,172 $ 2,261
+Added: Properties sold during the year ended December 31, 2019
+Added: 01/16/2019 20 15 states (1)
+Added: TravelCenters of America, Inc.
+Added: 541,483 $ 308,200 $ 159,535
+Added: 10/22/2019 1 Hermantown, MN (2)
+Added: HOM Furniture, Inc.
+Added: 103,631 6,250 —
+Added: 10/29/2019 1 Las Vegas, NV (2)
Station Casino 138,558 57,000 —
−Removed: Range Avenue, Colby, KS (2)
−Removed: 4740 Radio Road, Naples, FL 34110 (2)
+Added: 11/14/2019 1 Colby, KS (2)
+Added: Vacant 6,900 590 —
+Added: 11/25/2019 123 Various (2)
+Added: Various 2,429,333 435,104 —
+Added: 12/16/2019 1 Naples, FL (2)
Rick Johnson Auto & Tire 4,480 1,112 —
−Removed: 996 Central Avenue, Naples, FL 34102 (2)
+Added: 12/16/2019 1 Naples, FL (2)
Rick Johnson Auto & Tire 4,500 706 —
−Removed: 9032 & 9080 Harry Hines Boulevard, Dallas, TX (2)
+Added: 12/30/2019 2 Dallas, TX (2)
Pine Creek Medical Center 85,839 12,250 —
−Removed: In January 2019, in a series of transactions, we sold 20 travel centers in 15 states to TA for $ 308,200 .
−Removed: We recorded a gain of $ 159,535 in 2019 as a result of these sales.
−Removed: During 2019, we sold 130 net lease properties that we acquired in the SMTA Transaction in 28 states with 2,773,241 square feet and annual minimum rent of $ 43,180 for $ 513,012 .
−Removed: During the year ended December 31, 2017 , we sold three of our Radisson branded hotels.
−Removed: On August 1, 2017 , we sold our 159 room Radisson hotel located in Chandler, AZ for net proceeds of $ 9,085 .
−Removed: On August 31, 2017 , we sold our 143 room Country Inn & Suites hotel located in Naperville, IL for net proceeds of $ 6,313 .
−Removed: On September 22, 2017 , we sold our 209 room Park Plaza hotel located in Bloomington, MN for net proceeds of $ 8,030 .
−Removed: As a result of these sales, we recorded a $ 9,348 gain on sale of real estate in the year ended December 31, 2017 .
−Removed: Also in 2017 , we received, net of expenses, $ 1,030 as the final payment with respect to a travel center we previously owned in Roanoke, VA that we leased to TA and which was taken by eminent domain proceedings brought by the Virginia Department of Transportation in 2014.
−Removed: This final payment was allocated to TA as set forth in the lease.
−Removed: We are currently marketing for sale or rebranding 20 Wyndham-branded hotels with a net carrying value of $ 111,271 , 33 Marriott hotels with a net carrying value of $ 224,895 and 19 net lease properties with a net carrying value of $ 87,493 we have classified as held for sale.
−Removed: See Notes 5 and 14 for further information on these disposition activities.
−Removed: Since January 1, 2020, we have sold four vacant net lease properties with approximately 160,434 square feet in three states for an aggregate sales price of $ 5,010 , excluding closing costs.
+Added: 150 3,314,724 $ 821,212 $ 159,535
+Added: (1) See Note 5 to these consolidated financial statements for further information on this transaction.
+Added: (2) In the fourth quarter of 2019, we sold 130 net lease properties with an aggregate of approximately $ 2.8 million square feet in 28 states for an aggregate sales price of $ 513,012 , excluding closing costs.
+Added: We have entered into an agreement to sell five hotels with 430 rooms in four states with an aggregate carrying value of $ 10,699 for an aggregate sales price of $ 22,263 , excluding closing costs.
+Added: We currently expect the sales of these hotels to be completed in the first quarter of 2021.
+Added: We have also entered into agreements to sell three net lease properties with approximately 38,942 square feet with a carrying value of $ 1,746 for an aggregate sales price of $ 2,050 , excluding closing costs.
+Added: We currently expect the sale of these net lease properties to be completed by the end of the second quarter of 2021.The sales of these properties are subject to conditions and may be delayed, may not occur, or their terms may change.
+Added: In January 2021, the landlord for a hotel subject to a ground lease exercised its purchase option to acquire our leasehold interest for our net book value, which was $ 9,753 as of December 31, 2020.
+Added: We expect this transaction to close in April 2021.
+Added: As of December 31, 2020, we had five hotels with 430 rooms with an aggregate carrying value of $ 10,699 classified as held for sale and six net lease properties with 46,799 square feet with leases requiring aggregate annual minimum rent of $ 121 and an aggregate carrying value of $ 2,844 classified as held for sale.
+Added: See Notes 5 and 13 for further information on these properties.
Management Agreements and Leases
−Removed: As of December 31, 2019 , we owned 329 hotels included in six operating agreements and 816 service-oriented retail properties net leased to 194 tenants.
+Added: As of December 31, 2020, we owned 310 hotels included in seven operating agreements and 799 service-oriented retail properties net leased to 170 tenants.
We do not operate any of our properties.
Hotel agreements
−Removed: As of December 31, 2019 , 327 of our hotels were leased to our TRSs and managed by independent hotel operating companies and two hotels are leased to third parties.
−Removed: As of December 31, 2019 , our hotel properties were managed by or leased to separate subsidiaries of Marriott, IHG, Sonesta, Wyndham, Hyatt and Radisson under eight agreements.
+Added: As of December 31, 2020, 305 of our hotels were leased to our TRSs and managed by independent hotel operating companies.
+Added: As of December 31, 2020, our hotel properties were managed by separate subsidiaries of Sonesta, Marriott, Hyatt, Radisson and IHG under six agreements.
+Added: We have entered into an agreement to sell five hotels and we have entered a short term lease of these properties with the buyer in anticipation of the sale.
These hotel agreements had initial terms expiring between 2021 and 2037.
Each of these agreements is for between one and 168 of our hotels.
−Removed: In general, the agreements contain renewal options for all, but not less than all, of the affected properties included in each agreement, and the renewal terms range between 15 to 60 years.
+Added: In general, the agreements contain renewal options for all, but not less than all, of the affected properties included in each agreement, and the renewal terms range between one to 60 years.
Most of these agreements require the third party manager or tenant to:
1 unchanged sentence
(2) deposit a percentage of total hotel sales into FF&E reserves;
−Removed: and (3) for our managed hotels, make payments to our TRSs of additional returns to the extent of available cash flows after payment of operating expenses, funding of the FF&E reserves, payment of our minimum returns, payment of certain management fees and replenishment of security deposits or guarantees.
−Removed: Some of our managers or tenants or their affiliates have provided deposits or guarantees to secure their obligations to pay us.
−Removed: IHG agreement.
−Removed: Our management agreement with IHG for 103 hotels, or our IHG agreement, which expires in 2036, provides that, as of December 31, 2019 , we are to be paid annual minimum returns and rents of $ 216,239 .
−Removed: We realized minimum returns and rents of $ 205,941 , $ 189,981 and $ 178,883 during the years ended December 31, 2019 , 2018 and 2017 , respectively, under this agreement.
−Removed: We also realized additional returns under this agreement $ 12,250 during the year ended December 31, 2017 from our share of hotel cash flows in excess of the minimum returns and rents due to us for those years.
−Removed: There were no additional returns realized under this agreement during the years ended December 31, 2019 and 2018 .
−Removed: Pursuant to our IHG agreement, IHG has provided us with a security deposit to cover minimum payment shortfalls, if any.
−Removed: Under this agreement, IHG is required to maintain a minimum security deposit of $ 37,000 and this security deposit may be replenished and increased up to $ 100,000 from a share of future cash flows from the hotels in excess of our minimum returns and rents.
−Removed: The available balance of the IHG security deposit was $ 75,717 as of December 31, 2019 .
−Removed: We funded $ 55,359 and $ 39,668 for capital improvements to certain of the hotels included in our IHG agreement during the years ended December 31, 2019 and 2018 , respectively.
−Removed: 1 agreement .
−Removed: Our management agreement with Marriott for 53 hotels, or our Marriott No.
−Removed: 1 agreement, provided that, as of December 31, 2019 , we were to be paid an annual minimum return of $ 71,872 to the extent that gross revenues of the hotels, after payment of hotel operating expenses and funding of the FF&E reserve, were sufficient to do so.
−Removed: Marriott’s base and incentive management fees were only earned after we received our minimum returns.
−Removed: We realized minimum returns of $ 71,410 , $ 69,325 and $ 68,944 during the years ended December 31, 2019 , 2018 and 2017 , respectively, under this agreement.
−Removed: We also realized additional returns of $ 2,052 , $ 4,457 and $ 6,180 during the years ended December 31, 2019 , 2018 and 2017 , respectively, which represented our share of hotel cash flows in excess of the minimum returns due to us for those years.
−Removed: We did not have any security deposits or guarantees for our minimum returns from the 53 hotels included in our Marriott No.
−Removed: Accordingly, the minimum returns we received from these hotels managed by Marriott were limited to the hotels’ available cash flows after payment of operating expenses and funding of the FF&E reserve.
−Removed: We funded $ 17,356 and $ 9,050 for capital improvements to certain of the hotels included in our Marriott No.
−Removed: 1 agreement during the years ended December 31, 2019 and 2018 .
−Removed: 234 agreement .
−Removed: Our management agreement with Marriott for 68 hotels, or our Marriott No.
−Removed: 234 agreement, provided that, as of December 31, 2019 , we were to be paid an annual minimum return of $ 110,383 .
−Removed: We realized minimum returns of $ 108,564 , $ 106,978 and $ 106,405 during the years ended December 31, 2019 , 2018 and 2017 , respectively, under this agreement.
−Removed: Pursuant to our Marriott No.
−Removed: 234 agreement, Marriott had provided us with a security deposit to cover minimum return payment shortfalls, if any.
−Removed: Under this agreement, this security deposit may have been replenished and increased up to $ 64,700 from a share of hotel cash flows in excess of the minimum returns due to us.
−Removed: Marriott’s base and incentive management fees were only earned after we received our minimum returns.
−Removed: During the year ended December 31, 2019 , our available security deposit was replenished by $ 734 from a share of hotel cash flows in excess of the minimum returns due to us for the year.
−Removed: The available balance of this deposit was $ 33,445 as of December 31, 2019 .
−Removed: Pursuant to our Marriott No.
−Removed: 234 agreement, Marriott had also provided us with a limited guaranty for shortfalls up to 90 % of our minimum returns, if and after the available security deposit had been depleted.
−Removed: This guaranty expired on December 31, 2019 .
−Removed: We funded $ 33,700 and $ 9,030 for capital improvements to certain of the hotels included in our Marriott No.
−Removed: 234 agreement during the years ended December 31, 2019 and 2018 .
−Removed: 5 agreement .
−Removed: We leased one hotel in Kauai, HI to Marriott which required that, as of December 31, 2019 , we were paid annual minimum rents of $ 10,518 .
−Removed: This lease was guaranteed by Marriott and we realized $ 10,518 , $ 10,321 and $ 10,159 of rent for this hotel during the years ended December 31, 2019 , 2018 and 2017 , respectively.
−Removed: This lease expired on December 31, 2019 .
−Removed: On December 31, 2019 , we entered into agreements with Marriott, which combined our Marriott Nos.
−Removed: 1, 234 and 5 agreements into a single portfolio for a 16 -year term commencing January 1, 2020 , or the Marriott Agreement.
−Removed: Among other terms, the new combined agreements with Marriott provide as follows:
−Removed: That all 122 Marriott hotels will be combined economically so that excess cash flows from any of these hotels are available to pay the aggregate annual minimum returns due to SVC for these hotels, which was initially $ 190,600 .
−Removed: Our TRS subsidiaries will continue to participate in the net cash flows from hotel operations after payment of management fees to Marriott and these base fees will continue to be subordinated to the annual minimum return due to us.
−Removed: That the existing security deposit we held for the Marriott No.
−Removed: 234 agreement ( $ 33,445 as of December 31, 2019) will continue to secure payment of the aggregate annual minimum returns due to us under the new combined agreements and may be replenished up to the security deposit cap of $ 64,700 from 60 % of the cash flows realized from operations of the 122 hotels after payment of the aggregate annual minimum return due to us, Marriott’s base management fees and certain other advances by us or Marriott, if any.
−Removed: That Marriott will provide a new $ 30,000 limited guaranty for 85 % of the aggregate annual minimum return due to us through 2026 under the new combined agreements if the security deposit is exhausted.
−Removed: That the term of the agreements will be extended through 2035 , with Marriott having the option to renew for two consecutive 10 -year terms on an all or none basis.
−Removed: That 5.5 % - 6.5 % of gross revenues from hotel operations will continue to be placed in escrow for hotel maintenance and periodic renovations, or an FF&E reserve.
−Removed: We and Marriott identified 33 of the 122 hotels covered by the Marriott Agreement that will be sold or rebranded, at which time we would retain the proceeds of any such sale and the aggregate annual minimum returns due to us would decrease by the amount allocated to the applicable hotel.
+Added: and (3) for our managed hotels, make payments to our TRSs of additional returns to the extent of available cash flows after payment of operating expenses, payment of certain management fees, funding of our FF&E reserves, payment of our minimum returns, reimbursement of certain advances and replenishment of security deposits or guarantees.
+Added: In the past, some of our managers or tenants or their affiliates provided deposits or guarantees to secure their obligations to pay us.
Sonesta agreement.
−Removed: As of December 31, 2019 , Sonesta managed 14 of our full service hotels and 39 of our limited service hotels pursuant to management agreements for each of the hotels, which we refer to collectively as our Sonesta agreement, and a pooling agreement, which combines those management agreements for purposes of calculating gross revenues, payment of hotel operating expenses, payment of fees and distributions and minimum returns due to us.
+Added: As of December 31, 2020, Sonesta managed 38 of our full-service hotels, 121 extended stay hotels, and nine select service hotels pursuant to management agreements for each of the hotels.
+Added: We are also party to pooling agreements that combine certain of our management agreements with Sonesta for purposes of calculating gross revenues, payment of hotel operating expenses, payment of fees and distributions and minimum returns due to us.
See Notes 4 and 9 for further information regarding our relationship, agreements and transactions with Sonesta.
−Removed: As of December 31, 2019 , our Sonesta agreement provided that we are paid a fixed annual minimum return equal to 8 % of our invested capital, as defined therein, which was $ 146,800 , as of December 31, 2019 , if gross revenues of the hotels, after payment of hotel operating expenses and management and related fees (other than Sonesta’s incentive fee, if applicable), are sufficient to do so.
−Removed: Our Sonesta agreement further provided that we are paid an additional return based upon operating profits, as defined therein, after payment of Sonesta’s incentive fee, if applicable.
−Removed: We realized returns of $ 67,592 , $ 78,076 and $ 70,576 during the years ended December 31, 2019 , 2018 and 2017 , respectively, under our Sonesta agreement.
+Added: On February 27, 2020, we entered into a transaction agreement with Sonesta pursuant to which we and Sonesta restructured our business arrangements with respect to our hotels then managed by Sonesta as follows:
+Added: • we and Sonesta had agreed to sell, rebrand or repurpose our 39 extended stay hotels then managed by Sonesta.
+Added: We have since decided not to pursue the sale of these 39 hotels based on market conditions and the improved performance of these hotels during the pandemic;
+Added: • the annual minimum returns due for the 14 full-service hotels that Sonesta then managed, and which it continues to manage, were reduced from $ 99,013 to $ 69,013 as of that date;
+Added: • Sonesta issued to us a number of its shares of common stock representing approximately (but not more than) 34 % of its outstanding shares of common stock (post-issuance) and we entered into a stockholders agreement with Sonesta, Adam Portnoy and the other stockholder of Sonesta, and a registration rights agreement with Sonesta;
+Added: • we and Sonesta modified our then existing management agreements and pooling agreement so that up to 5 % of the hotel gross revenues of each of our 14 full-service hotels then managed, and which it continues to manage, by Sonesta will be escrowed for future capital expenditures as FF&E reserves, subject to available cash flows after payment of the annual minimum returns due to us under the management agreements;
+Added: • we and Sonesta modified the termination provisions of our then existing management agreements and pooling agreement and removed the provisions in our pooling agreement that allowed either us or Sonesta to require the marketing for sale of non-economic hotels;
+Added: • we and Sonesta extended the initial expiration date of the then existing management agreements for our full-service hotels managed by Sonesta located in Chicago, IL and Irvine, CA to January 2037 to align with the initial expiration date for our other full-service hotels then managed by Sonesta.
+Added: We refer to the amended and restated management agreements in effect as of February 27, 2020, as the legacy management agreements and we refer to the amended and restated pooling agreement that includes those legacy management agreements as the legacy pooling agreement.
+Added: We previously leased 48 vacation units to Wyndham Destinations, Inc.
+Added: WYND) at our full service hotel located in Chicago, IL, which Sonesta began managing in November 2019 and which had previously been managed by Wyndham.
+Added: Effective March 1, 2020, Sonesta commenced managing those units and those units were added to our legacy management agreement with respect to that Chicago hotel.
+Added: Between September 18, 2020 and December 15, 2020, we transferred the branding and management of 115 hotels previously managed by IHG, Marriott and Wyndham to Sonesta.
+Added: In February 2021, we transferred the branding and management of 78 Marriott branded hotels to Sonesta and we expect to transition the branding and management of 10 additional Marriott hotels to Sonesta in March 2021.
+Added: In addition, if our discussions with Hyatt do not result in a mutually acceptable agreement, we expect to transition management of the 22 hotels currently managed by Hyatt to Sonesta in April 2021.
+Added: We entered into management agreements with Sonesta with respect to these hotels on terms substantially consistent with our legacy management agreements, except that the management agreements for these transitioned hotels expire on December 31, 2021 and automatically renew for successive one-year terms unless terminated earlier.
+Added: We refer to these management agreements as the conversion hotel management agreements and we refer to the conversion hotel management agreements and the legacy management agreements collectively as our Sonesta agreements.
+Added: We also entered into a separate pooling agreement with Sonesta with respect to the conversion hotel management agreements on substantially the same terms as the existing Sonesta pooling agreement.
+Added: Our Sonesta agreements provide that we are paid a fixed annual minimum return equal to 8 % of our invested capital, as defined therein, if gross revenues of the hotels, after payment of hotel operating expenses and management and related fees (other than Sonesta’s incentive fee, if applicable), are sufficient to do so.
+Added: Our fixed annual minimum return under our Sonesta agreements was $ 349,456 as of December 31, 2020.
+Added: Our Sonesta agreements further provide that we are paid an additional return equal to 80 % of the operating profits, as defined therein, after reimbursement of owner or manager advances, FF&E reserve escrows and Sonesta’s incentive fee, if applicable.
+Added: Our Sonesta hotels generated net operating losses of $ 65,277 during the year ended December 31, 2020.
+Added: Our funding of these losses is considered an owner advance, as defined, and is reimbursable to us from a share of future cash flows from the hotel operations in excess of the minimum returns due to us, if any, pursuant to the terms of our Sonesta agreements.
+Added: We realized returns of $ 67,592 and $ 78,076 during the years ended December 31, 2019 and 2018, respectively, under our Sonesta agreements.
We do not have any security deposits or guarantees for our Sonesta hotels.
−Removed: Accordingly, the returns we receive from our Sonesta hotels are limited to the hotels’ available cash flows after payment of operating expenses including management and related fees.
−Removed: As of December 31, 2019 our Sonesta agreement provided that Sonesta is entitled to receive, after payment of hotel operating expenses, a base management fee equal to 3.0 % of gross revenues for our full service Sonesta hotels and 5.0 % of gross revenues for our limited service Sonesta hotels.
−Removed: Additionally, Sonesta is entitled to a reservation fee equal to 1.5 % of gross room revenues, as defined in the Sonesta agreement, a system fee for centralized services of 1.5 % of gross revenues, a procurement and construction supervision fee equal to 3.0 % of third party costs of capital expenditures and an incentive management fee equal to 20.0 % of operating profits remaining after reimbursement to us and to Sonesta of certain advances and payment of our minimum returns.
+Added: Accordingly, the returns we receive from our Sonesta hotels are limited to the hotels’ available cash flows, if any, after payment of operating expenses, including management and related fees.
+Added: Our Sonesta agreements provide that Sonesta is entitled to receive, after payment of hotel operating expenses, a base management fee equal to 3.0 % of gross revenues for our full-service hotels and 5.0 % of gross revenues for our extended stay and select service hotels.
+Added: Additionally, Sonesta is entitled to a reservation fee equal to 1.5 % of gross room revenues, as defined in our Sonesta agreements, a system fee for centralized services of 1.5 % of gross revenues, a procurement and construction supervision fee equal to 3.0 % of third party costs of capital expenditures and an incentive management fee equal to 20.0 % of operating profits remaining after reimbursement to us and to Sonesta of certain advances and payment of our minimum returns.
Sonesta’s incentive management fee, but not its other fees, is earned only after our minimum returns are paid.
−Removed: Our Sonesta agreement also provided that the costs incurred by Sonesta for advertising, marketing, promotional and public relations programs and campaigns, including “frequent stay” rewards programs, for the benefit of our Sonesta hotels are subject to reimbursement by us or are otherwise treated as hotel operating expenses, subject to our approval.
−Removed: Pursuant to our Sonesta agreement, as of December 31, 2019 , we incurred base management, reservation and system fees and reimbursement costs for certain guest loyalty, marketing program and third party reservation transmission fees of $ 36,169 , $ 34,821 and $ 28,238 for the years ended December 31, 2019 , 2018 and 2017 , respectively, under our Sonesta agreement.
−Removed: In addition, as of December 31, 2019 , we recognized procurement and construction supervision fees of $ 3,320 , $ 2,374 and $ 1,080 for the years ended December 31, 2019 , 2018 and 2017 , respectively, under our Sonesta agreement.
−Removed: These amounts are included in hotel operating expenses or have been capitalized, as appropriate, in our consolidated financial statements.
−Removed: As of December 31, 2019 our Sonesta agreement did not require FF&E escrow deposits, but did require us to fund capital expenditures that we approved at our Sonesta hotels.
−Removed: We funded $ 114,082 , $ 82,329 and $ 34,933 for renovations and other capital improvements to hotels included in our Sonesta agreement during the years ended December 31, 2019 , 2018 and 2017 , respectively.
−Removed: We owed Sonesta $ 15,537 and $ 5,703 for capital expenditure reimbursements and for a previously estimated overpayment of minimum returns advanced at December 31, 2019 and 2018 , respectively.
+Added: Our Sonesta agreements also provide that the costs incurred by Sonesta for advertising, marketing, promotional and public relations programs and campaigns, including “frequent stay” rewards programs, for the benefit of our Sonesta hotels are subject to reimbursement by us or are otherwise treated as hotel operating expenses, subject to our approval.
+Added: Pursuant to our Sonesta agreements, we incurred management, reservation and system fees and reimbursement costs for certain guest loyalty, marketing program and third-party reservation transmission fees of $ 17,734 , $ 36,169 and $ 34,821 for the years ended December 31, 2020, 2019 and 2018, respectively, under our Sonesta agreements.
+Added: These fees and costs are included in hotel operating expenses in our consolidated statements of comprehensive income (loss).
+Added: In addition, we recognized procurement and construction supervision fees of $ 1,571 , $ 3,320 and $ 2,374 for the years ended December 31, 2020, 2019 and 2018, respectively, under our Sonesta agreements.
+Added: These amounts have been capitalized in our consolidated balance sheets and are depreciated over the estimated useful lives of the related capital assets.
+Added: Our Sonesta agreements require us to fund capital expenditures that we approve or approved at our Sonesta hotels.
+Added: Commencing February 27, 2020, each of our 14 full-service hotels operated under the legacy management agreements and all the hotels operated under the conversion hotel management agreements managed by Sonesta require that 5 % of the hotel gross revenues be escrowed for future capital expenditures as FF&E reserves, subject to available cash flows after payment of the annual minimum returns due to us.
+Added: Our legacy management agreements do not require FF&E escrow deposits for 39 extended stay hotels.
+Added: No FF&E escrow deposits were required during the year ended December 31, 2020 under our Sonesta agreements.
+Added: We funded $ 62,963 , $ 114,082 and $ 82,329 for renovations and other capital improvements to certain hotels included in our Sonesta agreements during the years ended December 31, 2020, 2019 and 2018, respectively.
+Added: We owed Sonesta $ 26,096 , $ 15,537 and $ 5,703 for 2020 operating losses generated by our Sonesta hotels, capital expenditure and other reimbursements or for previous overpayments of estimated minimum returns advanced at December 31, 2020, 2019 and 2018, respectively.
Amounts due from Sonesta are included in due from related persons and amounts owed to Sonesta are included in due to related persons in our consolidated balance sheets, respectively.
−Removed: Our Sonesta agreement expires in January 2037, and will be extended automatically for up to two successive 15 year renewal terms unless Sonesta elects not to renew any such agreement.
−Removed: Under the pooling agreement, if Sonesta elects not to renew a management agreement, that will be deemed to be a notice of non-renewal for all our management agreements with Sonesta.
−Removed: We generally have the right to terminate a management agreement with Sonesta after three to four years without cause upon payment of a termination fee.
−Removed: We also have the right to terminate a management agreement with Sonesta without a termination fee if our minimum return is less than 6 % of our invested capital during any three of four applicable consecutive years.
−Removed: Both we and Sonesta have the right to terminate any management agreement included in our Sonesta agreement upon a change in control, as defined therein, of the other party, and under certain other circumstances that, in the case of termination by Sonesta, may require that we pay a termination fee to Sonesta.
−Removed: Under the pooling agreement, if we terminate or Sonesta terminates a management agreement following a change of control, that will be deemed a termination of all of our management agreements with Sonesta.
−Removed: Under our Sonesta agreement, if we terminate without cause, or if Sonesta terminates under certain circumstances, the termination fee is an amount equal to the present value of the payments that would have been made to Sonesta as a base management fee, reservation fee, system fee and incentive management fee, each as defined therein, between the date of termination of the applicable agreement and the scheduled expiration date of the term that was remaining prior to such termination, which present value is calculated based upon the average of each of such fees earned in each of the three years ended prior to the date of termination, discounted at an annual rate equal to 8 % .
−Removed: We may designate a hotel as “non-economic” under the pooling agreement, in which case the hotel would be subject to sale and the applicable Sonesta management agreement would be terminated, and we have an early termination right under each of the management agreements included in our Sonesta agreement if the applicable hotel does not meet certain criteria for the stipulated measurement period.
−Removed: These stipulated measurement periods begin on the later of January 1, 2017 and January 1st of the year beginning at least 18 months following the effective date of the applicable management agreement.
−Removed: On November 1, 2019, we rebranded two full service hotels previously managed by Wyndham (Chicago, IL and Irvine, CA) to the Sonesta brands under short term agreements with Sonesta that expire on December 31, 2020.
−Removed: We also lease 48 vacation units in the Chicago, IL Sonesta hotel to a subsidiary of Wyndham Destinations, Inc.
−Removed: WYND), or Destinations, which requires that, as of December 31, 2019 , we are paid annual minimum rents of $ 1,537 .
−Removed: The guaranty provided by Destinations with respect to the Destinations lease for part of one hotel is unlimited.
−Removed: We recognized rental income of $ 503 during the year ended December 31, 2019 and $ 1,456 and $ 1,414 during the years ended December 31, 2018 and 2017 , respectively, under our Destinations agreement.
−Removed: We reduced rental income by $ 997 for the year ended December 31, 2019 and increased rental income by $ 358 and $ 400 for the years ended December 31, 2018 and 2017 , respectively, to record adjustments necessary to record rent on a straight line basis.
−Removed: We have amended the lease of the 48 Destinations units at the Chicago hotel so the term of the lease expires on March 31, 2020, at which time Destinations will vacate the leased space.
−Removed: See Note 4 for information regarding the effects of certain of our property acquisitions on our management agreements with Sonesta.
−Removed: On February 27, 2020 , we entered into a transaction agreement with Sonesta and its newly formed parent company, Sonesta Holdco Corporation, or Holdco, pursuant to which we and Sonesta restructured our existing business arrangements as follows:
−Removed: We amended and restated our existing management agreements with Sonesta for each of our hotels currently manage by Sonesta, which we refer to collectively as our Sonesta agreement, and our existing pooling agreement with Sonesta, which combines our management agreements with Sonesta for purposes of calculating gross revenues, payment of hotel operating expenses, payment of fees and distributions and minimum returns due to us, as further described below;
−Removed: We and Sonesta agreed to sell, rebrand or repurpose our 39 extended stay hotels currently managed by Sonesta with an aggregate carrying value of $ 480,547 and which currently require aggregate minimum returns of $ 49,467 .
−Removed: As the hotels are sold, rebranded or repurposed, the management agreement for the applicable hotel(s) will terminate witout our being required to pay Sonesta a termination fee and our annual minimum returns due to us under our Sonesta agreement will decrease by the amount allocated to the applicable hotel(s);
−Removed: Sonesta will continue to manage 14 of our full-service hotels that Sonesta currently manages and the annual minimum returns due for these hotels will be reduced from $ 99,013 to $ 69,013 ;
−Removed: Holdco issued to us a number of its shares of common stock representing approximately (but not more than) 34 % of its outstanding shares of common stock (post-issuance);
−Removed: We modified our Sonesta agreement and pooling agreement so that 5 % of the hotel gross revenues of each of our 14 full-service hotels managed by Sonesta will be escrowed for future capital expenditures as “FF&E reserves,” subject to available cash flow after payment of the annual minimum returns due to us under the Sonesta agreement;
−Removed: We modified our Sonesta agreement and pooling agreement so that (1) our termination rights under those agreements for our 14 full-service hotels managed by Sonesta are generally limited to performance and for “cause,” casualty and condemnation events, (2) a portfolio wide performance test now applies for determining whether the management agreement for any of our full service hotels managed by Sonesta may be terminated for performance reasons, and (3) the provisions included in our historical pooling agreement that allowed either us or Sonesta to require the marketing for sale of non-economic hotels were removed;
−Removed: We extended the initial expiration date of the management agreements for our full service hotels located in Chicago, IL and Irvine, CA that are managed by Sonesta to January 2037 to align with the initial expiration date for our other full-service hotels managed by Sonesta.
−Removed: Except as described above, the economic terms of our amended and restated Sonesta agreement and amended and restated pooling agreement are consistent with the historical Sonesta agreement and pooling agreement.
+Added: Our legacy management agreements with Sonesta expire in January 2037, and will be extended automatically for up to two successive 15 years renewal terms unless Sonesta elects not to renew any such agreement.
+Added: Under the legacy pooling agreement, if Sonesta elects not to renew a legacy management agreement, that will be deemed to be a notice of non-renewal for all our legacy management agreements with Sonesta.
+Added: The legacy pooling agreement includes only legacy management agreements with Sonesta.
+Added: In general, we may terminate any legacy management agreement with respect to a full-service hotel or an extended stay hotel for cause, casualty and condemnation events.
+Added: We may terminate any legacy management agreement with respect to an extended stay hotel without cause upon 60 days’ notice.
+Added: We also have the right to terminate a legacy management agreement with respect to a full-service hotel if our minimum return is less than 6 % of our invested capital during any three of four applicable consecutive years;
+Added: however, under the legacy pooling agreement, this termination right is subject to a portfolio wide performance test such that we may only terminate the legacy management agreement with respect to a full-service hotel if our aggregate minimum returns for all of our full-service hotels in the portfolio covered by the legacy pooling agreement are less than 6 % of our aggregate invested capital during the applicable testing period.
+Added: A termination fee may be payable under certain circumstances if a legacy management agreement with respect to a full-service hotel is terminated.
+Added: The termination fee would be an amount equal to the present value of the payments that would have been made to Sonesta as a base management fee, reservation fee, system fee and incentive management fee between the date of termination of the applicable legacy management agreement and the scheduled expiration date of the term that was remaining prior to such termination, which present value is calculated based upon the average of each of such fees earned in each of the three years ended prior to the date of termination, discounted at an annual rate equal to 8 %.
+Added: No termination fee is payable if a legacy management agreement with respect to an extended stay hotel is terminated.
+Added: We or Sonesta may terminate any conversion hotel management agreement upon 30 days’ notice (if by us) or 60 days’ notice (if by Sonesta) or as otherwise provided in such agreement.
+Added: No termination fee is payable if a conversion hotel management agreement is terminated.
+Added: Accounting for Investment in Sonesta:
+Added: We account for our 34 % non-controlling interest in Sonesta under the equity method of accounting.
+Added: As of December 31, 2020, our investment in Sonesta had a carrying value of $ 36,646 .
+Added: This amount is included in other assets in our consolidated balance sheets.
+Added: The cost basis of our investment in Sonesta exceeded our proportionate share of Sonesta’s total shareholders’ equity book value on the date of acquisition, February 27, 2020, by an aggregate of $ 8,000 .
+Added: As required under GAAP, we are amortizing this difference to equity in earnings of an investee over 31 years, the weighted average remaining useful life of the real estate assets and intangible assets and liabilities owned by Sonesta as of the date of our acquisition.
+Added: We recorded amortization of the basis difference of $ 216 in the year ended December 31, 2020.
+Added: We recognized losses of $ 9,910 related to our investment in Sonesta for the year ended December 31, 2020.
+Added: These amounts are included in equity in earnings (losses) of an investee in our consolidated statements of comprehensive income (loss).
+Added: We recorded a liability of $ 42,000 for the fair value of our initial investment in Sonesta, as no cash consideration was exchanged related to the modification of our management agreement with, and investment in, Sonesta.
+Added: This liability for our investment in Sonesta is included in accounts payable and other liabilities in our consolidated balance sheet and is being amortized on a straight-line basis through January 31, 2037, as a reduction to hotel operating expenses in our consolidated statements of comprehensive income (loss).
+Added: We reduced hotel operating expenses by $ 2,070 for the year ended December 31, 2020 for amortization of this liability.
+Added: As of December 31, 2020, the unamortized balance of this liability was $ 39,931 .
+Added: See Note 9 for further information regarding our relationship, agreements and transactions with Sonesta.
+Added: IHG agreement.
+Added: Our historical management for 102 hotels and lease agreement for one hotel with IHG, or the IHG agreement, had provided that we were to be paid annual minimum returns and rents of $ 216,551 .
+Added: Pursuant to the IHG agreement, IHG had provided us with a security deposit to cover minimum payment shortfalls, if any.
+Added: Under this agreement, IHG was required to maintain a minimum security deposit of $ 37,000 and this security deposit could be replenished and increased up to $ 100,000 from a share of cash flows from the hotels in excess of our minimum returns and rents, working capital advances and certain management fees, if any.
+Added: During the year ended December 31, 2020, we had fully utilized the $ 75,717 security deposit we held to cover shortfalls in hotel cash flows available to pay the minimum returns due to us for the period.
+Added: We terminated our agreement with IHG for failure to pay minimum returns and rents due to us during 2020 upon exhausting the security deposit.
+Added: We transferred the branding and management of 102 of our 103 IHG hotels to Sonesta in December 2020 as described above.
+Added: On December 1, 2020 we entered into an agreement with IHG for one hotel located in Ravinia, GA.
+Added: This agreement expires on January 31, 2026 and IHG has an option to acquire the hotel for the greater of $ 128,500 , our historical investment in the property, and an amount based on the operating results of the hotel for the 24 months period prior to the option notice date, divided by 8 %.
+Added: IHG is paid a base management fee of 3 % of gross revenues to operate this property.
+Added: We realized returns and rents of $ 107,888 , $ 205,941 and $ 189,981 during the years ended December 31, 2020, 2019 and 2018 respectively, under our IHG agreement and the December 2020 agreement with IHG.
+Added: The IHG agreement required 5 % of gross revenues from hotel operations be placed in an FF&E reserve.
+Added: As a result of market conditions, we and IHG agreed to suspend contributions to the FF&E reserve under the IHG agreement beginning in March 2020 through the end of 2020.
+Added: In April 2020, we funded $ 37,000 of working capital advances under the IHG agreement to cover projected operating losses at our hotels managed by IHG.
+Added: Marriott agreement .
+Added: Our management agreement with Marriott for 105 hotels, or the Marriott agreement, provides that, as of December 31, 2020, we were to be paid annual minimum returns of $ 176,416 .
+Added: Pursuant to the Marriott agreement, Marriott had provided us with a security deposit to cover minimum return payment shortfalls, if any.
+Added: Under this agreement, this security deposit, if utilized, would be replenished and increased up to $ 64,700 from 60 % of the cash flows realized from operations of the 122 hotels after payment of the aggregate annual minimum returns, Marriott’s base management fees and working capital advances, if any.
+Added: Marriott had also provided us with a $ 30,000 limited guaranty to cover payment shortfalls up to 85 % of our minimum returns after the available security deposit balance has been depleted.
+Added: During the year ended December 31, 2020, we fully utilized the $ 33,445 security deposit we then held and exhausted the $ 30,000 limited guaranty to cover shortfalls in hotel cash flows available to pay the minimum returns due to us for the period.
+Added: The Marriott agreement required 5.5 % to 6.5 % of gross revenues from hotel operations be placed in an FF&E reserve.
+Added: As a result of current market conditions, we and Marriott agreed to suspend contributions to the FF&E reserve under the Marriott agreement from March through December 2020.
+Added: We sent notices to Marriott terminating our agreement in October 2020 for its failure to cover the cumulative shortfall between the payments we had received to date and 80 % of the cumulative priority returns due to us.
+Added: We and Marriott identified 33 of the 105 hotels covered by the Marriott agreement that will be sold or rebranded.
+Added: On November 18, 2020, we sold eight of these hotels and on December 15, 2020, we transferred the branding and management of nine of these hotels to Sonesta.
+Added: We had entered an agreement to sell the remaining 16 hotels, which were to be sold by December 15, 2020 under the terms we agreed to with Marriott but we did not reach acceptable terms with the buyer and terminated the agreement to sell these hotels.
+Added: See Note 4 for further information on our disposition activity.
+Added: We are in dispute with Marriott and have submitted various claims for arbitration regarding the timing and characterization of certain payments made to us, including Marriott’s assertion we are required to refund $ 19,120 of minimum return advances made to us in 2020, and the validity of the timing of the termination of the Marriott agreements.
+Added: We are also seeking repayment of certain working capital advances we made to Marriott during 2020.
+Added: Despite the arbitration claims, we and Marriott agreed to an orderly transition and we transferred the branding and management of 78 Marriott hotels to Sonesta in February 2021 and expect to transfer the branding and management of 10 additional Marriott hotels to Sonesta in March 2021.
+Added: We have also entered an agreement with Marriott regarding 16 hotels we previously agreed to sell, pursuant to which we agreed to have these hotels remain Marriott branded hotels until the arbitration is resolved.
+Added: We realized returns of $ 93,593 , $ 190,492 and $ 186,822 during the years ended December 31, 2020, 2019 and 2018, respectively, under our Marriott agreement.
+Added: In April 2020, we funded $ 30,000 of working capital advances under the Marriott agreement to cover projected operating losses at our hotels managed by Marriott.
+Added: We expect Marriott to disburse to us any remaining working capital and FF&E upon resolution of the arbitration described above.
Hyatt agreement.
Our management agreement with Hyatt for 22 hotels, or our Hyatt agreement, which expires in 2030, provides that, as of December 31, 2020 we are to be paid an annual minimum return of $ 22,037 .
−Removed: We realized minimum returns of $ 22,037 during each of the years ended December 31, 2019 , 2018 and 2017 under this agreement.
+Added: We realized minimum returns of $ 22,037 during each of the years ended December 31, 2020, 2019 and 2018, respectively, under this agreement.
Pursuant to our Hyatt agreement, Hyatt has provided us with a guaranty, which is limited to $ 50,000 .
−Removed: During the year ended December 31, 2019 , the hotels under this agreement generated cash flows that were less than the minimum rents due to us for the period and Hyatt made $ 2,260 guarantee payments to cover the shortfall.
−Removed: The available balance of the guaranty was $ 19,655 as of December 31, 2019 .
+Added: During the year ended December 31, 2020, the hotels under this agreement generated cash flows that were less than the minimum rents due to us for the period and we exhausted the remaining $ 19,120 limited guaranty available to us to cover the shortfall.
+Added: In January 2021, we received a notice of termination from Hyatt with respect to our management agreement with it for 22 hotels as a result of Hyatt’s guaranty being exhausted.
+Added: We and Hyatt are currently in discussions regarding possible changes to the management agreement that may enable some or all of the hotels to continue to be managed by Hyatt.
+Added: However, if such discussions do not result in a mutually acceptable agreement, we expect to transition management of the 22 hotels to Sonesta in April 2021.
+Added: During the year ended December 31, 2020, we funded $ 3,700 of working capital advances under our Hyatt agreement to cover projected operating losses at our hotels managed by Hyatt.
+Added: Working capital advances are reimbursable to us from a share of future cash flows from the hotel operations in excess of the minimum returns due to us, if any, pursuant to the terms of the Hyatt agreement.
+Added: Our Hyatt agreement requires 5 % of gross revenues from hotel operations be placed in an FF&E reserve, subject to available cash flow.
Radisson agreement .
1 unchanged sentence
We realized minimum returns of $ 20,456 , $ 20,056 and $ 16,183 during the years ended December 31, 2020, 2019 and 2018, respectively, under this agreement.
−Removed: Pursuant to our Radisson agreement, Radisson has provided us with a limited guaranty which, as a result of capital improvement amounts funded by us during the year ended December 31, 2019 , increased by $ 1,523 to a total of $ 47,523 .
+Added: Pursuant to our Radisson agreement, Radisson has provided us with a guaranty, which is limited to $ 47,523 .
During the year ended December 31, 2020, the hotels under this agreement generated cash flows that were less than the minimum returns due to us for the period and Radisson made $ 27,978 of guaranty payments to cover the shortfall.
−Removed: The available balance of the guarantee was $ 41,216 at December 31, 2019 .
−Removed: We funded $ 19,034 for capital improvements at certain of the hotels included in our Radisson agreement during the year ended December 31, 2019 .
+Added: The available balance of the guaranty was $ 13,238 as of December 31, 2020.
+Added: In addition to our minimum returns, our Radisson agreement provides for payment to us of 50 % of the hotels’ available cash flows after payment of operating expenses, funding the required FF&E reserve, payment of our minimum returns, our working capital advances and reimbursement to Radisson of working capital and guaranty advances, if any.
+Added: Our Radisson agreement requires 5 % of gross revenues from hotel operations be placed in an FF&E reserve.
+Added: As a result of market conditions, we and Radisson agreed to suspend contributions to the FF&E reserve under our Radisson agreement for the period of April 2020 through December 2020.
Wyndham agreements .
−Removed: In October 2019, we amended our agreement with Wyndham whereby the term of the management agreement will expire on September 30, 2020 unless sooner terminated with respect to any hotels that are sold or rebranded.
−Removed: Under the amendment, Wyndham will pay us all cash flows of the hotels after payment of hotel operating costs.
−Removed: Wyndham will not be entitled to any base management fees for the remainder of the agreement term.
+Added: Our Wyndham hotels generated net operating losses of $ 9,295 during the year ended December 31, 2020.
We realized returns of $ 20,023 and $ 23,562 during the years ended December 31, 2019 and 2018, respectively.
−Removed: Wyndham had provided us with a guaranty, which was limited to $ 35,656 , subject to an annual payment limit of $ 17,828 which was depleted during 2017 .
−Removed: To avoid default, Wyndham was required to pay 85% of the minimum returns due to us.
−Removed: Our Wyndham agreement requires FF&E escrow deposits equal to 5% of total hotel sales for all hotels included in the agreement subject to available cash flows after payment of our minimum return.
−Removed: No FF&E escrow deposits were made during the year ended December 31, 2019.
−Removed: We funded $ 3,040 , $ 2,883 and $ 1,449 for capital improvements to certain of the hotels included in our Wyndham agreement during the years ended December 31, 2019 , 2018 and 2017 , respectively.
+Added: In September and October 2020, we rebranded four hotels previously managed by Wyndham to Sonesta.
+Added: In September 2020, we amended our management agreement with Wyndham with respect to 15 hotels so that it would remain as the manager for a limited period.
+Added: Under the amended terms of this agreement, we paid Wyndham a management fee of 7 % of hotel revenues, subject to certain minimums.
+Added: On December 29, 2020, we sold ten Wyndham branded hotels and entered a short-term lease and revised purchase agreement for our five remaining Hawthorn Suites branded hotels with the same buyer.
+Added: See Note 4 for further information regarding these sales.
+Added: One Wyndham branded hotel we previously were marketing for sale ceased operations as a hotel on September 30, 2020.
+Added: We are reviewing alternatives regarding this hotel including possibly remarketing it for sale or repurposing it.
+Added: As of December 31, 2020, we no longer have any relationships with Wyndham.
+Added: Certain managers of our hotels are required to fund the shortfalls of minimum returns under the terms of our management agreements or their guarantees.
+Added: We reflect such fundings (including security deposit applications) in our consolidated statements of comprehensive income (loss) as a reduction of hotel operating expenses.
+Added: The net reduction to hotel operating expenses was $ 235,521 , $ 29,162 and $ 5,569 for the years ended December 31, 2020, 2019 and 2018, respectively.
Net lease portfolio
−Removed: As of December 31, 2019 , we owned 816 net lease service-oriented retail properties with 14.9 million square feet with annual minimum rent of $ 381,679 with a weighted (by annual minimum rents) average lease term of 8.6 years .
+Added: As of December 31, 2020, we owned 799 net lease service-oriented retail properties with 13,455,405 square feet with annual minimum rent of $ 369,593 with a weighted (by annual minimum rents) average lease term of 10.9 years.
The portfolio was 98.7 % leased by 170 tenants operating under 127 brands in 22 distinct industries.
−Removed: On January 16, 2019 , we entered agreements with TA pursuant to which:
−Removed: We sold to TA 20 travel center properties that TA previously leased from us for a total purchase price of $ 308,200 .
−Removed: We recorded a gain of $ 159,535 as a result of these sales.
−Removed: Upon completing these sales, these travel center properties were removed from the TA leases and TA’s annual minimum rent payable to us decreased by $ 43,148 .
−Removed: Commencing on April 1, 2019 , TA paid us the first of the 16 quarterly installments of approximately $ 4,404 each (an aggregate of $ 70,458 ) to fully satisfy and discharge its $150,000 deferred rent obligation to us that otherwise would have become due in five installments between 2024 and 2030 .
−Removed: TA paid to us $ 13,200 in respect of such obligation for the year ended December 31, 2019 .
−Removed: Commencing with the year ending December 31, 2020 , TA will be obligated to pay to us an additional amount of percentage rent equal to one-half percent ( 0.5 % ) of the excess of its annual nonfuel revenues at leased sites over the nonfuel revenues for each respective site for the year ending December 31, 2019 .
−Removed: The term of each TA lease was extended by three years .
−Removed: Certain of the 179 travel center properties that TA continues to lease from us were reallocated among the TA leases.
−Removed: TA is our largest tenant.
−Removed: As of December 31, 2019 , we leased to TA a total of 179 travel centers under five leases that expire between 2029 and 2035 and require annual minimum returns of $ 246,088 which represents approximately 24.6 % of our total annual minimum rents as of December 31, 2019 .
+Added: TA is our largest tenant, leasing 26.7 % of our gross carrying value of real estate properties as of December 31, 2020.
The number of travel centers, the terms, the annual minimum rent and the deferred rent balances owed to us by TA under our TA leases as of December 31, 2020, were as follows:
−Removed: Number of Travel Centers
−Removed: Initial Term End (1)
−Removed: Annual Minimum Rent
−Removed: Deferred Rent (2) (3)
−Removed: December 31, 2032
−Removed: December 31, 2031
−Removed: December 31, 2029
−Removed: December 31, 2033
−Removed: June 30, 2035
+Added: Number of Travel Centers Initial Term End (1)
+Added: Annual Minimum Rent Deferred Rent (2) (3)
+Added: 1 Lease 36 December 31, 2032 $ 49,707 $ 10,487
+Added: 2 Lease 36 December 31, 2031 44,077 9,740
+Added: 3 Lease 35 December 31, 2029 42,409 9,602
+Added: 4 Lease 37 December 31, 2033 48,263 9,803
+Added: 5 Lease 35 June 30, 2035 61,654 —
+Added: 179 $ 246,110 $ 39,632
(1) TA has two renewal options of 15 years each under each of our TA leases.
−Removed: Commencing April 1, 2019, TA is required to pay us $ 70,458 in 16 quarterly installments of $ 4,404 each for deferred rent TA owes us.
+Added: (2) Commencing April 1, 2019, TA is required to pay us $ 70,458 in 16 quarterly installments of $ 4,404 for deferred rent TA owes us.
(3) Represents the balance as of December 31, 2020.
6 unchanged sentences
We recognized rental income from TA of $ 250,573 , $ 262,038 and $ 302,309 for the years ended December 31, 2020, 2019 and 2018, respectively.
−Removed: We reduced rental income by $ 11,894 for the year ended December 31, 2019 and increased rental income of $ 12,127 and $ 11,966 for the years ended December 31, 2018 and 2017 , respectively, to record the deferred rent obligations under our TA leases and the estimated future payments to us by TA for the cost of removing underground storage tanks on a straight line basis.
+Added: Rental income for the years ended December 31, 2020, 2019 and 2018 includes $ 13,156 , $ 11,894 and $ 12,127 , respectively, of adjustments to record the deferred rent obligations under our TA leases and the estimated future payments to us by TA for the cost of removing underground storage tanks on a straight line basis.
As of December 31, 2020 and 2019, we had receivables for current rent amounts owed to us by TA and straight line rent adjustments of $ 55,530 and $ 68,653 , respectively.
These amounts are included in due from related persons in our consolidated balance sheets.
−Removed: For the years ended December 31, 2018 and 2017, we recognized the deferred rent obligations under our TA leases as rental income on a straight line basis over the then in-place lease terms.
+Added: For the year ended December 31, 2018, we recognized the deferred rent obligations under our TA leases as rental income on a straight line basis over the then in-place lease terms.
Beginning in January 2019, our recognition of the amended deferred rent obligations are recorded on a straight line basis over the new lease terms of our TA leases.
+Added: Commencing on April 1, 2019, TA paid us the first of the 16 quarterly installments of approximately $ 4,404 each (an aggregate of $ 70,458 ) to fully satisfy and discharge its $ 150,000 deferred rent obligation to us that otherwise would have become due in five installments between 2024 and 2030.
+Added: TA paid to us $ 17,616 and $ 13,200 in respect of such obligation for the years ended December 31, 2020 and 2019, respectively.
+Added: On January 16, 2019, we sold to TA 20 travel center properties that TA previously leased from us for a total purchase price of $ 308,200 .
+Added: We recorded a gain of $ 159,535 as a result of these sales.
+Added: Upon completing these sales, these travel center properties were removed from the TA leases and TA’s annual minimum rent payable to us decreased by $ 43,148
In addition to the payment of annual minimum rent, our TA Nos.
6 unchanged sentences
TA is not obligated to request and we are not obligated to fund any such improvements.
−Removed: We funded $ 56,346 and $ 84,632 during the years ended December 31, 2018 and 2017, respectively, for capital improvements to our travel center properties and, as a result, TA’s annual minimum rent payable to us increased by $ 4,789 and $ 7,194 , respectively.
−Removed: We did not fund any improvements under these leases during 2019.
+Added: We funded $ 56,346 during the year ended December 31, 2018 for capital improvements to our travel center properties and, as a result, TA’s annual minimum rent payable to us increased by $ 4,789 .
+Added: We did not fund any improvements under these leases during the years ended December 31, 2020 or 2019.
See Notes 4 and 9 for further information regarding our relationship with TA.
−Removed: Other net lease agreements
−Removed: We recognized rental income from the net lease properties we acquired under the SMTA Transaction of $ 46,861 during the year ended December 31, 2019 , which includes $ 2,160 of adjustments to record scheduled rent changes under certain of our leases on a straight line basis.
+Added: Our net lease agreements generally provide for minimum rent payments and in addition may include variable payments.
+Added: Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight-line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable.
+Added: Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term.
+Added: We recognized rental income from our other net lease properties (excluding TA) of $ 137,111 and $ 46,861 for the years ended December 31, 2020 and 2019, respectively, which included $ 14,345 and $ 2,160 , respectively, of adjustments to record scheduled rent changes under certain of our leases on a straight-line basis.
+Added: As a result of the COVID-19 pandemic, some of our tenants have requested rent assistance.
+Added: During the year ended December 31, 2020, we collected 94.0 % of rents due to us from our net lease tenants.
+Added: In January 2021, we collected 89.3 % of rents due to us from our net lease tenants.
+Added: We have entered into rent deferral agreements with 46 net lease retail tenants with leases requiring an aggregate of $ 46,370 of annual minimum rents.
+Added: These amounts do not include tenants that have withdrawn previously approved deferral requests.
+Added: Generally, these rent deferrals are for one to four months of rent and were payable by the tenants over a 12 to 24 month period beginning in September 2020.
+Added: We have deferred an aggregate of $ 12,115 of rent related to the 46 tenants as of February 26, 2021.
+Added: We have elected to use the FASB relief package regarding the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic.
+Added: The FASB relief package provides entities with the option to account for lease concessions resulting from the COVID-19 pandemic outside of the existing lease modification guidance if the resulting cash flows from the modified lease are substantially the same as the original lease.
+Added: Because the deferred rents referenced above will be repaid over a 12 to 24 month period, the cash flows from the respective leases are substantially the same as before the rent deferrals.
+Added: We continually review receivables related to rent, straight-line rent and property operating expense reimbursements and determine collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located.
+Added: The review includes an assessment of whether or not substantially all of the amounts due under a tenant’s lease are probable of collection.
+Added: For leases that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term.
+Added: For leases that are deemed not probable of collection, revenue is recorded as cash is received.
+Added: We recognize all changes in the collectability assessment for an operating lease as an adjustment to rental income and do not record an allowance for uncollectable accounts.
+Added: We recorded reserves for uncollectable amounts against rental income of $ 9,892 and $ 5,981 for the years ended December 31, 2020 and 2019, respectively.
+Added: We had reserves for uncollectable rents of $ 15,873 and $ 5,981 as of December 31, 2020 and 2019, respectively, included in other assets on our consolidated balance sheets.
Additional lease information (as lessor) .
As of December 31, 2020, our leases with parties other than our TRSs provide for contractual minimum rents to be paid to us during the remaining current terms as follows:
+Added: 2021 $ 391,108
+Added: Thereafter 2,442,524
+Added: Total $ 4,298,448
Additional lease information (as lessee) .
3 unchanged sentences
The right of use assets and related lease liabilities are included within other assets, net and accounts payable and other liabilities, respectively, in our consolidated balance sheets.
−Removed: At December 31, 2019 , our right of use assets and related lease liabilities totaled $ 75,040 and $ 75,040 , respectively, which represented our future obligations under our operating leases and are included in other assets and other liabilities, respectively, in our consolidated balance sheets.
+Added: At December 31, 2020 and 2019, our right of use assets and related lease liabilities each totaled $ 84,924 and $ 75,040 , respectively, which represented our future obligations under our operating leases and are included in other assets and other liabilities , respectively, in our consolidated balance sheets.
Our operating leases require minimum fixed rent payments, percentage rent payments based on a percentage of hotel revenues in excess of certain thresholds, or rent payments equal to the greater of a minimum fixed rent or percentage rent.
−Removed: Rental expense related to our operating leases of $ 13,892 for year ended December 31, 2019 , is included in hotel operating expenses within our consolidated statements of comprehensive income.
+Added: Rental expense related to our operating leases of $ 13,396 for the year ended December 31, 2020 is included in hotel operating expenses within our consolidated statements of comprehensive income (loss).
As of December 31, 2020, our operating leases provide for contractual minimum rent payments to third parties during the remaining lease terms, as follows:
+Added: Thereafter 163,045
Total lease payments 195,685
4 unchanged sentences
We are not required to record right of use assets and lease liabilities for these properties as we are not the primary obligor under the leases.
−Removed: The average remaining term of these 17 ground leases was 12 years (range of two to 31 years ) with rents averaging $ 508 per year.
+Added: The average remaining term of these 17 ground leases was 11 years (range of one to 30 years) with rents averaging $ 485 per year.
Generally, payments of ground lease obligations are made by our managers or tenants.
1 unchanged sentence
Our principal debt obligations at December 31, 2020 were:
−Removed: (1) $ 377,000 of outstanding borrowings under our $ 1,000,000 unsecured revolving credit facility;
−Removed: (2) our $ 400,000 unsecured term loan;
+Added: (1) $ 78,424 of outstanding borrowings under our $ 1,000,000 revolving credit facility;
and (2) $ 6,200,000 aggregate outstanding principal amount of senior unsecured notes.
−Removed: Our revolving credit facility and our term loan are governed by a credit agreement with a syndicate of institutional lenders.
+Added: Our revolving credit facility is governed by a credit agreement with a syndicate of institutional lenders.
Our $ 1,000,000 revolving credit facility is available for general business purposes, including acquisitions.
−Removed: The maturity date of our revolving credit facility is July 15, 2022 , and, subject to the payment of an extension fee and meeting certain other conditions, we have an option to extend the maturity date of the facility for two additional six -month periods.
+Added: The maturity date of our revolving credit facility is July 15, 2022, and, subject to the payment of an extension fee and meeting certain other conditions, we have an option to extend the maturity date of the facility by two additional six-month periods.
We can borrow, repay and reborrow funds available under our revolving credit facility until maturity, and no principal repayment is due until maturity.
−Removed: We are required to pay interest at the rate of LIBOR plus a premium, which was 120 basis points per annum as of December 31, 2019 , on the amount outstanding under our revolving credit facility.
−Removed: We also have to pay a facility fee on the total amount of lending commitments under our revolving credit facility, which was 25 basis points per annum as of December 31, 2019 .
+Added: We are required to pay interest on borrowings under our revolving credit facility at the rate of LIBOR plus a premium, which was 235 basis points per annum, subject to a LIBOR floor of 0.50 %, as of December 31, 2020.
+Added: We also pay a facility fee, which was 30 basis points per annum at December 31, 2020, on the total amount of lending commitments under our revolving credit facility.
Both the interest rate premium and the facility fee are subject to adjustment based upon changes to our credit ratings.
2 unchanged sentences
As of December 31, 2020, we had $ 78,424 outstanding and $ 921,576 available under our revolving credit facility.
−Removed: As of February 27, 2020 , we had $ 437,000 outstanding and $ 563,000 available to borrow under our revolving credit facility.
−Removed: Our $ 400,000 term loan, which matures on July 15, 2023 , is prepayable without penalty at any time.
−Removed: We are required to pay interest on the amount outstanding under our term loan at the rate of LIBOR plus a premium, which was 135 basis points per annum at December 31, 2019 .
−Removed: The interest rate premium is subject to adjustment based upon changes to our credit ratings.
−Removed: As of December 31, 2019 and 2018 , the annual interest rate for the amount outstanding under our term loan was 3.04 % and 3.45 % , respectively.
−Removed: The weighted average annual interest rate for borrowings under our term loan was 3.43 % , 3.12 % and 2.27 % for the years ended December 31, 2019 , 2018 and 2017 , respectively.
−Removed: Our credit agreement also includes a feature under which maximum aggregate borrowings may be increased to up to $ 2,300,000 on a combined basis in certain circumstances.
+Added: On January 19, 2021, we borrowed $ 972,793 under our revolving credit facility as a precautionary measure to preserve financial flexibility.
+Added: As of February 26, 2021, we had fully drawn our $ 1,000,000 revolving credit facility.
+Added: We repaid our $ 400,000 term loan, which was scheduled to mature on July 15, 2023, without penalty on November 5, 2020.
+Added: The weighted average annual interest rate for borrowings under our term loan was 2.74 %, 3.43 % and 3.12 % during the years ended December 31, 2020, 2019 and 2018, respectively.
+Added: As a result of the repayment, we recorded a loss on early extinguishment of debt of $ 2,391 , which represents unamortized debt issuance costs of the term loan.
+Added: We may not, during the New Waiver Period and until we demonstrate compliance with certain covenants, utilize the feature in our credit agreement pursuant to which maximum aggregate borrowings may be increased to up to $ 2,300,000 on a combined basis in certain circumstances.
Our credit agreement and our unsecured senior notes indentures and their supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes RMR LLC ceasing to act as our business manager.
1 unchanged sentence
We believe we were in compliance with the terms and conditions of our credit agreement and our unsecured senior notes indentures and their supplements at December 31, 2020.
−Removed: On January 13, 2017, we issued $ 600,000 aggregate principal amount of senior notes in public offerings, which included $ 200,000 aggregate principal amount of 4.500 % senior notes due 2023 and $ 400,000 aggregate principal amount 4.950 % senior notes due 2027.
−Removed: Net proceeds from these offerings were $ 593,228 after discounts, premiums and expenses.
−Removed: On March 15, 2017, we repurchased at par plus accrued interest $ 8,431 of the outstanding principal amount of our 3.80 % convertible senior notes due 2027, which were tendered by the holders of these notes for repurchase by us.
−Removed: On April 24, 2017, we redeemed at par plus accrued interest the remaining $ 47 of the outstanding principal amount of these notes.
−Removed: On October 26, 2017, we issued $ 400,000 principal amount of 3.950 % senior notes due 2028 in a public offering.
−Removed: Net proceeds from this offering were $ 388,244 after discounts and expenses.
−Removed: On October 29, 2017, we redeemed at par all of our outstanding 6.700 % senior notes due 2018 for a redemption price equal to the principal amount of $ 350,000 , plus accrued and unpaid interest (an aggregate of $ 356,774 ).
−Removed: As a result of the redemption, we recorded a loss on early extinguishment of debt of $ 146 in the year ended December 31, 2017, which represented the unamortized discounts and issuance costs of these notes.
+Added: The November 2020 amendment to our credit agreement waives all of the then existing financial covenants through the New Waiver Period.
+Added: We and our lenders amended our credit agreement governing our $ 1,000,000 revolving credit facility and $ 400,000 term loan on May 8, 2020 and we amended our credit agreement governing our $ 1,000,000 revolving credit facility again on November 5, 2020.
+Added: The May 2020 amendment provided a waiver of certain of the financial covenants under our credit agreement through March 31, 2021, or the Waiver Period, during which, subject to certain conditions, we continued to have access to undrawn amounts under the credit facility.
+Added: During the Waiver Period, and continuing thereafter until such time as we had demonstrated compliance with certain of our financial covenants as of June 30, 2021:
+Added: • we were required to maintain unrestricted liquidity (unrestricted cash or undrawn availability under our $ 1,000,000 revolving credit facility) of not less than $ 125,000 ;
+Added: • our interest rate premium over LIBOR under our revolving credit facility and term loan was increased by 50 basis points;
+Added: • our ability to pay distributions on our common shares was limited to amounts required to maintain our qualification for taxation as a REIT and to avoid the payment of certain income and excise taxes, and to pay a cash dividend of $ 0.01 per common share per quarter;
+Added: • we were subject to certain additional covenants, including additional restrictions on our ability to incur indebtedness (with exceptions for borrowings under our revolving credit facility and certain other categories of secured and unsecured indebtedness), and to acquire real property or make other investments (with exceptions for, among other things, certain categories of capital expenditures and costs, and certain share purchases);
+Added: • we were generally required to apply the net cash proceeds from the disposition of assets, capital markets transactions, and any debt refinancing or a COVID-19 government stimulus program to reduce the principal balance under the revolving credit facility;
+Added: • we pledged equity interests in certain of our property owning subsidiaries to secure our obligations under the credit agreement.
+Added: These subsidiaries owned properties with $ 1,027,334 of undepreciated book value as of December 31, 2020.
+Added: As a result of the November 5, 2020 amendment:
+Added: • all existing financial covenants have been waived through the New Waiver Period;
+Added: • we repaid our $ 400,000 term loan on November 5, 2020 using undrawn amounts under our revolving credit facility;
+Added: • we pledged certain additional equity interests of subsidiaries owning properties and we are providing first mortgage liens on 74 properties owned by the pledging subsidiaries with an undepreciated book value of $ 1,834,748 as of December 31, 2020 to secure our obligations under the credit agreement;
+Added: • we have the ability to fund up to $ 250,000 of capital expenditures per year and up to $ 50,000 of certain other investments per year as defined in the credit agreement;
+Added: • the interest rate premium over LIBOR under our revolving credit facility increased by 30 basis points;
+Added: • certain covenants and restrictions on distributions to common shareholders, share repurchases, incurring indebtedness, and acquiring real property (in each case subject to various exceptions), and the minimum liquidity requirement of $ 125,000 will remain in place during the New Waiver Period;
+Added: • we are generally required to apply the net cash proceeds from the disposition of assets, capital markets transactions and debt refinancings to repay outstanding amounts under the credit agreement, and then to other debt maturities.
On February 2, 2018, we issued $ 400,000 principal amount of 4.375 % senior notes due 2030 in a public offering.
3 unchanged sentences
In connection with the SMTA Transaction, a syndicate of lenders committed to provide us with a one year unsecured term loan facility, under which we would be able to borrow up to $ 2,000,000 .
−Removed: We terminated these commitments in September 2019 and recorded a loss on early extinguishment of debt of $ 8,451 during the year ended December 31, 2019 to write off unamortized issuance costs.
+Added: We terminated these commitments in September 2019 and recorded a loss on early extinguishment of debt of $ 8,451 during the year ended December 31, 2019 to write off unamortized debt issuance costs.
See Note 4 for further information about the SMTA Transaction.
+Added: On June 17, 2020, we issued $ 800,000 principal amount of our 7.50 % unsecured senior notes due 2025, or the 2025 Notes.
+Added: The aggregate net proceeds from this offering were $ 787,718 , after underwriting discounts and other offering expenses.
+Added: These notes are fully and unconditionally guaranteed by certain of our subsidiaries.
+Added: On June 17, 2020, we repurchased $ 350,000 principal amount of our $ 400,000 of 4.25 % senior notes due 2021 at a total cost of $ 355,971 , excluding accrued interest pursuant to a cash tender offer.
+Added: We recorded a loss of $ 6,970 , net of discount and debt issuance costs, on early extinguishment of debt during the year ended December 31, 2020.
+Added: On November 20, 2020, we issued $ 450,000 principal amount of our 5.5 % senior notes due in 2027, or the 2027 Notes.
+Added: The aggregate net proceeds from this offering were $ 442,232 , after underwriting discounts and other offering expenses.
+Added: These notes are fully and unconditionally guaranteed by certain of our subsidiaries.
+Added: The subsidiaries in the guarantee pool for the 2025 Notes and the 2027 Notes may change from time to time as subsidiaries are allocated to or from the pledge pool for our credit agreement or for certain other reasons.
+Added: Each subsidiary guarantor’s guarantee will automatically terminate and each subsidiary guarantor will automatically be released from all of its obligations under its guarantee and the indenture under certain circumstances, including on or after the date on which (a) the notes have received a rating equal to or higher than Baa2 (or the equivalent) by Moody’s Investors Service, or Moody’s, or BBB (or the equivalent) by Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, or S&P, or if Moody’s or S&P ceases to rate the notes for reasons outside of our control, the equivalent investment grade rating from any other rating agency and (b) no default or event of default has occurred and is continuing under the indenture governing the notes.
+Added: On December 18, 2020, we redeemed the remaining $ 50,000 of the 4.25 % senior notes due 2021 for a redemption price equal to the principal amount, plus accrued and unpaid interest.
+Added: We recorded a loss of $ 33 , net of discounts and debt issuance costs, on extinguishment of this debt during the year ended December 31, 2020.
All of our senior notes are prepayable at any time prior to their maturity date at par plus accrued interest plus a premium equal to a make whole amount, as defined, generally designed to preserve a stated yield to the noteholder.
2 unchanged sentences
The required principal payments due during the next five years and thereafter under all our outstanding debt at December 31, 2020 are as follows:
+Added: 2024 1,175,000
+Added: 2025 1,150,000
+Added: Thereafter 2,875,000
Shareholders' Equity
1 unchanged sentence
We have common shares available for issuance under the terms of our 2012 Equity Compensation Plan, or our Share Award Plan.
−Removed: During the years ended December 31, 2019 , 2018 and 2017 , we granted 140,100 of our common shares with an aggregate market value of $ 3,507 , 97,000 of our common shares with an aggregate market value of $ 2,810 and 85,000 of our common shares with an aggregate market value of $ 2,387 , respectively, to our officers and certain other employees of our manager, RMR LLC, pursuant to the Share Award Plan.
−Removed: The value of the share grants was based upon the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on the date of the grant.
−Removed: See Note 9 for a further discussion of the grants we made to our officers and certain other employees of RMR LLC.
−Removed: On April 12, 2018 , we granted 3,000 of our common shares with an aggregate market value of $ 75 to one of our Managing Trustees who was elected as a Managing Trustee that day.
−Removed: In addition, we granted each of our then Trustees 3,000 of our common shares in each of 2019 and 2018 and 2017 with an aggregate market value of $ 370 ( $ 74 per trustee), $ 427 ( $ 85 per trustee) and $ 452 ( $ 90 per trustee), respectively, as part of their annual compensation.
−Removed: The values of the share grants were based upon the closing price of our common shares on Nasdaq on the dates of the grants.
−Removed: The shares granted to our Trustees vest immediately.
−Removed: The shares granted to our officers and certain other employees of RMR LLC vest in five equal annual installments beginning on the date of grant.
−Removed: Share grants are expensed ratably over the vesting period and the value of such share grants are included in general and administrative expense in our consolidated statements of comprehensive income.
−Removed: A summary of shares granted, vested, forfeited and unvested under the terms of the Share Award Plan for the years ended December 31, 2019 , 2018 and 2017 is as follows:
+Added: During the years ended December 31, 2020, 2019 and 2018, we awarded 264,400 of our common shares with an aggregate market value of $ 2,232 , 140,100 of our common shares with an aggregate market value of $ 3,507 and 97,000 of our common shares with an aggregate market value of $ 2,810 , respectively, to our officers and certain other employees of our manager, RMR LLC, pursuant to the Share Award Plan.
+Added: The value of the share awards was based upon the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on the date of the award.
+Added: See Note 9 for a further discussion of the awards we made to our officers and certain other employees of RMR LLC.
+Added: On February 27, 2020, we awarded 3,000 of our common shares each to two new Trustees who were elected to our Board of Trustees with an aggregate market value of $ 112 .
+Added: In addition, we awarded each of our Trustees 5,000 of our common shares with an aggregate market value of $ 378 ($ 54 per trustee) during the year ended December 31, 2020.
+Added: On April 12, 2018, we awarded 3,000 of our common shares with an aggregate market value of $ 75 to one of our Managing Trustees who was elected as a Managing Trustee that day.
+Added: In addition, we awarded each of our then Trustees 3,000 of our common shares in each of 2019 and 2018 with an aggregate market value of $ 370 ($ 74 per trustee) and $ 427 ($ 85 per trustee), respectively, as part of their annual compensation.
+Added: The values of the share awards were based upon the closing price of our common shares on Nasdaq on the dates of the awards.
+Added: The shares awarded to our Trustees vest immediately.
+Added: The shares awarded to our officers and certain other employees of RMR LLC vest in five equal annual installments beginning on the date of award.
+Added: Shares forfeited are recognized as they occur.
+Added: Share awards are expensed ratably over the vesting period and the value of such share awards are included in general and administrative expense in our consolidated statements of comprehensive income (loss).
+Added: A summary of shares awarded, vested, forfeited and unvested under the terms of the Share Award Plan for the years ended December 31, 2020, 2019 and 2018 is as follows:
+Added: 2020 2019 2018
+Added: Shares Weighted
+Added: Fair Value Number
+Added: Shares Weighted
+Added: Fair Value Number
+Added: Shares Weighted
Unvested shares, beginning of year 194,540 $ 26.59 164,000 $ 28.39 146,605 $ 27.93
9 unchanged sentences
At December 31, 2020, 2,029,893 of our common shares remain reserved for issuance under our current Share Award Plan.
−Removed: Stock Repurchases
−Removed: During 2019 , we purchased an aggregate of 31,225 of our common shares valued at a weighted average price per common share of $ 25.61 , based on the closing price of our common shares on Nasdaq, on the date of repurchase, from certain of our officers and certain current or former employees of RMR LLC, in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.
−Removed: During 2018 , we purchased an aggregate of 21,202 of our common shares valued at a weighted average price per common share of $ 28.59 , based on the closing price of our common shares on Nasdaq, on the date of repurchase, from certain of our officers and certain current or former employees of RMR LLC, in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.
−Removed: During 2017 , we purchased an aggregate of 19,058 of our common shares valued at a weighted average price per common share of $ 28.01 , based on the closing price of our common shares on Nasdaq, on the dates of repurchase, from certain of our officers and certain other employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.
+Added: Share Repurchases
+Added: During the years ended December 31, 2020, 2019 and 2018, we repurchased our common shares from certain of our officers and certain current or former employees of RMR LLC, in satisfaction of tax withholding and payment obligations in connection with the vesting of our common shares as follows:
+Added: Year Aggregate Number
+Added: of Shares Repurchased Weighted Average
+Added: Repurchase Price Value
+Added: 2020 43,751 $ 7.90 $ 346
+Added: 2019 31,225 $ 25.61 $ 800
+Added: 2018 21,202 $ 28.59 $ 606
Distributions
During the years ended December 31, 2020, 2019 and 2018, we paid distributions on our common shares as follows:
−Removed: Annual Per Share Distribution
−Removed: Total Distribution
−Removed: Characterization of Distribution
−Removed: Ordinary Income
−Removed: Return of Capital
−Removed: Qualified Dividend
+Added: Annual Per Share Distribution Total Distribution Characterization of Distribution
+Added: Year Ordinary Income Capital Gain Return of Capital Qualified Dividend
+Added: 2020 $ 0.57 $ 93,804 — % — 100.00 % — %
+Added: 2019 $ 2.15 $ 353,620 44.50 % 37.93 % 17.57 % 0.50 %
+Added: 2018 $ 2.11 $ 346,832 100.00 % — — —
On January 14, 2021, we declared a distribution of $ 0.01 per common share, or $ 1,648 , which we paid on February 18, 2021, to shareholders of record on January 25, 2021.
−Removed: On February 10, 2017 , we redeemed all 11,600,000 of our outstanding 7.125 % Series D cumulative redeemable preferred shares at the stated liquidation preference of $ 25.00 per share plus accrued and unpaid dividends to the date of redemption (an aggregate of $ 291,435 ).
−Removed: We reduced net income available for common shareholders in 2017 by $ 9,893 , which represents the amount by which the liquidation preference for our Series D cumulative redeemable preferred shares that were redeemed exceeded our carrying amount for those preferred shares as of the date of redemption.
Cumulative Other Comprehensive Income (Loss)
−Removed: Cumulative other comprehensive income (loss), as of December 31, 2019 , represents our share of the comprehensive loss of AIC.
−Removed: See Note 9 for further information regarding this investment.
+Added: Cumulative other comprehensive income (loss) represents our share of the comprehensive loss of Sonesta and AIC.
+Added: See Notes 5 and 9 for further information regarding these investments.
The following table presents changes in the amounts we recognized in cumulative other comprehensive income (loss) by component for the year ended December 31, 2020:
Unrealized Gain
−Removed: (Loss) on Investment
−Removed: Unrealized Gain
−Removed: Securities, net
−Removed: (Loss) of Investees
+Added: (Loss) of Investees Total
Balance at December 31, 2018 $ ( 266 ) $ ( 266 )
Amounts reclassified from cumulative other comprehensive income to retained earnings 91 91
−Removed: Current year other comprehensive income
+Added: Amounts reclassified from cumulative other comprehensive income to net income 175 175
Balance at December 31, 2019 — —
6 unchanged sentences
We have two agreements with RMR LLC to provide management services to us:
−Removed: (1) a business management agreement, which relates to our business generally, and (2) a property management agreement, which currently relates to our property level operations of our net lease portfolio, excluding properties leased to TA, and the office building component of one of our hotels.
+Added: (1) a business management agreement, which relates to our business generally, and (2) a property management agreement, which relates to our property level operations of our net lease portfolio, excluding properties leased to TA, and the office building component of one of our hotels.
See Note 9 for further information regarding our relationship, agreements and transactions with RMR LLC.
13 unchanged sentences
For purposes of the total return per share of our common shareholders, share price appreciation for a measurement period is determined by subtracting (1) the closing price of our common shares on Nasdaq on the last trading day of the year immediately before the first year of the applicable measurement period, or the initial share price, from (2) the average closing price of our common shares on the 10 consecutive trading days having the highest average closing prices during the final 30 trading days in the last year of the measurement period.
−Removed: The calculation of the incentive management fee (including the determinations of our equity market capitalization, initial share price and the total return per share of our common shareholders) is subject to adjustments if additional common shares are issued, or if we repurchase our common shares during the measurement period.
+Added: ◦ The calculation of the incentive management fee (including the determinations of our equity market capitalization, initial share price and the total return per share of our common shareholders) is subject to adjustments if we issue or repurchase our common shares, or if our common shares are forfeited, during the measurement period.
◦ No incentive management fee is payable by us unless our total return per share during the measurement period is positive.
9 unchanged sentences
Pursuant to our business management agreement with RMR LLC, we recognized net business management fees of $ 36,830 , $ 41,607 and $ 39,942 for the years ended December 31, 2020, 2019 and 2018, respectively.
−Removed: The net business management fees we recognized are included in general and administrative expenses in our consolidated statements of comprehensive income for these periods.
−Removed: The net business management fees we recognized for each of the years ended December 31, 2019 , 2018 and 2017 reflect a reduction of $ 3,585 for each of those years for the amortization of the liability we recorded in connection with our prior investment in RMR Inc., as further described in Note 9 .
−Removed: Pursuant to our business management agreement, in January 2019 and 2018 , we paid RMR LLC an incentive management fee of $ 53,635 and $ 74,753 for the years ended December 31, 2018 and 2017 , respectively.
−Removed: We did not incur an incentive management fee payable to RMR LLC for the year ended December 31, 2019 .
+Added: The net business management fees we recognized are included in general and administrative expenses in our consolidated statements of comprehensive income (loss) for these periods.
+Added: The net business management fees we recognized for each of the years ended December 31, 2020, 2019 and 2018 reflect a reduction of $ 3,585 for each of those years for the amortization of the liability we recorded in connection with our former investment in RMR Inc.
+Added: Pursuant to our business management agreement, in January 2019, we paid RMR LLC an incentive management fee of $ 53,635 for the year ended December 31, 2018.
+Added: We did no t incur an incentive management fee payable to RMR LLC for the years ended December 31, 2020 or 2019.
In calculating the incentive management fee payable by us, our total shareholder return per share was adjusted in accordance with the business management agreement to reflect aggregate net increases in the number of our common shares outstanding as a result of certain share issuances and repurchases by us during the three year measurement period.
In addition, the calculation of our benchmark return per share was also adjusted for these issuances and repurchases in accordance with the business management agreement.
+Added: We include business management fee amounts in general and administrative expenses in our consolidated statements of comprehensive income (loss).
• Property Management and Construction Supervision Fees.
1 unchanged sentence
Pursuant to our property management agreement with RMR LLC, we recognized aggregate property management and construction supervision fees of $ 3,575 , $ 1,399 and $ 64 for the years ended December 31, 2020, 2019 and 2018, respectively.
−Removed: These amounts are included in hotel operating expenses in our consolidated statements of comprehensive income.
+Added: These amounts are included in other operating expenses or have been capitalized as appropriate in our consolidated financial statements.
• Expense Reimbursement.
−Removed: We are generally responsible for all of our operating expenses, including certain expenses incurred by RMR LLC on our behalf.
+Added: We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR LLC on our behalf.
We are generally not responsible for payment of RMR LLC’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR LLC employees assigned to work exclusively or partly at our net lease properties (excluding properties leased to TA) and the office building component of one of our hotels, our share of the wages, benefits and other related costs of RMR LLC’s centralized accounting personnel, our share of RMR LLC’s costs for providing our internal audit function, and as otherwise agreed.
2 unchanged sentences
We reimbursed RMR LLC $ 425 , $ 620 and $ 399 for these expenses and costs for the years ended December 31, 2020, 2019 and 2018, respectively.
−Removed: We included these amounts in other operating expenses and selling, general and administrative expense, as applicable, for these periods.
+Added: We included these amounts in other operating expenses and general and administrative expense, as applicable, for these periods.
Our management agreements with RMR LLC have terms that end on December 31, 2040, and automatically extend on December 31st of each year for an additional year, so that the terms of our management agreements thereafter end on the 20th anniversary of the date of the extension.
14 unchanged sentences
Related Person Transactions
−Removed: We have relationships and historical and continuing transactions with TA, Sonesta, RMR LLC, RMR Inc.
−Removed: and others related to them, including other companies to which RMR LLC or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers.
−Removed: is the managing member of RMR LLC.
−Removed: One of our Managing Trustees, Adam D.
−Removed: Portnoy, as the sole trustee of ABP Trust, is the controlling shareholder of RMR Inc.
−Removed: and is a managing director and the president and chief executive officer of RMR Inc.
+Added: We have relationships and historical and continuing transactions with TA, Sonesta, RMR LLC, RMR Inc., and others related to them, including other companies to which RMR LLC or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers.
+Added: RMR LLC is a majority owned subsidiary of RMR Inc.
+Added: The Chair of our Board of Trustees and one of our Managing Trustees, Adam D.
+Added: Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., a managing director and the president and chief executive officer of RMR Inc.
and an officer and employee of RMR LLC.
−Removed: Murray, our other Managing Trustee and our President and Chief Executive Officer, and each of our other officers is also an officer and employee of RMR LLC, including Ethan S.
−Removed: Bornstein, the brother-in-law of Adam Portnoy, Brian E.
−Removed: Donley, our Chief Financial Officer and Treasurer, and Todd Hargreaves, our Vice President.
−Removed: Certain of TA’s and Sonesta’s executive officers are officers and employees of RMR LLC.
−Removed: Some of our Independent Trustees also serve as independent directors or independent trustees of other public companies to which RMR LLC or its subsidiaries provide management services.
−Removed: Adam Portnoy serves as the chair of the boards of trustees or boards of directors of several of these public companies and as a managing director or managing trustee of these companies and other officers of RMR LLC serve as managing trustees or managing directors of certain of these companies.
−Removed: In addition, officers of RMR LLC and RMR Inc.
−Removed: serve as our officers and officers of other companies to which RMR LLC or its subsidiaries provide management services.
+Added: Murray, our other Managing Trustee and our President and Chief Executive Officer, also serves as an officer and employee of RMR LLC.
+Added: In addition, each of our other officers serves as an officer of RMR LLC, including, until his resignation on December 31, 2020, Ethan S.
+Added: Bornstein, our former Senior Vice President.
+Added: Some of our Independent Trustees also serve as independent trustees or independent directors of other public companies to which RMR LLC or its subsidiaries provide management services.
+Added: Adam Portnoy serves as chair of the boards of trustees or boards of directors of several of these public companies and as a managing director or managing trustee of these public companies.
+Added: Other officers of RMR LLC, including Mr.
+Added: Murray and certain of our other officers, serve as managing trustees, managing directors or officers of certain of these companies.
Our Manager, RMR LLC .
2 unchanged sentences
See Note 8 for further information regarding our management agreements with RMR LLC.
−Removed: Lease With RMR LLC.
−Removed: We lease office space to RMR LLC in the office building component of one of our hotels.
−Removed: We recognized rental income from RMR LLC for leased office space of $ 35 for each of the years ended December 31, 2019 , 2018 and 2017 .
−Removed: Our office space lease with RMR LLC is terminable by RMR LLC if our management agreements with RMR LLC are terminated.
Share Awards to RMR LLC Employees .
As described in Note 7, we award shares to our officers and other employees of RMR LLC annually.
−Removed: Generally, one fifth of these awards vest on the grant date and one fifth vests on each of the next four anniversaries of the grant dates.
+Added: Generally, one fifth of these awards vest on the award date and one fifth vests on each of the next four anniversaries of the award dates.
In certain instances, we may accelerate the vesting of an award, such as in connection with the award holder’s retirement as an officer of us or an officer or employee of RMR LLC.
These awards to RMR LLC employees are in addition to the share awards to our Managing Trustees, as Trustee compensation, and the fees we paid to RMR LLC.
−Removed: See Note 7 for information regarding our share awards and activity as well as certain share purchases we made in connection with share award recipients satisfying tax withholding obligation on vesting share awards.
−Removed: We initially acquired 2,503,777 shares of class A common stock of RMR Inc.
−Removed: on June 5, 2015 for cash and share consideration of $ 55,922 .
−Removed: We concluded, for accounting purposes, that the consideration we paid for our investment in these shares represented a discount to the fair value of these shares and we recorded a liability for the amount by which the estimated fair value of these shares exceeded the price we paid for these shares.
−Removed: This liability is included in accounts payable and other liabilities in our consolidated balance sheets and is being amortized on a straight line basis through December 31, 2035 as an allocated reduction to our business management and property management fee expense.
−Removed: We amortized $ 3,585 of this liability during each of the years ended December 31, 2019 , 2018 and 2017 .
−Removed: As of December 31, 2019 , the remaining unamortized amount of this liability was $ 57,421 .
−Removed: Future amortization of this liability as of December 31, 2019, is estimated to be $ 3,585 for each of the years 2020 through 2024 and $ 39,496 thereafter.
+Added: See Note 7 for information regarding our share awards and activity as well as certain share purchases we made in connection with share award recipients satisfying tax withholding obligations on the vesting of share awards.
On July 1, 2019, we sold all the 2,503,777 shares of class A common stock of RMR Inc.
2 unchanged sentences
We received net proceeds of $ 93,568 from this sale, after deducting the underwriting discounts and commissions and before other offering expenses.
−Removed: TA was our 100 % owned subsidiary until we distributed its common shares to our shareholders in 2007.
−Removed: TA is our largest tenant and property operator, leasing 27 % of our gross carrying value of real estate properties as of December 31, 2019 .
−Removed: We are TA’s largest shareholder;
−Removed: as of December 31, 2019 , we owned 684,000 common shares, representing approximately 8.2 % of TA’s outstanding common shares.
−Removed: One of our Managing Trustees, Adam Portnoy, is a managing director of TA.
−Removed: TA’s chief executive officer, president and chief operating officer, executive vice president, chief financial officer and treasurer and executive vice president and general counsel are also officers and employees of RMR LLC, and TA’s two most recent former chief executive officers were also officers of RMR LLC until they resigned those positions in 2017 and 2019, respectively.
−Removed: RMR LLC provides management services to both us and TA.
−Removed: As of December 31, 2019 , RMR LLC owned 298,538 common shares, representing approximately 3.6 % of TA’s outstanding common shares.
+Added: We lease 179 of our travel centers to TA under the TA leases.
+Added: As of December 31, 2020, we owned 1,184,797 shares of common stock, representing approximately 8.1 % of TA’s outstanding shares of common stock, which amount includes 500,797 shares of TA common stock that we purchased in an underwritten public equity offering in July 2020 at the public offering price of $ 14.00 per share.
+Added: RMR LLC provides management services to both us and TA, and Adam D.
+Added: Portnoy also serves as the chair of the board of directors and as a managing director of TA and, as of December 31, 2020, beneficially owned 655,505 shares of TA common stock (including through RMR LLC), representing approximately 4.5 % of TA’s outstanding shares of common stock.
Spin-Off of TA .
5 unchanged sentences
TA also agreed not to take any action that might reasonably be expected to have a material adverse impact on our ability to qualify as a REIT and to indemnify us for any liabilities we may incur relating to TA’s assets and business.
−Removed: Lease Arrangements with TA .
−Removed: We lease 179 of our travel centers to TA under the TA leases.
See Notes 4 and 5 for further information regarding our relationships, agreements and transactions with TA.
−Removed: Sonesta is a private company majority owned by Adam Portnoy, who also serves as Sonesta’s director.
−Removed: One of Sonesta’s other directors is our other Managing Trustee, President and Chief Executive Officer and Sonesta’s other director serves as RMR Inc.’s executive vice president, general counsel and secretary and as our Secretary.
+Added: Sonesta is a private company that is controlled by one of our Managing Trustees, Adam D.
+Added: Portnoy is the largest owner and a director of Sonesta.
+Added: One of Sonesta’s other directors is our other Managing Trustee, President and Chief Executive Officer and Sonesta’s other director serves as RMR LLC’s and RMR Inc.’s executive vice president, general counsel and secretary and as our Secretary.
Sonesta’s chief executive officer and chief financial officer are officers of RMR LLC.
1 unchanged sentence
RMR LLC also provides certain services to Sonesta.
−Removed: As of December 31, 2019, Sonesta managed 53 of our hotels pursuant to our Sonesta agreement.
−Removed: See Notes 4 and 5 for further information regarding our relationships, agreements and transactions with Sonesta including our recent restructuring of our business arrangements with Sonesta.
−Removed: We, ABP Trust, TA and four other companies to which RMR LLC provides management services currently own AIC, an Indiana insurance company, in equal amounts.
−Removed: Certain of our Trustees and certain directors or trustees of the other AIC shareholders currently serve on the board of directors of AIC.
−Removed: We and the other AIC shareholders historically participated in a combined property insurance program arranged and insured or reinsured in part by AIC.
−Removed: The policies under that program expired on June 30, 2019, and we and the other AIC shareholders elected not to renew the AIC property insurance program;
−Removed: we have instead purchased standalone property insurance coverage with unrelated third party insurance providers.
+Added: As of December 31, 2020, we owned approximately 34 % of Sonesta which managed 168 of our hotels.
+Added: See Notes 4 and 5 for further information regarding our relationships, agreements and transactions with Sonesta.
+Added: Until its dissolution on February 13, 2020, we, ABP Trust, TA and four other companies to which RMR LLC provides management services owned AIC, an Indiana insurance company, in equal portions.
+Added: We and the other AIC shareholders historically participated in a combined property insurance program arranged and insured or reinsured in part by AIC until June 30, 2019.
We paid aggregate annual premiums, including taxes and fees, of $ 5,738 and $ 6,387 in connection with this insurance program for the policy years ending June 30, 2019 and 2018, respectively.
−Removed: On February 13, 2020, AIC was dissolved and in connection with its dissolution, we and each other AIC shareholder received an initial liquidating distribution of $ 9,000 from AIC in December 2019.
+Added: In connection with AIC’s dissolution, we and each other AIC shareholder received an initial liquidating distribution of $ 9,000 from AIC in December 2019 and an additional liquidating distribution of approximately $ 286 in June 2020.
As of December 31, 2020 and 2019, our investment in AIC had a carrying value of $ 12 and $ 298 , respectively.
These amounts are included in other assets in our consolidated balance sheets.
−Removed: We recognized income of $ 393 , $ 515 and $ 607 related to our investment in AIC for the years ended December 31, 2019 , 2018 and 2017 , respectively.
−Removed: These amounts are presented as equity in earnings of an investee in our consolidated statements of comprehensive income.
−Removed: Our other comprehensive income (loss) includes our proportionate part of unrealized gains (losses) on securities which are owned and held for sale by AIC of $( 175 ) , $( 68 ) and $ 460 related to our investment in AIC for the years ended December 31, 2019 , 2018 and 2017 , respectively.
−Removed: RMR LLC historically provided management and administrative services to AIC for a fee equal to 3.0 % of the total premiums paid for insurance arranged by AIC.
−Removed: As a result of the property insurance program having been discontinued, AIC has not incurred fees payable to RMR LLC since that time.
−Removed: Directors’ and Officers’ Liability Insurance .
−Removed: We, RMR Inc., RMR LLC and certain other companies to which RMR LLC or its subsidiaries provide management services, including TA, participate in a combined directors’ and officers’ liability insurance policy.
−Removed: The current combined policy expires in September 2020.
−Removed: We paid aggregate premiums of $ 201 , $ 247 and $ 253 in 2019 , 2018 and 2017 , respectively, for these policies.
+Added: We did not recognize any income in the year ended December 31, 2020 and recognized income of $ 393 and $ 515 related to our investment in AIC for the years ended December 31, 2019 and 2018, respectively.
+Added: These amounts are presented as equity in earnings of an investee in our consolidated statements of comprehensive income (loss).
+Added: Our other comprehensive income (loss) includes our proportionate part of unrealized gains (losses) on securities which were owned and held for sale by AIC of $( 175 ) and $( 68 ) related to our investment in AIC for the years ended December 31, 2019 and 2018, respectively.
Our provision (benefit) for income taxes consists of the following:
For the Year Ended December 31,
−Removed: We realized a $ 5,431 tax benefit in 2017 related to the enactment of the Tax Cuts and Jobs Act, or the Tax Act.
+Added: 2020 2019 2018
+Added: Federal $ — $ — $ —
+Added: State 3,361 2,327 1,575
+Added: Foreign — 593 667
+Added: 3,361 2,920 2,242
+Added: Foreign 13,850 ( 127 ) ( 1,047 )
+Added: 13,850 ( 127 ) ( 1,047 )
+Added: $ 17,211 $ 2,793 $ 1,195
A reconciliation of our effective tax rate and the current U.S.
1 unchanged sentence
For the Year Ended December 31,
+Added: 2020 2019 2018
Taxes at statutory U.S.
1 unchanged sentence
Nontaxable income of SVC ( 21.0 ) % ( 21.0 ) % ( 21.0 ) %
−Removed: Minimum tax credit refund
State and local income taxes, net of federal tax benefit ( 1.1 ) % 0.7 % 0.8 %
Foreign taxes ( 4.4 ) % 0.1 % ( 0.2 ) %
−Removed: Tax Act adjustment
−Removed: Change in valuation allowance
−Removed: Other differences, net
Effective tax rate ( 5.5 ) % 0.8 % 0.6 %
4 unchanged sentences
Tax loss carryforwards $ 42,940 $ 44,285
+Added: Other 3,175 3,612
+Added: 46,115 47,897
Valuation allowance ( 46,115 ) ( 47,897 )
1 unchanged sentence
Property basis difference ( 6,682 ) ( 6,996 )
+Added: Puerto Rico deferred tax gain $ ( 13,850 ) $ —
Net deferred tax liabilities $ ( 20,532 ) $ ( 6,996 )
−Removed: Net deferred tax liabilities are included in accounts payable and other liabilities in the accompanying consolidated balance sheets.
+Added: Net deferred tax liabilities are included in accounts payable and other liabilities in our consolidated balance sheets.
+Added: The following table provides a reconciliation of the beginning and ending balances of gross unrecognized tax benefits from uncertain tax positions in accordance with ASC 740-10-50:
+Added: Gross Unrecognized Tax Benefits
+Added: As of December 31, 2019 Current Period Increase As of December 31, 2020
+Added: $ — $ 2,531 $ 2,531
At December 31, 2020 and 2019, our consolidated TRS had a net deferred tax asset, prior to any valuation allowance, of $ 40,879 and $ 42,434 , respectively, which consists primarily of the tax benefit of net operating loss carryforwards and tax credits.
Because of the uncertainty surrounding our ability to realize the future benefit of these assets, we have provided a 100 % valuation allowance as of December 31, 2020 and 2019.
−Removed: As of December 31, 2019 , our consolidated TRS had net operating loss carryforwards for federal income tax purposes of approximately $ 167,780 which begin to expire in 2023 if unused.
+Added: As of December 31, 2020, our consolidated TRS had net operating loss carryforwards for federal income tax purposes of approximately $ 161,702 which do not expire.
+Added: We recorded a $ 13,850 deferred tax liability as a result of the book value to tax basis difference related to the accounting of an insurance settlement in 2020.
+Added: See Note 4 for further information regarding this insurance settlement.
Concentration
4 unchanged sentences
Credit Concentration
−Removed: All of our managers and tenants are subsidiaries of other companies.
−Removed: The percentage of our annual minimum returns and rents, for each management or lease agreement is shown below, as of December 31, 2019 .
−Removed: Agreement Reference Name
−Removed: Annual Minimum
−Removed: Returns/Rents
−Removed: Investment (1)
−Removed: Marriott (No.
−Removed: Marriott (No.
−Removed: Marriott (No.
−Removed: Subtotal Marriott
−Removed: Subtotal Hotels
−Removed: TravelCenters of America Inc.
−Removed: Other Net Leases (5)
−Removed: Subtotal Net Lease
−Removed: Hotel investments represent historical cost of our properties plus capital improvements funded by us less impairment writedowns, if any, and excludes capital improvements made from FF&E reserves funded from hotel operations which do not result in increases to minimum returns or rents.
−Removed: Net lease investments represents historical cost of our properties plus capital improvements funded by us less impairment write-downs, if any.
−Removed: The annual minimum return/minimum rent amount presented includes $ 7,908 of rent related to our lease with IHG for one hotel in Puerto Rico.
−Removed: The annual minimum return/minimum rent amount presented includes $ 1,537 of rent related to our lease with Destinations for 48 vacation units in one hotel.
−Removed: The annual minimum rent amount for our TA No.
−Removed: 4 lease includes approximately $ 2,175 of ground rent paid by TA for a property we lease and sublease to TA.
−Removed: Represents 193 individual tenants.
−Removed: No other tenant represents more than 1% of our annual minimum returns or rents.
−Removed: Minimum return and minimum rent payments due to us under some of these hotel management agreements and leases are supported by guarantees.
−Removed: As of January 1, 2020 the guaranty provided by Marriott with respect to the 122 hotels managed by Marriott under our Marriott Agreement is limited to $ 30,000 and expires on December 31, 2026.
−Removed: The guaranty provided by Hyatt with respect to the 22 hotels managed by Hyatt is limited to $ 50,000 ( $ 19,655 remaining at December 31, 2019 ).
−Removed: The guaranty provided by Radisson with respect to the nine hotels managed by Radisson is limited to $ 47,523 ( $ 41,216 remaining at December 31, 2019 ).
−Removed: These guarantees may be replenished by future cash flows from the hotels in excess of our minimum returns.
−Removed: The guaranty provided by Destinations is unlimited.
−Removed: Security deposits support minimum return and minimum rent payments that may be due to us under some of our management agreements and leases.
−Removed: As of December 31, 2019 , we hold security deposits for our 103 hotels managed or leased by IHG ( $ 75,717 ) and for the 122 hotels included in our Marriott Agreement ( $ 33,445 ).
−Removed: These deposits may be replenished further in the future from available cash flows.
−Removed: Certain of our managed hotel portfolios had net operating results that were, in the aggregate, $ 96,744 , $ 50,203 and $ 31,477 less than the minimum returns due to us for the years ended December 31, 2019 , 2018 , and 2017 , respectively.
−Removed: When managers of these hotels are required to fund the shortfalls under the terms of our management agreements or their guarantees, we reflect such fundings (including security deposit applications) in our consolidated statements of comprehensive income as a reduction of hotel operating expenses.
−Removed: The reduction to hotel operating expenses was $ 29,897 , $ 5,569 and $ 4,673 in the years ended December 31, 2019 , 2018 and 2017 , respectively.
−Removed: When we reduce the amounts of the security deposits we hold for any of our operating agreements for payment deficiencies, it does not result in additional cash flows to us of the deficiency amounts, but reduces the refunds due to the respective tenants or managers who have provided us with these deposits upon expiration of the respective operating agreement.
−Removed: The security deposits are non-interest bearing and are not held in escrow.
−Removed: We had shortfalls at certain of our managed hotel portfolios not funded by the managers of these hotels under the terms of our management agreements of $ 69,929 and $ 44,634 during the years ended December 31, 2019 and 2018 , respectively, which represents the unguaranteed portion of our minimum returns from our Sonesta and Wyndham agreements and shortfalls of $ 26,804 during the year ended December 31, 2017 , which represents the unguaranteed portion of our minimum returns from our Sonesta agreement.
−Removed: Certain of our managed hotel portfolios had net operating results that were, in the aggregate, $ 10,702 , $ 35,464 and $ 68,338 more than the minimum returns due to us during the years ended December 31, 2019 , 2018 and 2017 , respectively.
−Removed: Certain of our guarantees and our security deposits may be replenished by a share of future cash flows from the applicable hotel operations in excess of the minimum returns due to us pursuant to the terms of the respective agreements.
−Removed: When our guarantees and security deposits are replenished by cash flows from hotel operations, we reflect such replenishments in our consolidated statements of comprehensive income as an increase to hotel operating expenses.
−Removed: We had $ 734 , $ 10,743 and $ 25,419 of guaranty and security deposit replenishments during the years ended December 31, 2019 , 2018 and 2017 , respectively.
−Removed: Selected Quarterly Financial Data (Unaudited)
−Removed: First Quarter
−Removed: Second Quarter
−Removed: Third Quarter
−Removed: Fourth Quarter
−Removed: Net income (loss)
−Removed: Net income (loss) per share (basic and diluted) (1)
−Removed: Distributions per common share (2)
−Removed: First Quarter
−Removed: Second Quarter
−Removed: Third Quarter
−Removed: Fourth Quarter
−Removed: Net income (loss)
−Removed: Net income (loss) per share (basic and diluted) (1)
−Removed: Distributions per common share (2)
−Removed: The sum of per common share amounts for the four quarters differs from annual per share amounts due to the required method of computing weighted average number of shares in interim periods and rounding.
−Removed: Amounts represent distributions paid in the periods shown.
+Added: As of December 31, 2020, Sonesta operated 168 of our hotels and TA leased 179 of our net lease properties, representing 28.3 % and 26.8 %, respectively, of our gross real estate assets at cost.
+Added: Marriott operated 105 of our hotels as of December 31, 2020, representing 8.9 % of our gross real estate assets, at cost, as of December 31, 2020.
+Added: We transitioned the branding and management of 78 Marriott hotels to Sonesta in February 2021 and expect to transition the branding and management of 10 additional Marriott hotels to Sonesta in March 2021.
+Added: See Notes 5 and 9 for a discussion of our Sonesta, TA and Marriott agreements.
Segment Information
1 unchanged sentence
For the Year Ended December 31, 2020
+Added: Hotels Net Lease Corporate Consolidated
Hotel operating revenues $ 875,098 $ — $ — $ 875,098
6 unchanged sentences
General and administrative — — 50,668 50,668
−Removed: Acquisition and other transaction related costs
Loss on asset impairment 17,131 38,625 — 55,756
Total expenses 978,708 289,068 50,668 1,318,444
−Removed: Gain on sale of real estate
−Removed: Dividend income
−Removed: Unrealized losses on equity securities
+Added: Gain (loss) on sale of real estate, net 14,927 ( 12,666 ) — 2,261
+Added: Gain on insurance settlement 62,386 — — 62,386
+Added: Unrealized gains on equity securities — — 19,882 19,882
Interest income 6 — 278 284
1 unchanged sentence
Loss on early extinguishment of debt — — ( 9,394 ) ( 9,394 )
−Removed: Income (loss) before income taxes and equity in earnings of an investee
+Added: Income (loss) before income taxes and equity in losses of an investee ( 23,819 ) 85,950 ( 346,392 ) ( 284,261 )
Income tax expense — — ( 17,211 ) ( 17,211 )
−Removed: Equity in earnings of an investee
+Added: Equity in losses of an investee — — ( 9,910 ) ( 9,910 )
Net income (loss) $ ( 23,819 ) $ 85,950 $ ( 373,513 ) $ ( 311,382 )
As of December 31, 2020
+Added: Hotels Net Lease Corporate Consolidated
+Added: Total assets $ 4,846,410 $ 3,721,418 $ 119,491 $ 8,687,319
For the Year Ended December 31, 2019
+Added: Hotels Net Lease Corporate Consolidated
Hotel operating revenues $ 1,989,173 $ — $ — $ 1,989,173
6 unchanged sentences
General and administrative — — 54,639 54,639
−Removed: Acquisition and other transaction related costs
+Added: Transaction related costs — — 1,795 1,795
Loss on asset impairment 28,371 10,925 — 39,296
Total expenses 1,707,386 179,642 56,434 1,943,462
+Added: Gain on sale of real estate, net — 159,535 — 159,535
Dividend income — — 1,752 1,752
−Removed: Unrealized losses on equity securities
+Added: Unrealized losses on equity securities, net — — ( 40,461 ) ( 40,461 )
Interest income 795 — 1,420 2,215
2 unchanged sentences
Income (loss) before income taxes and equity in earnings of an investee
+Added: 308,306 281,144 ( 327,300 ) 262,150
Income tax expense — — ( 2,793 ) ( 2,793 )
2 unchanged sentences
As of December 31, 2019
+Added: Hotels Net Lease Corporate Consolidated
+Added: Total assets $ 4,866,549 $ 4,042,831 $ 124,587 $ 9,033,967
For the Year Ended December 31, 2018
+Added: Hotels Net Lease Corporate Consolidated
Hotel operating revenues $ 1,958,598 $ — $ — $ 1,958,598
7 unchanged sentences
Total expenses 1,642,824 152,608 104,862 1,900,294
−Removed: Gain on sale of real estate
Dividend income — — 2,754 2,754
+Added: Unrealized losses on equity securities, net — — ( 16,737 ) ( 16,737 )
Interest income 990 — 538 1,528
2 unchanged sentences
Income (loss) before income taxes and equity in earnings of an investee
−Removed: Income tax benefit
+Added: 350,540 149,554 ( 313,680 ) 186,414
+Added: Income tax expense — — ( 1,195 ) ( 1,195 )
Equity in earnings of an investee — — 515 515
1 unchanged sentence
As of December 31, 2018
+Added: Hotels Net Lease Corporate Consolidated
+Added: Total assets $ 4,586,709 $ 2,398,118 $ 192,252 $ 7,177,079
Fair Value of Assets and Liabilities
The table below presents certain of our assets carried at fair value at December 31, 2020, categorized by the level of inputs, as defined in the fair value hierarchy under GAAP, used in the valuation of each asset.
−Removed: Fair Value at Reporting Date Using
−Removed: Carrying Value at December 31, 2019
−Removed: Quoted Prices in
−Removed: Active Markets for
−Removed: Identical Assets
−Removed: Significant Other
−Removed: Observable Inputs
−Removed: Recurring Fair Value Measurement Assets:
−Removed: Investment in TA (1)
−Removed: Non-recurring Fair Value Measurement Assets
−Removed: Assets of properties held for sale (2)
−Removed: Assets of properties held and used (3)
−Removed: Our 684,000 common shares of TA, which are included in other assets in our consolidated balance sheets, are reported at fair value which is based on quoted market prices (Level 1 inputs).
−Removed: Our historical cost basis for these shares is $ 17,407 as of December 31, 2019 .
−Removed: During the year ended December 31, 2019 , we recorded unrealized losses of $ 1,129 to adjust the carrying value of our investment in TA shares to their fair value as of December 31, 2019 .
−Removed: As of December 31, 2019 , we owned 19 net lease properties located in 12 states classified as held for sale of $ 87,493 .
+Added: As of December 31, 2020 As of December 31, 2019
+Added: Carrying Value Fair Value Carrying Value Fair Value
+Added: Investment in TA (Level 1) (1)
+Added: $ 38,624 $ 38,624 $ 11,731 $ 11,731
+Added: Assets of properties held for sale (Level 3) (2)
+Added: $ 13,543 $ 13,543 $ 87,493 $ 90,122
+Added: Assets of properties held and used (Level 3) (3)
+Added: $ — $ — $ 38,000 $ 38,000
+Added: (1) As of December 31, 2020, and 2019, we owned 1,184,797 and 684,000 common shares of TA, respectively, which are included in other assets in our consolidated balance sheets and reported at fair value based on quoted market prices (Level 1 inputs).
+Added: Our historical cost basis for these shares was $ 24,418 and $ 17,407 , as of December 31, 2020 and 2019, respectively.
+Added: During the year ended December 31, 2020 and 2019, we recorded unrealized gains of $ 19,883 and unrealized losses of $ 1,129 , respectively, to adjust the carrying value of our investment in TA shares to their fair values.
+Added: (2) As of December 31, 2020, we owned five hotels in four states with a carrying value of $ 10,699 and six net lease properties located in six states with a carrying value of $ 2,844 classified as held for sale.
These properties are recorded at their estimated fair value less costs to sell based on information derived from third party appraisals (Level 3 inputs as defined in the fair value hierarchy under GAAP).
+Added: We recorded a $ 55,756 loss on asset impairment in 2020 to reduce the carrying value of certain of these properties to their estimated fair value less costs to sell.
+Added: As of December 31, 2019 we owned 19 net lease properties located in 12 states with a carrying value of $ 87,493 classified as held for sale.
+Added: These properties were recorded at their estimated fair value less costs to sell based on information derived from third party appraisals (Level 3 inputs as defined in the fair value hierarchy under GAAP).
We recorded a $ 10,925 loss on asset impairment in 2019 to reduce the carrying value of these properties to their estimated fair value less costs to sell.
−Removed: We recorded a $ 28,371 loss on asset impairment in 2019 to reduce the carrying value of two hotels to their estimated fair value of $ 38,000 based on discounted cash flow analyses (Level 3 inputs).
−Removed: In addition to the investment securities included in the table above, our financial instruments include our cash and cash equivalents, restricted cash, rents receivable, revolving credit facility, term loan, senior notes and security deposits.
−Removed: At December 31, 2019 and December 31, 2018 , the fair values of these additional financial instruments approximated their carrying values in our consolidated balance sheets due to their short term nature or floating interest rates, except as follows:
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: (3) As of December 31, 2019, we recorded a $ 28,371 loss on asset impairment to reduce the carrying value of two hotels to their estimated fair value of $ 38,000 based on discounted cash flow analyses (Level 3 inputs).
+Added: In addition to the assets included in the table above, our financial instruments include our cash and cash equivalents, restricted cash, rents receivable, revolving credit facility, term loan, senior notes and security deposits.
+Added: At December 31, 2020 and 2019, the fair values of these additional financial instruments approximated their carrying values in our consolidated balance sheets due to their short term nature or floating interest rates, except as follows:
+Added: December 31, 2020 December 31, 2019
+Added: Carrying Fair Carrying Fair
+Added: Value Amount (1)
Senior Unsecured Notes, due 2021 at 4.25 %
+Added: $ — $ — $ 398,379 $ 406,838
Senior Unsecured Notes, due 2022 at 5.00 %
+Added: 498,032 510,285 496,821 526,500
Senior Unsecured Notes, due 2023 at 4.50 %
+Added: 499,596 505,280 499,432 520,478
Senior Unsecured Notes, due 2024 at 4.65 %
+Added: 348,700 347,893 348,295 364,277
Senior Unsecured Notes, due 2024 at 4.35 %
+Added: 819,546 819,328 818,075 848,847
Senior Unsecured Notes, due 2025 at 4.50 %
+Added: 347,118 346,462 346,431 361,783
Senior Unsecured Notes, due 2025 at 7.50 %
+Added: 789,006 926,404 — —
Senior Unsecured Notes, due 2026 at 5.25 %
+Added: 344,212 354,996 343,083 369,185
Senior Unsecured Notes, due 2026 at 4.75 %
+Added: 446,515 448,506 445,905 464,315
Senior Unsecured Notes, due 2027 at 4.95 %
+Added: 395,405 404,328 394,649 414,012
Senior Unsecured Notes, due 2027 at 5.25 %
+Added: 442,370 491,918 — —
Senior Unsecured Notes, due 2028 at 3.95 %
+Added: 391,908 388,146 390,759 393,940
+Added: Senior Unsecured Notes, due 2029 at 4.95 %
+Added: 418,102 430,064 417,307 434,248
+Added: Senior Unsecured Notes, due 2030 at 4.375 %
+Added: 389,656 388,292 388,522 394,788
Total financial liabilities $ 6,130,166 $ 6,361,902 $ 5,287,658 $ 5,499,211
−Removed: Carrying value includes unamortized discounts and premiums and certain issuance costs.
+Added: (1) Carrying value includes unamortized discounts and premiums and certain debt issuance costs.
At December 31, 2020 and 2019, we estimated the fair values of our senior notes using an average of the bid and ask price of our then outstanding issuances of senior notes (Level 2 inputs).
4 unchanged sentences
Initial Cost to
−Removed: Costs Capitalized
−Removed: Subsequent to Acquisition
−Removed: Gross Amount at which Carried
+Added: Company Costs Capitalized
+Added: Subsequent to Acquisition Gross Amount at which Carried
at Close of Period
+Added: Land Building &
+Added: Improvements Improvements Impairment Cost Basis
Adjustment (1)
+Added: Land Building &
+Added: Improvements Total (2)
Hotel Properties
−Removed: 71 Courtyards
15 Royal Sonesta
−Removed: 35 Residence Inns
−Removed: 11 Crowne Plaza
+Added: $ 218 $ 1,307 $ 35 $ ( 16 ) $ ( 9 ) $ 218 $ 1,317 $ 1,535
+Added: 138 292 582 ( 56 ) ( 5 ) 138 813 951
+Added: 108 599 216 ( 14 ) ( 97 ) 108 704 812
60 Sonesta ES Suites
−Removed: 61 Candlewood Hotels
−Removed: 20 Staybridge Suites
−Removed: 7 Sonesta Hotels & Resorts
−Removed: 5 Kimpton Hotels
+Added: 135 523 242 ( 38 ) ( 27 ) 135 700 835
+Added: 68 326 160 ( 6 ) ( 22 ) 68 458 526
+Added: 61 Simply Suites
+Added: 71 383 59 — — 71 442 513
22 Hyatt Place
−Removed: 3 InterContinental
−Removed: 2 Marriott Full Service
−Removed: 12 TownePlace Suites
−Removed: 3 Holiday Inn
−Removed: 3 Country Inn and Suites
−Removed: 16 Hawthorn Suites
+Added: 24 185 17 — — 24 202 226
+Added: 6 Radisson Hotel
+Added: 10 165 44 — — 10 209 219
+Added: 2 Marriott Hotel
+Added: 10 69 55 — — 10 124 134
+Added: 1 Crowne Plaza
+Added: 16 32 67 — — 16 99 115
+Added: 9 Sonesta Select
+Added: 17 44 36 — — 17 80 97
+Added: 3 Country Inn and Suites by Radisson
+Added: 3 35 5 — — 3 40 43
2 SpringHill Suites
+Added: 3 15 11 — — 3 26 29
+Added: 4 TownePlace Suites
+Added: 6 24 33 ( 3 ) ( 18 ) 6 36 42
Net Lease Properties
134 TravelCenters of America
+Added: 568 939 480 — — 568 1,419 1,987
45 Petro Stopping Centers
+Added: 260 522 210 — — 260 732 992
11 AMC Theatres
+Added: 30 55 — — — 30 55 85
14 The Great Escape
+Added: 19 64 — — — 19 64 83
3 Life Time Fitness
+Added: 17 56 — — — 17 56 73
5 Buehler's Fresh Foods
+Added: 10 49 — — — 10 49 59
+Added: 14 33 — — — 14 33 47
59 Heartland Dental
+Added: 11 37 — — — 11 37 48
+Added: 23 24 — — — 23 24 47
23 Express Oil Change
−Removed: 6 Regal Cinemas
+Added: 6 37 — — — 6 37 43
+Added: 6 America's Auto Auction
+Added: 7 23 4 — — 7 27 34
3 Flying J Travel Plaza
+Added: 6 32 — — — 6 32 38
+Added: 6 Regal Cinemas
+Added: 9 25 — — — 9 25 34
4 Courthouse Athletic Club
−Removed: 1 Mills Fleet Farm
+Added: 5 28 — — — 5 28 33
45 Church's Chicken
−Removed: 4 B&B Theatres
−Removed: 6 America's Auto Auction
+Added: 7 25 — — — 7 25 32
+Added: 3 28 — — — 3 28 31
21 Burger King
−Removed: 3 Mealey's Furniture
−Removed: 20 Popeye's Chicken & Biscuits
+Added: 9 22 — — — 9 22 31
+Added: 3 27 — — — 3 27 30
+Added: 4 24 — — — 4 24 28
+Added: 4 B&B Theatres
+Added: 12 15 — — — 12 15 27
+Added: 7 20 — — — 7 20 27
+Added: 7 19 — — — 7 19 26
4 Creme de la Creme
+Added: 7 18 — — — 7 18 25
+Added: 20 Popeye's Chicken & Biscuits
+Added: 8 17 — — — 8 17 25
+Added: 6 Golden Corral
+Added: 6 16 — — — 6 16 22
5 Mister Car Wash
+Added: 2 19 — — — 2 19 21
6 United Supermarkets
−Removed: 6 Golden Corral
+Added: 4 17 — — — 4 17 21
+Added: 1 27 7 — — 1 34 35
+Added: 2 Mesa Fitness
+Added: 3 17 — — — 3 17 20
+Added: 4 15 — — — 4 15 19
+Added: 5 13 — — — 5 13 18
28 Uncle Ed's Oil Shoppe
+Added: 6 12 — — — 6 12 18
+Added: 4 Bonfire and Axels
+Added: 2 12 — — — 2 12 14
+Added: 1 Dave & Buster's
+Added: 3 11 — — — 3 11 14
Initial Cost to
−Removed: Costs Capitalized
−Removed: Subsequent to Acquisition
−Removed: Gross Amount at which Carried
+Added: Company Costs Capitalized
+Added: Subsequent to Acquisition Gross Amount at which Carried
at Close of Period
+Added: Land Building &
+Added: Improvements Improvements Impairment Cost Basis
Adjustment (1)
−Removed: 1 Dave & Buster's
+Added: Land Building &
+Added: Improvements Total (2)
5 Pike Nursery
+Added: 8 6 — — — 8 6 14
2 HHI-Formtech
−Removed: 3 Max & Erma's
−Removed: 4 Bonfire and Axels
+Added: 3 10 — — — 3 10 13
+Added: 2 Mealey's Furniture
+Added: 3 10 — — — 3 10 13
+Added: 3 9 — — — 3 9 12
+Added: 2 Sanford's Grub & Pub
+Added: 1 10 — — — 1 10 11
1 Baptist Emergency Hospital
+Added: 2 8 — — — 2 8 10
+Added: 2 Eddie Merlot's
+Added: 2 8 — — — 2 8 10
5 Fuddruckers
+Added: 4 6 — — — 4 6 10
+Added: 3 7 — — — 3 7 10
1 Cermak Fresh Market
−Removed: 5 Lerner and Rowe
−Removed: 2 Eddie Merlot's
+Added: 2 7 — — — 2 7 9
1 Columbus Preparatory Academy
−Removed: 2 Sanford's Grub & Pub
−Removed: 1 HOM Furniture
+Added: 1 8 — — — 1 8 9
12 Core & Main
+Added: 4 5 — — — 4 5 9
+Added: 5 Lerner and Rowe
+Added: 1 8 — — — 1 8 9
+Added: 4 Meineke Car Care Center
+Added: 3 6 — — — 3 6 9
+Added: 1 8 — — — 1 8 9
1 Austin's Park n' Pizza
−Removed: 1 Columbus Arts & Tech Academy
+Added: — 8 — — — — 8 8
+Added: 2 6 — — — 2 6 8
+Added: 1 7 — — — 1 7 8
1 Marcus Theaters
−Removed: 4 Meineke Car Care Center
+Added: 3 5 — — — 3 5 8
1 Academy Sports + Outdoors
+Added: 1 6 — — — 1 6 7
+Added: 3 4 — — — 3 4 7
+Added: 1 Columbus Arts & Tech Academy
+Added: 1 6 — — — 1 6 7
2 Diagnostic Health
−Removed: 3 Oregano's Pizza Bistro
−Removed: 5 Brookshire Brothers
+Added: 1 6 — — — 1 6 7
3 Krispy Kreme
+Added: 2 5 — — — 2 5 7
+Added: 2 Max & Erma's
+Added: 1 6 — — — 1 6 7
+Added: 3 Oregano's Pizza Bistro
+Added: 1 6 — — — 1 6 7
9 Sonic Drive-In
−Removed: 1 RGB Eye Associates
−Removed: 3 Jack's Family Restaurant
+Added: 3 4 — — — 3 4 7
2 Texas Roadhouse
+Added: 3 4 — — — 3 4 7
+Added: 5 Brookshire Brothers
+Added: 1 5 — — — 1 5 6
2 Flying Star Cafe
−Removed: 1 Adult & Pediatric Orthopedics
+Added: 1 5 — — — 1 5 6
+Added: 1 5 — — — 1 5 6
+Added: 7 Hughes Supply
+Added: 2 4 — — — 2 4 6
1 Jack Stack Barbeque
−Removed: 1 Multi-Tenant
+Added: 1 5 — — — 1 5 6
+Added: 3 Jack's Family Restaurant
+Added: 2 4 — — — 2 4 6
+Added: 1 5 — — — 1 5 6
+Added: 2 3 — — — 2 3 5
+Added: 1 Adult & Pediatric Orthopedics
+Added: 1 4 — — — 1 4 5
2 Bricktown Brewery
+Added: 1 4 — — — 1 4 5
1 ConForm Automotive
−Removed: 1 Planet Fitness
−Removed: 3 Focus Child Development Center
−Removed: 7 Hughes Supply
−Removed: 6 Long John Silver's
−Removed: 1 Boozman-Hof
+Added: 2 3 — — — 2 3 5
2 Gerber Collision & Glass
−Removed: 1 Humperdinks
+Added: 1 4 — — — 1 4 5
2 HD Supply White Cap
−Removed: 2 Famous Dave's
+Added: 2 3 — — — 2 3 5
+Added: 1 Multi-Tenant
+Added: 1 4 — — — 1 4 5
+Added: 1 Planet Fitness
+Added: 1 4 — — — 1 4 5
+Added: 1 RGB Eye Associates
+Added: 1 4 — — — 1 4 5
+Added: 1 Ashley Furniture
+Added: 1 3 — — — 1 3 4
+Added: 1 Boozman-Hof
+Added: 2 2 — — — 2 2 4
1 Caldwell Country Chevrolet
+Added: — 4 — — — — 4 4
+Added: 2 Famous Dave's
+Added: 1 3 — — — 1 3 4
+Added: 3 Focus Child Development Center
+Added: 1 3 — — — 1 3 4
+Added: 1 Joe's Crab Shack
+Added: 1 3 — — — 1 3 4
+Added: 1 Metaldyne BSM
+Added: — 4 — — — — 4 4
+Added: 2 Primanti Bros.
+Added: 1 3 — — — 1 3 4
+Added: 1 Rainbow Kids Clinic
+Added: 1 3 — — — 1 3 4
+Added: 1 Renn Kirby Chevrolet Buick
+Added: 1 3 — — — 1 3 4
1 Sportsman's Warehouse
+Added: 1 3 — — — 1 3 4
Initial Cost to
−Removed: Costs Capitalized
−Removed: Subsequent to Acquisition
−Removed: Gross Amount at which Carried
+Added: Company Costs Capitalized
+Added: Subsequent to Acquisition Gross Amount at which Carried
at Close of Period
+Added: Land Building &
+Added: Improvements Improvements Impairment Cost Basis
Adjustment (1)
−Removed: 1 Renn Kirby Chevrolet Buick
−Removed: 1 Ashley Furniture
−Removed: 1 Metaldyne BSM
−Removed: 2 Primanti Bros.
−Removed: 1 Rainbow Kids Clinic
−Removed: 1 Joe's Crab Shack
−Removed: 1 Tractor Supply
−Removed: 2 Orscheln Farm and Home
−Removed: 1 Providence Athletic Club
−Removed: 1 Sunbelt Supply LP
−Removed: 1 Ojos Locos Sports Cantina
+Added: Land Building &
+Added: Improvements Total (2)
+Added: 1 2 — — — 1 2 3
+Added: 1 2 — — — 1 2 3
1 Black Angus Steakhouse
−Removed: 1 Bridgestone Tire
−Removed: 1 Kerry's Car Care
+Added: 1 2 — — — 1 2 3
1 Buffalo Wild Wings
−Removed: 1 What the Buck
−Removed: 1 Slim Chickens
−Removed: 2 Rick Johnson Auto & Tire
+Added: 1 2 — — — 1 2 3
+Added: 1 Kerry's Car Care
+Added: 1 2 — — — 1 2 3
+Added: 2 Long John Silver's
+Added: 1 2 — — — 1 2 3
2 Monterey's Tex Mex
+Added: 1 2 — — — 1 2 3
+Added: 1 Ojos Locos Sports Cantina
+Added: 1 2 — — — 1 2 3
+Added: 2 Orscheln Farm and Home
+Added: 1 2 — — — 1 2 3
+Added: 2 Rick Johnson Auto & Tire
+Added: 1 2 — — — 1 2 3
+Added: 1 Slim Chickens
+Added: 1 2 — — — 1 2 3
+Added: 1 Southwest Stainless, LP
+Added: — 3 — — — — 3 3
+Added: 1 Spoons Place
+Added: 1 2 — — — 1 2 3
+Added: 1 Tractor Supply
+Added: — 3 — — — — 3 3
+Added: 1 What the Buck
+Added: — 3 — — — — 3 3
2 Affordable Care, Inc.
+Added: 1 1 — — — 1 1 2
+Added: 1 Bridgestone Tire
+Added: 1 1 — — — 1 1 2
2 Dollar General
+Added: — 2 — — — — 2 2
+Added: 1 1 — — — 1 1 2
+Added: — 2 — — — — 2 2
+Added: 1 1 — — — 1 1 2
1 Red Robin Gourmet Burgers
−Removed: 1 Pier1 Imports
−Removed: 1 SRS Distribution
−Removed: 1 The Atlanta Center for Foot & Ankle Surgery
+Added: 1 1 — — — 1 1 2
+Added: 1 1 — — — 1 1 2
1 Bru Burger Bar
+Added: — 1 — — — — 1 1
+Added: 1 Haus Energy
+Added: — 1 — — — — 1 1
+Added: 1 Howlin Concrete
+Added: 1 — — — — 1 — 1
+Added: 1 Jack in the Box
+Added: — 1 — — — — 1 1
+Added: 1 Little Caesars
+Added: — 1 — — — — 1 1
+Added: 1 NAPA Auto Parts
+Added: — 1 — — — — 1 1
1 Old Mexico Cantina
−Removed: 1 Touchstone Imaging
−Removed: 1 Solea Mexican Grill
−Removed: 1 Harbor Court
+Added: — 1 — — — — 1 1
1 O'Reilly Auto Parts
−Removed: 1 Aggregate Industries
−Removed: 1 NAPA Auto Parts
−Removed: 1 Jack in the Box
−Removed: 1 Off the Hook Seafood & More
+Added: — 1 — — — — 1 1
+Added: 1 SRS Distribution
+Added: — 1 — — — — 1 1
+Added: 1 The Atlanta Center for Foot & Ankle Surgery
+Added: — 1 — — — — 1 1
+Added: 1 Touchstone Imaging
+Added: — 1 — — — — 1 1
1 Consolidated Pipe
+Added: — — — — — — — —
+Added: — — — — — — — —
1 Family Dollar Stores
+Added: — — — — — — — —
+Added: — — — — — — — —
+Added: 1 Off the Hook Seafood & More
+Added: — — — — — — — —
+Added: 1 Bigham Cable
+Added: — — — — — — — —
+Added: Other 2 8 2 — — 2 10 12
+Added: 2,030 6,647 2,265 ( 133 ) ( 178 ) 2,030 8,601 10,631
Assets Held for Sale
+Added: 3 13 2 ( 9 ) — 3 6 9
6 Net lease properties
+Added: 3 5 — ( 4 ) — 3 1 4
Total ( 1,109 properties)
+Added: $ 2,036 $ 6,665 $ 2,267 $ ( 146 ) $ ( 178 ) $ 2,036 $ 8,608 $ 10,644
(1) Represents reclassifications between accumulated depreciation and building & improvements made to record certain properties at fair value in accordance with GAAP.
(2) Excludes $ 531 of personal property classified in our consolidated balance sheets as furniture, fixtures and equipment.
+Added: (3) We have entered into an agreement to sell five hotels and we have entered into a short term lease with the buyer in anticipation of the sale.
Service Properties Trust
3 unchanged sentences
Depreciation (1)
−Removed: Life on which
+Added: Construction Date
+Added: Acquired Life on which
Depreciation in
1 unchanged sentence
Hotel Properties
−Removed: 71 Courtyards
−Removed: 1987 through 2000
−Removed: 1995 through 2003
−Removed: 10 - 40 Years
−Removed: 35 Residence Inns
−Removed: 1989 through 2002
−Removed: 1996 through 2005
−Removed: 10 - 40 Years
−Removed: 61 Candlewood Hotels
−Removed: 1996 through 2000
−Removed: 1997 through 2003
−Removed: 10 - 40 Years
−Removed: 20 Staybridge Suites
−Removed: 1989 through 2009
−Removed: 1996 through 2018
−Removed: 10 - 40 Years
−Removed: 22 Hyatt Place
−Removed: 1992 through 2000
−Removed: 1997 through 2002
−Removed: 10 - 40 Years
15 Royal Sonesta
−Removed: 1913 through 1987
−Removed: 2005 through 2017
−Removed: 10 - 40 Years
−Removed: 11 Crowne Plaza
−Removed: 1971 through 1988
−Removed: 2006 and 2017
−Removed: 10 - 40 Years
+Added: $ ( 256 ) 1913 through 1987 2005 through 2017 10 - 40 Years
+Added: ( 191 ) 1924 through 1999 2005 through 2018 10 - 40 Years
+Added: ( 346 ) 1987 through 2000 1995 through 2003 10 - 40 Years
60 Sonesta ES Suites
−Removed: 1984 through 2000
−Removed: 1996 through 2017
−Removed: 10 - 40 Years
−Removed: 3 InterContinental
−Removed: 1924 through 1989
−Removed: 10 - 40 Years
−Removed: 2 Marriott Full Service
−Removed: 1972 through 1995
−Removed: 1998 through 2001
−Removed: 10 - 40 Years
−Removed: 1987 through 1990
−Removed: 1996 through 2018
−Removed: 10 - 40 Years
−Removed: 4 Wyndham Hotels and Resorts
−Removed: 1960 through 1988
−Removed: 2006 through 2013
−Removed: 10 - 40 Years
−Removed: 7 Sonesta Hotels and Resorts
−Removed: 1924 through 1999
−Removed: 2005 through 2018
−Removed: 10 - 40 Years
−Removed: 4 Country Inn and Suites
−Removed: 1987 through 1997
−Removed: 1996 and 2005
−Removed: 10 - 40 Years
−Removed: 12 TownePlace Suites
−Removed: 1997 through 2000
−Removed: 1998 through 2001
−Removed: 10 - 40 Years
−Removed: 3 Holiday Inn
−Removed: 1984 through 2001
−Removed: 10 - 40 Years
−Removed: 16 Hawthorn Suites
−Removed: 1996 through 2000
−Removed: 1997 through 2006
−Removed: 10 - 40 Years
−Removed: 3 Kimpton Hotels
−Removed: 1901 through 1927
−Removed: 2016 through 2019
−Removed: 10 - 40 Years
+Added: ( 227 ) 1984 through 2000 1996 through 2017 10 - 40 Years
+Added: ( 224 ) 1989 through 2002 1996 through 2005 10 - 40 Years
+Added: 61 Simply Suites
+Added: ( 219 ) 1996 through 2000 1997 through 2003 10 - 40 Years
+Added: 22 Hyatt Place
+Added: ( 111 ) 1992 through 2000 1997 through 2002 10 - 40 Years
+Added: 6 Radisson Hotel
+Added: ( 65 ) 1987 through 1990 1996 through 2018 10 - 40 Years
+Added: 2 Marriott Hotel
+Added: ( 67 ) 1972 through 1995 1998 through 2001 10 - 40 Years
+Added: 1 Crowne Plaza
+Added: ( 8 ) 1971 through 1988 2006 and 2017 10 - 40 Years
+Added: 9 Sonesta Select
+Added: ( 42 ) 1987 through 2000 1995 through 2003 10 - 40 Years
+Added: 3 Country Inn and Suites by Radisson
+Added: ( 19 ) 1987 through 1997 1996 and 2005 10 - 40 Years
2 SpringHill Suites
−Removed: 1997 through 2000
−Removed: 2000 through 2001
−Removed: 10 - 40 Years
+Added: ( 10 ) 1997 through 2000 2000 through 2001 10 - 40 Years
+Added: 4 TownePlace Suites
+Added: ( 15 ) 1997 through 2000 1998 through 2001 10 - 40 Years
Net Lease Properties
134 TravelCenters of America
−Removed: 1962 through 2017
−Removed: 2007 through 2017
−Removed: 10 - 40 Years
+Added: ( 779 ) 1962 through 2017 2007 through 2017 10 - 40 Years
45 Petro Stopping Centers
−Removed: 1975 through 2017
−Removed: 2007 through 2017
−Removed: 10 - 40 Years
+Added: ( 391 ) 1975 through 2017 2007 through 2017 10 - 40 Years
11 AMC Theatres
−Removed: 1993 through 2008
−Removed: 10 - 40 Years
+Added: ( 4 ) 1993 through 2008 2019 10 - 40 Years
14 The Great Escape
−Removed: 1986 through 2007
−Removed: 10 - 40 Years
+Added: ( 3 ) 1986 through 2007 2019 10 - 40 Years
3 Life Time Fitness
−Removed: 1987 through 2012
−Removed: 10 - 40 Years
+Added: ( 3 ) 1987 through 2012 2019 10 - 40 Years
5 Buehler's Fresh Foods
−Removed: 1985 through 2000
−Removed: 10 - 40 Years
−Removed: 1972 through 2006
−Removed: 10 - 40 Years
+Added: ( 4 ) 1985 through 2000 2019 10 - 40 Years
+Added: ( 5 ) 1972 through 2006 2019 10 - 40 Years
59 Heartland Dental
−Removed: 1920 through 2005
−Removed: 10 - 40 Years
−Removed: 1957 through 2014
−Removed: 10 - 40 Years
+Added: ( 2 ) 1920 through 2005 2019 10 - 40 Years
+Added: ( 2 ) 1957 through 2014 2019 10 - 40 Years
23 Express Oil Change
−Removed: 1970 through 2001
−Removed: 10 - 40 Years
−Removed: 6 Regal Cinemas
−Removed: 2005 through 2010
−Removed: 10 - 40 Years
+Added: ( 2 ) 1970 through 2001 2019 10 - 40 Years
+Added: 6 America's Auto Auction
+Added: ( 2 ) 1965 through 2005 2019 10 - 40 Years
3 Flying J Travel Plaza
( 2 ) 2001 2019 10 - 40 Years
+Added: 6 Regal Cinemas
+Added: ( 2 ) 2005 through 2010 2019 10 - 40 Years
4 Courthouse Athletic Club
−Removed: 1997 through 2001
−Removed: 10 - 40 Years
−Removed: 1 Mills Fleet Farm
−Removed: 10 - 40 Years
+Added: ( 2 ) 1997 through 2001 2019 10 - 40 Years
45 Church's Chicken
−Removed: 1968 through 1985
−Removed: 10 - 40 Years
−Removed: 2006 through 2010
−Removed: 10 - 40 Years
−Removed: 4 B&B Theatres
−Removed: 1998 through 2004
−Removed: 10 - 40 Years
−Removed: 6 America's Auto Auction
−Removed: 1965 through 2005
−Removed: 10 - 40 Years
+Added: ( 2 ) 1968 through 1985 2019 10 - 40 Years
+Added: ( 1 ) 2006 through 2010 2019 10 - 40 Years
21 Burger King
−Removed: 1977 through 2004
−Removed: 10 - 40 Years
−Removed: 1969 through 1994
−Removed: 10 - 40 Years
−Removed: 1962 through 2003
−Removed: 10 - 40 Years
−Removed: 3 Mealey's Furniture
−Removed: 1987 through 2004
+Added: ( 2 ) 1998 through 2004 2019 10 - 40 Years
( 2 ) 1979 2019 10 - 40 Years
+Added: ( 2 ) 1969 through 1994 2019 10 - 40 Years
+Added: 4 B&B Theatres
+Added: ( 2 ) 1998 through 2004 2019 10 - 40 Years
+Added: ( 2 ) 1962 through 2003 2019 10 - 40 Years
+Added: ( 2 ) 1969 through 2005 2019 10 - 40 Years
+Added: 4 Creme de la Creme
+Added: ( 1 ) 1999 through 2008 2019 10 - 40 Years
+Added: 20 Popeye's Chicken & Biscuits
+Added: ( 2 ) 1968 through 2004 2019 10 - 40 Years
+Added: 6 Golden Corral
+Added: ( 2 ) 1993 through 2000 2019 10 - 40 Years
+Added: 5 Mister Car Wash
+Added: ( 1 ) 1960 through 2002 2019 10 - 40 Years
Depreciation (1)
−Removed: Life on which
+Added: Construction Date
+Added: Acquired Life on which
Depreciation in
Latest Income
−Removed: 20 Popeye's Chicken & Biscuits
−Removed: 1968 through 2004
−Removed: 10 - 40 Years
−Removed: 1969 through 2005
−Removed: 10 - 40 Years
−Removed: 4 Creme de la Creme
−Removed: 1999 through 2008
−Removed: 10 - 40 Years
−Removed: 5 Mister Car Wash
−Removed: 1960 through 2002
−Removed: 10 - 40 Years
6 United Supermarkets
−Removed: 1979 through 1997
−Removed: 10 - 40 Years
−Removed: 6 Golden Corral
−Removed: 1993 through 2000
−Removed: 10 - 40 Years
−Removed: 1983 through 2007
+Added: ( 2 ) 1979 through 1997 2019 10 - 40 Years
+Added: ( 2 ) 1962 through 2007 2019 10 - 40 Years
+Added: 2 Mesa Fitness
+Added: ( 1 ) 1983 through 2007 2019 10 - 40 Years
+Added: ( 1 ) 1982 through 2010 2019 10 - 40 Years
( 1 ) 2005 2019 10 - 40 Years
28 Uncle Ed's Oil Shoppe
−Removed: 1959 through 1999
−Removed: 10 - 40 Years
−Removed: 10 - 40 Years
+Added: ( 2 ) 1959 through 1999 2019 10 - 40 Years
+Added: 4 Bonfire and Axels
+Added: ( 2 ) 1995 through 1996 2019 10 - 40 Years
1 Dave & Buster's
1 unchanged sentence
5 Pike Nursery
−Removed: 1970 through 1996
−Removed: 10 - 40 Years
−Removed: 1901 through 2000
−Removed: 10 - 40 Years
+Added: ( 1 ) 1970 through 1996 2019 10 - 40 Years
2 HHI-Formtech
( 2 ) 1952 2019 10 - 40 Years
−Removed: 3 Max & Erma's
−Removed: 1990 through 1997
−Removed: 10 - 40 Years
−Removed: 4 Bonfire and Axels
−Removed: 1995 through 1996
−Removed: 10 - 40 Years
−Removed: 1982 through 2010
−Removed: 10 - 40 Years
+Added: 2 Mealey's Furniture
+Added: ( 1 ) 1997 through 2004 2019 10 - 40 Years
+Added: ( 1 ) 1901 through 2000 2019 10 - 40 Years
+Added: 2 Sanford's Grub & Pub
+Added: ( 1 ) 1928 through 2003 2019 10 - 40 Years
1 Baptist Emergency Hospital
( 1 ) 2013 2019 10 - 40 Years
+Added: 2 Eddie Merlot's
+Added: ( 1 ) 1997 through 2003 2019 10 - 40 Years
5 Fuddruckers
−Removed: 1994 through 1995
−Removed: 10 - 40 Years
−Removed: 2007 through 2008
−Removed: 10 - 40 Years
+Added: ( 1 ) 1994 through 1995 2019 10 - 40 Years
+Added: ( 1 ) 2007 through 2008 2019 10 - 40 Years
1 Cermak Fresh Market
( 1 ) 1989 2019 10 - 40 Years
−Removed: 5 Lerner and Rowe
−Removed: 1973 through 2007
−Removed: 10 - 40 Years
−Removed: 10 - 40 Years
−Removed: 2 Eddie Merlot's
−Removed: 1997 through 2003
−Removed: 10 - 40 Years
1 Columbus Preparatory Academy
— 2004 2019 10 - 40 Years
−Removed: 10 - 40 Years
−Removed: 2 Sanford's Grub & Pub
−Removed: 1928 through 2003
−Removed: 10 - 40 Years
−Removed: 1 HOM Furniture
−Removed: 10 - 40 Years
12 Core & Main
−Removed: 1972 through 2001
−Removed: 10 - 40 Years
+Added: — 1972 through 2001 2019 10 - 40 Years
+Added: 5 Lerner and Rowe
+Added: — 1973 through 2007 2019 10 - 40 Years
+Added: 4 Meineke Car Care Center
+Added: — 1999 through 2000 2019 10 - 40 Years
+Added: — 1999 through 2000 2019 10 - 40 Years
1 Austin's Park n' Pizza
— 2003 2019 10 - 40 Years
−Removed: 1 Columbus Arts & Tech Academy
— 1986 2019 10 - 40 Years
−Removed: 1 Marcus Theaters
— 2012 2019 10 - 40 Years
−Removed: 4 Meineke Car Care Center
−Removed: 1999 through 2000
+Added: 1 Marcus Theaters
— 1999 2019 10 - 40 Years
1 unchanged sentence
— 2016 2019 10 - 40 Years
−Removed: 2 Diagnostic Health
−Removed: 1985 through 1997
— 2004 2019 10 - 40 Years
−Removed: 10 - 40 Years
−Removed: 1999 through 2000
−Removed: 10 - 40 Years
−Removed: 3 Oregano's Pizza Bistro
−Removed: 1964 through 2006
−Removed: 10 - 40 Years
−Removed: 5 Brookshire Brothers
−Removed: 1990 through 1999
+Added: 1 Columbus Arts & Tech Academy
— 1980 2019 10 - 40 Years
+Added: 2 Diagnostic Health
+Added: — 1985 through 1997 2019 10 - 40 Years
3 Krispy Kreme
−Removed: 2000 through 2004
−Removed: 10 - 40 Years
+Added: — 2000 through 2004 2019 10 - 40 Years
+Added: 2 Max & Erma's
+Added: — 1990 through 2007 2019 10 - 40 Years
+Added: 3 Oregano's Pizza Bistro
+Added: — 1964 through 2006 2019 10 - 40 Years
9 Sonic Drive-In
−Removed: 1987 through 2010
−Removed: 10 - 40 Years
+Added: — 1987 through 2010 2019 10 - 40 Years
+Added: 2 Texas Roadhouse
+Added: — 2003 through 2005 2019 10 - 40 Years
+Added: 5 Brookshire Brothers
+Added: — 1990 through 1999 2019 10 - 40 Years
+Added: 2 Flying Star Cafe
+Added: — 1994 through 1999 2019 10 - 40 Years
+Added: — 2008 through 2016 2019 10 - 40 Years
+Added: 7 Hughes Supply
— 1993 2019 10 - 40 Years
−Removed: 1 RGB Eye Associates
+Added: 1 Jack Stack Barbeque
— 1983 2019 10 - 40 Years
3 Jack's Family Restaurant
−Removed: 2008 through 2016
−Removed: 10 - 40 Years
−Removed: 2 Texas Roadhouse
−Removed: 2003 through 2005
−Removed: 10 - 40 Years
−Removed: 2 Flying Star Cafe
−Removed: 1994 through 1999
+Added: — 2008 through 2016 2019 10 - 40 Years
+Added: — 1984 through 1989 2019 10 - 40 Years
— 1994 2019 10 - 40 Years
1 unchanged sentence
— 1991 2019 10 - 40 Years
−Removed: 1 Jack Stack Barbeque
−Removed: 10 - 40 Years
+Added: 2 Bricktown Brewery
+Added: — 1904 through 1984 2019 10 - 40 Years
Depreciation (1)
−Removed: Life on which
+Added: Construction Date
+Added: Acquired Life on which
Depreciation in
Latest Income
−Removed: 1 Multi-Tenant
−Removed: 10 - 40 Years
−Removed: 1984 through 1989
−Removed: 10 - 40 Years
−Removed: 2 Bricktown Brewery
−Removed: 1904 through 1984
−Removed: 10 - 40 Years
−Removed: 1967 through 1985
−Removed: 10 - 40 Years
1 ConForm Automotive
— 1987 2019 10 - 40 Years
−Removed: 1 Planet Fitness
+Added: 2 Gerber Collision & Glass
+Added: — 2001 through 2002 2019 10 - 40 Years
+Added: 2 HD Supply White Cap
+Added: — 1990 through 2001 2019 10 - 40 Years
+Added: 1 Multi-Tenant
— 2001 2019 10 - 40 Years
−Removed: 3 Focus Child Development Center
−Removed: 1965 through 1998
+Added: 1 Planet Fitness
— 2007 2019 10 - 40 Years
−Removed: 7 Hughes Supply
+Added: 1 RGB Eye Associates
— 2013 2019 10 - 40 Years
−Removed: 6 Long John Silver's
−Removed: 1972 through 1987
+Added: 1 Ashley Furniture
— 1973 2019 10 - 40 Years
1 unchanged sentence
— 1988 2019 10 - 40 Years
−Removed: 2 Gerber Collision & Glass
−Removed: 2001 through 2002
−Removed: 10 - 40 Years
−Removed: 1 Humperdinks
−Removed: 10 - 40 Years
−Removed: 2 HD Supply White Cap
−Removed: 1990 through 2001
−Removed: 10 - 40 Years
−Removed: 2 Famous Dave's
−Removed: 1997 through 1999
−Removed: 10 - 40 Years
1 Caldwell Country Chevrolet
— 2000 2019 10 - 40 Years
−Removed: 1 Sportsman's Warehouse
−Removed: 10 - 40 Years
−Removed: 1 Renn Kirby Chevrolet Buick
−Removed: 10 - 40 Years
−Removed: 1 Ashley Furniture
+Added: 2 Famous Dave's
+Added: — 1997 through 1999 2019 10 - 40 Years
+Added: 3 Focus Child Development Center
+Added: — 1965 through 1998 2019 10 - 40 Years
+Added: 1 Joe's Crab Shack
— 1997 2019 10 - 40 Years
1 unchanged sentence
— 1960 2019 10 - 40 Years
−Removed: 1984 through 1999
−Removed: 10 - 40 Years
2 Primanti Bros.
2 unchanged sentences
— 2011 2019 10 - 40 Years
−Removed: 1 Joe's Crab Shack
−Removed: 10 - 40 Years
−Removed: 10 - 40 Years
−Removed: 1 Tractor Supply
−Removed: 10 - 40 Years
−Removed: 2 Orscheln Farm and Home
−Removed: 1977 through 1986
−Removed: 10 - 40 Years
−Removed: 1 Providence Athletic Club
−Removed: 10 - 40 Years
−Removed: 1962 through 2007
+Added: 1 Renn Kirby Chevrolet Buick
— 2005 2019 10 - 40 Years
−Removed: 1 Sunbelt Supply LP
+Added: 1 Sportsman's Warehouse
— 1983 2019 10 - 40 Years
−Removed: 1 Ojos Locos Sports Cantina
+Added: — 1984 through 1999 2019 10 - 40 Years
— 1996 2019 10 - 40 Years
1 unchanged sentence
— 1996 2019 10 - 40 Years
−Removed: 1977 through1994
−Removed: 10 - 40 Years
−Removed: 1 Bridgestone Tire
+Added: 1 Buffalo Wild Wings
— 2014 2019 10 - 40 Years
1 unchanged sentence
— 2015 2019 10 - 40 Years
−Removed: 1 Buffalo Wild Wings
+Added: 2 Long John Silver's
+Added: — 1972 through 1987 2019 10 - 40 Years
+Added: 2 Monterey's Tex Mex
+Added: — 1979 through 1997 2019 10 - 40 Years
+Added: 1 Ojos Locos Sports Cantina
— 1993 2019 10 - 40 Years
−Removed: 1977 through 2006
+Added: 2 Orscheln Farm and Home
+Added: — 1977 through 1986 2019 10 - 40 Years
+Added: 2 Rick Johnson Auto & Tire
— 1993 2019 10 - 40 Years
−Removed: 1 What the Buck
+Added: 1 Slim Chickens
— 2013 2019 10 - 40 Years
−Removed: 1991 through 2003
+Added: 1 Southwest Stainless, LP
+Added: — 1977 through1994 2019 10 - 40 Years
+Added: 1 Spoons Place
— 1998 2019 10 - 40 Years
−Removed: 1 Slim Chickens
+Added: 1 Tractor Supply
— 2007 2019 10 - 40 Years
−Removed: 2 Monterey's Tex Mex
−Removed: 1979 through 1997
+Added: 1 What the Buck
— 1958 2019 10 - 40 Years
2 Affordable Care, Inc.
−Removed: 2008 through 2010
+Added: — 2008 through 2010 2019 10 - 40 Years
+Added: 1 Bridgestone Tire
— 1998 2019 10 - 40 Years
2 Dollar General
−Removed: 2012 through 2015
−Removed: 10 - 40 Years
+Added: — 2012 through 2015 2019 10 - 40 Years
+Added: — 1997 through 1994 2019 10 - 40 Years
+Added: — 1977 through 2006 2019 10 - 40 Years
+Added: — 1990 through 1992 2019 10 - 40 Years
1 Red Robin Gourmet Burgers
— 1995 2019 10 - 40 Years
−Removed: 1990 through 1992
+Added: — 1991 through 2003 2019 10 - 40 Years
+Added: 1 Bru Burger Bar
— 1996 2019 10 - 40 Years
−Removed: 1 Pier1 Imports
+Added: 1 Haus Energy
— 1996 2019 10 - 40 Years
−Removed: 1 SRS Distribution
+Added: 1 Howlin Concrete
— 1975 2019 10 - 40 Years
−Removed: 1 The Atlanta Center for Foot & Ankle Surgery
+Added: 1 Jack in the Box
— 1992 2019 10 - 40 Years
+Added: 1 Little Caesars
+Added: — 1996 2019 10 - 40 Years
+Added: 1 NAPA Auto Parts
+Added: — 2001 2019 10 - 40 Years
Depreciation (1)
−Removed: Life on which
+Added: Construction Date
+Added: Acquired Life on which
Depreciation in
Latest Income
−Removed: 1 Bru Burger Bar
−Removed: 10 - 40 Years
1 Old Mexico Cantina
— 2007 2019 10 - 40 Years
−Removed: 1 Touchstone Imaging
−Removed: 10 - 40 Years
−Removed: 1 Solea Mexican Grill
−Removed: 10 - 40 Years
−Removed: 1 Harbor Court
−Removed: 10 - 40 Years
1 O'Reilly Auto Parts
— 2006 2019 10 - 40 Years
−Removed: 1 Aggregate Industries
−Removed: 10 - 40 Years
−Removed: 1 NAPA Auto Parts
+Added: 1 SRS Distribution
— 1975 2019 10 - 40 Years
−Removed: 1 Jack in the Box
+Added: 1 The Atlanta Center for Foot & Ankle Surgery
— 1963 2019 10 - 40 Years
−Removed: 1 Off the Hook Seafood & More
+Added: 1 Touchstone Imaging
— 1992 2019 10 - 40 Years
1 unchanged sentence
— 1987 2019 10 - 40 Years
+Added: — 1992 2019 10 - 40 Years
1 Family Dollar Stores
1 unchanged sentence
— 1982 2019 10 - 40 Years
−Removed: Assets Held for Sale
−Removed: 17 Net Lease Properties
+Added: 1 Off the Hook Seafood & More
+Added: — 2007 2019 10 - 40 Years
+Added: 1 Bigham Cable
+Added: — 1982 2019 10 - 40 Years
Total ( 1,109 properties)
4 unchanged sentences
(dollars in thousands)
−Removed: The change in total cost of properties for the period from January 1, 2017 to December 31, 2019 is as follows:
+Added: (A) The change in total cost of properties for the period from January 1, 2018 to December 31, 2020 is as follows:
+Added: 2020 2019 2018
Balance at beginning of year $ 10,716,233 $ 8,820,346 $ 8,778,907
acquisitions and capital expenditures 99,141 1,983,380 324,227
+Added: Dispositions ( 145,836 ) — ( 62,923 )
Reclassification of properties held for sale ( 38,978 ) ( 87,493 ) ( 219,865 )
Balance at close of year $ 10,630,560 $ 10,716,233 $ 8,820,346
−Removed: The change in accumulated depreciation for the period from January 1, 2017 to December 31, 2019 is as follows:
+Added: (B) The change in accumulated depreciation for the period from January 1, 2018 to December 31, 2020 is as follows:
+Added: 2020 2019 2018
Balance at beginning of year $ 2,851,121 $ 2,574,297 $ 2,409,416
depreciation expense 364,636 305,441 304,224
+Added: Dispositions ( 143,814 ) ( 28,617 ) ( 62,923 )
Reclassification of properties held for sale ( 24,927 ) — ( 76,420 )
Balance at close of year $ 3,047,016 $ 2,851,121 $ 2,574,297
−Removed: The aggregate cost tax basis for federal income tax purposes of our real estate properties was $ 8,414,576 on December 31, 2019 .
+Added: (C) The aggregate cost tax basis for federal income tax purposes of our real estate properties was $ 8,316,892 on December 31, 2020.
Pursuant to the requirements of Section 13 or 15(d) 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.
1 unchanged sentence
President and Chief Executive Officer
−Removed: February 28, 2020
+Added: March 1, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
−Removed: Managing Trustee, President and
+Added: Signature Title Date
+Added: Murray Managing Trustee, President and
Chief Executive Officer
−Removed: February 28, 2020
−Removed: Chief Financial Officer and Treasurer
+Added: March 1, 2021
+Added: Donley Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
−Removed: February 28, 2020
−Removed: Independent Trustee
−Removed: February 28, 2020
−Removed: Independent Trustee
−Removed: February 28, 2020
+Added: March 1, 2021
+Added: /s/ Laurie B.
+Added: Burns Independent Trustee March 1, 2021
+Added: /s/ Robert E.
+Added: Cramer Independent Trustee March 1, 2021
+Added: Fraiche Independent Trustee March 1, 2021
+Added: Harrington Independent Trustee March 1, 2021
/s/ William A.
−Removed: Independent Trustee
−Removed: February 28, 2020
−Removed: Managing Trustee
−Removed: February 28, 2020
+Added: Lamkin Independent Trustee March 1, 2021
+Added: Portnoy Managing Trustee March 1, 2021
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.