What changed in this filing

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Item 1. Business

2024-02-28 compared with 2023-02-28 · 130 added, 156 removed, 801 unchanged (26% of the section changed)

We are a REIT formed in 1995 under the laws of the State of Maryland.

As of December 31, 2022, we owned 238 hotels with 40,053 rooms or suites located in 36 states, the District of Columbia, Ontario, Canada and San Juan, Puerto Rico and 765 service-oriented retail properties with 13,374,325 square feet located in 42 states.

As of December 31, 2023, we owned 221 hotels with 37,777 rooms or suites located in 36 states, the District of Columbia, Ontario, Canada and San Juan, Puerto Rico and 752 service-focused retail net lease properties with 13,341,172 square feet located in 42 states.

Our principal place of business is Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634, and our telephone number is (617) 964-8389.

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Our principal internal growth strategy is to apply asset management strategies to aid our hotel operators in improving performance and operating income of our hotel properties.

We actively manage our net lease portfolio by engaging in early lease renewal discussions to maintain occupancy and grow rental income, monitoring the credit of our tenants and identifying asset recycling opportunities.

We actively manage our net lease portfolio by engaging in early lease renewal discussions to maintain occupancy and grow rental income while simultaneously monitoring the credit of our tenants and identifying asset recycling opportunities.

Our asset management teams also work closely with our operators to ensure our hotels and net lease properties are well maintained and that capital investments are well planned, prudent and executed efficiently in order to maximize the long term value of our properties.

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Hotel Portfolio

As of December 31, 2022, we owned 238 hotels with 40,053 rooms or suites located in 36 states, the District of Columbia, Ontario, Canada and Puerto Rico.

As of December 31, 2023, we owned 221 hotels with 37,777 rooms or suites located in 36 states, the District of Columbia, Ontario, Canada and San Juan, Puerto Rico.

We believe the scale, geographic diversity, strategic locations and the variety of service levels of our hotels gives us a competitive advantage.

Our hotel properties are typically located in urban or high density suburban locations in the vicinity of major demand generators such as large suburban office parks, urban centers, airports, medical or educational facilities or major tourist attractions.

The following table summarizes the brand affiliations, service level and chain scale of our hotels, as characterized by STR Inc., or STR, a data benchmark and analytics provider for the lodging industry, under which our hotels operate as of December 31, 2022:

Our hotel properties are typically located in urban or high density suburban locations in the vicinity of major demand generators such as urban centers, airports, medical or educational facilities, major tourist attractions or large suburban office parks.

Brand Manager Service Level Chain Scale (1)

Number of Properties Number of Rooms or Suites Investment (in 000s) (2)

Number of Hotels Number of Rooms or Suites Investment (2)

Royal Sonesta Hotels® Sonesta Full Service Upper Upscale 17 5,663 $ 1,900,380

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Hyatt Place® Hyatt Select Service Upscale 17 2,107 294,344

Courtyard by Marriott® Marriott Select Service Upscale 13 1,813 172,301

Radisson® Hotels & Resorts Radisson Full Service Upscale 5 1,149 170,800

Crowne Plaza® IHG Full Service Upscale 1 495 124,276

Country Inns & Suites® by Radisson Radisson Full Service Upper Midscale 3 430 54,076

Residence Inn by Marriott® Marriott Extended Stay Upscale 3 342 46,074

Country Inn & Suites® by Radisson Radisson Full Service Upper Midscale 3 430 54,049

Total Hotels 221 37,777 $ 6,311,013

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Chain scale segments are grouped primarily according to average room rates.

(2) Represents historical cost of our properties plus capital improvements funded by us less impairment write-downs, if any, and excludes capital improvements made from reserves established for the regular refurbishment of our hotels, or FF&E, reserves funded from hotel operations that do not result in increases in our owner’s priority returns or rents.

(2) Represents the historical cost of our properties plus capital improvements funded by us less impairment write-downs, if any, and excludes capital improvements made from reserves established for the regular refurbishment of our hotels, or FF&E reserves, funded from hotel operations that do not result in increases in our owner’s priority returns or rents.

Net Lease Portfolio

As of December 31, 2022, we owned 765 service-oriented retail properties with 13,374,325 square feet.

As of December 31, 2022, our net lease portfolio was occupied by 180 tenants with a weighted (by annual minimum rent) lease term of 9.6 years, operating under 138 brands in 21 distinct industries.

The portfolio is leased to tenants that include travel centers, quick service and casual dining restaurants, movie theaters, health and fitness centers, grocery stores, automotive parts and services and other businesses in service-oriented and necessity-based industries across 42 states.

As of December 31, 2023, we owned 752 service-focused retail net lease properties with an aggregate of 13,341,172 square feet.

As of December 31, 2023, our net lease portfolio was occupied by 175 tenants with a weighted average (by annual minimum rent) lease term of 8.8 years, operating under 137 brands in 21 distinct industries.

The portfolio is leased to tenants that include travel centers, quick service and casual dining restaurants, health and fitness centers, movie theaters, grocery stores, automotive parts and services and other businesses in service-focused and necessity-based industries across 42 states.

The following table summarizes the brand affiliation and industries under which our net lease properties operate as of December 31, 2023 (dollars in thousands):

Brand Industry No.

of Properties Square Feet Investment (in 000s) (1)

TravelCenters of America Travel Centers 133 3,643,581 $ 2,289,189

of Properties Square Feet Annualized Minimum Rent (1)

Investment (2)

TravelCenters of America Inc.

Travel Centers 132 3,697,503 $ 173,402 $ 2,258,977

Petro Stopping Centers Travel Centers 44 1,367,802 80,598 1,015,156

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Life Time Fitness Health and Fitness 3 420,335 5,770 92,617

AMC Theatres Movie Theaters 9 442,240 82,488

Buehler's Fresh Foods Grocery Stores 5 502,727 5,657 76,469

Heartland Dental Medical, Dental Office 59 234,274 4,699 61,120

AMC Theatres Movie Theaters 6 297,166 4,438 67,023

Express Oil Change Automotive Equipment and Services 23 83,825 3,717 49,724

Norms Restaurants - Casual Dining 10 63,490 3,693 53,673

Express Oil Change Automotive Equipment & Services 23 83,825 49,724

Pizza Hut Restaurants - Quick Service 40 167,366 3,422 45,285

Flying J Travel Plaza Travel Centers 3 48,069 3,247 41,681

Courthouse Athletic Club Health And Fitness 4 193,659 39,688

America's Auto Auction Automotive Dealers 6 72,338 3,216 38,314

Fleet Farm General Merchandise Stores 1 218,248 2,783 37,802

B&B Theatres Movie Theaters 4 261,300 37,619

Crème de la Crème Educational Services 4 81,929 2,429 29,131

Big Al's Entertainment 2 111,912 2,336 35,214

Regal Cinemas Movie Theaters 5 223,846 34,953

Burger King Restaurants-Quick Service 21 68,710 34,289

Hardee's Restaurants-Quick Service 19 62,792 31,844

Martin's Restaurants - Quick Service 16 81,909 2,252 31,144

Arby's Restaurants-Quick Service 19 57,868 29,234

Crème de la Crème Educational Services 4 81,929 29,131

Mister Car Wash Car Washes 5 41,456 2,214 28,658

Burger King Restaurants - Quick Service 20 94,949 2,034 32,953

Popeye's Restaurants - Quick Service 20 45,708 1,983 28,434

Regal Cinemas Movie Theaters 5 223,846 1,958 34,953

Courthouse Athletic Club Health and Fitness 4 193,659 1,906 39,688

Arby's Restaurants - Quick Service 19 57,868 1,744 29,234

Hardee's Restaurants - Quick Service 15 49,958 1,697 24,919

Church's Chicken Restaurants - Quick Service 32 43,399 1,693 26,326

United Supermarkets Grocery Stores 6 236,178 1,686 26,121

Various 258 4,362,592 46,034 759,837

Total 752 13,341,172 $ 372,319 $ 5,062,695

(1) Represents historical cost of our properties plus capital improvements funded by us less impairment write-downs, if any.

(1) Represents cash amounts and excludes adjustments, if any, necessary to record scheduled rent changes on a straight line basis or any expense reimbursement.

(2) Represents the historical cost of our properties plus capital improvements funded by us less impairment write-downs, if any.

(3) Consists of 112 distinct brands with an average investment of $2,945 per property.

For more information about our hotel agreements and net lease portfolio, see Notes 5 and 10 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

For more information about our hotel agreements and net lease portfolio, see Note 4 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Principal Management Agreement or Lease Features

As of December 31, 2022, our 238 hotels were managed by subsidiaries of Sonesta, Hyatt Hotels Corporation, or Hyatt, Radisson Hospitality, Inc., or Radisson, Marriott International, Inc., or Marriott, and InterContinental Hotels Group, plc, or IHG.

As of December 31, 2023, our 221 hotels were managed by subsidiaries of Sonesta, Hyatt Hotels Corporation, or Hyatt, Radisson Hospitality, Inc., or Radisson, and InterContinental Hotels Group, plc, or IHG.

Our hotel operating agreements have initial terms expiring between 2026 and 2037.

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• Long Terms.

The weighted average term remaining for our hotel agreements (weighted by our investments as of December 31, 2022) is 13.9 years, without giving effect to any renewal options our managers may have.

The weighted average term remaining for our hotel agreements (weighted by owner’s priority as of December 31, 2023) is 12.9 years, without giving effect to any renewal options our managers may have.

• Pooled Agreements.

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Generally, manager renewal options for each portfolio agreement of our hotel properties may only be exercised on an all or none basis and not for separate properties.

Our agreements with Marriott and Sonesta for hotels that we expect to sell allows us to terminate the agreement with respect to individual properties as they are sold.

See Notes 4 and 5 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K for more information on our properties held for sale and these agreements.

Our agreement with Radisson for hotels that we may sell allows us to terminate the agreement with respect to individual properties as they are sold.

See Note 4 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K for more information on these agreements.

• Property Maintenance.

Most of our hotel agreements require the deposit of 5% to 6.5% of annual gross hotel revenues into escrows to fund periodic renovations subject to available cash flow.

Most of our hotel agreements require the deposit of 5% of annual gross hotel revenues into escrows to fund periodic renovations subject to available cash flow.

We own the cash in these escrow accounts.

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We are required to maintain working capital for each hotel and to fund the cost of certain operating supplies (for example, linen, china, glassware, silverware and uniforms).

We also are responsible for funding hotel operations if at any time the funds available from working capital are insufficient to meet the financial requirements of the hotels.

We are also responsible for funding hotel operations if at any time the funds available from working capital are insufficient to meet the financial requirements of the hotels.

Generally, the working capital accounts which would otherwise be maintained by the operators for each of such hotels are maintained on a pooled basis, with operators being authorized to make withdrawals from such pooled account as otherwise contemplated with respect to working capital in accordance with the provisions of the management agreements.

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Incentive management fees under our hotel management agreements are subordinate to payment of annual owner’s priority returns due to us.

Our hotel managers have the ability to earn incentive management fees generally based on excess cash flows after payment of hotel operating expenses, payment of base management fees, funding of the required FF&E reserve, if any, payment of our owner's priority returns, reimbursement of certain advances and in certain instances, replenishment of the security deposit or guarantee.

Our hotel managers have the ability to earn incentive management fees generally based on excess cash flows after payment of hotel operating expenses, payment of base management fees, funding of the required FF&E reserve, if any, payment of our owner’s priority returns, reimbursement of certain advances and in certain instances, replenishment of the guarantees.

Generally, the incentive fee would be 20% of such excess cash flow and the remaining 80% would be retained by us.

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In general, our 752 net lease properties are subject to “triple net” leases where the tenant is generally responsible for the payment of operating expenses and capital expenditures of the property during the lease term.

Our tenants are responsible to pay us fixed annual rents on a monthly, quarterly or semi-annual basis.

Our tenants are responsible to

pay us fixed annual rents on a monthly, quarterly or semi-annual basis.

Our net lease tenants are responsible to maintain the properties including structural and non-structural components.

Certain of our net lease properties also have future rent increases included in the leases either at a fixed amount or based on changes in the consumer price index, or

Certain of our net lease properties also have future rent increases included in the leases either at a fixed amount or based on changes in the consumer price index, or CPI.

Certain of our lease agreements also require payment of percentage rent to us based on increases in certain gross property revenues over threshold amounts.

Certain of our net lease properties, including all our TA properties, are subject to pooling agreements and include all or none renewal options.

Certain of our net lease properties, including all our TravelCenters of America Inc., or TA, properties, include the right to repool properties, and include all or none renewal options.

TA is our largest tenant.

As of December 31, 2022, we leased 177 travel centers to TA under five leases that expire between 2029 and 2035;

133 of our travel centers are operated under the TravelCenters of America ® , or TA ® , brand name and 44 are operated under the Petro Stopping Centers ® , or Petro ® , brand name.

As of December 31, 2022, we have invested $2.3 billion in 133 TA ® branded properties with 3,643,581 square feet and $1.0 billion in 44 Petro ® branded properties with 1,445,004 square feet.

Substantially all our travel centers are full service sites located at or near an interstate highway exit and offer fuel and non-fuel products and services 24 hours per day, 365 days per year.

As of December 31, 2023, we leased 176 travel centers to a subsidiary of TA under five master leases that expire in 2033.

In connection with BP Products North America Inc.’s, or BP’s, acquisition of TA pursuant to a merger on May 15, 2023, or the TA Merger, BP Corporation North America Inc.

has provided a limited guaranty of payments under each of these leases.

As of December 31, 2023, we have invested approximately $2.3 billion in 132 TravelCenters of America branded properties with an aggregate of 3,697,503 square feet and approximately $1.0 billion in 44 Petro Stopping Centers branded properties with an aggregate of 1,367,802 square feet.

See Note 4 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K for more information on these leases.

Substantially all of our travel centers are full service sites located at or near an interstate highway exit and offer fuel and non-fuel products and services 24 hours per day, 365 days per year.

Our typical travel center includes over 25 acres of land with parking for approximately 200 tractor trailers and approximately 100 cars.

Our travel centers offer a broad range of products and services, including diesel fuel and gasoline, as well as nonfuel products and services such as truck repair and maintenance services, diesel exhaust fluid, one full service restaurant, one or more quick service restaurants, travel stores and various customer amenities.

On February 15, 2023, we and certain of our subsidiaries entered into a consent and amendment agreement, or the Consent Agreement, with TA and its subsidiary, TA Operating LLC, or together, the TCA Parties, and BP Products North America Inc., or BP, pursuant to which we and our applicable subsidiaries:

(1) consented to TA’s entering into an agreement and plan of merger, or the Merger Agreement, with BP and its merger subsidiary, pursuant to which BP will acquire TA in a merger transaction, or the Merger, for cash consideration of $86.00 per share of the outstanding shares of common stock, par value $0.001 per share, of TA, or the TA common shares, and to the consummation of the Merger and the other transactions contemplated by the Merger Agreement, or collectively, the BP Acquisition;

(2) agreed to amend and restate our subsidiaries’ existing lease and guaranty agreements with the applicable TCA Parties, effective at the time of the Merger;

and (3) agreed to sell to TA certain tradenames and trademarks associated with TA’s business that we or our applicable subsidiaries own at their current book value of $89.4 million, effective at the time of the Merger.

Pursuant to the amended and restated lease agreements to be entered into at the effective time of the Merger, or the A&R Leases, for 176 of our travel center properties, the aggregate annual minimum rent due to our applicable subsidiaries will be $254.0 million, with annual 2% increases throughout the initial term and any renewal terms of the A&R Leases, and there will be no percentage rent requirement.

The A&R Leases will each have an initial term of 10 years, with five 10-year extension options, and TA Operating LLC will prepay $188.0 million of rent under the A&R Leases at the effective time of the Merger and will receive monthly rent credits totaling $25.0 million per year over the 10-year initial term of the A&R Leases.

In addition, TA Operating LLC will have a right of first offer with respect to certain potential sales of travel center properties included in the A&R Leases.

Pursuant to the amended and restated guaranty amendments to be entered into at the effective time of the Merger, or the A&R Guarantees, BP Corporation North America Inc.

will guarantee payment under each of the A&R Leases.

BP Corporation North America Inc.’s obligations under the A&R Guarantees will be limited by an initial aggregate cap of approximately $3.04 billion.

We currently own 1,184,797 TA common shares, which represent approximately 7.8% of TA’s outstanding common shares and which are valued at approximately $101.9 million based on the cash consideration for the Merger.

In connection with the Merger Agreement, we entered into a voting agreement, or the Voting Agreement, with BP, pursuant to which, among other things, we agreed to vote all of our TA common shares in favor of the BP Acquisition and against any alternative acquisition proposal, including any superior proposal, as defined.

We also agreed not to sell or transfer our TA common shares while the Voting Agreement remains in effect.

Our obligations under the Voting Agreement terminate upon the earliest to occur of the effective time of the Merger, the valid termination of the Merger Agreement or the effective date of a written agreement by us and BP to terminate the Voting Agreement.

We expect to receive approximately $379.3 million in total cash for the value of our TA common shares, the TA tradenames and trademarks and the prepaid rent under the A&R Leases upon completion of the BP Acquisition.

The Merger is subject to various customary conditions to closing, including the approval of TA stockholders owning a majority of the TA common shares outstanding, as well as regulatory approvals.

The parties currently expect that the BP Acquisition will be completed by mid-year 2023.

Investment and Operating Policies

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structure investments which generate a return in excess of our capital costs and provide an opportunity to participate in operating growth at our properties;

when market conditions permit, refinance debt with additional equity or long term debt;

when market conditions permit, refinance maturing debt with additional equity or long term debt;

and pursue diversification so that our cash flows from operations come from diverse properties.

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Because we are a REIT, we generally may not operate our properties.

We or our tenants have entered into arrangements for operation of our properties.

Under the IRC, we may lease our hotels to one of our “taxable REIT subsidiaries,” as defined in Section 856(l) of the IRC, or TRSs, if the hotel is managed by a third party.

We or our tenants have entered into arrangements for the operation of our properties.

Under the United States Internal Revenue Code of 1986, as amended, or the IRC, we may lease our hotels to one of our “taxable REIT subsidiaries”, as defined in Section 856(l) of the IRC, or TRSs, if the hotel is managed by a third party.

As of December 31, 2023, all of our hotels were leased to our TRSs and managed by third parties.

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• Historical and projected cash flows;

• The estimated replacement cost, capital improvement requirements and proposed acquisition price of the property;

• The proposed management agreement or lease terms;

• The brand under which the property operates or is expected to operate;

• The competitive market environment and the current or potential market position of each property;

• The tax and regulatory circumstances of the market area in which the property is located;

• The availability of a qualified manager or tenant;

• The availability of a qualified and reputable manager or tenant;

• The financial strength of the proposed manager or tenant;

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• The location, type of property, market conditions and demographics of the area where it is located and surrounding demand generators;

• The estimated replacement cost, capital improvement requirements and proposed acquisition price of the property;

• Our weighted average long term cost of capital compared to projected returns we may realize by owning the property;

• The reputation of any operator with which the property is or may become affiliated;

• The tax and regulatory circumstances of the market area in which the property is located;

• The amount and type of financial support available from the proposed manager or lessee;

• The level of services and amenities offered at the property;

• The proposed management agreement or lease terms;

• The brand under which the property operates or is expected to operate;

• The strategic fit of the property or investment with the rest of our portfolio and our own plans;

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In determining the competitive position of a property, we examine the proximity and convenience of the property to its expected customer base, the number and characteristics of competitive properties within the property’s market area and the existence of barriers to entry for competitive properties within that market, including site availability and zoning restrictions.

While we have historically focused on the acquisition of upscale limited service, extended stay and full service hotel properties, full service travel centers and necessity based retail properties, we consider acquisitions in all segments of the hospitality, necessity based retail industries and other net leased properties.

While we have historically focused on the acquisition of upscale limited service, extended stay and full service hotel properties, full service travel centers and necessity based retail net lease properties, we consider acquisitions in all segments of the hospitality, necessity based retail industries and other net leased properties.

We expect most of our acquisition efforts will focus on hotel and net lease based properties;

however, we may consider acquiring other types of properties, as well.

however, we may also consider acquiring other types of properties.

An important part of our acquisition strategy is to identify and select or create qualified, experienced and financially stable operators.

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Our principal goal of any such transactions will be to increase our cash flows from operations and to further diversify our revenue sources.

We owned 34.0% of the outstanding common stock of Sonesta and 7.8% of the outstanding common stock of TA as of December 31, 2022.

As disclosed elsewhere in this Annual Report on Form 10-K, in connection with the BP Acquisition, we entered into the Voting Agreement, pursuant to which, among other things, we agreed to vote all of our TA common shares in favor of the BP Acquisition and not to sell or transfer our TA common shares while the Voting Agreement remains in effect.

We own 34% of the outstanding common stock of Sonesta.

We may in the future acquire additional shares of common stock of Sonesta or securities of other entities, including entities engaged in real estate activities, or we may sell these shares of common stock.

We may invest in the securities of other entities for the purpose of exercising control or otherwise, make loans to other persons or entities, engage in the sale of investments, offer securities in exchange for property or repurchase our securities.

We may invest in the securities of other entities for the purpose of exercising control or otherwise, make loans

to other persons or entities, engage in the sale of investments, offer securities in exchange for property or repurchase our securities.

We may not achieve some or all of our investment objectives.

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However, we may seek to strategically sell assets from time to time as part of managing our leverage, capital recycling, highest and best use analysis, or as part of long term financing of acquisitions.

During 2022, we sold 65 hotels with 8,296 rooms for an aggregate sales price of $543.4 million and 21 net lease properties with 138,638 square feet for an aggregate sales price of $16.4 million.

As of December 31, 2022, we had 18 hotels and four net lease properties with an aggregate carrying value of $111.6 million classified as held for sale.

For more information on these disposition activities, please refer to Note 4 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

During 2023, we sold 18 hotels with 2,526 rooms for an aggregate sales price of $157.2 million and 13 net lease properties with an aggregate of 160,310 square feet for an aggregate sales price of $13.1 million.

As of December 31, 2023, we had one hotel with a carrying value of $4.1 million and nine net lease properties with an aggregate carrying value of $6.4 million classified as held for sale.

For more information on these disposition activities, see Note 3 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

We currently make decisions to dispose of properties based on factors including, but not limited to, the following:

• The property’s current and expected future performance;

• The competition and demand generators near the property;

• The proposed or expected sale price;

• The age and capital required to maintain the property;

• The competition and demand generators near the property;

• Our intended use of the proceeds we may realize from the sale of a property;

• The strategic fit of the property with the rest of our portfolio and with our plans;

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• The remaining agreement term of the property, including the likelihood of a manager or tenant exercising any renewal options;

• Our intended use of the proceeds we may realize from the sale of a property;

• The existence of alternative sources, uses or needs for our capital and our debt leverage;

• The tax implications to us and our shareholders of any proposed disposition.

• The tax implications to us and our shareholders.

Our Board of Trustees may change our investment and operating policies at any time without a vote of, or notice to, our shareholders.

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For further information regarding our financing sources and activities, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Our Investment and Financing Liquidity and Capital Resources” included in Part II, Item 7 of this Annual Report on Form 10-K and Note 6 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Although there are no limitations in our organizational documents on the amount of indebtedness we may incur, our $800 million revolving credit facility, our unsecured senior notes indentures and their supplements and our secured borrowings contain financial covenants which, among other things, restrict our ability to incur additional indebtedness and require us to maintain certain financial ratios.

Our ability to incur additional debt is subject to meeting the required covenant levels and subject to the provisions of our revolving credit facility and senior notes indentures.

Although there are no limitations in our organizational documents on the amount of indebtedness we may incur, our debt agreements contain financial covenants which, among other things, restrict our ability to incur additional indebtedness and require us to maintain certain financial ratios.

Our ability to incur additional debt is subject to meeting the required covenant levels and subject to the provisions of our debt agreements.

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and an officer and employee of RMR.

Murray, our other Managing Trustee and our former President and Chief Executive Officer, was appointed the president and chief executive officer of Sonesta, effective April 1, 2022.

Murray also serves as an officer and employee of RMR.

Murray, our other Managing Trustee and our former President and Chief Executive Officer, also serves as an officer and employee of RMR and is the chief executive officer of Sonesta.

Our day to day operations are conducted by RMR.

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RMR is an alternative asset management company that is focused on commercial real estate and related businesses.

RMR or its subsidiaries also acts as a manager to other publicly traded real estate companies, privately held real estate funds and real estate related operating businesses.

As of the date of this Annual Report on Form 10-K, the executive officers of RMR are:

Adam Portnoy, President and Chief Executive Officer;

Clark, Executive Vice

President, General Counsel and Secretary;

Francis, Executive Vice President;

Jordan, Executive Vice President, Chief Financial Officer and Treasurer;

Murray, Executive Vice President and Jonathan M.

Pertchik, Executive Vice President.

Our President and Chief Investment Officer, Todd Hargreaves, and our Chief Financial Officer and Treasurer, Brian E.

RMR or its subsidiaries also act as a manager to other publicly traded real estate companies, privately held real estate funds and real estate related operating businesses.

As of February 22, 2024, the executive officers of RMR are:

Portnoy, president and chief executive officer;

Christopher J.

Bilotto, executive vice president;

Clark, executive vice president, general counsel and secretary;

Jordan, executive vice president, chief financial officer and treasurer and John G.

Murray, executive vice president.

Our President and Chief Investment Officer, Todd W.

Hargreaves, and our Chief Financial Officer and Treasurer, Brian E.

Donley, are senior vice presidents of RMR.

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Murray and Ms.

Clark also serve on the board of directors of Sonesta, and Mr.

Portnoy is the chair of the board and managing director of TA.

Clark also serves as an officer of TA.

Clark also serve on the board of directors of Sonesta.

We have no employees.

Services which would otherwise be provided to us by employees are provided by RMR and by our Managing Trustees and officers.

As of December 31, 2022 , RMR has approximately 600 full time employees in its headquarters and regional offices located throughout the United States.

As of December 31, 2023 , RMR has over 1,100 full time employees in its headquarters and regional offices located throughout the United States.

The hotel industry is highly competitive.

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Agreements with the operators of our hotels sometimes restrict the right of each operator and its affiliates for periods of time to own, build, operate, franchise or manage other hotels of the same brand within various specified areas around our hotels.

Under these agreements, neither the operators nor their affiliates are usually restricted from operating other brands of hotels in the market areas of any of our hotels, and after such period of time, the operators and their affiliates may also compete with our hotels by opening, managing or franchising additional hotels under the same brand name in direct competition with our hotels.

Under these agreements, neither the

operators nor their affiliates are usually restricted from operating other brands of hotels in the market areas of any of our hotels, and after such period of time, the operators and their affiliates may also compete with our hotels by opening, managing or franchising additional hotels under the same brand name in direct competition with our hotels.

As of December 31, 2023 , 195 of our hotels are operated by Sonesta.

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The market for net lease properties is also highly competitive.

As an owner and landlord of net lease retail properties, we compete in the multi-billion dollar commercial real estate market with numerous developers and owners of properties, many of which own properties similar to ours and are in the same markets in which our properties are located.

As an owner and landlord of retail net lease properties, we compete in the multi-billion dollar commercial real estate market with numerous developers and owners of properties, many of which own properties similar to ours and are in the same markets in which our properties are located.

In operating and managing our portfolio, we compete for tenants based on a number of factors, including location, rental rates and flexibility.

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Such competition may reduce the number of suitable property acquisition or financing opportunities available to us or increase the bargaining power of property owners seeking to sell or finance their properties.

Sustainability, Environmental and Climate Change Matters.

Our manager, RMR, periodically publishes its Sustainability Report, which summarizes the environmental, social and governance initiatives RMR and its client companies, including us, employ.

Corporate Sustainability.

Our manager, RMR, periodically publishes its Sustainability Report, which summarizes the environmental, social and governance, or ESG, initiatives employed by RMR and its client companies, including us.

Sonesta also publishes a Sustainability Report summarizing its ESG initiatives.

RMR’s Sustainability Report may be accessed on the RMR Inc.

website at www.rmrgroup.com/corporate-sustainability/default.aspx.

The information on or accessible through RMR Inc.’s website is not incorporated by reference into this Annual Report on Form 10-K.

Sonesta’s Sustainability Report may be accessed on the Sonesta website at www.sonesta.com/esg-sonesta.

The information on or accessible through RMR Inc.’s or Sonesta’s website is not incorporated by reference into this Annual Report on Form 10-K.

We believe corporate sustainability is a strategic part of our focus on operational practices, enhancing our competitive position, development and redevelopment efforts and economic performance.

Our sustainability practices, which align with those of our manager, RMR — minimizing our impact on the environment, embracing the communities where we operate and attracting top professionals — are critical elements supporting our long-term success.

Our business strategy incorporates a focus on sustainable approaches to operating our properties in a manner that benefits us, our shareholders, operators and the communities in which we are located.

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However, our asset managers encourage our managers and tenants to operate our properties in ways that improve the economic performance of their operations, while simultaneously managing energy and water consumption, as well as greenhouse gas emissions.

Our environmental sustainability and community engagement strategies are primarily implemented by our operators and focus on a complementary set of objectives, including the following:

We recognize our responsibility to minimize the impact of our business on the environment and seek to preserve natural resources and maximize efficiencies in order to reduce the impact our properties have on the planet.

Our environmental sustainability strategies and best practices help to mitigate our properties’ environmental footprint, optimize operational

efficiency and enhance our competitiveness in the marketplace.

Our sustainability and community engagement strategies, including those implemented by our hotel managers, focus on a complementary set of objectives, including the following:

• Responsible Investment:

We seek to invest capital in our properties that both improves environmental performance and enhances asset value.

During the acquisition of properties, RMR assesses, among other things, environmental sustainability opportunities and climate related risks as part of the due diligence process.

As part of our property acquisition due diligence and annual budgeting processes, RMR assesses, among other things, environmental sustainability opportunities and physical and policy driven climate related risks.

• Environmental Stewardship:

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• installed electric car charging stations at some of our hotels and travel centers.

• Climate Change Matters:

We define climate change resilience as our ability to anticipate, prepare for and recover from adverse physical climate activity including increased severity of acute weather events and chronic changes to weather patterns as well as identify and plan for climate-related transitional activities such as changes in policy and market driven expectations.

We routinely evaluate properties susceptible to flooding and other natural disasters.

The evaluation may include implementing tenant and local agency coordination protocols, property incident response plan reviews, insurance provider assessments and the implementation of physical protection elements, such as flood protection barriers and the installation of hurricane and blizzard resistant windows and doors.

When major weather or climate-related events, such as hurricanes, floods or wildfires, occur near our properties, our manager or tenant may need to suspend operations of the impacted property until the event has ended and the property is then ready for operation.

We or the operators of our properties may incur significant costs and losses as a result of these activities, both in terms of operating, preparing and repairing our properties in anticipation of, during and after a severe weather or climate-related event and in terms of potential lost business due to the interruption in operating our properties.

Our insurance and our managers’ and tenants’ insurance may not adequately compensate us or them for these costs and losses.

Concerns about climate change have resulted in various treaties, laws and regulations that are intended to limit carbon emissions and address other environmental concerns.

These and other laws may cause energy or other costs at our hotel and net lease properties to increase.

We do not expect the direct impact of these increases to be material to our results of operations, because the increased costs either would be the responsibility of our tenants or managers directly or in the longer term, passed through and paid by customers of our properties.

Although we do not believe it is likely in the foreseeable future, laws enacted to mitigate climate change may make some of our buildings obsolete or cause us to make material investments in our properties, which could materially and adversely affect our financial condition or the financial condition of our tenants or managers and their ability to pay rent or returns to us.

For more information regarding climate change and other environmental matters and their possible adverse impact on us, see “Risk Factors—Risks Related to Our Business—Ownership of real estate is subject to environmental risks and liabilities,” “Risk Factors—Risks Related to Our Business—We are subject to risks from adverse weather, natural disasters and climate change and climate related events, and we incur significant costs and invest significant amounts with respect to these matters” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Impact of Climate Change” included in Part II, Item 7 of this Annual Report on Form 10-K.

• Investments in Human Capital.

We have no employees.

We rely on our managers, including RMR, to hire, train, and develop a workforce that meets the needs of our business, contributes positively to our society and helps reduce our impact on the natural environment.

We rely on our managers, including RMR and Sonesta, to hire, train, and develop a workforce that meets the needs of our business, contributes positively to our society and helps reduce our impact on the natural environment.

• Corporate Citizenship.

We seek to be a responsible corporate citizen and to strengthen the communities in which we own properties.

Our manager, RMR, regularly encourages its employees to engage in a variety of charitable and community programs, including participation in a company-wide service day and charitable giving matching program.

• Diversity & Inclusion.

Our managers regularly encourage their employees to engage in a variety of charitable and community programs, including participation in company-wide service days and charitable gift giving matching programs.

• Diversity and Inclusion.

We value a diversity of backgrounds, experience and perspectives.

Our Board is comprised of 29% women and 14% members of underrepresented communities.

Our Board of Trustees is comprised of 25% women and 25% members of under-represented communities.

RMR is an equal opportunity employer, with all qualified applicants receiving consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability or protected veteran status.

Our hotel managers are committed to racial equity and fostering a culture of diversity and inclusion.

For more information regarding climate change and other environmental matters and their possible adverse impact on us, see “Risk Factors—Risks Related to Our Business—Ownership of real estate is subject to environmental risks and liabilities,” “Risk Factors—Risks Related to Our Business—We are subject to risks from adverse weather, natural disasters and adverse impacts from global climate change, and we incur significant costs and invest significant amounts with respect to these matters,” included in Part I, Item 1A of this Annual Report on Form 10-K and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Impact of Climate Change” included in Part II, Item 7 of this Annual Report on Form 10-K.

We generally have insurance coverage for our properties and the operations conducted on them, including for casualty, liability, fire, flood, earthquake, extended coverage and rental or business interruption losses.

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We also have a policy outlining procedures for handling concerns or complaints about accounting, internal accounting controls or auditing matters and a governance hotline accessible on our website that shareholders can use to report concerns or complaints about accounting, internal accounting controls or auditing matters or violations or possible violations of our Code of Conduct.

We make available, free of charge, through the “Investors” section of our website, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, as soon as reasonably practicable after these forms are filed with, or furnished to, the Securities and Exchange Commission, or the SEC.

13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, as soon as reasonably practicable after these forms are filed with, or furnished to, the SEC.

Any material we file with or furnish to the SEC is also maintained on the SEC website, www.sec.gov.

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For all these reasons, we urge you and any holder of or prospective acquiror of our shares to consult with a tax advisor about the federal income tax and other tax consequences of the acquisition, ownership and disposition of our shares.

Our intentions and beliefs described in this summary are based upon our understanding of applicable laws and regulations that are in effect as of the date of this Annual Report on Form 10-K.

Our intentions and beliefs described in this summary are based upon our understanding of applicable laws and regulations that are in effect as of February 22, 2024.

If new laws or regulations are enacted which impact us directly or indirectly, we may change our intentions or beliefs.

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No portion of any of our dividends is eligible for the dividends received deduction for corporate shareholders.

Distributions in excess of our current or accumulated earnings and profits generally are treated for federal income tax purposes as returns of capital to the extent of a recipient shareholder’s basis in our shares, and will reduce this basis.

Distributions in excess of our current or accumulated earnings and profits generally are treated for federal income

tax purposes as returns of capital to the extent of a recipient shareholder’s basis in our shares, and will reduce this basis.

Our current or accumulated earnings and profits are generally allocated first to distributions made on our preferred shares, of which there are none outstanding at this time, and thereafter to distributions made on our common shares.

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• If we fail to satisfy the 75% gross income test or the 95% gross income test discussed below, due to reasonable cause and not due to willful neglect, but nonetheless maintain our qualification for taxation as a REIT because of specified cure provisions, we will be subject to tax at a 100% rate on the greater of the amount by which we fail the 75% gross income test or the 95% gross income test, with adjustments, multiplied by a fraction intended to reflect our profitability for the taxable year.

• If we fail to satisfy any of the REIT asset tests described below (other than a de minimis failure of the 5% or 10% asset tests) due to reasonable cause and not due to willful neglect, but nonetheless maintain our qualification for taxation as a REIT because of specified cure provisions, we will be subject to a tax equal to the greater of $50,000 or the highest regular corporate income tax rate multiplied by the net income generated by the nonqualifying assets that caused us to fail the test.

regular corporate income tax rate multiplied by the net income generated by the nonqualifying assets that caused us to fail the test.

• If we fail to satisfy any provision of the IRC that would result in our failure to qualify for taxation as a REIT (other than violations of the REIT gross income tests or violations of the REIT asset tests described below) due to reasonable cause and not due to willful neglect, we may retain our qualification for taxation as a REIT but will be subject to a penalty of $50,000 for each failure.

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In addition, for these purposes, the character of the assets and items of gross income of the partnership generally remains the same in the hands of the REIT.

In contrast, for purposes of the distribution requirements discussed below, we must take into account as a partner our share of the partnership’s income as determined under the general federal income tax rules governing partners and partnerships under Subchapter K of the IRC.

In contrast, for purposes of the distribution requirements discussed below, we must take into account as a partner our share of the

partnership’s income as determined under the general federal income tax rules governing partners and partnerships under Subchapter K of the IRC.

Subsidiary REITs.

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In such a situation, the REIT parent’s own qualification and taxation as a REIT could be jeopardized on account of the subsidiary’s failure cascading up to the REIT parent, all as described below under the heading “—Asset Tests”.

We may make protective TRS elections with respect to any subsidiary REIT that we form or acquire and may implement other protective arrangements intended to avoid a cascading REIT failure if any of our intended subsidiary REITs were not to qualify for taxation as a REIT, but we cannot be sure that such protective elections or other arrangements will be effective to avoid or mitigate the resulting adverse consequences to us.

We expect to make protective TRS elections with respect to any subsidiary REIT that we form or acquire and may implement other protective arrangements intended to avoid a cascading REIT failure if any of our intended subsidiary REITs were not to qualify for taxation as a REIT, but we cannot be sure that such protective elections or other arrangements will be effective to avoid or mitigate the resulting adverse consequences to us.

Taxable REIT Subsidiaries.

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For example, if a TRS pays interest, rent or other amounts to its affiliated REIT in an amount that exceeds what an unrelated third party would have paid in an arm’s length transaction, then the REIT generally will be subject to an excise tax equal to 100% of the excessive portion of the payment.

Further, if in comparison to an arm’s length transaction, a third-party tenant has overpaid rent to the REIT in exchange for underpaying the TRS for services rendered, and if the REIT has not adequately compensated the TRS for services provided to or on behalf of the third-party

tenant, then the REIT may be subject to an excise tax equal to 100% of the undercompensation to the TRS.

A safe harbor exception to this excise tax applies if the TRS has been compensated at a rate at least equal to 150% of its direct cost in furnishing or rendering the service.

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We generally do not intend to lease property to any party if rents from that property would not qualify as “rents from real property,” but application of the 10% ownership rule is dependent upon complex attribution rules and circumstances that may be beyond our control.

In this regard, we currently own close to, but less than, 10% of the outstanding common shares of TA, and TA has undertaken to limit its redemptions and repurchases of outstanding common shares so that we do not come to own 10% or more of its outstanding common shares.

In this regard, prior to the TA Merger, we owned close to, but less than, 10% of the outstanding common shares of TA.

Our declaration of trust and bylaws generally disallow transfers or purported acquisitions, directly or by attribution, of our shares to the extent necessary to maintain our qualification for taxation as a REIT under the IRC.

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There is an exception to this rule permitting a REIT to perform customary management and tenant services of the sort that a tax-exempt organization could perform without being considered in receipt of “unrelated business taxable income” as defined in Section 512(b)(3) of the IRC, or UBTI.

In addition, a de minimis amount of noncustomary

services provided to tenants will not disqualify income as “rents from real property” as long as the value of the impermissible tenant services does not exceed 1% of the gross income from the property.

In addition, a de minimis amount of noncustomary services provided to tenants will not disqualify income as “rents from real property” as long as the value of the impermissible tenant services does not exceed 1% of the gross income from the property.

• If rent attributable to personal property leased in connection with a lease of real property is 15% or less of the total rent received under the lease, then the rent attributable to personal property will qualify as “rents from real property;” if this 15% threshold is exceeded, then the rent attributable to personal property will not so qualify.

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• which is more than 90 days after the day on which the REIT acquired the property and the property is used in a trade or business which is conducted by the REIT, other than through an independent contractor from whom the REIT itself does not derive or receive any income or a TRS.

Other than sales of foreclosure property, any gain that we realize on the sale of property held as inventory or other property held primarily for sale to customers in the ordinary course of a trade or business, together known as dealer gains, may be treated

as income from a prohibited transaction that is subject to a penalty tax at a 100% rate.

The 100% tax does not apply to gains from the sale of property that is held through a TRS, although such income will be subject to tax in the hands of the TRS at regular corporate income tax rates;

we may therefore utilize our TRSs in transactions in which we might otherwise recognize dealer gains.

Whether property is held as inventory or primarily for sale to customers in the ordinary course of a trade or business is a question of fact that depends on all the facts and circumstances surrounding each particular transaction.

Whether property is held as inventory or primarily for sale to customers in the ordinary course of a trade or

business is a question of fact that depends on all the facts and circumstances surrounding each particular transaction.

Sections 857(b)(6)(C) and (E) of the IRC provide safe harbors pursuant to which limited sales of real property held for at least two years and meeting specified additional requirements will not be treated as prohibited transactions.

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Our Relationship with TA.

As of December 31, 2022, we owned a significant percentage (but less than 10%) of the outstanding common shares of TA.

Our leases with TA, TA’s articles of incorporation, and other agreements collectively contain restrictions upon the ownership of TA common shares and require TA to refrain from taking any actions that may result in any affiliation with us that would jeopardize our qualification for taxation as a REIT under the IRC.

Accordingly, from and after January 31, 2007 we expect that the rental income we have received and will receive from TA and its subsidiaries has been and will be “rents from real property” under Section 856(d) of the IRC, and therefore qualifying income under the 75% and 95% gross income tests described above.

As disclosed elsewhere in this Annual Report on Form 10-K, in connection with the BP Acquisition, we entered into the Consent Agreement and the Voting Agreement, pursuant to which, among other things, we have agreed to vote all of our TA common shares in favor of the BP Acquisition and to amend and restate our existing TA lease and guaranty agreements, effective at the time of the Merger.

Prior to the TA Merger, we owned a significant percentage (but less than 10%) of the outstanding common shares of TA.

Commencing with our 2007 taxable year and continuing through to the present, we expect that the rental income we have received and will receive from TA and its subsidiaries has constituted and will continue to constitute “rents from real property” under Section 856(d) of the IRC, and therefore qualifying income under the 75% and 95% gross income tests described above.

Our Relationship with Sonesta .

As of December 31, 2022, we owned (directly and indirectly through one of our TRSs) approximately 34% of the outstanding common shares of Sonesta.

As of December 31, 2023, we owned (directly and indirectly through one of our TRSs) 34% of the outstanding common shares of Sonesta.

We have not elected to treat Sonesta as a TRS, and it is not otherwise an automatic TRS because no TRS of ours owns more than 35% of Sonesta.

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In lease transactions involving our TRSs, our intent is for the rents paid to us by the TRS to qualify as “rents from real property” under the REIT gross income tests summarized above.

In order for this to be the case, the manager operating the

leased property on behalf of the applicable TRS must be an “eligible independent contractor” within the meaning of Section 856(d)(9)(A) of the IRC, and the hotels leased to the TRS must be “qualified lodging facilities” within the meaning of Section 856(d)(9)(D) of the IRC.

In order for this to be the case, the manager operating the leased property on behalf of the applicable TRS must be an “eligible independent contractor” within the meaning of Section 856(d)(9)(A) of the IRC, and the hotels leased to the TRS must be “qualified lodging facilities” within the meaning of Section

856(d)(9)(D) of the IRC.

Qualified lodging facilities are defined as hotels, motels or other establishments where more than half of the dwelling units are used on a transient basis, provided that legally authorized wagering or gambling activities are not conducted at or in connection with such facilities.

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For instance, we may be subject to federal income taxation on all or part of the built-in gain that was present on the last date an asset was owned by a C corporation, if we succeed to a carryover tax basis in that asset directly or indirectly from such C corporation and if we sell the asset during the five year period beginning on the day the asset ceased being owned by such C corporation.

To the extent of our income and gains in a taxable year that are subject to the built-in gains tax, net of any taxes paid on such income and gains with respect to that taxable year, our taxable dividends paid in the following year will be potentially eligible for taxation to

noncorporate U.S.

To the extent of our

income and gains in a taxable year that are subject to the built-in gains tax, net of any taxes paid on such income and gains with respect to that taxable year, our taxable dividends paid in the following year will be potentially eligible for taxation to noncorporate U.S.

shareholders at the preferential tax rates for “qualified dividends” as described below under the heading “—Taxation of Taxable U.S.

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federal income tax purposes as true leases, rather than as sales or financing arrangements, and we believe this to be the case.

Like-Kind Exchanges

We have in the past disposed of properties in transactions intended to qualify as like-kind exchanges under the IRC, and may continue this practice in the future.

Such like-kind exchanges are intended to result in the deferral of gain for U.S.

federal income tax purposes.

The failure of any such transaction to qualify as a like-kind exchange could subject us to U.S.

federal income tax, possibly including the 100% prohibited transaction tax, depending on the facts and circumstances surrounding the particular transaction.

Distributions to our Shareholders

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shareholders whose total adjusted income exceeds the applicable thresholds, the maximum federal income tax rate for long-term capital gains and most corporate dividends is generally 20%.

However, because we are not generally

subject to federal income tax on the portion of our “real estate investment trust taxable income” distributed to our shareholders, dividends on our shares generally are not eligible for these preferential tax rates, except that any distribution of C corporation earnings and profits and taxed built-in gain items will potentially be eligible for these preferential tax rates.

However, because we are not generally subject to federal income tax on the portion of our “real estate investment trust taxable income” distributed to our shareholders, dividends on our shares generally are not eligible for these preferential tax rates, except that any distribution of C corporation

earnings and profits and taxed built-in gain items will potentially be eligible for these preferential tax rates.

As a result, our ordinary dividends generally are taxed at the higher federal income tax rates applicable to ordinary income (subject to the lower effective tax rates applicable to qualified REIT dividends via the deduction-without-outlay mechanism of Section 199A of the IRC, which is generally available to our noncorporate U.S.

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national securities exchange;

cannot be sure that our shares will continue to be so listed in future taxable years or that any class of our shares that we may issue in the future will be so listed.

however, we cannot be sure that our shares will continue to be so listed in future taxable years or that any class of our shares that we may issue in the future will be so listed.

Distributions .

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shareholder would be able to offset as a credit against its resulting U.S.

federal income tax liability its proportionate share of the tax paid by us on the undistributed capital gain treated as distributed to the non-U.S.

federal income tax liability its proportionate share of the tax paid by us on the undistributed capital

gain treated as distributed to the non-U.S.

shareholder, and receive from the IRS a refund to the extent its proportionate share of the tax paid by us were to exceed the non-U.S.

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Fiduciaries considering an investment in our securities should consult their own legal advisors if they have any concern as to whether the investment is consistent with the foregoing criteria or is otherwise appropriate.

The sale of our securities to an ERISA Plan or Non-ERISA Plan is in no respect a representation by us or any underwriter of the securities that the investment

meets all relevant legal requirements with respect to investments by the arrangements generally or any particular arrangement, or that the investment is appropriate for arrangements generally or any particular arrangement.

The sale of our securities to an ERISA Plan or Non-ERISA Plan is in no respect a representation by us or any underwriter of the securities that the investment meets all relevant legal requirements with respect to investments by the arrangements generally or any particular arrangement, or that the investment is appropriate for arrangements generally or any particular arrangement.

Prohibited Transactions

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The regulation provides that whether a security is “freely transferable” is a factual question to be determined on the basis of all relevant facts and circumstances.

The regulation further provides that, where a security is part of an offering in which the minimum investment is $10,000 or less, some restrictions on transfer ordinarily will not, alone or in combination, affect a finding that these securities are freely transferable.

The regulation further provides that, where a security is part of an offering in which the

minimum investment is $10,000 or less, some restrictions on transfer ordinarily will not, alone or in combination, affect a finding that these securities are freely transferable.

The restrictions on transfer enumerated in the regulation as not affecting that finding include:

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• any limitation or restriction on transfer or assignment that is not imposed by the issuer or a person acting on behalf of the issuer.

transferability of our shares exist, other than those that are enumerated under the regulation as not affecting the free transferability of shares.

We believe that the restrictions imposed under our declaration of trust and bylaws on the transfer of shares do not result in the failure of our shares to be “freely transferable.” Furthermore, we believe that no other facts or circumstances limiting the transferability of our shares exist, other than those that are enumerated under the regulation as not affecting the free transferability of shares.

In addition, we do not expect or intend to impose in the future, or to permit any person to impose on our behalf, any limitations or restrictions on transfer that would not be among the enumerated permissible limitations or restrictions.

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

What changed 10-K

Item 1. Business