What changed in this filing

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Item 1. Financial Statements

2025-08-05 compared with 2025-05-06 · 257 added, 155 removed, 465 unchanged (47% of the section changed)

3 unchanged sentences

(dollars in thousands, except per share data)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Real estate properties:

35 unchanged sentences

(amounts in thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Hotel operating revenues $ 404,405 $ 412,486 $ 739,368 $ 748,722

8 unchanged sentences

Total expenses 438,599 474,447 885,901 890,320

Gain (loss) on sale of real estate, net 746 ( 2,963 )

(Loss) gain on sale of real estate, net ( 156 ) ( 32 ) 590 ( 2,995 )

Interest income 822 819 2,071 2,781

1 unchanged sentence

( 102,679 ) ( 93,850 ) ( 204,196 ) ( 185,264 )

Loss on early extinguishment of debt, net — ( 16,048 ) — ( 16,048 )

Loss before income tax expense and equity in losses of an investee ( 37,176 ) ( 70,610 ) ( 148,821 ) ( 142,648 )

22 unchanged sentences

Balance at March 31, 2025 166,646,721 1,666 ( 5,908,632 ) 4,560,982 2,078,539 2,018 734,573

Net loss — — — — ( 38,159 ) — ( 38,159 )

Equity interest in investee’s unrealized gains — — — — — 155 155

Common share grants 282,975 3 — 1,136 — — 1,139

Common share repurchases ( 28,417 ) — — ( 59 ) — — ( 59 )

Common share forfeitures ( 40,449 ) — — ( 38 ) — — ( 38 )

Distributions — — ( 1,667 ) — — — ( 1,667 )

Balance at June 30, 2025 166,860,830 $ 1,669 $ ( 5,910,299 ) $ 4,562,021 $ 2,040,380 $ 2,173 $ 695,944

Balance at December 31, 2023 165,769,595 $ 1,658 $ ( 5,805,816 ) $ 4,557,473 $ 2,470,500 $ 2,318 $ 1,226,133

5 unchanged sentences

Balance at March 31, 2024 165,768,058 1,658 ( 5,838,970 ) 4,557,890 2,392,117 1,974 1,114,669

Net loss — — — — ( 73,850 ) — ( 73,850 )

Equity interest in investee’s unrealized losses — — — — — ( 192 ) ( 192 )

Common share grants 146,040 1 — 1,395 — — 1,396

Common share repurchases ( 10,261 ) — — ( 65 ) — — ( 65 )

Distributions — — ( 33,152 ) — — — ( 33,152 )

Balance at June 30, 2024 165,903,837 $ 1,659 $ ( 5,872,122 ) $ 4,559,220 $ 2,318,267 $ 1,782 $ 1,008,806

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net loss $ ( 154,594 ) $ ( 152,233 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 164,130 188,781

1 unchanged sentence

Straight line rental income ( 6,561 ) ( 10,546 )

Loss on early extinguishment of debt, net — 16,048

Loss on asset impairment 54,721 37,338

7 unchanged sentences

Due to related persons 1,201 ( 4,729 )

Net cash provided by (used in) operating activities 38,200 ( 926 )

Net cash provided by operating activities 38,193 42,893

Cash flows from investing activities:

1 unchanged sentence

Hotel managers’ purchases with restricted cash ( 2,064 ) ( 2,869 )

Real estate acquisition deposits

Real estate acquisitions and deposits ( 31,353 ) —

Net proceeds from sale of real estate 47,101 5,844

3 unchanged sentences

Repayment of mortgage notes payable ( 979 ) ( 979 )

Proceeds from senior unsecured notes, net of discounts — 1,165,007

Repayments of senior unsecured notes — ( 1,162,520 )

Borrowings under variable funding note 45,000 —

Borrowings under revolving credit facility 50,000 —

Repayments of revolving credit facility ( 100,000 ) —

10 unchanged sentences

(dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Supplemental cash flow information:

Cash paid for interest $ 185,533 $ 184,737

Cash (refunded) paid for income taxes

$ ( 183 ) $ 115

Cash paid for income taxes $ 1,897 $ 2,886

Non-cash investing activities:

Real estate improvements accrued, not paid $ 15,668 $ 37,499

Non-cash financing activities:

Extinguishment of senior unsecured notes $ — $ ( 2,569 )

Supplemental disclosure of cash and cash equivalents and restricted cash:

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows:

As of March 31,

As of June 30,

Cash and cash equivalents $ 63,176 $ 14,626

9 unchanged sentences

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 service-focused retail net lease properties.

At March 31, 2025, we owned, directly and through our subsidiaries, 202 hotels and 739 service-focused retail net lease properties.

At June 30, 2025, we owned, directly and through our subsidiaries, 200 hotels and 742 service-focused retail net lease properties.

Basis of Presentation

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We have concluded that we must consolidate each of our wholly owned TRSs because we are the entity with the power to direct the activities that most significantly impact such VIEs’ performance and we have the obligation to absorb losses or the right to receive benefits from each VIE that could be significant to the VIE and are, therefore, the primary beneficiary of each VIE.

The assets of our TRSs were $ 157,084 and $ 144,079 as of March 31, 2025 and December 31, 2024, respectively, and consist primarily of our TRSs’ investment in Sonesta International Hotels Corporation’s, or, collectively with its parent and subsidiaries, Sonesta’s, common stock and amounts due from and working capital advances to certain of our hotel managers.

The liabilities of our TRSs were $ 94,169 and $ 78,749 as of March 31, 2025 and December 31, 2024, respectively, and consist primarily of amounts payable to certain of our hotel managers.

The assets of our TRSs were $ 164,817 and $ 144,079 as of June 30, 2025 and December 31, 2024, respectively, and consist primarily of our TRSs’ investment in Sonesta International Hotels Corporation’s, or, collectively with its parent and subsidiaries, Sonesta’s, common stock and amounts due from and working capital advances to certain of our hotel managers.

The liabilities of our TRSs were $ 101,712 and $ 78,749 as of June 30, 2025 and December 31, 2024, 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.

22 unchanged sentences

We recognize rental income from operating leases on a straight line basis over the terms of the lease agreements.

We increased rental income by $ 3,878 and $ 5,768 for the three months ended March 31, 2025 and 2024, respectively, to record scheduled rent changes under certain of our leases on a straight line basis.

Other assets, net, includes $ 87,001 and $ 81,574 of straight line rent receivables at March 31, 2025 and December 31, 2024, respectively.

We increased rental income by $ 2,683 and $ 4,778 for the three months ended June 30, 2025 and 2024, respectively, and increased rental income by $ 6,561 and $ 10,546 for the six months ended June 30, 2025 and 2024, respectively, to record scheduled rent changes under certain of our leases on a straight line basis.

Other assets, net, includes $ 90,969 and $ 81,574 of straight line rent receivables at June 30, 2025 and December 31, 2024, respectively.

Certain of our lease agreements require additional percentage rent if gross revenues of our properties exceed certain thresholds defined in our lease agreements.

We determine percentage rent due to us under our leases monthly, quarterly or annually, as applicable, depending on the specific lease terms, and recognize it when all contingencies are met and the rent is earned.

We recorded percentage rent of $ 846 and $ 544 for the three months ended March 31, 2025 and 2024, respectively.

We recorded percentage rent of $ 501 and $ 471 for the three months ended June 30, 2025 and 2024, respectively, and $ 1,347 and $ 1,015 for the six months ended June 30, 2025 and 2024, respectively.

Per Common Share Amounts

2 unchanged sentences

Unvested common share awards and other potentially dilutive common shares, together with the related impact on earnings, are considered when calculating diluted earnings per common share.

The calculation of basic and diluted earnings per common share is as follows (amounts in thousands, except per share data):

Three Months Ended March 31,

Net loss $ ( 116,435 ) $ ( 78,383 )

Income attributable to unvested participating securities ( 10 ) ( 122 )

Net loss used in calculating earnings per common share $ ( 116,445 ) $ ( 78,505 )

Denominators:

Weighted average common shares outstanding (basic and diluted) 165,615 165,158

Net loss per common share (basic and diluted) $ ( 0.70 ) $ ( 0.48 )

For the three and six months ended June 30, 2025 and 2024, there were no dilutive common shares and certain unvested common shares were not included in the calculation of diluted earnings per common share because to do so would have been antidilutive.

Real Estate Properties

As of March 31, 2025, we owned 202 hotels with an aggregate of 35,359 rooms or suites and 739 service-focused retail net lease properties with an aggregate of 13,189,476 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 book value of $ 9,589,528 , including $ 1,722,906 related to properties classified as held for sale as of March 31, 2025.

We funded capital improvements to certain of our properties of $ 45,869 and $ 68,782 during the three months ended March 31, 2025 and 2024, respectively.

As of June 30, 2025, we owned 200 hotels with an aggregate of 35,101 rooms or suites and 742 service-focused retail net lease properties with an aggregate of 13,162,020 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 book value of $ 9,541,028 , including $ 1,689,398 related to properties classified as held for sale as of June 30, 2025.

We funded capital improvements to certain of our properties of $ 84,944 and $ 135,124 during the six months ended June 30, 2025 and 2024, respectively.

SERVICE PROPERTIES TRUST

1 unchanged sentence

(dollars in thousands, except per share amounts)

From April 1, 2025 through May 2, 2025, we acquired three net lease properties with a total of 18,218 square feet for a combined purchase price of $ 12,597 , excluding closing costs.

During the six months ended June 30, 2025, we acquired seven net lease properties with a total of 83,436 square feet for a combined purchase price of $ 29,923 , excluding closing costs.

We accounted for these transactions as acquisitions of assets and allocated the purchase price based on the estimated fair value of the acquired assets as follows:

Quarter Acquired Property Type Number of Properties Square Feet Purchase Price (1)

Land Buildings, Improvements and Equipment Acquired Real Estate Leases

Q2 2025 Net Lease 7 83,436 $ 30,149 $ 6,036 $ 19,621 $ 4,492

(1) Purchase price is the gross contract price, plus closing costs of $ 226 .

From July 1, 2025 through August 1, 2025, we acquired seven net lease properties with a total of 54,141 square feet for a combined purchase price of $ 14,524 , excluding closing costs.

We have also entered into agreements to acquire six net lease properties with a total of 13,250 square feet for a combined purchase price of $ 10,254 , excluding closing costs.

1 unchanged sentence

accordingly, we cannot be sure that we will complete these acquisitions, that these acquisitions will not be delayed or that the terms will not change.

During the three months ended March 31, 2025, we sold seven properties for a combined sales price of $ 22,700 , excluding closing costs.

During the six months ended June 30, 2025, we sold 13 properties for a combined sales price of $ 49,296 , excluding closing costs.

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 in our business.

1 unchanged sentence

Quarter Sold Property Type Number of Properties Rooms or Suites / Square Feet Gross Sales Price (1)

Gain on Sale of Real Estate, net

Hotel 4 514 $ 19,600 $ 403

Net Lease 3 103,043 3,100 343

Gain (Loss) on Sale of Real Estate, net

Q1 2025 Hotel 4 514 $ 19,600 $ 403

Q1 2025 Net Lease 3 103,043 3,100 343

Q2 2025 Hotel 2 258 12,900 1,883

Q2 2025 Net Lease 4 140,512 13,696 ( 2,039 )

13 772 / 243,555

1 unchanged sentence

(1) Gross sales price is the gross contract price, excluding closing costs.

As of March 31, 2025, we had 118 hotels with a total of 15,417 keys and seven net lease properties with a total of 82,302 square feet classified as held for sale.

As of June 30, 2025, we had 116 hotels with a total of 15,159 keys and nine net lease properties with a total of 123,656 square feet classified as held for sale.

See Note 14 for further information on certain of these properties.

The following table summarizes the major class of assets and liabilities by our hotel investments and net lease investments segments as of March 31, 2025:

As of March 31, 2025

The following table summarizes the major class of assets and liabilities by our hotel investments and net lease investments segments as of June 30, 2025:

As of June 30, 2025

Hotels Net Lease Total

8 unchanged sentences

(1) Other assets, net includes working capital of $ 15,298 for our hotel investments segment as described in Note 6.

From April 1, 2025 through May 2, 2025, we sold one net lease property with 2,053 square feet for a sales price of $ 365 , excluding closing costs.

We have also entered into agreements to sell four hotels with a total of 492 keys for a combined sales price of $ 26,500 , excluding closing costs, and one net lease property with 1,122 square feet for a sales price of $ 395 , excluding closing costs.

SERVICE PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

From July 1, 2025 through August 1, 2025, we sold two hotels with a total of 234 keys for a combined sales price of $ 13,100 , excluding closing costs, and one net lease property with 33,106 square feet for a sales price of $ 850 , excluding closing costs.

We have also entered into agreements to sell 114 hotels with a total of 14,925 keys for a combined sales price of $ 919,952 , excluding closing costs, and two net lease properties with 10,301 square feet for a combined sales price of $ 1,395 , excluding closing costs.

These pending sales are subject to conditions;

accordingly, we cannot be sure that we will complete these sales, that these sales will not be delayed or that the terms will not change.

We are at various stages of selling 114 hotels with a total of 14,925 keys and six net lease properties with a total of 80,249 square feet for sale.

We believe it is probable that the sales of these properties will be completed within one year.

We are at various stages of selling six net lease properties with a total of 80,249 square feet.

We believe it is probable that the sales of the 114 hotel properties will be completed in the second half of 2025 and the sales of the remainder of these properties will be completed within one year.

Management Agreements and Leases

As of March 31, 2025, we owned 202 hotels included in four operating agreements and 739 service-focused retail properties net leased to 175 tenants.

As of June 30, 2025, we owned 200 hotels included in four operating agreements and 742 service-focused retail net lease properties leased to 174 tenants.

We do not operate any of our properties.

SERVICE PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

As of March 31, 2025, all 202 of our hotels were managed by subsidiaries of the following companies:

As of June 30, 2025, all 200 of our hotels were managed by subsidiaries of the following companies:

Sonesta ( 175 hotels), Hyatt Hotels Corporation, or Hyatt ( 17 hotels), Radisson Hospitality, Inc., or Radisson ( seven hotels), and InterContinental Hotels Group, plc, or IHG ( one hotel).

As of March 31, 2025, our 739 service-focused retail net lease properties were leased by 175 tenants, including 175 travel centers leased to TravelCenters of America Inc., or TA, our largest tenant.

As of June 30, 2025, our 742 service-focused retail net lease properties were leased by 174 tenants, including 175 travel centers leased to TravelCenters of America Inc., or TA, our largest tenant.

Hereinafter, these companies are sometimes referred to as our managers and/or tenants, or collectively, operators.

1 unchanged sentence

Sonesta Agreement

As of March 31, 2025, Sonesta managed 39 of our full service hotels, 99 of our extended stay hotels and 39 of our select service hotels pursuant to management agreements for all of the hotels, which we collectively refer to as our Sonesta agreement.

As of March 31, 2025, the hotels Sonesta managed for us comprised approximately 49.8 % of our total historical real estate investments.

As of June 30, 2025, Sonesta managed 39 of our full service hotels, 98 of our extended stay hotels and 38 of our select service hotels pursuant to management agreements for all of the hotels, which we collectively refer to as our Sonesta agreement.

As of June 30, 2025, the hotels Sonesta managed for us comprised approximately 49.8 % of our total historical real estate investments.

Our Sonesta agreement, which expires on January 31, 2037 and includes two 15 -year renewal options, provides that we are paid an annual owner’s priority return 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.

1 unchanged sentence

We do not have any security deposits or guarantees for our Sonesta hotels.

We realized returns under our Sonesta agreement of $ 18,169 and $ 27,375 during the three months ended March 31, 2025 and 2024, respectively.

We realized returns under our Sonesta agreement of $ 65,518 and $ 75,130 during the three months ended June 30, 2025 and 2024, respectively, and $ 83,687 and $ 102,505 during the six months ended June 30, 2025 and 2024, respectively.

Our Sonesta agreement requires us to fund capital expenditures made at our hotels.

We incurred capital expenditures for hotels included in our Sonesta agreement in an aggregate amount of $ 41,561 and $ 46,996 during the three months ended March 31, 2025 and 2024, respectively, which resulted in increases in our contractual annual owner’s priority returns of $ 2,494 and $ 2,820 , respectively.

Our annual priority return under our Sonesta agreement as of March 31, 2025 was $ 354,924 .

We owed Sonesta $ 7,517 and $ 18,199 for capital expenditures and other reimbursements at March 31, 2025 and December 31, 2024, respectively.

Sonesta owed us $ 19,908 and $ 3,911 in owner’s priority returns and other amounts as of March 31, 2025 and December 31, 2024, respectively.

We incurred capital expenditures for hotels included in our Sonesta agreement in an aggregate amount of $ 78,807 and $ 106,366 during the six months ended June 30, 2025 and 2024, respectively, which resulted in increases in our contractual annual owner’s priority returns of $ 4,728 and $ 6,382 , respectively.

Our annual priority return under our Sonesta agreement as of June 30, 2025 was $ 355,093 .

We owed Sonesta $ 6,864 and $ 18,199 for capital expenditures and other reimbursements at June 30, 2025 and December 31, 2024, respectively.

Sonesta owed us $ 29,219 and $ 3,911 in owner’s priority returns and other amounts as of June 30, 2025 and December 31, 2024, 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 condensed consolidated balance sheets.

Our Sonesta agreement requires 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 owner’s priority returns due to us.

No FF&E escrow deposits were required during either of the three months ended March 31, 2025 or 2024.

Pursuant to our Sonesta agreement, we incurred management, reservation and system fees and reimbursement costs for certain guest loyalty, marketing programs and third-party reservation transmission fees of $ 26,276 and $ 27,015 for the three months ended March 31, 2025 and 2024, respectively.

No FF&E escrow deposits were required during either of the three or six months ended June 30, 2025 or 2024.

SERVICE PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

Pursuant to our Sonesta agreement, we incurred management, reservation and system fees and reimbursement costs for certain guest loyalty, marketing programs and third-party reservation transmission fees of $ 31,883 and $ 32,969 for the three months ended June 30, 2025 and 2024, respectively, and $ 58,159 and $ 59,984 for the six months ended June 30, 2025 and 2024, respectively.

These fees and costs are included in hotel operating expenses in our condensed consolidated statements of comprehensive income (loss).

In addition, we incurred procurement and construction supervision fees payable to Sonesta of $ 621 and $ 400 for the three months ended March 31, 2025 and 2024, respectively, which amounts have been capitalized in our condensed consolidated balance sheets and are depreciated over the estimated useful lives of the related capital assets.

In addition, we incurred procurement and construction supervision fees payable to Sonesta of $ 625 and $ 587 for the three months ended June 30, 2025 and 2024, respectively, and $ 1,246 and $ 987 for the six months ended June 30, 2025 and 2024, respectively, which amounts have been capitalized in our condensed consolidated balance sheets and are depreciated over the estimated useful lives of the related capital assets.

We are required to maintain working capital for each of our hotels managed by Sonesta and have advanced a fixed amount based on the number of rooms in each hotel to meet the cash needs for hotel operations.

As of March 31, 2025 and December 31, 2024, we had advanced $ 45,952 and $ 46,466 , respectively, of initial working capital to Sonesta net of any working capital returned to us on termination of the applicable management agreements in connection with hotels we have sold.

As of June 30, 2025 and December 31, 2024, we had advanced $ 45,694 and $ 46,466 , respectively, of initial working capital to Sonesta net of any working capital returned to us on termination of the applicable management agreements in connection with hotels we have sold.

These amounts are included in other assets, net and assets of properties held for sale, as applicable, in our condensed consolidated balance sheets.

Any remaining working capital would be returned to us upon termination in accordance with the terms of our Sonesta agreement.

Of the 175 hotels managed by Sonesta pursuant to our Sonesta agreement, we have identified 122 hotels to sell in 2025 with a total of 15,931 keys.

As of August 1, 2025, we sold eight of these hotels with a total of 1,006 keys for a combined sales price of $ 45,600 , excluding closing costs, and entered into agreements to sell the remaining 114 hotels with a total of 14,925 keys for a combined sales price of $ 919,952 , excluding closing costs.

We and Sonesta have agreed to amend and restate our existing management agreements for the 59 retained hotels managed by Sonesta and waive any termination fees under the existing Sonesta agreements associated with the sale of the 122 hotels.

Among other things, the changes to the agreements between us and Sonesta are as follows:

• Each retained hotel will have its own individual management agreement, performance under which shall not be subject to pooling, cross-default, or similar contractual ties across more than one hotel,

• The initial term of each management agreement will be for a period of 15 years and may be renewed for two additional terms of ten years each,

• Fees payable by us will be modified to provide better alignment with market terms, which modifications are not expected to result in any material cost impact to us, and

• Performance provisions will be aligned with individual hotel measurement for both termination rights and incentive fees, both based on current estimated value rather than historical cost.

See Notes 7 and 11 for further information regarding our relationships, agreements and transactions with Sonesta.

SERVICE PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

Hyatt Agreement

As of March 31, 2025, Hyatt managed 17 of our select service hotels pursuant to a portfolio management agreement that expires on March 31, 2031, or our Hyatt agreement, and provides that, as of March 31, 2025, we are to be paid an annual owner’s priority return of $ 17,400 .

As of June 30, 2025, Hyatt managed 17 of our select service hotels pursuant to a portfolio management agreement that expires on March 31, 2031, or our Hyatt agreement, and provides that, as of June 30, 2025, we are to be paid an annual owner’s priority return of $ 17,400 .

Any returns we receive from Hyatt are currently limited to the hotels’ available cash flows, if any, after payment of operating expenses.

Hyatt has provided us with a $ 30,000 limited guarantee for 75 % of the aggregate annual owner’s priority returns due to us that became effective upon substantial completion of planned renovations of the hotels, which occurred in January 2025.

We realized returns under our Hyatt agreement of $ 3,127 during the three months ended March 31, 2025 and a net operating loss of $ 1,108 during the three months ended March 31, 2024.

During the three months ended March 31, 2025, the hotels under this agreement generated cash flows that were less than the guaranteed owner’s priority level due to us for this period, and we reduced hotel operating expenses by $ 1,367 , to record the guaranteed amount of the shortfall due from Hyatt.

The available balance of the guaranty was $ 28,633 as of March 31, 2025.

During the three months ended March 31, 2025, we incurred capital expenditures for certain hotels included in our Hyatt agreement of $ 1,619 ;

however, the contractual annual owner’s priority returns did not increase as the cost of the renovations had reached the maximum stated in our management agreement with Hyatt.

During the three months ended March 31, 2024, we incurred capital expenditures for certain hotels included in our Hyatt agreement of $ 20,225 , which resulted in an increase in our contractual annual owner’s priority returns of $ 1,214 .

We realized returns under our Hyatt agreement of $ 3,263 and $ 3,314 during the three months ended June 30, 2025 and 2024, respectively, and $ 6,390 and $ 2,206 during the six months ended June 30, 2025 and 2024, respectively.

During the six months ended June 30, 2025, the hotels under this agreement generated cash flows that were less than the guaranteed owner’s priority level due to us for this period, and we reduced hotel operating expenses by $ 654 , to record the guaranteed amount of the shortfall due from Hyatt.

The available balance of the guaranty was $ 29,346 as of June 30, 2025.

During the six months ended June 30, 2025 and 2024, we incurred capital expenditures for certain hotels included in our Hyatt agreement of $ 1,968 and $ 23,377 , respectively.

SERVICE PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

Radisson Agreement

As of March 31, 2025, Radisson managed seven of our full service hotels pursuant to a portfolio management agreement that expires on July 31, 2031, or our Radisson agreement, and provides that we are to be paid an annual owner’s priority return of $ 10,906 .

Radisson has provided us with a $ 22,000 limited guarantee for 75 % of the aggregate annual owner’s priority returns due to us that became effective on January 1, 2023, subject to adjustment for planned renovations of certain hotels, which occurred in December 2024.

We realized returns under our Radisson agreement of $ 1,403 and $ 1,451 during the three months ended March 31, 2025 and 2024, respectively.

During the three months ended March 31, 2025 and 2024, the hotels under this agreement generated cash flows that were less than the guaranteed owner’s priority level due to us for these periods, and we reduced hotel operating expenses by $ 2,045 and $ 522 , respectively, to record the guaranteed amount of the shortfalls due from Radisson.

The available balance of the guaranty was $ 19,305 as of March 31, 2025.

We did not incur any capital expenditures during the three months ended March 31, 2025 for the hotels included in our Radisson agreement.

During the three months ended March 31, 2024, we incurred capital expenditures of $ 286 for the hotels included in our Radisson agreement, which resulted in an increase in our contractual owner’s priority returns of $ 17 .

As of June 30, 2025, Radisson managed seven of our full service hotels pursuant to a portfolio management agreement that expires on July 31, 2031, or our Radisson agreement, and provides that we are to be paid an annual owner’s priority return of $ 10,911 .

Radisson has provided us with a $ 22,000 limited guarantee for 75 % of the aggregate annual owner’s priority returns due to us.

We realized returns under our Radisson agreement of $ 2,038 and $ 1,789 during the three months ended June 30, 2025 and 2024, respectively, and $ 3,441 and $ 3,240 during the six months ended June 30, 2025 and 2024, respectively.

During the six months ended June 30, 2025, the hotels under this agreement generated cash flows that were less than the guaranteed owner’s priority level due to us for the period, and we reduced hotel operating expenses by $ 2,820 , to record the guaranteed amount of the shortfalls due from Radisson.

The available balance of the guaranty was $ 18,530 as of June 30, 2025.

We did not incur any capital expenditures during the six months ended June 30, 2025 for the hotels included in our Radisson agreement.

During the six months ended June 30, 2024, we incurred capital expenditures of $ 544 for the hotels included in our Radisson agreement, which resulted in an increase in our contractual owner’s priority returns of $ 32 .

IHG Agreement

Our management agreement with IHG for one hotel expires on January 31, 2026.

We realized returns under our management agreement with IHG of $ 2,243 and $ 1,593 during the three months ended March 31, 2025 and 2024, respectively.

Our management agreement with IHG for one hotel expires on January 31, 2026 and we have an option to extend the term for one year .

We realized returns under our management agreement with IHG of $ 776 and $ 1,536 during the three months ended June 30, 2025 and 2024, respectively, and $ 3,019 and $ 3,129 during the six months ended June 30, 2025 and 2024, respectively.

Any returns we receive from IHG are limited to the hotel’s available cash flows, if any, after payment of operating expenses.

During the three months ended March 31, 2025 and 2024, we incurred capital expenditures of $ 975 and $ 149 , respectively, for the hotel included in our IHG agreement.

During the six months ended June 30, 2025 and 2024, we incurred capital expenditures of $ 1,023 and $ 221 , respectively, for the hotel included in our IHG agreement.

Net Lease Portfolio

As of March 31, 2025, we owned 739 service-focused retail net lease properties with an aggregate of 13,189,476 square feet with leases requiring annual minimum rents of $ 380,568 with a weighted (by annual minimum rents) average remaining lease term of 7.8 years.

As of June 30, 2025, we owned 742 service-focused retail net lease properties with an aggregate of 13,162,020 square feet with leases requiring annual minimum rents of $ 386,521 with a weighted (by annual minimum rents) average remaining lease term of 7.6 years.

Our net lease properties were 97.3 % occupied and leased by 174 tenants operating under 136 brands in 21 distinct industries.

2 unchanged sentences

(dollars in thousands, except per share amounts)

As of March 31, 2025, TA is our largest tenant, representing 28.8 % of our total historical real estate investments.

We lease to TA a total of 175 travel centers under five master leases that expire in 2033, or our TA leases, subject to TA’s right to extend those leases, and require annual minimum rents of $ 259,080 as of March 31, 2025.

As of June 30, 2025, TA is our largest tenant, representing 28.7 % of our total historical real estate investments.

TA receives a monthly rent credit totaling $ 25,000 per year over the 10-year initial term of the TA leases as a result of rent it prepaid.

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However, TA is required to maintain the leased travel centers, including structural and non-structural components.

BP Corporation North America Inc., a subsidiary of BP p.l.c., guarantees payment under each of the TA leases, limited to an aggregate cap which was $ 3,037,475 as of March 31, 2025.

We recognized rental income from our TA leases of $ 67,834 for each of the three months ended March 31, 2025 and 2024.

Rental income was increased by $ 3,039 and $ 4,309 for the three months ended March 31, 2025 and 2024, respectively, to record the scheduled rent changes on a straight line basis.

As of March 31, 2025 and December 31, 2024, we had receivables for current rent amounts owed to us by TA and straight line rent adjustments of $ 44,811 and $ 40,097 , respectively, included in other assets, net in our condensed consolidated balance sheets.

BP Corporation North America Inc., a subsidiary of BP p.l.c., guarantees payment under each of the TA leases, limited to an aggregate cap which was $ 3,037,475 as of June 30, 2025.

We recognized rental income from our TA leases of $ 67,834 for each of the three months ended June 30, 2025 and 2024, and $ 135,668 for each of the six months ended June 30, 2025 and 2024.

Rental income was increased by $ 2,607 and $ 3,885 for the three months ended June 30, 2025 and 2024, respectively, and increased by $ 5,646 and $ 8,194 for the six months ended June 30, 2025 and 2024, respectively, to record the scheduled rent changes on a straight line basis.

As of June 30, 2025 and December 31, 2024, we had receivables for current rent amounts owed to us by TA and straight line rent adjustments of $ 49,702 and $ 40,097 , respectively, included in other assets, net in our condensed consolidated balance sheets.

Our other net lease agreements generally provide for minimum rent payments and in addition may include variable payments.

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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.

We recognized rental income from our net lease properties (excluding TA) of $ 32,382 and $ 32,180 for the three months ended March 31, 2025 and 2024, respectively, which included $ 839 and $ 1,459 , respectively, of adjustments to record scheduled rent changes under certain of our leases on a straight line basis.

We recognized rental income from our net lease properties (excluding TA) of $ 31,197 and $ 32,628 for the three months ended June 30, 2025 and 2024, respectively, which included $ 76 and $ 893 , respectively, of adjustments to record scheduled rent changes under certain of our leases on a straight line basis, and $ 63,579 and $ 64,808 for the six months ended June 30, 2025 and 2024, respectively, which included $ 915 and $ 2,352 , respectively, of adjustments to record scheduled rent changes under certain of our leases on a straight line basis.

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.

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We recognize all changes in the collectability assessment for an operating lease as an adjustment to rental income.

We recorded reserves for uncollectable amounts and reduced rental income by $ 235 and $ 665 for the three months ended March 31, 2025 and 2024, respectively, based on our assessment of the collectability of rents.

We had reserves for uncollectable rents of $ 4,959 and $ 5,058 as of March 31, 2025 and December 31, 2024, respectively, included in other assets, net in our condensed consolidated balance sheets.

We recorded reserves for uncollectable amounts and reduced rental income by $ 1,142 and $ 1,377 for the three and six months ended June 30, 2025, respectively, based on our assessment of the collectability of rents.

We recorded reserves for uncollectable amounts and reduced rental income by $ 377 and $ 1,042 for the three and six months ended June 30, 2024, respectively, based on our assessment of the collectability of rents.

We had reserves for uncollectable rents of $ 6,016 and $ 5,058 as of June 30, 2025 and December 31, 2024, respectively, included in other assets, net in our condensed consolidated balance sheets.

Equity Method Investment

As of both March 31, 2025 and December 31, 2024, we owned 34 % of Sonesta’s outstanding common stock.

As of both June 30, 2025 and December 31, 2024, we owned 34 % of Sonesta’s outstanding common stock.

We account for our 34 % non-controlling interest in Sonesta under the equity method of accounting.

As of March 31, 2025 and December 31, 2024, our investment in Sonesta had a carrying value of $ 112,024 and $ 115,818 , respectively.

As of June 30, 2025 and December 31, 2024, our investment in Sonesta had a carrying value of $ 111,653 and $ 115,818 , respectively.

On the date of acquisition of our initial equity interest in Sonesta (February 27, 2020), the cost basis of our investment in Sonesta exceeded our proportionate share of Sonesta’s total stockholders’ equity book value by an aggregate of $ 8,000 .

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.

We recorded amortization of the basis difference of $ 65 in each of the three months ended March 31, 2025 and 2024.

We recognized losses of $ 3,947 and $ 5,338 related to our investment in Sonesta for the three months ended March 31, 2025 and 2024, respectively.

These amounts, which include amortization of the basis difference, are included in equity in losses of an investee in our condensed consolidated statements of comprehensive income (loss).

We recorded amortization of the basis difference of $ 65 in each of the three months ended June 30,

SERVICE PROPERTIES TRUST

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(dollars in thousands, except per share amounts)

2025 and 2024, and $ 130 in each of the six months ended June 30, 2025 and 2024.

We recognized losses of $ 526 and $ 2,716 related to our investment in Sonesta for the three months ended June 30, 2025 and 2024, respectively, and losses of $ 4,473 and $ 8,054 for the six months ended June 30, 2025 and 2024, respectively.

These amounts, which include amortization of the basis difference, are included in equity in losses of an investee in our condensed consolidated statements of comprehensive income (loss).

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.

This liability for our investment in Sonesta is included in accounts payable and other liabilities in our condensed consolidated balance sheets and is being amortized on a straight line basis through the initial term of the Sonesta agreement, January 31, 2037, as a reduction to hotel operating expenses in our condensed consolidated statements of comprehensive income (loss).

We reduced hotel operating expenses by $ 621 for each of the three months ended March 31, 2025 and 2024 for amortization of this liability.

As of March 31, 2025 and December 31, 2024, the unamortized balance of this liability was $ 29,374 and $ 29,995 , respectively.

We reduced hotel operating expenses by $ 621 for each of the three months ended June 30, 2025 and 2024 and $ 1,242 for each of the six months ended June 30, 2025 and 2024 for amortization of this liability.

As of June 30, 2025 and December 31, 2024, the unamortized balance of this liability was $ 28,753 and $ 29,995 , respectively.

During the three months ended March 31, 2024, we funded a capital contribution to Sonesta of $ 3,392 to support its growth initiatives, including its franchising efforts.

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See Notes 6 and 11 for further information regarding our relationships, agreements and transactions with Sonesta.

Our principal debt obligations at March 31, 2025 were:

Our principal debt obligations at June 30, 2025 were:

(1) $ 100,000 of outstanding borrowings under our $ 650,000 revolving credit facility;

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Availability of borrowings under our credit agreement is subject to ongoing minimum performance and market values of the collateral properties, satisfying certain financial covenants and other credit facility conditions.

The maturity date of our revolving credit facility is June 29, 2027, and, subject to the payment of an extension fee and meeting certain other conditions, we have an option to further extend the stated maturity date of the facility by two additional six-month periods.

Interest payable on drawings under our revolving credit facility is based on the secured overnight financing rate, or SOFR, plus a margin ranging from 1.50 % to 3.00 % based on our leverage ratio, as defined in our credit agreement, which was 2.50 % as of March 31, 2025.

The maturity date of our revolving credit facility is June 29, 2027, and, subject to the payment of an extension fee and meeting certain other conditions, we have an option to extend the stated maturity date of the facility by two additional six-month periods.

We also pay unused commitment fees of 20 to 30 basis points per annum on the total amount of lending commitments under our revolving credit facility based on amounts outstanding.

As of March 31, 2025 and 2024, the annual interest rate payable on borrowings under our revolving credit facility was 6.91 % and 7.84 %, respectively.

The weighted average interest rate for borrowings under our revolving credit facility was 6.94 % for the three months ended March 31, 2025.

We had no borrowings outstanding under our revolving credit facility for the three months ended March 31, 2024.

As of both March 31, 2025 and May 2, 2025, we had $ 50,000 outstanding under our revolving credit facility and $ 600,000 available for borrowings.

As collateral for all loans and other obligations under our revolving credit facility, certain of our subsidiaries pledged all of their respective equity interests in certain of our direct and indirect property owning subsidiaries, and our pledged subsidiaries provided first mortgage liens on 67 properties, including 64 hotels and three net lease properties, with an aggregate undepreciated book value of $ 1,691,230 as of March 31, 2025.

During the three months ended March 31, 2025, we sold two hotels that previously served as collateral under our revolving credit facility.

In connection with the sales of these hotels, the hotels were released from the collateral pool in accordance with the terms of our revolving credit facility.

As of June 30, 2025 and 2024, the annual interest rate payable on borrowings under our revolving credit facility was 6.89 % and 7.83 %, respectively.

The weighted average annual interest rate for borrowings under our revolving credit facility was 6.91 % and 6.93 % f or the three and six months ended June 30, 2025, respectively.

We had no borrowings outstanding under our revolving credit facility for the three or six months ended June 30, 2024.

As of June 30, 2025, we had $ 100,000 outstanding under our revolving credit facility and $ 550,000 available for borrowings.

On July 1, 2025, we borrowed $ 550,000 under our revolving credit facility as a precautionary measure to preserve financial flexibility.

As of August 1, 2025, our $ 650,000 revolving credit facility was fully drawn.

SERVICE PROPERTIES TRUST

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(dollars in thousands, except per share amounts)

In February 2025, we and our lenders amended the agreement governing our revolving credit facility to reduce the required debt service coverage ratio covenant from 1.50 times to 1.30 times effective with respect to the fourth quarter of 2024 and continuing through the end of the loan term.

In order to exercise the first extension option, we are required to maintain a 1.50 times debt service coverage level as of and for the duration of the extension period.

In February 2025, we and our lenders amended the agreement governing our revolving credit facility to reduce the minimum fixed charge coverage ratio covenant from 1.50 x to 1.30 x effective with respect to the fourth quarter of 2024 and continuing through the end of the loan term.

In order to exercise the first extension option, we are required to maintain a 1.50 x minimum fixed charge coverage ratio level as of and for the duration of the extension period.

We also agreed to change the required collateral property debt yield to 10 % effective with respect to the first quarter of 2025 and continuing through the end of the loan term and to swap collateral properties as follows:

47 hotels with an aggregate of 7,981 keys and an aggregate undepreciated book value of $ 1,375,449 will be released from the collateral pool and 35 travel centers leased to TA, which travel centers we refer to as our TA No.

5 lease, with an aggregate undepreciated book value of $ 598,908 , will be added as collateral to our revolving credit facility.

Of the hotels being released from the collateral pool, 36 hotels with an aggregate of 4,862 keys and an aggregate undepreciated book value of $ 655,514 are part of our hotel disposition plan.

The corresponding equity pledges will be swapped as well.

We expect to complete this collateral swap by the end of the second quarter of 2025.

47 hotels with an aggregate of 7,981 keys were released from the collateral pool and 35 travel centers leased to TA, which we refer to as TA Lease No.

5, were added as collateral to our revolving credit facility.

Our disposition plan includes 36 hotels with an aggregate of 4,862 keys and an aggregate undepreciated book value of $ 650,093 that were released from the collateral pool.

The collateral swap was completed in May 2025.

As of June 30, 2025, our revolving credit facility was secured by 55 properties, including 17 hotels and 38 net lease properties, with an aggregate undepreciated book value of $ 900,148 .

Our debt agreements 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 The RMR Group LLC, or RMR, ceasing to act as our business manager.

1 unchanged sentence

Borrowings under our revolving credit facility are subject to meeting ongoing minimum performance and market values of the collateral properties, satisfying certain financial covenants and other credit facility conditions.

We believe we were in compliance with the terms and conditions of our debt agreements as of March 31, 2025.

As of June 30, 2025, we did not meet the applicable threshold in one of our senior note debt covenants necessary to incur additional debt, and as a result, we will not be able to incur additional debt while the ratio is below the required covenant level.

Redemption of Senior Unsecured Notes

On August 5, 2025, we announced the early redemption of our $ 350,000 5.25 % senior unsecured notes due 2026 at par, plus accrued and unpaid interest to, but excluding the date of redemption.

The redemption is expected to occur on or about September 4, 2025.

Net Lease Mortgage Notes

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Our net lease mortgage notes are summarized below:

Note Class Principal Outstanding as of March 31, 2025

Note Class Principal Outstanding as of June 30, 2025

Coupon Rate Initial Term (in years) Maturity

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The notes mature in February 2028 and may be redeemed without penalty 24 months prior to the scheduled maturity date beginning in February 2026.

The notes are non-recourse and, as of March 31, 2025, were secured by 315 net lease retail properties owned by the Issuer.

As of March 31, 2025, the current leases relating to those properties required annual minimum rents of $ 67,001 and had an aggregate undepreciated book value of $ 760,165 .

The notes are non-recourse and, as of June 30, 2025, were secured by 314 retail net lease properties owned by the Issuer.

During the six months ended June 30, 2025, the Issuer sold one retail net lease property that served as collateral under the notes.

In connection with its sale, the property was released from the collateral pool in accordance with the terms of the agreement.

As of June 30, 2025, the current leases relating to the 314 properties required annual minimum rents of $ 66,464 and had an aggregate undepreciated book value of $ 751,298 .

SERVICE PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

On January 27, 2025, the Issuer issued a variable funding note, or the VFN, secured by the 314 net lease properties that secure our existing $ 605,632 of net lease mortgage notes.

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The VFN requires interest payments only on drawings under the VFN based on SOFR plus a margin of 1.75 %, and an unused commitment fee of 50 basis points per annum paid on undrawn amounts.

As of March 31, 2025, the annual interest rate payable on borrowings under the VFN was 6.16 %.

The weighted average interest rate for borrowings under the VFN was 6.19 % for the three months ended March 31, 2025.

As of March 31, 2025, $ 45,000 was outstanding under the VFN.

SERVICE PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

As of June 30, 2025, the annual interest rate payable on borrowings under the VFN was 6.04 %.

The weighted average annual interest rate for borrowings under the VFN was 6.05 % for the three and six months ended June 30, 2025, respectively.

As of both June 30, 2025 and August 1, 2025, we had $ 45,000 outstanding under the VFN.

Shareholders’ Equity

On March 26, 2025, in accordance with our Trustee compensation arrangements, we awarded 32,490 of our common shares, valued at $ 2.77 per common share, the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day, in connection with the appointment of one of our Managing Trustees as part of his annual compensation.

On June 13, 2025, in accordance with our Trustee compensation arrangements, we awarded 40,425 of our common shares, valued at $ 2.35 per common share, the closing price of our common shares on Nasdaq on that day to each of our seven Trustees as part of their annual compensation.

Share Purchases

During the three months ended March 31, 2025, we purchased 1,539 of our common shares, valued at $ 2.77 per common share, from a former employee of RMR in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.

We withheld and purchased these common shares at their fair market value based upon the trading price of our common shares at the close of trading on Nasdaq, on the applicable purchase date.

During the six months ended June 30, 2025, we purchased 29,956 of our common shares, valued at $ 2.12 per common share, from former officers of ours and certain other former officers and employees of RMR in satisfaction of tax withholding and payment obligations in connection with the vesting of prior awards of our common shares.

We withheld and purchased these common shares at their fair market values based upon the trading prices of our common shares at the close of trading on Nasdaq on the applicable purchase dates.

Distributions

During the three months ended March 31, 2025, we declared and paid a regular quarterly distribution to common shareholders as follows:

During the six months ended June 30, 2025, we declared and paid a regular quarterly distribution to common shareholders as follows:

Declaration Date Record Date Paid Date Dividend Per Common Share Total Distributions

January 16, 2025 January 27, 2025 February 20, 2025 $ 0.01 $ 1,666

On April 10, 2025, we declared a regular quarterly distribution to common shareholders of record as of April 22, 2025 of $ 0.01 per common share, or approximately $ 1,666 .

We expect to pay this distribution on or about May 15, 2025.

April 10, 2025 April 22, 2025 May 15, 2025 0.01 1,667

$ 0.02 $ 3,333

On July 10, 2025, we declared a regular quarterly distribution to common shareholders of record as of July 21, 2025 of $ 0.01 per common share, or approximately $ 1,669 .

We expect to pay this distribution on or about August 14, 2025.

Cumulative Other Comprehensive Income (Loss)

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(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, the office building component of one of our hotels and major renovation or repositioning activities at our hotels that we may request RMR to manage from time to time.

We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR on our behalf.

We are generally not responsible for payment of RMR’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR’s employees assigned to work exclusively or partly at our net lease properties and the office building component of one of our hotels, our share of the wages, benefits and other related costs of RMR’s centralized accounting personnel, our share of RMR’s costs for providing our internal audit function and as otherwise agreed.

Our property level operating expenses are generally incorporated into rents charged to our tenants, including certain payroll and related costs incurred by RMR.

SERVICE PROPERTIES TRUST

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(dollars in thousands, except per share amounts)

For the three months ended March 31, 2025 and 2024, the business management fees, property management fees and construction supervision fees and expense reimbursements recognized in our condensed consolidated financial statements were as follows:

Financial Statement Three Months Ended March 31,

We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR on our behalf.

Our property level operating expenses are generally incorporated into rents charged to our tenants, including certain payroll and related costs incurred by RMR.

For the three and six months ended June 30, 2025 and 2024, the business management fees, property management fees and construction supervision fees and expense reimbursements recognized in our condensed consolidated financial statements were as follows:

Financial Statement Three Months Ended June 30,

Six Months Ended June 30,

Line Item 2025 2024 2025 2024

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General and administrative $ 6,900 $ 7,440 $ 13,830 $ 15,197

$ 6,930 $ 7,757

Pursuant to property management agreement:

2 unchanged sentences

465 1,334 1,122 3,030

Expense reimbursement:

Property level expenses Net lease operating expenses, general and administrative and buildings, improvements and equipment (2)

$ 2,575 $ 2,839 $ 5,319 $ 6,019

(1) The net business management fees we recognized for each of the three months ended March 31, 2025 and 2024 reflect a reduction of $ 896 for the amortization of the liability we recorded in connection with our former investment in The RMR Group Inc., or RMR Inc.

Expense reimbursement Net lease operating expenses, general and administrative and buildings, improvements and equipment (2)

$ 1,105 $ 1,032 $ 2,300 $ 2,126

(1) The net business management fees we recognized for each of the three and six months ended June 30, 2025 and 2024, reflect a reduction of $ 897 and $ 1,793 , respectively, for the amortization of the liability we recorded in connection with our former investment in The RMR Group Inc., or RMR Inc.

(2) Amounts capitalized as buildings, improvements and equipment are depreciated over the estimated useful lives of the related assets.

Based on our common share total return, as defined in our business management agreement, as of March 31, 2025, no incentive fees are included in the net business management fees we recognized for the three months ended March 31, 2025.

Based on our common share total return, as defined in our business management agreement, as of June 30, 2025, no incentive fees are included in the net business management fees we recognized for the three and six months ended June 30, 2025.

The actual amount of annual incentive fees for 2025, if any, will be based on our common share total return, as defined in our business management agreement, for the three-year period ending December 31, 2025, and will be payable in January 2026.

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The consent was approved by our Independent Trustees.

SERVICE PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

Related Person Transactions

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Other officers of RMR, including certain of our officers, serve as managing trustees or officers of certain of these companies.

SERVICE PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

Our Manager, RMR

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RMR also provides certain services to Sonesta.

As of March 31, 2025, we owned 34 % of Sonesta’s outstanding shares of common stock and Sonesta managed 177 of our hotels.

As of June 30, 2025, we owned 34 % of Sonesta’s outstanding shares of common stock and Sonesta managed 175 of our hotels.

See Notes 6 and 7 for further information regarding our relationships, agreements and transactions with Sonesta.

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Our consolidated income tax provision (or benefit) includes the income tax provision (or benefit) related to the operations of our TRSs and certain state and foreign income taxes incurred by us despite our qualification for taxation as a REIT.

During the three months ended March 31, 2025, we recognized income tax expense of $ 843 , which includes $ 353 of state tax expense and $ 490 of foreign tax expense.

During the three months ended March 31, 2024, we recognized income tax expense of $ 1,007 , which includes $ 621 of state tax expense and $ 386 of foreign tax expense.

During the three months ended June 30, 2025, we recognized income tax expense of $ 457 , which includes $ 147 of state tax expense and $ 310 of foreign tax expense.

During the three months ended June 30, 2024, we recognized income tax expense of $ 524 , which includes $ 88 of state tax expense and $ 436 of foreign tax expense.

During the six months ended June 30, 2025, we recognized income tax expense of $ 1,300 , which includes $ 500 of state tax expense and $ 800 of foreign tax expense.

During the six months ended June 30, 2024, we recognized income tax expense of $ 1,531 , which includes $ 709 of state tax expense and $ 822 of foreign tax expense.

SERVICE PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

Segment Information

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(dollars in thousands, except per share amounts)

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Hotels Net Lease Total

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15,273 3,812 19,085

Segment profit 21,765 40,657 62,422

Reconciliation of segment profit:

General and administrative ( 10,218 )

Interest income 752

Interest expense ( 90,132 )

Income tax expense ( 457 )

Equity in losses of an investee ( 526 )

Net loss $ ( 38,159 )

Six Months Ended June 30, 2025

Hotels Net Lease Total

Hotel operating revenues $ 739,368 $ — $ 739,368

Rental income — 199,247 199,247

Total revenues 739,368 199,247 938,615

Labor and benefits (1)

284,875 1,678 286,553

Management fees 27,598 4,197 31,795

Real estate taxes and insurance 58,787 1,459 60,246

Other operating expenses (2)

263,493 3,733 267,226

Depreciation and amortization 92,197 71,933 164,130

Interest expense — 24,673 24,673

Other segment items (3)

51,971 3,322 55,293

Segment (loss) profit ( 39,553 ) 88,252 48,699

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Net loss $ ( 154,594 )

(1) Labor and benefits for our net lease investments segment include property level expense reimbursements as discussed in Note 10.

(1) Labor and benefits for our net lease investments segment include expense reimbursements as discussed in Note 10.

(2) Other operating expenses for each reportable segment include expenses such as repairs and maintenance, utilities and other costs incurred in connection with the operation of our properties.

3 unchanged sentences

(dollars in thousands, except per share amounts)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Hotels Net Lease Total

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Management fees

15,060 1,505 16,565

Real estate taxes and insurance

31,296 986 32,282

Other operating expenses (2)

1 unchanged sentence

Depreciation and amortization

55,389 40,285 95,674

Interest expense

— 11,441 11,441

Other segment items (3)

5 unchanged sentences

Interest expense ( 82,409 )

Loss on early extinguishment of debt, net ( 16,048 )

Income tax expense ( 524 )

1 unchanged sentence

Net loss $ ( 73,850 )

(1) Labor and benefits for our net lease investments segment include property level expense reimbursements as discussed in Note 10.

Six Months Ended June 30, 2024

Hotels Net Lease Total

Hotel operating revenues $ 748,722 $ — $ 748,722

Rental income — 200,476 200,476

Total revenues 748,722 200,476 949,198

Labor and benefits (1)

278,504 1,949 280,453

Management fees 27,355 2,989 30,344

Real estate taxes and insurance 64,807 1,676 66,483

Other operating expenses (2)

262,667 3,067 265,734

Depreciation and amortization 110,475 78,306 188,781

Interest expense — 22,958 22,958

Other segment items (3)

33,843 6,222 40,065

Segment (loss) profit ( 28,929 ) 83,309 54,380

Reconciliation of segment profit or loss:

General and administrative ( 21,187 )

Interest income 2,513

Interest expense ( 162,306 )

Loss on early extinguishment of debt, net ( 16,048 )

Income tax expense ( 1,531 )

Equity in losses of an investee ( 8,054 )

Net loss $ ( 152,233 )

(1) Labor and benefits for our net lease investments segment include expense reimbursements as discussed in Note 10.

(2) Other operating expenses for each reportable segment include expenses such as repairs and maintenance, utilities and other costs incurred in connection with the operation of our properties.

(3) Other segment items for each reportable segment include gains and losses on asset impairment and sale of real estate and interest income, as applicable.

As of March 31, 2025

SERVICE PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

(3) Other segment items for each reportable segment include transaction related costs, gains and losses on asset impairment and sale of real estate and interest income, as applicable.

As of June 30, 2025

As of December 31, 2024

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Total assets $ 6,932,512 $ 7,119,558

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Capital expenditures:

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Fair Value of Assets and Liabilities

The table below presents certain of our assets carried at fair value at March 31, 2025, categorized by the level of inputs, as defined in the fair value hierarchy under GAAP, used in the valuation of each asset.

The table below presents certain of our assets carried at fair value at June 30, 2025, categorized by the level of inputs, as defined in the fair value hierarchy under GAAP, used in the valuation of each asset.

Fair Value at Reporting Date Using

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$ 127,800 $ — $ 126,450 $ 1,350

(1) We recorded impairment charges totaling $ 37,067 during the three months ended March 31, 2025, to reduce the carrying value of 16 hotels in our condensed consolidated balance sheet to their estimated fair value, less estimated costs to sell of $ 2,633 , based on negotiated sales prices with third party buyers (Level 2 inputs as defined in the fair value hierarchy under GAAP).

(1) We recorded impairment charges totaling $ 52,861 during the six months ended June 30, 2025, to reduce the carrying value of 17 hotels in our condensed consolidated balance sheet to their estimated fair value, less estimated costs to sell of $ 2,906 , based on negotiated sales prices with third party buyers (Level 2 inputs as defined in the fair value hierarchy under GAAP).

(2) We recorded impairment charges totaling $ 1,795 during the six months ended June 30, 2025, to reduce the carrying value of two net lease properties in our condensed consolidated balance sheet to their estimated fair value, less estimated costs to sell of $ 90 , based on brokers’ opinions of values (Level 3 inputs as defined in the fair value hierarchy under GAAP).

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, VFN, net lease mortgage notes, senior notes and security deposits.

At March 31, 2025 and December 31, 2024, the fair values of these financial instruments approximated their carrying values in our condensed consolidated balance sheets due to their short-term nature or floating interest rates, except as follows:

March 31, 2025 December 31, 2024

At June 30, 2025 and December 31, 2024, the fair values of these financial instruments approximated their carrying values in our condensed consolidated balance sheets due to their short-term nature or floating interest rates, except as follows:

June 30, 2025 December 31, 2024

Carrying Value (1)

24 unchanged sentences

(1) Carrying value includes unamortized discounts, premiums and certain debt issuance costs.

At March 31, 2025 and December 31, 2024, 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).

At March 31, 2025 and December 31, 2024, we estimated the fair value of our net lease mortgage notes using discounted cash flow analyses and current prevailing market rates as of the measurement dates (Level 3 inputs).

At June 30, 2025 and December 31, 2024, 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).

At June 30, 2025 and December 31, 2024, we estimated the fair value of our net lease mortgage notes using discounted cash flow analyses and current prevailing market rates as of the measurement dates (Level 3 inputs).

As Level 3 inputs are unobservable, our estimated value may differ materially from the actual fair value.

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-Q

Item 1. Financial Statements