What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-05 compared with 2025-05-06 · 245 added, 130 removed, 385 unchanged (49% of the section changed)

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We are a REIT organized under the laws of the State of Maryland.

As of March 31, 2025, we owned 941 properties in 46 states, the District of Columbia, Canada and Puerto Rico.

As of June 30, 2025, we owned 942 properties in 46 states, the District of Columbia, Canada and Puerto Rico.

Consumer confidence, corporate travel and lodging demand will continue to be affected by economic and market conditions, inflationary pressures, uncertainties surrounding interest rates, unemployment levels, work from home policies, use of technologies and broader economic trends.

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An economic recession or continued or intensified disruptions in the financial markets could adversely affect our financial condition, operations at our hotels, our tenants and their ability or willingness to renew our leases or pay rent to us, may restrict our ability to obtain new or replacement financing, would likely increase our cost of capital, and may cause the values of our properties to decline.

We are at various stages of selling 119 hotels with a total of 15,912 keys and a combined net carrying value of $945,100.

We expect to sell these hotels in 2025 and use the net proceeds to repay debt.

We previously identified 122 hotels managed by Sonesta with a total of 15,931 keys for disposition.

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.

Our current strategy is focused on reducing debt, growing our net lease portfolio and improving the performance of the hotels we expect to retain after completing the sale of our previously announced dispositions.

Management Agreements and Leases .

At March 31, 2025, we owned 202 hotels operated under four agreements.

At June 30, 2025, we owned 200 hotels operated under four agreements.

We leased all of these hotels to our wholly owned TRSs that are managed by hotel operating companies as of that date.

At March 31, 2025, we also owned 739 service-focused retail properties leased to 175 tenants subject to “triple net” leases, where the tenants are generally responsible for the payment of operating expenses and capital expenditures.

At June 30, 2025, we also owned 742 service-focused retail properties leased to 174 tenants subject to “triple net” leases, where the tenants are generally responsible for the payment of operating expenses and capital expenditures.

Our condensed consolidated statements of comprehensive income (loss) include hotel operating revenues and hotel operating expenses of our managed hotels and rental income and net lease operating expenses from our net lease properties.

Hotel Portfolio.

As of March 31, 2025, we owned 202 hotels.

During the three months ended March 31, 2025, the U.S.

hotel industry generally realized increases in average daily rate, or ADR, and revenue per available room, or RevPAR, compared to the corresponding 2024 periods.

Our hotels produced increases in ADR and outpaced the industry increases in RevPAR, which we believe is partially a result of renovation disruption in the 2024 period.

As of June 30, 2025, we owned 200 hotels.

During the three and six months ended June 30, 2025, the U.S.

hotel industry generally realized increases in average daily rate, or ADR, and decreases in revenue per available room, or RevPAR, compared to the corresponding 2024 periods.

Our hotels produced increases in ADR and RevPAR, which we believe is partially a result of renovation disruption in the 2024 period.

The following table provides a summary for all of our hotels with these revenue metrics for the periods presented, which we believe are key indicators of performance at our hotels.

Three Months Ended June 30,

Six Months Ended June 30,

2025 2024 Change 2025 2024 Change

Retained Hotels

of hotels 84 84 — 84 84 —

of rooms or suites 19,942 19,942 — 19,942 19,942 —

Occupancy 69.0 % 68.2 % 0.8 pts 62.9 % 61.8 % 1.1 pts

ADR $ 175.89 $ 175.21 0.4 % $ 175.02 $ 173.59 0.8 %

RevPAR $ 121.30 $ 119.51 1.5 % $ 110.15 $ 107.21 2.7 %

of hotels 116 136 (20) 116 136 (20)

of rooms or suites 15,159 17,755 (2,596) 15,159 17,755 (2,596)

Occupancy 69.5 % 68.2 % 1.3 pts 63.6 % 62.8 % 0.8 pts

ADR $ 107.75 $ 106.71 1.0 % $ 145.67 $ 106.10 37.3 %

RevPAR $ 74.94 $ 72.74 3.0 % $ 92.63 $ 66.60 39.1 %

of hotels 200 220 (20) 200 220 (20)

of rooms or suites 35,101 37,697 (2,596) 35,101 37,697 (2,596)

Occupancy 69.2 % 68.2 % 1.0 pts 63.6 % 62.2 % 1.4 pts

ADR $ 146.32 $ 142.99 2.3 % $ 145.67 $ 141.56 2.9 %

RevPAR $ 101.27 $ 97.50 3.9 % $ 92.63 $ 88.10 5.1 %

Comparable Hotels Data.

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We define comparable hotels as those that were owned by us and were open and operating for the entirety of the periods being compared.

For each of the three months ended March 31, 2025 and 2024, our comparable results exclude one hotel that suspended operations during the periods presented.

The following table provides a summary of these revenue metrics for the periods presented.

Three Months Ended March 31,

2025 2024 Change

Comparable Hotels

Three Months Ended June 30,

Six Months Ended June 30,

2025 2024 Change 2025 2024 Change

Retained Hotels

of hotels 84 84 — 84 84 —

of rooms or suites 19,942 19,942 — 19,942 19,942 —

Occupancy 57.9 % 57.1 % 0.8 pts

Occupancy 69.0 % 68.2 % 0.8 pts 62.9 % 61.8 % 1.1 pts

ADR $ 175.89 $ 175.21 0.4 % $ 175.02 $ 173.59 0.8 %

RevPAR $ 121.30 $ 119.51 1.5 % $ 110.15 $ 107.21 2.7 %

The following table provides a summary for all of our hotels with these revenue metrics for the periods presented, which we believe are key indicators of performance at our hotels.

Three Months Ended March 31,

2025 2024 Change

of hotels 116 116 — 116 116 —

of rooms or suites 15,159 15,159 — 15,159 15,159 —

Occupancy 57.8 % 56.3 % 1.5 pts

Occupancy 69.5 % 70.2 % (0.7) pts 64.4 % 64.9 % (0.5) pts

ADR $ 107.75 $ 108.72 (0.9) % $ 107.97 $ 108.40 (0.4) %

RevPAR $ 74.94 $ 76.32 (1.8) % $ 69.59 $ 70.33 (1.1) %

Comparable Hotels

of hotels 200 200 — 200 200 —

of rooms or suites 35,101 35,101 — 35,101 35,101 —

Occupancy 69.2 % 69.1 % 0.1 pts 63.6 % 63.1 % 0.5 pts

ADR $ 146.32 $ 146.02 0.2 % $ 145.67 $ 144.64 0.7 %

RevPAR $ 101.27 $ 100.85 0.4 % $ 92.63 $ 91.28 1.5 %

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 leased to 175 tenants subject to “triple net” leases (where the tenants are responsible for payments of operating expenses and capital expenditures) requiring annual minimum rents of $380,568.

Our net lease properties were 97.8% occupied as of March 31, 2025 with a weighted (by annual minimum rent) average lease term of 7.8 years, operating under 136 brands in 21 distinct industries.

TA is our largest tenant and as of March 31, 2025, leased 175 of our travel centers under five master leases that expire in 2033 and require annual minimum rents of $259,080.

As of June 30, 2025, we owned 742 service-focused retail net lease properties with an aggregate of 13,162,020 square feet leased to 174 tenants subject to “triple net” leases (where the tenants are responsible for payments of operating expenses and capital expenditures) requiring annual minimum rents of $386,521.

Our net lease properties were 97.3% occupied as of June 30, 2025 with a weighted (by annual minimum rent) average lease term of 7.6 years, operating under 136 brands in 21 distinct industries.

TA is our largest tenant and as of June 30, 2025, leased 175 of our travel centers under five master leases that expire in 2033 and require annual minimum rents of $264,262.

In addition, TA receives an annual credit of $25,000 as a result of prepaid rent.

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Results of Operations (amounts in thousands, except per share data)

Three Months Ended March 31, 2025, Compared to Three Months Ended March 31, 2024

Three Months Ended March 31,

Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024

Three Months Ended June 30,

2025 2024 $ Change % Change

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Transaction related costs 1,345 — 1,345 n/m

Loss on asset impairment 37,067 2,451 34,616 n/m

Loss on asset impairment 17,654 34,887 (17,233) (49.4) %

Total expenses 438,599 474,447 (35,848) (7.6) %

Loss on sale of real estate, net (156) (32) (124) n/m

Interest income 822 819 3 0.4 %

Interest expense (102,679) (93,850) (8,829) 9.4 %

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

Loss before income tax expense and equity in losses of an investee (37,176) (70,610) 33,434 (47.4) %

Income tax expense (457) (524) 67 (12.8) %

Equity in losses of an investee (526) (2,716) 2,190 (80.6) %

Net loss $ (38,159) $ (73,850) $ 35,691 (48.3) %

Weighted average common shares outstanding (basic and diluted) 165,743 165,198 545 0.3 %

Net loss per common share (basic and diluted) $ (0.23) $ (0.45) $ 0.22 (48.9) %

References to changes in the income and expense categories below relate to the comparison of consolidated results for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Hotel operating revenues.

The decrease in hotel operating revenues is primarily a result of our sales of certain hotels since April 1, 2024 ($11,654), partially offset by increases in occupancy and average rates at certain hotels during the 2025 period ($3,573).

Additional operating statistics of our hotels are included in the tables beginning on page 38.

Rental income.

The decrease in rental income is primarily a result of lower rental income recognized in the 2025 period ($1,423) and the sale of certain net lease properties since April 1, 2024 ($271), partially offset by our acquisitions of certain net lease properties since April 1, 2024 ($263).

Hotel operating expenses.

The increase in hotel operating expenses is primarily a result of increases in wages and benefits ($8,496) and other operating expenses ($3,954) in the 2025 period, partially offset by our sales of certain hotels since April 1, 2024 ($11,784).

Net lease operating expenses.

The increase in net lease operating expenses is primarily the result of increased property management fees ($609), partially offset by decreases in other operating expenses ($128) in the 2025 period.

Depreciation and amortization - hotels.

The decrease in depreciation and amortization - hotels is primarily a result of certain of our hotels classified as held for sale ($16,935) in the 2025 period.

Depreciation and amortization - net lease properties.

The decrease in depreciation and amortization - net lease properties is primarily a result of certain of our depreciable assets becoming fully depreciated since April 1, 2024 ($3,308) and our sale of certain net lease properties since April 1, 2024 ($401).

General and administrative.

The decrease in general and administrative costs is primarily due to decreases in business management fees ($540), partially offset by an increase in other professional fees ($77) in the 2025 period.

Transaction related costs .

Transaction related costs for the 2025 period primarily consisted of costs related to the renovation of certain hotels.

Loss on asset impairment.

We recorded a $17,654 loss on asset impairment during the 2025 period to reduce the carrying value of 17 hotels and two net lease properties to their estimated fair value less costs to sell.

We recorded a $34,887 loss on asset impairment during the 2024 period to reduce the carrying value of eight hotels and three net lease properties to their estimated fair value less costs to sell.

Loss on sale of real estate, net.

We recorded a $156 loss on sale of real estate during the 2025 period in connection with the sales of two hotels and four net lease properties.

We recorded a $32 net loss on sale of real estate during the 2024 period in connection with the sale of one hotel.

Interest income.

Interest income was relatively unchanged during the 2025 period compared to the 2024 period.

Interest expense.

The increase in interest expense is primarily due to higher weighted average interest rates during the 2025 period compared to the 2024 period.

Loss on early extinguishment of debt, net.

We recorded a $16,048 loss on early extinguishment of debt, net in the 2024 period as a result of the redemption and purchase of certain senior notes in the 2024 period.

Income tax expense.

The decrease in income tax expense is primarily due to a decrease in foreign tax expense ($126), partially offset by an increase in state tax expense ($59) during the 2025 period.

Equity in losses of an investee.

Equity in losses of an investee represents our proportionate share of the losses of Sonesta.

Our net loss and net loss per common share (basic and diluted) each decreased in the 2025 period compared to the 2024 period primarily due to the revenue and expense changes discussed above.

Six Months Ended June 30, 2025, Compared to the Six Months Ended June 30, 2024

Six Months Ended June 30,

2025 2024 $ Change % Change

Hotel operating revenues $ 739,368 $ 748,722 $ (9,354) (1.2) %

Rental income 199,247 200,476 (1,229) (0.6) %

Total revenues 938,615 949,198 (10,583) (1.1) %

Hotel operating expenses 634,753 633,333 1,420 0.2 %

Net lease operating expenses 11,067 9,681 1,386 14.3 %

Depreciation and amortization - hotels 92,197 110,475 (18,278) (16.5) %

Depreciation and amortization - net lease properties 71,933 78,306 (6,373) (8.1) %

Total depreciation and amortization 164,130 188,781 (24,651) (13.1) %

General and administrative 19,774 21,187 (1,413) (6.7) %

Transaction related costs 1,456 — 1,456 n/m

Loss on asset impairment 54,721 37,338 17,383 46.6 %

Total expenses 885,901 890,320 (4,419) (0.5) %

Gain (loss) on sale of real estate, net 590 (2,995) 3,585 (119.7) %

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Interest expense (204,196) (185,264) (18,932) 10.2 %

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

Loss before income tax expense and equity in losses of an investee (148,821) (142,648) (6,173) 4.3 %

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Net loss per common share (basic and diluted) $ (0.93) $ (0.92) $ (0.01) 1.1 %

References to changes in the income and expense categories below relate to the comparison of consolidated results for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

References to changes in the income and expense categories below relate to the comparison of consolidated results for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Hotel operating revenues.

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Rental income.

The increase in rental income is primarily a result of higher rental income recognized at certain of our net lease properties ($710), partially offset by our sales of certain net lease properties since January 1, 2024 ($508).

The decrease in rental income is primarily a result of our sales of certain net lease properties since January 1, 2024 ($726) and lower rental income recognized during the 2025 period ($503).

Hotel operating expenses.

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Net lease operating expenses.

The increase in net lease operating expenses is primarily the result of increased property management fees ($594) and other operating expenses ($311) in the 2025 period.

The increase in net lease operating expenses is primarily the result of increased property management fees ($1,208) and other operating expenses at certain net lease properties ($178) in the 2025 period.

Depreciation and amortization - hotels.

The decrease in depreciation and amortization - hotels is primarily a result of certain of our depreciable assets becoming fully depreciated since January 1, 2024 ($5,769) and our sale of certain hotels since January 1, 2024 ($2,498), partially offset by depreciation and amortization related to capital expenditures made since January 1, 2024 ($6,924).

The decrease in depreciation and amortization - hotels is primarily a result of certain of our hotels classified as held for sale ($18,278) in the 2025 period.

Depreciation and amortization - net lease properties.

The decrease in depreciation and amortization - net lease properties is primarily a result of certain of our depreciable assets becoming fully depreciated since January 1, 2024 ($2,129) and our sale of certain net lease properties since January 1, 2024 ($535).

The decrease in depreciation and amortization - net lease properties is primarily a result of our sale of certain net lease properties since January 1, 2024 ($5,437) and certain of our depreciable assets becoming fully depreciated since January 1, 2024 ($936).

General and administrative.

The decrease in general and administrative costs is primarily due to decreases in business management fees ($1,367) and other professional fees ($46) in the 2025 period.

Transaction related costs .

Transaction related cos ts.

Transaction related costs for the 2025 period primarily consisted of costs related to the renovation of certain hotels, partially offset by the recovery of a working capital reserve related to our former agreement with Marriott International, Inc.

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Loss on asset impairment.

We recorded a $37,067 loss on asset impairment during the 2025 period to reduce the carrying value of 16 hotels to their estimated fair value less costs to sell.

We recorded a $2,451 loss on asset impairment during the 2024 period to reduce the carrying value of five net lease properties to their estimated fair value less costs to sell.

We recorded a $54,721 loss on asset impairment during the 2025 period to reduce the carrying value of 17 hotels and two net lease properties to their estimated fair value less costs to sell.

We recorded a $37,338 net loss on asset impairment during the 2024 period to reduce the carrying value of eight hotels and six net lease properties to their estimated fair value less costs to sell.

Gain (loss) on sale of real estate, net.

We recorded a $746 net gain on sale of real estate during the 2025 period in connection with the sales of four hotels and three net lease properties.

We recorded a $2,963 net loss on sale of real estate during the 2024 period in connection with the sales of one hotel and three net lease properties.

We recorded a $590 net gain on sale of real estate during the 2025 period in connection with the sale of six hotels and seven net lease properties.

We recorded a $2,995 loss on sale of real estate during the 2024 period in connection with the sale of one hotel and three net lease properties.

Interest income.

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The increase in interest expense is primarily due to higher weighted average interest rates during the 2025 period compared to the 2024 period.

Loss on early extinguishment of debt, net.

We recorded a $16,048 loss on early extinguishment of debt, net in the 2024 period as a result of the redemption and purchase of certain senior notes in the 2024 period.

Income tax expense.

The decrease in income tax expense is primarily due to a decrease in state tax expense ($268), partially offset by an increase in foreign tax expense ($104) during the 2025 period.

The decrease in income tax expense is primarily due to decreases in our state income tax expense ($209) and foreign tax expense ($22) during the 2025 period.

Equity in losses of an investee.

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Our Managers and Tenants

As of March 31, 2025, all 202 of our hotels were managed by four hotel operating companies.

As of June 30, 2025, all 200 of our hotels were managed by four hotel operating companies.

Our 742 service-focused retail net lease properties were leased to 174 tenants.

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Our hotel managers and tenants derive their funding for property operating expenses and for returns and rents due to us generally from property operating revenues and, to the extent these parties themselves fund our owner’s priority returns and rents, from their separate resources.

As of March 31, 2025, Sonesta is our largest hotel manager (177 hotels) and TA is our largest tenant (175 travel centers).

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.

As of June 30, 2025, Sonesta is our largest hotel manager (175 hotels) and TA is our largest tenant (175 travel centers).

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.

We define net lease rent coverage as earnings before interest, taxes, depreciation, amortization and rent, or EBITDAR, divided by the annual minimum rent due to us weighted by the minimum rent of the property to total minimum rents of the net lease portfolio.

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As a result, we believe using this implied coverage metric provides a more reasonable estimated representation of recent operating results and the financial condition for those tenants.

Our net lease properties generated rent coverage of 2.07x and 2.37x as of March 31, 2025 and 2024, respectively.

Our net lease properties generated rent coverage of 2.04x and 2.25x as of June 30, 2025 and 2024, respectively.

Our Operating Liquidity and Capital Resources

Our principal sources of funds to meet operating and capital expenses, debt service obligations and distributions to our shareholders are owner’s priority returns from our hotels, rents from our net lease portfolio and borrowings under our revolving credit facility and VFN.

We receive owner’s priority returns and rents from our managers and tenants monthly.

Our principal sources of funds to meet operating and capital expenses, debt service obligations and distributions to our shareholders are returns generated from our hotels, rents from our net lease portfolio and borrowings under our revolving credit facility and VFN.

We receive hotel returns and rents from our managers and tenants monthly.

We may receive additional returns, percentage rents and our share of the operating profits of our managed hotels after payment of management fees and other deductions, if any, either monthly or quarterly, and these amounts are usually subject to annual reconciliations.

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However, as a result of economic conditions, including if the U.S.

enters an economic recession, or otherwise, our managers and tenants may become unable or unwilling to pay owner’s priority returns and rents to us when due, and, as a result, our cash flows and net income would decline.

enters an economic recession, or otherwise, our managers and tenants may become unable or unwilling to pay returns and rents to us when due, and, as a result, our cash flows and net income would decline.

As of June 30, 2025, we did not meet the 1.50x consolidated income available for debt service to debt service ratio level necessary under our senior notes indentures to incur additional debt, and as a result, we will not be able to incur additional debt while the ratio is below this requirement.

We may sell additional properties, access equity markets, refinance our debt with unsecured and/or secured debt, or seek other sources of capital if favorable conditions exist for us in order to enhance our liquidity, reduce debt and fund cash needs.

The following is a summary of our sources and uses of cash flows for the periods presented:

Three Months Ended March 31,

Six Months Ended June 30,

Cash and cash equivalents and restricted cash at the beginning of the period $ 157,386 $ 197,830

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Cash and cash equivalents and restricted cash at the end of the period $ 86,031 $ 29,456

The change from cash flow used in operating activities in the 2024 period to cash flow provided by operating activities in the 2025 period is primarily due to lower cash paid for interest in the 2025 period.

The decrease in cash flow used in investing activities in the 2025 period is primarily due to higher proceeds from the sale of real estate in the 2025 period and decreased real estate improvements during the 2025 period.

The increase in cash flow used in financing activities in the 2025 period is primarily due to higher net borrowings in the 2025 period, partially offset by lower distributions to common shareholders during the 2025 period.

The decrease in cash flow provided by operating activities in the 2025 period is primarily due to lower returns from our hotel portfolio in the 2025 period.

The decrease in cash flow used in financing activities in the 2025 period is primarily due to lower distributions to common shareholders during the 2025 period.

We maintain our qualification for taxation as a REIT under the IRC by meeting certain requirements.

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Our hotel operating agreements generally provide that, if necessary, we may provide our managers with funding for capital improvements to our hotels in excess of amounts otherwise available in escrowed FF&E reserves or when no FF&E reserves are available.

During the three months ended March 31, 2025, we funded $44,053 for capital improvements in excess of FF&E reserves available to our hotels.

We currently expect to fund $210,000 during the last nine months of 2025 for capital improvements to certain hotels using cash on hand and borrowings under our revolving credit facility.

During the six months ended June 30, 2025, we funded $82,838 for capital improvements in excess of FF&E reserves available to our hotels.

We currently expect to fund $170,000 during the last six months of 2025 and $150,000 in 2026 for capital improvements to certain hotels using cash on hand.

Various percentages of total sales at some of our hotels are escrowed as FF&E reserves to fund future capital improvements.

We own all the FF&E escrows for our hotels.

During the three months ended March 31, 2025, certain of our hotel managers deposited $971 to these accounts and spent $1,124 from the FF&E reserve escrow accounts to renovate and refurbish our hotels.

As of March 31, 2025, there was $5,289 on deposit in these escrow accounts, which was held directly by us and is reflected in our condensed consolidated balance sheets as restricted cash.

During the six months ended June 30, 2025, certain of our hotel managers deposited $2,710 to these accounts and spent $2,064 from the FF&E reserve escrow accounts to renovate and refurbish our hotels.

As of June 30, 2025, there was $6,089 on deposit in these escrow accounts, which was held directly by us and is reflected in our condensed consolidated balance sheets as restricted cash.

Our net lease portfolio leases do not require FF&E escrow deposits and tenants under these leases are generally required to maintain the leased properties, including structural and non-structural components.

We may provide tenant improvement allowances to tenants in certain cases or may develop sites with the intent to lease them.

During the three months ended March 31, 2025, we funded $748 for capital improvements to our net lease properties.

As of March 31, 2025, we had $1,382 of unspent leasing-related obligations related to certain of our net lease tenants.

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

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.

During the six months ended June 30, 2025, we funded $982 for capital improvements to our net lease properties.

As of June 30, 2025, we had $3,433 of unspent leasing-related obligations related to certain of our net lease tenants.

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

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 115 hotels with a total of 15,420 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 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.

We expect to use the net sales proceeds from these sales for general business purposes, including to repay debt.

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, using cash on hand.

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, using cash on hand.

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.

We currently expect to fund these acquisitions using cash on hand.

These pending acquisitions are subject to conditions;

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 declared and paid a regular quarterly distribution to common shareholders using cash on hand as follows:

During the six months ended June 30, 2025, we declared and paid a regular quarterly distribution to common shareholders using cash on hand 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 using cash on hand.

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 using cash on hand.

In order to meet cash needs that may result from our desire or need to make distributions or pay operating or capital expenses, we maintain a $650,000 secured revolving credit facility which is governed by a credit agreement.

This revolving credit facility is available for general business purposes, including acquisitions.

We can borrow, repay and reborrow funds available under our revolving credit facility until maturity and no principal repayments are due until maturity.

We can borrow, subject to meeting certain financial covenants, repay and reborrow funds available under our revolving credit facility until maturity and no principal repayments are due until maturity.

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 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.

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.

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 the 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.

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.

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.

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 the remaining $550,000 available under our revolving credit facility as a precautionary measure to preserve financial flexibility.

As of August 1, 2025, we remain fully drawn under our revolving credit facility.

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 certain properties, as discussed below.

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 1.50x to 1.30x 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 1.50x 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.

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.

We expect to fund this redemption on or about September 4, 2025, using cash on hand.

Net Lease Mortgage Notes

On January 27, 2025, the Issuer issued a variable funding note secured by the 315 net lease properties that secure our existing $606,122 of net lease mortgage notes.

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

The VFN permits borrowings on a revolving basis up to $45,000 and the Issuer can borrow, repay and reborrow funds available until maturity.

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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%.

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

Our debt maturities (other than our revolving credit facility and VFN) as of March 31, 2025 were as follows:

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, $45,000 was outstanding under the VFN.

Our debt maturities (other than our revolving credit facility and VFN) as of June 30, 2025 were as follows:

Year Debt Maturities

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Our mortgage notes require monthly principal payments as described in Part I, Item 3 of this Quarterly Report on Form 10-Q.

We currently expect to use cash on hand, the cash flows from our operations, borrowings under our revolving credit facility or VFN, net proceeds from any asset sales and net proceeds of offerings of equity or the incurrence of debt to fund our operations, capital expenditures, investments, future debt maturities, distributions to our shareholders and other general business purposes.

We currently expect to use cash on hand, the cash flows from our operations, borrowings available under our revolving credit facility, if any, or VFN, net proceeds from any asset sales and net proceeds of offerings of equity or the incurrence of debt to fund our operations, capital expenditures, investments, future debt maturities, distributions to our shareholders and other general business purposes.

When significant amounts are outstanding for an extended period of time under our revolving credit facility, or the maturities of our indebtedness approach, we currently expect to explore refinancing alternatives.

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While we believe we will generally have access to various types of financings, including debt or equity, to fund our future acquisitions and to pay our debts and other obligations, we cannot be sure that we will be able to complete any debt or equity offerings or other types of financings or that our cost of any future public or private financings will not increase.

Also, as noted above, we are limited in our ability to incur additional debt pursuant to our debt agreements and are not permitted under our debt agreements to incur any debt while below the 1.50x consolidated income available for debt service to debt service ratio requirement under our public debt covenants as described below.

Our ability to complete, and the costs associated with, future debt transactions depend primarily upon credit market conditions and our then perceived creditworthiness.

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Debt Covenants

Our debt obligations at March 31, 2025 consisted of $50,000 of borrowings outstanding under our $650,000 revolving credit facility, $5,075,000 aggregate principal amounts of senior notes, $606,122 aggregate principal amounts of mortgage notes and $45,000 of borrowings outstanding under the VFN.

Our debt obligations at June 30, 2025 consisted of $100,000 of borrowings outstanding under our $650,000 revolving credit facility, $5,075,000 aggregate principal amounts of senior notes, $605,632 aggregate principal amounts of net lease mortgage notes and $45,000 of borrowings outstanding under the VFN.

For further information regarding our indebtedness, see Note 8 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Our publicly and privately issued senior notes are governed by our indentures and related supplements.

These indentures and related supplements and our credit agreement contain covenants that generally restrict our ability to incur debts, including debts secured by mortgages on our properties, in excess of calculated amounts, and require us to maintain various financial ratios.

These indentures and related supplements and our credit agreement contain covenants that generally restrict our ability to incur debt, including debt secured by mortgages on our properties, in excess of calculated amounts, and require us to maintain various financial ratios.

Our credit agreement, net lease mortgage notes, secured senior notes and unsecured senior notes, indentures and their supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes RMR ceasing to act as our business manager.

As of March 31, 2025, we believe we were in compliance with all of the covenants under our indentures and their supplements, net lease mortgage notes and our credit agreement.

As of June 30, 2025, we believe we were in compliance with all of the covenants under our indentures and their supplements, net lease mortgage notes and our credit agreement, except as noted above and below.

Senior Notes Indenture Covenants

The following table summarizes the results of the financial tests required by the indentures and related supplements for our senior secured and unsecured notes as of March 31, 2025:

The following table summarizes the results of the financial tests required by the indentures and related supplements for our senior secured and unsecured notes as of June 30, 2025:

Actual Results Covenant Requirement

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4.51x Minimum of 2.20x

As of March 31, 2025, adjusted total assets for covenant purposes as defined in our senior notes indentures were $10,462,373 and assets encumbered under our revolving credit facility, serving as collateral for our net lease mortgage notes or secured senior notes represented $3,466,968 of adjusted total assets, as defined in our senior notes indentures.

The above consolidated income available for debt service to debt service ratio was 1.49x on a pro forma basis as of June 30, 2025, which was below the required level that would permit us to incur additional debt.

We are not permitted under our debt agreements to incur additional debt while we remain below the required covenant level.

As of June 30, 2025, adjusted total assets for covenant purposes as defined in our senior notes indentures were $10,414,487 and assets encumbered under our revolving credit facility, serving as collateral for our net lease mortgage notes or secured senior notes represented $2,670,993 of adjusted total assets, as defined in our senior notes indentures.

Our unencumbered hotels, travel centers, other net lease properties and other corporate assets represent $5,802,780, $916,092, $833,832 and $190,790 of adjusted total assets, respectively.

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(1) Includes $865,039 of accumulated depreciation on assets of properties held for sale.

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

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

Acceleration and Cross-Default

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The following table presents summarized financial information for us and the subsidiary guarantors, on a combined basis, after elimination of (i) intercompany transactions and balances among us and the subsidiary guarantors, and (ii) equity in earnings from, and any investments in, any of our non-guarantor subsidiaries:

As of March 31, 2025 As of December 31, 2024

As of June 30, 2025 As of December 31, 2024

Real estate properties, net (1)

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Other liabilities 313,184 358,778

Three Months Ended March 31, 2025

(1) Real estate properties, net as of March 31, 2025 includes $138,986 of properties owned directly by us and not included in the assets of the subsidiary guarantors.

Six Months Ended June 30, 2025

(1) Real estate properties, net as of June 30, 2025 includes $133,061 of properties owned directly by us and not included in the assets of the subsidiary guarantors.

(2) Intercompany balances represent payables to non-guarantor subsidiaries.

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Property and Operating Statistics (dollars in thousands, except hotel statistics)

As of March 31, 2025, we owned and managed a diverse portfolio of hotels and net lease properties across the United States and in Puerto Rico and Canada with 145 distinct brands across 22 industries.

As of June 30, 2025, we owned and managed a diverse portfolio of hotels and net lease properties across the United States and in Puerto Rico and Canada with 145 distinct brands across 22 industries.

Hotel Portfolio

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We have not independently verified our managers’ operating data.

Comparable Hotels* No.

of Rooms or Suites Occupancy ADR RevPAR

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of Hotels Three Months Ended

March 31, Three Months Ended

June 30, Three Months Ended

Brand 2025 2024 Change 2025 2024 Change 2025 2024 Change

Sonesta Hotels & Resorts® Full Service 22 7,207 54.3 % 56.3 % (2.0) pts $ 167.99 $ 164.22 2.3 % $ 91.20 $ 92.38 (1.3) %

Retained Hotels:

Royal Sonesta Hotels® Full Service 17 5,663 68.2 % 67.5 % 0.7 pts $238.10 $239.45 (0.6) % $ 162.31 $ 161.70 0.4 %

Sonesta Hotels & Resorts® Full Service 22 7,207 66.2 % 65.0 % 1.2 pts 166.86 164.16 1.6 % 110.49 106.65 3.6 %

Radisson® Hotels & Resorts Full Service 5 1,149 64.8 % 71.3 % (6.5) pts 153.03 146.39 4.5 % 99.22 104.33 (4.9) %

Crowne Plaza® Full Service 1 495 73.4 % 64.6 % 8.8 pts 149.84 148.98 0.6 % 109.98 96.17 14.4 %

Country Inn & Suites® by Radisson Full Service 2 346 70.1 % 74.6 % (4.5) pts 144.57 152.57 (5.2) % 101.29 113.89 (11.1) %

Crowne Plaza® Full Service 1 495 67.8 % 69.4 % (1.6) pts 133.49 144.36 (7.5) % 90.45 100.25 (9.8) %

Full Service Total/Average 47 14,860 67.0 % 66.8 % 0.2 pts 191.77 190.70 0.6 % 128.48 127.40 0.8 %

Sonesta ES Suites® Extended Stay 7 958 80.3 % 74.2 % 6.1 pts 149.90 154.83 (3.2) % 120.40 114.94 4.7 %

Sonesta Select® Select Service 6 873 71.8 % 68.8 % 3.0 pts 140.89 143.26 (1.7) % 101.17 98.58 2.6 %

Sonesta Simply Suites® Extended Stay 7 1,144 73.1 % 76.1 % (3.0) pts 129.80 124.86 4.0 % 94.87 94.96 (0.1) %

Hyatt Place® Select Service 17 2,107 74.3 % 70.9 % 3.4 pts 126.28 124.16 1.7 % 93.78 88.00 6.6 %

Select Service Total/Average 56 7,818 56.4 % 51.0 % 5.4 pts 117.41 117.52 (0.1) % 66.24 59.89 10.6 %

Focused Service Total/Average 37 5,082 74.7 % 72.3 % 2.4 pts 134.25 133.38 0.7 % 100.31 96.46 4.0 %

Retained Hotels Total/Average 84 19,942 69.0 % 68.2 % 0.8 pts $175.89 $175.21 0.4 % $ 121.30 $ 119.51 1.5 %

Sonesta ES Suites® Extended Stay 45 5,731 74.5 % 73.5 % 1.0 pts $124.18 $124.91 (0.6) % $ 92.57 $ 91.82 0.8 %

Sonesta Select® Select Service 32 4,678 61.1 % 62.5 % (1.4) pts 111.96 114.22 (2.0) % 68.38 71.40 (4.2) %

Sonesta Simply Suites® Extended Stay 39 4,750 71.9 % 73.8 % (1.9) pts 83.67 84.65 (1.2) % 60.12 62.45 (3.7) %

Extended Stay Total/Average 98 12,583 63.1 % 63.6 % (0.5) pts 110.44 109.94 0.5 % 69.71 69.92 (0.3) %

Comparable Hotels Total/Average 201 35,261 57.9 % 57.1 % 0.8 pts $ 144.61 $ 142.74 1.3 % $ 83.67 $ 81.52 2.6 %

* We define comparable hotels as those that were owned by us and were open and operating for the entirety of the periods being compared.

For each of the three months ended March 31, 2025 and 2024, our comparable results exclude one hotel that suspended operations during the periods presented.

Exit Hotels Total/Average 116 15,159 69.5 % 70.2 % (0.7) pts 107.75 108.72 (0.9) % 74.94 76.32 (1.8) %

All Hotels Total/Average 200 35,101 69.2 % 69.1 % 0.1 pts $146.32 $146.02 0.2 % $ 101.27 $ 100.85 0.4 %

* Includes results of all hotels owned as of June 30, 2025.

Excludes the results of hotels sold during the periods presented.

Retained Hotels represents 59 hotels managed by Sonesta, 17 hotels managed by Hyatt, seven hotels managed by Radisson, and one hotel managed by IHG that we will continue to own after the Exit Hotels are sold.

Exit Hotels represent 116 hotels managed by Sonesta that we plan to sell.

We are no longer marketing our Crowne Plaza hotel for sale.

of Rooms or Suites Occupancy ADR RevPAR

Service Level No.

of Hotels Three Months Ended

March 31, Three Months Ended

of Hotels Six Months Ended

June 30, Six Months Ended

Brand 2025 2024 Change 2025 2024 Change 2025 2024 Change

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Country Inn & Suites® by Radisson Full Service 2 346 62.9 % 67.5 % (4.6) pts 138.62 144.66 (4.2) % 87.14 97.59 (10.7) %

Crowne Plaza® Full Service 1 495 70.6 % 67.0 % 3.6 pts 141.95 146.59 (3.2) % 100.16 98.21 2.0 %

Full Service Total/Average 47 14,860 60.6 % 60.8 % (0.2) pts 192.42 189.16 1.7 % 116.64 115.07 1.4 %

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Retained Hotels Total/Average 84 19,942 62.9 % 61.8 % 1.1 pts $175.02 $173.59 0.8 % $ 110.15 $ 107.21 2.7 %

Crowne Plaza® Full Service 1 495 73.4 % 64.6 % 8.8 pts $149.84 $148.98 0.6 % $ 109.98 $ 96.17 14.4 %

Sonesta ES Suites® Extended Stay 45 5,731 69.5 % 69.2 % 0.3 pts $123.80 $123.40 0.3 % $ 86.05 $ 85.41 0.8 %

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All Hotels Total/Average 200 35,101 63.6 % 63.1 % 0.5 pts $145.67 $144.64 0.7 % $ 92.63 $ 91.28 1.5 %

* Includes results of all hotels owned as of March 31, 2025.

* Includes results of all hotels owned as of June 30, 2025.

Excludes the results of hotels sold during the periods presented.

Retained Hotels represents 59 hotels managed by Sonesta, 17 hotels managed by Hyatt, and seven hotels managed by Radisson that we will continue to own after the Exit Hotels are sold.

Exit Hotels represent 118 hotels managed by Sonesta and one hotel managed by IHG that we plan to sell.

Exit Hotels represent 116 hotels managed by Sonesta that we plan to sell.

Net Lease Portfolio

As of March 31, 2025, our net lease properties were 97.8% occupied and we had 16 properties available for lease.

During the three months ended March 31, 2025, we entered into lease renewals for 31,607 rentable square feet (four properties) at weighted (by rentable square feet) average rents that were 18.0% above the prior rents for the same space.

As of June 30, 2025, our net lease properties were 97.3% occupied and we had 20 properties available for lease.

During the six months ended June 30, 2025, we entered into lease renewals for 383,743 rentable square feet (14 properties) at weighted (by rentable square feet) average rents that were 10.8% above the prior rents for the same space.

The weighted (by rentable square feet) average lease term for these leases was 12.6 years.

We also entered into new leases for 1,685 rentable square feet (one property) at rent that was 15.7% above the prior rent for the same space.

The lease term for this new lease was 3.0 years.

We also entered into new leases for 7,893 rentable square feet (two properties) at rent that was 9.9% above the prior rent for the same space.

The weighted (by rentable square feet) average lease term for these leases was 12.7 years.

Generally, lease agreements with our net lease tenants require payment of minimum rent to us.

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Annualized minimum rent excludes the impact of rents prepaid by TA.

As of March 31, 2025, our net lease tenants operated across 136 brands.

As of June 30, 2025, our net lease tenants operated across 136 brands.

The following table identifies the top ten brands based on annualized minimum rent:

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(2) See page 31 for our definition of rent coverage.

(3) Rent coverage information provided by tenant is for all 175 sites on a consolidated basis and is as of March 31, 2025.

(3) Rent coverage information provided by tenant is for all 175 sites on a consolidated basis and is as of June 30, 2025.

(4) Consists of 126 distinct brands with an average investment of $3,024 per property and average annual minimum rent of $205 per property.

As of March 31, 2025, our top ten net lease tenants based on our annualized minimum rent are listed below:

As of June 30, 2025, our top ten net lease tenants based on our annualized minimum rent are listed below:

Tenant Brand Affiliation No.

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(3) TA is our largest tenant.

As of March 31, 2025, we leased 175 travel centers (131 under the TravelCenters of America brand and 44 under the Petro Stopping Centers brand) to a subsidiary of TA under five master leases that expire in 2033 .

As of June 30, 2025, we leased 175 travel centers (131 under the TravelCenters of America brand and 44 under the Petro Stopping Centers brand) to a subsidiary of TA under five master leases that expire in 2033.

TA has five renewal options for 10 years each for all of the travel centers under each lease.

BP Corporation North America Inc.

guarantees payments under each of the five master leases.

The aggregate guaranty as of March 31, 2025 was $3,037,475.

guarantees payment under each of the five master leases.

The aggregate guaranty as of June 30, 2025 was $3,037,475.

Annualized minimum rent excludes the impact of rents prepaid by TA.

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5, respectively.

Rent coverage is as of March 31, 2025.

Rent coverage is as of June 30, 2025.

(4) Consists of 164 tenants with an average investment of $2,751 per property and an average annual minimum rent of $184 per property.

As of March 31, 2025, our net lease tenants operated across 21 distinct industries within the service-focused retail sector of the U.S.

As of June 30, 2025, our net lease tenants operated across 21 distinct industries within the service-focused retail sector of the U.S.

of Properties Investment (1)

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Health and Fitness 14 196,084 3.9% 11,790 3.1 % 2.23 x

Home Goods and Leisure 20 134,613 2.7% 10,763 2.8 % 4.10 x

Grocery Stores 19 129,152 2.6% 9,317 2.4 % 3.22 x

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Automotive Equipment and Services 64 107,054 2.1% 7,826 2.1 % 5.01 x

Home Goods and Leisure 14 98,242 1.9% 7,711 2.0 % 4.75 x

Automotive Dealers 8 62,656 1.2% 4,982 1.3 % 7.35 x

Entertainment 4 61,436 1.2% 4,609 1.2 % 2.12 x

General Merchandise Stores 4 55,457 1.1% 3,997 1.0 % 2.89 x

Entertainment 3 51,473 1.0% 3,947 1.0 % 1.29 x

Educational Services 7 44,820 0.9% 3,572 0.9 % 1.90 x

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(2) See page 31 for our definition of rent coverage.

(3) Rent coverage for TA is as of March 31, 2025.

(3) Rent coverage for TA is as of June 30, 2025.

(4) Consists of miscellaneous businesses with an average investment of $6,002 per property.

As of March 31, 2025, lease expirations at our net lease properties by year are as follows:

As of June 30, 2025, lease expirations at our net lease properties by year are as follows:

Number of Properties Square Feet Annualized Minimum Rent Expiring Percent of Total Annualized Minimum Rent Expiring Cumulative Percent of Total Annualized Minimum Rent Expiring

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(1) The year of lease expiration is pursuant to contract terms.

As of March 31, 2025, shown below is the list of our top ten states where our net lease properties are located.

As of June 30, 2025, shown below is the list of our top ten states where our net lease properties are located.

No other state represents more than 3% of our net lease annualized minimum rents.

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FFO and Normalized FFO are among the factors considered by our Board of Trustees when determining the amount of distributions to our shareholders.

Other factors include, but are not limited to, requirements to satisfy our REIT distribution requirements, limitations in our debt agreements, the availability to us of debt and equity capital, our distribution rate as a percentage of the trading price of our common shares, or dividend yield, and our dividend yield to the dividend yields of other REITs, our expectation of our future capital requirements and operating performance and our expected needs for and availability of cash to pay our obligations.

Other factors include, but are not limited to, requirements to satisfy our REIT distribution requirements, limitations in our debt agreements, the availability to us of debt and equity capital, our distribution rate as a percentage of the trading price of our common shares, or dividend yield, and our dividend yield compared to the dividend yields of other REITs, our expectation of our future capital requirements and operating performance and our expected needs for and availability of cash to pay our obligations.

Other real estate companies and REITs may calculate FFO and Normalized FFO differently than we do.

Our calculations of FFO and Normalized FFO for the three months ended March 31, 2025 and 2024 and reconciliations of net loss, the most directly comparable financial measure under GAAP reported in our condensed consolidated financial statements, to those amounts appear in the following table (amounts in thousands, except per share amounts):

Three Months Ended March 31,

Our calculations of FFO and Normalized FFO for the three and six months ended June 30, 2025 and 2024 and reconciliations of net loss, the most directly comparable financial measure under GAAP reported in our condensed consolidated financial statements, to those amounts appear in the following table (amounts in thousands, except per share amounts):

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

2025 2024 2025 2024

Net loss $ (38,159) $ (73,850) $ (154,594) $ (152,233)

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Loss on asset impairment 17,654 34,887 54,721 37,338

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

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

Adjustments to reflect our share of FFO attributable to an investee 1,182 1,021 2,382 1,987

FFO 55,863 57,764 66,049 78,868

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

Transaction related costs 1,345 — 1,456 —

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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-Q

Item 2. Management’s Discussion and Analysis