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Item 1. Financial Statements

2025-11-05 compared with 2025-08-05 · 228 added, 181 removed, 541 unchanged (43% of the section changed)

3 unchanged sentences

(dollars in thousands, except per share data)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Real estate properties:

35 unchanged sentences

(amounts in thousands, except per share data)

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

9 unchanged sentences

Total expenses 448,854 446,495 1,334,755 1,336,815

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

Gain on sale of real estate, net 25,256 4,105 25,846 1,110

Interest income 4,841 537 6,912 3,318

2 unchanged sentences

Loss on early extinguishment of debt, net ( 529 ) ( 133 ) ( 529 ) ( 16,181 )

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

Income tax expense ( 457 ) ( 524 ) ( 1,300 ) ( 1,531 )

Equity in losses of an investee ( 526 ) ( 2,716 ) ( 4,473 ) ( 8,054 )

Loss before income tax (expense) benefit and equity in earnings (losses) of an investee ( 48,292 ) ( 49,941 ) ( 197,113 ) ( 192,589 )

Income tax (expense) benefit ( 253 ) 77 ( 1,553 ) ( 1,454 )

Equity in earnings (losses) of an investee 1,600 2,963 ( 2,873 ) ( 5,091 )

Net loss ( 46,945 ) ( 46,901 ) ( 201,539 ) ( 199,134 )

Other comprehensive income (loss):

Equity interest in investee’s unrealized gains (losses) 155 ( 192 ) 308 ( 536 )

Other comprehensive income (loss) 155 ( 192 ) 308 ( 536 )

Other comprehensive (loss) income:

Equity interest in investee’s unrealized (losses) gains ( 119 ) ( 286 ) 189 ( 822 )

Other comprehensive (loss) income ( 119 ) ( 286 ) 189 ( 822 )

Comprehensive loss $ ( 47,064 ) $ ( 47,187 ) $ ( 201,350 ) $ ( 199,956 )

22 unchanged sentences

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

Net loss — — — — ( 46,945 ) — ( 46,945 )

Equity interest in investee’s unrealized losses — — — — — ( 119 ) ( 119 )

Common share grants 1,432,396 14 — 1,256 — — 1,270

Common share repurchases ( 203,002 ) ( 2 ) — ( 571 ) — — ( 573 )

Distributions — — ( 1,669 ) — — — ( 1,669 )

Balance at September 30, 2025 168,090,224 $ 1,681 $ ( 5,911,968 ) $ 4,562,706 $ 1,993,435 $ 2,054 $ 647,908

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

SERVICE PROPERTIES TRUST

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(dollars in thousands)

Number of Shares Common Shares Cumulative Common Distributions Additional Paid in Capital Cumulative

Net Income Cumulative Other Comprehensive Income Total

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

11 unchanged sentences

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

Net loss — — — — ( 46,901 ) — ( 46,901 )

Equity interest in investee’s unrealized losses — — — — — ( 286 ) ( 286 )

Common share grants 885,289 8 — 1,213 — — 1,221

Common share repurchases ( 137,674 ) ( 1 ) — ( 641 ) — — ( 642 )

Common share forfeitures ( 3,000 ) — — ( 1 ) — — ( 1 )

Distributions — — ( 33,178 ) — — — ( 33,178 )

Balance at September 30, 2024 166,648,452 $ 1,666 $ ( 5,905,300 ) $ 4,559,791 $ 2,271,366 $ 1,496 $ 929,019

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

2 unchanged sentences

(dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

7 unchanged sentences

Equity in losses of an investee 2,873 5,091

(Gain) loss on sale of real estate, net ( 590 ) 2,995

Gain on sale of real estate, net ( 25,846 ) ( 1,110 )

Other non-cash income, net ( 1,095 ) ( 1,035 )

11 unchanged sentences

Investment in Sonesta — ( 3,392 )

Net cash used in investing activities ( 94,307 ) ( 142,799 )

Net cash provided by (used in) investing activities 123,218 ( 180,121 )

Cash flows from financing activities:

1 unchanged sentence

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

Proceeds from senior secured notes, net of discounts 492,499 —

Repayments of senior unsecured notes ( 350,000 ) ( 1,162,653 )

5 unchanged sentences

Distributions to common shareholders ( 5,002 ) ( 99,484 )

Net cash used in financing activities ( 15,241 ) ( 68,468 )

Decrease in cash and cash equivalents and restricted cash ( 71,355 ) ( 168,374 )

Net cash provided by (used in) financing activities 24,323 ( 103,906 )

Increase (decrease) in cash and cash equivalents and restricted cash 283,846 ( 134,984 )

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

4 unchanged sentences

(dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Supplemental cash flow information:

Cash paid for interest $ 239,155 $ 230,027

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

Cash (refunded) paid for income taxes $ ( 4,696 ) $ 3,219

Non-cash investing activities:

4 unchanged sentences

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 June 30,

As of September 30,

Cash and cash equivalents $ 417,415 $ 48,588

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

At September 30, 2025, we owned, directly and through our subsidiaries, 160 hotels and 752 service-focused retail net lease properties.

Basis of Presentation

12 unchanged sentences

Significant estimates in our condensed consolidated financial statements include the allowance for credit losses, purchase price allocations, useful lives of fixed assets and impairment of real estate and related intangibles.

We have determined that each of our wholly owned taxable REIT subsidiaries, or TRSs, is a variable interest entity, or VIE, as defined under the Consolidation Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification ™ , or ASC .

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 $ 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 were $ 143,535 and $ 144,079 as of September 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 $ 78,830 and $ 78,749 as of September 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.

9 unchanged sentences

2023-09 will have on our condensed consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

In November 2024, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, or ASU 2024-03, which requires public entities to disclose specific expense categories such as employee compensation, depreciation and intangible asset amortization.

10 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 $ 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.

We increased rental income by $ 2,257 and $ 4,030 for the three months ended September 30, 2025 and 2024, respectively, and increased rental income by $ 8,818 and $ 14,576 for the nine months ended September 30, 2025 and 2024, respectively, to record scheduled rent changes under certain of our leases on a straight line basis.

Other assets, net, includes $ 94,775 and $ 81,574 of straight line rent receivables at September 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 $ 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.

We recorded percentage rent of $ 959 and $ 1,055 for the three months ended September 30, 2025 and 2024, respectively, and $ 2,306 and $ 2,070 for the nine months ended September 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.

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.

For the three and nine months ended September 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 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.

As of September 30, 2025, we owned 160 hotels with an aggregate of 29,536 rooms or suites and 752 service-focused retail net lease properties with an aggregate of 13,185,953 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 $ 8,921,010 , including $ 1,044,112 related to properties classified as held for sale as of September 30, 2025.

We funded capital improvements to certain of our properties of $ 131,664 and $ 217,108 during the nine months ended September 30, 2025 and 2024, respectively.

SERVICE PROPERTIES TRUST

1 unchanged sentence

(dollars in thousands, except per share amounts)

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.

During the nine months ended September 30, 2025, we acquired 20 net lease properties with a total of 150,776 square feet for a combined purchase price of $ 54,701 , 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:

2 unchanged sentences

Q2 2025 Net Lease 7 83,326 $ 30,149 $ 6,036 $ 19,621 $ 4,492

Q3 2025 Net Lease 13 67,450 25,091 5,798 15,935 3,358

20 150,776 $ 55,240 $ 11,834 $ 35,556 $ 7,850

(1) Purchase price is the gross contract price, plus closing costs of $ 539 .

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.

From October 1, 2025 through November 4, 2025, we acquired four net lease properties with a total of 21,703 square feet for a combined purchase price of $ 15,942 , excluding closing costs.

We have also entered into agreements to acquire five net lease properties with a total of 111,279 square feet for a combined purchase price of $ 25,350 , excluding closing costs.

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 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.

During the nine months ended September 30, 2025, we sold 56 properties for a combined sales price of $ 343,893 , excluding closing costs.

The sales of these properties as presented in the table below do not represent a strategic shift in our business.

As a result, the results of the operations of these properties are included in continuing operations through the date of sale in our condensed consolidated statements of comprehensive income (loss).

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

Gain (Loss) on Sale of Real Estate, net

Gain (Loss) on Sale of Real Estate, net Loss on Impairment of Real Estate (2)

Q1 2025 Hotel 4 514 $ 19,600 $ 403 $ —

2 unchanged sentences

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

Q3 2025 Hotel 40 5,565 292,352 24,982 72,398

Q3 2025 Net Lease 3 43,407 2,245 274 1,795

56 6,337 / 286,962

1 unchanged sentence

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

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.

(2) We also recorded impairment of $ 7,530 during the nine months ended September 30, 2025, related to certain properties we owned during the period.

As of September 30, 2025, we had 76 hotels with a total of 9,594 keys and seven net lease properties with a total of 117,689 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 June 30, 2025:

As of June 30, 2025

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

SERVICE PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

As of September 30, 2025

Hotels Net Lease Total

8 unchanged sentences

(1) Other assets, net includes working capital of $ 9,733 for our hotel investments segment as described in Note 6.

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.

From October 1, 2025 through November 4, 2025, we sold six hotels with a total of 777 keys for a combined sales price of $ 66,500 , excluding closing costs, and one net lease property with 37,440 square feet for a sales price of $ 550 , excluding closing costs.

We have also entered into agreements to sell 69 hotels with a total of 8,695 keys for a combined sales price of $ 567,500 , 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 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.

We are at various stages of selling six net lease properties with a total of 80,249 square feet and one hotel with 122 keys.

We believe it is probable that the sales of the 69 hotel properties will be completed by the end of 2025 and the sales of the remainder of these properties will be completed within one year.

Management Agreements and Leases

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.

As of September 30, 2025, we owned 160 hotels managed by four operators and 752 service-focused retail net lease properties leased to 178 tenants.

We do not operate any of our properties.

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

As of September 30, 2025, all 160 of our hotels were managed by subsidiaries of the following companies:

Sonesta ( 135 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 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.

As of September 30, 2025, our 752 service-focused retail net lease properties were leased by 178 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.

Hotel Agreements

Sonesta Agreement

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.

The Sonesta agreement further provides that we are paid an additional return equal to 80 % of the operating profits, as defined therein, after paying the owner’s priority return, reimbursing owner or manager advances, funding FF&E reserves and paying Sonesta’s incentive fee, if applicable.

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

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 $ 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 or six months ended June 30, 2025 or 2024.

Sonesta Agreements

As of September 30, 2025, Sonesta managed 39 of our full service hotels, 84 of our extended stay hotels and 12 of our select service hotels pursuant to management agreements.

The hotels Sonesta managed for us comprised approximately 46.7 % of our total historical real estate investments as of September 30, 2025.

We previously identified 122 hotels with a total of 15,931 keys managed by Sonesta as of December 31, 2024 for disposition in 2025.

As of September 30, 2025, we have sold 46 of these hotels with a total of 6,337 keys for a combined sales price of $ 324,852 , excluding closing costs, entered into agreements to sell 75 hotels with a total of 9,472 keys for a combined sales price of $ 634,000 , excluding closing costs, and are marketing one hotel with 122 keys for sale.

Upon completion of the hotel sales, we expect to retain 59 hotels managed by Sonesta, or the Retained Hotels.

As discussed below, in August 2025, we and Sonesta amended and restated our management agreements for the Retained Hotels managed by Sonesta and waived any termination fees under the existing Sonesta management agreement associated with the sale of the 122 hotels.

Prior to August 1, 2025, all of the hotels managed by Sonesta were managed pursuant to a management agreement that was scheduled to expire on January 31, 2037, or the legacy Sonesta agreement, and provided that we would be 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), were sufficient to do so.

The legacy Sonesta agreement further provided that we would be paid an additional return equal to 80 % of the operating profits, as defined therein, after paying the owner’s priority return, reimbursing owner or manager advances, funding FF&E reserves and paying Sonesta’s incentive fee, if any.

SERVICE PROPERTIES TRUST

1 unchanged sentence

(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.

On August 29, 2025, we entered into new management agreements with Sonesta for each of the Retained Hotels, in each case effective August 1, 2025, or the Retained Hotel agreements.

Each Retained Hotel agreement expires on July 31, 2040 and includes two 10-year renewal options at Sonesta’s option.

Pursuant to the Retained Hotel agreements, we will pay Sonesta, after payment of hotel operating expenses, a base management fee equal to 3.0 % of gross revenues for full service hotels and 5.0 % for extended stay and select service hotels.

Additionally, we are required to pay (i) an incentive fee equal to 20 % of EBITDA, as defined in the Retained Hotel agreements, in excess of the incentive threshold, subject to a cap, commencing with the 2026 calendar year, which has initially been set at $ 194,248 in the aggregate;

(ii) a brand promotion fee of 3.5 % of gross room revenues;

(iii) a loyalty fee of the greater of (x) 1.0 % of gross room revenues or (y) 4.5 % of qualified room revenue, in the case of full service hotels, 2.5 %, in the case of extended stay hotels, and 3.0 %, in the case of select service hotels;

(iv) a centralized service fee equal to $ 1,100 per year for full service hotels and $ 250 per year for extended stay and select service hotels, adjusted annually based on the Consumer Price Index;

and (v) a construction management fee of 3.0 % of construction and capital expenditures managed by Sonesta.

We have the right to terminate the Retained Hotel agreements for certain events of default, casualty and condemnation events, and if minimum performance thresholds are not met for two consecutive calendar years beginning with the measurement period commencing with the 2028 calendar year.

The Retained Hotel agreements are not subject to any pooling, cross-default or other similar contractual arrangement and the legacy Sonesta agreement will remain subject to a pooling agreement and cross-default provisions until the hotels are sold.

Our legacy Sonesta agreement and the Retained Hotel agreements are collectively referred to as our Sonesta agreements.

We realized returns under our Sonesta agreements of $ 37,209 and $ 54,554 during the three months ended September 30, 2025 and 2024, respectively, and $ 120,896 and $ 157,059 during the nine months ended September 30, 2025 and 2024, respectively.

We incurred management, reservation and system fees and reimbursement costs for certain guest loyalty, marketing programs or brand promotion fees, and third-party reservation transmission fees or centralized service fees of $ 31,575 and $ 31,500 for the three months ended September 30, 2025 and 2024, respectively, and $ 89,734 and $ 91,484 for the nine months ended September 30, 2025 and 2024, respectively, under our Sonesta agreements.

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 $ 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 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.

In addition, we incurred procurement and construction supervision fees payable to Sonesta pursuant to our legacy Sonesta agreement and construction management fees payable to Sonesta pursuant to our Sonesta agreements of $ 850 and $ 805 for the three months ended September 30, 2025 and 2024, respectively, and $ 2,096 and $ 1,792 for the nine months ended September 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.

Our Sonesta agreements require us to fund capital expenditures made at our hotels.

We incurred capital expenditures for hotels included in our Sonesta agreements in an aggregate amount of $ 123,075 and $ 182,493 during the nine months ended September 30, 2025 and 2024, respectively.

Our annual return equal to the incentive threshold under our Retained Hotel agreements as of September 30, 2025 was $ 195,807 .

We owed Sonesta $ 12,669 and $ 18,199 for capital expenditures and other reimbursements at September 30, 2025 and December 31, 2024, respectively.

Sonesta owed us $ 12,680 and $ 3,911 in owner’s priority returns and other amounts as of September 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 legacy 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 or nine months ended September 30, 2025 or 2024.

We are required to maintain minimum 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 September 30, 2025 and December 31, 2024, we had advanced $ 40,129 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.

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

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

Hyatt Agreement

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 $ 3,263 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.

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(dollars in thousands, except per share amounts)

Hyatt Agreement

As of September 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 September 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.

We realized returns under our Hyatt agreement of $ 3,262 and $ 2,037 during the three months ended September 30, 2025 and 2024, respectively, and $ 9,652 and $ 4,243 during the nine months ended September 30, 2025 and 2024, respectively.

During the nine months ended September 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 $ 1,869 , to record the guaranteed amount of the shortfall due from Hyatt.

The available balance of the guaranty was $ 28,131 as of September 30, 2025.

During the nine months ended September 30, 2025 and 2024, we incurred capital expenditures for certain hotels included in our Hyatt agreement of $ 2,388 and $ 25,113 , respectively.

Radisson Agreement

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 .

As of September 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 .

We realized returns under our Radisson agreement of $ 2,046 and $ 2,160 during the three months ended September 30, 2025 and 2024, respectively, and $ 5,487 and $ 5,400 during the nine months ended September 30, 2025 and 2024, respectively.

During the nine months ended September 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 $ 3,084 , to record the guaranteed amount of the shortfalls due from Radisson.

The available balance of the guaranty was $ 18,266 as of September 30, 2025.

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

During the nine months ended September 30, 2024, we incurred capital expenditures of $ 714 for the hotels included in our Radisson agreement, which resulted in an increase in our contractual owner’s priority returns of $ 42 .

IHG Agreement

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.

Our management agreement with IHG, or our IHG agreement, 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 IHG agreement of $ 1,819 and $ 1,189 during the three months ended September 30, 2025 and 2024, respectively, and $ 4,838 and $ 4,318 during the nine months ended September 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 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.

During the nine months ended September 30, 2025 and 2024, we incurred capital expenditures of $ 1,023 and $ 700 , respectively, for the hotel included in our IHG agreement.

We are currently in discussions with IHG regarding a potential extension of this agreement, but there can be no assurance that the agreement will be extended or the terms of such extension.

Net Lease Portfolio

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.

As of September 30, 2025, we owned 752 service-focused retail net lease properties with an aggregate of 13,185,953 square feet with leases requiring annual minimum rents of $ 388,745 with a weighted (by annual minimum rents) average remaining lease term of 7.5 years.

Our net lease properties were 97.3 % occupied and leased by 178 tenants operating under 139 brands in 21 distinct industries.

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(dollars in thousands, except per share amounts)

As of June 30, 2025, TA is our largest tenant, representing 28.7 % 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 $ 264,262 as of June 30, 2025.

As of September 30, 2025, TA is our largest tenant, representing 30.4 % 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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Our TA leases generally require TA to indemnify us for certain environmental matters and for liabilities that arise during the terms of the leases from ownership or operation of the leased travel centers.

Our TA leases do not require FF&E escrow deposits.

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 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.

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 September 30, 2025.

We recognized rental income from our TA leases of $ 67,834 for each of the three months ended September 30, 2025 and 2024, and $ 203,502 for each of the nine months ended September 30, 2025 and 2024.

Rental income was increased by $ 1,743 and $ 3,039 for the three months ended September 30, 2025 and 2024, respectively, and increased by $ 7,389 and $ 11,233 for the nine months ended September 30, 2025 and 2024, respectively, to record the scheduled rent changes on a straight line basis.

As of September 30, 2025 and December 31, 2024, we had receivables for current rent amounts owed to us by TA and straight line rent adjustments of $ 51,864 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 $ 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 recognized rental income from our net lease properties (excluding TA) of $ 33,360 and $ 32,402 for the three months ended September 30, 2025 and 2024, respectively, which included $ 514 and $ 991 , respectively, of adjustments to record scheduled rent changes under certain of our leases on a straight line basis, and $ 96,939 and $ 97,210 for the nine months ended September 30, 2025 and 2024, respectively, which included $ 1,429 and $ 3,343 , 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 $ 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 recorded reserves for uncollectable amounts and reduced rental income by $ 479 and $ 1,856 for the three and nine months ended September 30, 2025, respectively, based on our assessment of the collectability of rents.

We recorded reserves for uncollectable amounts and reduced rental income by $ 515 and $ 1,557 for the three and nine months ended September 30, 2024, respectively, based on our assessment of the collectability of rents.

We had reserves for uncollectable rents of $ 6,235 and $ 5,058 as of September 30, 2025 and December 31, 2024, respectively, included in other assets, net in our condensed consolidated balance sheets.

Equity Method Investment

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

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

As of September 30, 2025 and December 31, 2024, our investment in Sonesta had a carrying value of $ 113,134 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 June 30,

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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).

date of our acquisition.

We recorded amortization of the basis difference of $ 65 in each of the three months ended September 30, 2025 and 2024, and $ 195 in each of the nine months ended September 30, 2025 and 2024.

We recognized earnings of $ 1,600 and $ 2,963 related to our investment in Sonesta for the three months ended September 30, 2025 and 2024, respectively, and losses of $ 2,873 and $ 5,091 for the nine months ended September 30, 2025 and 2024, respectively.

These amounts, which include amortization of the basis difference, are included in equity in earnings (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 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.

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 legacy 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 September 30, 2025 and 2024 and $ 1,863 for each of the nine months ended September 30, 2025 and 2024 for amortization of this liability.

As of September 30, 2025 and December 31, 2024, the unamortized balance of this liability was $ 28,132 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 June 30, 2025 were:

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

Our principal debt obligations at September 30, 2025 were:

(1) $ 3,725,000 aggregate outstanding principal amount of senior unsecured notes;

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and (4) $ 45,000 of outstanding borrowings under our $ 45,000 variable funding note.

We had no amounts outstanding under our revolving credit facility as of September 30, 2025.

Revolving Credit Facility

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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.

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 June 30, 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 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.

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.

As of September 30, 2025 and 2024, the annual interest rate payable on borrowings under our revolving credit facility was 6.74 % and 7.46 %, respectively.

The weighted average annual interest rate for borrowings under our revolving credit facility was 6.96 % and 6.95 % f or the three and nine months ended September 30, 2025, respectively.

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

As of both September 30, 2025 and November 4, 2025, we had no amounts outstanding under our revolving credit facility and $ 650,000 available for borrowings.

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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.

Of the 47 hotels released from the collateral pool, 36 hotels with an aggregate of 4,862 keys and an aggregate undepreciated book value of $ 650,093 at the time of the amendment are part of our disposition plan.

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 .

As of September 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 $ 894,032 .

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.

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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.

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.

Senior Secured Notes Issuance

In September 2025, we issued $ 580,155 in aggregate principal amount at maturity of zero coupon senior secured notes due 2027 in a private offering, raising net proceeds of approximately $ 490,000 , after giving effect to original issue discount and deducting the initial purchasers’ discount and estimated transaction fees and expenses.

These notes are fully and unconditionally guaranteed on a joint and several basis by (i) newly formed wholly owned subsidiaries, or the TA Landlord Subsidiaries, that are the landlords with respect to a portfolio of our properties leased to TA, which we refer to as TA Lease No.

2, and (ii) all of our subsidiaries that guarantee our existing senior unsecured notes.

These notes are secured by first-priority liens on the equity interests of subsidiaries that own and lease 36 of our travel center properties with an undepreciated carrying value of $ 416,952 as of September 30, 2025.

These notes require no cash interest payments to accrue prior to maturity.

The accreted value of these notes will increase at a rate of 7.50 % per annum compounded semiannually on March 30 and September 30 of each year.

We have a one-time option to extend the maturity date of these notes by one year, subject to the satisfaction of certain conditions and the payment of an extension fee.

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.

In September 2025, we redeemed at par all of our outstanding 5.25 % senior unsecured notes due 2026 for a redemption price equal to the principal amount of $ 350,000 , plus accrued and unpaid interest to but excluding the date of redemption.

As a result of the redemption, we recorded a loss on early extinguishment of debt of $ 529 during the nine months ended September 30, 2025, which represented the write-off of unamortized discounts and issuance costs related to these notes.

In October 2025, we redeemed all $ 450,000 of our outstanding 4.75 % senior unsecured notes due 2026 for a redemption price equal to the principal amount plus accrued and unpaid interest to but excluding the date of redemption and a make whole premium of $ 1,796 .

Net Lease Mortgage Notes

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Our net lease mortgage notes are summarized below:

Note Class Principal Outstanding as of June 30, 2025

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

Note Class Principal Outstanding as of September 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 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.

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

During the nine months ended September 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 .

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

As of September 30, 2025, the current leases relating to the 314 properties required annual minimum rents of $ 66,509 and had an aggregate undepreciated book value of $ 751,442 .

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 $ 605,143 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 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.

As of September 30, 2025, the annual interest rate payable on borrowings under the VFN was 5.73 %.

The weighted average annual interest rate for borrowings under the VFN was 6.00 % and 6.03 % for the three and nine months ended September 30, 2025, respectively.

As of both September 30, 2025 and November 4, 2025, we had $ 45,000 outstanding under the VFN.

Shareholders’ Equity

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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.

On September 9, 2025, we awarded under our equity compensation plan an aggregate of 1,432,396 of our common shares, valued at $ 2.85 per share, the closing price of our common shares on Nasdaq on that day, to our officers and certain other employees of RMR and certain employees of Sonesta.

Share Purchases

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.

During the nine months ended September 30, 2025, we purchased an aggregate of 232,958 of our common shares, valued at $ 2.73 per common share, from current officers of ours and certain other current and 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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

Distributions

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

During the nine months ended September 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

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

July 10, 2025 July 21, 2025 August 14, 2025 0.01 1,669

$ 0.03 $ 5,002

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.

On October 9, 2025, we declared a regular quarterly distribution to common shareholders of record as of October 27, 2025 of $ 0.01 per common share, or approximately $ 1,681 .

We expect to pay this distribution on or about November 13, 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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

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

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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,

For the three and nine months ended September 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 September 30,

Nine Months Ended September 30,

Line Item 2025 2024 2025 2024

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$ 1,241 $ 1,080 $ 3,541 $ 3,206

(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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

(1) The net business management fees we recognized for each of the three and nine months ended September 30, 2025 and 2024, reflect a reduction of $ 896 and $ 2,689 , 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 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.

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

16 unchanged sentences

RMR also provides certain services to Sonesta.

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

As of September 30, 2025, we owned 34 % of Sonesta’s outstanding shares of common stock and Sonesta managed 135 of our hotels.

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

For further information about these and certain other such relationships and certain other related person transactions, refer to our 2024 Annual Report.

SERVICE PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

We have elected to be taxed as a REIT under the United States Internal Revenue Code of 1986, as amended, or the IRC, and, as such, are generally not subject to federal and most state income taxation on our operating income provided we distribute our taxable income to our shareholders and meet certain organization and operating requirements.

2 unchanged sentences

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 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)

During the three months ended September 30, 2025, we recognized income tax expense of $ 253 , which includes $ 1 of state tax expense and $ 252 of foreign tax expense.

During the three months ended September 30, 2024, we recognized an income tax benefit of $ 77 , which includes $ 50 of state tax benefit and $ 27 of foreign tax benefit.

During the nine months ended September 30, 2025, we recognized income tax expense of $ 1,553 , which includes $ 501 of state tax expense and $ 1,052 of foreign tax expense.

During the nine months ended September 30, 2024, we recognized income tax expense of $ 1,454 , which includes $ 659 of state tax expense and $ 795 of foreign tax expense.

Segment Information

11 unchanged sentences

(dollars in thousands, except per share amounts)

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Hotels Net Lease Total

15 unchanged sentences

General and administrative ( 11,057 )

Transaction costs ( 222 )

Interest income 4,766

Interest expense ( 95,365 )

Loss on early extinguishment of debt, net ( 529 )

Income tax expense ( 253 )

Equity in losses of an investee ( 526 )

Equity in earnings of an investee 1,600

Net loss $ ( 46,945 )

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Hotels Net Lease Total

18 unchanged sentences

Interest expense ( 274,888 )

Loss on early extinguishment of debt, net ( 529 )

Income tax expense ( 1,553 )

2 unchanged sentences

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

SERVICE PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share amounts)

(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 June 30, 2024

Three Months Ended September 30, 2024

Hotels Net Lease Total

16 unchanged sentences

697 8,827 9,524

Segment (loss) profit ( 4,220 ) 42,029 37,809

Segment profit 8,941 38,792 47,733

Reconciliation of segment profit or loss:

3 unchanged sentences

Loss on early extinguishment of debt, net ( 133 )

Income tax expense ( 524 )

Equity in losses of an investee ( 2,716 )

Income tax benefit 77

Equity in earnings of an investee 2,963

Net loss $ ( 46,901 )

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Hotels Net Lease Total

27 unchanged sentences

(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 September 30, 2025

As of December 31, 2024

3 unchanged sentences

Total assets $ 6,980,324 $ 7,119,558

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

7 unchanged sentences

Fair Value of Assets and Liabilities

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.

The table below presents certain of our assets carried at fair value at September 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

3 unchanged sentences

$ 166,957 $ — $ 166,957 $ —

(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).

(1) We recorded impairment charges totaling $ 7,530 during the nine months ended September 30, 2025, to reduce the carrying value of 17 hotels and one net lease property in our condensed consolidated balance sheet to their estimated fair value, less estimated costs to sell of $ 938 , based on negotiated sales prices with third party buyers (Level 2 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 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

At September 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:

September 30, 2025 December 31, 2024

Carrying Value (1)

8 unchanged sentences

447,590 441,711 446,758 420,809

Senior Secured Notes, due 2027 at zero coupon

491,763 511,424 — —

Net Lease Mortgage Notes, due 2028 at 5.60 %

14 unchanged sentences

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

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).

At September 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 September 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