Service Properties Trust 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our 2024 Annual Report. Overview (dollars in thousands, except per share amounts and per room hotel data) We are a REIT organized under the laws of the State of Maryland. As of September 30, 2025, we owned 912 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. Increased labor costs and other price inflation may continue to negatively impact our hotel operations and the operations of our tenants. Further, recent announcements regarding tariffs on a wide variety of imports could impact the cost of products our operators use, such as furniture, equipment, materials and supplies sourced from outside the United States. 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 previously identified 122 hotels managed by Sonesta with a total of 15,931 keys for disposition in 2025. As of November 4, 2025, we sold 52 of these hotels with a total of 7,114 keys for a combined sales price of $391,352, excluding closing costs, 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, and are marketing for sale one hotel with 122 keys. Upon completion of the hotel sales, we expect to retain 59 hotels managed by Sonesta. As discussed in Note 6 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, in August 2025, we and Sonesta amended and restated our management agreements for the 59 retained hotels managed by Sonesta and waived any termination fees under the legacy Sonesta agreement associated with the sale of the 122 hotels. Our current strategy is focused on reducing debt, transitioning to a company with the majority of its properties being service-focused retail net lease properties through the growth of 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 September 30, 2025, we owned 160 hotels managed by four operators. We leased all of these hotels to our wholly owned TRSs that are managed by hotel operating companies as of that date. At September 30, 2025, we also owned 752 service-focused retail properties leased to 178 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 September 30, 2025, we owned 160 hotels. During the three and nine months ended September 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 decreases in ADR and increases in 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. 27 Table of Contents Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 Change 2025 2024 Change Retained Hotels No. of hotels 84 84 — 84 84 — No. of rooms or suites 19,942 19,940 2 19,942 19,940 2 Occupancy 67.8 % 66.4 % 1.4 pts 64.6 % 63.3 % 1.3 pts ADR $ 168.00 $ 170.80 (1.6) % $ 172.54 $ 172.61 — % RevPAR $ 113.96 $ 113.33 0.6 % $ 111.43 $ 109.26 2.0 % Exit Hotels No. of hotels 76 130 (54) 76 130 (54) No. of rooms or suites 9,594 16,935 (7,341) 9,594 16,935 (7,341) Occupancy 71.1 % 68.3 % 2.8 pts 68.5 % 65.0 % 3.5 pts ADR $ 100.89 $ 106.11 (4.9) % $ 103.25 $ 106.28 (2.9) % RevPAR $ 71.75 $ 72.45 (1.0) % $ 70.77 $ 69.11 2.4 % All Hotels No. of hotels 160 214 (54) 160 214 (54) No. of rooms or suites 29,536 36,875 (7,339) 29,536 36,875 (7,339) Occupancy 68.9 % 67.2 % 1.7 pts 65.9 % 64.1 % 1.8 pts ADR $ 145.50 $ 140.66 3.4 % $ 149.11 $ 141.73 5.2 % RevPAR $ 100.25 $ 94.58 6.0 % $ 98.22 $ 90.84 8.1 % Comparable Hotels Data. We present occupancy, ADR and RevPAR for the periods presented on a comparable basis to facilitate comparisons between periods. We define comparable hotels as those that were owned by us and were open and operating for the entirety of the periods being compared. The following table provides a summary of these revenue metrics for the periods presented. Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 Change 2025 2024 Change Retained Hotels No. of hotels 84 84 — 84 84 — No. of rooms or suites 19,942 19,942 — 19,942 19,942 — Occupancy 67.8 % 66.4 % 1.4 pts 64.6 % 63.3 % 1.3 pts ADR $ 168.00 $ 170.80 (1.6) % $ 172.54 $ 172.61 — % RevPAR $ 113.96 $ 113.33 0.6 % $ 111.43 $ 109.26 2.0 % Exit Hotels No. of hotels 76 76 — 76 76 — No. of rooms or suites 9,594 9,594 — 9,594 9,594 — Occupancy 71.1 % 71.2 % (0.1) pts 68.5 % 69.0 % (0.5) pts ADR $ 100.89 $ 101.71 (0.8) % $ 103.25 $ 103.85 (0.6) % RevPAR $ 71.75 $ 72.45 (1.0) % $ 70.77 $ 71.63 (1.2) % Comparable Hotels No. of hotels 160 160 — 160 160 — No. of rooms or suites 29,536 29,536 — 19,942 19,942 — Occupancy 68.9 % 67.9 % 1.0 pts 65.9 % 65.1 % 0.8 pts ADR $ 145.50 $ 147.27 (1.2) % $ 149.11 $ 148.96 0.1 % RevPAR $ 100.25 $ 100.05 0.2 % $ 98.22 $ 97.04 1.2 % 28 Table of Contents Net Lease Portfolio . As of September 30, 2025, we owned 752 service-focused retail net lease properties with an aggregate of 13,185,953 square feet leased to 178 tenants subject to “triple net” leases (where the tenants are responsible for payments of operating expenses and capital expenditures) requiring annual minimum rents of $388,745. Our net lease properties were 97.3% occupied as of September 30, 2025 with a weighted (by annual minimum rent) average lease term of 7.5 years, operating under 139 brands in 21 distinct industries. TA is our largest tenant and as of September 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. BP Corporation North America Inc. guarantees payment under the TA leases, subject to a cap. Additional details of our hotel operating agreements and our net lease agreements are set forth in Note 6 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Results of Operations (amounts in thousands, except per share data) Three Months Ended September 30, 2025, Compared to Three Months Ended September 30, 2024 Three Months Ended September 30, 2025 2024 $ Change % Change Revenues: Hotel operating revenues $ 377,576 $ 390,935 $ (13,359) (3.4) % Rental income 101,194 100,236 958 1.0 % Total revenues 478,770 491,171 (12,401) (2.5) % Expenses: Hotel operating expenses 328,358 328,535 (177) (0.1) % Net lease operating expenses 5,236 4,791 445 9.3 % Depreciation and amortization - hotels 40,298 52,762 (12,464) (23.6) % Depreciation and amortization - net lease properties 34,155 36,243 (2,088) (5.8) % Total depreciation and amortization 74,453 89,005 (14,552) (16.3) % General and administrative 11,057 10,472 585 5.6 % Transaction related costs 2,683 — 2,683 n/m Loss on asset impairment 27,067 13,692 13,375 97.7 % Total expenses 448,854 446,495 2,359 0.5 % Gain on sale of real estate, net 25,256 4,105 21,151 n/m Interest income 4,841 537 4,304 n/m Interest expense (107,776) (99,126) (8,650) 8.7 % Loss on early extinguishment of debt, net (529) (133) (396) n/m Loss before income tax (expense) benefit and equity in earnings of an investee (48,292) (49,941) 1,649 (3.3) % Income tax (expense) benefit (253) 77 (330) n/m Equity in earnings of an investee 1,600 2,963 (1,363) (46.0) % Net loss $ (46,945) $ (46,901) $ (44) 0.1 % Weighted average common shares outstanding (basic and diluted) 166,085 165,398 687 0.4 % Net loss per common share (basic and diluted) $ (0.28) $ (0.28) $ — — % References to changes in the income and expense categories below relate to the comparison of consolidated results for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. Hotel operating revenues. The decrease in hotel operating revenues is primarily a result of our sales of certain hotels since July 1, 2024 ($17,030), partially offset by increases in occupancy and average rates at certain hotels during the 2025 period ($3,671). Additional operating statistics of our hotels are included in the tables beginning on page 41. 29 Table of Contents Rental income. The increase in rental income is primarily a result of the acquisitions of certain net lease properties since July 1, 2024 ($937) and higher rental income recognized in the 2025 period ($137), partially offset by our sale of certain net lease properties since July 1, 2024 ($116). Hotel operating expenses. The decrease in hotel operating expenses is primarily a result of our sales of certain hotels since July 1, 2024 ($14,373), partially offset by increases in wages and benefits ($7,510) and other operating expenses ($6,686) in the 2025 period. Net lease operating expenses. The increase in net lease operating expenses is primarily the result of increased property management fees ($648) and other operating expenses ($529) in the 2025 period, partially offset by decreases resulting from the sale of certain net lease properties since July 1, 2024 ($732). 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 ($12,464) 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 July 1, 2024 ($2,203) and our sale of certain net lease properties since July 1, 2024 ($492), partially offset by increases from our acquisition of certain net lease properties since July 1, 2024 ($607). General and administrative. The increase in general and administrative costs is primarily due to increases in other professional fees ($420) and business management fees ($165) in the 2025 period. Transaction related costs . Transaction related costs for the 2025 period primarily consisted of costs related to the sale and renovation of certain hotels. Loss on asset impairment. We recorded a $27,067 loss on asset impairment during the 2025 period to reduce the carrying value of 25 hotels and one net lease property to their estimated fair value less costs to sell. We recorded a $13,692 loss on asset impairment during the 2024 period to reduce the carrying value of four hotels and two net lease properties to their estimated fair value or estimated fair value less costs to sell. Gain on sale of real estate, net. We recorded a $25,256 net gain on sale of real estate during the 2025 period in connection with the sales of 40 hotels and three net lease properties. We recorded a $4,105 net gain on sale of real estate during the 2024 period in connection with the sales of six hotels and four net lease properties. Interest income. The increase in interest income is due to higher average cash balances invested and higher interest rates during the 2025 period compared to the 2024 period. Interest expense. The increase in interest expense is primarily due to higher debt outstanding and weighted average interest rates during the 2025 period compared to the 2024 period. Loss on early extinguishment of debt, net. We recorded a $529 loss on early extinguishment of debt, net in the 2025 period as a result of the redemption and write off of unamortized deferred financing costs and discounts of certain unsecured senior notes in the 2025 period. We recorded a $133 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) benefit. The change from income tax benefit in the 2024 period to income tax expense in the 2025 period is due to increases in foreign tax expense ($279) and state tax expense ($51) during the 2025 period. Equity in earnings of an investee. Equity in earnings of an investee represents our proportionate share of the earnings of Sonesta. Net loss. Our net loss increased and our net loss per common share (basic and diluted) did not change in the 2025 period compared to the 2024 period primarily due to the revenue and expense changes discussed above. 30 Table of Contents Nine Months Ended September 30, 2025, Compared to the Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2025 2024 $ Change % Change Revenues: Hotel operating revenues $ 1,116,944 $ 1,139,657 $ (22,713) (2.0) % Rental income 300,441 300,712 (271) (0.1) % Total revenues 1,417,385 1,440,369 (22,984) (1.6) % Expenses: Hotel operating expenses 963,111 961,868 1,243 0.1 % Net lease operating expenses 16,303 14,472 1,831 12.7 % Depreciation and amortization - hotels 132,495 163,237 (30,742) (18.8) % Depreciation and amortization - net lease properties 106,088 114,549 (8,461) (7.4) % Total depreciation and amortization 238,583 277,786 (39,203) (14.1) % General and administrative 30,831 31,659 (828) (2.6) % Transaction related costs 4,139 — 4,139 n/m Loss on asset impairment 81,788 51,030 30,758 60.3 % Total expenses 1,334,755 1,336,815 (2,060) (0.2) % Gain on sale of real estate, net 25,846 1,110 24,736 n/m Interest income 6,912 3,318 3,594 108.3 % Interest expense (311,972) (284,390) (27,582) 9.7 % Loss on early extinguishment of debt, net (529) (16,181) 15,652 (96.7) % Loss before income tax expense and equity in losses of an investee (197,113) (192,589) (4,524) 2.3 % Income tax expense (1,553) (1,454) (99) 6.8 % Equity in losses of an investee (2,873) (5,091) 2,218 (43.6) % Net loss $ (201,539) $ (199,134) $ (2,405) 1.2 % Weighted average common shares outstanding (basic and diluted) 165,816 165,252 564 0.3 % Net loss per common share (basic and diluted) $ (1.22) $ (1.21) $ (0.01) 0.8 % References to changes in the income and expense categories below relate to the comparison of consolidated results for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. Hotel operating revenues. The decrease in hotel operating revenues is primarily a result of our sales of certain hotels since January 1, 2024 ($37,769), partially offset by increases in occupancy and average rates at certain hotels during the 2025 period ($15,056). Additional operating statistics of our hotels are included in the tables beginning on page 41. Rental income. The decrease in rental income is primarily a result of our sales of certain net lease properties since January 1, 2024 ($934) and lower rental income recognized in the 2025 period ($538), partially offset by our acquisition of certain net lease properties during the 2025 period ($1,201). Hotel operating expenses. The increase in hotel operating expenses is primarily a result of increases in wages and benefits ($21,830) and other operating expenses ($12,590) in the 2025 period, partially offset by our sales of certain hotels since January 1, 2024 ($33,177). Net lease operating expenses. The increase in net lease operating expenses is primarily the result of increased property management fees ($1,847), partially offset by a decrease in other operating expenses at certain net lease properties ($16) 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 ($30,742) in the 2025 period. 31 Table of Contents 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 ($7,855) and our sale of certain net lease properties since January 1, 2024 ($1,428), partially offset by increases from our acquisition of certain net lease properties since January 1, 2024 ($822). General and administrative. The decrease in general and administrative costs is primarily due to decreases in business management fees ($1,202), partially offset by increase in other professional fees ($374) in the 2025 period. Transaction related cos ts. Transaction related costs for the 2025 period primarily consisted of costs related to the sale and renovation of certain hotels, partially offset by the recovery of a working capital reserve related to our former agreement with Marriott International, Inc. previously deemed uncollectable and expensed in 2021. Loss on asset impairment. We recorded a $81,788 loss on asset impairment during the 2025 period to reduce the carrying value of 28 hotels and three net lease properties to their estimated fair value less costs to sell. We recorded a $51,030 net loss on asset impairment during the 2024 period to reduce the carrying value of ten hotels and eight net lease properties to their estimated fair value or estimated fair value less costs to sell. Gain on sale of real estate, net. We recorded a $25,846 net gain on sale of real estate during the 2025 period in connection with the sales of 46 hotels and ten net lease properties. We recorded a $1,110 net gain on sale of real estate during the 2024 period in connection with the sale of seven hotels and seven net lease properties. Interest income. The increase in interest income is due to higher average cash balances invested 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 $529 loss on early extinguishment of debt, net in the 2025 period as a result of the redemption and write off of unamortized deferred financing costs and discounts of certain unsecured senior notes in the 2025 period. We recorded a $16,181 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 increase in income tax expense is primarily due to an increase in our foreign tax expense ($257), partially offset by a decrease in state income tax expense ($158) 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. Net loss. Our net loss and net loss per common share (basic and diluted) each increased in the 2025 period compared to the 2024 period primarily due to the revenue and expense changes discussed above. 32 Table of Contents Liquidity and Capital Resources (dollars in thousands, except per share amounts) Our Managers and Tenants As of September 30, 2025, all 160 of our hotels were managed by four hotel operating companies. Our 752 service-focused retail net lease properties were leased to 178 tenants. The costs of operating and maintaining our properties are generally paid by the hotel managers as agents for us or by our tenants for their own account. 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 September 30, 2025, Sonesta is our largest hotel manager (135 hotels) and TA is our largest tenant (175 travel centers). 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. 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. Tenants with no minimum rent required under the lease are excluded. EBITDAR amounts used to determine rent coverage are generally for the latest twelve-month period, based on the most recent operating information, if any, furnished by our tenants. Operating statements furnished by our tenants often are unaudited and, in certain cases, may not have been prepared in accordance with GAAP and are not independently verified by us. In instances where we do not have tenant financial information, we calculate an implied coverage ratio for the period based on other tenants with available financial statements operating the same brand or within the same industry. 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 2.04x and 2.16x as of September 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 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. We believe these sources of funds will be sufficient to meet our operating expenses and capital expenditures, pay debt service obligations and make distributions to our shareholders for the next twelve months and for the foreseeable future thereafter. 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 returns and rents to us when due, and, as a result, our cash flows and net income would decline. The following is a summary of our sources and uses of cash flows for the periods presented: Nine Months Ended September 30, 2025 2024 Cash and cash equivalents and restricted cash at the beginning of the period $ 157,386 $ 197,830 Net cash provided by (used in): Operating activities 136,305 149,043 Investing activities 123,218 (180,121) Financing activities 24,323 (103,906) Cash and cash equivalents and restricted cash at the end of the period $ 441,232 $ 62,846 33 Table of Contents The decrease in cash flow provided by operating activities in the 2025 period is primarily due to the sale of certain hotels and lower returns from our hotel portfolio in the 2025 period. The change from cash flow used in investing activities in the 2024 period to cash flow provided by investing activities in the 2025 period is primarily due to higher proceeds from the sale of real estate and decreased real estate improvements during the 2025 period, partially offset by real estate acquisitions during the 2025 period. The change from cash flow used in financing activities in the 2024 period to cash flow provided by financing activities during the 2025 period is primarily due to higher net borrowings, partially offset by 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. We lease 160 hotels to our wholly owned TRSs that are managed by hotel operating companies. As a REIT, we do not expect to pay federal income taxes on the majority of our income; however, the income realized by our TRSs in excess of the rent they pay to us is subject to U.S. federal income tax at corporate income tax rates. In addition, the income we receive from our hotels in Canada and Puerto Rico is subject to taxes in those jurisdictions and we are subject to taxes in certain states where we have properties despite our qualification for taxation as a REIT. Our Investment and Financing Liquidity and Capital Resources 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 nine months ended September 30, 2025, we funded $126,465 for capital improvements in excess of FF&E reserves available to our hotels. We currently expect to fund $70,000 during the last three 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 nine months ended September 30, 2025, certain of our hotel managers deposited $4,519 to these accounts and spent $3,570 from the FF&E reserve escrow accounts to renovate and refurbish our hotels. As of September 30, 2025, there was $6,391 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 nine months ended September 30, 2025, we funded $1,431 for capital improvements to our net lease properties. As of September 30, 2025, we had $5,576 of unspent leasing-related obligations related to certain of our net lease tenants. 34 Table of Contents During the nine months ended September 30, 2025, we sold 56 properties for a combined sales price of $343,893, 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 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. We expect to use the net sales proceeds from these sales for general business purposes, including to repay debt. 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, using cash on hand. 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, using cash on hand. 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. 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 nine months ended September 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 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 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 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. 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 September 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 September 30, 2025 and 2024, the annual interest rate payable on borrowings under our revolving credit facility was 6.74% and 7.46%, respectively. As of September 30, 2025 and November 4, 2025, we had no borrowings outstanding under our revolving credit facility and $650,000 available for borrowings. As collateral for all loans and other obligations under our revolving credit facility, certain of our subsidiaries pledged all of their respective equity interests in certain of our direct and indirect property owning subsidiaries, and our pledged subsidiaries provided first mortgage liens on certain properties, as discussed below. 35 Table of Contents 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 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. 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 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. 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) 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 secured 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. The net proceeds from this offering were used repay amounts outstanding under our revolving credit facility. Redemption of Senior Unsecured Notes 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. The redemption was funded using cash on hand. In October 2025, we redeemed all $450,000 of our outstanding $450,000 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. The redemption was funded using cash on hand and borrowings under our revolving credit facility. 36 Table of Contents Net Lease Mortgage Notes On January 27, 2025, the Issuer issued the VFN secured by the 314 net lease properties that secure our existing $605,143 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. The maturity date of the VFN is January 27, 2027, and, subject to the payment of an extension fee and meeting certain other conditions, can be extended by one year at the Issuer’s option. 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 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, $45,000 was outstanding under the VFN. Our debt maturities (other than our revolving credit facility and VFN) as of September 30, 2025 were as follows: Year Debt Maturities 2025 $ 490 2026 451,958 2027 1,432,113 2028 1,000,737 2029 1,125,000 Thereafter 1,900,000 $ 5,910,298 None of our senior note debt obligations require principal or sinking fund payments prior to their maturity dates. 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 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. Such alternatives may include incurring additional debt, issuing new equity securities and the sale of properties. We have an effective shelf registration statement that allows us to issue public securities on an expedited basis, but it does not assure that there will be buyers for such securities. We may also seek to participate in joint ventures or other arrangements that may provide us additional sources of financing. We may also assume mortgage debt on properties we may acquire or obtain mortgage financing on our existing properties. 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. Our ability to complete, and the costs associated with, future debt transactions depend primarily upon credit market conditions and our then perceived creditworthiness. We have no control over market conditions. Our credit ratings depend upon evaluations by credit rating agencies of our business practices and plans, including our ability to maintain our earnings, to stagger our debt maturities and to balance our use of debt and equity capital so that our financial performance and leverage ratios afford us flexibility to withstand any reasonably anticipated adverse changes. Similarly, our ability to raise equity capital in the future will depend primarily upon equity capital market conditions and our ability to conduct our business to maintain and grow our operating cash flows. We intend to conduct our business activities in a manner which will afford us reasonable access to capital for investment and financing activities. However, as discussed elsewhere in this Quarterly Report on Form 10-Q, the impacts of the current, and possibly future, inflationary conditions, uncertainties surrounding interest rates and a possible economic recession are uncertain and may have various negative consequences on us and our operations, including a decline in financing availability and increased costs for financing. Further, such conditions could also disrupt the capital markets generally and limit our access to financing from public sources or on favorable terms, particularly if the global financial markets experience significant disruptions. 37 Table of Contents Debt Covenants Our debt obligations at September 30, 2025 consisted of $5,305,155 aggregate principal amounts of senior notes, $605,143 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 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 September 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. 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 September 30, 2025: Actual Results (1) Covenant Requirement Total debt / adjusted total assets 57.5% Maximum of 60% Secured debt / adjusted total assets 23.9% Maximum of 40% Consolidated income available for debt service / debt service 1.56x Minimum of 1.50x Total unencumbered assets / unsecured debt 202.6% Minimum 150% Total unencumbered assets in guarantor subsidiaries / senior guaranteed unsecured debt 3.84x Minimum of 2.20x (1) As adjusted for the redemption of $450,000 of 4.75% senior unsecured notes redeemed in October 2025. As of September 30, 2025, as adjusted for the redemption of $450,000 of 4.75% senior unsecured notes redeemed in October 2025, adjusted total assets for covenant purposes as defined in our senior notes indentures were $9,746,354 and assets encumbered under our revolving credit facility, serving as collateral for our net lease mortgage notes or secured senior notes represented $3,112,680 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 $5,130,095, $457,181, $851,505 and $194,893 of adjusted total assets, respectively. The following table presents the calculation of adjusted total assets to total assets in accordance with GAAP: Total assets $ 6,630,324 Plus: accumulated depreciation (1) 2,931,891 Plus: impairment and other adjustments to reflect original cost of real estate assets 405,597 Less: accounts receivable and intangibles (221,458) Adjusted total assets $ 9,746,354 (1) Includes $498,233 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 debt agreements. Acceleration and Cross-Default Our indentures and their supplements contain cross default provisions to any other debt of $50,000 or more. Similarly, our credit agreement has cross default provisions to other indebtedness that is recourse of $25,000 or more and indebtedness that is non-recourse of $75,000 or more. Neither our indentures and their supplements nor our credit agreement contain provisions for acceleration which could be triggered by a change in our debt ratings. 38 Table of Contents Supplemental Guarantor Information Our 5.50% Senior Notes due 2027, or the 2027 Notes, our 8.375% Senior Guaranteed Unsecured Notes due 2029, or the 2029 Notes, and our 8.875% Senior Guaranteed Unsecured Notes due 2032, or the 2032 Notes, are fully and unconditionally guaranteed, on a joint and several basis and on a senior unsecured basis, by all of our subsidiaries, except for certain excluded subsidiaries, including our foreign subsidiaries and our subsidiaries pledged under our credit agreement and our net lease mortgage notes. The notes and the guarantees will be effectively subordinated to all of our and the subsidiary guarantors’ secured indebtedness, respectively, to the extent of the value of the collateral securing such secured indebtedness, and will be structurally subordinated to all indebtedness and other liabilities and any preferred equity of any of our subsidiaries that do not guarantee the notes. Our remaining $2,075,000 of senior unsecured notes do not have the benefit of any guarantees. A subsidiary guarantor’s guarantee of the 2027 Notes, the 2029 Notes and the 2032 Notes and all other obligations of such subsidiary guarantor under the indentures governing the notes will automatically terminate and such subsidiary guarantor will automatically be released from all of its obligations under such subsidiary guarantee and such indenture under certain circumstances, including on or after the date on which (a) the notes have received a rating equal to or higher than Baa2 (or the equivalent) by Moody’s Investor Services, or Moody’s, and BBB (or the equivalent) by Standard & Poor’s Ratings Services, or S&P, or if Moody’s or S&P ceases to rate the notes for reasons outside of our control, the equivalent investment grade rating from any other rating agency and (b) no default or event of default has occurred and is continuing under the indenture. Our non-guarantor subsidiaries are separate and distinct legal entities and will have no obligation, contingent or otherwise, to pay any amounts due on these notes or the guarantees, or to make any funds available therefor, whether by dividend, distribution, loan or other payments. The rights of holders of these notes to benefit from any of the assets of our non-guarantor subsidiaries are subject to the prior satisfaction of claims of those subsidiaries’ creditors and any preferred equity holders. As a result, these notes and the related guarantees will be effectively subordinated to all of our and the subsidiary guarantors’ secured indebtedness, respectively, to the extent of the value of the collateral securing such secured indebtedness, and will be structurally subordinated to all indebtedness and other liabilities of our subsidiaries that do not guarantee these notes, including guarantees of or pledges under other indebtedness of ours, payment obligations under lease agreements, trade payables and preferred equity. 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 September 30, 2025 As of December 31, 2024 Real estate properties, net (1) $ 3,913,336 $ 4,167,260 Other assets, net 778,508 507,507 Indebtedness, net $ 5,147,233 $ 5,142,420 Intercompany balances (2) 1,558,539 751,637 Other liabilities 330,279 358,778 Nine Months Ended September 30, 2025 Revenues $ 1,134,198 Expenses 1,395,011 Net loss $ (260,813) (1) Real estate properties, net as of September 30, 2025 includes $33,234 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. 39 Table of Contents Related Person Transactions We have relationships and historical and continuing transactions with RMR, RMR Inc. and Sonesta and others related to them. For further information about these and other such relationships and related person transactions, see Notes 6, 10 and 11 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, our 2024 Annual Report, our definitive Proxy Statement for our 2025 Annual Meeting of Shareholders and our other filings with the Securities and Exchange Commission, or SEC. In addition, see the section captioned “Risk Factors” in our 2024 Annual Report for a description of risks that may arise as a result of these and other related person transactions and relationships. We may engage in additional transactions with related persons, including businesses to which RMR or its subsidiaries provide management services. Critical Accounting Estimates The preparation of our condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the condensed consolidated financial statements include consolidation of VIEs, purchase price allocations, the determination of useful lives of fixed assets, classification of leases, and the assessment of the book values and impairment of real estate intangible assets and equity investments. A discussion of our critical accounting estimates is included in our 2024 Annual Report. There have been no significant changes in our critical accounting estimates since the year ended December 31, 2024. 40 Table of Contents Property and Operating Statistics (dollars in thousands, except hotel statistics) As of September 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 148 distinct brands across 22 industries. Hotel Portfolio The following tables summarize the operating statistics, including occupancy, ADR and RevPAR reported to us by our hotel managers by hotel brand for the periods indicated. All operating data presented are based upon the operating results provided by our hotel managers for the indicated periods. We have not independently verified our managers’ operating data. All Hotels* No. of Rooms or Suites Occupancy ADR RevPAR Service Level No. of Hotels Three Months Ended September 30, Three Months Ended September 30, Three Months Ended September 30, Brand 2025 2024 Change 2025 2024 Change 2025 2024 Change Retained Hotels: Royal Sonesta Hotels® Full Service 17 5,663 67.5 % 67.5 % – pts $223.89 $227.48 (1.6) % $ 151.04 $ 153.49 (1.6) % Sonesta Hotels & Resorts® Full Service 22 7,207 64.8 % 60.5 % 4.3 pts 154.77 158.39 (2.3) % 100.29 95.87 4.6 % Radisson® Hotels & Resorts Full Service 5 1,149 61.6 % 67.2 % (5.6) pts 153.93 148.21 3.9 % 94.78 99.53 (4.8) % Country Inn & Suites® by Radisson Full Service 2 346 80.3 % 78.3 % 2.0 pts 158.34 167.43 (5.4) % 127.10 131.05 (3.0) % Crowne Plaza® Full Service 1 495 65.6 % 62.7 % 2.9 pts 150.00 141.21 6.2 % 98.36 88.49 11.2 % Full Service Total/Average 47 14,860 66.0 % 64.2 % 1.8 pts 181.58 184.94 (1.8) % 119.76 118.68 0.9 % Sonesta ES Suites® Extended Stay 7 958 81.0 % 75.2 % 5.8 pts 151.09 157.62 (4.1) % 122.45 118.60 3.2 % Sonesta Select® Select Service 6 873 70.4 % 70.8 % (0.4) pts 150.13 156.51 (4.1) % 105.67 110.78 (4.6) % Sonesta Simply Suites® Extended Stay 7 1,144 73.1 % 76.4 % (3.3) pts 125.04 123.76 1.0 % 91.35 94.53 (3.4) % Hyatt Place® Select Service 17 2,107 71.2 % 70.4 % 0.8 pts 119.27 120.02 (0.6) % 84.95 84.50 0.5 % Focused Service Total/Average 37 5,082 73.3 % 72.7 % 0.6 pts 132.28 134.34 (1.5) % 97.02 97.70 (0.7) % Retained Hotels Total/Average 84 19,942 67.8 % 66.4 % 1.4 pts $168.00 $170.80 (1.6) % $ 113.96 $ 113.33 0.6 % Exit Hotels: Sonesta ES Suites® Extended Stay 32 4,101 72.5 % 72.0 % 0.5 pts $121.09 $121.86 (0.6) % $ 87.83 $ 87.70 0.1 % Sonesta Select® Select Service 6 880 52.4 % 54.4 % (2.0) pts 99.01 99.65 (0.6) % 51.85 54.24 (4.4) % Sonesta Simply Suites® Extended Stay 38 4,613 73.4 % 73.8 % (0.4) pts 83.42 84.53 (1.3) % 61.25 62.37 (1.8) % Exit Hotels Total/Average 76 9,594 71.1 % 71.2 % (0.1) pts 100.89 101.71 (0.8) % 71.75 72.45 (1.0) % All Hotels Total/Average 160 29,536 68.9 % 67.9 % 1.0 pts $145.50 $147.27 (1.2) % $ 100.25 $ 100.05 0.2 % * Includes results of all hotels owned as of September 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 represents 76 hotels managed by Sonesta that we plan to sell. 41 Table of Contents All Hotels* No. of Rooms or Suites Occupancy ADR RevPAR Service Level No. of Hotels Nine Months Ended September 30, Nine Months Ended September 30, Nine Months Ended September 30, Brand 2025 2024 Change 2025 2024 Change 2025 2024 Change Retained Hotels: Royal Sonesta Hotels® Full Service 17 5,663 62.3 % 61.9 % 0.4 pts $235.10 $234.33 0.3 % $ 146.53 $ 145.13 1.0 % Sonesta Hotels & Resorts® Full Service 22 7,207 61.8 % 60.6 % 1.2 pts 162.92 162.24 0.4 % 100.69 98.29 2.4 % Radisson® Hotels & Resorts Full Service 5 1,149 62.0 % 66.3 % (4.3) pts 153.67 148.43 3.5 % 95.22 98.42 (3.3) % Country Inn & Suites® by Radisson Full Service 2 346 68.7 % 71.1 % (2.4) pts 146.38 153.08 (4.4) % 100.61 108.82 (7.5) % Crowne Plaza® Full Service 1 495 68.9 % 65.5 % 3.4 pts 144.53 144.86 (0.2) % 99.55 94.95 4.8 % Full Service Total/Average 47 14,860 62.4 % 62.0 % 0.4 pts 188.56 187.69 0.5 % 117.69 116.28 1.2 % Sonesta ES Suites® Extended Stay 7 958 76.6 % 72.7 % 3.9 pts 151.22 155.75 (2.9) % 115.77 113.16 2.3 % Sonesta Select® Select Service 6 873 68.0 % 65.6 % 2.4 pts 138.10 142.05 (2.8) % 93.88 93.25 0.7 % Sonesta Simply Suites® Extended Stay 7 1,144 71.3 % 71.9 % (0.6) pts 123.54 121.71 1.5 % 88.09 87.46 0.7 % Hyatt Place® Select Service 17 2,107 69.4 % 62.9 % 6.5 pts 122.90 121.53 1.1 % 85.29 76.50 11.5 % Focused Service Total/Average 37 5,082 70.9 % 67.2 % 3.7 pts 131.31 131.98 (0.5) % 93.14 88.76 4.9 % Retained Hotels Total/Average 84 19,942 64.6 % 63.3 % 1.3 pts $172.54 $172.61 — % $ 111.43 $ 109.26 2.0 % Exit Hotels: Sonesta ES Suites® Extended Stay 32 4,101 70.9 % 70.4 % 0.5 pts $123.46 $123.74 (0.2) % $ 87.54 $ 87.15 0.4 % Sonesta Select® Select Service 6 880 58.0 % 59.5 % (1.5) pts 115.21 117.77 (2.2) % 66.81 70.04 (4.6) % Sonesta Simply Suites® Extended Stay 38 4,613 68.5 % 69.5 % (1.0) pts 82.71 83.66 (1.1) % 56.63 58.14 (2.6) % Exit Hotels Total/Average 76 9,594 68.5 % 69.0 % (0.5) pts 103.25 103.85 (0.6) % 70.77 71.63 (1.2) % All Hotels Total/Average 160 29,536 65.9 % 65.1 % 0.8 pts $149.11 $148.96 0.1 % $ 98.22 $ 97.04 1.2 % * Includes results of all hotels owned as of September 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 represents 76 hotels managed by Sonesta that we plan to sell. Net Lease Portfolio As of September 30, 2025, our net lease properties were 97.3% occupied and we had 20 properties available for lease. During the nine months ended September 30, 2025, we entered into lease renewals for 559,303 rentable square feet (21 properties) at weighted (by rentable square feet) average rents that were 5.3% below the prior rents for the same space. The weighted (by rentable square feet) average lease term for these leases was 10.4 years. We also entered into new leases for 19,371 rentable square feet (four properties) at rent that was 1.9% below the prior rent for the same space. The weighted (by rentable square feet) average lease term for these leases was 14.5 years. Generally, lease agreements with our net lease tenants require payment of minimum rent to us. Certain of these minimum rent payment amounts are secured by full or limited guarantees. Annualized minimum rent represents cash amounts and excludes adjustments, if any, necessary to record scheduled rent changes on a straight line basis or any expense reimbursement. Annualized minimum rent excludes the impact of rents prepaid by TA. 42 Table of Contents As of September 30, 2025, our net lease tenants operated across 139 brands. The following table identifies the top ten brands based on annualized minimum rent: Brand No. of Properties Investment (1) Percent of Total Investment Annualized Minimum Rent Percent of Total Annualized Minimum Rent Rent Coverage (2) 1. TravelCenters of America Inc. 131 $ 2,254,950 44.6 % $ 180,329 46.4 % 1.27 x (3) 2. Petro Stopping Centers 44 1,015,156 20.1 % 83,933 21.6 % 1.27 x (3) 3. The Great Escape 14 98,242 1.9 % 7,711 2.0 % 4.75 x 4. Life Time Fitness 3 92,617 1.8 % 6,347 1.6 % 2.59 x 5. Buehler's Fresh Foods 5 76,469 1.5 % 5,657 1.5 % 2.72 x 6. Heartland Dental 59 61,120 1.2 % 4,841 1.2 % 4.79 x 7. Pizza Hut 44 51,312 1.0 % 4,124 1.1 % 2.17 x 8. Express Oil Change 23 49,724 1.0 % 3,717 1.0 % 5.77 x 9. AMC Theatres 5 57,446 1.1 % 3,575 0.9 % 1.83 x 10. Norms 10 53,673 1.1 % 3,430 0.9 % 3.75 x Other (4) 414 1,244,967 24.7 % 85,081 21.8 % 3.74 x Total 752 $ 5,055,676 100.0 % $ 388,745 100.0 % 2.04 x (1) Represents the historical cost of our properties plus capital improvements funded by us less impairment write-downs, if any. (2) See page 33 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 September 30, 2025. (4) Consists of 129 distinct brands with an average investment of $3,007 per property and average annual minimum rent of $206 per property. As of September 30, 2025, our top ten net lease tenants based on our annualized minimum rent are listed below: Tenant Brand Affiliation No. of Properties Investment (1) Percent of Total Investment Annualized Minimum Rent Percent of Total Annualized Minimum Rent Rent Coverage (2) 1. TravelCenters of America Inc. (3) TravelCenters of America / Petro Stopping Centers 175 $ 3,270,106 64.7 % $ 264,262 68.0 % 1.27x 2. Universal Pool Co., Inc. The Great Escape 14 98,242 1.9 % 7,711 2.0 % 4.75x 3. Healthy Way of Life II, LLC Life Time Fitness 3 92,617 1.8 % 6,347 1.6 % 2.59x 4. Styx Acquisition, LLC Buehler's Fresh Foods 5 76,469 1.5 % 5,657 1.5 % 2.72x 5. Professional Resource Development, Inc. Heartland Dental 59 61,120 1.2 % 4,841 1.2 % 4.79x 6. Express Oil Change, L.L.C. Express Oil Change 23 49,724 1.0 % 3,717 1.0 % 5.77x 7. Norms Restaurants, LLC Norms 10 53,673 1.1 % 3,430 0.9 % 3.75x 8. Pilot Travel Centers LLC Flying J Travel Plaza 3 41,681 0.8 % 3,312 0.9 % 3.14x 9. Automotive Remarketing Group, Inc. America's Auto Auction 6 38,314 0.8 % 3,216 0.8 % 10.27x 10. Fleet Farm Group LLC Fleet Farm 1 37,802 0.7 % 2,894 0.7 % 2.11x Subtotal, top 10 299 3,819,748 75.5 % 305,387 78.6 % 1.67x 11. Other (4) Various 453 1,235,928 24.5 % 83,358 21.4 % 3.40x Total 752 $ 5,055,676 100.0 % $ 388,745 100.0 % 2.04x (1) Represents the historical cost of our net lease properties plus capital improvements funded by us less impairment write-downs, if any. (2) See page 33 for our definition of rent coverage. (3) TA is our largest tenant. As of September 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 payment under each of the five master leases. The aggregate guaranty as of September 30, 2025 was $3,037,475. Annualized minimum rent excludes the impact of rents prepaid by TA. Rent coverage was 1.31x, 1.30x, 1.40x, 1.32x and 1.08x for our TA leases no. 1, no. 2, no. 3, no. 4 and no. 5, respectively. Rent coverage is as of September 30, 2025. (4) Consists of 168 tenants with an average investment of $2,728 per property and an average annual minimum rent of $184 per property. 43 Table of Contents As of September 30, 2025, our net lease tenants operated across 21 distinct industries within the service-focused retail sector of the U.S. economy. Industry No. of Properties Investment (1) Percent of Total Investment Annualized Minimum Rent Percent of Total Annualized Minimum Rent Rent Coverage (2) 1. Travel Centers 178 $ 3,311,787 65.5% $ 267,574 68.8 % 1.29 x (3) 2. Restaurants - Quick Service 211 293,499 5.8% 20,758 5.3 % 2.88 x 3. Health and Fitness 14 196,097 3.9% 12,463 3.2 % 2.11 x 4. Restaurants - Casual Dining 56 198,586 3.9% 12,184 3.1 % 3.26 x 5. Grocery Stores 19 129,152 2.6% 9,317 2.4 % 3.22 x 6. Medical, Dental Office 70 104,042 2.1% 8,354 2.1 % 3.56 x 7. Movie Theaters 14 134,474 2.7% 8,253 2.1 % 1.94 x 8. Automotive Equipment and Services 64 107,141 2.1% 7,865 2.0 % 4.98 x 9. Home Goods and Leisure 14 98,242 1.9% 7,711 2.0 % 4.75 x 10. Automotive Dealers 8 62,656 1.2% 5,094 1.3 % 8.06 x 11. General Merchandise Stores 4 55,457 1.1% 4,054 1.0 % 2.94 x 12. Entertainment 3 51,473 1.0% 3,947 1.0 % 1.29 x 13. Educational Services 7 44,820 0.9% 3,478 0.9 % 1.94 x 14. Building Materials 29 34,006 0.7% 3,258 0.8 % 8.62 x 15. Car Washes 7 36,125 0.7% 2,840 0.7 % 4.96 x 16. Miscellaneous Manufacturing 5 24,355 0.5% 1,730 0.4 % 14.26 x 17. Sporting Goods 3 18,548 0.4% 1,106 0.3 % 4.32 x 18. Legal Services 5 11,362 0.2% 1,097 0.3 % 3.32 x 19. Dollar Stores 7 10,164 0.2% 721 0.2 % 2.34 x 20. Drug Stores and Pharmacies 3 9,699 0.2% 590 0.2 % 1.26 x 21. Other (4) 11 66,054 1.3% 6,351 1.9 % 4.53 x 22. Vacant 20 57,937 1.1% — — % — x Total 752 $ 5,055,676 100.0% $ 388,745 100.0% 2.04 x (1) Represents the historical cost of our net lease properties plus capital improvements funded by us less impairment write-downs, if any. (2) See page 33 for our definition of rent coverage. (3) Rent coverage for TA is as of September 30, 2025. (4) Consists of miscellaneous businesses with an average investment of $6,005 per property. 44 Table of Contents As of September 30, 2025, lease expirations at our net lease properties by year are as follows: Year (1) Number of Properties Square Feet Annualized Minimum Rent Expiring Percent of Total Annualized Minimum Rent Expiring Cumulative Percent of Total Annualized Minimum Rent Expiring 2025 13 140,372 $ 2,497 0.6% 0.6% 2026 104 1,072,915 13,359 3.4% 4.0% 2027 36 1,007,582 12,781 3.3% 7.3% 2028 22 594,918 9,662 2.5% 9.8% 2029 73 602,537 10,193 2.6% 12.4% 2030 35 290,019 6,707 1.7% 14.1% 2031 29 404,162 5,493 1.4% 15.5% 2032 35 137,154 2,903 0.7% 16.2% 2033 213 5,371,427 270,537 69.6% 85.8% 2034 22 289,885 5,728 1.6% 87.4% 2035 47 1,179,701 20,565 5.3% 92.7% 2036 15 350,190 6,110 1.6% 94.3% 2037 11 318,609 3,306 0.9% 95.2% 2038 6 44,484 1,201 0.3% 95.5% 2039 13 178,338 4,076 1.0% 96.5% 2040 27 170,179 4,446 1.1% 97.6% 2041 9 233,084 2,802 0.7% 98.3% 2042 1 5,775 160 —% 98.3% 2043 7 127,440 2,158 0.6% 98.9% 2044 2 93,010 278 0.1% 99.0% 2045 12 157,306 3,783 1.0% 100.0% Total 732 12,769,087 $ 388,745 100.0% (1) The year of lease expiration is pursuant to contract terms. As of September 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. State Number of Properties Square Feet Annualized Minimum Rent Percent of Total Annualized Minimum Rent Texas 54 1,132,614 $ 33,496 8.6% Illinois 54 973,236 27,852 7.2% Ohio 38 1,289,668 27,393 7.0% California 22 399,045 25,979 6.7% Georgia 70 580,553 20,777 5.3% Florida 48 587,706 18,330 4.7% Arizona 25 476,651 17,012 4.4% Indiana 39 519,353 16,265 4.2% Pennsylvania 28 544,003 15,977 4.1% New Mexico 16 246,478 12,014 3.1% Other 358 6,436,646 173,650 44.7% Total 752 13,185,953 $ 388,745 100.0% 45 Table of Contents Non-GAAP Financial Measures We present certain “non-GAAP financial measures” within the meaning of the applicable SEC rules, including funds from operations, or FFO, and normalized funds from operations, or Normalized FFO. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income (loss) as indicators of our operating performance or as measures of our liquidity. These measures should be considered in conjunction with net income (loss) as presented in our condensed consolidated statements of comprehensive income (loss). We consider these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net income (loss). We believe these measures provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation and amortization expense, they may facilitate a comparison of our operating performance between periods and with other REITs. Funds From Operations and Normalized Funds From Operations We calculate FFO and Normalized FFO as shown below. FFO is calculated on the basis defined by The National Association of Real Estate Investment Trusts, which is net income (loss), calculated in accordance with GAAP, excluding any gain or loss on sale of real estate and loss on impairment of real estate assets, if any, plus real estate depreciation and amortization, as well as adjustments to reflect our share of FFO attributable to an investee and certain other adjustments currently not applicable to us. In calculating Normalized FFO, we adjust for the items shown below. 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 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 and nine months ended September 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 September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net loss $ (46,945) $ (46,901) $ (201,539) $ (199,134) Add (less): Depreciation and amortization 74,453 89,005 238,583 277,786 Loss on asset impairment 27,067 13,692 81,788 51,030 Gain on sale of real estate, net (25,256) (4,105) (25,846) (1,110) Adjustments to reflect our share of FFO attributable to an investee 1,113 1,045 3,495 3,032 FFO 30,432 52,736 96,481 131,604 Add (less): Loss on early extinguishment of debt, net 529 133 529 16,181 Transaction related costs 2,683 — 4,139 — Adjustments to reflect our share of Normalized FFO attributable to an investee 266 — 1,200 — Normalized FFO $ 33,910 $ 52,869 $ 102,349 $ 147,785 Weighted average common shares outstanding (basic and diluted) 166,085 165,398 165,816 165,252 Basic and diluted per common share amounts: Net loss $ (0.28) $ (0.28) $ (1.22) $ (1.21) FFO $ 0.18 $ 0.32 $ 0.58 $ 0.80 Normalized FFO $ 0.20 $ 0.32 $ 0.62 $ 0.89 Distributions declared per share $ 0.01 $ 0.20 $ 0.03 $ 0.60 46 Table of Contents