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Item 1. Business

2026-02-25 compared with 2025-02-26 · 145 added, 161 removed, 757 unchanged (29% of the section changed)

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

As of December 31, 2024, we owned 206 hotels with an aggregate of 35,871 rooms or suites located in 35 states, the District of Columbia, Ontario, Canada and San Juan, Puerto Rico and 742 service-focused retail net lease properties with an aggregate of 13,292,519 square feet located in 42 states.

As of December 31, 2025, we owned 760 service-focused retail net lease properties with an aggregate of 13,601,902 square feet located in 42 states and 94 hotels with an aggregate of 21,243 rooms or suites located in 31 states, the District of Columbia, Ontario, Canada, and San Juan, Puerto Rico.

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

We seek to have a geographically diverse portfolio of real estate primarily in the United States.

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

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

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

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

We apply asset management strategies to aid our hotel operators in improving performance and operating income of our hotel properties.

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

During 2025, we sold 112 hotels with a total of 14,631 keys and we acquired 29 net lease properties with a total of 283,759 square feet.

We are currently marketing additional hotels for sale and may acquire additional net lease properties as part of our initiative to re-balance our portfolio.

Our external growth strategy is defined by our acquisition, disposition and financing policies as described below.

Our investment, financing and disposition policies and business strategies are established by our Board of Trustees and may be changed by our Board of Trustees at any time without shareholder approval.

Hotel Portfolio

As of December 31, 2024, we owned 206 hotels with 35,871 rooms or suites located in 35 states, the District of Columbia, Ontario, Canada and San Juan, Puerto Rico.

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

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

In October 2024, we announced our plan to sell 114 extended stay and select service hotels managed by Sonesta and concentrate the Sonesta portfolio on full service hotels and certain higher performing extended stay and select service hotels.

The following table summarizes the brand affiliations, service level and chain scale of our hotels, as characterized by STR Inc., or STR, a data benchmark and analytics provider for the lodging industry, under which our hotels operate as of December 31, 2024 (dollars in thousands):

Brand Manager Service Level Chain Scale (1)

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

Royal Sonesta Hotels® Sonesta Full Service Upper Upscale 17 5,663 $ 1,922,244

Sonesta Hotels & Resorts® Sonesta Full Service Upscale 22 7,205 1,437,540

Sonesta ES Suites® Sonesta Extended Stay Upper Midscale 52 6,689 1,086,862

Sonesta Select® Sonesta Select Service Upscale 42 6,131 681,327

Sonesta Simply Suites® Sonesta Extended Stay Midscale 48 6,086 575,083

Hyatt Place® Hyatt Select Service Upscale 17 2,107 326,009

Radisson® Hotels & Resorts Radisson Full Service Upscale 5 1,149 171,579

Crowne Plaza® IHG Full Service Upscale 1 495 125,399

Country Inn & Suites® by Radisson Radisson Full Service Upper Midscale 2 346 46,269

Total Hotels 206 35,871 $ 6,372,312

(1) Chain scales are defined by STR.

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

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

Net Lease Portfolio

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As of December 31, 2025, our net lease portfolio was occupied by 181 tenants with a weighted average (by annual minimum rent) lease term of 7.4 years, operating under 140 brands in 21 distinct industries.

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

Our net lease portfolio is leased to tenants that include travel centers, quick service restaurants, health and fitness centers, casual dining restaurants, grocery stores, medical and dental offices, automotive parts and services, and other businesses in service-focused and necessity-based industries across 42 states.

The following table summarizes the brand affiliation and industries under which our net lease properties operate as of December 31, 2025 (dollars in thousands):

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Heartland Dental Medical, Dental Office 59 234,274 5,159 61,120

Norms Restaurants - Casual Dining 10 63,490 3,759 53,673

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

AMC Theatres Movie Theaters 5 251,166 3,558 57,339

Pizza Hut Restaurants - Quick Service 45 179,216 4,353 54,248

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

Norms Restaurants - Casual Dining 10 63,490 3,430 53,673

Flying J Travel Plaza Travel Centers 3 48,069 3,312 41,681

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Big Al's Entertainment 2 111,912 2,569 35,214

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

AMC Theatres Movie Theaters 5 251,166 2,426 57,450

Mister Car Wash Car Washes 5 41,456 2,303 28,658

Martin's Restaurants - Quick Service 16 81,909 2,252 31,335

B&B Theatres Movie Theaters 4 261,300 2,260 37,619

Martin's Restaurants - Quick Service 16 81,909 2,252 32,017

Popeye's Restaurants - Quick Service 20 45,708 2,058 28,434

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

Courthouse Athletic Club Health and Fitness 4 193,659 1,954 39,688

Arby's Restaurants - Quick Service 19 57,868 1,792 29,234

Burger King Restaurants - Quick Service 17 55,127 1,941 29,204

Church's Chicken Restaurants - Quick Service 32 43,399 1,732 26,326

Hardee's Restaurants - Quick Service 15 49,958 1,764 24,919

Church's Chicken Restaurants - Quick Service 32 43,399 1,763 26,326

KinderCare Educational Services 3 61,276 1,760 22,041

Regal Cinemas Movie Theaters 4 186,406 1,758 29,659

United Supermarkets Grocery Stores 6 236,178 1,757 26,121

Various 283 4,565,535 52,862 801,802

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(1) 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 for TravelCenters of America, Inc., or TA, excludes the impact of rents prepaid by TA.

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

(3) Consists of 115 distinct brands with an average investment of $2,833 per property and an average annual minimum rent of $187 per property.

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

Principal Management Agreement or Lease Features

As of December 31, 2024, our 206 hotels were managed by subsidiaries of Sonesta, Hyatt Hotels Corporation, or Hyatt, Radisson Hospitality, Inc., or Radisson, and InterContinental Hotels Group, plc, or IHG.

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

Each of these agreements is for between one and 181 of our hotels.

The principal features of our hotel agreements are as follows:

• Owner’s Priority Returns.

Our hotel management agreements have stated owner’s priority return amounts designed to provide us a return on investment greater than our cost of capital.

The owner’s priority returns are generally subject to available cash flow and we are not assured we will receive them in full or at all.

Owner’s priority returns under our Hyatt and Radisson hotel agreements are partially supported by limited guarantees.

• Long Terms.

The weighted average term remaining for our hotel agreements (weighted by owner’s priority as of December 31, 2024) is 11.9 years, without giving effect to any renewal options our managers may have.

• Pooled Agreements.

Most of our hotel properties are subject to portfolio agreements.

Some agreements are subject to cross default provisions, such that a manager’s default under one of the agreements would trigger defaults of the other agreements in that portfolio.

• All or None Renewals.

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

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

• Property Maintenance.

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

We own the cash in these escrow accounts.

If no escrowed cash is available, we are required to fund capital expenditures.

Generally, as we fund capital expenditures, our owner’s priority return amount increases.

• Working Capital.

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

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

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

• Management Fees.

Base fees are generally between 3% to 5% of gross revenues, as defined in our hotel management agreements, and are paid as operating expenses senior to our owner’s priority returns.

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

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

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

• Termination Rights.

In addition to any right to terminate that may arise as a result of a default by the manager, most of our management agreements include rights for us to terminate on the basis of the manager’s failure to meet certain performance-based metrics, including the level of owner’s priority return generated over a period of time.

Typically, such performance-based termination rights arise in the event the operator fails to achieve these specified performance thresholds over a consecutive two or three-year period and are subject to the manager’s ability to “cure” and avoid termination by payment to us of specified deficiency amounts, or are subject to force majeure provisions.

A termination fee may be payable to the hotel operator under certain circumstances if a management agreement with respect to a hotel is terminated.

We have agreed in the past, and may agree in the future, to waive certain of these termination rights in exchange for consideration from a manager or its affiliates, which consideration may include amendments to the management agreements.

Hotel Portfolio

As of December 31, 2025, we owned 94 hotels with 21,243 rooms or suites located in 31 states, the District of Columbia, Ontario, Canada and San Juan, Puerto Rico.

Brand Manager Service Level Chain Scale (1)

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

Royal Sonesta Hotels® Sonesta Full Service Upper Upscale 17 5,663 $ 1,996,881

Sonesta Hotels & Resorts® Sonesta Full Service Upscale 22 7,208 1,534,639

Hyatt Place® Hyatt Select Service Upscale 17 2,107 328,520

Sonesta ES Suites® Sonesta Extended Stay Upper Midscale 13 1,726 310,396

Sonesta Simply Suites® Sonesta Extended Stay Midscale 10 1,521 180,896

Radisson® Hotels & Resorts Radisson Full Service Upscale 5 1,149 171,562

Crowne Plaza® IHG Full Service Upscale 1 495 127,128

Sonesta Select® Sonesta Select Service Upscale 7 1,028 117,676

Country Inn & Suites® by Radisson Radisson Full Service Upper Midscale 2 346 46,269

Total Hotels 94 21,243 $ 4,813,967

(1) Chain scales are defined by STR.

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

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

Lease Features and Principal Management Agreements

Lease Features.

In general, our 760 net lease properties are subject to “triple net” leases where the tenant is generally responsible for the payment of operating expenses and capital expenditures of the property during the lease term.

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

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

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

TA is our largest tenant.

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

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

Principal Management Agreements.

As of December 31, 2025, our 94 hotels were managed by subsidiaries of Sonesta, Hyatt Hotels Corporation, or Hyatt, Radisson Hospitality, Inc., or Radisson, and InterContinental Hotels Group, plc, or IHG, pursuant to hotel operating agreements that have current terms expiring between 2026 and 2040.

Each of our hotel operating agreements generally provides for base management fees ranging from 3% and 5% of gross revenues, as defined in each of our hotel operating agreements, and incentive management fees based on a percentage of hotel earnings before interest, taxes, depreciation and amortization in excess of specified performance thresholds, as defined in each of our hotel operating agreements.

Our hotel operating agreements also require us to fund capital expenditures made at our hotels, with certain of these agreements requiring the deposit of 5% of annual gross hotel revenues into escrows to fund capital improvements.

by payment to us of specified deficiency amounts, or are subject to force majeure provisions.

A termination fee may be payable to the hotel operator under certain circumstances if a management agreement with respect to a hotel is terminated.

For further information regarding our lease and management agreements, see Note 4 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Investment and Operating Policies

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To achieve these objectives, we seek to maintain a strong capital base of shareholders’ equity;

invest in high quality properties operated by qualified operating companies;

use moderate debt leverage to fund additional investments which increase cash flows from operations;

invest in properties operated by qualified tenants and operating companies;

use debt leverage to fund additional investments which increase cash flows from operations;

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

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We intend to pursue growth through the acquisition of additional properties.

Generally, we prefer to purchase multiple properties in one transaction or individual properties that can be added to a pre-existing portfolio agreement because we believe a single management or lease agreement, cross default covenants and all or none renewal rights for multiple properties in diverse locations enhance the credit characteristics and the security of our investments.

Generally, we aim to purchase multiple properties in one transaction or individual properties that can be added to a pre-existing portfolio agreement because we believe a single management or lease agreement, cross default covenants and all or none renewal rights for multiple properties in diverse locations enhance the credit characteristics and the security of our investments.

In implementing our acquisition strategy, we consider a range of factors relating to proposed property purchases including some or all of the following:

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

• The proposed management agreement or lease terms;

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

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

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

• The financial strength of the proposed manager or tenant;

• The proposed lease term or management agreements;

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

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

• The financial strength of the proposed tenant or manager;

• The property’s design, construction quality, physical condition and age and expected capital expenditures that may be needed to maintain the property or to enhance its operation;

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

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

• The credit quality, or reputation, of the tenant or manager;

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

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

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

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

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

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

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

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

Whenever we purchase an individual property or a small number of properties, we prefer arrangements in which these properties are added to agreements covering, and operated in combination with, properties we already own, but we may not always do so.

We believe portfolios of diverse groups of properties may increase the security of our cash flows and likelihood our agreements will be renewed.

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

We have no policies which specifically limit the percentage of our assets that may be invested in any individual property, in any one type of property, in properties managed by or leased to any one entity, in properties operated under any one brand, in properties managed by or leased to an affiliated group of entities or in securities of one or more persons.

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We generally consider ourselves to be a long term owner of properties and are more interested in the long term earnings potential of our properties than selling properties for short term gains.

However, we may seek to strategically sell properties or sell an interest in properties through joint venture arrangements as part of managing our leverage, capital recycling, highest and best use analysis, or as part of long term financing of new acquisitions.

However, we may seek to strategically sell properties or sell an interest in properties through joint venture arrangements as part of managing our leverage, repositioning of the portfolio, capital recycling, highest and best use analysis, or as part of long term financing of new acquisitions.

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

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

• The manager’s or tenant’s desire to operate or cease operation of the property;

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

• The tenant’s or manager’s desire to operate or cease operation of the property;

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

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

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

Our ability to incur additional debt is subject to meeting the required covenant

levels and subject to the provisions of our debt agreements.

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

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

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and an officer and employee of RMR.

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

Christopher J.

Bilotto, our other Managing Trustee and our President and Chief Executive Officer, also serves as an executive vice president of RMR Inc.

and an officer and employee of RMR.

Our day to day operations are conducted by RMR.

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RMR has a principal place of business at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634, and its telephone number is (617) 796-8390.

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

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

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

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Bilotto, executive vice president;

Clark, executive vice president, general counsel and secretary;

Jordan, executive vice president, chief financial officer and treasurer;

Brown, executive vice president, chief financial officer and treasurer;

Yael Duffy, executive vice president;

Getz, executive vice president, general counsel and secretary;

Jordan, executive vice president and chief operating officer;

Leer, executive vice president;

Murray, executive vice president.

Our President and Chief Investment Officer, Todd W.

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

Donley, are senior vice presidents of RMR.

Our Vice President, Jesse W.

Abair, is also a vice president of RMR.

Donley also serves as an officer of another company to which RMR or its subsidiaries provide management services.

Murray and Ms.

Clark also serve on the board of directors of Sonesta.

Our Chief Financial Officer and Treasurer, Brian E.

Donley, and our Vice President, Jesse W.

Abair, are also senior vice presidents of RMR.

Donley, and other officers of RMR, also serve as officers of other companies to which RMR or its subsidiaries provide management services.

Portnoy is a director and controlling shareholder of Sonesta and Mr.

Murray also serves on the board of directors of Sonesta and is also president and chief executive officer of Sonesta.

In connection with his retirement, Mr.

Murray will resign from his positions with Sonesta and RMR, effective March 31, 2026.

Leer has been appointed a co-chief executive officer of Sonesta, effective April 1, 2026.

We have no employees.

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

As of December 31, 2024, RMR had approximately 1,000 full time employees in its headquarters and regional offices located throughout the United States.

The hotel industry is highly competitive.

Generally, our hotels are located in areas that include other hotels.

Our hotels compete for customers based on brand affiliation, reputation, location, pricing, amenities, loyalty programs and other competitive factors.

Increases in the number of hotels in a particular area could have a material adverse effect on the occupancy and daily room rates at our hotels located in that area.

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

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

As of December 31, 2024, 181 of our hotels are operated by Sonesta.

Sonesta faces competition from larger, well known hotel companies.

Competitive pressures from these companies and others could negatively impact Sonesta’s ability to pay our owner’s priority returns.

Our hotels also face competition from alternative lodging options such as home sharing services, timeshares, vacation rentals or cruise ships in our markets.

The market for net lease properties is also highly competitive.

As of December 31, 2025, RMR had nearly 900 full time employees in its headquarters and regional offices located throughout the United States.

The market for net lease properties is highly competitive.

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

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and Love’s Travel Stops & Country Stores, especially for large trucking fleets and long haul trucking fleets, could negatively impact TA’s ability to pay rents due to us.

The hotel industry is also highly competitive.

Generally, our hotels are located in areas that include other hotels.

Our hotels compete for customers based on brand affiliation, reputation, location, pricing, amenities, loyalty programs and other competitive factors.

Increases in the number of hotels in a particular area could have a material adverse effect on the occupancy and daily room rates at our hotels located in that area.

As of December 31, 2025, 69 of our hotels are operated by Sonesta.

Sonesta faces competition from larger, well known hotel companies.

Our hotels also face competition from alternative lodging options such as home sharing services, timeshares, vacation rentals or cruise ships in our markets.

We expect to compete for property acquisition and financing opportunities with entities which may have substantially greater financial resources than us, including, without limitation, other REITs, operating companies in the hospitality industry, banks, insurance companies, pension plans and public and private partnerships.

These entities may be able to accept more risk than we can prudently manage, including risks with respect to the creditworthiness of property operators and the extent of leverage used in their capital structure.

These entities may be able to accept more risk than we can prudently manage, including risks with respect to the creditworthiness of property operators and the extent of

leverage used in their capital structure.

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

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

• Investments in Human Capital.

• Investments in Human Capital and Employee Engagement.

We have no employees.

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

RMR and Sonesta each strive to create a collaborative and engaging culture, and invest in their employees.

• Corporate Citizenship.

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We value a diversity of backgrounds, experiences and perspectives.

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

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

Our Board of Trustees is comprised of 29% women and 29% members of marginalized communities.

RMR is an equal opportunity employer, with all qualified applicants receiving consideration for employment without regard to race, color, religion, sex, sexual

orientation, gender identity, national origin, disability or protected veteran status.

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

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Segment Information.

As of December 31, 2024, we had two operating segments, hotel investments and net lease investments.

As of December 31, 2025, we had two operating segments, net lease investments and hotel investments.

For further information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II, Item 7 of this Annual Report on Form 10-K and Notes 2 and 12 in our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

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• a person subject to special tax accounting rules as a result of their use of applicable financial statements (within the meaning of Section 451(b)(3) of the IRC);

• except as specifically described in the following summary, a trust, estate, tax-exempt entity or foreign person.

• except as specifically described in the following summary, a trust, estate, tax-exempt entity, governmental organization or foreign person.

The sections of the IRC that govern the federal income tax qualification and treatment of a REIT and its shareholders are complex.

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Our dividends are not generally entitled to the preferential tax rates on qualified dividend income, but a portion of our dividends may be treated as capital gain dividends or as qualified dividend income, all as explained below.

In addition, for taxable years beginning before 2026 and pursuant to the deduction-without-outlay mechanism of Section 199A of the IRC, our noncorporate U.S.

In addition, pursuant to the deduction-without-outlay mechanism of Section 199A of the IRC, our noncorporate U.S.

shareholders that meet specified holding period requirements are generally eligible for lower effective tax rates on our dividends that are not treated as capital gain dividends or as qualified dividend income.

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

To the extent that such distributions exceed the basis of a U.S.

shareholder’s shares, the U.S.

shareholder generally must include such distributions in income as long-term capital gain, or short-term capital gain if the shares have been held for one year or less.

For all these purposes, our distributions include cash distributions, any in kind distributions of property that we might make, and deemed or constructive distributions resulting from capital market activities (such as some redemptions), as described below.

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The opinions of our counsel are based upon the law as it exists today, but the law may change in the future, possibly with retroactive effect.

LLP nor we can be sure that we will qualify as or be taxed as a REIT for any particular year.

Given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations, and the possibility of future changes in our circumstances, neither Sullivan & Worcester LLP nor we can be sure that we will qualify as or be taxed as a REIT for any particular year.

Any opinion of Sullivan & Worcester LLP as to our qualification or taxation as a REIT will be expressed as of the date issued.

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• We will be taxed at regular corporate income tax rates on any undistributed “real estate investment trust taxable income,” including our undistributed ordinary income and net capital gains, if any.

We may elect to retain and pay income tax on our net capital gain, as well as on certain amounts attributable to cancellation of indebtedness income.

We may elect to retain and pay income tax on our net capital gain, as well as on certain amounts attributable to cancellation of indebtedness income, if any.

In addition, if we so elect by making a timely designation to our shareholders, a shareholder would be taxed on its proportionate share of our undistributed capital gain and would generally be expected to receive a credit or refund for its proportionate share of the federal corporate income tax we paid on our retained net capital gain.

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• If we acquire a REIT asset where our adjusted tax basis in the asset is determined by reference to the adjusted tax basis of the asset in the hands of a C corporation, under specified circumstances we may be subject to federal income taxation on all or part of the built-in gain (calculated as of the date the property ceased being owned by the C corporation) on such asset.

We generally do not expect to sell assets if doing so would result in the imposition of a

material built-in gains tax liability;

We generally do not expect to sell assets if doing so would result in the imposition of a material built-in gains tax liability;

but if and when we do sell assets that may have associated built-in gains tax exposure, then we expect to make appropriate provision for the associated tax liabilities on our financial statements.

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These restrictions, however, do not ensure that we have previously satisfied, and may not ensure that we will in all cases be able to continue to satisfy, the share ownership requirements described in condition (6).

If we comply with applicable Treasury regulations to

ascertain the ownership of our outstanding shares and do not know, or by exercising reasonable diligence would not have known, that we failed condition (6), then we will be treated as having met condition (6).

If we comply with applicable Treasury regulations to ascertain the ownership of our outstanding shares and do not know, or by exercising reasonable diligence would not have known, that we failed condition (6), then we will be treated as having met condition (6).

Accordingly, we have complied and will continue to comply with these regulations, including by requesting annually from holders of significant percentages of our shares information regarding the ownership of our shares.

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

but we cannot be sure that such protective elections or other arrangements will be effective to avoid or mitigate the resulting adverse consequences to us.

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

Taxable REIT Subsidiaries.

As a REIT, we are permitted to own any or all of the securities of a TRS, provided that no more than 20% of the total value of our assets, at the close of each quarter, is comprised of our investments in the stock or other securities of our TRSs.

As a REIT, we are permitted to own any or all of the securities of a TRS, provided that no more than 20% (25% with respect to taxable years beginning after December 31, 2025) of the total value of our assets, at the close of each quarter, is comprised of our investments in the stock or other securities of our TRSs.

Very generally, a TRS is a subsidiary corporation other than a REIT in which a REIT directly or indirectly holds stock and that has made a joint election with such REIT to be treated as a TRS.

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Among other requirements, a TRS of ours must:

(1) not directly or indirectly operate or manage a lodging facility or a health care facility;

(2) not directly or indirectly provide to any person, under a franchise, license or otherwise, rights to any brand name under which any lodging facility or health care facility is operated, except that in limited circumstances a subfranchise, sublicense or similar right can be granted to an independent contractor to operate or manage a lodging facility or a health care facility.

(1) not directly or indirectly operate or manage a health care facility or lodging facility;

(2) not directly or indirectly provide to any person, under a franchise, license or otherwise, rights to any brand name under which any health care facility or lodging facility is operated, except that in limited circumstances a subfranchise,

sublicense or similar right can be granted to an independent contractor to operate or manage a health care facility or lodging facility.

In addition, any corporation (other than a REIT and other than a QRS) in which a TRS directly or indirectly owns more than 35% of the voting power or value of the outstanding securities is automatically a TRS (excluding, for this purpose, certain “straight debt” securities).

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Therefore, our TRSs may generally conduct activities that would be treated as prohibited transactions or would give rise to nonqualified income if conducted by us directly.

Additionally, while a REIT is generally limited in its ability to earn qualifying rental income from a TRS, a REIT can earn qualifying rental income from the lease of a qualified lodging facility to a TRS if an eligible independent contractor operates the facility, as discussed more fully below.

Restrictions and sanctions are imposed on TRSs and their affiliated REITs to ensure that the TRSs will be subject to an appropriate level of federal income taxation.

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Second, at least 95% of our gross income for each taxable year must consist of income that is qualifying income for purposes of the 75% gross income test, other types of interest and dividends, gain from the sale or disposition of stock or securities, or any combination of these.

Gross income from our sale of property that we hold primarily for sale to customers in the ordinary course of business, income and gain from specified “hedging transactions” that are clearly and timely identified as such, and income from the repurchase or discharge of indebtedness is excluded from both the numerator and the denominator in both

gross income tests.

In addition, specified foreign currency gains will be excluded from gross income for purposes of one or both of the gross income tests.

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

Prior to BP Products North America Inc.’s acquisition of TA pursuant to a merger, or the TA Merger, we owned close to, but less than, 10% of the outstanding common shares of TA.

Prior to BP Products North America Inc.’s acquisition of TA pursuant to a merger, or the TA Merger, we owned close to, but less than, 10% of the outstanding

common shares of TA.

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

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• There is an additional exception to the above prohibition on earning “rents from real property” from a 10% affiliated tenant.

For this additional exception to apply, a real property interest in a “qualified lodging facility” must be leased by the REIT to its TRS, and the facility must be operated on behalf of the TRS by a person who is an “eligible independent contractor,” all as described in Sections 856(d)(8)-(9) of the IRC.

For this additional exception to apply, a real property interest in a “qualified lodging facility” must be leased by the REIT to its TRS, and the property must be operated on behalf of the TRS by a person who is an “eligible independent contractor,” all as described in Sections 856(d)(8)-(9) of the IRC.

As described below, we believe our leases with our TRSs have satisfied and will continue to satisfy these requirements.

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Our stock and other securities in a TRS are exempted from these 5% and 10% asset tests.

• Not more than 20% of the value of our total assets may be represented by stock or other securities of our TRSs.

• Not more than 20% (25% with respect to taxable years beginning after December 31, 2025) of the value of our total assets may be represented by stock or other securities of our TRSs.

• Not more than 25% of the value of our total assets may be represented by “nonqualified publicly offered REIT debt instruments” as defined in Section 856(c)(5)(L)(ii) of the IRC.

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The IRC also provides an excepted securities safe harbor to the 10% value test that includes among other items (a) “straight debt” securities, (b) specified rental agreements in which payment is to be made in subsequent years, (c) any obligation to pay “rents from real property,” (d) securities issued by governmental entities that are not dependent in whole or in part on the profits of or payments from a nongovernmental entity, and (e) any security issued by another REIT.

In addition, any debt instrument issued by an entity classified as a partnership for federal income tax purposes, and not otherwise excepted from the definition of a security for purposes of the above safe harbor, will not be treated as a security for purposes of the 10% value test if at least 75% of the partnership’s gross income, excluding income from prohibited transactions, is qualifying income for purposes of the 75% gross income test.

In addition, any debt instrument

issued by an entity classified as a partnership for federal income tax purposes, and not otherwise excepted from the definition of a security for purposes of the above safe harbor, will not be treated as a security for purposes of the 10% value test if at least 75% of the partnership’s gross income, excluding income from prohibited transactions, is qualifying income for purposes of the 75% gross income test.

We have maintained and will continue to maintain records of the value of our assets to document our compliance with the above asset tests and intend to take actions as may be required to cure any failure to satisfy the tests within thirty days after the close of any quarter or within the six month periods described above.

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Also included in the definition are the qualified lodging facility’s customary amenities and facilities.

For these purposes, a contractor qualifies as an “eligible independent contractor” if it is less than 35% affiliated with the REIT and, at the time the contractor enters into the agreement with the TRS to operate the qualified lodging facility, that contractor or any person related to that contractor is actively engaged in the trade or business of operating qualified lodging

facilities for persons unrelated to the TRS or its affiliated REIT.

For these purposes, an otherwise eligible independent contractor is not disqualified from that status on account of (a) the TRS bearing the expenses of the operation of the qualified lodging facility, (b) the TRS receiving the revenues from the operation of the qualified lodging facility, net of expenses for that operation and fees payable to the eligible independent contractor, or (c) the REIT receiving income from the eligible independent contractor pursuant to a preexisting or otherwise grandfathered lease of another property.

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Under those circumstances, however, we expect we would qualify for the gross income tests’ relief provision described above, and thereby would preserve our qualification for taxation as a REIT.

If the relief provision were to apply to us, we would be subject to tax at a 100% rate upon the greater of the amount by which we failed the 75% gross income test or the amount by which we failed the 95% gross income test, with adjustments, multiplied by a fraction intended to reflect our profitability for the taxable year;

reflect our profitability for the taxable year;

even though we have little or no nonqualifying income from other sources in a typical taxable year, imposition of this 100% tax in this circumstance would be material because to date most of the properties leased to our TRSs are managed for the TRSs by this contractor.

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For these purposes, our “real estate investment trust taxable income” is as defined under Section 857 of the IRC and is computed without regard to the dividends paid deduction and our net capital gain and will generally be reduced by specified corporate-level income taxes that we pay (e.g., taxes on built-in gains or foreclosure property income).

The IRC generally limits the deductibility of net interest expense paid or accrued on debt properly allocable to a trade or business to 30% of “adjusted taxable income,” subject to specified exceptions.

Beginning with the calendar taxable year 2018, the IRC generally limits the deductibility of net interest expense paid or accrued on debt properly allocable to a trade or business to 30% of “adjusted taxable income,” subject to specified exceptions.

For calendar taxable years 2018 through 2021 and beginning with the calendar taxable year 2025, adjusted taxable income was (and is) an amount roughly equivalent to earnings before interest, taxes, depreciation and amortization;

adjusted taxable income for calendar taxable years 2022 through 2024 was an amount roughly equivalent to earnings before interest and taxes (i.e., an amount after depreciation and amortization).

For taxable years beginning after December 31, 2025, the interest deduction limitation generally is calculated prior to the application of any interest capitalization provisions under the IRC.

Any deduction in excess of the limitation is carried forward and may be used in a subsequent year, subject to that year’s 30% limitation.

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Treasury regulations provide that a real property trade or business includes a trade or business conducted by a REIT.

We have made an election to be treated as a real property trade or business and accordingly do not expect the foregoing interest deduction limitations to apply to us or to the calculation of our “real estate investment trust taxable income”, but the interest deduction limitations could apply to our subsidiary partnerships or subsidiary REITs, if any, that are not eligible for or otherwise do not make the election for electing real property trades or businesses.

Distributions must be paid in the taxable year to which they relate, or in the following taxable year if declared before we timely file our federal income tax return for the earlier taxable year and if paid on or before the first regular distribution payment after that declaration.

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In addition to the other distribution requirements above, to preserve our qualification for taxation as a REIT we are required to timely distribute all C corporation earnings and profits that we inherit from acquired corporations, as described below.

We may elect to retain, rather than distribute, some or all of our net capital gain and certain of our cancellation of indebtedness income, and pay income tax on such retained amounts.

We may elect to retain, rather than distribute, some or all of our net capital gain and certain of our cancellation of indebtedness income, if any, and pay income tax on such retained amounts.

In addition, if we so elect by making a timely designation to our shareholders, our shareholders would include their proportionate share of such undistributed capital gain in their taxable income, and they would receive a corresponding credit for their share of the federal corporate income tax that we pay thereon.

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

shareholders that meet specified holding period requirements for taxable years before 2026).

shareholders that meet specified holding period requirements).

To summarize, the preferential federal income tax rates for long-term capital gains and for qualified dividends generally apply to:

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shareholders that we do not designate as a capital gain dividend generally will be treated as an ordinary income dividend to the extent of our available current or accumulated earnings and profits (subject to the lower effective tax rates applicable to qualified REIT dividends via the deduction-without-outlay mechanism of Section 199A of the IRC, which is generally available to our noncorporate U.S.

shareholders that meet specified holding period requirements for taxable years before 2026).

shareholders that meet specified holding period requirements).

Distributions made out of our current or accumulated earnings and profits that we properly designate as capital gain dividends generally will be taxed as long-term capital gains, as discussed below, to the extent they do not exceed our actual net capital gain for the taxable year.

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This gain or loss will be capital gain or loss, and will be long-term capital gain or loss if the shareholder’s holding period in our shares exceeds one year.

In addition, any loss upon a

sale or exchange of our shares held for six months or less will generally be treated as a long-term capital loss to the extent of any long-term capital gain dividends we paid on such shares during the holding period.

In addition, any loss upon a sale or exchange of our shares held for six months or less will generally be treated as a long-term capital loss to the extent of any long-term capital gain dividends we paid on such shares during the holding period.

shareholders who are individuals, estates or trusts are generally required to pay a 3.8% Medicare tax on their net investment income (including dividends on our shares (without regard to any deduction allowed by Section 199A of the IRC) and gains from the sale or other disposition of our shares), or in the case of estates and trusts on their net investment income that is not distributed, in each case to the extent that their total adjusted income exceeds applicable thresholds.

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shareholder recognizes a loss upon a disposition of our shares in an amount that exceeds a prescribed threshold, it is possible that the provisions of Treasury regulations involving “reportable transactions” could apply, with a resulting requirement to separately disclose the loss-generating transaction to the IRS.

These Treasury regulations are written quite broadly, and apply to many routine and simple transactions.

These Treasury regulations are written quite

broadly, and apply to many routine and simple transactions.

A reportable transaction currently includes, among other things, a sale or exchange of our shares resulting in a tax loss in excess of (a) $10 million in any single year or $20 million in a prescribed combination of taxable years in the case of our shares held by a C corporation or by a partnership with only C corporation partners or (b) $2 million in any single year or $4 million in a prescribed combination of taxable years in the case of our shares held by any other partnership or an S corporation, trust or individual, including losses that flow through pass through entities to individuals.

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national securities exchange;

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

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

Distributions .

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shareholder status on an applicable IRS Form W-8 or substantially similar form.

Information reporting and backup

withholding will not apply to proceeds a non-U.S.

Information reporting and backup withholding will not apply to proceeds a non-U.S.

shareholder receives upon the sale, exchange, redemption, retirement or other disposition of our shares, if the non-U.S.

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In particular, a payee that is a foreign financial institution that is subject to the diligence and reporting requirements described above must enter into an agreement with the U.S.

Department of the Treasury requiring, among other things, that it undertake to identify accounts held by “specified United States persons” or “United States owned foreign entities” (each as defined in the IRC and administrative guidance thereunder), annually report information about such accounts, and withhold 30% on applicable payments to noncompliant foreign financial institutions and account holders.

Department of the Treasury requiring, among other things, that it undertake to identify accounts held

by “specified United States persons” or “United States owned foreign entities” (each as defined in the IRC and administrative guidance thereunder), annually report information about such accounts, and withhold 30% on applicable payments to noncompliant foreign financial institutions and account holders.

Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States with respect to these requirements may be subject to different rules.

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The restrictions on transfer enumerated in the regulation as not affecting that finding include any restriction on or prohibition against any transfer or assignment that would result in a termination or reclassification for federal or state tax purposes, or would otherwise violate any state or federal law or court order.

We believe the restrictions imposed under our declaration of trust and bylaws on the transfer of shares do not result in the failure of our shares to be “freely transferable.” In addition, we do not expect or intend to impose in the future, or to permit any person to impose on our behalf, any limitations or restrictions on transfer that would not be among the enumerated permissible limitations or restrictions in the regulation.

Assuming that each class of our shares will be “widely held” and that no facts and circumstances exist that restrict transferability of these shares, our counsel, Sullivan & Worcester LLP, is of the opinion that our shares will not fail to be “freely transferable” for purposes of the regulation due to the restrictions on transfer of our shares in our declaration of trust and bylaws and that under the regulation each class of our currently outstanding shares is publicly offered and our assets will not be deemed to be “plan assets” of any ERISA Plan or Non-ERISA Plan that acquires our shares in a public offering.

This opinion is conditioned upon certain assumptions and representations, as discussed above under the heading “Material United States Federal Income Tax Considerations-Taxation as a REIT.” Also, the opinion of our counsel is not binding on either the U.S.

Department of Labor or a court, and either could take a position different from that expressed by our counsel.

Additionally, limitations or restrictions on the transfer or assignment of a security that are created or imposed by persons other than the issuer of a security or persons acting for or on behalf of the issuer will ordinarily not prevent the security from being considered freely transferable.

We believe that the restrictions imposed under our declaration of trust and bylaws on the transfer of shares do not result in the failure of our shares to be “freely transferable.” In addition, we do not expect or intend to impose in the future, or to permit any person to impose on our behalf, on shares owned by an ERISA Plan or Non-ERISA Plan, any limitations or restrictions on transfer that would not be among the enumerated permissible limitations or restrictions in the regulation and that would otherwise result in the failure of our shares to be “freely transferable”.

Assuming that each class of our shares will be “widely held” and that no facts and circumstances exist that prevent shares owned by an ERISA Plan or Non-ERISA Plan from being “freely transferable” for purposes of the regulation, our counsel, Sullivan & Worcester LLP, is of the opinion that under the regulation each class of our currently outstanding shares is publicly offered and our assets will not be deemed to be “plan assets” of any ERISA Plan or Non-ERISA Plan that acquires our shares in a public offering.

This opinion is conditioned upon certain assumptions and representations, as discussed above under the heading “Material United States Federal Income Tax

Considerations—Taxation as a REIT.” Also, the opinion of our counsel is not binding on either the Department of Labor or a court, and either could take a position different from that expressed by our counsel.

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

What changed 10-K

Item 1. Business