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Item 7. Management’s Discussion and Analysis

2026-02-25 compared with 2025-02-26 · 207 added, 177 removed, 429 unchanged (47% of the section changed)

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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.

In October 2024, we announced our plan to sell 114 extended stay and select service hotels managed by Sonesta with an aggregate of 14,925 keys and an aggregate net carrying value of $850,000.

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

To further improve our liquidity beginning with the fourth quarter of 2024, we reduced our regular quarterly cash distribution rate on our common shares from $0.20 per common share to $0.01 per common share, which we expect to result in $127,000 of annual savings.

Management Agreements and Leases.

At December 31, 2024, we owned 206 hotels operated under four agreements.

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

As of December 31, 2025, we have sold 112 of these hotels with a total of 14,631 keys for a combined sales price of $858,752, excluding closing costs.

From January 1, 2026 through February 23, 2026, we sold one hotel with 133 keys for a sales price of $7,100, excluding closing costs.

We are at various stages of selling the remaining nine hotels with a total of 1,167 keys.

Additionally, in January 2026 we began the marketing for sale of seven full service Sonesta hotels with a total of 2,010 keys.

Following completion of the hotel sales, we expect to retain 52 hotels managed by Sonesta, or the Retained Hotels.

In August 2025, we and Sonesta amended and restated our management agreements for the Retained Hotels and certain other hotels managed by Sonesta and waived any termination fees under the existing Sonesta management 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.

Leases and Management Agreements .

At December 31, 2025, we owned 760 service-focused retail properties leased to 181 tenants subject to “triple net” leases, where the tenants are generally responsible for the payment of operating expenses and capital expenditures.

At December 31, 2025, we also owned 94 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 December 31, 2024, we also owned 742 service-focused retail properties leased to 177 tenants subject to “triple net” leases, where the tenants are generally responsible for the payment of operating expenses and capital expenditures.

Our 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.

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

Net Lease Portfolio .

As of December 31, 2025, we owned 760 service-focused retail net lease properties with an aggregate of 13,601,902 square feet leased to 181 tenants subject to “triple net” leases (where the tenants are responsible for payments of operating expenses and capital expenditures) requiring annual minimum rents of $390,051.

Our net lease properties were 96.6% occupied as of December 31, 2025 with a weighted (by annual minimum rent) average lease term of 7.4 years, operating under 140 brands in 21 distinct industries.

TA is our largest tenant and as of December 31, 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.

Hotel Portfolio.

As of December 31, 2025, we owned 94 hotels.

In 2024, the U.S.

hotel industry generally realized increases in average daily rate, or ADR, and revenue per available room, or RevPAR, compared to the corresponding 2023 periods.

Our comparable hotels produced year over year declines in ADR and RevPAR, which we believe is partially a result of disruption and displacement at certain of our hotels undergoing renovation and decreased business activity in areas where some of our hotels are located.

During the year ended December 31, 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 2024.

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

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.

Year Ended December 31,

2025 2024 Change

Retained Hotels

of hotels 77 84 (7)

of rooms or suites 17,933 19,940 (2,007)

Occupancy 65.3 % 62.5 % 2.8 pts

ADR $ 174.86 $ 171.82 1.8 %

RevPAR $ 114.17 $ 107.38 6.3 %

Exit Hotels (1)

of hotels 17 122 (105)

of rooms or suites 3,310 15,931 (12,621)

Occupancy 57.7 % 64.4 % (6.7) pts

ADR $ 115.68 $ 106.84 8.3 %

RevPAR $ 66.69 $ 68.77 (3.0) %

of hotels 94 206 (112)

of rooms or suites 21,243 35,871 (14,628)

Occupancy 64.1 % 63.3 % 0.8 pts

ADR $ 166.56 $ 142.12 17.2 %

RevPAR $ 106.77 $ 90.01 18.6 %

(1) Exit Hotels represents 17 hotels managed by Sonesta that we plan to sell.

Comparable Hotels Data.

We present RevPAR, ADR and occupancy for the periods presented on a comparable basis to facilitate comparisons between periods.

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.

For the years ended December 31, 2024 and 2023, our comparable results exclude one hotel that was not owned for the entirety of the periods presented and one other hotel that suspended operations during the periods presented.

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

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2025 2024 Change

Comparable Hotels

Retained Hotels

of hotels 77 77 —

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RevPAR $ 114.17 $ 111.60 2.3 %

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.

Year Ended December 31,

2024 2023 Change

of hotels 17 17 —

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RevPAR $ 66.69 $ 70.73 (5.7) %

Net Lease Portfolio .

As of December 31, 2024, we owned 742 service-focused retail net lease properties with an aggregate of 13,292,519 square feet leased to 177 tenants subject to “triple net” leases (where the tenants are responsible for payments of operating expenses and capital expenditures) requiring annual minimum rents of $380,863.

Our net lease properties were 97.6% occupied as of December 31, 2024 with a weighted (by annual minimum rent) average lease term of 8.0 years, operating under 136 brands in 21 distinct industries.

TA is our largest tenant and as of December 31, 2024, leased 175 of our travel centers under five master leases that expire in 2033 and require annual minimum rents of $259,080.

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 4 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Comparable Hotels

of hotels 94 94 —

of rooms or suites 21,243 21,243 —

Occupancy 64.1 % 63.1 % 1.0 pts

ADR $ 166.56 $ 166.88 (0.2) %

RevPAR $ 106.77 $ 105.23 1.5 %

Additional details of our net lease agreements and our hotel operating agreements are set forth in Note 4 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

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

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General and administrative 40,667 40,239 428 1.1 %

Transaction related costs 6,894 (1,623) 8,517 n/m

Loss on asset impairment, net 56,212 9,544 46,668 n/m

Transaction related costs 14,698 6,894 7,804 113.2 %

Loss on asset impairment 81,889 56,212 25,677 45.7 %

Total expenses 1,700,356 1,769,101 (68,745) (3.9) %

Gain on sale of real estate, net 6,269 43,239 (36,970) (85.5) %

Gain on equity securities, net — 48,837 (48,837) n/m

Gain on sale of real estate, net 84,218 6,269 77,949 n/m

Interest income 8,998 4,052 4,946 122.1 %

Interest expense (413,614) (383,792) (29,822) 7.8 %

Loss on early extinguishment of debt, net (16,181) (1,524) (14,657) n/m

Loss before income tax (expense) benefit and equity in losses of an investee (261,825) (29,895) (231,930) n/m

Income tax (expense) benefit (1,402) 1,498 (2,900) (193.6) %

Loss on early extinguishment of debt, net (2,897) (16,181) 13,284 (82.1) %

Loss before income tax benefit (expense) and equity in losses of an investee (208,813) (261,825) 53,012 (20.2) %

Income tax benefit (expense) 10,717 (1,402) 12,119 n/m

Equity in losses of an investee (4,225) (12,299) 8,074 (65.6) %

Net loss $ (275,526) $ (32,779) $ (242,747) n/m

Weighted average shares outstanding (basic and diluted) 165,338 164,988 350 0.2 %

Net loss per common share (basic and diluted) $ (1.67) $ (0.20) $ (1.47) n/m

Net loss $ (202,321) $ (275,526) $ 73,205 (26.6) %

Weighted average common shares outstanding (basic and diluted) 165,951 165,338 613 0.4 %

Net loss per common share (basic and diluted) $ (1.22) $ (1.67) $ 0.45 (26.9) %

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

For a comparison of consolidated results for the year ended December 31, 2023 compared to the year ended December 31, 2022, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II, Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2023.

For a comparison of consolidated results for the year ended December 31, 2024, compared to the year ended December 31, 2023, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024.

Hotel operating revenues.

The increase in hotel operating revenues is primarily a result of higher occupancies and average rates at certain of our hotels in 2024 ($21,096) and a hotel acquisition in June 2023 ($16,396), partially offset by the sale of certain hotels since January 1, 2023 ($18,821).

The decrease in hotel operating revenues is primarily a result of our sales of certain hotels since January 1, 2024 ($99,857), partially offset by increases in occupancy and average rates at certain hotels in 2025 ($16,555).

Additional operating statistics of our hotels are included in the tables beginning on page 66.

Rental income.

The increase in rental income is primarily a result of the TA leases that were amended in May 2023 ($5,071) and higher rental income recognized at certain net lease properties in 2024 ($302), partially offset by the sale of certain net lease properties since January 1, 2023 ($979).

The increase in rental income is primarily a result of our acquisitions of certain net lease properties in 2025 ($2,775), partially offset by decreases in rental income resulting from our sales of certain net lease properties since January 1, 2024 ($1,154) and lower rental income recognized at certain of our net lease properties in 2025 ($409).

Hotel operating expenses.

The increase in hotel operating expenses is primarily a result of a hotel acquisition in June 2023 ($10,971) and increases in labor and benefits ($27,782), real estate taxes and insurance ($12,904) and other operating expenses ($18,012) in 2024, partially offset by our sale of certain hotels since January 1, 2023 ($19,422).

The decrease in hotel operating expenses is primarily a result of our sales of certain hotels since January 1, 2024 ($92,047), partially offset by increases in room expenses ($16,381), food and beverage expenses ($7,216) and other operating expenses ($20,839) in 2025.

Net lease operating expenses.

The increase in net lease operating expenses is primarily the result of increased property management fees ($2,335) and other operating expenses ($2,019) in 2024, partially offset by our sale of certain net lease properties since January 1, 2023 ($2,200).

The increase in net lease operating expenses is primarily the result of increased property management fees ($2,496) and increases at certain net lease properties in 2025 ($758), partially offset by decreases resulting from our sales of certain net lease properties since January 1, 2024 ($1,474).

Depreciation and amortization - hotels.

The increase in depreciation and amortization - hotels is primarily a result of depreciation and amortization related to capital expenditures made since January 1, 2023 and our acquisition of a hotel in June 2023 ($14,207), partially offset by certain of our depreciable assets becoming fully depreciated since January 1, 2023 ($5,283) and the sale of certain hotels since January 1, 2023 ($3,860).

The decrease in depreciation and amortization—hotels is primarily a result of our sale of certain hotels since January 1, 2024 ($56,698) and certain of our depreciable assets becoming fully depreciated since January 1, 2024 ($12,665), partially offset by depreciation and amortization related to capital expenditures made since January 1, 2024 ($22,327).

Depreciation and amortization - net lease properties.

The decrease in depreciation and amortization - net lease properties is primarily a result of our sale of certain net lease properties since January 1, 2023 ($7,727) and certain of our depreciable assets becoming fully depreciated since January 1, 2023 ($9,611).

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 ($10,520) and our sale of certain net lease properties since January 1, 2024 ($1,890), partially offset by increases from our acquisition of certain net lease properties since January 1, 2024 ($1,549) and depreciation and amortization related to capital expenditures made since January 1, 2024 ($1,074).

General and administrative.

The decrease in general and administrative costs in 2024 is primarily due to decreases in business management fees ($3,699) and other professional fees ($1,459).

The increase in general and administrative costs in 2025 is primarily due to increases in other professional fees ($1,325) and franchise taxes ($634), partially offset by decreases in business management fees ($1,531).

Transaction related costs.

Transaction related costs in 2024 primarily consist of costs related to various labor litigation matters, re-opening costs and other professional fees related to major renovation projects at certain of our hotels.

Transaction related costs in 2023 primarily consisted of the partial recovery of a working capital reserve related to the IHG portfolio previously deemed uncollectable and expensed during 2021 ($5,797), partially offset by costs related to hotel rebranding activity, demolition of certain vacant properties and potential acquisitions ($4,174).

Loss on asset impairment, net.

We recorded a $56,212 loss on asset impairment, net in 2024 to reduce the carrying value of ten hotels and ten net lease properties to their estimated fair value or estimated fair value less costs to sell.

We recorded a $9,544 loss on asset impairment, net in 2023 to reduce the carrying value of one hotel and 16 net lease properties to their estimated fair value less costs to sell.

Transaction related costs in 2025 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.

Transaction related costs in 2024 primarily consisted of costs related to various labor litigation matters, re-opening costs and other professional fees related to major renovation projects at certain of our hotels.

Loss on asset impairment.

We recorded an $81,889 loss on asset impairment in 2025 to reduce the carrying value of 28 hotels and four net lease properties to their estimated fair value less costs to sell.

We recorded a $56,212 loss on asset impairment in 2024 to reduce the carrying value of ten hotels and ten 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 $6,269 net gain on sale of real estate in 2024 in connection with the sales of 15 hotels and ten net lease properties, and a $43,239 net gain on sale of real estate in 2023 in connection with the sales of 18 hotels and 13 net lease properties.

Gain on equity securities, net.

G ain on equity securities, net represents the adjustment to the carrying value of our former investment in shares of TA common stock to its fair value.

We recorded an $84,218 net gain on sale of real estate in 2025 in connection with the sales of 112 hotels and 11 net lease properties, and a $6,269 net gain on sale of real estate in 2024 in connection with the sales of 15 hotels and ten net lease properties.

Interest income.

The decrease in interest income is due to lower average cash balances invested during 2024 compared to 2023.

The increase in interest income is due to higher average cash balances invested during 2025 compared to 2024.

Interest expense.

The increase in interest expense is primarily due to higher weighted average interest rates during 2024 compared to 2023.

The increase in interest expense is primarily due to higher outstanding borrowings and weighted average interest rates during 2025 compared to 2024.

Loss on early extinguishment of debt, net .

We recorded a $16,181 loss on early extinguishment of debt, net in 2024 as a result of the redemption and purchase of certain senior notes.

We recorded a $1,524 loss on early extinguishment of debt in 2023 related to the write-off of deferred financing costs and unamortized discounts in connection with the repayment of certain senior unsecured notes and the write-off of certain deferred financing costs relating to the amendment of our revolving credit facility.

Income tax (expense) benefit.

The change in income tax (expense) benefit is primarily a result of increases in our foreign tax expense ($1,863) and state tax expense ($1,037) in 2024.

We recorded a $2,897 loss on early extinguishment of debt, net in 2025 as a result of the redemption of certain senior notes.

We recorded a $16,181 loss on early extinguishment of debt in 2024 as a result of the redemption and purchase of certain senior notes.

Income tax benefit (expense).

The change from income tax expense in 2024 to income tax benefit in 2025 is primarily due to increases in our foreign tax benefit ($11,808) and decreases in our state income tax expense ($311).

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

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

Our net loss and our net loss per common share (basic and diluted) each increased in 2024 compared to 2023 primarily due to the revenue and expense changes discussed above.

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

Liquidity and Capital Resources (dollars in thousands, except per share amounts)

Our Managers and Tenants

As of December 31, 2024, all 206 of our hotels were managed and operated by four hotel operating companies and our 742 service-focused retail net lease properties were leased to 177 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 December 31, 2024, our hotel managers included Sonesta (181 hotels), Hyatt (17 hotels), Radisson (seven hotels) and IHG (one hotel).

TA is our largest tenant (175 travel centers).

As of December 31, 2025, our 760 service-focused retail net lease properties were leased to 181 tenants and our 94 hotels were managed and operated by four hotel operating companies.

The costs of operating and maintaining our properties are generally paid by our tenants for their own account or by the hotel managers as agents for us.

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

As of December 31, 2025, TA is our largest tenant (175 travel centers) and Sonesta (69 hotels) is our largest hotel manager.

We recorded reserves for uncollectable amounts and reduced rental income by $1,858 and $2,158 during the years ended December 31, 2025 and 2024, respectively, based on our assessment of the collectability of rents.

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Our Operating Liquidity and Capital Resources

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

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

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

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

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 12 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 owner’s priority returns and rents to us when due, and, as a result, our cash flows and net income would decline.

enters an economic recession, or otherwise, our tenants and managers 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:

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Cash and cash equivalents and restricted cash at the end of the period $ 372,088 $ 157,386

The decrease in cash flow provided by operating activities in the 2024 period is primarily due to $188,000 of prepaid rent received from TA in the 2023 period, higher interest expense and lower hotel returns in the 2024 period.

The increase in cash flow used in investing activities in the 2024 period is primarily due to proceeds from the sale of TA common shares and higher proceeds from the sale of real estate in the 2023 period and increased real estate improvements during the 2024 period, partially offset by acquisitions in the 2023 period.

The change from cash flow used in financing activities in the 2023 period to cash flow provided by financing activities in the 2024 period is primarily due to higher net borrowings in the 2024 period.

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 2024 to cash flow provided by investing activities in 2025 is primarily due to higher proceeds from the sale of real estate and decreased real estate improvements during 2025, partially offset by real estate acquisitions and deposits during 2025.

The change from cash flow provided by financing activities in 2024 to cash flow used in financing activities during 2025 is primarily due to higher net repayments, partially offset by lower distributions to common shareholders during 2025.

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

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During the year ended December 31, 2025, we funded $229,389 for capital improvements in excess of FF&E reserves available to our hotels.

We currently expect to fund $250,000 during 2025 for capital improvements to certain hotels using cash on hand and borrowings under our revolving credit facility.

We currently expect to fund between approximately $120,000 to $140,000 during 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.

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As of December 31, 2025, we had $6,790 of unspent leasing-related obligations related to certain of our net lease tenants.

During the year ended December 31, 2024, we sold 15 hotels with an aggregate of 1,910 rooms for an aggregate sales price of $97,315, excluding closing costs, and ten net lease properties with an aggregate of 96,929 square feet for an aggregate sales price of $8,547, excluding closing costs.

From January 1, 2025 through February 24, 2025, we sold one hotel with 149 keys for a sales price of $4,000, excluding closing costs, and two net lease properties with an aggregate of 49,081 square feet for an aggregate sales price of $1,300, excluding closing costs.

We have also entered into agreements to sell five hotels with an aggregate of 623 keys for an aggregate sales price of $28,500, excluding closing costs, and two net lease properties with an aggregate of 155,559 square feet for an aggregate sales price of $5,800, 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 continue to market two hotels with an aggregate of 234 keys and six net lease properties with an aggregate of 80,249 square feet for sale.

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

We expect to use the net sales proceeds from these sales for general business purposes.

In February 2025, we entered into an agreement to acquire one net lease property with 5,120 square feet for a purchase price of $5,297, excluding closing costs.

We expect to complete this acquisition in the first quarter of 2025 using cash on hand.

In October 2024, we announced our plan to sell 114 extended stay and select service hotels managed by Sonesta with an aggregate of 14,925 keys and an aggregate net carrying value of $850,000.

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

During the year ended December 31, 2024, we funded $15,266 of capital contributions to Sonesta to support its growth initiatives, including its franchising efforts, using cash on hand.

During the year ended December 31, 2025, we sold 112 hotels for a combined sales price of $858,752, excluding closing costs, and 11 net lease properties for a combined sales price of $19,591, excluding closing costs.

From January 1, 2026 through February 23, 2026, we sold one hotel with 133 keys for a sales price of $7,100, excluding closing costs, and one net lease property with 2,510 square feet for a sales price of $610, excluding closing costs.

We are at various stages of selling nine hotels with a total of 1,167 keys and have initiated marketing for seven full service Sonesta hotels with a total of 2,010 keys.

We believe it is probable that the sales 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 year ended December 31, 2025, we acquired 29 net lease properties with a total of 283,759 square feet for a combined purchase price of $93,743, excluding closing costs, using cash on hand.

From January 1, 2026 through February 23, 2026, we acquired three net lease properties with a total of 8,788 square feet for a combined purchase price of $7,398, excluding closing costs, using cash on hand.

During the year ended December 31, 2025, we declared and paid regular quarterly distributions to our common shareholders using cash on hand as follows:

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

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

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

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

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

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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 2.75% as of December 31, 2025.

As collateral for all loans and other obligations under the 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 69 properties, including 66 hotels and three net lease properties, with an aggregate undepreciated carrying value of $1,717,254 as of December 31, 2024.

During the year ended December 31, 2024, we sold three hotels that served as collateral under our revolving credit facility.

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

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 December 31, 2025 and 2024, the annual interest rate payable on borrowings under our revolving credit facility was 6.37% and 6.99%, respectively.

As of December 31, 2024 and February 24, 2025, we had $150,000 and $50,000, respectively, outstanding under our revolving credit facility and $500,000 and $600,000, respectively, available for borrowing.

Availability under our revolving credit facility is partially based on the performance of the properties serving as collateral under the facility.

Based on expectations of performance of certain of the collateral properties, we and our lenders amended the credit facility in October 2024 to temporarily reduce the required collateral property debt yield from 12% to 8.5% from September 30, 2024 through December 31, 2024, and increase the required collateral property debt yield to 9.5% for the quarter ending March 31, 2025;

10% for the quarter ending June 30, 2025;

11% for the quarter ending September 30, 2025;

and 12% for the quarter ending December 31, 2025 and thereafter.

Subject to meeting these revised collateral property debt yield levels and meeting other conditions, we will continue to have full access to undrawn amounts under our revolving credit facility.

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

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

As of December 31, 2025 and February 23, 2026, we had no borrowings outstanding under our revolving credit facility and $650,000 available for borrowing.

As collateral for all loans and other obligations under our revolving credit facility, certain of our subsidiaries pledged all of their respective equity interests in certain of our direct and indirect property owning subsidiaries, and our pledged subsidiaries provided first mortgage liens on certain properties, as discussed below.

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

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

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

49 hotels with an aggregate of 8,197 keys and an aggregate undepreciated carrying value of $1,402,307 will be released from the collateral pool and 35 travel centers leased to TA, which travel centers we refer to as our TA No.

5 lease, with an aggregate undepreciated carrying value of $601,684, will be added as collateral to our revolving credit facility.

Of the hotels being released from the collateral pool, 38 hotels with an aggregate of 5,078 keys and an aggregate undepreciated carrying value of $689,592 are part of our hotel disposition plan.

The corresponding equity pledges will be swapped as well.

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

Senior Guaranteed Unsecured Notes Issuance and Repayment of 2025 Maturities

In June 2024 , we issued $700,000 aggregate principal amount of the 2029 Notes and $500,000 aggregate principal amount of the 2032 Notes in underwritten public offerings.

The aggregate net proceeds from these offerings were $1,162,077, after underwriting discounts and other offering expenses.

These 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 our foreign subsidiaries and certain other excluded subsidiaries.

Such other excluded subsidiaries include, but are not limited to, subsidiaries whose equity has been pledged to secure borrowings under our credit agreement and our 2031 Notes and subsidiaries whose assets secure our net lease mortgage notes.

We used the net proceeds from the issuance of these notes and cash on hand to redeem all of our outstanding 7.50% senior unsecured notes due 2025 and purchase and satisfy and discharge all of our outstanding 4.50% senior unsecured notes due 2025.

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

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

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 were part of our disposition plan.

The collateral swap was completed in May 2025.

As of December 31, 2025, our revolving credit facility was secured by 55 properties, including 38 net lease properties and 17 hotels, with an aggregate undepreciated book value of $890,424.

Senior Secured Notes Issuance

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

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

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

These notes are secured by first-priority liens on the equity interests of subsidiaries that own and lease 36 of our travel center properties with an undepreciated carrying value of $413,904 as of December 31, 2025.

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

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

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

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 of our outstanding 4.75% senior unsecured notes due 2026 for a redemption price equal to the principal amount of $450,000, 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.

In January 2026, we redeemed $300,000 of our $400,000 4.95% senior unsecured notes due 2027 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 $1,569.

The redemption was funded using cash on hand.

Net Lease Mortgage Notes

On January 27, 2025, our wholly owned, special purpose bankruptcy remote, indirect subsidiary, SVC ABS LLC, or the Issuer, issued a variable funding note, or VFN, secured by the 315 net lease properties that also secure our existing $606,611 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.

On January 27, 2025, our wholly owned, special purpose bankruptcy remote, indirect subsidiary, SVC ABS LLC, or the Initial Issuer, issued the VFN secured by the 314 net lease properties that secure our existing $604,654 of net lease mortgage notes.

The VFN permits borrowings on a revolving basis up to $45,000 and the Initial 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 Initial 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.

We borrowed $45,000 for general business purposes under the VFN upon closing.

As of December 31, 2025, the annual interest rate payable on borrowings under the VFN was 5.62%.

The weighted average annual interest rate for borrowings under the VFN was 5.93% for the year ended December 31, 2025.

As of both December 31, 2025 and February 23, 2026, we had $45,000 outstanding under the VFN.

On February 20, 2026, the Initial Issuer, SVC 2026 ABS LLC and SVC 2026 TA ABS LLC priced $745,000 in aggregate principal amount of net lease mortgage notes in three classes.

This transaction is expected to close on or about March 6, 2026.

The weighted average coupon rate of the three classes is 5.96%.

The Class A and Class B notes will require monthly principal repayments at an annualized rate of 0.50% and 0.25% of the balances outstanding, respectively, and the Class M notes will require interest payments only until the maturity date.

The notes are expected to mature in March 2031 and may be redeemed without penalty 24 months prior to the scheduled maturity date beginning in March 2029.

The notes are non-recourse and are secured by the same 314 properties that secure our existing net lease mortgage notes, plus an additional 158 retail net lease properties that had an aggregate undepreciated book value of $761,508 and leases requiring annual minimum rents of $83,837.

We expect to use the net proceeds from this transaction to redeem our 2029 Notes.

On February 20, 2026, we announced the early redemption of our outstanding 2029 Notes for a redemption price equal to the principal amount of $700,000, plus accrued and unpaid interest to but excluding the date of redemption and a make whole premium.

This redemption is expected to occur on or about March 7, 2026.

We expect to fund this redemption with the proceeds from the net lease mortgage notes transaction described above.

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

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Thereafter 1,500,000

(1) In January 2026, we redeemed $300,000 of our $400,000 4.95% senior unsecured notes due 2027.

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 II, Item 7A of this Annual Report on Form 10-K.

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

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

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

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Debt Covenants

Our debt obligations at December 31, 2024 consisted of $150,000 of borrowings outstanding under our $650,000 revolving credit facility, $5,075,000 aggregate principal amounts of senior notes and $606,611 aggregate principal amounts of mortgage notes secured by 315 net lease retail properties.

Our debt obligations at December 31, 2025 consisted of $4,855,155 aggregate principal amounts of senior notes, $604,654 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 6 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

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

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

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

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

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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 December 31, 2025:

Actual Results Covenant Requirement

Actual Results (1)

Covenant Requirement

Total debt / adjusted total assets 58.7% Maximum of 60%

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4.92x Minimum of 2.20x

As of December 31, 2024, adjusted total assets for covenant purposes as defined in our senior notes indentures were $10,625,259 and assets encumbered under our revolving credit facility, serving as collateral for our net lease mortgage notes or secured senior notes represented $3,482,758 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 $4,438,943, $1,589,727, $837,667 and $276,164 of adjusted total assets, respectively.

(1) As adjusted for the redemption of $300,000 of 4.95% senior unsecured notes due 2027 redeemed in January 2026, and the issuance of $745,000 of net lease mortgage notes and the redemption of $700,000 of 2029 Notes both expected to occur in March 2026.

As of December 31, 2025, as adjusted for the redemption of $300,000 of 4.95% senior unsecured notes due 2027 redeemed in January 2026, and the issuance of $745,000 of net lease mortgage notes and the redemption of $700,000 of 2029 Notes both expected to occur in March 2026, adjusted total assets for covenant purposes as defined in our senior notes indentures were $8,937,868 and assets encumbered under our revolving credit facility, serving as collateral for our net lease mortgage notes or secured senior notes represented $3,961,366 of adjusted total assets, as defined in our senior notes indentures.

Our unencumbered hotels, other net lease properties and other corporate assets represent $4,284,731, $474,510 and $217,261 of adjusted total assets, respectively.

The following table presents the calculation of adjusted total assets to total assets in accordance with GAAP:

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accounts receivable and intangibles (205,340)

adjustments for the redemption of $300,000 of 4.95% senior unsecured notes due 2027, the issuance of $745,000 of net lease mortgage notes and the redemption of $700,000 of 2029 Notes

Adjusted total assets $ 8,937,868

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

(1) Includes $66,559 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

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Supplemental Guarantor Information

Our 2027 Notes, 2029 Notes and 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.

Our 2027 Unsecured Notes, our 2029 Notes and our 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 $1,325,000 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.

A subsidiary guarantor’s guarantee of the 2027 Unsecured 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, and BBB (or the equivalent) 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.

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• income taxes.

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

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

We have concluded that we must consolidate each of our wholly owned TRSs because we are the entity with the power to direct the activities that most significantly impact such VIE’s performance and we have the obligation to absorb the majority of the potential variability in gains and losses of each VIE, with the primary focus on losses, and are therefore the primary beneficiary of each VIE.

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We have not independently verified our managers’ operating data.

Comparable Hotels* No.

All Hotels* No.

of Hotels No.

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Brand Service Level 2025 2024 Change 2025 2024 Change 2025 2024 Change

Sonesta Hotels & Resorts® Full Service 21 6,955 58.6 % 63.2 % (4.6) pts $ 154.95 $ 153.25 1.1 % $ 90.81 $ 96.84 (6.2) %

Retained Hotels:

Royal Sonesta Hotels® Full Service 14 4,821 64.1 % 63.9 % 0.2 pts $242.18 $240.63 0.6 % $ 155.22 $ 153.81 0.9 %

Sonesta Hotels & Resorts® Full Service 18 6,040 62.9 % 59.8 % 3.1 pts 171.97 171.92 — % 108.11 102.87 5.1 %

Radisson® Hotels & Resorts Full Service 5 1,149 61.4 % 65.4 % (4.0) pts 150.94 147.07 2.6 % 92.60 96.14 (3.7) %

Crowne Plaza® Full Service 1 495 63.3 % 60.6 % 2.7 pts 142.09 141.30 0.6 % 90.01 85.65 5.1 %

Country Inn & Suites® by Radisson Full Service 2 346 68.3 % 70.2 % (1.9) pts 139.96 148.28 (5.6) % 95.54 104.14 (8.3) %

Crowne Plaza® Full Service 1 495 66.6 % 63.3 % 3.3 pts 141.18 142.09 (0.6) % 94.03 90.01 4.5 %

Full Service Total/Average 40 12,851 63.5 % 62.3 % 1.2 pts 194.56 194.15 0.2 % 123.51 120.91 2.1 %

Sonesta Select® Select Service 42 6,131 57.9 % 55.8 % 2.1 pts 115.31 119.14 (3.2) % 66.80 66.48 0.5 %

Hyatt Place® Select Service 17 2,107 63.4 % 65.3 % (1.9) pts 120.48 122.23 (1.4) % 76.35 79.87 (4.4) %

Select Service Total/Average 59 8,238 59.3 % 58.2 % 1.1 pts 116.73 120.02 (2.7) % 69.24 69.91 (1.0) %

Sonesta ES Suites® Extended Stay 7 958 74.7 % 71.0 % 3.7 pts 149.65 152.75 (2.0) % 111.77 108.44 3.1 %

Sonesta Select® Select Service 6 873 65.2 % 64.2 % 1.0 pts 134.65 139.44 (3.4) % 87.74 89.50 (2.0) %

Sonesta Simply Suites® Extended Stay 7 1,144 72.6 % 74.1 % (1.5) pts 124.41 123.47 0.8 % 90.37 91.47 (1.2) %

Extended Stay Total/Average 99 12,677 69.1 % 68.7 % 0.4 pts 110.67 113.15 (2.2) % 76.52 77.78 (1.6) %

Comparable Hotels Total/Average 204 35,523 63.4 % 62.9 % 0.5 pts $ 140.96 $ 142.14 (0.8) % $ 89.32 $ 89.44 (0.1) %

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

For the years ended December 31, 2024 and 2023, our comparable results exclude two hotels;

one of the hotels was not owned for the entirety of the periods presented and the other hotel suspended operations during the periods presented.

All Hotels* No.

of Hotels No.

of Rooms or Suites Occupancy ADR RevPAR

Year Ended December 31, Year Ended December 31, Year Ended December 31,

Brand Service Level 2024 2023 Change 2024 2023 Change 2024 2023 Change

Sonesta Hotels & Resorts® Full Service 22 7,205 59.2 % 63.2 % (4.0) pts $ 160.51 $ 158.43 1.3 % $ 94.96 $ 100.21 (5.2) %

Hyatt Place® Select Service 17 2,107 68.2 % 63.4 % 4.8 pts 120.63 120.48 0.1 % 82.23 76.35 7.7 %

Focused Service Total/Average 37 5,082 69.9 % 67.4 % 2.5 pts 129.61 130.74 (0.9) % 90.58 88.06 2.9 %

Retained Hotels Total/Average 77 17,933 65.3 % 63.7 % 1.6 pts $174.86 $175.14 (0.2) % $ 114.17 $ 111.60 2.3 %

Royal Sonesta Hotels® Full Service 3 842 47.2 % 46.4 % 0.8 pts $ 166.91 $ 175.04 (4.6) % $ 78.77 $ 81.27 (3.1) %

Radisson® Hotels & Resorts Full Service 5 1,149 65.4 % 62.2 % 3.2 pts 147.07 147.06 — % 96.14 91.50 5.1 %

Crowne Plaza® Full Service 1 495 63.3 % 60.6 % 2.7 pts 142.09 141.30 0.6 % 90.01 85.65 5.1 %

Country Inn & Suites® by Radisson Full Service 2 346 70.2 % 67.2 % 3.0 pts 148.28 145.96 1.6 % 104.14 98.08 6.2 %

Sonesta Hotels & Resorts® Full Service 4 1,168 51.7 % 55.7 % (4.0) pts 93.14 97.14 (4.1) % 48.14 54.07 (11.0) %

Full Service Total/Average 7 2,010 49.8 % 51.8 % (2.0) pts 122.42 126.39 (3.1) % 60.97 65.47 (6.9) %

Sonesta Select® Select Service 42 6,131 57.9 % 55.8 % 2.1 pts 115.31 119.14 (3.2) % 66.80 66.48 0.5 %

Hyatt Place® Select Service 17 2,107 63.4 % 65.3 % (1.9) pts 120.48 122.23 (1.4) % 76.35 79.87 (4.4) %

Select Service Total/Average 59 8,238 59.3 % 58.2 % 1.1 pts 116.73 120.02 (2.7) % 69.24 69.91 (1.0) %

Sonesta ES Suites® Extended Stay 6 768 68.9 % 70.2 % (1.3) pts 114.68 116.86 (1.9) % 79.02 82.06 (3.7) %

Sonesta Select® Select Service 1 155 65.2 % 71.9 % (6.7) pts 125.30 125.38 (0.1) % 81.75 90.09 (9.3) %

Sonesta Simply Suites® Extended Stay 3 377 73.5 % 73.4 % 0.1 pts 89.72 92.26 (2.8) % 65.91 67.76 (2.7) %

Extended Stay Total/Average 100 12,775 68.8 % 68.4 % 0.4 pts 110.67 113.15 (2.2) % 76.15 77.40 (1.6) %

Focused Service Total/Average 10 1,300 69.8 % 71.4 % (1.6) pts 108.24 110.54 (2.1) % 75.54 78.87 (4.2) %

Exit Hotels Total/Average 17 3,310 57.7 % 59.5 % (1.8) pts 115.68 118.92 (2.7) % 66.69 70.73 (5.7) %

All Hotels Total/Average 94 21,243 64.1 % 63.1 % 1.0 pts $166.56 $166.88 (0.2) % $ 106.77 $ 105.23 1.5 %

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

Excludes the results of hotels sold during the periods presented and includes data for one hotel for periods prior to when we acquired it.

Excludes the results of hotels sold during the periods presented.

Retained Hotels represents 52 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 17 hotels managed by Sonesta that we plan to sell.

Net Lease Portfolio

As of December 31, 2025, our net lease properties were 96.6% occupied and we had 26 properties available for lease.

During the year ended December 31, 2024, we entered into lease renewals for 613,543 rentable square feet (56 properties) at weighted (by rentable square feet) average rents that were 3.8% below the prior rents for the same space.

During the year ended December 31, 2025, we entered into lease renewals for 977,089 rentable square feet (32 properties) at weighted (by rentable square feet) average rents that were 4.6% above the prior rents for the same space.

The weighted (by rentable square feet) average lease term for these leases was 10.5 years.

We also entered into new leases for 109,591 rentable square feet (four properties) at weighted (by rentable square feet) average rents that were 13.5% below the prior rents for the same space.

We also entered into new leases for 137,774 rentable square feet (40 properties) at weighted (by rentable square feet) average rents that were 19.9% above the prior rent for the same space.

The weighted (by rentable square feet) average lease term for these leases was 7.7 years.

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Heartland Dental 59 61,120 1.2 % 5,159 1.3 % 4.43x

Norms 10 53,673 1.1 % 3,759 1.0 % 3.42x

Express Oil Change 23 49,724 1.0 % 3,717 1.0 % 5.88x

AMC Theatres 5 57,339 1.1 % 3,558 0.9 % 1.76x

Pizza Hut 45 54,248 1.1 % 4,353 1.1 % 2.16x

Express Oil Change 23 49,724 1.0 % 3,717 1.0 % 5.77x

Norms 10 53,673 1.1 % 3,430 0.9 % 3.62x

Flying J Travel Plaza 3 41,681 0.8 % 3,312 0.8 % 3.14x

423 1,295,268 25.4 % 85,537 22.0 % 3.68x

Total 760 $ 5,093,148 100.0 % $ 390,051 100.0 % 1.98x

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

(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 58 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 December 31, 2025.

(4) Consists of 126 distinct brands with an average investment of $3,022 and average annual minimum rent of $204 per property.

Annualized minimum rent amounts and the rent used to calculate rent coverage is based on the stated rent amounts in the lease and excludes the impact of rents prepaid by TA.

(4) Consists of 130 distinct brands with an average investment of $3,062 per property and average annual minimum rent of $202 per property.

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

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Styx Acquisition, LLC Buehler's Fresh Foods 5 76,469 1.5 % 6,223 1.6 % 2.61 x

Professional Resource Development, Inc.

Heartland Dental 59 61,120 1.2 % 4,769 1.3 % 4.90 x

Norms Restaurants, LLC Norms 10 53,673 1.1 % 3,759 1.0 % 3.42 x

Express Oil Change, L.L.C.

Express Oil Change 23 49,724 1.0 % 3,717 1.0 % 5.77 x

Norms Restaurants, LLC Norms 10 53,673 1.1 % 3,430 0.9 % 3.62 x

Pilot Travel Centers LLC Flying J Travel Plaza 3 41,681 0.8 % 3,312 0.8 % 3.14 x

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America's Auto Auction 6 38,314 0.8 % 3,216 0.8 % 10.27 x

American Multi-Cinema, Inc.

AMC Theatres 3 46,993 0.9 % 2,552 0.7 % 1.02 x

Fleet Farm Group LLC Fleet Farm 1 37,802 0.7 % 2,894 0.7 % 2.11 x

Heartland Dental, LLC Heartland Dental 35 31,045 0.6 % 2,686 0.7 % 5.21 x

Subtotal, Top 10

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The aggregate guaranty as of December 31, 2025 was approximately $3,022,867.

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

Annualized minimum rent amounts and the rent used to calculate rent coverage is based on the stated rent amounts in the lease and excludes the impact of rents prepaid by TA.

Rent coverage was 1.21x, 1.23x, 1.35x, 1.24x and 1.05x, for our TA leases no.

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Rent coverage is as of December 31, 2025.

(4) Consists of 167 tenants with an average investment of $2,740 and an average annual minimum rent of $184 per property.

(4) Consists of 171 tenants with an average investment of $2,688 per property and an average annual minimum rent of $178 per property.

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

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Restaurants - Quick Service 211 293,030 5.8 % 20,783 5.3 % 2.87x

Restaurants - Casual Dining 55 194,448 3.9 % 12,136 3.2 % 2.89x

Health and Fitness 15 204,027 4.0 % 13,233 3.4 % 2.08x

Home Goods and Leisure 20 134,539 2.7 % 10,699 2.8 % 4.14x

Restaurants - Casual Dining 59 208,582 4.1 % 13,063 3.3 % 3.03x

Grocery Stores 19 129,152 2.5 % 9,883 2.5 % 3.12x

Movie Theaters 15 139,661 2.8 % 8,410 2.2 % 1.82x

Medical, Dental Office 70 104,042 2.0 % 8,680 2.2 % 3.47x

Automotive Equipment and Services 64 107,341 2.1 % 7,865 2.0 % 4.98x

Home Goods and Leisure 14 98,242 1.9 % 7,711 2.0 % 4.00x

Movie Theaters 14 134,478 2.6 % 7,104 1.8 % 2.13x

Automotive Dealers 8 62,656 1.2 % 5,094 1.3 % 7.98x

Entertainment 4 61,436 1.2 % 4,590 1.2 % 2.27x

General Merchandise Stores 4 55,457 1.1 % 4,054 1.0 % 2.92x

Educational Services 7 44,820 0.9 % 3,563 0.9 % 1.76x

Entertainment 3 51,473 1.0 % 3,947 1.0 % 1.08x

Building Materials 29 34,006 0.7 % 3,256 0.8 % 8.69x

Educational Services 6 37,730 0.7 % 2,902 0.7 % 2.46x

Car Washes 7 36,125 0.7 % 2,846 0.7 % 4.85x

Miscellaneous Manufacturing 5 24,355 0.5 % 1,726 0.5 % 13.38x

Drug Stores and Pharmacies 6 17,111 0.3 % 1,710 0.4 % 1.03x

Sporting Goods 4 29,367 0.6 % 1,920 0.5 % 4.57x

Legal Services 5 11,362 0.2 % 1,097 0.3 % 4.19x

Miscellaneous Manufacturing 5 24,355 0.5 % 1,741 0.4 % 14.17x

Dollar Stores 7 10,253 0.2 % 721 0.2 % 2.31x

Legal Services 3 7,609 0.1 % 681 0.2 % 0.90x

Drug Stores and Pharmacies 3 9,699 0.2 % 590 0.2 % 1.26x

11 66,061 1.3 % 6,403 1.9 % 4.51x

4 unchanged sentences

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

Annualized minimum rent amounts and the rent used to calculate rent coverage is based on the stated rent amounts in the lease and excludes the impact of rents prepaid by TA.

(4) Consists of miscellaneous businesses with an average investment of $6,006 per property.

1 unchanged sentence

Number of Properties

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

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

2026 65 644,888 $ 8,630 2.2% 2.2%

26 unchanged sentences

Texas 57 1,188,461 $ 34,630 8.9%

Illinois 53 972,329 27,346 7.2%

Ohio 38 1,289,668 27,999 7.2%

Illinois 54 973,236 27,677 7.1%

California 22 399,045 25,994 6.7%

Georgia 70 580,553 20,490 5.3%

Arizona 25 476,651 17,083 4.5%

Florida 48 587,706 18,473 4.7%

Arizona 25 476,651 16,827 4.3%

Pennsylvania 27 506,563 16,062 4.1%

35 unchanged sentences

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, less any gains and losses on equity securities, as well as adjustments to reflect our share of FFO attributable to an investee and certain other adjustments currently not applicable to us.

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 maintain our qualification for taxation as a REIT, limitations in our debt agreements, the availability to us of debt and equity capital, our 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 factors include, but are not limited to, requirements to maintain 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.

3 unchanged sentences

Depreciation and amortization expense 314,963 371,786

Loss on asset impairment, net 56,212 9,544

Loss on asset impairment 81,889 56,212

Gain on sale of real estate, net (84,218) (6,269)

Gain on equity securities, net — (48,837)

Adjustments to reflect our share of FFO attributable to an investee

2 unchanged sentences

Adjustments to reflect our share of Normalized FFO attributable to an investee

Deferred tax liability (1)

Transaction related costs 14,698 6,894

Normalized FFO $ 129,884 $ 176,402

Weighted average shares outstanding (basic and diluted) 165,338 164,988

Weighted average common shares outstanding (basic and diluted) 165,951 165,338

Basic and diluted per common share amounts:

3 unchanged sentences

Distributions declared per share $ 0.04 $ 0.61

(1) We recorded a $12,270 income tax benefit during the three months ended December 31, 2025 related to a tax exemption received from tax authorities in Puerto Rico related to our hotel in San Juan.

We deducted $6,235 of this benefit from our calculation of Normalized FFO as it relates to a deferred tax liability recorded in 2020 as a result of a book to tax difference previously adjusted from Normalized FFO.

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 7. Management’s Discussion and Analysis