What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-06 compared with 2025-11-05 · 198 added, 302 removed, 335 unchanged (60% of the section changed)

3 unchanged sentences

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

As of September 30, 2025, we owned 912 properties in 46 states, the District of Columbia, Canada and Puerto Rico.

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

As of March 31, 2026, we owned 854 properties in 46 states, the District of Columbia, Canada and Puerto Rico.

Our strategy continues to focus on reducing debt, transitioning to a company with the majority of our 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.

Leases and Management Agreements .

At March 31, 2026, we owned 761 service-focused retail properties with an aggregate of 13,605,978 square feet leased to 185 tenants subject to “triple net” leases, where the tenants are generally responsible for the payment of operating expenses and capital expenditures.

At March 31, 2026, we also owned 93 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.

Our condensed 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.

Market Outlook.

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

Increased labor costs and other price inflation may continue to negatively impact our hotel operations and the operations of our tenants.

Further, recent announcements regarding tariffs on a wide variety of imports could impact the cost of products our operators use, such as furniture, equipment, materials and supplies sourced from outside the United States.

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

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

As of November 4, 2025, we sold 52 of these hotels with a total of 7,114 keys for a combined sales price of $391,352, excluding closing costs, entered into agreements to sell 69 hotels with a total of 8,695 keys for a combined sales price of $567,500, excluding closing costs, and are marketing for sale one hotel with 122 keys.

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

As discussed in Note 6 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, in August 2025, we and Sonesta amended and restated our management agreements for the 59 retained hotels managed by Sonesta and waived any termination fees under the legacy Sonesta agreement associated with the sale of the 122 hotels.

Our current strategy is focused on reducing debt, transitioning to a company with the majority of its properties being service-focused retail net lease properties through the growth of our net lease portfolio and improving the performance of the hotels we expect to retain after completing the sale of our previously announced dispositions.

Management Agreements and Leases .

At September 30, 2025, we owned 160 hotels managed by four operators.

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

At September 30, 2025, we also owned 752 service-focused retail properties leased to 178 tenants subject to “triple net” leases, where the tenants are generally responsible for the payment of operating expenses and capital expenditures.

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

Net Lease Portfolio .

Our net lease properties were 96.6% occupied as of March 31, 2026 with a weighted (by annual minimum rent) average lease term of 7.3 years, operating under 140 brands in 21 distinct industries.

TA is our largest tenant and as of March 31, 2026, 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.

We use a variety of operating and other information to evaluate the financial condition and operating performance of our net lease portfolio, including the lease structure, credit evaluations, tenants’ payment history and net lease rent coverage metrics as defined below.

Our net lease portfolio is diverse geographically in service-focused and necessity-based industries, by brand concepts and tenants.

We believe this diversification may help mitigate the impact of macroeconomic factors.

Hotel Portfolio.

As of September 30, 2025, we owned 160 hotels.

During the three and nine months ended September 30, 2025, the U.S.

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

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

During the three months ended March 31, 2026, the U.S.

hotel industry generally realized increases in average daily rate, or ADR, and decreases in revenue per available room, or RevPAR, compared to the corresponding 2025 period.

Our comparable hotels produced increases in ADR and RevPAR, which we believe is partially a result of renovation disruption in the 2025 period.

In addition to the macroeconomic factors noted above, ADR, occupancy, and RevPAR performance are dependent on the continued success of our hotels' brands and our hotel operators.

While we do not operate our hotel properties, our asset management team and our executive management team monitor and work with our hotel managers by conducting regular revenue, sales, and financial performance reviews and also perform in-depth on-site reviews focused on ongoing operating margin improvement initiatives.

Significant Events

We sold 112 hotels with a total of 14,631 keys for a combined sales price of $858,752, excluding closing costs, during 2025.

During the three months ended March 31, 2026, we sold one hotel with 133 keys for a sales price of $7,100, excluding closing costs, and we are at various stages of selling 15 additional hotels with 3,022 keys.

In January 2026, we redeemed $300,000 of our $400,000 of 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, using cash on hand.

In March 2026, we redeemed all $700,000 of our outstanding 8.375% senior guaranteed unsecured notes due 2029 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 $37,128, using net proceeds from the issuance of $745,000 of net lease mortgage notes and cash on hand.

In April 2026, we issued and sold 479,166,667 common shares, including 62,500,000 common shares pursuant to the exercise of the underwriters’ option to purchase additional shares, at $1.20 per share in an underwritten public offering.

Our net proceeds from this offering were approximately $542,300, after deducting the underwriters’ discount and other offering expenses.

In April 2026, we used the net proceeds from this offering to redeem all $450,000 of our outstanding 5.50% senior guaranteed 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 $7,191.

Additionally, in May 2026, we used the remaining net proceeds from this offering and cash on hand to redeem the remaining $100,000 of our outstanding 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 $216.

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

Three Months Ended September 30,

Nine Months Ended September 30,

2025 2024 Change 2025 2024 Change

Three Months Ended March 31,

2026 2025 Change

Retained Hotels

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of rooms or suites 18,088 19,447 (1,359)

Occupancy 67.8 % 66.4 % 1.4 pts 64.6 % 63.3 % 1.3 pts

Occupancy 63.0 % 56.4 % 6.6 pts

ADR $ 179.39 $ 174.76 2.6 %

RevPAR $ 113.00 $ 98.59 14.6 %

Exit Hotels (1)

of hotels 15 119 (104)

of rooms or suites 3,022 15,912 (12,890)

Occupancy 71.1 % 68.3 % 2.8 pts 68.5 % 65.0 % 3.5 pts

Occupancy 48.6 % 59.4 % (10.8) pts

ADR $ 101.63 $ 109.54 (7.2) %

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of rooms or suites 21,110 35,359 (14,249)

Occupancy 68.9 % 67.2 % 1.7 pts 65.9 % 64.1 % 1.8 pts

Occupancy 60.9 % 57.8 % 3.1 pts

ADR $ 170.50 $ 144.61 17.9 %

RevPAR $ 103.90 $ 83.52 24.4 %

(1) Exit Hotels represents 15 hotels managed by Sonesta that are currently being marketed for sale.

Comparable Hotels Data.

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

Three Months Ended September 30,

Nine Months Ended September 30,

2025 2024 Change 2025 2024 Change

Three Months Ended March 31,

2026 2025 Change

Retained Hotels

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of rooms or suites 18,088 18,088 —

Occupancy 67.8 % 66.4 % 1.4 pts 64.6 % 63.3 % 1.3 pts

Occupancy 63.0 % 58.5 % 4.5 pts

ADR $ 179.39 $ 179.58 (0.1) %

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of rooms or suites 3,022 3,022 —

Occupancy 71.1 % 71.2 % (0.1) pts 68.5 % 69.0 % (0.5) pts

Occupancy 48.6 % 49.9 % (1.3) pts

ADR $ 101.63 $ 102.11 (0.5) %

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of rooms or suites 21,110 21,110 —

Occupancy 68.9 % 67.9 % 1.0 pts 65.9 % 65.1 % 0.8 pts

Occupancy 60.9 % 57.3 % 3.6 pts

ADR $ 170.50 $ 169.92 0.3 %

RevPAR $ 103.90 $ 97.35 6.7 %

Net Lease Portfolio .

As of September 30, 2025, we owned 752 service-focused retail net lease properties with an aggregate of 13,185,953 square feet leased to 178 tenants subject to “triple net” leases (where the tenants are responsible for payments of operating expenses and capital expenditures) requiring annual minimum rents of $388,745.

Our net lease properties were 97.3% occupied as of September 30, 2025 with a weighted (by annual minimum rent) average lease term of 7.5 years, operating under 139 brands in 21 distinct industries.

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

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

BP Corporation North America Inc.

guarantees payment under the TA leases, subject to a cap.

Additional details of our hotel operating agreements and our net lease agreements are set forth in Note 6 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Additional details of our net lease agreements and our hotel operating agreements are set forth in Note 6 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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

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

Three Months Ended September 30,

Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025

Three Months Ended March 31,

2026 2025 $ Change % Change

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Total expenses 365,327 447,302 (81,975) (18.3) %

Gain on sale of real estate, net 25,256 4,105 21,151 n/m

Interest income 4,841 537 4,304 n/m

Interest expense (107,776) (99,126) (8,650) 8.7 %

Loss on early extinguishment of debt, net (529) (133) (396) n/m

Loss before income tax (expense) benefit and equity in earnings of an investee (48,292) (49,941) 1,649 (3.3) %

Income tax (expense) benefit (253) 77 (330) n/m

Equity in earnings of an investee 1,600 2,963 (1,363) (46.0) %

Net loss $ (46,945) $ (46,901) $ (44) 0.1 %

Weighted average common shares outstanding (basic and diluted) 166,085 165,398 687 0.4 %

Net loss per common share (basic and diluted) $ (0.28) $ (0.28) $ — — %

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

Hotel operating revenues.

The decrease in hotel operating revenues is primarily a result of our sales of certain hotels since July 1, 2024 ($17,030), partially offset by increases in occupancy and average rates at certain hotels during the 2025 period ($3,671).

Additional operating statistics of our hotels are included in the tables beginning on page 41.

Rental income.

The increase in rental income is primarily a result of the acquisitions of certain net lease properties since July 1, 2024 ($937) and higher rental income recognized in the 2025 period ($137), partially offset by our sale of certain net lease properties since July 1, 2024 ($116).

Hotel operating expenses.

The decrease in hotel operating expenses is primarily a result of our sales of certain hotels since July 1, 2024 ($14,373), partially offset by increases in wages and benefits ($7,510) and other operating expenses ($6,686) in the 2025 period.

Net lease operating expenses.

The increase in net lease operating expenses is primarily the result of increased property management fees ($648) and other operating expenses ($529) in the 2025 period, partially offset by decreases resulting from the sale of certain net lease properties since July 1, 2024 ($732).

Depreciation and amortization - hotels.

The decrease in depreciation and amortization - hotels is primarily a result of certain of our hotels classified as held for sale ($12,464) in the 2025 period.

Depreciation and amortization - net lease properties.

The decrease in depreciation and amortization - net lease properties is primarily a result of certain of our depreciable assets becoming fully depreciated since July 1, 2024 ($2,203) and our sale of certain net lease properties since July 1, 2024 ($492), partially offset by increases from our acquisition of certain net lease properties since July 1, 2024 ($607).

General and administrative.

The increase in general and administrative costs is primarily due to increases in other professional fees ($420) and business management fees ($165) in the 2025 period.

Transaction related costs .

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

Loss on asset impairment.

We recorded a $27,067 loss on asset impairment during the 2025 period to reduce the carrying value of 25 hotels and one net lease property to their estimated fair value less costs to sell.

We recorded a $13,692 loss on asset impairment during the 2024 period to reduce the carrying value of four hotels and two net lease properties to their estimated fair value or estimated fair value less costs to sell.

Gain on sale of real estate, net 1,355 746 609 81.6 %

We recorded a $25,256 net gain on sale of real estate during the 2025 period in connection with the sales of 40 hotels and three net lease properties.

We recorded a $4,105 net gain on sale of real estate during the 2024 period in connection with the sales of six hotels and four net lease properties.

Interest income 943 1,249 (306) (24.5) %

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

Interest expense (96,547) (101,517) 4,970 (4.9) %

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

Loss on early extinguishment of debt, net.

We recorded a $529 loss on early extinguishment of debt, net in the 2025 period as a result of the redemption and write off of unamortized deferred financing costs and discounts of certain unsecured senior notes in the 2025 period.

We recorded a $133 loss on early extinguishment of debt, net in the 2024 period as a result of the redemption and purchase of certain senior notes in the 2024 period.

Income tax (expense) benefit.

The change from income tax benefit in the 2024 period to income tax expense in the 2025 period is due to increases in foreign tax expense ($279) and state tax expense ($51) during the 2025 period.

Equity in earnings of an investee.

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

Our net loss increased and our net loss per common share (basic and diluted) did not change in the 2025 period compared to the 2024 period primarily due to the revenue and expense changes discussed above.

Nine Months Ended September 30, 2025, Compared to the Nine Months Ended September 30, 2024

Nine Months Ended September 30,

2025 2024 $ Change % Change

Hotel operating revenues $ 1,116,944 $ 1,139,657 $ (22,713) (2.0) %

Rental income 300,441 300,712 (271) (0.1) %

Total revenues 1,417,385 1,440,369 (22,984) (1.6) %

Hotel operating expenses 963,111 961,868 1,243 0.1 %

Net lease operating expenses 16,303 14,472 1,831 12.7 %

Depreciation and amortization - hotels 132,495 163,237 (30,742) (18.8) %

Depreciation and amortization - net lease properties 106,088 114,549 (8,461) (7.4) %

Total depreciation and amortization 238,583 277,786 (39,203) (14.1) %

General and administrative 30,831 31,659 (828) (2.6) %

Transaction related costs 4,139 — 4,139 n/m

Loss on asset impairment 81,788 51,030 30,758 60.3 %

Total expenses 1,334,755 1,336,815 (2,060) (0.2) %

Gain on sale of real estate, net 25,846 1,110 24,736 n/m

Interest income 6,912 3,318 3,594 108.3 %

Interest expense (311,972) (284,390) (27,582) 9.7 %

Loss on early extinguishment of debt, net (529) (16,181) 15,652 (96.7) %

Loss on early extinguishment of debt, net (51,871) — (51,871) n/m

Loss before income tax expense and equity in losses of an investee (146,996) (111,645) (35,351) 31.7 %

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Net loss per common share (basic and diluted) $ (0.91) $ (0.70) $ (0.21) 30.0 %

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

References to changes in the income and expense categories below relate to the comparison of consolidated results for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Hotel operating revenues.

2 unchanged sentences

Rental income.

The decrease in rental income is primarily a result of our sales of certain net lease properties since January 1, 2024 ($934) and lower rental income recognized in the 2025 period ($538), partially offset by our acquisition of certain net lease properties during the 2025 period ($1,201).

The decrease in rental income is primarily a result of lower rental income from credit losses recognized at certain of our net lease properties in the 2026 period ($2,000) and certain sales of our net lease properties since January 1, 2025 ($248), partially offset by our acquisitions of certain net lease properties since January 1, 2025 ($1,908).

Hotel operating expenses.

The increase in hotel operating expenses is primarily a result of increases in wages and benefits ($21,830) and other operating expenses ($12,590) in the 2025 period, partially offset by our sales of certain hotels since January 1, 2024 ($33,177).

The decrease in hotel operating expenses is primarily a result of our sales of certain hotels since January 1, 2025 ($82,018), partially offset by increases in insurance expense ($4,060), room expenses ($2,801), food and beverage expenses ($758) and other operating expenses ($11,203) in the 2026 period.

Net lease operating expenses.

The increase in net lease operating expenses is primarily the result of increased property management fees ($1,847), partially offset by a decrease in other operating expenses at certain net lease properties ($16) in the 2025 period.

The increase in net lease operating expenses is primarily the result of our acquisition activity ($1,382) and increases of property management fees ($684) and other operating expenses ($148) in the 2026 period, partially offset by decreases resulting from the sale of certain net lease properties since January 1, 2025 ($402).

Depreciation and amortization - hotels.

The decrease in depreciation and amortization - hotels is primarily a result of certain of our hotels classified as held for sale ($30,742) in the 2025 period.

The decrease in depreciation and amortization - hotels is primarily a result of our sales of certain hotels since January 1, 2025 ($14,050) and certain of our depreciable assets becoming fully depreciated since January 1, 2025 ($3,248), partially offset by depreciation and amortization related to capital expenditures made since January 1, 2025 ($6,461).

Depreciation and amortization - net lease properties.

The decrease in depreciation and amortization - net lease properties is primarily a result of certain of our depreciable assets becoming fully depreciated since January 1, 2024 ($7,855) and our sale of certain net lease properties since January 1, 2024 ($1,428), partially offset by increases from our acquisition of certain net lease properties since January 1, 2024 ($822).

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, 2025 ($3,088) and our sale of certain net lease properties since January 1, 2025 ($355), partially offset by depreciation and amortization related to capital expenditures made since January 1, 2025 ($1,023).

General and administrative.

The decrease in general and administrative costs is primarily due to decreases in business management fees ($1,202), partially offset by increase in other professional fees ($374) in the 2025 period.

Transaction related cos ts.

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

previously deemed uncollectable and expensed in 2021.

The decrease in general and administrative costs is primarily due to a decrease in business management fees ($749) in the 2026 period.

Transaction related costs .

Transaction related costs for the 2026 period primarily consisted of costs related to the sales of certain hotels.

Loss on asset impairment.

We recorded a $81,788 loss on asset impairment during the 2025 period to reduce the carrying value of 28 hotels and three net lease properties to their estimated fair value less costs to sell.

We recorded a $51,030 net loss on asset impairment during the 2024 period to reduce the carrying value of ten hotels and eight net lease properties to their estimated fair value or estimated fair value less costs to sell.

We recorded a $28,095 loss on asset impairment during the 2026 period to reduce the carrying value of seven hotels and 21 net lease properties to their estimated fair value less costs to sell.

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

Gain on sale of real estate, net.

We recorded a $25,846 net gain on sale of real estate during the 2025 period in connection with the sales of 46 hotels and ten net lease properties.

We recorded a $1,110 net gain on sale of real estate during the 2024 period in connection with the sale of seven hotels and seven net lease properties.

We recorded a $1,355 net gain on sale of real estate during the 2026 period in connection with the sales of one hotel and two net lease properties.

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

Interest income.

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

The decrease in interest income is due to lower average cash balances invested and lower average interest rates during the 2026 period compared to the 2025 period.

Interest expense.

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

The decrease in interest expense is primarily due to lower debt outstanding and lower weighted average interest rates during the 2026 period compared to the 2025 period.

Loss on early extinguishment of debt, net.

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

We recorded a $51,871 loss on early extinguishment of debt, net in the 2026 period as a result of the redemption of certain senior notes.

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

Income tax expense.

The increase in income tax expense is primarily due to an increase in our foreign tax expense ($257), partially offset by a decrease in state income tax expense ($158) during the 2025 period.

The increase in income tax expense is due to increases in foreign tax expense ($205) and state tax expense ($133) during the 2026 period.

Equity in losses of an investee.

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

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

Our net loss and our net loss per common share (basic and diluted) each increased in the 2026 period compared to the 2025 period 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 September 30, 2025, all 160 of our hotels were managed by four hotel operating companies.

Our 752 service-focused retail net lease properties were leased to 178 tenants.

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

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

As of September 30, 2025, Sonesta is our largest hotel manager (135 hotels) and TA is our largest tenant (175 travel centers).

We recorded reserves for uncollectable amounts and reduced rental income by $479 and $1,856 for the three and nine months ended September 30, 2025, respectively, based on our assessment of the collectability of rents.

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

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

As of March 31, 2026, our 761 service-focused retail net lease properties were leased to 185 tenants and our 93 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 March 31, 2026, TA is our largest tenant (175 travel centers) and Sonesta (68 hotels) is our largest hotel manager.

We recorded reserves for uncollectable amounts and reduced rental income by $2,235 and $235 for the three months ended March 31, 2026 and 2025, respectively, based on our assessment of the collectability of rents.

We had reserves for uncollectable rents of $5,349 and $3,115 as of March 31, 2026 and December 31, 2025, respectively, included in other assets, net in our condensed consolidated balance sheets.

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

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

Our net lease properties generated rent coverage of 2.04x and 2.16x as of September 30, 2025 and 2024, respectively.

Our net lease properties generated rent coverage of 2.01x and 2.07x as of March 31, 2026 and 2025, respectively.

Our Operating Liquidity and Capital Resources

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

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

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 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:

Nine Months Ended September 30,

Three Months Ended March 31,

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

4 unchanged sentences

Cash and cash equivalents and restricted cash at the end of the period $ 39,358 $ 94,094

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

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

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

The decrease in cash flow provided by operating activities in the 2026 period is primarily due to lower returns from our hotel portfolio in the 2026 period.

The increase in cash flow used in investing activities in the 2026 period is primarily due to lower net proceeds from sales of real estate properties and higher acquisitions in the 2026 period, partially offset by a decrease in real estate improvements in the 2026 period.

The increase in cash flow used in financing activities in the 2026 period is primarily due to higher net debt repayments in the 2026 period, partially offset by debt issuances during 2026.

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

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Our Investment and Financing Liquidity and Capital Resources

Tenants in our net lease portfolio are generally required to maintain the leased properties, including structural and non-structural components under their respective leases.

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

During the three months ended March 31, 2026, we funded $580 for capital improvements to our net lease properties.

As of March 31, 2026, we had $8,297 of unspent leasing-related obligations related to certain of our net lease tenants.

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

During the nine months ended September 30, 2025, we funded $126,465 for capital improvements in excess of FF&E reserves available to our hotels.

We currently expect to fund $70,000 during the last three months of 2025 and $150,000 in 2026 for capital improvements to certain hotels using cash on hand.

During the three months ended March 31, 2026, we funded $19,161 for capital improvements in excess of FF&E reserves available to our hotels.

We currently expect to fund between approximately $100,000 and $120,000 during the last nine months of 2026 for capital improvements to certain properties using cash on hand.

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

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

During the nine months ended September 30, 2025, certain of our hotel managers deposited $4,519 to these accounts and spent $3,570 from the FF&E reserve escrow accounts to renovate and refurbish our hotels.

As of September 30, 2025, there was $6,391 on deposit in these escrow accounts, which was held directly by us and is reflected in our condensed consolidated balance sheets as restricted cash.

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

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

During the nine months ended September 30, 2025, we funded $1,431 for capital improvements to our net lease properties.

As of September 30, 2025, we had $5,576 of unspent leasing-related obligations related to certain of our net lease tenants.

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

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

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

During the three months ended March 31, 2026, certain of our hotel managers deposited $786 to these accounts and spent $1,845 from the FF&E reserve escrow accounts to renovate and refurbish our hotels.

As of March 31, 2026, there was $5,704 on deposit in these escrow accounts, which was held directly by us and is reflected in our condensed consolidated balance sheets as restricted cash.

During the three months ended March 31, 2026, we sold three properties for a combined sales price of $8,385, excluding closing costs.

From April 1, 2026 through May 4, 2026, we sold 11 net lease properties with a total of 88,084 square feet for a combined sales price of $9,160, excluding closing costs.

We have also entered into agreements to sell seven net lease properties with a total of 30,161 square feet for a combined sales price of $3,415, excluding closing costs.

These pending sales are subject to conditions;

accordingly, we cannot be sure that we will complete these sales, that these sales will not be delayed or that the terms will not change.

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

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

We are at various stages of selling four net lease properties with a total of 5,526 square feet and 15 hotels with 3,022 keys.

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

During the nine months ended September 30, 2025, we acquired 20 net lease properties with a total of 150,776 square feet for a combined purchase price of $54,701, excluding closing costs, using cash on hand.

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

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

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

These pending acquisitions are subject to conditions;

accordingly, we cannot be sure that we will complete these acquisitions, that these acquisitions will not be delayed or that the terms will not change.

During the nine months ended September 30, 2025, we declared and paid a regular quarterly distribution to common shareholders using cash on hand as follows:

During the three months ended March 31, 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.

From April 1, 2026 through May 4, 2026, we acquired one net lease property with a total of 3,200 square feet for a purchase price of $1,776, excluding closing costs, using cash on hand.

During the three months ended March 31, 2026, we declared and paid a regular quarterly distribution to common shareholders using cash on hand as follows:

Declaration Date Record Date Paid Date Dividend Per Common Share Total Distributions

January 15, 2026 January 26, 2026 February 19, 2026 $ 0.01 $ 1,681

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

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

$ 0.03 $ 5,002

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

We expect to pay this distribution on or about November 13, 2025 using cash on hand.

On April 9, 2026, we declared a regular quarterly distribution to common shareholders of record as of April 21, 2026 of $0.01 per common share, or approximately $6,472.

We expect to pay this distribution on or about May 14, 2026 using cash on hand.

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

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The maturity date of our revolving credit facility is June 29, 2027, and, subject to the payment of an extension fee and meeting certain other conditions, we have an option to further extend the stated maturity date of the facility by two additional six-month periods.

Interest payable on drawings under our revolving credit facility is based on SOFR plus a margin ranging from 1.50% to 3.00% based on our leverage ratio, as defined in our credit agreement, which was 2.50% as of September 30, 2025.

We also pay unused commitment fees of 20 to 30 basis points per annum on the total amount of lending commitments under our revolving credit facility based on amounts outstanding.

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

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

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

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

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

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

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

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

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

The collateral swap was completed in May 2025.

As of September 30, 2025, our revolving credit facility was secured by 55 properties, including 17 hotels and 38 net lease properties, with an aggregate undepreciated book value of $894,032.

Senior Secured Notes Issuance

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

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

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

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

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

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

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

The net proceeds from this offering were used repay amounts outstanding under our revolving credit facility.

As of March 31, 2026 and 2025, the annual interest rate payable on borrowings under our revolving credit facility was 6.43% and 6.91%, respectively.

As of March 31, 2026 and May 4, 2026, we had no borrowings outstanding under our revolving credit facility and $650,000 available for borrowing.

As of March 31, 2026, our revolving credit facility was secured by 55 properties, including 38 net lease properties and 17 hotels, with an aggregate undepreciated book value of $887,212.

Equity Offering

Our net proceeds from this offering were approximately $542,300, after deducting the underwriters’ discount and other offering expenses.

Redemption of Senior Unsecured Notes

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

The redemption was funded using cash on hand.

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

The redemption was funded using cash on hand and borrowings under our revolving credit facility.

Net Lease Mortgage Notes

On January 27, 2025, the Issuer issued the VFN secured by the 314 net lease properties that secure our existing $605,143 of net lease mortgage notes.

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

The maturity date of the VFN is January 27, 2027, and, subject to the payment of an extension fee and meeting certain other conditions, can be extended by one year at the Issuer’s option.

The VFN requires interest payments only on drawings under the VFN based on SOFR plus a margin of 1.75%, and an unused commitment fee of 50 basis points per annum paid on undrawn amounts.

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

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

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

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

On March 6, 2026, the Issuers issued $745,000 in aggregate principal amount of net lease mortgage notes in three classes.

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

The Series 2026-1 Class A notes and the Series 2026-1 Class B notes require monthly principal repayments at an annualized rate of 0.50% and 0.25% of the balances outstanding, respectively, and the Series 2026-1 Class M notes require interest payments only, with balloon payments due at maturity.

The Series 2026-1 Notes mature in March 2031 and may be redeemed without penalty 24 months prior to the scheduled maturity date beginning in March 2029.

The Series 2026-1 Notes are non-recourse and, as of March 31, 2026, were secured by 472 retail net lease properties, including 158 properties that we contributed in connection with this transaction.

As of March 31, 2026, the current leases relating to the 472 properties required annual minimum rents of $150,754 and had an aggregate undepreciated book value of $1,511,474.

As discussed above, we used the net proceeds from this transaction and cash on hand to redeem all $700,000 of our outstanding 8.375% senior guaranteed unsecured notes due 2029.

Our debt maturities (other than our revolving credit facility and VFN) as of May 4, 2026 were as follows:

Year Debt Maturities

2028 1,002,775

2028 1,000,737

2029 1,125,000

Thereafter 2,235,319

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Debt Covenants

Our debt obligations at September 30, 2025 consisted of $5,305,155 aggregate principal amounts of senior notes, $605,143 aggregate principal amounts of net lease mortgage notes and $45,000 of borrowings outstanding under the VFN.

Our debt obligations at May 4, 2026 consisted of $3,305,155 aggregate principal amounts of senior notes, $1,349,164 aggregate principal amounts of net lease mortgage notes and $45,000 of borrowings outstanding under the VFN.

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

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

As of September 30, 2025, we believe we were in compliance with all of the covenants under our indentures and their supplements, net lease mortgage notes and our credit agreement.

As of March 31, 2026, we believe we were in compliance with all of the covenants under our indentures and their supplements, net lease mortgage notes and our credit agreement.

Senior Notes Indenture Covenants

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

The following table summarizes the results of the financial tests required by the indentures and related supplements for our senior secured and unsecured notes as of March 31, 2026:

Actual Results (1)

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9.17x Minimum of 2.20x

(1) As adjusted for the redemption of $450,000 of 4.75% senior unsecured notes redeemed in October 2025.

As of September 30, 2025, as adjusted for the redemption of $450,000 of 4.75% senior unsecured notes redeemed in October 2025, adjusted total assets for covenant purposes as defined in our senior notes indentures were $9,746,354 and assets encumbered under our revolving credit facility, serving as collateral for our net lease mortgage notes or secured senior notes represented $3,112,680 of adjusted total assets, as defined in our senior notes indentures.

Our unencumbered hotels, travel centers, other net lease properties and other corporate assets represent $5,130,095, $457,181, $851,505 and $194,893 of adjusted total assets, respectively.

(1) Adjusted for the redemptions of $450,000 of 5.50% senior guaranteed unsecured notes due 2027 in April 2026 and $100,000 of 4.95% senior unsecured notes due 2027 in May 2026.

As of March 31, 2026, adjusted total assets for covenant purposes as defined in our senior notes indentures were $8,845,030 and assets encumbered under our revolving credit facility, serving as collateral for our net lease mortgage notes or secured senior notes represented $3,949,765 of adjusted total assets, as defined in our senior notes indentures.

Our unencumbered hotels, other net lease properties and other corporate assets represent $4,269,955, $481,860 and $143,450 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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Supplemental Guarantor Information

Our 5.50% Senior Notes due 2027, or the 2027 Notes, our 8.375% Senior Guaranteed Unsecured Notes due 2029, or the 2029 Notes, and our 8.875% Senior Guaranteed Unsecured Notes due 2032, or the 2032 Notes, are fully and unconditionally guaranteed, on a joint and several basis and on a senior unsecured basis, by all of our subsidiaries, except for certain excluded subsidiaries, including our foreign subsidiaries and our subsidiaries pledged under our credit agreement and our net lease mortgage notes.

Our 8.875% Senior Guaranteed Unsecured Notes due 2032, or the 2032 Notes, are fully and unconditionally guaranteed, on a joint and several basis and on a senior unsecured basis, by all of our subsidiaries, except for certain excluded subsidiaries, including our foreign subsidiaries and our subsidiaries pledged under our credit agreement and our net lease mortgage notes.

The notes and the guarantees will be effectively subordinated to all of our and the subsidiary guarantors’ secured indebtedness, respectively, to the extent of the value of the collateral securing such secured indebtedness, and will be structurally subordinated to all indebtedness and other liabilities and any preferred equity of any of our subsidiaries that do not guarantee the notes.

In April 2026, we redeemed $450,000 of 5.50% senior guaranteed unsecured notes due 2027.

Our remaining $1,225,000 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 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 Rating Services, or S&P, or if Moody’s or S&P ceases to rate the notes for reasons outside of our control, the equivalent investment grade rating from any other rating agency and (b) no default or event of default has occurred and is continuing under the indenture.

Our non-guarantor subsidiaries are separate and distinct legal entities and will have no obligation, contingent or otherwise, to pay any amounts due on these notes or the guarantees, or to make any funds available therefor, whether by dividend, distribution, loan or other payments.

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

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

As of March 31, 2026 As of December 31, 2025

Real estate properties, net (1)

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Other liabilities 231,035 255,069

Nine Months Ended September 30, 2025

(1) Real estate properties, net as of September 30, 2025 includes $33,234 of properties owned directly by us and not included in the assets of the subsidiary guarantors.

Three Months Ended March 31, 2026

(1) Real estate properties, net as of March 31, 2026 includes $17,211 of properties owned directly by us and not included in the assets of the subsidiary guarantors.

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

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Actual results could differ from those estimates.

Significant estimates in the condensed consolidated financial statements include consolidation of VIEs, purchase price allocations, the determination of useful lives of fixed assets, classification of leases, and the assessment of the book values and impairment of real estate intangible assets and equity investments.

Estimates in the condensed consolidated financial statements include consolidation of VIEs, purchase price allocations, the determination of useful lives of fixed assets, classification of leases and the assessment of the book values and impairment of real estate intangible assets and equity investments.

A discussion of our critical accounting estimates is included in our 2025 Annual Report.

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

As of September 30, 2025, we owned and managed a diverse portfolio of hotels and net lease properties across the United States and in Puerto Rico and Canada with 148 distinct brands across 22 industries.

Hotel Portfolio

The following tables summarize the operating statistics, including occupancy, ADR and RevPAR reported to us by our hotel managers by hotel brand for the periods indicated.

All operating data presented are based upon the operating results provided by our hotel managers for the indicated periods.

We have not independently verified our managers’ operating data.

of Rooms or Suites Occupancy ADR RevPAR

Service Level No.

of Hotels Three Months Ended

September 30, Three Months Ended

September 30,

Brand 2025 2024 Change 2025 2024 Change 2025 2024 Change

Retained Hotels:

Royal Sonesta Hotels® Full Service 17 5,663 67.5 % 67.5 % – pts $223.89 $227.48 (1.6) % $ 151.04 $ 153.49 (1.6) %

Sonesta Hotels & Resorts® Full Service 22 7,207 64.8 % 60.5 % 4.3 pts 154.77 158.39 (2.3) % 100.29 95.87 4.6 %

Radisson® Hotels & Resorts Full Service 5 1,149 61.6 % 67.2 % (5.6) pts 153.93 148.21 3.9 % 94.78 99.53 (4.8) %

Country Inn & Suites® by Radisson Full Service 2 346 80.3 % 78.3 % 2.0 pts 158.34 167.43 (5.4) % 127.10 131.05 (3.0) %

Crowne Plaza® Full Service 1 495 65.6 % 62.7 % 2.9 pts 150.00 141.21 6.2 % 98.36 88.49 11.2 %

Full Service Total/Average 47 14,860 66.0 % 64.2 % 1.8 pts 181.58 184.94 (1.8) % 119.76 118.68 0.9 %

Sonesta ES Suites® Extended Stay 7 958 81.0 % 75.2 % 5.8 pts 151.09 157.62 (4.1) % 122.45 118.60 3.2 %

Sonesta Select® Select Service 6 873 70.4 % 70.8 % (0.4) pts 150.13 156.51 (4.1) % 105.67 110.78 (4.6) %

Sonesta Simply Suites® Extended Stay 7 1,144 73.1 % 76.4 % (3.3) pts 125.04 123.76 1.0 % 91.35 94.53 (3.4) %

Hyatt Place® Select Service 17 2,107 71.2 % 70.4 % 0.8 pts 119.27 120.02 (0.6) % 84.95 84.50 0.5 %

Focused Service Total/Average 37 5,082 73.3 % 72.7 % 0.6 pts 132.28 134.34 (1.5) % 97.02 97.70 (0.7) %

Retained Hotels Total/Average 84 19,942 67.8 % 66.4 % 1.4 pts $168.00 $170.80 (1.6) % $ 113.96 $ 113.33 0.6 %

Sonesta ES Suites® Extended Stay 32 4,101 72.5 % 72.0 % 0.5 pts $121.09 $121.86 (0.6) % $ 87.83 $ 87.70 0.1 %

Sonesta Select® Select Service 6 880 52.4 % 54.4 % (2.0) pts 99.01 99.65 (0.6) % 51.85 54.24 (4.4) %

Sonesta Simply Suites® Extended Stay 38 4,613 73.4 % 73.8 % (0.4) pts 83.42 84.53 (1.3) % 61.25 62.37 (1.8) %

Exit Hotels Total/Average 76 9,594 71.1 % 71.2 % (0.1) pts 100.89 101.71 (0.8) % 71.75 72.45 (1.0) %

All Hotels Total/Average 160 29,536 68.9 % 67.9 % 1.0 pts $145.50 $147.27 (1.2) % $ 100.25 $ 100.05 0.2 %

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

Excludes the results of hotels sold during the periods presented.

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

Exit Hotels represents 76 hotels managed by Sonesta that we plan to sell.

of Rooms or Suites Occupancy ADR RevPAR

Service Level No.

of Hotels Nine Months Ended

September 30, Nine Months Ended

September 30,

Brand 2025 2024 Change 2025 2024 Change 2025 2024 Change

Retained Hotels:

Royal Sonesta Hotels® Full Service 17 5,663 62.3 % 61.9 % 0.4 pts $235.10 $234.33 0.3 % $ 146.53 $ 145.13 1.0 %

Sonesta Hotels & Resorts® Full Service 22 7,207 61.8 % 60.6 % 1.2 pts 162.92 162.24 0.4 % 100.69 98.29 2.4 %

Radisson® Hotels & Resorts Full Service 5 1,149 62.0 % 66.3 % (4.3) pts 153.67 148.43 3.5 % 95.22 98.42 (3.3) %

Country Inn & Suites® by Radisson Full Service 2 346 68.7 % 71.1 % (2.4) pts 146.38 153.08 (4.4) % 100.61 108.82 (7.5) %

Crowne Plaza® Full Service 1 495 68.9 % 65.5 % 3.4 pts 144.53 144.86 (0.2) % 99.55 94.95 4.8 %

Full Service Total/Average 47 14,860 62.4 % 62.0 % 0.4 pts 188.56 187.69 0.5 % 117.69 116.28 1.2 %

Sonesta ES Suites® Extended Stay 7 958 76.6 % 72.7 % 3.9 pts 151.22 155.75 (2.9) % 115.77 113.16 2.3 %

Sonesta Select® Select Service 6 873 68.0 % 65.6 % 2.4 pts 138.10 142.05 (2.8) % 93.88 93.25 0.7 %

Sonesta Simply Suites® Extended Stay 7 1,144 71.3 % 71.9 % (0.6) pts 123.54 121.71 1.5 % 88.09 87.46 0.7 %

Hyatt Place® Select Service 17 2,107 69.4 % 62.9 % 6.5 pts 122.90 121.53 1.1 % 85.29 76.50 11.5 %

Focused Service Total/Average 37 5,082 70.9 % 67.2 % 3.7 pts 131.31 131.98 (0.5) % 93.14 88.76 4.9 %

Retained Hotels Total/Average 84 19,942 64.6 % 63.3 % 1.3 pts $172.54 $172.61 — % $ 111.43 $ 109.26 2.0 %

Sonesta ES Suites® Extended Stay 32 4,101 70.9 % 70.4 % 0.5 pts $123.46 $123.74 (0.2) % $ 87.54 $ 87.15 0.4 %

Sonesta Select® Select Service 6 880 58.0 % 59.5 % (1.5) pts 115.21 117.77 (2.2) % 66.81 70.04 (4.6) %

Sonesta Simply Suites® Extended Stay 38 4,613 68.5 % 69.5 % (1.0) pts 82.71 83.66 (1.1) % 56.63 58.14 (2.6) %

Exit Hotels Total/Average 76 9,594 68.5 % 69.0 % (0.5) pts 103.25 103.85 (0.6) % 70.77 71.63 (1.2) %

All Hotels Total/Average 160 29,536 65.9 % 65.1 % 0.8 pts $149.11 $148.96 0.1 % $ 98.22 $ 97.04 1.2 %

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

Excludes the results of hotels sold during the periods presented.

Exit Hotels represents 76 hotels managed by Sonesta that we plan to sell.

As of March 31, 2026, we owned and managed a diverse portfolio of net lease and hotel properties across the United States and in Puerto Rico and Canada with 149 distinct brands across 22 industries.

Net Lease Portfolio

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

During the nine months ended September 30, 2025, we entered into lease renewals for 559,303 rentable square feet (21 properties) at weighted (by rentable square feet) average rents that were 5.3% below the prior rents for the same space.

As of March 31, 2026, our net lease properties were 96.6% occupied and we had 26 properties available for lease.

During the three months ended March 31, 2026, we entered into lease renewals for 194,474 rentable square feet (18 properties) at weighted (by rentable square feet) average rents that were 35.3% above the prior rents for the same space.

The weighted (by rentable square feet) average lease term for these leases was 5.9 years.

We also entered into new leases for 19,371 rentable square feet (four properties) at rent that was 1.9% below the prior rent for the same space.

We also entered into new leases for 24,802 rentable square feet (two properties) at rent that was 146.8% above the prior rent for the same space.

The weighted (by rentable square feet) average lease term for these leases was 10.1 years.

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

As of September 30, 2025, our net lease tenants operated across 139 brands.

As of March 31, 2026, our net lease tenants operated across 140 brands.

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

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Express Oil Change 23 49,724 1.0 % 3,717 0.9 % 5.77 x

AMC Theatres 5 57,446 1.1 % 3,575 0.9 % 1.83 x

Norms 10 53,673 1.1 % 3,498 0.9 % 3.55 x

America's Auto Auction 6 38,314 0.8 % 3,457 0.9 % 9.88 x

424 1,303,942 25.6 % 87,808 22.4 % 3.34 x

Total 761 $ 5,090,110 100.0 % $ 392,199 100.0 % 2.01 x

(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 28 for our definition of rent coverage.

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

(3) Rent coverage information provided by tenant is for all 175 sites on a consolidated basis and is as of March 31, 2026.

(4) Consists of 130 distinct brands with an average investment of $3,075 per property and average annual minimum rent of $207 per property.

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

As of March 31, 2026, our top ten net lease tenants based on our annualized minimum rent are listed below:

Tenant Brand Affiliation No.

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Styx Acquisition, LLC Buehler's Fresh Foods 5 76,469 1.5 % 6,223 1.6 % 2.75x

Professional Resource Development, Inc.

Heartland Dental 59 61,120 1.2 % 4,841 1.2 % 4.79x

Express Oil Change, L.L.C.

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Norms Restaurants, LLC Norms 10 53,673 1.1 % 3,498 0.9 % 3.55x

Pilot Travel Centers LLC Flying J Travel Plaza 3 41,681 0.8 % 3,312 0.9 % 3.14x

Automotive Remarketing Group, Inc.

America's Auto Auction 6 38,314 0.8 % 3,457 0.9 % 9.88x

Pilot Travel Centers LLC Flying J Travel Plaza 3 41,681 0.8 % 3,345 0.9 % 3.11x

Fleet Farm Group LLC Fleet Farm 1 37,802 0.7 % 2,894 0.7 % 2.26x

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

Subtotal, top 10 275 3,789,673 74.4 % 304,140 77.6 % 1.63x

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(3) TA is our largest tenant.

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

As of March 31, 2026, we leased 175 travel centers (131 under the TravelCenters of America brand and 44 under the Petro Stopping Centers brand) to a subsidiary of TA under five master leases that expire in 2033.

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

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guarantees payment under each of the five master leases.

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

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

The aggregate guaranty as of March 31, 2026 was $2,943,588.

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

Rent coverage was 1.21x, 1.26x, 1.40x, 1.27x and 1.11x for our TA leases no.

5, respectively.

Rent coverage is as of September 30, 2025.

Rent coverage is as of March 31, 2026.

(4) Consists of 175 tenants with an average investment of $2,676 per property and an average annual minimum rent of $181 per property.

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

As of March 31, 2026, our net lease tenants operated across 21 distinct industries within the service-focused retail sector of the U.S.

of Properties Investment (1)

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Restaurants - Quick Service 212 297,779 5.9% 21,398 5.5 % 2.89 x

Health and Fitness 14 196,097 3.9% 12,463 3.2 % 2.11 x

Restaurants - Casual Dining 59 209,058 4.1% 13,365 3.4 % 2.93 x

Health and Fitness 15 204,048 4.0% 13,302 3.4 % 2.42 x

Grocery Stores 19 129,152 2.5% 9,895 2.5 % 3.21 x

Medical, Dental Office 69 98,433 1.9% 8,662 2.2 % 3.48 x

Movie Theaters 14 134,474 2.7% 8,253 2.1 % 1.94 x

Automotive Equipment and Services 64 107,341 2.1% 7,869 2.0 % 4.98 x

Movie Theaters 14 134,479 2.6% 7,804 2.0 % 1.94 x

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

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Entertainment 3 51,473 1.0% 3,966 1.0 % 0.99 x

Educational Services 7 44,820 0.9% 3,478 0.9 % 1.94 x

Building Materials 30 35,554 0.7% 3,537 0.9 % 7.85 x

Educational Services 6 37,730 0.7% 2,902 0.7 % 2.44 x

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

Miscellaneous Manufacturing 5 24,355 0.5% 1,730 0.4 % 14.26 x

Sporting Goods 4 29,386 0.6% 1,920 0.5 % 4.38 x

Legal Services 5 11,362 0.2% 1,097 0.3 % 3.32 x

Miscellaneous Manufacturing 5 24,355 0.5% 1,744 0.4 % 13.56 x

Dollar Stores 7 10,253 0.2% 721 0.2 % 2.36 x

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

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

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(2) See page 28 for our definition of rent coverage.

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

(3) Rent coverage for TA is as of March 31, 2026.

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

(4) Consists of miscellaneous businesses with an average investment of $6,005 per property.

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

As of March 31, 2026, lease expirations at our net lease properties by year are as follows:

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

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2046 1 6,500 216 —% 99.9%

2051 3 7,414 274 0.1% 100.0%

Total 735 12,870,531 $ 392,199 100.0%

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

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

As of March 31, 2026, shown below is the list of our top ten states where our net lease properties are located.

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

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Texas 57 1,188,461 $ 35,176 9.0%

Illinois 54 973,236 27,852 7.2%

Ohio 38 1,289,668 27,999 7.1%

Illinois 54 973,236 27,692 7.1%

California 22 399,045 26,063 6.6%

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Total 761 13,605,978 $ 392,199 100.0%

Hotel Portfolio

The following tables summarize the operating statistics, including occupancy, ADR and RevPAR reported to us by our hotel managers by hotel brand for the periods indicated.

All operating data presented are based upon the operating results provided by our hotel managers for the indicated periods.

We have not independently verified our managers’ operating data.

Retained & Exit Hotels* No.

of Rooms or Suites Occupancy ADR RevPAR

Service Level No.

of Hotels Three Months Ended

March 31, Three Months Ended

Brand 2026 2025 Change 2026 2025 Change 2026 2025 Change

Retained Hotels:

Royal Sonesta Hotels® Full Service 14 4,821 57.3 % 55.5 % 1.8 pts $259.06 $255.61 1.3 % $ 148.47 $ 141.76 4.7 %

Sonesta Hotels & Resorts® Full Service 18 6,040 61.9 % 54.4 % 7.5 pts 179.93 182.33 (1.3) % 111.36 99.10 12.4 %

Radisson® Hotels & Resorts Full Service 5 1,149 66.6 % 59.5 % 7.1 pts 161.61 154.09 4.9 % 107.69 91.62 17.5 %

Country Inn & Suites® by Radisson Full Service 2 346 63.9 % 55.6 % 8.3 pts 126.76 131.03 (3.3) % 81.03 72.84 11.3 %

Crowne Plaza® Full Service 1 495 69.0 % 73.4 % (4.4) pts 140.26 149.84 (6.4) % 96.78 109.98 (12.0) %

Full Service Total/Average 40 12,851 60.9 % 56.0 % 4.9 pts 202.81 203.85 (0.5) % 123.57 114.14 8.3 %

Sonesta ES Suites® Extended Stay 7 958 74.3 % 68.2 % 6.1 pts 155.88 152.94 1.9 % 115.86 104.27 11.1 %

Sonesta Select® Select Service 7 1,028 64.1 % 62.6 % 1.5 pts 124.49 128.84 (3.4) % 79.83 80.66 (1.0) %

Sonesta Simply Suites® Extended Stay 7 1,144 68.6 % 67.7 % 0.9 pts 114.11 115.05 (0.8) % 78.30 77.91 0.5 %

Hyatt Place® Select Service 17 2,107 66.8 % 62.6 % 4.2 pts 123.13 123.07 — % 82.28 77.05 6.8 %

Focused Service Total/Average 38 5,237 68.1 % 64.7 % 3.4 pts 127.94 128.09 (0.1) % 87.07 82.93 5.0 %

Retained Hotels Total/Average 78 18,088 63.0 % 58.5 % 4.5 pts $179.39 $179.58 (0.1) % $ 113.00 $ 105.10 7.5 %

Royal Sonesta Hotels® Full Service 3 842 30.0 % 26.6 % 3.4 pts $129.34 $133.54 (3.1) % $38.76 $35.55 9.0 %

Sonesta Hotels & Resorts® Full Service 4 1,168 49.7 % 53.9 % (4.2) pts 93.65 93.29 0.4 % 46.52 50.31 (7.5) %

Full Service Total/Average 7 2,010 41.4 % 42.5 % (1.1) pts 104.47 103.85 0.6 % 43.27 44.13 (2.0) %

Sonesta ES Suites® Extended Stay 6 768 63.1 % 61.1 % 2.0 pts 103.66 108.71 (4.6) % 65.43 66.45 (1.5) %

Sonesta Simply Suites® Extended Stay 2 244 62.5 % 75.4 % (12.9) pts 79.72 77.19 3.3 % 49.82 58.20 (14.4) %

Focused Service Total/Average 8 1,012 63.0 % 64.6 % (1.6) pts 97.93 99.84 (1.9) % 61.66 64.46 (4.3) %

Exit Hotels Total/Average 15 3,022 48.6 % 49.9 % (1.3) pts 101.63 102.11 (0.5) % 49.43 50.94 (3.0) %

Retained & Exit Hotels Total/Average 93 21,110 60.9 % 57.3 % 3.6 pts $170.50 $169.92 0.3 % $ 103.90 $ 97.35 6.7 %

* Includes results of all hotels owned as of March 31, 2026.

Excludes the results of hotels sold during the periods presented.

Retained Hotels represents 53 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 15 hotels managed by Sonesta that are currently being marketed for sale.

Non-GAAP Financial Measures

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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.

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

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

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

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

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

2025 2024 2025 2024

Our calculations of FFO and Normalized FFO for the three months ended March 31, 2026 and 2025 and reconciliations of net loss, the most directly comparable financial measure under GAAP reported in our condensed consolidated financial statements, to those amounts appear in the following table (amounts in thousands, except per share amounts):

Three Months Ended March 31,

Net loss $ (151,178) $ (116,435)

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis