Service Properties Trust
For the period ended Sep 30, 2026. Filed Nov 4, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 4, 2026
SVC$5.20-5.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0000945394-26-000049
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-04.
0000945394-26-000061
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 139 previous paragraphs and 142 current paragraphs.
61 unchanged; 74 reworded; 6 added; 3 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 19 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
(1) Includes the results of hotels owned as of the end of the periods presented.
Current report
(1) Exit Hotels represents eight hotels sold in October 2026, as well as one hotel managed by Sonesta andone hotel managed by IHG that are currently in various stages of being sold.
Current report
Nine Months Ended September 30, 2026 Compared to the Nine Months Ended September 30, 2025
Current report
We are currently exploring our options to extend or refinance our secured revolving credit facility. There can be no assurance that we will be able to do so or the timing, size, or terms of any such replacement facility. We believe we have adequate sources of liquidity to meet our near term operating requirements while these discussions continue.
Current report
Termination of Secured Variable Funding Note
Current report
In September 2026, we repaid and terminated the $45,000 VFN which had a maturity date of January 2027, using existing cash balances.
Removed paragraphs (3)
Previous report
(1) Exit Hotels represents one hotel sold in July 2026 and 14 hotels managed by Sonesta that are currently under agreement or being marketed for sale.
Previous report
(1) Exit Hotels represents one hotel sold in July 2026 and 14 hotels managed by Sonesta that are currently under agreement or being marketed for sale.
Previous report
Six Months Ended June 30, 2026, Compared to the Six Months Ended June 30, 2025
Reworded paragraphs (74)
Previous wording
We are a REIT organized under the laws of the State of Maryland. As of June 30, 2026, we owned 838 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.
Current wording
We are a REIT organized under the laws of the State of Maryland. As of September 30, 2026, we owned 827 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.
Previous wording
Leases and Management Agreements. At June 30, 2026, we owned 745 service-focused retail properties with an aggregate of 13,553,509 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 June 30, 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.
Current wording
Leases and Management Agreements. At September 30, 2026, we owned 740 service-focused retail properties with an aggregate of 13,542,332 square feet leased to 188 tenants subject to “triple net” leases, where the tenants are generally responsible for the payment of operating expenses and capital expenditures. At September 30, 2026, we also owned 87 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.
Previous wording
Significant Events. During 2025, we sold 112 hotels containing a total of 14,631 keys for a combined sales price of $858,752, excluding closing costs. During the six months ended June 30, 2026, we sold one hotel containing 133 keys for gross proceeds of $7,100, excluding closing costs. We sold one additional hotel containing 133 keys for gross proceeds of $18,350 in July 2026. As of August 3, 2026, we were under agreement to sell 12 hotels with a total of 2,328 keys for a combined sales price of $77,350, excluding closing costs. We are also at various stages of negotiating or marketing the sale of two additional hotels containing a total of 561 keys.
Current wording
Significant Events. During 2025, we sold 112 hotels containing a total of 14,631 keys for a combined sales price of $858,752, excluding closing costs. During the nine months ended September 30, 2026, we sold seven hotels containing a total of 1,346 keys for a combined sales price of $73,200, excluding closing costs. We also sold eight additional hotels containing a total of 1,509 keys for a combined sales price of $50,600 in October 2026. As of November 2, 2026, we are at various stages of marketing for sale two hotels containing a total of 795 keys.
Previous wording
Net Lease Portfolio. Our net lease properties were 96.6% occupied as of June 30, 2026 with a weighted (by annual minimum rent) average lease term of 7.1 years, operating under 140 brands in 21 distinct industries. TA is our largest tenant and as of June 30, 2026, leased 175 of our travel centers under five master leases that expire in 2033 and require annual minimum rents of $269,547. 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.
Current wording
Net Lease Portfolio. Our net lease properties were 97.6% occupied as of September 30, 2026 with a weighted (by annual minimum rent) average lease term of 7.0 years, operating under 141 brands in 21 distinct industries. TA is our largest tenant and as of September 30, 2026, leased 175 of our travel centers under five master leases that expire in 2033 and require annual minimum rents of $269,547. 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.
Previous wording
Hotel Portfolio. During the six months ended June 30, 2026, the U.S. hotel industry generally realized increases in average daily rate, or ADR, and 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.
Current wording
Hotel Portfolio. Lodging industry fundamentals have been generally favorable in 2026, supported by strengthening leisure travel and group demand and improving business transient demand. During the nine months ended September 30, 2026, the U.S. hotel industry generally realized increases in average daily rate, or ADR, and 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 are 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.
Previous wording
Hotel operating revenues. The decrease in hotel operating revenues is primarily a result of our sales of certain hotels since April 1, 2025 ($98,615), partially offset by increases in occupancy and average rates at certain hotels during the 2026 period ($14,281). Additional operating statistics of our hotels are included in the tables beginning on page 38.
Current wording
Hotel operating revenues. The decrease in hotel operating revenues is primarily a result of our sales of certain hotels since July 1, 2025 ($94,624), partially offset by increases in occupancy and average rates at certain hotels during the 2026 period ($15,427). Additional operating statistics of our hotels are included in the tables beginning on page 37.
Previous wording
Rental income. The increase in rental income is primarily a result of our acquisitions of certain net lease properties since April 1, 2025 ($1,553), increases from our net leasing activity ($505) and credit losses recognized at certain of our net lease properties in the 2025 period ($478), partially offset by our sales of certain properties since April 1, 2025 ($664).
Current wording
Rental income. The decrease in rental income is primarily a result of our sales of certain properties since July 1, 2025 ($667) and decreases from our net leasing activity ($495), partially offset by our acquisitions of certain net lease properties since July 1, 2025 ($1,109).
Previous wording
Hotel operating expenses. The decrease in hotel operating expenses is primarily a result of our sales of certain hotels since January 1, 2025 ($162,761), partially offset by increases in marketing and sales expense ($7,595), insurance expense ($5,920), room expenses ($3,137), food and beverage expenses ($1,319) and other operating expenses ($17,335) in the 2026 period.
Current wording
Hotel operating expenses. The decrease in hotel operating expenses is primarily a result of our sales of certain hotels since July 1, 2025 ($83,369), as well as decreases in room expenses ($782) and food and beverage expenses ($584), partially offset by increases in marketing and sales expense ($4,907), utilities expense ($3,737), insurance expense ($425) and other operating expenses ($3,088) in the 2026 period.
Previous wording
Net lease operating expenses. The increase in net lease operating expenses is primarily the result of our acquisition activity ($55) and increases of property management fees ($668) and other operating expenses ($127) in the 2026 period, partially offset by decreases resulting from the sale of certain net lease properties since April 1, 2025 ($243).
Current wording
Net lease operating expenses. The increase in net lease operating expenses is primarily the result of increases of property management fees ($626), other operating expenses ($517) and our acquisition activity ($124) in the 2026 period, partially offset by decreases resulting from the sale of certain net lease properties since July 1, 2025 ($114).
Previous wording
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 April 1, 2025 ($8,445), partially offset by our sales of certain hotels since April 1, 2025 ($229) and certain of our depreciable assets becoming fully depreciated or classified as held for sale since April 1, 2025 ($2,952).
Current wording
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 July 1, 2025 ($3,818), partially offset by certain of our depreciable assets becoming fully depreciated or classified as held for sale since July 1, 2025 ($3,054) and our sales of certain hotels since July 1, 2025 ($612).
Previous wording
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 April 1, 2025 ($3,267) and our sale of certain net lease properties since April 1, 2025 ($696), partially offset by depreciation and amortization related to capital expenditures made since April 1, 2025 ($752).
Current wording
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, 2025 ($1,933) and our sale of certain net lease properties since July 1, 2025 ($520).
Previous wording
General and administrative. The increase in general and administrative costs is primarily due to increases in legal and other professional fees ($966) and other general and administrative expenses due to trustee share grants ($291), partially offset by a decrease in business management fees since April 1, 2025 ($382).
Current wording
General and administrative. The decrease in general and administrative costs is primarily due to a decrease in business management fees ($1,144) and decreases in legal and other professional fees ($372), partially offset by increases in other general and administrative expenses ($424) since July 1, 2025.
Previous wording
Transaction related costs. Transaction related costs for the 2026 period primarily consisted of costs related to the sales of certain hotels, partially offset by the recovery of deposits associated with certain previously terminated hotel sales.
Current wording
Transaction related costs. Transaction related costs for the 2026 and 2025 periods primarily consisted of costs related to the sale and renovation of certain hotels.
Previous wording
Loss on asset impairment. We recorded a $189,097 loss on asset impairment during the 2026 period to reduce the carrying value of six hotels and one net lease property to their estimated fair value less costs to sell. We recorded a $17,654 loss on asset impairment during the 2025 period to reduce the carrying value of 17 hotels and two net lease properties to their estimated fair value less costs to sell.
Current wording
Loss on asset impairment. We recorded a $53,691 loss on asset impairment during the 2026 period to reduce the carrying value of six hotels and six net lease properties to their estimated fair value less costs to sell. 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.
Previous wording
Loss on sale of real estate, net. We recorded a $383 net loss on sale of real estate during the 2026 period in connection with the sales of 17 net lease properties. We recorded a $156 net loss on sale of real estate during the 2025 period in connection with the sales of two hotels and four net lease properties.
Current wording
(Loss) gain on sale of real estate, net. We recorded a $1,103 net loss on sale of real estate during the 2026 period in connection with the sales of six net lease properties and six hotels. We recorded a $25,256 net gain on sale of real estate during the 2025 period in connection with the sales of three net lease properties and 40 hotels.
Previous wording
Interest income. The increase in interest income is due to higher average cash balances invested during the 2026 period compared to the 2025 period.
Current wording
Interest income. The decrease in interest income is due to lower average cash balances invested during the 2026 period compared to the 2025 period.
Previous wording
Loss on early extinguishment of debt, net. We recorded a $9,383 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.
Current wording
Loss on early extinguishment of debt, net. We recorded a $335 loss on early extinguishment of debt, net in the 2026 period as a result of the repayment and termination of the VFN. We recorded a $529 loss on early extinguishment of debt, net in the 2025 period as a result of the redemption of certain senior unsecured notes.
Previous wording
Income tax benefit (expense). The increase in income tax benefit (expense) is due to increases in foreign tax benefit ($381) and state tax benefit ($208) during the 2026 period.
Current wording
Income tax expense. The increase in income tax expense is due to increases in foreign tax expense ($336) and state tax expense ($286) during the 2026 period.
Previous wording
Equity in losses of an investee. Equity in losses of an investee represents our proportionate share of the losses of Sonesta.
Current wording
Equity in earnings of an investee. Equity in earnings of an investee represents our proportionate share of the earnings of Sonesta.
Previous wording
Weighted average common shares outstanding (basic and diluted). The increase in weighted average shares outstanding is primarily driven by our issuance of 95,833,333 common shares during the three months ended June 30, 2026.
Current wording
Weighted average common shares outstanding (basic and diluted). The increase in weighted average shares outstanding is primarily driven by our issuance of 95,833,333 common shares on April 2, 2026.
Previous wording
Net loss per common share (basic and diluted). Our net loss per common share increased in the 2026 period compared to the 2025 period primarily driven by our increase in net loss in the 2026 period compared to the 2025 period, partially offset by an increase in the number of common shares outstanding resulting from our equity offering during the three months ended June 30, 2026.
Current wording
Net loss per common share (basic and diluted). Our net loss per common share decreased in the 2026 period compared to the 2025 period primarily driven by an increase in the number of common shares outstanding following the closing of our equity offering on April 2, 2026, partially offset by an increase in net loss in the 2026 period compared to the 2025 period.
Previous wording
References to changes in the income and expense categories below relate to the comparison of consolidated results for the six months ended June 30, 2026, compared to the six months ended June 30, 2025.
Current wording
References to changes in the income and expense categories below relate to the comparison of consolidated results for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.
Previous wording
Hotel operating revenues. The decrease in hotel operating revenues is primarily a result of our sales of certain hotels since January 1, 2025 ($182,818), partially offset by increases in occupancy and average rates at certain hotels during the 2026 period ($28,096). Additional operating statistics of our hotels are included in the tables beginning on page 38.
Current wording
Hotel operating revenues. The decrease in hotel operating revenues is primarily a result of our sales of certain hotels since January 1, 2025 ($276,652), partially offset by increases in occupancy and average rates at certain hotels during the 2026 period ($42,733). Additional operating statistics of our hotels are included in the tables beginning on page 37.
Previous wording
Rental income. The increase in rental income is primarily a result of acquisitions of certain net lease properties since January 1, 2025 ($3,086) and increases from our net leasing activity ($1,047), partially offset by our sales of certain properties since January 1, 2025 ($1,040), and credit losses recognized at certain of our net lease properties in the 2026 period ($1,561).
Current wording
Rental income. The increase in rental income is primarily a result of acquisitions of certain net lease properties since January 1, 2025 ($3,098) and increases from our net leasing activity ($1,517), partially offset by our sales of certain properties since January 1, 2025 ($1,701), and credit losses recognized at certain of our net lease properties in the 2026 period ($1,435).
Previous wording
Hotel operating expenses. The decrease in hotel operating expenses is primarily a result of our sales of certain hotels since April 1, 2025 ($80,507), partially offset by increases in marketing and sales expense ($4,261), insurance expense ($1,571), room expenses ($1,030), food and beverage expenses ($555) and other operating expenses ($8,831) in the 2026 period.
Current wording
Hotel operating expenses. The decrease in hotel operating expenses is primarily a result of our sales of certain hotels since January 1, 2025 ($244,390), partially offset by increases in marketing and sales expense ($12,010), utilities expense ($11,135) insurance expense ($5,913), room expenses ($1,980), food and beverage expenses ($733) and other operating expenses ($12,586) in the 2026 period.
Previous wording
Net lease operating expenses. The increase in net lease operating expenses is primarily the result of our acquisition activity ($244) and increases of property management fees ($1,336) and other operating expenses ($1,710) in the 2026 period, partially offset by decreases resulting from the sale of certain net lease properties since January 1, 2025 ($871).
Current wording
Net lease operating expenses. The increase in net lease operating expenses is primarily the result of increases in real estate taxes ($2,132), property management fees ($1,948), our acquisition activity ($261) and other operating expenses ($191) in the 2026 period, partially offset by decreases resulting from the sale of certain net lease properties since January 1, 2025 ($960).
Previous wording
Depreciation and amortization - hotels. The decrease in depreciation and amortization - hotels is primarily a result of certain of our sales of certain hotels in the 2026 period ($14,017) and of certain of our depreciable assets becoming fully depreciated or classified as held for sale since January 1, 2025 ($6,319), partially offset by depreciation and amortization related to capital expenditures made in the 2026 period ($14,763).
Current wording
Depreciation and amortization - hotels. The decrease in depreciation and amortization - hotels is primarily a result of our sales of certain hotels in the 2026 period ($15,073) and certain of our depreciable assets becoming fully depreciated or classified as held for sale since January 1, 2025 ($9,163), partially offset by depreciation and amortization related to capital expenditures made in the 2026 period ($18,815).
Previous wording
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, 2025 ($6,343) and our sale of certain net lease properties since January 1, 2025 ($1,064), partially offset by depreciation and amortization related to capital expenditures and our acquisition of certain net lease properties since January 1, 2025 ($1,776).
Current wording
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, 2025 ($6,613) and our sale of certain net lease properties since January 1, 2025 ($1,625), partially offset by depreciation and amortization related to capital expenditures and our acquisition of certain net lease properties since January 1, 2025 ($154).
Previous wording
General and administrative. The increase in general and administrative costs is primarily due to increases in legal fees and other professional fees ($1,124) and other general and administrative expenses ($121), partially offset by a decrease in business management fees ($1,130) since April 1, 2025.
Current wording
General and administrative. The decrease in general and administrative costs is primarily due to a decrease in business management fees ($2,275), partially offset by increases in legal fees and other professional fees ($675) and other general and administrative expenses ($623) since January 1, 2025.
Previous wording
Transaction related costs. Transaction related costs for the 2026 period primarily consisted of costs related to the sales of certain hotels, partially offset by the recovery of deposits associated with certain previously terminated hotel sales.
Current wording
Transaction related costs. Transaction related costs for the 2026 period primarily consisted of costs related to the sales of certain hotels, partially offset by the recovery of deposits associated with certain previously terminated hotel sales. 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.
Previous wording
Loss on asset impairment. We recorded a $217,192 loss on asset impairment during the 2026 period to reduce the carrying value of 13 hotels and 22 net lease properties to their estimated fair value less costs to sell. We recorded a $54,721 net loss on asset impairment during the 2025 period to reduce the carrying value of 17 hotels and two net lease properties to their estimated fair value less costs to sell.
Current wording
Loss on asset impairment. We recorded a $270,883 loss on asset impairment during the 2026 period to reduce the carrying value of 27 net lease properties and 12 hotels to their estimated fair value less costs to sell. We recorded a $81,788 loss on asset impairment during the 2025 period to reduce the carrying value of three net lease properties and 28 hotels to their estimated fair value less costs to sell.
Previous wording
Gain on sale of real estate, net. We recorded a $972 net gain on sale of real estate during the 2026 period in connection with the sales of one hotel and 19 net lease properties. We recorded a $590 net gain on sale of real estate during the 2025 period in connection with the sale of six hotels and seven net lease properties.
Current wording
(Loss) gain on sale of real estate, net. We recorded a $131 net loss on sale of real estate during the 2026 period in connection with the sales of 25 net lease properties and seven hotels. We recorded a $25,846 net gain on sale of real estate during the 2025 period in connection with the sales of 10 net lease properties and 46 hotels.
Previous wording
Interest income. The increase in interest income is due to higher average cash balances invested during the 2026 period compared to the 2025 period.
Current wording
Interest income. The decrease in interest income is due to lower average cash balances during the 2026 period compared to the 2025 period.
Previous wording
Income tax expense. The decrease in income tax expense is primarily due to a decrease in our foreign tax expense ($176) and state income tax expense ($75) during the 2026 period.
Current wording
Income tax expense. The increase in income tax expense is primarily due to an increase in our foreign tax expense ($160) and state income tax expense ($211) during the 2026 period.
Previous wording
Weighted average common shares outstanding (basic and diluted). The increase in weighted average shares outstanding is primarily driven by our issuance of 95,833,333 common shares during the six months ended June 30, 2026.
Current wording
Weighted average common shares outstanding (basic and diluted). The increase in weighted average shares outstanding is primarily driven by our issuance of 95,833,333 common shares on April 2, 2026.
Previous wording
Net loss per common share (basic and diluted). Our net loss per common share decreased in the 2026 period compared to the 2025 period primarily driven by our equity offering during the six months ended June 30, 2026.
Current wording
Net loss per common share (basic and diluted). Our net loss per common share decreased in the 2026 period compared to the 2025 period primarily driven by an increase in the number of common shares outstanding following the closing of our equity offering on April 2, 2026, partially offset by an increase in net loss in the 2026 period compared to the 2025 period.
Previous wording
As of June 30, 2026, our 745 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 June 30, 2026, TA is our largest tenant (175 travel centers) and Sonesta (68 hotels) is our largest hotel manager.
Current wording
As of September 30, 2026, our 740 service-focused retail net lease properties were leased to 188 tenants and our 87 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 September 30, 2026, TA is our largest tenant (175 travel centers) and Sonesta (62 hotels) is our largest hotel manager.
Previous wording
We recorded reserves for uncollectable amounts and reduced rental income by $635 and $2,870 for the three and six months ended June 30, 2026, respectively, based on our assessment of the collectability of rents. We recorded reserves for uncollectable amounts and reduced rental income by $1,142 and $1,377 for the three and six months ended June 30, 2025, respectively, based on our assessment of the collectability of rents. We had reserves for uncollectable rents of $5,567 and $3,115 as of June 30, 2026 and December 31, 2025, respectively, included in other assets, net in our condensed consolidated balance sheets.
Current wording
We recorded reserves for uncollectable amounts and reduced rental income by $421 and $3,291 for the three and nine months ended September 30, 2026, respectively, based on our assessment of the collectability of rents. 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 had reserves for uncollectable rents of $3,864 and $3,115 as of September 30, 2026 and December 31, 2025, respectively, included in other assets, net in our condensed consolidated balance sheets.
Previous wording
We define net lease rent coverage as earnings before interest, taxes, depreciation, amortization and rent, or EBITDAR, divided by the annual minimum rent due to us weighted by the minimum rent of the property to total minimum rents of the net lease portfolio. Tenants with no minimum rent required under the lease are excluded. EBITDAR amounts used to determine rent coverage are generally for the latest twelve-month period, based on the most recent operating information, if any, furnished by our tenants. Operating statements furnished by our tenants often are unaudited and, in certain cases, may not have been prepared in accordance with GAAP and are not independently verified by us. In instances where we do not have tenant financial information, we calculate an implied coverage ratio for the period based on other tenants with available financial statements operating the same brand or within the same industry. As a result, we believe using this implied coverage metric provides a more reasonable estimated representation of recent operating results and the financial condition for those tenants. Our net lease properties generated rent coverage of 2.09x and 2.04x as of June 30, 2026 and 2025, respectively.
Current wording
We define net lease rent coverage as earnings before interest, taxes, depreciation, amortization and rent, or EBITDAR, divided by the annual minimum rent due to us weighted by the minimum rent of the property to total minimum rents of the net lease portfolio. Tenants with no minimum rent required under the lease are excluded. EBITDAR amounts used to determine rent coverage are generally for the latest twelve-month period, based on the most recent operating information, if any, furnished by our tenants. Operating statements furnished by our tenants often are unaudited and, in certain cases, may not have been prepared in accordance with GAAP and are not independently verified by us. In instances where we do not have tenant financial information, we calculate an implied coverage ratio for the period based on other tenants with available financial statements operating the same brand or within the same industry. As a result, we believe using this implied coverage metric provides a more reasonable estimated representation of recent operating results and the financial condition for those tenants. Our net lease properties generated rent coverage of 2.17x and 2.04x as of September 30, 2026 and 2025, respectively.
Previous wording
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 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 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.
Current wording
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. 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 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 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.
Showing the first 40 of 74 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Loss on early extinguishment of debt, net. We recorded a $61,589 loss on early extinguishment of debt, net in the 2026 period as a result of the redemption of certain senior notes and the repayment and termination of the VFN. We recorded a $529 loss on early extinguishment of debt, net in the 2025 period as a result of the redemption of certain senior unsecured notes.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Loss on early extinguishment of debt, net. We recorded a $61,254 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.