ASHFORD HOSPITALITY TRUST INC
For the period ended Dec 31, 2024. Filed Mar 21, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 21, 2025
AHT$2.37-2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-14.
0001232582-24-000035
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-21.
0001232582-25-000055
Item 7. 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 152 previous paragraphs and 179 current paragraphs.
71 unchanged; 50 reworded; 57 added; 28 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 7 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 (57)
Current report
We derecognized the hotel properties securing the KEYS Pool A and KEYS Pool B loans from our consolidated balance sheet in March 2024, when the receiver took control of the hotel properties, and accordingly recognized a gain of $133.9 million, which is included in “gain (loss) on derecognition of assets” in our consolidated statements of operations and recorded a contract asset of $378.2 million, which represented the liabilities we expect to be released from upon final resolution with the lenders on the KEYS Pool A and KEYS Pool B mortgage loans in exchange for the transfer of ownership of the respective hotel properties.
Current report
Subsequent to March 31, 2024, we recognized an additional gain of $33.3 million, which is included in “gain (loss) on derecognition of assets” in our consolidated statement of operations that increased the contract asset by a corresponding amount. The additional gain primarily represents the additional accrued interest expense recorded through December 31, 2024. In total for the year ended December 31, 2024 we recognized a gain of $167.2 million. The KEYS Pool A and the KEYS Pool B mortgage loans as well as all accrued and unpaid interest, default charges and late fees will remain liabilities until final resolution with the lenders is concluded, and thus are included in “indebtedness associated with hotels in receivership” and “accrued interest associated with hotels in receivership” on our consolidated balance sheets.
Current report
On July 2, 2024, the Courtyard Plano Legacy Park and the Residence Inn Plano were foreclosed on at a public auction. Additionally, on November 4, 2024, the receiver appointed for the KEYS Pool A and KEYS Pool B mortgage loans transferred the Courtyard Columbus Tipton Lakes to a third party purchaser. As a result the contract asset and corresponding indebtedness associated with hotels in receivership and accrued interest associated with hotels in receivership were reduced for the amounts attributable to each hotel.
Current report
In June 2024, the Company was informed by its lender that the lender intended to exercise remedies for the maturity default on the Ashton Hotel in Fort Worth, Texas, which secured the Company’s $8.9 million mortgage loan. The Company and the lender agreed to a deed-in-lieu of foreclosure, which was completed on July 16, 2024. See note 7.
Current report
On August 8, 2024, the parties to the Advisory Agreement entered into Amendment No. 1 to the Third Amended and Restated Advisory Agreement (the “Amendment”). The Amendment extended the outside date for which any sale or disposition of any of the Company’s eight hotel properties associated with JPMorgan 8-Pack mortgage loan (“JPM8”) following a JPM8 Event of Default (as such terms are defined in the Advisory Agreement) would be excluded from the numerator of the calculation of the percentage of gross book value of the Company’s assets sold or disposed (but, for the avoidance of doubt, included in the denominator of such calculation) for purposes of determining whether a Company Change of Control (as defined in the Advisory Agreement) has occurred, from May 31, 2025 to August 31, 2025.
Current report
On September 23, 2024, the Company received a written notice from the New York Stock Exchange (“NYSE”) that it was not in compliance with Section 802.01C of the NYSE Listed Company Manual because the average closing price of the Company’s common stock was less than $1.00 over a consecutive 30 trading-day period.
Current report
On September 27, 2024, our board of directors approved a reverse stock split of our issued and outstanding common stock at a ratio of 1-for-10. The purpose of the reverse stock split was to raise the per share trading price of the Company’s common stock to regain compliance with the minimum $1.00 continued listing requirement for the listing of the Company’s common stock on the NYSE. This reverse stock split converted every ten issued and outstanding shares of common stock into one share of common stock. The reverse stock split was effective as of the close of business on October 25, 2024. As a result of the reverse stock split, the number of outstanding shares of common stock was reduced from approximately 55.2 million shares to approximately 5.5 million shares on that date. Additionally, the number of outstanding common units, LTIP units and Performance LTIP units was reduced from approximately 2.1 million units to approximately 208,000 units on that date.
Current report
On November 1, 2024, the NYSE notified the Company that it had cured its non-compliance with the NYSE’s minimum average closing price per share standard because the average closing price of its common stock was above $1.00 per share on October 31, 2024 and for the consecutive 30 trading-day period ending October 31, 2024.
Current report
On October 18, 2024, Ashford Inc. entered into a compensatory arrangement (the “Compensatory Arrangement”) with Stephen Zsigray, the Company’s President and Chief Executive Officer. The Compensatory Arrangement is effective as of July 1, 2024.
Current report
The Company is not a party to the Compensatory Arrangement and all of Mr. Zsigray’s base compensation and employee health and welfare benefits are provided by Ashford Inc. However, in connection with Ashford Inc.’s entry into the Compensatory Arrangement with Mr. Zsigray, the board of directors of the Company has agreed to pay Mr. Zsigray a one-time sign on bonus consisting of a $704,110 deferred cash award (the “Deferred Cash Award”) and grant Mr. Zsigray a one-time award of 50,900 shares of restricted common stock of the Company (the “Equity Grant”). The Deferred Cash Award is payable (i) 25% in the fourth quarter of 2024; (ii) 50% upon repayment of all amounts owing under the Company’s corporate strategic financing with Oaktree Capital Management, L.P.; and (iii) 25% on successful completion of a process to review potential value creation strategies for the Company, as determined by the Compensation Committee of the Company’s board of directors. The Equity Grant is eligible to vest in three equal installments on each of July 1, 2025, 2026 and 2027. Payment of the Deferred Cash Award and vesting of the Equity Grant are generally subject to Mr. Zsigray’s continued employment through each applicable milestone.
Current report
On November 6, 2024, the Company entered into Amendment No. 4 to the Oaktree Credit Agreement which, among other items, will reduce the exit fee from 15.0% to 12.5% of the original loan balance through December 15, 2024, provided that the outstanding loan balance has been reduced to $50 million or less by November 15, 2024.
Current report
On November 7, 2024, the Company refinanced its mortgage loan secured by the Marriott Crystal Gateway Hotel located in Arlington, Virginia, which had a final maturity date in November 2026. The new, non-recourse mortgage loan totals $121.5 million and has a three-year initial term with two one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is interest only and provides for a floating interest rate of SOFR + 4.75%. The refinancing resulted in approximately $31 million of excess proceeds that was used to pay down the Oaktree term loan.
Current report
On November 8, 2024, the parties to the Third Amended and Restated Advisory Agreement entered into Amendment No. 2 to the Third Amended and Restated Advisory Agreement (the “Second Amendment”). The Second Amendment extended the outside date for which any sale or disposition of any of the Company’s Highland loan portfolio and JPM8 hotel properties securing the associated mortgage loans following certain defaults (as described in the Ashford Trust Advisory Agreement), including a maturity default, would be excluded from the numerator of the calculation of the percentage of gross book value of the Company’s assets sold or disposed (but, for the avoidance of doubt, included in the denominator of such calculation) for purposes of determining whether a Company Change of Control (as defined in the Advisory Agreement) has occurred, from August 31, 2025 to November 30, 2025. In addition, the Second Amendment places certain limitations on the operations of the Company and Ashford Trust OP should a Potential Company Change of Control (as defined in the Amendment) occur.
Current report
On November 8, 2024, the Company entered into a 90-day forbearance agreement for its $409.8 million mortgage loan with a final maturity of November 9, 2024 and secured by 17 hotel properties. That forbearance period was subsequently extended until April 2025. The Company is in active discussions with the lender regarding a multi-year extension of the mortgage loan.
Current report
On December 3, 2024, the Company announced the closing on March 31, 2025, of its Series J and Series K non-traded preferred stock offering.
Current report
On December 13, 2024, the Company filed an initial registration statement on Form S-11 with the SEC, as amended on January 23, 2025, related to the Company’s non-traded Series L Preferred Stock and Series M Preferred Stock. The registration statement was declared effective by the SEC on February 7, 2025, and contemplates the offering of up to (i) 8.4 million shares of Series L Preferred Stock and 3.6 million shares of Series M Preferred Stock in a primary offering and (ii) 2.8 million shares of Series L Preferred Stock and 1.2 million shares of Series M Preferred Stock pursuant to a dividend reinvestment plan. On February 7, 2025, we filed our prospectus for the offering with the SEC. Ashford Securities, a subsidiary of Ashford Inc., serves as the dealer manager for the offering.
Current report
On December 17, 2024, the Company announced the launch of a transformative strategic initiative designed to drive outsized EBITDA growth and substantially improve shareholder value. The initiative, labeled “GRO AHT,” centers around three core pillars: G&A Reduction, Revenue Maximization, and Operational Efficiency.
Current report
On January 10, 2025, the Company completed the sale of the 315-room Courtyard Boston Downtown located in Boston, Massachusetts for $123.0 million, subject to customary pro rations and adjustments.
Current report
On January 22, 2025, the Company filed with the State Department of Assessments and Taxation of the State of Maryland (“SDAT”) articles supplementary to the Company’s charter (as amended, the “Charter”) that reclassified and designated 5,000,000 unissued shares of common stock of the Company as unclassified and undesignated shares of preferred stock. After giving effect to the foregoing, the Company has the authority to issue 450,000,000 shares of capital stock, consisting of 395,000,000 shares of common stock and 55,000,000 shares of preferred stock, of which 20,481,195 are unclassified and undesignated shares of preferred stock.
Current report
On January 22, 2025, the Company filed with the SDAT articles supplementary to the Charter classifying and designating an aggregate of 16,000,000 shares of the unissued and undesignated shares of preferred stock and provided for their issuance as 11,200,000 shares of the Series L Preferred Stock and 4,800,000 shares of the Series M Preferred Stock.
Current report
On February 12, 2025, the Company closed on a $580 million refinancing secured by 16 hotels. The financing includes the hotels that were previously part of the Company’s KEYS Pool C Loan, KEYS Pool D Loan, KEYS Pool E Loan, and the BAML Pool 3 Loan, together with the Westin Princeton. The previous loans had a combined outstanding loan balance of approximately $438.7 million. The new financing is non-recourse, has a two-year term with three one-year extension options, subject to the satisfaction of certain conditions, and bears interest at a floating interest rate of SOFR + 4.37%. The Company used approximately $72 million of the excess proceeds to completely pay off the remaining balance on the Oaktree Credit Agreement, including the $30.0 million exit fee.
Current report
On February 24, 2025, the Company amended its mortgage loan secured by the 141-room Hotel Indigo Atlanta Midtown in Atlanta, Georgia. Terms of the amendment included extending the current maturity date to February 2026, reducing the interest rate to SOFR + 2.75% and adding one one-year extension option, subject to satisfaction of certain conditions.
Current report
On March 6, 2025, the $22.1 million non-recourse mortgage loan secured by the Hilton Scotts Valley reached final maturity and was not repaid resulting in default. The Company is in active discussions with the lender regarding a multi-year extension of the mortgage loan.
Current report
On March 10, 2025, the parties to the Third Amended and Restated Advisory Agreement entered into Amendment No. 3 to the Third Amended and Restated Advisory Agreement (the “Third Amendment”). The Third Amendment further extends the outside date for which any sale or disposition of any of the Company’s Highland loan portfolio and JPM8 hotel properties securing the associated mortgage loans following certain defaults (as described in the Ashford Trust Advisory Agreement), including a maturity default, would be excluded from the numerator of the calculation of the percentage of gross book value of the Company’s assets sold or disposed (but, for the avoidance of doubt, included in the denominator of such calculation) for purposes of determining whether a Company Change of Control (as defined in the Advisory Agreement) has occurred, from November 30, 2025 to March 31, 2026.
Current report
On March 10, 2025, we entered into a Limited Waiver Under Advisory Agreement with Ashford Inc. and Ashford LLC (the “2025 Advisory Agreement Limited Waiver”). Pursuant to the 2025 Advisory Agreement Limited Waiver, the Company, the Operating Partnership, TRS and the Advisor waive the operation of any provision in our advisory agreement that would otherwise limit the ability of the Company in its discretion, at the Company’s cost and expense, to award during calendar year 2025, cash incentive compensation to employees and other representatives of the Advisor.
Current report
(2) Referred to as “KEYS A and B properties”
Current report
Food and beverage revenue decreased $20.2 million, or 8.7%, to $212.6 million in 2024 compared to 2023. This decrease is attributable to $20.1 million from our Hotel Dispositions and $2.0 million from the KEYS A and B properties that went into receivership, partially offset by higher sales of food and beverage of $1.4 million at our comparable hotel properties and $413,000 from the Le Meridien that opened in August 2024.
Current report
Impairment Charges. Impairment charges increased $59.3 million or 100%, to $59.3 million in 2024 compared to 2023. We recorded an impairment charge of $59.3 million in 2024 that was comprised of $35.9 million at the Hilton Costa Mesa and $23.4 million at the Embassy Suites Portland as a result of reduced estimated cash flows resulting from changes to the expected holding periods of these hotel properties. The impairment charges were based on methodologies which include the development of the discounted cash flow method of the income approach with support based on the market approach, which are considered Level 3 valuation techniques.
Current report
Gain (Loss) on Derecognition of Assets. Gain on derecognition of assets was $167.2 million in 2024. The gain includes the initial gain of $133.9 million related to the derecognition of assets related to the hotel properties securing the KEYS Pool A and KEYS Pool B mortgage loans that were placed into receivership in March 2024. Additionally, subsequent to March 31, 2024, we recognized an additional gain of $33.3 million, which primarily represents the additional accrued interest expense recorded through December 31, 2024, which resulted in a corresponding increase of the contract asset on our consolidated balance sheet as we expect to be released from this obligation upon final resolution with the lender. On July 2, 2024, the Courtyard Plano Legacy Park and the Residence Inn Plano were foreclosed on at a public auction. Additionally, on November 4, 2024, the receiver appointed for the KEYS Pool A and KEYS Pool B mortgage loans transferred the Courtyard Columbus Tipton Lakes to a third party purchaser. See note 7 to our consolidated financial statements.
Current report
Interest Expense Associated with Hotels in Receivership. Interest expense associated with hotels in receivership increased $6.4 million, from $39.2 million in 2023 to $45.6 million in 2024. The increase is due to higher average interest rates, default charges and late fees on the KEYS Pool A and KEYS Pool B mortgage loans. On July 2, 2024, the Courtyard Plano Legacy Park and the Residence Inn Plano were foreclosed on at a public auction. Additionally, on November 4, 2024, the receiver appointed for the KEYS Pool A and KEYS Pool B mortgage loans transferred the Courtyard Columbus Tipton Lakes to a third party purchaser. See note 7 to our consolidated financial statements.
Current report
Reverse Stock Split
Current report
On September 27, 2024, our board of directors approved a reverse stock split of our issued and outstanding common stock at a ratio of 1-for-10. This reverse stock split converted every ten issued and outstanding shares of common stock into one share of common stock. The reverse stock split was effective as of the close of business on October 25, 2024. As a result of the reverse stock split, the number of outstanding shares of common stock was reduced from approximately 55.2 million shares to approximately 5.5 million shares on that date. Additionally, the number of outstanding common units, Long-Term Incentive Plan (“LTIP”) units and Performance LTIP units was reduced from approximately 2.1 million units to approximately 208,000 units on that date. All common stock, common units, LTIP units, Performance LTIP units, performance stock units and restricted stock units as well as per share data related to these classes of equity have been revised in the accompanying consolidated financial statements to reflect this reverse stock split for all periods presented.
Current report
The following sets forth selected data revised for the effects of the 1-for-10 reverse stock split:
Current report
(1)Amounts revised for the effects of the 1-for-10 reverse stock splits.
Current report
We derecognized the hotel properties securing the KEYS Pool A and KEYS Pool B loans from our consolidated balance sheet in March 2024, when the receiver took control of the hotel properties, and accordingly recognized a gain of $133.9 million, which is included in “gain (loss) on derecognition of assets” in our consolidated statements of operations and recorded a contract asset of $378.2 million, which represented the liabilities we expect to be released from upon final resolution with the lenders on the KEYS Pool A and KEYS Pool B mortgage loans in exchange for the transfer of ownership of the respective hotel properties.
Current report
Subsequent to March 31, 2024, we recognized an additional gain of $33.3 million, which is included in “gain (loss) on derecognition of assets” in our consolidated statement of operations that increased the contract asset by a corresponding amount. The additional gain primarily represents the additional accrued interest expense recorded through December 31, 2024. In total for the year ended December 31, 2024 we recognized a gain of $167.2 million. The KEYS Pool A and the KEYS Pool B mortgage loans as well as all accrued and unpaid interest, default charges and late fees will remain liabilities until final resolution with the lenders is concluded, and thus are included in “indebtedness associated with hotels in receivership” and “accrued interest associated with hotels in receivership” on our consolidated balance sheets.
Current report
On July 2, 2024, the Courtyard Plano Legacy Park and the Residence Inn Plano were foreclosed on at a public auction. Additionally, on November 4, 2024, the receiver appointed for the KEYS Pool A and KEYS Pool B mortgage loans transferred the Courtyard Columbus Tipton Lakes to a third party purchaser. As a result the contract asset and corresponding indebtedness associated with hotels in receivership and accrued interest associated with hotels in receivership were reduced for the amounts attributable to each hotel.
Current report
On March 11, 2024, we entered into Amendment No. 3 to the Oaktree Credit Agreement which, among other items, (i) extends the Credit Agreement to January 15, 2026, (ii) removes the $50 million minimum cash requirement, (iii) removes the 3% increase in the interest rate if cash is below $100 million, (iv) removes the provision in which a default under mortgage indebtedness is a default under the Credit Agreement, (v) increases the interest rate by 3.5% if the principal balance is not less than $100 million as of September 30, 2024 or not fully repaid by March 31, 2025, (vi) terminates all “delayed draw” term loan commitments and the unused fees thereon, (vii) provides for a mandatory prepayment of the Credit Agreement at the end of each calendar quarter in the amount by which unrestricted cash exceeds $75 million for the first three quarters of 2024, $50 million for the fourth quarter of 2024, and $25 million for each quarter thereafter, (viii) provides for a mandatory prepayment of the Credit Agreement in an amount equal to 50% of all net proceeds raised from the issuance of equity, including non-traded preferred stock (increased to 100% of such net proceeds if the principal balance is not less than $100 million as of September 30, 2024 or not fully repaid by March 31, 2025), (ix) removes the option to pay the exit fee in the form of common stock warrants, (x) requires the exit fee to be paid in the form of a 15% cash exit fee (payable entirely in cash), which exit fee shall be reduced to 12.5% if the Oaktree Credit Agreement is repaid on or before September 30, 2024, (xi) requires the Company to use commercially reasonable efforts to sell fifteen specified hotels, (xii) if the principal balance is not less than $100 million as of September 30, 2024 or not fully repaid by March 31, 2025, requires the Company to sell eight specified hotels at a minimum sales price within six months, with the net sales proceeds to be applied as a prepayment of the Credit Agreement, (xiii) requires the Company to use commercially reasonable efforts to refinance the Renaissance Nashville hotel property, and (xiv) limits the Company’s ability to perform discretionary capital expenditures.
Current report
On March 11, 2024, the Company and Ashford Trust OP, as borrower (the “Borrower”) entered into that certain Limited Waiver to Credit Agreement (the “Limited Waiver to Credit Agreement”) with the guarantors party thereto, the lenders party thereto (the "Lenders") and Oaktree Fund Administration, LLC, as administrative agent. Pursuant to the Limited Waiver to Credit Agreement, the Borrower, the other Loan Parties (as defined in the Oaktree Credit Agreement), the Lenders and the Administrative Agent acknowledged and agreed that:
Current report
(a) certain deferred cash grants were or are being awarded to employees and/or officers of the Advisor and/or their affiliates pursuant to equity compensation plans during 2022, 2023 and 2024, in aggregate amounts of $7,950,817 in 2022, $13,063,844 in 2023 and $14,880,846 in 2024 (i.e., $35,895,507 in the aggregate) (the “Specified Deferred Cash Grants”), which the parties agreed may be made (and were or are being made) in lieu of deferred stock grants that would otherwise be permitted and made under the terms of the Advisory Agreement;
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Removed paragraphs (28)
Previous report
The KEYS mortgage loans were entered into on June 13, 2018, each of which had a two-year initial term and five one-year extension options. In order to qualify for a one-year extension in June of 2023, each KEYS loan pool was required to achieve a certain debt yield test. On July 7, 2023, the Company elected not to make the required paydowns to extend its KEYS Pool A loan, KEYS Pool B loan and KEYS Pool F loan, thereby defaulting on such loans.
Previous report
On November 29, 2023, the Company completed the deed in lieu of foreclosure transaction for the transfer of ownership of the KEYS F $215.1 million mortgage to the mortgage lender. Below is a summary of the hotel properties that secured the KEYS Pool F loan prior to transfer of ownership to the mortgage lender:
Previous report
On November 9, 2023, the Company sold the Sheraton Bucks County in Langhorne, Pennsylvania for $13.8 million in cash. The sale resulted in a gain of approximately $3.9 million for the year ended December 31, 2023.
Previous report
On December 6, 2023 (the “Closing”), Ashford Hospitality Trust, Inc.’s subsidiaries, Ashford Hospitality Limited Partnership and Ashford TRS Corporation (together, the “Contribution Company”), entered into a Contribution Agreement (the “Contribution Agreement”) with Stirling OP. Pursuant to the terms of the Contribution Agreement, the Contribution Company contributed its equity interests, and the associated debt and other obligations, in four hotel assets (Residence Inn Manchester, Hampton Inn Buford, SpringHill Suites Buford, and Residence Inn Jacksonville) (the “Initial Portfolio”) to Stirling OP in exchange for 1,400,943 Class I units of Stirling OP. Pursuant to the Contribution Agreement, the Contribution Company entered into lock-up agreements with respect to its Class I units that restrict the assignment, sale, and transfer of the units for a period of one year following the Closing. In addition, the Contribution Company is prohibited from redeeming its Class I units for a period of three years following the Closing. At the end of the three-year period, the Class I units may be redeemed pursuant to the terms of the Amended and Restated Limited Partnership Agreement of Stirling OP and any Class I units converted to shares of Stirling Inc.’s Class I common stock may be repurchased by Stirling Inc. pursuant to the terms and conditions of its share repurchase plan. In addition, the Contribution Company has agreed not to withdraw as a participant in the distribution reinvestment plan of Stirling OP, and thereby will automatically reinvest any distributions paid on its Class I units into additional Class I units, through at least December 31, 2024. Ashford Trust began consolidating Stirling OP as of December 6, 2023. See note 4 to our consolidated financial statements.
Previous report
On January 29, 2024, the Company, entered into an Agreement of Purchase and Sale, for the sale of Hilton Boston Back Bay Hotel for $171 million in cash. The sale of the Hilton Boston Back Bay hotel is expected to close in the first quarter of 2024.
Previous report
On March 12, 2024, we entered into the Third Amended and Restated Advisory Agreement with Ashford LLC (the “Third Amended and Restated Advisory Agreement”). The Third Amended and Restated Advisory Agreement amends and restates the terms of the Second Amended and Restated Advisory Agreement, dated January 14, 2021, to, among other items: (i) require the Company pay the advisor the Portfolio Company Fee (as defined in the Third Amended and Restated Advisory Agreement) upon certain specified defaults under the Company’s loan agreements resulting in the foreclosure of the Company’s hotel properties, (ii) limit, for the period of time set forth therein, the incremental financial impact to no more than $2 million per year in additional payments to the advisor from the amendments to the master hotel management agreement with Remington
Previous report
Hospitality and the master project management agreement with Premier, (iii) revise the criteria that would constitute a Company Change of Control, (iv) revise the definition of termination fee to provide for a minimum amount of such termination fee and (v) revise the criteria that would constitute a voting control event.
Previous report
Comparison of Year Ended December 31, 2023 with Year Ended December 31, 2022
Previous report
We began the year with 100 hotel properties. We disposed of six properties and WorldQuest and contributed four properties to Stirling OP. However, as of December 31, 2023, we consolidate Stirling OP. Please see note 4 to our consolidated financial statements for additional information. As of December 31, 2023, our operating results consist of 90 consolidated comparable hotel properties and four consolidated Stirling OP hotel properties.
Previous report
Food and beverage revenue increased $36.2 million, or 18.4%, to $232.8 million in 2023 compared to 2022. This increase is attributable to higher sales of food and beverage of $33.3 million at our comparable hotel properties and an increase of $3.2 million from our Hotel Acquisition partially offset by a decrease of $245,000 from our Hotel Dispositions.
Previous report
On February 9, 2023, the Company amended its JP Morgan Chase – 8 hotel mortgage loan, which had a current maturity in February 2023. As part of the amendment, the Company repaid $50.0 million in principal, exercised the 2023 loan extension and reduced the 2024 debt yield extension test from 9.25% to 8.50%.
Previous report
On April 6, 2023, the Company extended its BAML Highland mortgage loan to April 2024. As part of the extension, the Company repaid $45.0 million in principal and the interest rate increased from LIBOR + 3.20% to LIBOR + 3.47%.
Previous report
On May 19, 2023, we refinanced our $73.5 million mortgage, secured by the Hilton Alexandria and our $25.0 million mortgage, secured by the La Posada de Santa Fe. The new mortgage loan totals $98.5 million. The mortgage loan is interest only and provides for an interest rate of SOFR + 4.00%. The stated maturity is May 2026 with two one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is secured by the Hilton Alexandria and the La Posada de Santa Fe.
Previous report
On June 9, 2023, the Company exercised a one-year extension option for its KEYS Pool C mortgage loan to extend the loan to June 2024. As part of the extension, the Company repaid approximately $62.4 million in principal.
Previous report
On June 21, 2023, the Company and Ashford Hospitality Limited Partnership, an indirect subsidiary of the Company, entered into Amendment No. 2 with the Lenders and Oaktree Fund Administration, LLC. Amendment No. 2, subject to the conditions set forth therein, provides that, among other things:
Previous report
(i) the DDTL Commitment Expiration Date will be July 7, 2023, or such earlier date that the Borrower makes an Initial DDTL draw to be used by the Borrower to prepay certain mortgage indebtedness;
Previous report
(ii) notwithstanding the occurrence of the DDTL Commitment Expiration Date, up to $100,000,000 of Initial DDTLs will be made available by the Lenders for a period of twelve (12) months ending July 7, 2024, subject to the Borrower paying an unused fee of 9% per annum on the undrawn amount;
Previous report
(iii) Ashford Trust and the Borrower will be permitted to make certain Restricted Payments, including without limitation dividends on Ashford Trust’s preferred stock, without having to maintain Unrestricted Cash in an amount not less than the sum of (x) $100,000,000 plus (y) the aggregate principal amount of DDTLs advanced prior to the date thereof or contemporaneously therewith;
Previous report
(iv) a default on certain pool mortgage loans will not be counted against the $400,000,000 Mortgage Debt Threshold Amount;
Previous report
(v) for purposes of the Mortgage Debt Threshold Amount, a certain mortgage loan, with a current aggregate principal amount of $415,000,000, will be deemed to have a principal amount of $400,000,000; and
Previous report
(vi) when payable by the Borrower under the Credit Agreement, at least 50% of the Exit Fee shall be paid as a Cash Exit Fee.
Previous report
Effective June 30, 2023, LIBOR is no longer published. Accordingly, all variable interest rate mortgage loans held by the Company that use the LIBOR index transitioned to SOFR beginning on July 1, 2023. Not all lenders will execute loan amendment documents and instead will defer to original loan documents that dictate changes in index rates.
Previous report
The KEYS mortgage loans were entered into on June 13, 2018, each of which had a two-year initial term and five one-year extension options. In order to qualify for a one-year extension in June of 2023, each KEYS loan pool was required to achieve a certain debt yield test. The Company extended its KEYS Pool C loan with a paydown of approximately $62.4 million, its KEYS Pool D loan with a paydown of approximately $25.6 million, and its KEYS Pool E loan with a paydown of approximately $41.0 million. On June 9, 2023 the Company received a 30-day extension to satisfy the extension conditions in order to negotiate modifications to the respective extension tests. On July 7, 2023, the Company elected not to make the required paydowns to extend its KEYS Pool A loan, KEYS Pool B loan and KEYS Pool F loan, thereby defaulting on such loans.
Previous report
On November 29, 2023, The Company completed the deed in lieu of foreclosure transaction for the transfer of ownership of the KEYS F $215.1 million mortgage to the mortgage lender. Below is a summary of the hotel properties that secured the KEYS Pool F loan prior to transfer of ownership to the mortgage lender:
Previous report
On November 16, 2023, we refinanced the $6.2 million loan secured by the Residence Inn Manchester, $9.1 million loan secured by the Residence Inn Jacksonville, and $21.9 million mortgage loan secured by the Hampton Inn Buford and the SpringHill Suites Buford. The new mortgage loan totaled $30.2 million and has a five-year term. The mortgage loan is interest only and provides for an interest rate of 8.506%. The new mortgage loan is secured by four hotels: Residence Inn Manchester, Residence Inn Jacksonville, Hampton Inn Buford and SpringHill Suites Buford.
Previous report
On December 6, 2023, Stirling Inc., through Stirling OP, acquired the Residence Inn Manchester, Hampton Inn Buford, SpringHill Suites Buford, and Residence Inn Jacksonville andassumed the $30.2 million mortgage loan secured by the four hotel assets from Ashford Hospitality Limited Partnership and Ashford TRS Corporation. Ashford Trust began consolidating Stirling OP as of December 6, 2023.
Previous report
On September 9, 2021, the Company and M3A LP (“M3A”) entered into a purchase agreement (the “M3A Purchase Agreement”), which provides that subject to the terms and conditions set forth therein, the Company may sell to M3A up to approximately 6.0 million shares of common stock, from time to time during the term of the M3A Purchase Agreement. The Company filed a Form S-3, which was declared effective by the SEC on April 1, 2022, to replace the previous Form S-11 and to register for resale any future resales by M3A under the M3A Purchase Agreement. As of March 12, 2024, the Company has issued approximately 900,000 shares of common stock for gross proceeds of approximately $12.9 million under the M3A Purchase Agreement.
Previous report
In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”), which provides optional guidance through December 31, 2022 to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which further clarified the scope of the reference rate reform optional practical expedients and exceptions outlined in Topic 848. The amendments in ASU Nos. 2020-04 and 2021-01 apply to contract modifications that replace a reference rate affected by reference rate reform, providing optional expedients regarding the measurement of hedge effectiveness in hedging relationships that have been modified to replace a reference rate. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848), which deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The Company applied the optional expedient in evaluating debt modifications converting from London Interbank Offered Rate (“LIBOR”) to Secured Overnight Financing Rate (“SOFR”). The Company adopted the standards upon the respective effective dates. There was no material impact as a result of this adoption.
Reworded paragraphs (50)
Previous wording
As of December 31, 2023, our portfolio consisted of 90 consolidated operating hotel properties which represents 20,549 total rooms. Additionally, our portfolio consists of four consolidated operating hotel properties, which represent 405 total rooms owned through a 99.4% ownership interest in Stirling OP, which was formed by Stirling Inc. to acquire and own a diverse portfolio of stabilized income-producing hotels and resorts. Currently, all of our hotel properties are located in the United States.
Current wording
As of December 31, 2024, our portfolio consisted of 68 consolidated operating hotel properties, which represent 17,051 total rooms. One consolidated operating hotel property, which represents 188 total rooms is owned through a 29.3% investment in a consolidated entity. Additionally, our portfolio consists of four consolidated operating hotel properties, which represent 405 total rooms owned through a 98.8% ownership interest in Stirling OP, which was formed by Stirling Inc. to acquire and own a diverse portfolio of stabilized income-producing hotels and resorts. Currently, all of our hotel properties are located in the United States.
Previous wording
The Company continues to work with the lender for the KEYS A and KEYS B loan pools on a consensual transfer of ownership of those hotels to the lender, and the Company anticipates that transfer could occur in the first half of 2024. The original lenders previously transferred the loans to a securitization trust. On March 1, 2024, the Company received notice that the hotel properties securing the KEYS A and KEYS B loan pools have been transferred to a court-appointed receiver. Below is a summary of the hotel properties securing the KEYS Pool A loan and KEYS Pool B loan:
Current wording
The Company continues to work with the lender of the KEYS A and KEYS B loan pools on a consensual transfer of ownership of those hotels to the lender, and the Company anticipates that transfer could occur in 2025. The original lenders previously transferred the loans to a securitization trust. On March 1, 2024, the Company received notice that the hotel properties securing the KEYS A and KEYS B loan pools have been transferred to a court-appointed receiver. Below is a summary of the hotel properties securing the KEYS Pool A loan and Keys Pool B loan:
Previous wording
Demand—The demand for lodging, including business travel, is directly correlated to the overall economy; as GDP increases, lodging demand typically increases. Historically, periods of declining demand are followed by extended periods of relatively strong demand, which typically occurs during the growth phase of the lodging cycle. Beginning in 2020, the COVID-19 pandemic had a direct impact on demand but we have seen demand recover beginning in 2022.
Current wording
Demand—The demand for lodging, including business travel, is directly correlated to the overall economy; as GDP increases, lodging demand typically increases. Historically, periods of declining demand are followed by extended periods of relatively strong demand, which typically occurs during the growth phase of the lodging cycle.
Previous wording
Supply—The development of new hotels is driven largely by construction costs, the availability of financing and expected performance of existing hotels. Short-term supply is also expected to be below long-term averages. While the industry is expected to have supply growth below historical averages, we may experience supply growth, in certain markets, in excess of national averages that may negatively impact performance. Beginning in 2020, the COVID-19 pandemic had a direct impact on supply. As the economy recovers from COVID-19, we have experienced supply growth in certain markets.
Current wording
Supply—The development of new hotels is driven largely by construction costs, the availability of financing and expected performance of existing hotels. Short-term supply is also expected to be below long-term averages. While the industry is expected to have supply growth below historical averages, we may experience supply growth, in certain markets, in excess of national averages that may negatively impact performance.
Previous wording
The following table summarizes the changes in key line items from our consolidated statements of operations for the years ended December 31, 2023 and 2022 (in thousands):
Current wording
The following table summarizes the changes in key line items from our consolidated statements of operations for the year ended December 31, 2024 and 2023 (in thousands):
Previous wording
All hotel properties owned during the years ended December 31, 2023 and 2022 have been included in our results of operations during the respective periods in which they were owned. Based on when a hotel property was acquired or disposed, operating results for certain hotel properties are not comparable for the years ended December 31, 2023 and 2022. The hotel properties listed below are not comparable hotel properties for the periods indicated and all other hotel properties are considered comparable hotel properties. The following transactions affect the reporting comparability of our consolidated financial statements:
Current wording
All hotel properties held during the years ended December 31, 2024 and 2023 have been included in our results of operations during the respective periods in which they were held. Based on when a hotel property was acquired or disposed, operating results for certain hotel properties are not comparable for the years ended December 31, 2024 and 2023. The hotel properties listed below are not comparable hotel properties for the periods indicated and all other hotel properties are considered comparable hotel properties. The following transactions affect the reporting comparability of our consolidated financial statements:
Previous wording
(1)Collectively referred to as “Hotel Dispositions”
Current wording
(1) Referred to as “Hotel Dispositions”
Previous wording
The following table illustrates the key performance indicators of the operating hotel properties included in our results of operations:
Current wording
The following table illustrates the key performance indicators of the operating hotel properties and WorldQuest included in our results of operations:
Previous wording
The following table illustrates the key performance indicators of the 90 comparable hotel properties that were included in our results of operations for the full years ended December 31, 2023 and 2022, respectively:
Current wording
The following table illustrates the key performance indicators of the 68 comparable hotel properties and four consolidated Stirling OP properties that were included in our results of operations for the full year ended December 31, 2024 and 2023, respectively:
Previous wording
Comparison of the Years ended December 31, 2023 and 2022
Current wording
Comparison of the Year Ended December 31, 2024 and 2023
Previous wording
Net Income (Loss) Attributable to the Company. Net loss attributable to the Company increased $38.7 million from $139.8 million for the year ended December 31, 2022 (“2022”) to $178.5 million for the year ended December 31, 2023 (“2023”) as a result of the factors discussed below.
Current wording
Net Income (Loss) Attributable to the Company. Net loss attributable to the Company decreased $118.2 million from $178.5 million for the year ended December 31, 2023 (“2023”) to $60.3 million for the year ended December 31, 2024 (“2024”) as a result of the factors discussed below.
Previous wording
Revenue. Rooms revenue from our hotel properties increased $85.2 million, or 8.7%, to $1.1 billion in 2023 compared to 2022. This increase is attributable to higher rooms revenue of $84.7 million at our comparable hotel properties as our hotel properties recover from the effects of the COVID-19 pandemic and an increase of $8.2 million from our Hotel Acquisition partially offset by a decrease of $7.6 million from our Hotel Dispositions and $85,000 from the Stirling hotel properties. Our comparable hotel properties experienced an increase of 4.3% in room rates and an increase of 325 basis points in occupancy.
Current wording
Revenue. Rooms revenue from our hotel properties decreased $169.4 million, or 16.0%, to $889.8 million in 2024 compared to 2023. This decrease is attributable to $111.0 million from our Hotel Dispositions, $69.5 million from the KEYS A and B properties that went into receivership partially offset by higher rooms revenue of $8.4 million at our comparable hotel properties, $509,000 from the Stirling hotel properties and $2.2 million from the Le Meridien that opened in August 2024. Our comparable hotel properties experienced an increase of 1.7% in room rates and a decrease of 89 basis points in occupancy.
Previous wording
Other hotel revenue, which consists mainly of Internet access, parking, and spa revenue, increased $5.4 million, or 8.1%, to $72.7 million in 2023 compared to 2022. This increase is attributable to higher other revenue of $6.1 million from our comparable hotel properties as our hotel properties recover from the effects of the COVID-19 pandemic, an increase of $356,000 from our Hotel Acquisition and $43,000 from the Stirling hotel properties, partially offset by a decrease of $1.1 million from our Hotel Dispositions. Other revenue decreased $83,000, or 2.9%, to $2.8 million in 2023 compared to 2022.
Current wording
Other hotel revenue, which consists mainly of Internet access, parking, and spa revenue, decreased $4.9 million, or 6.8%, to $67.8 million in 2024 compared to 2023. This decrease is attributable to $10.4 million from our Hotel Dispositions, $2.8 million from the KEYS A and B properties that went into receivership, and $7,000 from the Stirling properties, partially offset by higher other revenue of $8.1 million from our comparable hotel properties and $140,000 from the Le Meridien that opened in August 2024. Other revenue decreased $476,000, or 17.0%, to $2.3 million in 2024 compared to 2023.
Previous wording
Hotel Operating Expenses. Hotel operating expenses increased $89.4 million, or 10.7%, to $925.4 million in 2023 compared to 2022. Hotel operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and management fees. Direct expenses increased $41.4 million in 2023 compared to 2022, comprised of an increase of $40.0 million from our comparable hotel properties and an increase of $3.4 million from our Hotel Acquisition, partially offset by a decrease of $1.9 million from our Hotel Dispositions and $126,000 from the Stirling hotel properties. Direct expenses were 31.0% of total hotel revenue for 2023 and 30.8% for 2022. Indirect expenses and management fees increased $48.1 million in 2023 compared to 2022, comprised of an increase of $45.9 million from our comparable hotel properties and $4.7 million from our Hotel Acquisition partially offset by $2.4 million from our Hotel Dispositions and $101,000 from the Stirling hotel properties.
Current wording
Hotel Operating Expenses. Hotel operating expenses decreased $110.1 million, or 11.9%, to $815.4 million in 2024 compared to 2023. Hotel operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and management fees. Direct expenses decreased $58.0 million in 2024 compared to 2023, comprised of a decrease of $43.5 million from our Hotel Dispositions and $20.7 million from the KEYS A and B properties that went into receivership partially offset by an increase of $4.9 million from our comparable hotel properties, $151,000 from the Stirling properties, and $1.2 million from the Le Meridien that opened in August 2024. Direct expenses were 31.2% of total hotel revenue for 2024 and 31.0% for 2023. Indirect expenses and management fees decreased $52.1 million in 2024 compared to 2023, comprised of a decrease of $50.6 million from our Hotel Dispositions, $30.3 million from the KEYS A and B properties that went into receivership partially offset by an increase of $25.7 million from our comparable hotel properties, $500,000 from the Stirling hotel properties and $2.6 million from the Le Meridien that opened in August 2024.
Previous wording
Property Taxes, Insurance and Other. Property taxes, insurance and other expense increased $2.9 million or 4.3%, to $70.2 million in 2023 compared to 2022, which was primarily due to an increase of $3.2 million from our comparable hotel properties, $55,000 from the Stirling hotel properties and $135,000 from our Hotel Acquisition partially offset by a decrease of $497,000 from our Hotel Dispositions.
Current wording
Property Taxes, Insurance and Other. Property taxes, insurance and other expense decreased $6.1 million or 8.7%, to $64.1 million in 2024 compared to 2023, which was primarily due to a decrease of $7.2 million from our Hotel Dispositions and $4.5 million from the KEYS A and B properties that went into receivership, partially offset by an increase of $5.2 million from our comparable hotel properties, $178,000 from the Stirling hotel properties and $279,000 from the Le Meridien that opened in August 2024.
Previous wording
Depreciation and Amortization. Depreciation and amortization decreased $14.0 million or 6.9%, to $187.8 million in 2023 compared to 2022, which consisted of lower depreciation of $9.7 million from our comparable hotel properties primarily related to fully depreciated assets, $246,000 from the Stirling hotel properties and $4.5 million from our Hotel Dispositions partially offset by an increase of $512,000 from our Hotel Acquisition.
Current wording
Depreciation and Amortization. Depreciation and amortization decreased $35.0 million or 18.7%, to $152.8 million in 2024 compared to 2023, which consisted of lower depreciation of $19.9 million from our Hotel Dispositions, $11.4 million from the KEYS A and B properties that went into receivership and $6.3 million from our comparable hotel properties, primarily related to fully depreciated assets, partially offset by an increase of $1.0 million from our Stirling hotel properties and $1.5 million from the Le Meridien that opened in August 2024.
Previous wording
Advisory Services Fee. Advisory services fee decreased $970,000, or 1.9%, to $48.9 million in 2023 compared to 2022. The advisory services fee represents fees incurred in connection with the advisory agreements between Ashford Inc. and the Company and between Ashford Inc. and Stirling OP. In 2023, the advisory services fee was comprised of a base advisory fee of $33.2 million, equity-based compensation of $3.3 million associated with equity grants of our common stock, PSUs, LTIP units and Performance LTIP units awarded to the officers and employees of Ashford Inc. and reimbursable expenses of $12.5 million. In 2022, the advisory services fee was comprised of a base advisory fee of $34.8 million, equity-based compensation of $5.2 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. and reimbursable expenses of $9.9 million.
Current wording
Advisory Services Fee. Advisory services fee increased $9.7 million, or 19.8%, to $58.6 million in 2024 compared to 2023. The advisory services fee represents fees incurred in connection with the advisory agreements between Ashford Inc. and the Company and between Ashford Inc. and Stirling OP. In 2024, the advisory services fee was comprised of a base advisory fee of $32.5 million, equity-based compensation of $1.8 million associated with equity grants of our common stock, PSUs, LTIP units and Performance LTIP units awarded to the officers and employees of Ashford Inc., reimbursable expenses of $23.9 million and a performance participation fee of $454,000 associated with the Stirling OP advisory agreement with Ashford Inc. In 2023, the advisory services fee was comprised of a base advisory fee of $33.2 million, equity-based compensation of $3.3 million associated with equity grants of our common stock, PSUs, LTIP units and Performance LTIP units awarded to the officers and employees of Ashford Inc. and reimbursable expenses of $12.5 million.
Previous wording
Corporate, General and Administrative. Corporate, general and administrative expense increased $6.3 million, or 63.8%, to $16.2 million in 2023 compared to 2022. The increase was primarily attributable to higher reimbursed operating expenses of Ashford Securities of $5.6 million, $192,000 of public company expenses, $861,000 of start up and organizational costs related to the start-up of Stirling, Inc. partially offset by a decrease of $427,000 of legal and professional fees related to Ashford Trust.
Current wording
Corporate, General and Administrative. Corporate, general and administrative expense increased $8.5 million, or 52.4%, to $24.7 million in 2024 compared to 2023. The increase was primarily attributable to higher reimbursed operating expenses of Ashford Securities of $6.5 million, higher legal and professional fees of $2.4 million and higher public company cost of $258,000 partially offset by lower miscellaneous expenses of $627,000.
Previous wording
Gain (Loss) on Consolidation of VIE and Disposition of Assets. Gain on consolidation of VIE and disposition of assets increased $11.2 million, from $300,000 in 2022 to $11.5 million in 2023. The gain in 2023 was primarily related to a $1.1 million gain for the consolidation of the VIE, which is represented by the difference between the fair value of the assets and liabilities recognized, the fair value of the non-controlling interest and the previous carrying value of the Company’s investment in 815 Commerce MM and $10.4 million related to Hotel Dispositions. The gain in 2022 was primarily related to a gain related to the sale of six WorldQuest condominiums.
Current wording
Gain (Loss) on Consolidation of VIE and Disposition of Assets and Hotel Properties. Gain on consolidation of VIE and disposition of assets and hotel properties increased $82.9 million, from $11.5 million in 2023 to $94.4 million in 2024. The gain in 2024 was primarily related to the sale of the Residence Inn in Salt Lake City, Utah, Hilton Boston Back Bay in Boston, Massachusetts, Hampton Inn Lawrenceville in Lawrenceville, Georgia, SpringHill Suites Kennesaw in Kennesaw, Georgia, Fairfield Inn Kennesaw in Kennesaw, Georgia, One Ocean in Atlantic Beach, Florida, and Courtyard Hartford Manchester in Manchester, Connecticut. The gain in 2023 was primarily related to a $1.1 million gain for the consolidation of the VIE, which is represented by the difference between the fair value of the assets and liabilities recognized, the fair value of the non-controlling interest and the previous carrying value of the Company’s investment in 815 Commerce MM and $10.4 million related to hotel dispositions.
Previous wording
Equity in Earnings (Loss) of Unconsolidated Entities. Equity in loss of unconsolidated entities was $1.1 million in 2023, which consisted of equity in loss of $528,000 from OpenKey and $606,000 from an investment in an entity that owns the
Current wording
Equity in Earnings (Loss) of Unconsolidated Entities. Equity in loss of unconsolidated entities was $2.4 million in 2024, which consisted of equity in loss of $566,000 million from OpenKey, $795,000 from an investment in an entity that owns the Meritage Resort and Spa and the Grand Reserve at the Meritage in Napa, California and a $1.0 million impairment charge on OpenKey. Equity in loss of unconsolidated entities was $1.1 million in 2023 which consisted of equity in loss of $528,000 in OpenKey and $606,000 in the Napa resort investment.
Previous wording
Interest Income. Interest income was $9.0 million and $4.8 million in 2023 and 2022, respectively. The increase in interest income in 2023 was primarily attributable to higher short-term interest rates on excess cash and the Company’s cash management agreement with Ashford LLC.
Current wording
Interest Income. Interest income was $6.9 million and $9.0 million in 2024 and 2023, respectively. The decrease in interest income in 2024 was primarily attributable to lower excess cash balances in 2024 compared to 2023.
Previous wording
Other Income (Expense). Other income decreased $105,000 from $415,000 in 2022 to $310,000 in 2023. In 2023 and 2022 we recorded miscellaneous income of $310,000 and $415,000, respectively.
Current wording
Other Income (Expense). In 2024 and 2023 we recorded miscellaneous income of $108,000 and $310,000, respectively.
Previous wording
Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs increased $139.2 million, or 61.3%, to $366.1 million in 2023 compared to 2022. The increase was primarily due to a $110.3 million increase in interest expense at our comparable hotel properties primarily due to higher interest rates on our variable rate debt, lower credits to interest expense of $18.7 million related to the amortization credit of default interest and late charges recorded on mortgage loans previously in default, $6.0 million primarily attributable to the amortization of the Oaktree debt discount and higher interest expense in 2023 of $4.5 million from our Hotel Dispositions primarily attributable default interest and late charges. These increases were partially offset by a decrease of $283,000 from the Stirling hotel properties. The average SOFR rates in 2023 and 2022 were 4.91% and 1.58%, respectively. LIBOR ceased to be published after June 30, 2023. The average LIBOR rate for 2022 was 1.91%.
Current wording
Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs decreased $53.6 million, or 16.4%, to $273.4 million in 2024 compared to 2023. The decrease was primarily due to lower cash interest expense and amortization of loan costs of $33.0 million on the Oaktree loan attributable to a lower principal balance and the Oaktree deferred loan costs becoming fully amortized, $24.8 million from our Hotel Dispositions and lower default interest and late charges recorded on mortgage loans previously in default of $5.0 million. These decreases were partially offset by higher interest expense of $6.5 million at our comparable hotel properties primarily due to higher interest rates on our variable rate debt, $1.7 million from the Le Meridien and $1.2 million at our Stirling properties related to the new loan with a higher interest rate. The average SOFR rates in 2024 and 2023 were 5.15% and 4.91%, respectively.
Previous wording
Write-off of Premiums, Loan Costs and Exit Fees. Write-off of premiums, loan costs and exit fees decreased $67,000 to $3.5 million in 2023 compared to 2022. In 2023, we incurred fees of $3.5 million related to loan refinances, modifications and exit fees. In 2022, we recognized Lismore fees of $768,000 related to the Lismore Agreement and fees of $2.0 million related to loan modifications and extensions. We wrote off unamortized loan costs of $265,000 and a pro-rata write-off of the Oaktree loan discount in the amount of $514,000 upon making a $4.0 million pay down on the Oaktree loan.
Current wording
Write-off of Premiums, Loan Costs and Exit Fees. Write-off of premiums, loan costs and exit fees increased $1.8 million to $5.2 million in 2024 compared to 2023. In 2024, we incurred fees of approximately $4.4 million related to loan refinances and modifications and wrote-off $817,000 of unamortized loan costs. In 2023, we incurred fees of $3.5 million related to loan refinances and modifications
Previous wording
Gain (loss) on extinguishment of debt. Gain on extinguishment of debt was $53.4 million in 2023 related to the deed in lieu of foreclosure transaction for the KEYS Pool F loan.
Current wording
Gain (loss) on extinguishment of debt. Gain on extinguishment of debt in 2024 was $2.8 million. In June 2024, the Company was informed by its lender that the lender intended to exercise remedies for the maturity default on the Ashton Hotel in Fort Worth, Texas, which secured the Company’s $8.9 million mortgage loan. The Company and the lender agreed to a deed-in-lieu of foreclosure, which was completed on July 16, 2024 and resulted in a gain on extinguishment of debt of approximately $2.6 million. Gain on extinguishment of debt also included $45,000 in 2024 primarily related to the deed in lieu of foreclosure transaction for the KEYS Pool F mortgage loan. In 2023, the gain on extinguishment of debt was $53.4 million related to the deed in lieu of foreclosure transaction for the KEYS Pool F loan.
Previous wording
Realized and Unrealized Gain (Loss) on Derivatives. Realized and unrealized gain on derivatives changed $17.4 million from a gain of $15.2 million in 2022 to a loss of $2.2 million in 2023. In 2023, we recognized an unrealized loss of $44.0 million associated with interest rate caps and an unrealized loss of $9,000 from the revaluation of the embedded debt derivative in the Oaktree Agreement, partially offset by a realized gain of $41.8 million related to payments from counterparties on interest rate caps. In 2022, we recorded an unrealized gain of $4.2 million from the revaluation of the embedded debt derivative in the Oaktree Credit Agreement, an unrealized gain of $6.6 million from interest rate caps and a realized gain of $4.4 million related to payments from counterparties on interest rate caps.
Current wording
Realized and Unrealized Gain (Loss) on Derivatives. Realized and unrealized loss on derivatives increased $4.3 million from $2.2 million in 2023 to $6.5 million in 2024. In 2024, we recognized an unrealized loss of $27.1 million associated with interest rate caps, an unrealized loss of $320,000 associated with interest rate floors and an unrealized loss of $5.4 million from the revaluation of the embedded debt derivative in the Oaktree Agreement partially offset by a realized gain of $26.3 million related to payments from counterparties on interest rate caps. In 2023, we recognized an unrealized loss of $44.0 million associated with interest rate caps and an unrealized loss of $9,000 from the revaluation of the embedded debt derivative in the Oaktree Agreement, partially offset by a realized gain of $41.8 million related to payments from counterparties on interest rate caps.
Previous wording
Income Tax (Expense) Benefit. Income tax expense decreased $5.4 million, from $6.3 million in 2022 to $900,000 in 2023. This decrease was primarily due to a decrease in the profitability of our Ashford TRS entities in 2023 compared to 2022.
Current wording
Income Tax (Expense) Benefit. Income tax expense increased $97,000, from $900,000 in 2023 to $997,000 in 2024. This increase was primarily due to gains on property dispositions in 2024.
Previous wording
(Income) Loss from Consolidated Entities Attributable to Noncontrolling Interests. Our noncontrolling interest partners in consolidated entities were allocated a loss of $6,000 in 2023.
Current wording
(Income) Loss from Consolidated Entities Attributable to Noncontrolling Interests. Our noncontrolling interest partners in consolidated entities were allocated a loss of $4.0 million in 2024. Our noncontrolling interest partners in consolidated entities were allocated a loss of $6,000 in 2023. At December 31, 2024, noncontrolling interests in consolidated entities represented an ownership interest of 70.7% in 815 Commerce MM and 1.20% in Stirling OP. See note 2 to our consolidated financial statements.
Previous wording
Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in operating partnership were allocated net losses of $2.2 million and $1.2 million in 2023 and 2022, respectively. Redeemable noncontrolling interests represented ownership interests of 1.27% and 0.91% in the operating partnership at December 31, 2023 and 2022, respectively.
Current wording
Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in operating partnership were allocated net loss of $683,000 in 2024 and $2.2 million in 2023. Redeemable noncontrolling interests represented ownership interests of 1.02% and 1.27% in the operating partnership at December 31, 2024 and 2023, respectively.
Previous wording
As of December 31, 2023, the Company held cash and cash equivalents of $165.2 million and restricted cash of $146.3 million (including amounts held for sale), the vast majority of which is comprised of lender and manager-held reserves. As of December 31, 2023, $21.7 million was also due to the Company from third-party hotel managers, most of which is held by one of the Company’s managers and is available to fund hotel operating costs. At December 31, 2023, our net debt to gross assets was 70.2%.
Current wording
As of December 31, 2024, the Company held cash and cash equivalents of $112.9 million and restricted cash of $107.6 million (including amounts held for sale), the vast majority of which is comprised of lender and manager-held reserves. As of December 31, 2024, $21.6 million (including amounts held for sale) was also due to the Company from third-party hotel managers, most of which is held by one of the Company’s managers and is available to fund hotel operating costs. At December 31, 2024, our net debt to gross assets was 69.5%.
Previous wording
Certain of our loan agreements contain cash trap provisions that may be triggered if the performance of our hotels declines below a threshold. When these provisions are triggered, substantially all of the profit generated by our hotels is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our various lenders. During a cash trap, certain disbursements from these hotel operating cash receipts would require consent of our lenders. At December 31, 2023, 26 of our hotels were in cash traps and approximately $3.9 million of our restricted cash was subject to these cash traps. Our loans currently in cash traps may remain subject to cash trap provisions for a substantial period of time which could limit our flexibility and adversely affect our financial condition or our qualification as a REIT.
Current wording
Certain of our loan agreements contain cash trap provisions that may be triggered if the performance of our hotels declines below a threshold. When these provisions are triggered, substantially all of the profit generated by our hotels is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our various lenders. During a cash trap, certain disbursements from these hotel operating cash receipts would require consent of our lenders. At December 31, 2024, 12 of our hotels were in cash traps and approximately $2.6 million of our restricted cash was subject to these cash traps.
Previous wording
Our estimated future obligations as of December 31, 2023 include both current and long-term obligations. With respect to our indebtedness, as discussed in note 7 to our consolidated financial statements, we have current obligations of $3.1 billion and long-term obligations of $316.3 million. As of December 31, 2023, we have $824.2 million of mortgage loans that have final maturities in 2024 (of which $180.7 million relates to KEYS Pool A and $174.4 million relates to KEYS Pool B). We hold extension options for the remaining mortgage loans due in the next twelve months. We have amortization payments of approximately $2.2 million due in the next twelve months.
Current wording
Our estimated future obligations as of December 31, 2024 include both current and long-term obligations. With respect to our indebtedness, as discussed in note 7 to our consolidated financial statements, we have current obligations of $2.1 billion and long-term obligations of $577.7 million. As of December 31, 2024, we have $1.8 billion of mortgage loans that have final maturities in 2025. We hold extension options for the remaining mortgage loans due in the next twelve months. Additionally, we have amortization payments of approximately $133,000 due in the next twelve months. Subsequent to December 31, 2024, we refinanced four mortgage loans with outstanding loan balances of approximately $438.7 million and amended a mortgage loan with an outstanding balance of approximately $12.3 million that had final maturities in 2025. Additionally we paid the Oaktree term loan in full including the $30 million exit fee.
Previous wording
As discussed in note 19 to our consolidated financial statements, under our operating and finance leases we have current obligations of $5.5 million and long-term obligations of $253.3 million. Additionally, we have short-term capital commitments of $59.7 million.
Current wording
As discussed in note 19 to our consolidated financial statements, under our operating and finance leases we have current obligations of $7.2 million and long-term obligations of $704.1 million. Additionally, we have short-term capital commitments of $43.1 million.
Previous wording
The Company continues to work with the lender for the KEYS A and KEYS B loan pools on a consensual transfer of ownership of those hotels to the lender, and the Company anticipates that transfer will occur in the first half of 2024. The original lenders previously transferred the loans to a securitization trust. On March 1, 2024, the Company received notice that the hotel properties securing the KEYS A and KEYS B loan pools have been transferred to a court-appointed receiver. Below is a summary of the hotel properties securing the KEYS Pool A loan and Keys Pool B loan:
Current wording
The Company continues to work with the lender of the KEYS A and KEYS B loan pools on a consensual transfer of ownership of those hotels to the lender, and the Company anticipates that transfer could occur in 2025. The original lenders previously transferred the loans to a securitization trust. On March 1, 2024, the Company received notice that the hotel properties securing the KEYS A and KEYS B loan pools have been transferred to a court-appointed receiver. Below is a summary of the hotel properties securing the KEYS Pool A loan and KEYS Pool B loan:
Previous wording
On March 4, 2022, the Company filed an initial registration statement on Form S-3 with the SEC, as amended on April 29, 2022, related to the Company’s non-traded Series J Preferred Stock and Series K Preferred Stock. The registration statement was declared effective by the SEC on May 4, 2022, and contemplates the offering of up to (i) 20.0 million shares of Series J Preferred Stock or Series K Preferred Stock in a primary offering and (ii) 8.0 million shares of Series J Preferred Stock or Series K Preferred Stock pursuant to a dividend reinvestment plan. On May 5, 2022, we filed our prospectus for the offering with the SEC. Ashford Securities, a subsidiary of Ashford Inc., serves as the dealer manager for the offering. As of March 12, 2024, the Company has issued approximately 4.1 million shares of Series J Preferred Stock and received net proceeds of approximately $91.3 million and approximately 240,000 shares of Series K Preferred Stock and received net proceeds of approximately $5.8 million.
Current wording
On March 4, 2022, the Company filed an initial registration statement on Form S-3 with the SEC, as amended on April 29, 2022, related to the Company’s non-traded Series J Preferred Stock and Series K Preferred Stock. The registration statement was declared effective by the SEC on May 4, 2022, and contemplates the offering of up to (i) 20.0 million shares of Series J Preferred Stock or Series K Preferred Stock in a primary offering and (ii) 8.0 million shares of Series J Preferred Stock or Series K Preferred Stock pursuant to a dividend reinvestment plan. On May 5, 2022, we filed our prospectus for the offering with the SEC. Ashford Securities, a subsidiary of Ashford Inc., serves as the dealer manager for the offering. As of March 19, 2025, the Company has issued approximately 7.4 million shares (exclusive of the dividend reinvestment plan shares) of Series J Preferred Stock and received net proceeds of approximately $166.8 million and approximately 720,000 shares (exclusive of the dividend reinvestment plan shares) of Series K Preferred Stock and received net proceeds of approximately $17.5 million. On December 3, 2024, the Company announced the closing on March 31, 2025, of its Series J and Series K non-traded preferred stock offering.
Previous wording
On April 6, 2022, the board of directors approved a stock repurchase program (the “Repurchase Program”) pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock and preferred stock having an aggregate value of up to $200 million. The board of directors’ authorization replaced the 2017 Repurchase Program that the board of directors authorized in December 2017. No shares have been repurchased under the Repurchase Program. The ability to make repurchases under the Repurchase Program is subject to the same financial factors that must be taken into account in declaring a dividend as discussed herein under “Distribution Policy.”
Current wording
On April 6, 2022, the board of directors approved a stock repurchase program (the “Repurchase Program”) pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock and preferred stock having an aggregate value of up to $200 million. No shares have been repurchased under the Repurchase Program. The ability to make repurchases under the Repurchase Program is subject to the same financial factors that must be taken into account in declaring a dividend as discussed herein under “Distribution Policy.”
Previous wording
On April 11, 2022, the Company entered into the Virtu Equity Distribution Agreement with Virtu, to sell from time to time shares of the Company’s common stock having an aggregate offering price of up to $100 million. We will pay Virtu a commission of approximately 1% of the gross sales price of the shares of our common stock sold. The Company may also sell some or all of the shares of our common stock to Virtu as principal for its own account at a price agreed upon at the time of sale. As of March 12, 2024, the Company has issued approximately 1.8 million shares of common stock for gross proceeds of approximately $3.2 million under the Virtu Equity Distribution Agreement.
Current wording
On April 11, 2022, the Company entered into the Virtu Equity Distribution Agreement with Virtu, to sell from time to time shares of the Company’s common stock having an aggregate offering price of up to $100 million. We will pay Virtu a commission of approximately 1% of the gross sales price of the shares of our common stock sold. The Company may also sell some or all of the shares of our common stock to Virtu as principal for its own account at a price agreed upon at the time of sale. As of March 19, 2025, the Company has issued approximately 813,000 shares of common stock for gross proceeds of approximately $10.9 million under the Virtu Equity Distribution Agreement.
Previous wording
Net Cash Flows Provided by (Used in) Operating Activities. Net cash flows provided by operating activities, pursuant to our consolidated statements of cash flows, which includes changes in balance sheet items, were $14.4 million and $39.2 million for the years ended December 31, 2023 and 2022, respectively. Cash flows provided by operations were impacted by changes in hotel operations, our hotel dispositions in 2022 and 2023, our hotel acquisition in 2022 as well as the timing of collecting receivables from hotel guests, paying vendors, settling with derivative counterparties, settling with related parties and settling with hotel managers.
Current wording
Net Cash Flows Provided by (Used in) Operating Activities. Net cash flows provided by (used in) operating activities, pursuant to our consolidated statements of cash flows, which includes changes in balance sheet items, were $(23.6) million and $14.4 million for the years ended December 31, 2024 and 2023, respectively. Cash flows provided by (used in) operations were impacted by changes in hotel operations, our hotel dispositions and derecognized assets, as well as the timing of collecting receivables from hotel guests, paying vendors, settling with derivative counterparties, settling with related parties and settling with hotel managers.
Previous wording
For the year ended December 31, 2022, net cash flows used in investing activities were $70.3 million. Cash outflows primarily consisted of $103.8 million for capital improvements made to various hotel properties, $9.1 million investment in unconsolidated entities. Cash outflows were partially offset by cash inflows of $35.0 million from proceeds received from the sale of Sheraton Ann Arbor and six WorldQuest condominium units, $1.6 million of proceeds from property insurance and $4.0 million of proceeds from notes receivable.
Current wording
Net Cash Flows Provided by (Used in) Investing Activities. For the year ended December 31, 2024, net cash flows provided by investing activities were $191.3 million. Cash inflows consisted of $300.0 million of net proceeds from the disposition of assets and hotel properties, repayments of a note receivable of $2.5 million and $1.5 million from property insurance proceeds, partially offset by cash outflows of $108.0 million for capital improvements made to various hotel properties and $4.5 million from the issuance of a note receivable.
Previous wording
Net Cash Flows Provided by (Used in) Investing Activities. For the year ended December 31, 2023, net cash flows used in investing activities were $89.8 million. Cash outflows consisted of $137.4 million for capital improvements made to various hotel properties, $599,000 of payments for franchise fees and $6.9 million from the issuance of a note receivable, partially offset by cash inflows of $18.2 million related to restricted cash received from initial consolidation of VIE, $29.2 million of net proceeds from the disposition of assets and hotel properties, $2.5 million from property insurance proceeds and $5.3 million of proceeds from the payment of a note receivable.
Current wording
For the year ended December 31, 2023, net cash flows used in investing activities were $89.8 million. Cash outflows consisted of $137.4 million for capital improvements made to various hotel properties, $599,000 of payments for franchise fees and $6.9 million from the issuance of a note receivable, partially offset by cash inflows of $18.2 million related to restricted cash received from initial consolidation of VIE, $29.2 million of net proceeds from the disposition of assets and hotel properties, $2.5 million from property insurance proceeds and $5.3 million of proceeds from the payment of a note receivable.
Showing the first 40 of 50 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Our loans currently in cash traps may remain subject to cash trap provisions for a substantial period of time, which could limit our flexibility and adversely affect our financial condition or our qualification as a REIT.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
On March 6, 2024, the Company completed the sale of the Residence Inn in Salt Lake City, Utah for approximately $19.2 million. As of December 31, 2023, the carrying value of the building and FF&E was approximately $11.9 million at December 31, 2023. The Company repaid approximately $19 million of principal on its mortgage loan partially secured by the hotel property.
Previous report — wording carried elsewhere
(2)Referred to as “Hotel Acquisition”
Previous report — wording carried elsewhere
Meritage Resort and Spa and the Grand Reserve at the Meritage in Napa, California and $804,000 in 2022, which consisted of our share of loss of $668,000 in OpenKey and $136,000 in the Meritage investment.