ASHFORD HOSPITALITY TRUST INC
For the period ended Jun 30, 2025. Filed Aug 14, 2025.
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.
Jun 30, 2025 · Filed Aug 14, 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-Q
Period ended 2025-03-31; filed 2025-05-14.
0001232582-25-000093
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0001232582-25-000125
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 188 previous paragraphs and 215 current paragraphs.
130 unchanged; 48 reworded; 29 added; 6 removed; 4 previous and 8 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 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 (29)
Current report
On April 14, 2025, the Residence Inn Orlando sold a parcel of land for $7.2 million, net of selling expenses, resulting in a recognized gain of $6.7 million. This gain is reported within “gain (loss) on consolidation of VIE and disposition of assets and hotel properties” in the Company’s consolidated statements of operations.
Current report
On May 23, 2025, the Company signed a definitive agreement to sell the 242-room Hilton Houston NASA Clear Lake located in Houston, Texas for $27.0 million.
Current report
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing the full effects of the legislation on our effective tax rate and cash tax position, but the changes resulting from the tax provisions in the OBBBA are not expected to have a material impact on our consolidated financial statements.
Current report
On July 30, 2025, the Company extended its Highland mortgage loan secured by 18 hotels with an original maturity date of April 2025. Terms of the amendment included a $10.0 million principal paydown, extending the maturity date to January 9, 2026. The loan is subject to a six-month extension option to July 9, 2026, upon satisfaction of certain conditions, and bears interest at a floating rate of SOFR + 4.13%.
Current report
On August 14, 2025, Ashford Trust OP executed the Promissory Note with Ashford LLC allowing Ashford Trust OP to draw up to $20 million in cash through August 15, 2026 to fund Permitted Costs (as defined in the Promissory Note). Funds advanced under the Promissory Note bear interest at an annual rate of 10.0% which may be paid in cash or paid in-kind at Ashford OP’s discretion. The maturity date of the Promissory Note is August 15, 2026, at which time all principal drawn upon and outstanding interest are due and payable. As collateral to secure the repayment of any amounts advanced by Ashford LLC under the Promissory Note, the Company pledged to Ashford LLC the Company’s equity in Ashford Trust OP subject to Ashford LLC’s filing of a financing statement in the appropriate jurisdiction.
Current report
Revenue. Rooms revenue from our hotel properties decreased $16.4 million, or 6.7%, to $227.2 million in the 2025 quarter compared to the 2024 quarter. This decrease in the 2025 quarter is attributable to a decrease of $14.2 million from our Hotel Dispositions, and $4.8 million from our comparable hotel properties. These decreases were partially offset by higher rooms revenue of $2.3 million from the Le Méridien that opened in August 2024 (the “Le Méridien Opening”) and $190,000 from the Stirling hotel properties. Our comparable hotel properties experienced an decrease of 2.6% in room rates and a 36 basis point increase in occupancy.
Current report
Food and beverage revenue increased $76,000, or 0.1%, to $55.3 million in the 2025 quarter compared to the 2024 quarter. This increase in the 2025 quarter is primarily attributable to increased revenue of $2.2 million and $418,000 at our comparable hotel properties and the Le Méridien Opening, respectively. These increases were partially offset by a decrease of food and beverage sales of $2.5 million from our Hotel Dispositions.
Current report
Other hotel revenue, which consists mainly of internet access, parking, and spa revenue, increased $2.1 million, or 12.2%, to $19.0 million in the 2025 quarter compared to the 2024 quarter. This increase is primarily attributable to an increase of $3.5 million at our comparable hotel properties. The increase was partially offset by a decrease of $1.6 million from our Hotel Dispositions. Other non-hotel revenue decreased $227,000, or 33.2%, to $456,000 in the 2025 quarter as compared to the 2024 quarter.
Current report
Indirect expenses and management fees decreased $3.8 million in the 2025 quarter as compared to the 2024 quarter, comprising a decrease of $6.1 million from our Hotel Dispositions. The decrease in the 2025 quarter was partially offset by an increase of $1.0 million from our comparable hotel properties and $1.0 million from the Le Méridien Opening.
Current report
Property Taxes, Insurance and Other. Property taxes, insurance and other expense decreased $612,000, or 3.6%, to $16.2 million during the 2025 quarter compared to the 2024 quarter. The decrease in the 2025 quarter was primarily due to a decrease of $1.2 million from our Hotel Dispositions. The decrease in the 2025 quarter was partially offset by increases of $461,000 from the Le Méridien Opening and $151,000 from our comparable hotel properties.
Current report
Depreciation and Amortization. Depreciation and amortization decreased $1.9 million, or 5.1%, to $35.3 million during the 2025 quarter compared to the 2024 quarter. The decrease in the 2025 quarter was primarily due to decreases of $1.3 million from our Hotel Dispositions, $1.6 million from our comparable hotel properties and $143,000 from our Stirling properties. The decrease in the 2025 quarter was partially offset by an increase of $1.1 million from the Le Méridien Opening.
Current report
Impairment Charges. Impairment charges were $1.4 million in the 2025 quarter. We recorded an impairment charge of $1.4 million at the Residence Inn Evansville as a result of reduced estimated cash flows resulting from the sale of the property in August 2025.
Current report
Corporate, General and Administrative. Corporate, general and administrative expense decreased $1.7 million from $7.2 million in the 2024 quarter to $5.5 million in the 2025 quarter. The decrease was primarily attributable to decreases in legal and professional costs of $1.9 million, miscellaneous expenses of $306,000 and public company costs of $135,000. The decrease in the 2025 quarter was partially offset by an increase in reimbursements of Ashford Securities’ operating costs of $593,000.
Current report
Gain (Loss) on Derecognition of Assets. Gain on derecognition of assets decreased $1.8 million from $11.7 million in the 2024 quarter to $9.9 million in the 2025 quarter. The gain primarily represents the increase of the contract asset on our consolidated balance sheets. We record a contract asset associated with the accrued interest expense from the default of the KEYS A and KEYS B loans as we expect to be released from this obligation upon final resolution with the lender. The gain in the 2025 quarter primarily relates to accrued interest on the KEYS A and B properties in receivership and the transfer of the SpringHill Suites BWI Airport to a third-party purchaser in June of 2025. The gain in the 2024 quarter primarily relates to accrued interest on the KEYS A and B properties in receivership. See note 7 to our consolidated financial statements.
Current report
Other Income (Expense). Other income consisted of miscellaneous income of $0 in the 2025 quarter and $37,000 in the 2024 quarter.
Current report
Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs increased $2.3 million, or 3.3%, to $70.7 million during the 2025 quarter compared to the 2024 quarter. The increase is primarily due to $6.2 million from higher default interest and late charges recorded on a mortgage loan in default. Other increases include higher interest expense and amortization of discounts and loan costs of $2.9 million at our comparable hotel properties, primarily driven by refinancing activity and loan modifications and a $1.1 million increase from the Le Méridien Opening. These increases were partially offset by a $3.9 million decrease due to paying off the Oaktree loan in February 2025 and a $4.0 million decrease from our Hotel Dispositions. The average SOFR rates for the 2025 quarter and the 2024 quarter were 4.33% and 5.33%, respectively.
Current report
Interest Expense Associated with Hotels in Receivership. Interest expense associated with hotels in receivership decreased $2.0 million, from $11.9 million in 2024 quarter to $9.9 million in the 2025 quarter. The decrease is due is primarily due to lower interest rates in the 2025 quarter and the transfer of the SpringHill Suites BWI Airport to a third-party purchaser in June of 2025. See note 7 to our consolidated financial statements.
Current report
Gain (Loss) on Extinguishment of Debt. Gain on extinguishment of debt in the 2025 quarter was $2,000.
Current report
In the 2024 quarter, we recognized a realized gain of $7.4 million related to payments from counterparties on interest rate caps. These gains were partially offset by unrealized losses of $6.0 million primarily associated with interest rate caps.
Current report
Income Tax (Expense) Benefit. Income tax (expense) benefit changed $3.3 million, from an expense of $3.5 million in the 2024 quarter to an expense of $119,000 in the 2025 quarter. This decrease was primarily due to a decrease in current state taxes in the 2025 quarter compared to the 2024 quarter.
Current report
Comparison of the Six Months Ended June 30, 2025 and 2024
Current report
Net Income (Loss) Attributable to the Company. Net income (loss) attributable to the Company changed $172.2 million from net income of $121.8 million for the six months ended June 30, 2024 (the “2024 period”) to a net loss of $50.4 million for the six months ended June 30, 2025 (the “2025 period”) as a result of the factors discussed below.
Current report
Impairment Charges. Impairment charges were $1.4 million in the 2025 period. We recorded an impairment charge of $1.4 million at the Residence Inn Evansville as a result of reduced estimated cash flows resulting from the sale of the property in August 2025.
Current report
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 decreased $55.8 million, from $94.4 million in the 2024 period to $38.6 million in the 2025 period. The gain in the 2025 period was primarily related to the sale of the Boston Courtyard Downtown in January 2025 and the sale of a parcel of land previously owned by our Residence Inn Orlando property in April 2025. The gain in the 2024 period was primarily related to the sale of seven of our hotel properties in the 2024 period.
Current report
Gain (Loss) on Derecognition of Assets. Gain on derecognition of assets decreased $125.7 million, from $145.6 million in the 2024 period to $19.9 million in the 2025 period. The gain primarily represents the increase of the contract asset on our consolidated balance sheets. We record a contract asset associated with the accrued interest expense from the default of the KEYS A and KEYS B loans as we expect to be released from this obligation upon final resolution with the lender. The gain in the 2025 period primarily relates to accrued interest on the KEYS A and B properties in receivership and the transfer of the SpringHill Suites BWI Airport to a third-party purchaser in June of 2025. In the 2024 period, the gain primarily related to a gain of $133.9 million from the initial derecognition of assets of the KEYS A and B properties. See note 7 to our consolidated financial statements.
Current report
Realized and Unrealized Gain (Loss) on Derivatives. Realized and unrealized gain (loss) on derivatives changed by $9.7 million from a $6.1 million gain in the 2024 period to a $3.6 million loss in the 2025 period. In the 2025 period, we recognized $4.4 million of net unrealized losses on our derivatives which were primarily attributable to interest rate caps. These unrealized losses were partially offset by net realized gains on interest rate caps of $795,000.
Current report
Income Tax (Expense) Benefit. Income tax expense decreased $3.3 million, from $3.8 million in the 2024 period to $436,000 in the 2025 period. This decrease was primarily due to a decrease in current state taxes in the 2025 period compared to the 2024 period.
Current report
On July 30, 2025, the Company extended its Highland mortgage loan secured by 18 hotels with an original maturity date of April 2025. Terms of the amendment included a $10.0 million principal paydown, extending the maturity date to January 9, 2026. The loan is subject to a six-month extension option to July 9, 2026, upon satisfaction of certain conditions, and bears interest at a floating rate of SOFR + 4.13%.
Current report
On August 14, 2025, Ashford Trust OP executed the Promissory Note with Ashford LLC allowing Ashford Trust OP to draw up to $20 million in cash through August 15, 2026 to fund Permitted Costs (as defined in the Promissory Note). Funds advanced under the Promissory Note bear interest at an annual rate of 10.0% which may be paid in cash or paid in-kind at Ashford OP’s discretion. The maturity date of the Promissory Note is August 15, 2026, at which time all principal drawn upon and outstanding interest are due and payable. As collateral to secure the repayment of any amounts advanced by Ashford LLC under the Promissory Note, the Company pledged to Ashford LLC the Company’s equity in Ashford Trust OP subject to Ashford LLC’s filing of a financing statement in the appropriate jurisdiction.
Removed paragraphs (6)
Previous 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.
Previous 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 Redeemable Preferred Stock and 4,800,000 shares of the Series M Redeemable Preferred Stock.
Previous report
On January 22, 2025, the Company executed Amendment No. 13 to Seventh Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement Amendment”) of Ashford Trust OP in connection with the Company’s public offering of its Series L Redeemable Preferred Stock and Series M Redeemable Preferred Stock. The Partnership Agreement Amendment designated and authorized the issuance to Ashford OP Limited Partner LLC by Ashford Trust OP of 11,200,000 Series L Redeemable Preferred Units and 4,800,000 Series M Redeemable Preferred Units of the Ashford Trust OP, having substantially the same designations, preferences and other rights as the economic rights of the Series L Redeemable Preferred Stock and the Series M Redeemable Preferred Stock, respectively.
Previous 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.
Previous report
Gain (Loss) on Derecognition of Assets. Gain on derecognition of assets decreased $123.9 million, from $133.9 million in the 2024 quarter to $10.0 million in the 2025 quarter as no new hotels were placed into receivership in the 2025 quarter. The remaining gain relates to interest on the KEYS A and B properties. In the 2024 quarter, the gain included the initial gain of $133.9 million related to the derecognition of assets related to the KEYS A and B properties.
Previous report
Income Tax (Expense) Benefit. Income tax expense increased $14,000, from $303,000 in the 2024 quarter to $317,000 in the 2025 quarter.
Reworded paragraphs (48)
Previous wording
•actions by the lenders to foreclose on our assets which are pledged as collateral;
Current wording
•actions by the lenders to foreclose on our assets that are pledged as collateral;
Previous wording
•legislative and regulatory changes, including changes to the Internal Revenue Code of 1986, as amended (the “Code”), and related rules, regulations and interpretations governing the taxation of real estate investment trusts (“REITs”);
Current wording
•legislative and regulatory changes, including changes to the Internal Revenue Code of 1986, as amended (the “Code”), and related rules, regulations and interpretations governing the taxation of real estate investment trusts (“REITs”), including impacts from the One Big Beautiful Bill Act;
Previous wording
We do not operate any of our hotel properties directly; instead we employ hotel management companies to operate them for us under management contracts. As of March 31, 2025, Remington Hospitality, a subsidiary of Ashford Inc., managed 50 of our 68 hotel properties. Third-party management companies managed the remaining hotel properties.
Current wording
We do not operate any of our hotel properties directly; instead we employ hotel management companies to operate them for us under management contracts. As of June 30, 2025, Remington Lodging & Hospitality, LLC (“Remington Hospitality”), a subsidiary of Ashford Inc., manages 50 of our 68 operating hotel properties and three of the four Stirling OP hotel properties. Third-party management companies manage the remaining hotel properties.
Previous wording
Mr. Monty J. Bennett, chairman and chief executive officer of Ashford Inc. and, together with his father Mr. Archie Bennett, Jr. (the “Bennetts”), as of March 31, 2025, hold a controlling interest in Ashford Inc. The Bennetts owned approximately 809,937 shares of Ashford Inc. common stock, which represented an approximate 49.3% ownership interest in Ashford Inc., and owned 18,758,600 shares of Ashford Inc. Series D Convertible Preferred Stock, which, along with all unpaid accrued and accumulated dividends thereon, was convertible (at a conversion price of $117.50 per share) into an additional approximate 4,402,390 shares of Ashford Inc. common stock, which if converted as of March 31, 2025, would have increased the Bennetts’ ownership interest in Ashford Inc. to 86.2%. The 18,758,600 shares of Series D Convertible Preferred Stock owned by Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. include 360,000 shares owned by trusts. Additionally, Mr. Monty J. Bennett acquired voting rights over approximately 590,000 common shares, effective March 25, 2025.
Current wording
Mr. Monty J. Bennett, chairman and chief executive officer of Ashford Inc. and, together with his father, Mr. Archie Bennett, Jr. (the “Bennetts”), as of June 30, 2025, hold a controlling interest in Ashford Inc. The Bennetts owned approximately 809,937 shares of Ashford Inc. common stock, which represented an approximate 51.5% ownership interest in Ashford Inc., and owned 18,758,600 shares of Ashford Inc. Series D Convertible Preferred Stock, which, along with all unpaid accrued and accumulated dividends thereon, was convertible (at a conversion price of $117.50 per share) into an additional approximate 4,482,564 shares of Ashford Inc. common stock, which, if converted as of June 30, 2025, would have increased the Bennetts’ ownership interest in Ashford Inc. to 87.4%. The 18,758,600 shares of Series D Convertible Preferred Stock owned by Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. include 360,000 shares owned by trusts. Additionally, Mr. Monty J. Bennett acquired the right to direct votes, effective March 25, 2025, and as of June 30, 2025, those rights represented approximately 565,000 common shares.
Previous wording
On May 12, 2025, the Company and Ashford LLC entered into the Fourth Amendment. The Fourth Amendment further extends the updates made by the Third Amendment to 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 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 March 31, 2026 to May 31, 2026.
Current wording
On May 12, 2025, the Company and Ashford LLC entered into Amendment No. 4 to the Advisory Agreement (the “Fourth Amendment”). The Fourth Amendment further extends the updates made by the Third Amendment to 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 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 March 31, 2026 to May 31, 2026.
Previous wording
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 wording
On May 31, 2025, the Company signed a definitive agreement to sell the 78-room Residence Inn Evansville located in Evansville, Indiana. The sale was completed August 11, 2025 for $6.0 million, subject to customary pro rations and adjustments.
Previous wording
On March 10, 2025, the Company and Ashford LLC entered into the Third Amendment. The Third Amendment further extends the updates made by Amendments No. 1 and No. 2 to the Advisory Agreement to 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 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 wording
On August 14, 2025, the Company and Ashford LLC entered into the Fifth Amendment. The Fifth Amendment extends the outside date for which any sale or disposition of any of the Company’s Highland Portfolio and JPM8 hotel properties securing the associated mortgage loans following an event of default (as 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, 2026 to August 15, 2026.
Previous wording
RevPAR changes that are primarily driven by changes in occupancy have different implications for overall revenues and profitability than changes that are driven primarily by changes in ADR. For example, an increase in occupancy at a hotel would lead to additional variable operating costs (including housekeeping services, utilities and room supplies) and could also result in increased other operating department revenue and expense. Changes in ADR typically have a greater impact on operating margins and profitability as they do not have a substantial effect on variable operating costs.
Current wording
RevPAR changes that are primarily driven by changes in occupancy have different implications for overall revenues and profitability than changes that are driven primarily by changes in ADR. For example, an increase in occupancy at a hotel would lead to additional variable operating costs (including housekeeping services, utilities and room supplies) and could also result in increases in other operating department revenues and expenses. Changes in ADR typically have a greater impact on operating margins and profitability as they do not have a substantial effect on variable operating costs.
Previous wording
The following table summarizes the changes in key line items from our consolidated statements of operations for the three months ended March 31, 2025 and 2024 (in thousands):
Current wording
The following table summarizes the changes in key line items from our consolidated statements of operations for the three and six months ended June 30, 2025 and 2024 (in thousands):
Previous wording
All hotel properties held during the three months ended March 31, 2025 and 2024 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 three months ended March 31, 2025 and 2024. 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 three and six months ended June 30, 2025 and 2024 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 three and six months ended June 30, 2025 and 2024. 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
The following table illustrates the key performance indicators of the 67 comparable hotel properties andfour consolidated Stirling OP properties that were included in our results of operations for the full three months ended March 31, 2025 and 2024, respectively:
Current wording
The following table illustrates the key performance indicators of the 67 comparable hotel properties andfour consolidated Stirling OP properties that were included in our results of operations for the full three and six months ended June 30, 2025 and 2024, respectively:
Previous wording
Net Income (Loss) Attributable to the Company. Net loss attributable to the Company changed $91.5 million from income of $71.6 million for the three months ended March 31, 2024 (the “2024 quarter”) to a loss of $20.0 million for the three months ended March 31, 2025 (the “2025 quarter”) as a result of the factors discussed below.
Current wording
Net Income (Loss) Attributable to the Company. Net income (loss) attributable to the Company changed $80.7 million, from net income of $50.3 million for the three months ended June 30, 2024 (the “2024 quarter”) to a net loss of $30.4 million for the three months ended June 30, 2025 (the “2025 quarter”) as a result of the factors discussed below.
Previous 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 $24.9 million, from $7.0 million in the 2024 quarter to $31.9 million in the 2025 quarter. The gain in the 2025 quarter was primarily related to the sale of the Boston Courtyard Downtown in January 2025. The gain in the 2024 quarter was primarily related to the sale of the Residence Inn in Salt Lake City, Utah.
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 decreased $80.8 million from $87.4 million in the 2024 quarter to $6.7 million in the 2025 quarter. The gain in the 2025 quarter was primarily related to a gain of $6.7 million on the sale of a parcel of land previously owned by our Residence Inn Orlando property in April 2025. The gain in the 2024 quarter primarily related to the sale of six of our hotel properties in the 2024 quarter.
Previous wording
Interest Income. Interest income was $1.2 million and $2.0 million in the 2025 quarter and the 2024 quarter, respectively. The decrease in interest income in the 2025 quarter was primarily attributable to lower excess cash balances in the 2025 quarter compared to the 2024 quarter.
Current wording
Interest Income. Interest income was $1.3 million and $1.7 million for the 2025 quarter and the 2024 quarter, respectively. The decrease in interest income in the 2025 quarter was primarily attributable to lower excess cash balances in the 2025 quarter compared to the 2024 quarter.
Previous wording
Realized and Unrealized Gain (Loss) on Derivatives. Realized and unrealized gain (loss) on derivatives changed $7.5 million from a $4.8 million gain in the 2024 quarter to a $2.7 million loss in the 2025 quarter. In the 2025 quarter, we recorded unrealized and realized losses of $2.3 million and $369,000, respectively, associated with interest rate caps and we recorded an unrealized loss of $901,000 from the revaluation of the embedded debt derivative in the Oaktree Agreement. These losses were partially offset by a realized gain of $692,000 related to payments from counterparties on interest rate caps and an unrealized gain of $184,000 associated with interest rate floors.
Current wording
Realized and Unrealized Gain (Loss) on Derivatives. Realized and unrealized gain (loss) on derivatives changed $2.2 million from a $1.4 million gain in the 2024 quarter to an $836,000 loss in the 2025 quarter. In the 2025 quarter, we recognized net unrealized losses of $1.3 million on our derivatives. These unrealized losses were partially offset by net realized gains of $473,000 related to payments from counterparties on interest rate caps.
Previous wording
(Income) Loss from Consolidated Entities Attributable to Noncontrolling Interests. Our noncontrolling interest partners in consolidated entities were allocated a loss of $1.8 million and $9,000 in the 2025 quarter and the 2024 quarter, respectively. At March 31, 2025, noncontrolling interests in consolidated entities represented an ownership interest of 70.7% in 815 Commerce MM and 1.30% in Stirling OP. See note 2 to our consolidated financial statements.
Current wording
(Income) Loss from Consolidated Entities Attributable to Noncontrolling Interests. Our noncontrolling interest partners in consolidated entities were allocated a loss of $1.4 million in the 2025 quarter and $8,000 in the 2024 quarter. At June 30, 2025, noncontrolling interests in consolidated entities represented an ownership interest of 70.7% in 815 Commerce MM and 1.30% in Stirling OP. See notes 1 and 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 a net loss of $451,000 in the 2025 quarter and net income of $853,000 in the 2024 quarter. Redeemable noncontrolling interests represented ownership interests of 1.60% and 1.25% in the operating partnership as of March 31, 2025 and 2024, respectively.
Current wording
Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in operating partnership were allocated a net loss of $631,000 in the 2025 quarter and net income of $565,000 in the 2024 quarter. Redeemable noncontrolling interests represented ownership interests of 1.56% and 1.26% in the operating partnership at June 30, 2025 and 2024, respectively.
Previous wording
Revenue. Rooms revenue from our hotel properties decreased $22.9 million, or 10.0%, to $206.3 million in the 2025 quarter compared to the 2024 quarter. This decrease in the 2025 quarter is primarily attributable to decreases in rooms revenue of $16.0 million from our Hotel Dispositions and $13.7 million from the KEYS A and B properties that went into receivership in the 2024 quarter. These decreases were partially offset by $2.1 million in rooms revenue from the Le Meridien that opened in August 2024 (the “Le Meridien Opening”) and higher rooms revenue of $4.2 million and $495,000 at our comparable hotel properties and the Stirling properties, respectively, in the 2025 quarter. Our comparable hotel properties experienced an increase of 2.4% in room rates and a decrease of 59 basis points in occupancy.
Current wording
Revenue. Rooms revenue from our hotel properties decreased $39.3 million, or 8.3%, to $433.5 million in the 2025 period compared to the 2024 period. This decrease in the 2025 period is primarily attributable to decreases in rooms revenue of $30.2 million from our Hotel Dispositions, $13.7 million from the KEYS A and B properties that went into receivership in the 2024 period and lower rooms revenue of $533,000 at our comparable hotel properties. These decreases were partially offset by $4.4 million in rooms revenue from the Le Méridien Opening and higher rooms revenue of $683,000 at the Stirling properties in the 2025 period. Our comparable hotel properties experienced a decrease of 0.3% in room rates and a increase of 50 basis points in occupancy.
Previous wording
Food and beverage revenue decreased $2.8 million, or 4.9%, to $54.5 million in the 2025 quarter compared to the 2024 quarter. This decrease in the 2025 quarter is primarily attributable to decreases in food and beverage revenue of $3.3 million from our Hotel Dispositions and $404,000 from the KEYS A and B properties. These decreases were partially offset by higher sales of food and beverage of $483,000 at our comparable hotel properties and $401,000 from the Le Meridien Opening.
Current wording
Food and beverage revenue decreased $2.8 million, or 2.4%, to $109.9 million in the 2025 period compared to the 2024 period. This decrease in the 2025 period is primarily attributable to decreases in food and beverage revenue of $5.8 million from our Hotel Dispositions and $404,000 from the KEYS A and B properties. These decreases were partially offset by higher food and beverage revenue of $2.7 million at our comparable hotel properties and $819,000 from the Le Méridien Opening.
Previous wording
Other hotel revenue, which consists mainly of internet access, parking, and spa revenue, decreased $472,000, or 2.8%, to $16.2 million in the 2025 quarter compared to the 2024 quarter. This decrease in the 2025 quarter is primarily attributable to decreases in other hotel revenue of $2.3 million from our Hotel Dispositions and $488,000 from the KEYS A and B properties. These decreases were partially offset by higher other hotel revenue of $2.1 million from our comparable hotel properties and $143,000 from the Le Meridien Opening. Other revenue decreased $330,000, or 51.6%, to $309,000 in the 2025 quarter compared to the 2024 quarter.
Current wording
Other hotel revenue, which consists mainly of internet access, parking, and spa revenue, increased $1.6 million, or 4.8%, to $35.2 million in the 2025 period compared to the 2024 period. This increase in the 2025 period is primarily attributable to increases in other hotel revenue of $5.6 million from our comparable hotel properties and $314,000 from the Le Méridien Opening. These increases were partially offset by lower other hotel revenue of $3.9 million from our Hotel Dispositions and $488,000 from the KEYS A and B properties. Other revenue decreased $557,000, or 42.1%, to $765,000 in the 2025 period compared to the 2024 period.
Previous wording
Hotel Operating Expenses. Hotel operating expenses decreased $22.4 million, or 10.6%, to $188.5 million in the 2025 quarter compared to the 2024 quarter. 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 $9.4 million in the 2025 quarter compared to the 2024 quarter, comprised of a decrease of $7.6 million from our Hotel Dispositions and $3.9 million from the KEYS A and B properties. The decrease in direct expenses was partially offset by an increase in the 2025 quarter of $1.2 million from our comparable hotel properties and $990,000 from the Le Meridien Opening. Direct expenses were 30.9% of total hotel revenue for the 2025 quarter and 31.4% for the 2024 quarter.
Current wording
Hotel Operating Expenses. Hotel operating expenses decreased $31.0 million, or 7.4%, to $387.3 million in the 2025 period compared to the 2024 period. 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 $14.2 million in the 2025 period compared to the 2024 period, comprising a decrease of $13.4 million from our Hotel Dispositions and $3.9 million from the KEYS A and B properties. The decrease in direct expenses was partially offset by an increase in the 2025 period of $1.2 million and $1.9 million from our comparable hotel properties and the Le Méridien Opening, respectively. Direct expenses were 30.3% of total hotel revenue for the 2025 period and 30.6% for the 2024 period.
Previous wording
Indirect expenses and management fees decreased $13.0 million in the 2025 quarter compared to the 2024 quarter, comprised of a decrease of $9.8 million from our Hotel Dispositions and $6.3 million from the KEYS A and B properties. These decreases in the 2025 quarter were partially offset by an increase of $1.8 million and $150,000 in the 2025 quarter from our comparable hotel properties and the Stirling hotel properties, respectively, and $1.1 million from the Le Meridien Opening.
Current wording
Indirect expenses and management fees decreased $16.8 million in the 2025 period compared to the 2024 period, comprising a decrease of $15.8 million from our Hotel Dispositions and $6.3 million from the KEYS A and B properties. These decreases in the 2025 period were partially offset by an increase of $2.9 million from our comparable hotel properties and $2.0 million and $417,000 in the 2025 period from the Le Méridien Opening and the Stirling hotel properties, respectively.
Previous wording
Property Taxes, Insurance and Other. Property taxes, insurance and other expense decreased $1.3 million or 7.6%, to $16.0 million in the 2025 quarter compared to the 2024 quarter. The decrease in the 2025 quarter was primarily due to a decrease of $2.1 million from our Hotel Dispositions and $1.0 million from the KEYS A and B properties. The decrease in the 2025 quarter was partially offset by an increase of $1.5 million from our comparable hotel properties and $307,000 from the Le Meridien Opening.
Current wording
Property Taxes, Insurance and Other. Property taxes, insurance and other expense decreased $2.0 million or 5.8%, to $32.3 million in the 2025 period compared to the 2024 period. The decrease in the 2025 period was primarily due to a decrease of $3.3 million from our Hotel Dispositions and $1.0 million from the KEYS A and B properties. The decrease in the 2025 period was partially offset by an increase of $1.6 million from our comparable hotel properties and $768,000 from the Le Méridien Opening.
Previous wording
Depreciation and Amortization. Depreciation and amortization decreased $3.2 million or 7.9%, to $37.3 million in the 2025 quarter compared to the 2024 quarter. The decrease in the 2025 quarter was primarily due to lower depreciation of $2.4 million from our Hotel Dispositions and $1.8 million from the KEYS A and B properties. The decrease in the 2025 quarter was partially offset by $1.1 million from the Le Meridien Opening.
Current wording
Depreciation and Amortization. Depreciation and amortization decreased $5.1 million or 6.6%, to $72.6 million in the 2025 period compared to the 2024 period. The decrease in the 2025 period was primarily due to lower depreciation of $3.7 million from our Hotel Dispositions, $1.8 million from our comparable hotels and $1.8 million from the KEYS A and B properties. The decrease in the 2025 period was partially offset by $2.2 million from the Le Méridien Opening.
Previous wording
Advisory Services Fee. Advisory services fee decreased $3.7 million, or 24.1%, to $11.5 million in the 2025 quarter compared to the 2024 quarter. 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 the 2025 quarter, the advisory services fee was primarily comprised of a base advisory fee of $8.1 million, reimbursable expenses of $3.2 million, an incentive advisory fee of $93,000 and fees totaling $268,000 associated with Stirling OP’s advisory agreement. In the 2024 quarter, the advisory services fee was comprised of a base advisory fee of $8.0 million, equity-based compensation of $536,000 awarded to the officers and employees of Ashford Inc., reimbursable expenses of $6.4 million and fees totaling $304,000 associated with Stirling OP’s advisory agreement.
Current wording
Advisory Services Fee. The advisory services fee decreased $3.1 million, or 11.7%, to $23.6 million in the 2025 period compared to the 2024 period. 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 the 2025 period, the advisory services fee primarily comprised a base advisory fee of $16.3 million, reimbursable expenses of $6.5 million and fees totaling $574,000 associated with Stirling OP’s advisory agreement. In the 2024 period, the advisory services fee comprised a base advisory fee of $15.9 million, equity-based compensation of $1.0 million awarded to the officers and employees of Ashford Inc., reimbursable expenses of $9.1 million and fees totaling $542,000 associated with Stirling OP’s advisory agreement.
Previous wording
Corporate, General and Administrative. Corporate, general and administrative expense decreased $3.9 million, or 47.6%, to $4.3 million in the 2025 quarter compared to the 2024 quarter. The decrease was primarily attributable to lower reimbursed operating expenses of Ashford Securities of $3.3 million and lower miscellaneous expenses of $697,000.
Current wording
Corporate, General and Administrative. Corporate, general and administrative expenses decreased $5.6 million, or 36.3%, to $9.8 million in the 2025 period compared to the 2024 period. The decrease was primarily attributable to a decrease in reimbursements of Ashford Securities’ operating expenses of $2.7 million and decreases in legal and professional expenses and miscellaneous expenses of $1.8 million and $1.0 million, respectively.
Previous wording
Equity in Earnings (Loss) of Unconsolidated Entities. Equity in loss of unconsolidated entities was $431,000 in the 2025 quarter and $534,000 in the 2024 quarter. Equity in loss primarily results from our investment in an entity that owns the Meritage Resort and Spa and the Grand Reserve at the Meritage in Napa, California.
Current wording
Equity in Earnings (Loss) of Unconsolidated Entities. Equity in loss of unconsolidated entities was $387,000 in the 2025 period and $695,000 in the 2024 period. Equity in loss primarily results from our investment in an entity that owns the Meritage Resort and Spa and the Grand Reserve at the Meritage in Napa, California.
Previous wording
Other Income (Expense). In the 2025 quarter and the 2024 quarter we recorded miscellaneous income of $0 and $36,000, respectively.
Current wording
Other Income (Expense). In the 2025 period and the 2024 period, we recorded miscellaneous income of $0 and $72,000, respectively.
Previous wording
Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs decreased $7.2 million, or 9.7%, to $66.8 million in the 2025 quarter compared to the 2024 quarter. The decrease was primarily due to lower cash interest expense and amortization of loan costs of $8.7 million on the Oaktree loan as a result of the pay off of the Oaktree loan in February 2025. Other decreases in the 2025 quarter were from a $6.2 million decrease from our Hotel Dispositions and a $322,000 decrease in interest expense at our comparable hotels, primarily due to lower interest rates on our variable rate debt. These decreases were partially offset by higher default interest and late charges recorded on mortgage loans in default of $6.7 million and $1.3 million from the Le Meridien. The average SOFR rates in the 2025 quarter and the 2024 quarter were 4.36% and 5.33%, respectively.
Current wording
Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs decreased $4.9 million, or 3.4%, to $137.5 million in the 2025 period compared to the 2024 period. The decrease was primarily due to lower cash interest expense and amortization of loan costs of $13.0 million on the Oaktree loan as a result of the pay-off of the Oaktree loan in February 2025 and a $10.1 million decrease from our Hotel Dispositions. These decreases were partially offset by higher default interest and late charges recorded on mortgage loans in default of $12.9 million, higher interest expense and amortization of discounts and loan costs at our comparable hotels of $2.9 million primarily driven by refinancing activity and loan modifications, and higher interest expense of $2.4 million from the Le Méridien Opening. The average SOFR rates in the 2025 period and the 2024 period were 4.34% and 5.33%, respectively.
Previous wording
Interest Expense Associated with Hotels in Receivership. Interest expense associated with hotels in receivership decreased $2.1 million, from $12.1 million in the 2024 quarter to $10.0 million in the 2025 quarter. The decrease is due to three fewer hotels being under receivership in the 2025 quarter compared to the 2024 quarter. 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 the accrued interest associated with hotels in receivership were reduced for the amounts attributable to each hotel. See note 7 to our consolidated financial statements.
Current wording
Interest Expense Associated with Hotels in Receivership. Interest expense associated with hotels in receivership decreased $4.1 million, from $24.0 million in the 2024 period to $19.9 million in the 2025 period. The decrease is due to four fewer hotels being under receivership in the 2025 period compared to the 2024 period. 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 and June 25, 2025, the receiver appointed for the KEYS Pool A and KEYS Pool B mortgage loans transferred the Courtyard Columbus Tipton Lakes and SpringHill Suites BWI Airport, respectively, to a third-party purchaser. As a result, the contract asset and corresponding indebtedness associated with hotels in receivership and the accrued interest associated with hotels in receivership were reduced for the amounts attributable to each hotel. See note 7 to our consolidated financial statements.
Previous wording
Write-off of Premiums, Loan Costs and Exit Fees. Write-off of premiums, loan costs and exit fees increased to $4.6 million in the 2025 quarter compared to the 2024 quarter. In the 2025 quarter, we incurred fees of approximately $1.8 million related to loan refinances and modifications, $2.2 million related to prepayment penalties and exit fees on loan refinances, wrote-off $378,000 of unamortized loan costs and incurred $193,000 non-reimbursed legal fees relating to the repaying the Oaktree loan. In the 2024 quarter, we incurred fees of $18,000 related to loan refinances and modifications.
Current wording
Write-off of Premiums, Loan Costs and Exit Fees. Write-off of premiums, loan costs and exit fees increased to $6.1 million in the 2025 period compared to the 2024 period. In the 2025 period, we incurred fees of approximately $3.3 million related to loan refinances and modifications, $2.2 million related to prepayment penalties and exit fees on loan refinances, wrote-off $378,000 of unamortized loan costs and incurred $193,000 non-reimbursed legal fees relating to the repaying the Oaktree loan. In the 2024 period, we incurred fees of $3.0 million related to loan refinances and modifications, and an $817,000 write-off of unamortized loan cost.
Previous wording
Gain (Loss) on Extinguishment of Debt. Gain (loss) on extinguishment of debt resulted in a gain of $13,000 in the 2025 quarter and loss of $45,000 in the 2024 quarter.
Current wording
Gain (Loss) on Extinguishment of Debt. Gain (loss) on extinguishment of debt resulted in a loss of $15,000 in the 2025 period and gain of $45,000 in the 2024 period.
Previous wording
In the 2024 quarter, we recognized an unrealized gain of $2.6 million from the revaluation of the embedded debt derivative in the Oaktree Agreement and a realized gain of $8.7 million related to payments from counterparties on interest rate caps. These gains were partially offset by an unrealized loss of $6.6 million associated with interest rate caps.
Current wording
In the 2024 period, we recognized an unrealized gain of $2.5 million from the revaluation of the embedded debt derivative in the Oaktree Agreement and a realized gain of $16.1 million related to payments from counterparties on interest rate caps. These gains were partially offset by an unrealized loss of $12.5 million associated with interest rate caps.
Previous wording
As of March 31, 2025, the Company held cash and cash equivalents of $85.8 million and restricted cash of $139.2 million, the vast majority of which is comprised of lender and manager-held reserves. As of March 31, 2025, $22.1 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 March 31, 2025, our net debt to gross assets was 70.9%.
Current wording
As of June 30, 2025, the Company held cash and cash equivalents of $101.3 million and restricted cash of $154.6 million (including amounts held for sale), the vast majority of which comprises lender and manager-held reserves. As of June 30, 2025, $21.8 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 June 30, 2025, our net debt to gross assets was 71.3%.
Previous wording
The Company’s cash and cash equivalents are primarily comprised of corporate cash invested in short-term U.S. Treasury securities with maturity dates of less than 90 days and corporate cash held at commercial banks in Insured Cash Sweep (“ICS”) accounts, which are fully insured by the FDIC. The Company’s cash and cash equivalents also includes property-level operating cash deposited with commercial banks that have been designated as a Global Systemically Important Bank (“G-SIB”) by the Financial Stability Board (“FSB”) and a small amount deposited with other commercial banks.
Current wording
The Company’s cash and cash equivalents primarily comprised corporate cash invested in short-term U.S. Treasury securities with maturity dates of less than 90 days and corporate cash held at commercial banks in Insured Cash Sweep (“ICS”) accounts, which are fully insured by the FDIC. The Company’s cash and cash equivalents also includes property-level operating cash deposited with commercial banks that have been designated as a Global Systemically Important Bank (“G-SIB”) by the Financial Stability Board (“FSB”) and a small amount deposited with other commercial banks.
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 March 31, 2025, 29 of our hotels were in cash traps and approximately $2.6 million of our restricted cash was subject to these cash traps.
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 June 30, 2025, 47 of our hotels were in cash traps and approximately $4.6 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.
Previous wording
Mortgage and mezzanine loans are nonrecourse to the borrowers, except for customary exceptions or carve-outs that trigger recourse liability to the borrowers in certain limited instances. Recourse obligations typically include only the payment of costs and liabilities suffered by lenders as a result of the occurrence of certain bad acts on the part of the borrower. However, in certain cases, carve-outs could trigger recourse obligations on the part of the borrower with respect to repayment of all or a portion of the outstanding principal amount of the loans. We have entered into customary guaranty agreements pursuant to which we guaranty payment of any recourse liabilities of the borrowers that result from non-recourse carve-outs (which include, but are not limited to, fraud, misrepresentation, willful conduct resulting in waste, misappropriations of rents following an event of default, voluntary bankruptcy filings, unpermitted transfers of collateral and certain environmental liabilities). In the opinion of management, none of these guaranty agreements, either individually or in the aggregate, are likely to have a material adverse effect on our business, results of operations, or financial condition.
Current wording
Mortgage and mezzanine loans are nonrecourse to the borrowers, except for customary exceptions or carve-outs that trigger recourse liability to the borrowers in certain limited instances. Recourse obligations typically include only the payment of costs and liabilities suffered by lenders as a result of the occurrence of certain bad acts on the part of the borrower. However, in certain cases, carve-outs could trigger recourse obligations on the part of the borrower with respect to repayment of all or a portion of the outstanding principal amount of the loans. We have entered into customary guaranty agreements pursuant to which we guaranty payment of any recourse liabilities of the borrowers that result from non-recourse carve-outs (which include, but are not limited to, fraud, misrepresentation, willful conduct resulting in waste, misappropriation of rents following an event of default, voluntary bankruptcy filings, unpermitted transfers of collateral and certain environmental liabilities). In the opinion of management, none of these guaranty agreements, either individually or in the aggregate, are likely to have a material adverse effect on our business, results of operations, or financial condition.
Previous wording
We have entered into certain customary guaranty agreements pursuant to which we guaranty payment of any recourse liabilities of our subsidiaries or joint ventures that may result from non-recourse carve-outs, which include, but are not limited to, fraud, misrepresentation, willful misconduct resulting in waste, misappropriations of rents following an event of default, voluntary bankruptcy filings, unpermitted transfers of collateral, delinquency of trade payables and certain environmental liabilities. Certain of these guarantees represent a guaranty of material amounts, and if we are required to make payments under those guarantees, our liquidity could be adversely affected.
Current wording
We have entered into certain customary guaranty agreements pursuant to which we guarantee payment of any recourse liabilities of our subsidiaries or joint ventures that may result from non-recourse carve-outs, which include, but are not limited to, fraud, misrepresentation, willful misconduct resulting in waste, misappropriation of rents following an event of default, voluntary bankruptcy filings, unpermitted transfers of collateral, delinquency of trade payables and certain environmental liabilities. Certain of these guarantees represent a guaranty of material amounts, and if we are required to make payments under those guarantees, our liquidity could be adversely affected.
Previous wording
We are committed to an investment strategy where we will pursue hotel-related investments as suitable situations arise. Funds for future hotel-related investments are expected to be derived, in whole or in part, from cash on hand, future borrowings under a credit facility or other loans, or proceeds from additional issuances of common stock, preferred stock (including net proceeds from the sale of any shares of Series J Preferred Stock or Series K Preferred Stock), or other securities, asset sales, and joint ventures. However, we have no formal commitment or understanding to invest in additional assets, and there can be no assurance that we will successfully make additional investments. We may, when conditions are suitable, consider additional capital raising opportunities.
Current wording
We are committed to an investment strategy where we will pursue hotel-related investments as suitable situations arise. Funds for future hotel-related investments are expected to be derived, in whole or in part, from cash on hand, future borrowings under a credit facility or other loans or proceeds from additional issuances of common stock, preferred stock (including net proceeds from the sale of any shares of Series L Preferred Stock or Series M Preferred Stock), or other securities, asset sales, and joint ventures. However, we have no formal commitment or understanding to invest in additional assets, and there can be no assurance that we will successfully make additional investments. We may, when conditions are suitable, consider additional capital-raising opportunities.
Previous 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 that secured the KEYS Pool A and KEYS Pool B loans have been transferred to a court-appointed receiver. Below is a summary of the hotel properties that secured the KEYS Pool A and Pool B loans:
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. The original lenders previously transferred the loans to a securitization trust. On March 1, 2024, the Company received notice that the hotel properties that secured the KEYS Pool A and KEYS Pool B loans have been transferred to a court-appointed receiver. Below is a summary of the hotel properties that secured the KEYS Pool A and Pool B loans:
Showing the first 40 of 48 pairs. Open the source sections for the rest.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
Hotel Operating Expenses. Hotel operating expenses decreased $8.6 million, or 4.2%, to $198.8 million in the 2025 quarter compared to the 2024 quarter. 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 $4.8 million in the 2025 quarter as compared to the 2024 quarter, comprising a decrease of $5.7 million from our Hotel Dispositions. The decrease in direct expenses was partially offset by an increase of $916,000 from the Le Méridien Opening in the 2025 quarter. Direct expenses were 29.7% of total hotel revenue for the 2025 quarter and 29.9% for the 2024 quarter.
Current report — wording carried from elsewhere
Advisory Services Fee. Advisory services fee increased $543,000, or 4.7%, to $12.0 million in the 2025 quarter compared to the 2024 quarter. The advisory services fee represents fees incurred in connection with the advisory agreement between Ashford Inc. and the Company and between Ashford Inc. and Stirling OP. In the 2025 quarter, the advisory services fee was comprised a base advisory fee of $8.2 million, equity-based compensation of $222,000 awarded to the officers and employees of Ashford Inc., reimbursable expenses of $3.3 million and fees totaling $306,000 associated with the Stirling OP’s advisory agreement. In the 2024 quarter, the advisory services fee comprised a base advisory fee of $8.0 million, equity-based compensation of $507,000 awarded to the officers and employees of Ashford Inc., reimbursable expenses of $2.7 million and fees totaling $238,000 associated with Stirling OP’s advisory agreement.
Current report — wording carried from elsewhere
Equity in Earnings (Loss) of Unconsolidated Entities. Equity in earnings (loss) of unconsolidated entities changed $206,000 from a loss of $162,000 during the 2024 quarter to earnings of $44,000 during the 2025 quarter. Equity in earnings (loss) primarily results from our investment in an entity that owns the Meritage Resort and Spa and the Grand Reserve at the Meritage in Napa, California.
Current report — wording carried from elsewhere
Write-off of Premiums, Loan Costs and Exit Fees. Write-off of premiums, loan costs and exit fees decreased $2.3 million to $1.5 million in the 2025 quarter compared to the 2024 quarter. In the 2025 quarter, we incurred fees of $1.5 million related to loan refinances and modifications. In the 2024 quarter, we incurred fees of $3.0 million related to loan refinances and modifications and $796,000 in write-offs in unamortized loan costs.
Current report — wording carried from elsewhere
Interest Income. Interest income was $2.5 million and $3.7 million in the 2025 period and the 2024 period, respectively. The decrease in interest income in the 2025 period was primarily attributable to lower excess cash balances in the 2025 period compared to the 2024 period.
Current report — wording carried from elsewhere
(Income) Loss from Consolidated Entities Attributable to Noncontrolling Interests. Our noncontrolling interest partners in consolidated entities were allocated a loss of $3.2 million and $17,000 in the 2025 period and the 2024 period, respectively. At June 30, 2025, noncontrolling interests in consolidated entities represented an ownership interest of 70.7% in 815 Commerce MM and 1.30% in Stirling OP. See note 2 to our consolidated financial statements.
Current report — wording carried from elsewhere
Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in operating partnership were allocated a net loss of $1.1 million in the 2025 period and net income of $1.4 million in the 2024 period. Redeemable noncontrolling interests represented ownership interests of 1.56% and 1.26% in the operating partnership as of June 30, 2025 and 2024, respectively.
Current report — wording carried from elsewhere
On May 8, 2025, the Company received $35.0 million in return for an equity investment in a hotel property. The holder is entitled to a preferred return of 14.0% per annum. The investment is mandatorily redeemable on May 10, 2029.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
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.
Previous report — wording carried 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.
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
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 and adding one one-year extension option, subject to satisfaction of certain conditions.