ASHFORD HOSPITALITY TRUST INC
For the period ended Jun 30, 2026. Filed Aug 12, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 12, 2026
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 2026-03-31; filed 2026-05-14.
0001232582-26-000118
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-12.
0001232582-26-000183
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 199 previous paragraphs and 216 current paragraphs.
136 unchanged; 43 reworded; 25 added; 17 removed; 3 previous and 12 current paragraphs rearranged.
Tables are not compared: 8 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 (25)
Current report
Disposition of Hotel Properties
Current report
The following table presents the Company’s most recent dispositions of hotel properties (in thousands):
Current report
(1)Sale price is prior to adjustments and buyer credits.
Current report
Other Developments
Current report
On June 1, 2026, the Company received notice that the Hilton Santa Cruz Scotts Valley had been transferred to a court-appointed receiver. We derecognized the Hilton Santa Cruz Scotts Valley from our consolidated balance sheet in June 2026, when the receiver took control of the hotel property and, accordingly, recognized a loss of $597,000, which is included in “gain (loss) on derecognition of assets” in our consolidated statements of operations for the three and six months ended June 30, 2026. We recorded a contract asset of $24.9 million as of June 30, 2026, which represented the liabilities from which we expect to be released upon final resolution with the lenders on the Hilton Santa Cruz Scotts Valley mortgage loans in exchange for the transfer of ownership of the hotel property.
Current report
On July 27, 2026, the Company entered into a definitive agreement to sell the 263-room Embassy Suites Philadelphia located in Philadelphia, Pennsylvania for a purchase price of $26.0 million. The agreement included a nonrefundable deposit of $500,000 which was paid in July of 2026.
Current report
Revenue. Rooms revenue from our hotel properties decreased $17.6 million, or 7.7%, to $209.6 million in the 2026 quarter compared to the 2025 quarter. This decrease in the 2026 quarter is primarily attributable to decreases of $28.3 million from our Hotel Dispositions and $758,000 from the derecognition of the Hilton Santa Cruz Scotts Valley in June 2026 (the “Hilton Santa Cruz Scotts Valley Derecognition”). These decreases were partially offset by higher rooms revenue of $11.5 million from our comparable hotel properties. Our comparable hotel properties experienced an increase of 5.8% in room rates and a 54 basis point increase in occupancy.
Current report
Food and beverage revenue decreased $8.3 million, or 15.1%, to $47.0 million in the 2026 quarter compared to the 2025 quarter. This decrease in the 2026 quarter is primarily attributable to decreases of food and beverage sales of $6.2 million from our Hotel Dispositions and $2.1 million from our comparable hotels.
Current report
Indirect expenses and management fees decreased $12.1 million in the 2026 quarter as compared to the 2025 quarter primarily due to decreases of $14.1 million from our Hotel Dispositions and $392,000 from the Hilton Santa Cruz Scotts Valley Derecognition. The decrease in the 2026 quarter was partially offset by an increase of $2.4 million from our comparable hotel properties.
Current report
Depreciation and Amortization. Depreciation and amortization decreased $6.6 million, or 18.8%, to $28.6 million during the 2026 quarter compared to the 2025 quarter. The decrease in the 2026 quarter was primarily due to decreases of $6.1 million from our Hotel Dispositions and $395,000 from our comparable hotel properties.
Current report
Impairment Charges. Impairment charges were $1.4 million in the 2025 quarter. The impairment charges related to 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 Disposition of Assets and Hotel Properties. Gain on disposition of assets and hotel properties increased $143.4 million from $6.7 million in the 2025 quarter to $150.0 million in the 2026 quarter. The gain in the 2026 quarter was primarily related to net gains from the sale of nine hotel properties in the 2026 quarter. See note 5 to our consolidated financial statements.
Current report
Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs decreased $14.5 million, or 20.6%, to $55.7 million during the 2026 quarter compared to the 2025 quarter. The decrease is primarily due to decreases of $9.3 million from our Hotel Dispositions, $3.6 million from lower interest expense and amortization of discounts and loan costs at our comparable hotels and $1.6 million from lower default interest and late charges recorded on mortgage loans in default.
Current report
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.
Current report
Comparison of the Six Months Ended June 30, 2026 and 2025
Current report
Net Income (Loss) Attributable to the Company. Net income (loss) attributable to the Company changed $114.6 million from a net loss of $50.4 million for the six months ended June 30, 2025 (the “2025 period”) to net income of $64.2 million for the six months ended June 30, 2026 (the “2026 period”) as a result of the factors discussed below.
Current report
Other hotel revenue, which consists mainly of internet access, parking, and spa revenue, decreased $2.8 million, or 8.0%, to $32.4 million in the 2026 period compared to the 2025 period primarily attributable to our Hotel Dispositions. Other revenue decreased $438,000, or 57.3%, to $327,000 in the 2026 period compared to the 2025 period.
Current report
Property Taxes, Insurance and Other. Property taxes, insurance and other expense decreased $4.2 million or 13.0%, to $28.1 million in the 2026 period compared to the 2025 period. The decrease in the 2026 period was primarily due to decreases of $3.2 million from our Hotel Dispositions and $933,000 from our comparable hotel properties.
Current report
Gain (Loss) on Extinguishment of Debt. Gain (loss) on extinguishment of debt resulted in a loss of $2.0 million in the 2026 period and a loss of $15,000 in the 2025 period. The loss in the 2026 period primarily related to write-offs related to our Hotel Dispositions.
Current report
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
Hilton Santa Cruz Scotts Valley
Current report
JPM8 Loan Pool
Current report
During the first quarter of 2026, the Company paid down the remaining balance of $98.5 million of its mortgage loan secured by the La Posada de Santa Fe and Hilton Alexandria Old Town in conjunction with the sale of both hotel properties.
Current report
During the first and second quarters of 2026, the Company paid down $197.7 million of its Morgan Stanley Pool mortgage loan in conjunction with the sale of seven hotel properties.
Current report
In the second quarter of 2026, the Company paid down $72.2 million of its BAML/Sculptor KEYS 16 Pool mortgage loan in conjunction with the sale of two hotel properties. On July 1, 2026, the mortgage loan was paid down by an additional $43.5 million in conjunction with the sale of the Marriott Fremont Silicon Valley.
Removed paragraphs (17)
Previous report
On February 9, 2026 and February 17, 2026, the Company completed the sales of the 150-room Embassy Suites Houston located in Houston, Texas, and the 150-room Embassy Suites Austin located in Austin, Texas, for a combined $27.0 million, subject to customary pro rations and adjustments.
Previous report
Effective February 24, 2026, Sonny Sra retired from the Company’s board of directors due to health reasons.
Previous report
On March 5, 2026, Ashford Inc. and Ashford LLC agreed with Deric Eubanks, the Chief Financial Officer of Ashford Inc., and Ashford LLC that, effective March 31, 2026 (the “Termination Date”), Mr. Eubanks would terminate employment with and service to Ashford Inc., Ashford LLC and their affiliates. Mr. Eubanks was also the Chief Financial Officer of the Company and Braemar and accordingly his service as Chief Financial Officer of each of the Company and Braemar ended effective as of the Termination Date. Effective on the Termination Date, Justin Coe, the Company’s Chief Accounting Officer and principal accounting officer, assumed the role of principal financial officer of the Company.
Previous report
On March 5, 2026, the Company completed the sale of the 333-room Hilton St. Petersburg Bayfront located in St. Petersburg, Florida for $96 million, subject to customary pro rations and adjustments.
Previous report
On March 13, 2026, we entered into a Limited Waiver Under Advisory Agreement with Ashford Inc. and Ashford LLC (the “2026 Advisory Agreement Limited Waiver”). Pursuant to the 2026 Advisory Agreement Limited Waiver, the Company, the Operating Partnership, TRS, Ashford Inc. and Ashford LLC waived 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 2026, cash incentive compensation to employees and other representatives of Ashford Inc. and Ashford LLC.
Previous report
On March 16, 2026, the Company entered into a definitive agreement to sell the 168-room Lakeway Resort & Spa located in Austin, Texas for a purchase price of $37.8 million. The agreement included a nonrefundable deposit of $500,000 which was paid on March 16, 2026.
Previous report
On March 17, 2026, the Company completed the sale of the 157-room La Posada de Santa Fe located in Santa Fe, New Mexico for a purchase price of $57.5 million, subject to customary pro rations and adjustments.
Previous report
On March 27, 2026, the Company entered into the Advisory Agreement with Ashford Inc. and Ashford LLC. The Advisory Agreement amends and restates the terms of the Third Amended and Restated Advisory Agreement, dated as of March 12, 2024 and extends the initial term of the Advisory Agreement to December 31, 2055 with two 20-year possible extensions. See note 13 in our consolidated financial statements.
Previous report
On March 31, 2026, the Company completed the sale of the 252-room Hilton Alexandria Old Town located in Alexandria, Virginia for a purchase price of $58.0 million, subject to customary pro rations and adjustments.
Previous report
On April 7, 2026, the Company completed the sale of the 160-room Embassy Suites Palm Beach Gardens located in Palm Beach Gardens, Florida for a purchase price of $41.0 million, subject to customary pro rations and adjustments.
Previous report
On April 8, 2026, the Company entered into a definitive agreement to sell the 358-room Hyatt Regency Long Island located in Hauppauge, New York for a purchase price of $26.1 million. The agreement included a nonrefundable deposit of $500,000 which was paid on April 13, 2026.
Previous report
On April 8, 2026, the Company entered into a definitive agreement to sell the 144-room Silversmith Hotel located in Chicago, Illinois for a purchase price of $16.0 million. The agreement included a nonrefundable deposit of $200,000 which was paid on April 17, 2026.
Previous report
On April 16, 2026, the Company entered into a definitive agreement to sell the 119-room Hilton Garden Inn Jacksonville located in Jacksonville, Florida for a purchase price of $11.3 million. The agreement included a nonrefundable deposit of $1.1 million which was paid on April 17, 2026.
Previous report
On May 1, 2026, a $1.0 million nonrefundable deposit was paid by the buyer as part of a definitive agreement the Company entered into on March 26, 2026, to sell the 260-room Sheraton San Diego Mission Valley located in San Diego, California for a purchase price of $45.3 million.
Previous report
On May 6, 2026, the Company entered into a definitive agreement to sell the 378-room Sheraton Indianapolis City Centre located in Indianapolis, Indiana for a purchase price of $18.5 million. The agreement included a nonrefundable deposit of $641,000 which was paid on May 8, 2026.
Previous report
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.
Previous report
Net cash flows provided by investing activities for the three months ended March 31, 2026 excluded $24.1 million of net proceeds from the sale of the Hilton Alexandria Old Town that was completed on March 31, 2026. The proceeds were recorded in prepaid expenses and other assets on the Company’s consolidated balance sheet at March 31, 2026 and subsequently received in April 2026.
Reworded paragraphs (43)
Previous wording
As of March 31, 2026, our portfolio consisted of 62 consolidated operating hotel properties, which represent 15,403 total rooms, and one additional consolidated operating hotel property owned through a 29.3% investment in a consolidated entity, which represents 188 total rooms. Currently, all of our hotel properties are located in the United States.
Current wording
As of June 30, 2026, our portfolio consisted of 52 consolidated operating hotel properties, which represent 13,241 total rooms, and one additional consolidated operating hotel property owned through a 29.3% investment in a consolidated entity, which represents 188 total rooms. Currently, all of our hotel properties are located in the United States.
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, 2026, Remington Lodging & Hospitality, LLC (“Remington Hospitality”), a subsidiary of Ashford Inc., manages 45 of our 63 operating hotel properties. Third-party management companies manage 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, 2026, Remington Lodging & Hospitality, LLC (“Remington Hospitality”), a subsidiary of Ashford Inc., manages 36 of our 53 operating 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, 2026, hold a controlling interest in Ashford Inc. The Bennetts owned approximately 809,937 shares of Ashford Inc. common stock, which represented an approximate 52.5% 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 4,656,337 shares of Ashford Inc. common stock, which, if converted as of March 31, 2026, would have increased the Bennetts’ ownership interest in Ashford Inc. to 88.2%. 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 the right to direct votes, effective March 25, 2025, and as of March 31, 2026, those rights represented approximately 534,000 common shares.
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, 2026, hold a controlling interest in Ashford Inc. The Bennetts owned approximately 810,123 shares of Ashford Inc. common stock, which represented an approximate 52.5% ownership interest in Ashford Inc., and owned 18,777,914 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 4,745,833 shares of Ashford Inc. common stock, which, if converted as of June 30, 2026, would have increased the Bennetts’ ownership interest in Ashford Inc. to 88.4%. The 18,777,914 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, 2026, those rights represented approximately 534,000 common shares.
Previous wording
On March 26, 2026, the Company entered into a definitive agreement to sell the 150-room Embassy Suites Dallas located in Dallas, Texas for a purchase price of $17.0 million. The agreement included a nonrefundable deposit of $500,000 which was paid on March 26, 2026. The sale was completed on May 6, 2026.
Current wording
On July 24, 2026, the Company entered into a definitive agreement to sell the 150-room Embassy Suites Dulles located in Herndon, Virginia for a purchase price of $22.8 million. The agreement included a nonrefundable deposit of $500,000 which was paid in July of 2026.
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, 2026 and 2025 (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, 2026 and 2025 (in thousands):
Previous wording
All hotel properties held during the three months ended March 31, 2026 and 2025 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, 2026 and 2025. 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, 2026 and 2025 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, 2026 and 2025. 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 63 comparable hotel properties that were included in our results of operations for the full three months ended March 31, 2026 and 2025, respectively:
Current wording
The following table illustrates the key performance indicators of the 53 comparable hotel properties that were included in our results of operations for the full three and six months ended June 30, 2026 and 2025, respectively:
Previous wording
Net Income (Loss) Attributable to the Company. Net loss attributable to the Company increased $43.8 million from a net loss of $20.0 million for the three months ended March 31, 2025 (the “2025 quarter”) to a net loss of $63.8 million for the three months ended March 31, 2026 (the “2026 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 $158.4 million, from net loss of $30.4 million for the three months ended June 30, 2025 (the “2025 quarter”) to net income of $128.0 million for the three months ended June 30, 2026 (the “2026 quarter”) as a result of the factors discussed below.
Previous wording
Other hotel revenue, which consists mainly of internet access, parking, and spa revenue, decreased $237,000, or 1.5%, to $16.0 million in the 2026 quarter compared to the 2025 quarter. This decrease in the 2026 quarter was primarily attributable to decreases in other hotel revenue of $735,000 from our Hotel Dispositions. This decrease was partially offset by an increase of $498,000 from our comparable hotel properties. Other revenue decreased $155,000, or 50.2%, to $154,000 in the 2026 quarter compared to the 2025 quarter.
Current wording
Other hotel revenue, which consists mainly of internet access, parking, and spa revenue, decreased $2.6 million, or 13.5%, to $16.4 million in the 2026 quarter compared to the 2025 quarter primarily due to our Hotel Dispositions. Other non-hotel revenue decreased $283,000, or 62.1%, to $173,000 in the 2026 quarter as compared to the 2025 quarter.
Previous wording
Property Taxes, Insurance and Other. Property taxes, insurance and other expense decreased $1.2 million or 7.2%, to $14.9 million in the 2026 quarter compared to the 2025 quarter. The decrease in the 2026 quarter was primarily due to decreases of $583,000 from our Hotel Dispositions and $572,000 from our comparable hotel properties.
Current wording
Property Taxes, Insurance and Other. Property taxes, insurance and other expense decreased $3.1 million, or 18.8%, to $13.2 million during the 2026 quarter compared to the 2025 quarter. The decrease in the 2026 quarter was primarily due to decreases of $2.4 million and $594,000 from our Hotel Dispositions and our comparable hotel properties, respectively.
Previous wording
Gain (Loss) on Derecognition of Assets. Gain on derecognition of assets decreased $2.3 million, from $10.0 million in the 2025 quarter to $7.8 million in the 2026 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 gains in the 2026 quarter and the 2025 quarter relate to accrued interest on the KEYS A and B properties in receivership.
Current wording
Gain (Loss) on Derecognition of Assets. Gain on derecognition of assets decreased $3.1 million from $9.9 million in the 2025 quarter to $6.8 million in the 2026 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, KEYS B and Hilton Santa Cruz Scotts Valley loans as we expect to be released from this obligation upon final resolution with the lender. The gains in the 2026 quarter and in the 2025 quarter primarily relate to accrued interest on the mortgage loans of the KEYS A, KEYS B and Hilton Santa Cruz Scotts Valley properties in receivership. See note 6 to our consolidated financial statements.
Previous wording
Equity in Earnings (Loss) of Unconsolidated Entities. Equity in loss of unconsolidated entities was $202,000 in the 2026 quarter and $431,000 in the 2025 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 earnings of unconsolidated entities was $47,000 in the 2026 quarter and $44,000 in the 2025 quarter. Equity in earnings 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
Interest Income. Interest income was $922,000 and $1.2 million in the 2026 quarter and the 2025 quarter, respectively. The decrease in interest income in the 2026 quarter was primarily attributable to lower excess cash balances in the 2026 quarter compared to the 2025 quarter.
Current wording
Interest Income. Interest income was $1.0 million and $1.3 million for the 2026 quarter and the 2025 quarter, respectively. The decrease in interest income in the 2026 quarter was primarily attributable to lower excess cash balances in the 2026 quarter compared to the 2025 quarter.
Previous wording
Interest Expense Associated with Hotels in Receivership. Interest expense associated with hotels in receivership decreased $2.2 million, from $10.0 million in the 2025 quarter to $7.8 million in the 2026 quarter. The decrease is due to fewer hotels being under receivership in the 2026 quarter compared to the 2025 quarter. On June 25, 2025 and December 22, 2025, the Courtyard Oakland Airport and SpringHill Suites BWI Airport mortgage loans were transferred to a third-party purchaser. On March 4, 2026, the SpringHill Suites Plymouth Meeting’s mortgage loan was also transferred 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. See note 6 to our consolidated financial statements.
Current wording
Interest Expense Associated with Hotels in Receivership. Interest expense associated with hotels in receivership decreased $2.8 million, from $10.5 million in the 2025 quarter to $7.6 million in the 2026 quarter. The decrease is due to fewer hotels being under receivership in the 2026 quarter compared to the 2025 quarter. On June 25, 2025 and December 22, 2025, the Courtyard Oakland Airport and SpringHill Suites BWI Airport were transferred to a third-party purchaser. On March 4, 2026, the SpringHill Suites Plymouth Meeting was also transferred 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. Interest expense associated with hotels in receivership additionally includes interest expense related to the Hilton Santa Cruz Scotts Valley Derecognition. See note 6 to our consolidated financial statements.
Previous wording
Gain (Loss) on Extinguishment of Debt. Gain (loss) on extinguishment of debt resulted in a loss of $25,000 in the 2026 quarter and a loss of $13,000 in the 2025 quarter.
Current wording
Gain (Loss) on Extinguishment of Debt. Gain (loss) on extinguishment of debt resulted in a loss of $2.0 million in the 2026 quarter and a loss of $2,000 in the 2025 quarter. The loss in the 2026 quarter primarily related to write-offs related to our Hotel Dispositions.
Previous wording
Realized and Unrealized Gain (Loss) on Derivatives. Realized and unrealized gain (loss) on derivatives changed by $3.5 million from a $2.7 million loss in the 2025 quarter to a $757,000 gain in the 2026 quarter. In the 2026 quarter, we recognized $757,000 of net unrealized gains on our derivatives which were primarily attributable to interest rate caps.
Current wording
Realized and Unrealized Gain (Loss) on Derivatives. Realized and unrealized gain (loss) on derivatives changed $880,000 from an $836,000 loss in the 2025 quarter to a $44,000 gain in the 2026 quarter. In the 2026 quarter, we recognized net unrealized gains of $44,000 on our derivatives, which were primarily attributable to interest rate caps.
Previous wording
Income Tax (Expense) Benefit. Income tax expense increased $435,000, from income tax expense of $317,000 in the 2025 quarter to income tax expense of $752,000 in the 2026 quarter. The increase in income tax expense in the 2026 quarter was primarily attributable to an increase in the income of our TRS entities.
Current wording
Income Tax (Expense) Benefit. Income tax expense increased $2.4 million, from $119,000 in the 2025 quarter to $2.6 million in the 2026 quarter. The increase in income tax expense in the 2026 quarter was primarily attributable to an increase in the taxable income of our TRS entities.
Previous wording
(Income) Loss from Consolidated Entities Attributable to Noncontrolling Interests. Our noncontrolling interest partners in consolidated entities were allocated losses of $655,000 and $1.8 million in the 2026 quarter and the 2025 quarter, respectively. Noncontrolling interests in consolidated entities represented an ownership interest of 70.7% in 815 Commerce MM and, prior to September 2, 2025, 0.30% in Stirling OP. See notes 1 and 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 losses of $341,000 and $1.4 million in the 2026 quarter and the 2025 quarter, respectively. Noncontrolling interests in consolidated entities represented an ownership interest of 70.7% in 815 Commerce MM and, prior to September 2, 2025, an ownership interest of 0.30% in Stirling OP. See notes 1 and 2 to our consolidated financial statements.
Previous wording
Revenue. Rooms revenue from our hotel properties decreased $6.3 million, or 3.0%, to $200.0 million in the 2026 quarter compared to the 2025 quarter. This decrease in the 2026 quarter was primarily attributable to a decrease in rooms revenue of $12.3 million from our Hotel Dispositions. This decrease was partially offset by an increase in rooms revenue of $6.0 million at our comparable hotel properties. Our comparable hotel properties experienced an increase of 2.1% in room rates and an increase of 79 basis points in occupancy.
Current wording
Revenue. Rooms revenue from our hotel properties decreased $23.9 million, or 5.5%, to $409.6 million in the 2026 period compared to the 2025 period. This decrease in the 2026 period was primarily attributable to decreases in rooms revenue of $41.4 million from our Hotel Dispositions and $645,000 from the Hilton Santa Cruz Scotts Valley Derecognition. These decreases were partially offset by an increase in rooms revenue of $18.1 million at our comparable hotel properties. Our comparable hotel properties experienced an increase of 4.2% in room rates and an increase of 78 basis points in occupancy.
Previous wording
Food and beverage revenue decreased $3.0 million, or 5.4%, to $51.6 million in the 2026 quarter compared to the 2025 quarter. This decrease in the 2026 quarter was primarily attributable to decreases in food and beverage revenue of $2.1 million from our Hotel Dispositions and $867,000 at our comparable hotel properties.
Current wording
Food and beverage revenue decreased $11.3 million, or 10.3%, to $98.6 million in the 2026 period compared to the 2025 period. This decrease in the 2026 period was primarily attributable to decreases in food and beverage revenue of $8.2 million from our Hotel Dispositions and $2.9 million at our comparable hotel properties.
Previous wording
Hotel Operating Expenses. Hotel operating expenses decreased $7.3 million, or 3.9%, to $181.1 million in the 2026 quarter compared to the 2025 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 $3.1 million in the 2026 quarter compared to the 2025 quarter, primarily due to a decrease of $3.8 million from our Hotel Dispositions. The decrease in direct expenses was partially offset by an increase in the 2026 quarter of $664,000 from our comparable hotel properties. Direct expenses were 30.9% of total hotel revenue for the 2026 quarter and 30.9% for the 2025 quarter.
Current wording
Hotel Operating Expenses. Hotel operating expenses decreased $29.7 million, or 7.7%, to $357.6 million in the 2026 period compared to the 2025 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 $13.4 million in the 2026 period compared to the 2025 period, primarily due to a decrease of $14.1 million from our Hotel Dispositions. The decrease in direct expenses was partially offset by an increase in the 2026 period of $893,000 from our comparable hotel properties. Direct expenses were 29.9% of total hotel revenue for the 2026 period and 30.3% for the 2025 period.
Previous wording
Indirect expenses and management fees decreased $4.3 million in the 2026 quarter compared to the 2025 quarter, primarily due to a decrease of $5.5 million from our Hotel Dispositions. The decrease in the 2026 quarter was partially offset by an increase of $1.2 million from our comparable hotel properties.
Current wording
Indirect expenses and management fees decreased $16.3 million in the 2026 period compared to the 2025 period, primarily due to a decrease of $19.3 million from our Hotel Dispositions. The decrease in the 2026 period was partially offset by an increase of $3.3 million from our comparable hotel properties.
Previous wording
Depreciation and Amortization. Depreciation and amortization decreased $5.3 million or 14.3%, to $32.0 million in the 2026 quarter compared to the 2025 quarter. The decreases in the 2026 quarter were primarily due to decreases of $3.2 million from our Hotel Dispositions and $2.1 million from our comparable hotel properties.
Current wording
Depreciation and Amortization. Depreciation and amortization decreased $12.0 million or 16.5%, to $60.6 million in the 2026 period compared to the 2025 period. The decreases in the 2026 period were primarily due to decreases of $9.4 million from our Hotel Dispositions and $2.4 million from our comparable hotel properties.
Previous wording
Impairment Charges. Impairment charges were $112.6 million in the 2026 quarter and $0 in 2025. In the 2026 quarter, we recorded impairment charges on nine properties. The impairment charges were a result of reduced estimated future cash flows resulting from reductions to the expected holding periods of the hotel properties. The impairment charges for four properties were based on a market approach methodology which compares the net book value of the assets to their fair market value. The impairment charge for the remaining five properties were based on the income approach which utilized a discounted cash flow methodology, supported by the market approach. See note 5 to our consolidated financial statements.
Current wording
Impairment Charges. Impairment charges were $112.6 million in the 2026 period and $1.4 million in the 2025 period. In the 2026 period, we recorded impairment charges on nine properties. The impairment charges were a result of reduced estimated future cash flows resulting from reductions to the expected holding periods of the hotel properties. The impairment charges for four properties were based on a market approach methodology which compares the net book value of the assets to their fair market value. The impairment charge for the remaining five properties were based on the income approach which utilized a discounted cash flow methodology, supported by the market approach. See note 5 to our consolidated financial statements.
Previous wording
Advisory Services Fee. The advisory services fee increased $8.5 million, or 73.4%, to $20.0 million in the 2026 quarter compared to the 2025 quarter primarily due to an increase in reimbursable expenses arising from the Company’s obligation to indemnify Ashford LLC for certain tax liabilities under the Advisory Agreement. The advisory services fee represents fees incurred in connection with the advisory agreements between Ashford Inc. and the Company and, prior to September 2, 2025, between Ashford Inc. and Stirling OP. In the 2026 quarter, the advisory services fee comprised a base advisory fee of $8.3 million and reimbursable expenses of $11.7 million. In the 2025 quarter, the advisory services fee comprised 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.
Current wording
Advisory Services Fee. The advisory services fee increased $10.7 million, or 45.2%, to $34.2 million in the 2026 period compared to the 2025 period primarily due to an increase in reimbursable expenses arising from the Company’s obligation to indemnify Ashford LLC for certain tax liabilities under the Advisory Agreement. The advisory services fee represents fees incurred in connection with the advisory agreements between Ashford LLC and the Company and, prior to September 2, 2025, between Stirling Advisor and Stirling OP. In the 2026 period, the advisory services fee primarily comprised a base advisory fee of $16.8 million and reimbursable expenses of $17.4 million. In the 2025 period, the advisory services fee primarily comprised a base advisory fee of $16.3 million, reimbursable expenses of $6.5 million, an incentive advisory fee of $27,000, and fees totaling $574,000 associated with Stirling OP’s advisory agreement.
Previous wording
Corporate, General and Administrative. Corporate, general and administrative expenses decreased $2.7 million, or 63.0%, to $1.6 million in the 2026 quarter compared to the 2025 quarter. The decrease was primarily attributable to decreases in reimbursements of Ashford Securities’ operating expenses of $1.3 million from the winding down of Ashford Securities, legal and professional expenses of $937,000, public company costs of $414,000 and miscellaneous expenses of $97,000.
Current wording
Corporate, General and Administrative. Corporate, general and administrative expenses decreased $6.9 million, or 70.2%, to $2.9 million in the 2026 period compared to the 2025 period. The decrease was primarily attributable to decreases in reimbursements of Ashford Securities’ operating expenses of $3.8 million from the winding down of Ashford Securities, legal and professional expenses of $1.2 million, public company costs of $951,000 and miscellaneous expenses of $973,000.
Previous wording
Gain (Loss) on Disposition of Assets and Hotel Properties. Gain on disposition of assets and hotel properties increased $68.2 million, from $31.9 million in the 2025 quarter to $100.0 million in the 2026 quarter. The gain in the 2026 quarter was primarily related to the sale of five of our hotel properties in the 2026 quarter. The gain in the 2025 quarter was primarily related to the sale of Courtyard Boston Downtown.
Current wording
Gain (Loss) on Disposition of Assets and Hotel Properties. Gain on disposition of assets and hotel properties increased $211.5 million, from $38.6 million in the 2025 period to $250.1 million in the 2026 period. The gain in the 2026 period was primarily related to the sale of 14 of our hotel properties in the 2026 period. The gain in the 2025 period was primarily related to the sale of Courtyard Boston Downtown. See note 5 to our consolidated financial statements.
Previous wording
Other Income (Expense). In the 2026 quarter and the 2025 quarter, we recorded other income of $3.2 million and $0, respectively. The income in the 2026 quarter was from the sale of historical tax credits related to the Le Pavillon hotel which were sold subsequent to the sale of the property in December 2025.
Current wording
Other Income (Expense). In the 2026 period and the 2025 period, we recorded other income of $3.2 million and $0, respectively. The income in the 2026 period was from the sale of historical tax credits related to the Le Pavillon hotel which were sold subsequent to the sale of the property in December 2025.
Previous wording
Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs increased $6.8 million, or 10.1%, to $73.6 million in the 2026 quarter compared to the 2025 quarter. The increase was primarily due to higher default interest and late charges recorded on mortgage loans in default of $10.1 million and higher interest expense and amortization of discounts and loan costs at our comparable hotels of $3.3 million. These increases were partially offset by decreases of $5.8 million from our Hotel Dispositions and $944,000 from the pay-off of the Oaktree loan in February 2025.
Current wording
Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs decreased $7.4 million, or 5.4%, to $129.2 million in the 2026 period compared to the 2025 period. The decrease was primarily due to decreases of $16.3 million from our Hotel Dispositions and $944,000 from the pay-off of the Oaktree loan in February 2025. These decreases were partially offset by increases due to higher default interest and late charges recorded on mortgage loans in default of $8.5 million and higher interest expense and amortization of discounts and loan costs at our comparable hotels of $1.3 million.
Previous wording
Write-off of Premiums, Loan Costs and Exit Fees. Write-off of premiums, loan costs and exit fees was $1.3 million in the 2026 quarter and $4.6 million in the 2025 quarter. In the 2026 quarter, we incurred fees of $1.3 million from loan refinances and modifications. 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.
Current wording
Write-off of Premiums, Loan Costs and Exit Fees. Write-off of premiums, loan costs and exit fees was $1.6 million in the 2026 period and $6.1 million in the 2025 period. In the 2026 period, we incurred fees of $1.6 million from loan refinances and modifications. 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 repaying the Oaktree loan.
Previous wording
Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Redeemable noncontrolling interests in operating partnership were allocated a net loss of $1.0 million in the 2026 quarter and a net loss of $451,000 in the 2025 quarter. Redeemable noncontrolling interests represented ownership interests of 1.43% and 1.60% in the operating partnership as of March 31, 2026 and 2025, respectively.
Current wording
Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Redeemable noncontrolling interests in operating partnership were allocated net income of $699,000 in the 2026 period and a net loss of $1.1 million in the 2025 period. Redeemable noncontrolling interests represented ownership interests of 1.41% and 1.56% in the operating partnership as of June 30, 2026 and 2025, respectively.
Previous wording
As of March 31, 2026, the Company held cash and cash equivalents of $79.8 million and restricted cash of $141.2 million (including amounts held for sale), the vast majority of which comprises lender and manager-held reserves. As of March 31, 2026, $24.5 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. During the three months ended March 31, 2026, the net increase in cash, cash equivalents and restricted cash (including cash, cash equivalents and restricted cash held for sale) was$4.6 million.
Current wording
As of June 30, 2026, the Company held cash and cash equivalents of $75.0 million and restricted cash of $137.0 million (including amounts held for sale), the vast majority of which comprises lender and manager-held reserves. As of June 30, 2026, $24.2 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. During the six months ended June 30, 2026, the net decrease in cash, cash equivalents and restricted cash (including cash, cash equivalents and restricted cash held for sale) was$4.5 million.
Previous wording
As described in note 2 to our consolidated financial statements, the Company forecasts it may not have enough cash to support the Company’s daily operations one year from the date the financial statements are issued due primarily to anticipated debt service costs, debt maturities and the potential termination fee the Company would owe to Ashford LLC upon the triggering of the change of control provision in the Advisory Agreement. We have$1.9 billion of non-recourse loans that mature within one year from the date the financial statements are issued. If our lenders elect not to refinance these loans and foreclose on these properties and the Company’s Annualized Portfolio Cash Flow (as defined in the Advisory Agreement) is below $65 million, the change of control provision in the Advisory Agreement could be triggered at Ashford LLC’s discretion within one year from the date the financial statements are issued, resulting in a termination fee. See discussion in note 13 to our consolidated financial statements.
Current wording
As described in note 2 to our consolidated financial statements, the Company forecasts it may not have enough cash to support the Company’s daily operations one year from the date the financial statements are issued due primarily to anticipated debt service costs, debt maturities and the potential termination fee the Company would owe to Ashford LLC upon the triggering of the change of control provision in the Advisory Agreement. We have$945.2 million of non-recourse loans that mature within one year from the date the financial statements are issued. If our lenders elect not to refinance these loans and foreclose on these properties and the Company’s Annualized Portfolio Cash Flow (as defined in the Advisory Agreement) is below $65 million, the change of control provision in the Advisory Agreement could be triggered at Ashford LLC’s discretion within one year from the date the financial statements are issued, resulting in a termination fee. See discussion in note 13 to our consolidated financial statements.
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, 2026, 38 of our hotels were in cash traps and approximately $2.6 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.
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, 2026, 30 of our hotels were in cash traps and approximately $13.7 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
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. On June 25, 2025 and December 22, 2025, the receiver appointed for the KEYS Pool A and KEYS Pool B mortgage loans transferred the Courtyard Oakland Airport and SpringHill Suites BWI Airport to a third-party purchaser. On March 4, 2026, the receiver appointed for the KEYS Pool A and KEYS Pool B mortgage loans transferred the SpringHill Suites Plymouth Meeting to a third-party purchaser.
Current wording
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. On June 25, 2025 and December 22, 2025, the receiver transferred the Courtyard Oakland Airport and SpringHill Suites BWI Airport to a third-party purchaser. On March 4, 2026, the receiver transferred the SpringHill Suites Plymouth Meeting to a third-party purchaser. On July 16, 2026, the receiver transferred the Courtyard Newark Silicon Valley and the Residence Inn San Jose Newark to third-party purchasers and, on August 6, 2026, the receiver transferred the TownePlace Suites Manhattan Beach and the SpringHill Suites Manhattan Beach to third-party purchasers.
Previous wording
On March 17, 2026, the Company was notified the lender intends to appoint a receiver for the Hilton Santa Cruz Scotts Valley. The $22.1 million non-recourse mortgage loan securing the Hilton Santa Cruz Scotts Valley reached final maturity on March 6, 2025 and was not repaid, resulting in a default under the terms and conditions of the mortgage loan agreement.
Current wording
On March 6, 2025, the $22.0 million non-recourse mortgage loan secured by the Hilton Santa Cruz Scotts Valley reached final maturity and was not repaid, resulting in a default under the terms and conditions of the mortgage loan agreement. On June 1, 2026, the Company received notice that the Hilton Santa Cruz Scotts Valley had been transferred to a court-appointed receiver. We derecognized the Hilton Santa Cruz Scotts Valley from our consolidated balance sheet in June 2026, when the receiver took control of the hotel property and, accordingly, recognized a loss of $597,000, which is included in “gain (loss) on derecognition of assets” in our consolidated statements of operations for the three and six months ended June 30, 2026. We recorded a contract asset of $24.9 million as of June 30, 2026, which represented the liabilities from which we expect to be released upon final resolution with the lenders on the Hilton Santa Cruz Scotts Valley mortgage loans in exchange for the transfer of ownership of the hotel property.
Previous wording
For the three months ended March 31, 2026 and 2025, we recognized additional gains of $7.8 million and $10.0 million, which were included in “gain (loss) on derecognition of assets” in our consolidated statement of operations. These gains increased the related contract asset by a corresponding amount. 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 wording
For the three and six months ended June 30, 2026 and 2025, we recognized gains of $6.8 million and $14.6 million The gains were included in “gain (loss) on derecognition of assets” in our consolidated statement of operations. These gains increased the related contract asset by a corresponding amount. The KEYS Pool A, KEYS Pool B and Hilton Santa Cruz Scotts Valley 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 “debt associated with hotels in receivership” and “accrued interest associated with hotels in receivership” on our consolidated balance sheets.
Previous wording
On January 13, 2026, the Company extended its Highland mortgage loan secured by 18 hotels. As a condition to the extension, the loan was paid down by $10 million to a current balance of $723.6 million, or approximately 65% of appraised value, and has a final maturity date of July 9, 2026.
Current wording
On January 13, 2026, the Company extended its Highland mortgage loan. As a condition to the extension, the loan was paid down by $10 million to $723.6 million, or approximately 65% of appraised value, with a final maturity date of July 9, 2026. In June 2026, the mortgage loan was paid down $199.7 million in conjunction with the sale of three hotel properties, and on July 31, 2026, the mortgage loan was paid down an additional $25.7 million in conjunction with the sale of the Hyatt Regency Long Island. In July 2026, a 30-day forbearance agreement was executed for this mortgage loan. On August 7, 2026, we refinanced this mortgage loan secured by 14 hotels with a new $525.0 million mortgage loan. The refinanced mortgage loan has a two-year initial term, is interest only, bears interest at SOFR + 5.24%, and has three one-year extension options, subject to satisfaction of certain conditions.
Previous wording
Net Cash Flows Provided by (Used in) Operating Activities. Net cash flows provided by operating activities were $29.5 million for the three months ended March 31, 2026 compared to net cash flows used in operating activities of $25.0 million for the three months ended March 31, 2025. Cash flows provided by (used in) operating activities were impacted by changes in hotel operations and our hotel dispositions, as well as the timing of collecting receivables from hotel guests, paying vendors and settling with derivative counterparties, related parties and hotel managers.
Current wording
Net Cash Flows Provided by (Used in) Operating Activities. Net cash flows provided by operating activities were $22.1 million for the six months ended June 30, 2026 compared to net cash flows used in operating activities of $8.6 million for the six months ended June 30, 2025. Cash flows provided by (used in) operating activities were impacted by changes in hotel operations and our hotel dispositions, as well as the timing of collecting receivables from hotel guests, paying vendors and settling with derivative counterparties, related parties and hotel managers.
Previous wording
Net Cash Flows Provided by (Used in) Investing Activities. For the three months ended March 31, 2026, net cash flows provided by investing activities were $197.1 million. Cash inflows consisted primarily of $209.2 million of net proceeds from the disposition of five hotel properties, $3.2 million of proceeds from the sale of historical tax credits related to the Le Pavillon hotel, which were sold subsequent to the sale of the property in December 2025, and $1.6 million from property insurance proceeds. Cash inflows were partially offset by cash outflows of $17.0 million for capital improvements made to various hotel properties.
Current wording
Net Cash Flows Provided by (Used in) Investing Activities. For the six months ended June 30, 2026, net cash flows provided by investing activities were $555.8 million. Cash inflows consisted primarily of $592.8 million of net proceeds from the disposition of fourteen hotel properties, $3.2 million of proceeds from the sale of historical tax credits related to the Le Pavillon hotel, which were sold subsequent to the sale of the property in December 2025, and $2.1 million from property insurance proceeds. Cash inflows were partially offset by cash outflows of $37.6 million for capital improvements made to various hotel properties and $4.7 million of cash removed upon the derecognition of the Hilton Santa Cruz Scotts Valley in June of 2026.
Showing the first 40 of 43 pairs. Open the source sections for the rest.
Rearranged current paragraphs (12)
Current report — wording carried from elsewhere
Hotel Operating Expenses. Hotel operating expenses decreased $22.4 million, or 11.3%, to $176.5 million in the 2026 quarter compared to the 2025 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 $10.3 million in the 2026 quarter as compared to the 2025 quarter primarily due to a decrease of $10.4 million from our Hotel Dispositions. Direct expenses were 29.0% of total hotel revenue for the 2026 quarter and 29.7% for the 2025 quarter.
Current report — wording carried from elsewhere
Advisory Services Fee. Advisory services fee increased $2.2 million, or 18.2%, to $14.2 million in the 2026 quarter compared to the 2025 quarter. The advisory services fee represents fees incurred in connection with the advisory agreements between Ashford LLC and the Company and, prior to September 2, 2025, between Stirling Advisor and Stirling OP. In the 2026 quarter, the advisory services fee was primarily comprised of a base advisory fee of $8.5 million and reimbursable expenses of $5.7 million. In the 2025 quarter, the advisory services fee was primarily comprised of a base advisory fee of $8.2 million, equity-based compensation of $222,000 awarded to the officers and employees of Ashford LLC, reimbursable expenses of $3.3 million and fees totaling $306,000 associated with Stirling OP’s advisory agreement.
Current report — wording carried from elsewhere
Corporate, General and Administrative. Corporate, general and administrative expense decreased $4.2 million from $5.5 million in the 2025 quarter to $1.3 million in the 2026 quarter. The decrease was primarily attributable to decreases in reimbursements of Ashford Securities’ operating expenses of $2.5 million from the winding down of Ashford Securities, miscellaneous expenses of $888,000, public company costs of $536,000 and legal and professional costs of $221,000.
Current report — wording carried from elsewhere
Write-off of Premiums, Loan Costs and Exit Fees. Write-off of premiums, loan costs and exit fees was $305,000 in the 2026 quarter and $1.5 million in the 2025 quarter. In the 2025 quarter, we incurred fees of $1.5 million related to loan refinances and modifications.
Current report — wording carried from elsewhere
Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in operating partnership were allocated net income of $1.7 million in the 2026 quarter and a net loss of $631,000 in the 2025 quarter. Redeemable noncontrolling interests represented ownership interests of 1.41% and 1.56% in the operating partnership at June 30, 2026 and 2025, respectively.
Current report — wording carried from elsewhere
Gain (Loss) on Derecognition of Assets. Gain on derecognition of assets decreased $5.3 million, from $19.9 million in the 2025 period to $14.6 million in the 2026 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, KEYS B and Hilton Santa Cruz Scotts Valley loans as we expect to be released from this obligation upon final resolution with the lender. The gains in the 2026 period and the 2025 period relate to accrued interest on the mortgage loans of the KEYS A, KEYS B and Hilton Santa Cruz Scotts Valley properties in receivership. See note 6 to our consolidated financial statements.
Current report — wording carried from elsewhere
Equity in Earnings (Loss) of Unconsolidated Entities. Equity in loss of unconsolidated entities was $155,000 in the 2026 period and $387,000 in the 2025 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.
Current report — wording carried from elsewhere
Interest Income. Interest income was $2.0 million and $2.5 million in the 2026 period and the 2025 period, respectively. The decrease in interest income in the 2026 period was primarily attributable to lower excess cash balances in the 2026 period compared to the 2025 period.
Current report — wording carried from elsewhere
Interest Expense Associated with Hotels in Receivership. Interest expense associated with hotels in receivership decreased $5.4 million, from $20.8 million in the 2025 period to $15.4 million in the 2026 period. The decrease is due to fewer hotels being under receivership in the 2026 period compared to the 2025 period. On June 25, 2025 and December 22, 2025, the Courtyard Oakland Airport and SpringHill Suites BWI Airport were transferred to a third-party purchaser. On March 4, 2026, the SpringHill Suites Plymouth Meeting was also transferred 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. Interest expense associated with hotels in receivership additionally includes interest expense related to the Hilton Santa Cruz Scotts Valley Derecognition. See note 6 to our consolidated financial statements.
Current report — wording carried from elsewhere
Realized and Unrealized Gain (Loss) on Derivatives. Realized and unrealized gain (loss) on derivatives changed by $4.4 million from a $3.6 million loss in the 2025 period to an $801,000 gain in the 2026 period. In the 2026 period, we recognized $801,000 of net unrealized gains on our derivatives which were primarily attributable to interest rate caps.
Current report — wording carried from elsewhere
Income Tax (Expense) Benefit. Income tax expense increased $2.9 million, from $436,000 in the 2025 period to $3.3 million in the 2026 period. The increase in income tax expense in the 2026 period was primarily attributable to an increase in the taxable income of our TRS entities.
Current report — wording carried from elsewhere
(Income) Loss from Consolidated Entities Attributable to Noncontrolling Interests. Our noncontrolling interest partners in consolidated entities were allocated losses of $996,000 and $3.2 million in the 2026 period and the 2025 period, respectively. Noncontrolling interests in consolidated entities represented an ownership interest of 70.7% in 815 Commerce MM and, prior to September 2, 2025, 0.30% in Stirling OP. See notes 1 and 2 to our consolidated financial statements.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
On January 13, 2026, the Company announced that, to preserve the Company’s liquidity position as it evaluates strategic alternatives, preferred dividends have been suspended, including dividends previously declared for recordholders of the Company’s Series D, F, G, H, I, J, K, L and M preferred stock as of December 31, 2025, and payable on January 15, 2026. We intend to pay the previously declared but unpaid dividends as soon as reasonably practicable. Any accrued but unpaid dividends will accrue in accordance with the terms outlined in the applicable governing documents for each series of preferred stock. We will continue to evaluate potential future dividends on a quarterly basis.
Previous report — wording carried elsewhere
On January 13, 2026, the Company extended its Highland mortgage loan secured by 18 hotels. As a condition to the extension, the loan was paid down by $10 million to a current balance of $723.6 million, or approximately 65% of appraised value, and has a final maturity date of July 9, 2026.
Previous report — wording carried elsewhere
On February 11, 2026, the Company received a notice of default and acceleration from the lender relating to the Company’s mortgage loan on the JPM8 hotel properties. The notice followed the Company’s failure on February 9, 2026 to make certain required payments and deliver required documentation under the existing loan extension, which constituted an event of default under the loan agreement. As a result, the lender demanded immediate payment of the outstanding principal balance of $325 million, plus accrued interest, default interest, fees, and other amounts due, and also required delivery of a replacement interest rate cap agreement. The loan is secured by eight hotel properties. The notice does not trigger any cross‑defaults under other loans of the Company’s subsidiaries, and the Company has no indebtedness at the parent‑company level.