Summit Hotel Properties, Inc 10-Q for FY2026 Q2
Summit Hotel Properties, Inc. (INN)
10-Q
2026-08-05
For: 2026-06-30
View Original
Added on
August 05, 2026
About this 10-Q
Summit Hotel Properties, Inc filed this 10-Q on August 5, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).
Headline figures
Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $199.02M
- up 3.2% from $192.92M a year earlier
- Net income
- $9.74M
- up 377.9% from net income of $2.04M a year earlier
- Diluted EPS
- $0.04
- compared with -$0.02 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________________________________________
FORM 10-Q
____________________________________________________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2026
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number: 001-35074
(Exact name of registrant as specified in its charter)
_____________________________________________________________________________________
| (State or other jurisdiction | (I.R.S. Employer Identification No.) | |||||||
| of incorporation or organization) | ||||||||
(Address of principal executive offices, including zip code)
(512 ) 538-2300
(Registrant’s telephone number, including area code)
________________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405) of this chapter during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | ☒ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | ||||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
As of July 24, 2026, the number of outstanding shares of common stock of Summit Hotel Properties, Inc. was 107,853,463 .
TABLE OF CONTENTS
| Page | ||||||||
Condensed Consolidated Balance Sheets — June 30, 2026 (Unaudited) and December 31, 2025 | ||||||||
Condensed Consolidated Statements of Operations (Unaudited) — Three and Six Months Ended June 30, 2026 and 2025 | ||||||||
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) — Three and Six Months Ended June 30, 2026 and 2025 | ||||||||
Condensed Consolidated Statements of Changes in Equity and Redeemable Non-controlling Interests (Unaudited) — Three and Six Months Ended June 30, 2026 and 2025 | ||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) — Six Months Ended June 30, 2026 and 2025 | ||||||||
i
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Summit Hotel Properties, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
| June 30, 2026 | December 31, 2025 | |||||||||||||
| (Unaudited) | ||||||||||||||
| ASSETS | ||||||||||||||
| Investments in lodging property, net | $ | $ | ||||||||||||
| Assets held for sale, net | ||||||||||||||
| Cash and cash equivalents | ||||||||||||||
| Restricted cash | ||||||||||||||
| Right-of-use assets, net | ||||||||||||||
| Trade receivables, net | ||||||||||||||
| Prepaid expenses and other | ||||||||||||||
| Deferred charges, net | ||||||||||||||
| Other assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY | ||||||||||||||
| Liabilities: | ||||||||||||||
| Debt, net of debt issuance costs | $ | $ | ||||||||||||
| Lease liabilities, net | ||||||||||||||
| Accounts payable | ||||||||||||||
| Accrued expenses and other | ||||||||||||||
| Total liabilities | ||||||||||||||
Commitments and contingencies (Note 11) | ||||||||||||||
| Redeemable non-controlling interests | ||||||||||||||
| Equity: | ||||||||||||||
Preferred stock, $ | ||||||||||||||
Common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated other comprehensive income | ||||||||||||||
| Accumulated deficit and distributions in excess of retained earnings | ( | ( | ||||||||||||
| Total stockholders’ equity | ||||||||||||||
| Non-controlling interests | ||||||||||||||
| Total equity | ||||||||||||||
| Total liabilities, redeemable non-controlling interests and equity | $ | $ | ||||||||||||
See Notes to the Condensed Consolidated Financial Statements
1
Summit Hotel Properties, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Room | $ | $ | $ | $ | ||||||||||||||||||||||
| Food and beverage | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Total revenues | ||||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||
| Room | ||||||||||||||||||||||||||
| Food and beverage | ||||||||||||||||||||||||||
| Other lodging property operating expenses | ||||||||||||||||||||||||||
| Property taxes, insurance and other | ||||||||||||||||||||||||||
| Management fees | ||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
| Corporate general and administrative | ||||||||||||||||||||||||||
| Loss on write-down of assets | ||||||||||||||||||||||||||
| Total expenses | ||||||||||||||||||||||||||
| Gain (loss) on disposal of assets, net | ( | ( | ||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||
| Other income, net | ||||||||||||||||||||||||||
| Total other expense, net | ( | ( | ( | ( | ||||||||||||||||||||||
| Income from continuing operations before income taxes | ||||||||||||||||||||||||||
| Income tax benefit (expense) (Note 13) | ( | ( | ||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||
| Less - Income (loss) attributable to non-controlling interests | ( | ( | ||||||||||||||||||||||||
| Net income attributable to Summit Hotel Properties, Inc. before preferred dividends | ||||||||||||||||||||||||||
| Less - Distributions to and accretion of redeemable non-controlling interests | ( | ( | ( | ( | ||||||||||||||||||||||
| Less - Preferred dividends | ( | ( | ( | ( | ||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
| Income (loss) per common share: | ||||||||||||||||||||||||||
| Basic | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
| Diluted | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
| Weighted-average common shares outstanding: | ||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
See Notes to the Condensed Consolidated Financial Statements
2
Summit Hotel Properties, Inc.
Condensed Consolidated Statements of Comprehensive (Loss) Income
(Unaudited)
(In thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
| Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||
| Changes in fair value of derivative financial instruments | ( | ( | ||||||||||||||||||||||||
| Comprehensive income (loss) | ( | ( | ||||||||||||||||||||||||
| Comprehensive (income) loss attributable to non-controlling interests | ( | ( | ||||||||||||||||||||||||
| Comprehensive income (loss) attributable to Summit Hotel Properties, Inc. | ( | |||||||||||||||||||||||||
| Distributions to and accretion on redeemable non-controlling interests | ( | ( | ( | ( | ||||||||||||||||||||||
| Preferred dividends and distributions | ( | ( | ( | ( | ||||||||||||||||||||||
| Comprehensive income (loss) attributable to common stockholders | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
See Notes to the Condensed Consolidated Financial Statements
3
Summit Hotel Properties, Inc.
Condensed Consolidated Statements of Changes in Equity and Redeemable Non-controlling Interests
For the Three Months Ended June 30, 2026 and 2025
(Unaudited)
(In thousands, except share amounts)
| Redeemable Non-controlling Interests | Shares of Preferred Stock | Preferred Stock | Shares of Common Stock | Common Stock | Additional Paid-In Capital | Accumulated Comprehensive Income (Loss) | Accumulated Deficit and Distributions | Stockholders’ Equity | Non-controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment of redeemable non-controlling interests to redemption value | — | — | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common shares | — | — | — | ( | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends and distributions on common stock and common units | — | — | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred dividends and distributions | ( | — | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Joint venture partner distributions | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | ( | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment of redeemable non-controlling interests to redemption value | — | — | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions by non-controlling interest in joint venture | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common shares | — | — | — | ( | ( | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends and distributions on common stock and common units | — | — | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred dividends and distributions | ( | — | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Joint venture partner distributions | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares of common stock acquired for employee withholding requirements | — | — | — | ( | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | — | ( | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
See Notes to the Condensed Consolidated Financial Statements
4
Summit Hotel Properties, Inc.
Condensed Consolidated Statements of Changes in Equity and Redeemable Non-controlling Interests
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
(In thousands, except share amounts)
| Redeemable Non-controlling Interests | Shares of Preferred Stock | Preferred Stock | Shares of Common Stock | Common Stock | Additional Paid-In Capital | Accumulated Comprehensive Income (Loss) | Accumulated Deficit and Distributions | Stockholders’ Equity | Non-controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment of redeemable non-controlling interests to redemption value | — | — | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common shares | — | — | — | ( | ( | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends and distributions on common stock and common units | — | — | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred dividends and distributions | ( | — | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Joint venture partner distributions | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares of common stock acquired for employee withholding requirements | — | — | — | ( | ( | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment of redeemable non-controlling interests to redemption value | — | — | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions by non-controlling interest in joint venture | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock redemption of common units | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common shares | — | — | — | ( | ( | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends and distributions on common stock and common units | — | — | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred dividends and distributions | ( | — | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Joint venture partner distributions | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares of common stock acquired for employee withholding requirements | — | — | — | ( | ( | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | — | ( | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
See Notes to the Condensed Consolidated Financial Statements
5
Summit Hotel Properties, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) | ||||||||||||||
| Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| OPERATING ACTIVITIES | ||||||||||||||
| Net income | $ | $ | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Amortization of debt issuance costs | ||||||||||||||
| Loss on write-down of assets | ||||||||||||||
| Equity-based compensation | ||||||||||||||
| Deferred tax (benefit) expense | ( | |||||||||||||
| (Gain) loss on disposal of assets, net | ( | |||||||||||||
| Debt transaction costs | ||||||||||||||
| Other | ||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Trade receivables, net | ( | ( | ||||||||||||
| Prepaid expenses and other | ( | ( | ||||||||||||
| Accounts payable | ( | ( | ||||||||||||
| Accrued expenses and other | ( | |||||||||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||||||||
| INVESTING ACTIVITIES | ||||||||||||||
| Improvements to lodging properties | ( | ( | ||||||||||||
| Investment in lodging property under development | ( | |||||||||||||
| Proceeds from asset dispositions, net | ||||||||||||||
| Purchase of undeveloped land parcel | ( | |||||||||||||
| Other | ( | |||||||||||||
| NET CASH USED IN INVESTING ACTIVITIES | ( | ( | ||||||||||||
| FINANCING ACTIVITIES | ||||||||||||||
| Proceeds from borrowings on revolving line of credit | ||||||||||||||
| Repayments of revolving line of credit borrowings | ( | ( | ||||||||||||
| Proceeds from mortgage loan | ||||||||||||||
| Repayment of mortgage loan | ( | |||||||||||||
| Scheduled principal payments on mortgage debt | ( | ( | ||||||||||||
| Repurchases of common shares | ( | ( | ||||||||||||
| Proceeds from term loan | ||||||||||||||
| Repayment on Convertible Notes | ( | |||||||||||||
| Repayment of term loan | ( | |||||||||||||
| Common dividends and distributions paid | ( | ( | ||||||||||||
| Preferred dividends and distributions paid | ( | ( | ||||||||||||
| Contributions by non-controlling interests in joint venture | ||||||||||||||
| Distributions to joint venture partners | ( | ( | ||||||||||||
| Financing fees, debt transaction costs and other issuance costs | ( | ( | ||||||||||||
| Repurchase of common stock for tax withholding requirements | ( | ( | ||||||||||||
| NET CASH USED IN FINANCING ACTIVITIES | ( | ( | ||||||||||||
| Net change in cash, cash equivalents and restricted cash | ( | |||||||||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ||||||||||||||
| Beginning of period | ||||||||||||||
| End of period | $ | $ | ||||||||||||
| RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH WITHIN THE CONDENSED CONSOLIDATED BALANCE SHEET TO THE AMOUNTS SHOWN IN THE STATEMENT OF CASH FLOWS ABOVE: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash | ||||||||||||||
| TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH | $ | $ | ||||||||||||
See Notes to the Condensed Consolidated Financial Statements
6
SUMMIT HOTEL PROPERTIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - DESCRIPTION OF BUSINESS
General
Summit Hotel Properties, Inc. (the “Company”) is a self-managed lodging property investment company that was organized in June 2010 as a Maryland corporation. The Company holds both general and limited partnership interests in Summit Hotel OP, LP (the “Operating Partnership”), a Delaware limited partnership also organized in June 2010. Unless the context otherwise requires, “we,” “us,” and “our” refer to the Company and its consolidated subsidiaries.
We focus on owning lodging properties with efficient operating models that generate strong margins and investment returns. At June 30, 2026, our portfolio consisted of 94 lodging properties with a total of 14,226 guestrooms located in 24 states of the United States of America (“USA”). At June 30, 2026, we own 100 % of the outstanding equity interests in 52 of the 94 lodging properties. We own a 51 % controlling interest in 39 lodging properties through a joint venture that was formed in July 2019 with USFI G-Peak, Ltd. (“GIC”), a private limited company incorporated in the Republic of Singapore (the “GIC Joint Venture”). We also own 90 % equity interests in two separate joint ventures (the “Brickell Joint Venture” and the “Onera Joint Venture”). The Brickell Joint Venture owns two lodging properties, and the Onera Joint Venture owns one lodging property.
At June 30, 2026, 87 % of our guestrooms were located in the top 50 metropolitan statistical areas (“MSAs”), 92 % were located within the top 100 MSAs, and over 99 % of our guestrooms operate under premium franchise brands owned by Marriott® International, Inc. (“Marriott”), Hilton® Worldwide (“Hilton”), Hyatt® Hotels Corporation (“Hyatt”), and InterContinental® Hotels Group (“IHG”).
Substantially all of our assets are held by, and all of our operations are conducted through, the Operating Partnership. Through a wholly-owned subsidiary, we are the sole general partner of the Operating Partnership. At June 30, 2026, we owned, directly and indirectly, approximately 89 % of the Operating Partnership’s issued and outstanding common units of limited partnership interest (“Common Units”), and all of the Operating Partnership’s issued and outstanding 6.25 % Series E and 5.875 % Series F preferred units of limited partnership interest. NewcrestImage (as defined in “Note 5 - Debt” to the Condensed Consolidated Financial Statements) owns all of the issued and outstanding 5.25 % Series Z Cumulative Perpetual Preferred Units (liquidation preference $25 per unit) of the Operating Partnership (“Series Z Preferred Units”) as a result of the NCI Transaction (described in “Note 5 - Debt” to the Condensed Consolidated Financial Statements). We collectively refer to preferred units of limited partnership interests of our Operating Partnership as “Preferred Units.”
Pursuant to the Operating Partnership’s partnership agreement, we have full, exclusive and complete responsibility and discretion in the management and control of the Operating Partnership, including the ability to cause the Operating Partnership to enter into certain major transactions including acquisitions, dispositions, refinancings, to make distributions to partners, and to cause changes in the Operating Partnership’s business activities.
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NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
We prepare our Condensed Consolidated Financial Statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Condensed Consolidated Financial Statements and reported amounts of consolidated revenues and expenses in the reporting period. Actual results could differ from those estimates. As interim statements, the Condensed Consolidated Financial Statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation in accordance with GAAP have been included. Results for the three and six months ended June 30, 2026 may not be indicative of the results that may be expected for the full year of 2026. For further information, please read the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.
The accompanying Condensed Consolidated Financial Statements consolidate the accounts of all entities in which we have a controlling financial interest, as well as variable interest entities, if any, for which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated on the Condensed Consolidated Financial Statements.
Use of Estimates
Our Condensed Consolidated Financial Statements are prepared in conformity with GAAP, which requires us to make estimates based on assumptions about current and, for some estimates, future economic and market conditions that affect reported amounts and related disclosures on our Condensed Consolidated Financial Statements. Although our current estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could significantly differ from our expectations, which could materially affect our consolidated financial position and results of operations.
Trade Receivables and Current Estimate of Credit Losses
Investments in Lodging Property, net
The Company allocates the purchase price of acquired lodging properties based on the relative fair values of the acquired land, land improvements, building, furniture, fixtures and equipment, identifiable intangible assets or liabilities, other assets, and assumed liabilities. Intangible assets may include certain value associated with the on-going operations of the lodging property being acquired as part of the acquisition. Acquired intangible assets that derive their values from real property, or an interest in real property, are inseparable from that real property or interest in real property, or do not produce or contribute to the production of income other than consideration for the use or occupancy of space, are recorded as a component of the related real estate asset on our Condensed Consolidated Financial Statements.
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Our lodging properties and related assets are recorded at cost, less accumulated depreciation and amortization. We capitalize development costs and the costs of significant additions and improvements that materially upgrade, increase the value or extend the useful life of the property. These costs may include development, refurbishment, renovation, and remodeling expenditures, as well as certain indirect internal costs related to construction projects. If an asset requires a period of time in which to carry out the activities necessary to bring it to the condition necessary for its intended use, the interest cost incurred during that period as a result of expenditures for the asset is capitalized as part of the cost of the asset. We expense the cost of repairs and maintenance as incurred.
We generally depreciate our lodging properties and related assets using the straight-line method over their estimated useful lives as follows:
| Classification | Estimated Useful Lives | |||||||
| Buildings and improvements | ||||||||
| Furniture, fixtures and equipment | ||||||||
We periodically re-evaluate asset lives based on current assessments of remaining utilization, which may result in changes in estimated useful lives. Such changes are accounted for prospectively and will increase or decrease future depreciation expense.
When depreciable property and equipment is retired or disposed, the related costs and accumulated depreciation are removed from the balance sheet and any gain or loss is reflected in current operations.
On a limited basis, we provide financing to developers of lodging properties for development projects. We evaluate these arrangements to determine if we participate in residual profits of the lodging property through the loan provisions or other agreements. Where we conclude that these arrangements are more appropriately treated as an investment in the real property, we reflect the loan in Investments in lodging property, net on our Condensed Consolidated Balance Sheets.
Insurable Losses
Under our general liability insurance program, we retain risk up to a specified per‑claim retention limit, beyond which insurance coverage is provided by third‑party insurers, subject to policy terms and limits.
In accordance with Accounting Standards Codification (“ASC”) No. 450 - Contingencies, we accrue liabilities for self‑insured losses when it is probable that a loss has been incurred and the amount of such loss can be reasonably estimated. The accrued liabilities represent management’s best estimate of the ultimate cost to settle both reported claims and incurred but not reported (“IBNR”) claims as of the balance sheet date.
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Estimated insurance liabilities that are the Company’s responsibility are determined using actuarial methods consistent with ASC No. 944 - Financial Services - Insurance, including loss development techniques that consider historical claims experience, reported claim severity, claim frequency patterns, anticipated medical and legal cost trends, expected claim settlement patterns, and other relevant factors. We utilize information provided by third‑party claims administrators and, where appropriate, independent actuarial specialists to assist in estimating these liabilities. Management reviews the assumptions and valuation methodologies used in the actuarial analyses on a regular basis and updates them as new information becomes available.
Accrued insurance losses include estimated claim adjustment expenses and are recorded on an undiscounted basis, as the period over which the claims are expected to be settled is not determinable with sufficient precision or the effect of discounting is not material to the financial statements.
Debt Issuance Costs
Debt issuance costs related to our debt generally are recorded at historical cost as a discount to the related debt. Debt issuance costs are amortized as interest expense on a straight-line basis, which approximates the interest method, over the life of the related debt instrument unless there is a significant modification to the debt instrument. Unamortized debt issuance costs related to the $50 million delayed draw term loan that closed in June 2026 (the “$50 Million Delayed Draw Term Loan”), as detailed in Note 5 - Debt, are included in Deferred charges, net as we have not yet drawn any amounts on this loan. These costs will be reclassified as a discount to the related debt at the time the funds are drawn.
Assets Held for Sale
We classify assets as Assets held for sale in the period in which certain criteria are met, including when the sale of the asset within one year is probable. Assets classified as Assets held for sale are no longer depreciated and are carried at the lower of net book value or its fair value calculated as the expected selling price less estimated costs of disposition. We record a write-down when the carrying amounts of Assets held for sale exceed their fair value.
If we subsequently decide not to sell a long-lived asset or a group of assets to be sold together in one transaction (“Disposal Group”) classified in Assets held for sale, or if a long-lived asset or Disposal Group no longer meets the Assets held for sale criteria, the long-lived asset or Disposal Group is reclassified as Investments in lodging property, net in the period in which the Assets held for sale criteria are no longer met. A long-lived asset that is reclassified from Assets held for sale to Investments in lodging property, net is measured individually at the lower of either its:
i.) Carrying amount before it was classified as Assets held for sale, adjusted for any depreciation (amortization) expense or impairment losses that would have been recognized had the asset (group) been continuously classified as Investments in lodging property, net; or
ii.) Fair value at the date of the subsequent decision not to sell.
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Income Taxes
We account for federal and state income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for: i) the future tax consequences attributable to differences between carrying amounts of existing assets and liabilities based on GAAP and the respective carrying amounts for tax purposes, and ii) operating losses and tax-credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of the change in tax rates. However, deferred tax assets are recognized only to the extent that it is more likely than not they will be realized based on consideration of available evidence. Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
Earnings Per Share
Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. We apply the two-class method of computing earnings (loss) per share, which requires the calculation of separate earnings (loss) per share amounts for participating securities. Any anti-dilutive securities are excluded from the basic per-share calculation. Diluted EPS is computed by dividing net income (loss) available to common stockholders, as adjusted for dilutive securities, by the weighted-average number of common shares outstanding plus dilutive securities. Any anti-dilutive securities are excluded from the diluted per-share calculation.
New Accounting Standards
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Disaggregation of Income Statement Expenses, that will require entities to provide enhanced disclosures related to certain expense categories included on the Consolidated Statement of Operations. ASU No. 2024-03 is intended to increase transparency and provide investors with more detailed information about the nature of expenses reported on the face of the Consolidated Statement of Operations. ASU No. 2024-03 does not change the requirements for the presentation of expenses on the face of the consolidated statement of operations. Under ASU No. 2024-03, entities are required to disaggregate, in tabular format, expenses presented on the face of the Consolidated Statement of Operations - excluding earnings or losses from equity method investments - if they include any of the following expense categories: purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation or depletion. For any remaining items within each relevant expense caption, entities must provide a qualitative description of the nature of those expenses. ASU No. 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. While the adoption of ASU No. 2024-03 is not expected to have a material effect on our Consolidated Financial Statements, it is expected to result in incremental disclosures within the footnotes to our Consolidated Financial Statements.
In November 2025, the FASB issued ASU No. 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. The amendments are intended to simplify the application of hedge accounting and better align accounting outcomes with an entity’s risk management strategies. ASU No. 2025-09 expands the scope of eligible hedged risks and forecasted transactions, modifies certain hedge effectiveness requirements, and provides additional guidance on the accounting for variable-rate debt instruments with multiple reference rate options. The guidance is effective for fiscal years beginning after December 15, 2026 for public business entities, with early adoption permitted. The adoption of ASU No. 2025-09 is not expected to have a material effect on our Consolidated Financial Statements.
In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which establishes authoritative guidance for the recognition, measurement, presentation, and disclosure of government grants. The amendments are intended to reduce diversity in practice and align U.S. GAAP more closely with international accounting standards. ASU No. 2025-10 is effective for fiscal years beginning after December 15, 2028 for public business entities, with early adoption permitted. The adoption of ASU No. 2025-10 is not expected to have an effect on our Consolidated Financial Statements.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Interim Disclosure Improvements, which expands interim disclosure requirements to provide more timely and decision-useful information to investors. ASU No. 2025-11 is effective for interim periods beginning after December 15, 2026 for public business entities, with early adoption permitted. The adoption of ASU No. 2025-11 is not expected to have a material effect on our Consolidated Financial Statements.
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NOTE 3 - INVESTMENTS IN LODGING PROPERTY, NET
Investments in Lodging Property, net
Investments in lodging property, net is as follows (in thousands):
| June 30, 2026 | December 31, 2025 | |||||||||||||
| Lodging buildings and improvements | $ | $ | ||||||||||||
| Land | ||||||||||||||
| Furniture, fixtures and equipment | ||||||||||||||
| Construction in progress | ||||||||||||||
| Intangible assets | ||||||||||||||
| Real estate development loan | ||||||||||||||
| Less accumulated depreciation and amortization | ( | ( | ||||||||||||
| $ | $ | |||||||||||||
Depreciation and amortization expense related to our lodging properties (excluding amortization of franchise fees) was $36.3 million and $37.0 million for the three months ended June 30, 2026 and 2025, respectively, and $72.9 million and $74.1 million for the six months ended June 30, 2026 and 2025, respectively.
Lodging Property Sales
Hilton Garden Inn - Longview, TX
In November 2025, the GIC Joint Venture entered into a purchase and sale agreement to sell the 122 -guestroom Hilton Garden Inn, Longview, TX for a selling price of $12.3 million. At December 31, 2025, we reclassified the carrying amount of the property to Assets held for sale, net and recorded a write-down of $1.8 million for the excess of the net carrying amount of the lodging property over the net selling price less estimated costs to sell. We completed the sale of the property on February 20, 2026 in accordance with the terms described above. The net selling price of the lodging property approximated its net book value on the closing date.
Undeveloped Parcel of Land - San Antonio, TX
We owned a 5.99 -acre parcel of undeveloped land in San Antonio, TX that was classified as Assets held for sale, net at December 31, 2024. In February 2025, we closed on the sale of the parcel of undeveloped land for $1.3 million, which approximated its carrying amount.
Pending Property Sale
In April 2026, we entered into a purchase and sale agreement to sell the 103 -guestroom Courtyard by Marriott, Dallas (Arlington South), TX and the 96 -guestroom Residence Inn by Marriott, Dallas (Arlington South), TX for a combined selling price of $19.0 million. We reclassified the properties to Assets held for sale, net at March 31, 2026 since the reclassification criteria were met and recorded a write-down of $3.6 million for the excess of the net carrying amount of the two properties over the net selling price less estimated costs to sell, which is included in Loss on write-down of assets in our Condensed Consolidated Statement of Operations. We completed the sale of the properties on July 22, 2026 in accordance with the terms described above. The net selling price of the lodging properties approximated their aggregate net book value on the closing date.
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Assets Held for Sale, net
Assets held for sale, net is as follows (in thousands):
| June 30, 2026 | December 31, 2025 | ||||||||||||||||
Courtyard by Marriott and Residence Inn - Dallas (Arlington South), TX | $ | (1) | $ | ||||||||||||||
Hilton Garden Inn - Longview, TX | (1) | ||||||||||||||||
| $ | $ | ||||||||||||||||
(1) Carrying amounts are at the net sales price less estimated costs to sell (Level 2 of the fair value hierarchy).
Purchase of Land
Undeveloped Parcel of Land - Frisco, TX
In June 2026, the GIC Joint Venture acquired an approximately one acre undeveloped parcel of land in Frisco, Texas for $1.4 million. The parcel is adjacent to the three GIC Joint Venture owned lodging properties in Frisco, TX. See “Note 17 - Related Party Transaction” for additional details.
Intangible Assets
Intangible assets, net is as follows (in thousands):
| June 30, 2026 | December 31, 2025 | |||||||||||||
| Indefinite-lived intangible assets: | ||||||||||||||
| Air rights | $ | $ | ||||||||||||
| Other | ||||||||||||||
| Finite-lived intangible assets: | ||||||||||||||
| Tax incentives | ||||||||||||||
| Key money | ||||||||||||||
| Intangible assets | ||||||||||||||
| Less - accumulated amortization | ( | ( | ||||||||||||
| Intangible assets, net | $ | $ | ||||||||||||
We recorded amortization expense related to intangible assets of approximately $0.4 0.8
Future amortization expense related to intangible assets is as follows (in thousands):
| For the Year Ending December 31, | Amount | |||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| $ | ||||||||
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NOTE 4 - INVESTMENT IN REAL ESTATE LOANS
Real Estate Development Loans
Onera Mezzanine Financing Loan
In January 2023, we entered into an agreement with affiliates of Onera Opportunity Fund I, LP (“Onera”) to provide a mezzanine financing loan of $4.6 million (the “Onera Mezzanine Loan”) for the development of a lodging property. The Onera Mezzanine Loan had an original maturity date of January 2026 and is secured by a second mortgage on the property that is subordinate to the senior loan on the development project. During the first quarter of 2026, the agreement with Onera was amended to extend the maturity of the Onera Mezzanine loan to June 2027 (the “Onera Amendment”). As of June 30, 2026, we have funded our entire $4.6 million commitment under the Onera Mezzanine Loan. The development of the property was completed and operations commenced in September 2024.
We also have an option to purchase 90 % of the equity of the entity that owns the property that became exercisable upon completion of construction in September 2024 (the “Onera Purchase Option”). The Onera Amendment modified the Onera Purchase Option (the “Modified Purchase Option”) to extend the exercise date to March 2027.
We recorded the estimated fair value of the Onera Purchase Option in Other assets and as a contra-asset to Investments in lodging property, net at its estimated fair value of $0.9 million on the transaction date using the Black-Scholes model. Our estimate of the fair value of the Onera Purchase Option under the Black-Scholes model requires substantial judgment related to the future operating performance of the property and the volatility of the underlying equity.
The recorded amount of the Onera Purchase Option was amortized as non-cash interest income beginning in January 2023 using the straight-line method, which approximated the interest method, through September 2024 when the Onera Purchase Option became exercisable. Upon the execution of the Onera Amendment, the Modified Onera Purchase Option was revalued using the Monte Carlo simulation model. The fair value of the Modified Onera Purchase Option was estimated to be approximately the same as estimated fair value of the original Onera Purchase Option. As such, no change in the carrying amount of the purchase option was required upon the execution of the Onera Amendment.
NOTE 5 - DEBT
At June 30, 2026, our indebtedness was comprised of borrowings under our 2026 Senior Credit Facility, the 2024 Term Loan, the 2025 Delayed Draw Term Loan (which was used to refinance a significant portion of our outstanding convertible notes when they matured in February 2026), the GIC Joint Venture Credit Facility, the GIC Joint Venture Term Loan, the PACE loan (each of such credit facilities and loans are defined below), and two loans secured by first priority mortgage liens on three lodging properties.
We have entered into interest rate swaps to fix the interest rates on a portion of our variable interest rate indebtedness. The weighted-average interest rate, after giving effect to our interest rate derivatives, for all borrowings was 5.52 % at June 30, 2026 and 4.83 % at December 31, 2025. We are in compliance with all financial covenants in the loan agreements.
Debt, net of debt issuance costs, is as follows (in thousands):
| June 30, 2026 | December 31, 2025 | |||||||||||||
| Revolving debt | $ | $ | ||||||||||||
| Term loans | ||||||||||||||
| Convertible notes | ||||||||||||||
| Mortgage loans | ||||||||||||||
Unamortized debt issuance costs (1) | ( | ( | ||||||||||||
Debt, net of debt issuance costs | $ | $ | ||||||||||||
(1) In June 2026, we recorded $0.6 million in bank, legal and other fees related to the $50 million Delayed Draw Term Loan (as described in further detail below) in Deferred charges, net on our Condensed Consolidated Balance Sheet since we have not yet drawn any amounts on this loan. These costs will be reclassified as a discount to the related debt at the time the funds are drawn.
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Our total fixed-rate and variable-rate debt, after consideration of our interest rate derivative agreements that are currently in effect, is as follows (in thousands):
| June 30, 2026 | Percentage | December 31, 2025 | Percentage | |||||||||||||||||||||||
Fixed-rate debt (1) | $ | $ | ||||||||||||||||||||||||
| Variable-rate debt | ||||||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||||
(1) At June 30, 2026, debt related to our wholly-owned properties and our pro rata share of joint venture debt has a fixed-rate debt ratio of approximately 51 % of our total pro rata indebtedness when taking into consideration interest rate swaps that are currently in effect.
Information about the fair value of our fixed-rate debt that does not approximate fair value is as follows (in thousands):
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||
| Carrying Value | Fair Value | Carrying Value | Fair Value | Valuation Technique | ||||||||||||||||||||||||||||
| Convertible notes | $ | $ | $ | $ | Level 1 - Market approach | |||||||||||||||||||||||||||
| Mortgage loans | Level 2 - Market approach | |||||||||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||||||||
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Detailed information about our debt at June 30, 2026 and December 31, 2025 is as follows (dollars in thousands):
| Principal Balance Outstanding | ||||||||||||||||||||||||||||||||||||||||||||
| Lender | Interest Rate | Initial Maturity Date | Fully Extended Maturity Date | Number of Encumbered Properties | June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| OPERATING PARTNERSHIP DEBT: | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 Senior Credit Facility | ||||||||||||||||||||||||||||||||||||||||||||
| Bank of America, N.A. | ||||||||||||||||||||||||||||||||||||||||||||
$ | 6/29/2030 | 6/29/2031 | n/a | $ | $ | |||||||||||||||||||||||||||||||||||||||
$ | 6/29/2031 | 6/29/2031 | n/a | |||||||||||||||||||||||||||||||||||||||||
$ | 6/29/2031 | 6/29/2031 | n/a | |||||||||||||||||||||||||||||||||||||||||
| Total Senior Credit Facility | ||||||||||||||||||||||||||||||||||||||||||||
| Convertible Notes | 2/15/2026 | 2/15/2026 | n/a | |||||||||||||||||||||||||||||||||||||||||
| Term Loans | ||||||||||||||||||||||||||||||||||||||||||||
Regions Bank 2024 Term Loan Facility (1) | 2/26/2027 | 2/26/2029 | n/a | |||||||||||||||||||||||||||||||||||||||||
2025 Delayed Draw Term Loan (1) | 3/27/2028 | 3/27/2030 | n/a | |||||||||||||||||||||||||||||||||||||||||
Total Operating Partnership Debt | ||||||||||||||||||||||||||||||||||||||||||||
| JOINT VENTURE DEBT: | ||||||||||||||||||||||||||||||||||||||||||||
| Brickell Joint Venture Mortgage Loan | ||||||||||||||||||||||||||||||||||||||||||||
| Wells Fargo Bank, N.A. | 5/15/2028 | 5/15/2030 | ||||||||||||||||||||||||||||||||||||||||||
| GIC Joint Venture Credit Facility and Term Loans | ||||||||||||||||||||||||||||||||||||||||||||
| Bank of America, N.A. | ||||||||||||||||||||||||||||||||||||||||||||
$ | 9/15/2027 | 9/15/2028 | n/a | |||||||||||||||||||||||||||||||||||||||||
$ | 9/15/2027 | 9/15/2028 | n/a | |||||||||||||||||||||||||||||||||||||||||
Bank of America, N.A. 2025 Term Loan (3) | 7/24/2028 | 7/24/2030 | n/a | |||||||||||||||||||||||||||||||||||||||||
| Wells Fargo | 6/6/2028 | 6/6/2028 | ||||||||||||||||||||||||||||||||||||||||||
| PACE loan | 7/31/2040 | 7/31/2040 | n/a | |||||||||||||||||||||||||||||||||||||||||
| Total GIC Joint Venture Credit Facility and Term Loans | ||||||||||||||||||||||||||||||||||||||||||||
| Total Joint Venture Debt | ||||||||||||||||||||||||||||||||||||||||||||
| Total Debt | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
(1) The 2026 Senior Credit Facility, the Regions Bank 2024 Term Loan Facility, and the 2025 Delayed Draw Term Loan are supported by a borrowing base of 52 unencumbered hotel properties and their affiliates.
(2) The $125 Million Revolver and the $125 Million Term Loan are secured by pledges of the equity in the entities that own 15 lodging properties and affiliated entities.
(3) The GIC Joint Venture Term Loan with Bank of America, N.A. is secured by pledges of the equity in the entities that own 23 lodging properties and two parking garages and their affiliates.
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$650 Million Senior Credit and Term Loan Facility
In June 2026, the Operating Partnership, as borrower, the Company, as parent guarantor, and each party executing the loan documentation as a subsidiary guarantor, entered into the second amended and restated $650 million senior credit facility (the “2026 Senior Credit Facility”) with Bank of America, N.A., as successor administrative agent, and a syndicate of lenders to replace the 2023 senior credit facility (the “2023 Senior Credit Facility”). The 2026 Senior Credit Facility is comprised of a $400 million revolver (the “$400 Million Revolver”), a $200 million term loan (the “$200 Million Term Loan”), and the $50 Million Delayed Draw Term Loan. The 2026 Senior Credit Facility has an accordion feature which allows the Company to increase the total borrowings and commitments under the 2026 Senior Credit Facility up to an aggregate total amount of $900 million for all loans and commitments under the 2026 Senior Credit Facility. The 2026 Senior Credit Facility extends the maturity date of the previous $400 Million Revolver in the 2023 Senior Credit Facility to June 2030, which may be extended by the Company for up to two consecutive six-month periods, subject to certain conditions. The 2026 Senior Credit Facility extends the previous $200 Million Term Loan in the 2023 Senior Credit Facility to June 2031. The $50 Million Delayed Draw Term Loan matures in June 2031. As part of the amendment, at the Company’s current leverage, the interest rate was reduced by 20 basis points from the previous $400 Million Revolver and the previous $200 Million Term Loan in the 2023 Senior Credit Facility.
As part of the amendment, we incurred debt issuance costs of $6.7 million, which are recorded as a reduction to the related debt on our Condensed Consolidated Balance Sheet at June 30, 2026. These costs and $1.6 million of unamortized debt issuance costs from the 2023 Senior Credit Facility will be amortized over the term of the 2026 Senior Credit Facility. Additionally, we recorded $0.6 million of debt issuance costs to the $50 Million Delayed Draw Term Loan as Deferred charges, net on our Condensed Consolidated Balance Sheet at June 30, 2026 as we have not yet drawn any amounts on this loan. This amount will be reclassified as a reduction to the related debt at the time the funds are drawn. Amortization of the costs will commence when we draw on the $50 Million Delayed Draw Term Loan.
At June 30, 2026, our $200 Million Term Loan was fully funded, we had $5.0 million in outstanding borrowings under our $400 Million Revolver, and we had no outstanding borrowings under our $50 Million Delayed Draw Term Loan. Borrowings under the Senior Credit Facility are limited by the value of the Unencumbered Assets.
The $400 Million Revolver bears interest at our option, at either (i) the Secured Overnight Financing Rate (“SOFR”) or term SOFR plus a margin ranging from 140 basis points to 230 basis points depending on the Company's leverage ratio (as defined in the loan documents) or (ii) an applicable base rate (which is the greatest of the administrative agent’s prime rate, the federal funds rate plus 50 basis points, and 1-month term SOFR plus 100 basis points) (the “base rate”) plus a margin ranging from 40 basis points to 130 basis points, depending on the Company's leverage ratio (as defined in the loan documents).
The $200 Million Term Loan and $50 Million Delayed Draw Term Loan each bear interest, at our option, at either (i) daily SOFR or term SOFR plus a margin ranging from 135 225 35 125
We are also required to pay an unused fee (the “Revolver Unused Fee”) on the undrawn portion of the $400 Million Revolver and the $50 Million Delayed Draw Term Loan. The Revolver Unused Fee for the $400 Million Revolver is calculated on a daily basis on the unused amount of the $400 Million Revolver multiplied by (i) 0.25 % per annum in the event that the unused amount is greater than 50 % of the maximum aggregate amount of the $400 Million Revolver, or (ii) 0.20 % per annum in the event that the unused amount is equal to or less than 50 % of the maximum aggregate amount of the $400 Million Revolver. The Revolver Unused Fee is payable quarterly in arrears and on the final maturity date of the $400 Million Revolver and the $50 Million Delayed Draw Term Loan. In addition, on a quarterly basis commencing on the forty-fifth (45th) day following the closing date of the 2026 Senior Credit Facility and until the $50 million Delayed Draw Term Loan is fully funded or the commitments thereunder terminate, we are required to pay a fee on the unused portion of the $50 million Delayed Draw Term Loan equal to the unused amount of the $50 million Delayed Draw Term Loan multiplied by 0.25 % per annum.
We are required to comply with various financial and other covenants to draw and maintain borrowings under the 2026 Senior Credit Facility.
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2024 Term Loan
In February 2024, our Operating Partnership, as borrower, the Company, as parent guarantor, and each party executing the term loan document as a subsidiary guarantor, entered into a $200 million senior unsecured term loan financing (the “2024 Term Loan”) with Regions Bank. Proceeds from the 2024 Term Loan financing and advances on our $400 Million Revolver were used to repay in full a similar term loan that was scheduled to mature in February 2025.
The 2024 Term Loan has an initial maturity date of February 2027 and can be extended for two 12-month periods by the Company, subject to certain conditions. At June 30, 2026, the 2024 Term Loan was fully funded.
We pay interest on advances at varying rates, based upon, at our option, either daily, 1-, 3-, or 6-month SOFR (subject to a floor of zero basis points), plus an applicable margin between 135 and 235 basis points, depending upon our leverage ratio (as defined in the loan documents) or (ii) the base rate plus a margin ranging between 35 and 135 basis points, depending on our leverage ratio (as defined in the loan documents). We are required to pay other fees, including arrangement and administrative fees.
We are required to comply with various financial and other covenants to maintain borrowings under the 2024 Term Loan.
Amendment to 2024 Term Loan
In September 2024, we executed an amendment to the 2024 Term Loan. Under the amendment, we may elect at our sole discretion that the Unsecured Term Loan Leverage Ratio (as defined in the loan documents) may exceed 60 % but shall in no event exceed 65 % for such fiscal quarter and the next three succeeding fiscal quarters (the “Unsecured Term Loan Leverage Increase Period”). Once this one-time right has been exercised and after the Unsecured Term Loan Leverage Increase Period expires, the 2024 Term Loan will revert back to the prior Unsecured Term Loan Leverage Ratio pursuant to which the credit availability under the 2024 Term Loan will be limited to the 60 % Unsecured Term Loan Leverage Ratio for the remainder of the term of the 2024 Term Loan. We have not yet made the election under the amendment.
$275 Million 2025 Delayed Draw Term Loan
In March 2025, the Operating Partnership, as borrower, the Company, as parent guarantor, and each party executing the loan documentation as a subsidiary guarantor, entered into a $275 million delayed draw term loan (the “2025 Delayed Draw Term Loan”) with Bank of America, N.A., as administrative agent. The 2025 Delayed Draw Term Loan was used to refinance a significant portion of our Convertible Notes which matured in February 2026. The 2025 Delayed Draw Term Loan has an accordion feature which allows the Company to increase the total commitments to $325 million.
The 2025 Delayed Draw Term Loan has an initial maturity date of March 2028 and can be extended for two 12-month periods by the Company, subject to certain conditions, resulting in a fully extended maturity of March 2030. At June 30, 2026, the 2025 Delayed Draw Term Loan was fully funded. Advances under the 2025 Delayed Draw Term Loan bear interest at varying rates based upon, at our option, either (i) daily SOFR or term SOFR, plus a margin ranging from 135 basis points to 235 basis points depending on our leverage ratio, or (ii) the base rate, plus a base rate margin ranging from 35 basis points to 135 basis points, depending on our leverage ratio.
We are also required to pay a fee on the unused portion of the 2025 Delayed Draw Term Loan equal to the undrawn amount multiplied by an annual rate of 0.25 % of the average unused amount of the 2025 Delayed Draw Term Loan.
In March 2025, we incurred debt issuance costs related to the 2025 Delayed Draw Term Loan of $4.3 million. The debt issuance costs were recorded as deferred financing costs and included in Deferred charges, net on our Condensed Consolidated Balance Sheet at December 31, 2025. These costs were reclassified as a reduction to the related debt at the time the funds were drawn, which coincided with the repayment of the Convertible Notes at their maturity in February 2026.
Borrowings under the 2025 Delayed Draw Term Loan are limited by the value of the Unencumbered Assets (as defined in the loan agreements).
We are required to comply with various financial and other covenants to maintain borrowings under the 2025 Delayed Draw Term Loan.
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Convertible Senior Notes and Capped Call Options
In January 2021, we entered into an underwriting agreement (the “Convertible Notes Offering”) pursuant to which the Company agreed to offer and sell an aggregate of $287.5 million of 1.50 % convertible senior notes due in February 2026 (the “Convertible Notes”). The net proceeds from the Convertible Notes Offering, after deducting underwriting discounts and commissions and offering expenses payable by the Company (including net proceeds from the full exercise by the underwriters of their over-allotment option to purchase additional Convertible Notes), were approximately $280 million before consideration of the execution of certain capped call options. These proceeds were used to pay the cost of the capped call options and to partially repay outstanding obligations under our senior credit facility that was replaced by the 2023 Senior Credit Facility and another term loan.
The Convertible Notes matured on February 15, 2026 (the “Maturity Date”). The Company recorded interest expense of $0.5 million and $2.2 million for the six-month periods ended June 30, 2026 and 2025, respectively. The Company incurred debt issuance costs related to the Convertible Notes Offering of $7.6 million, of which $0.4 million was amortized as non-cash interest expense for the three-month period ended June 30, 2025, and $0.2 million and $0.7 million for the six-month periods ended June 30, 2026 and 2025, respectively. Including the amortization of the debt issuance costs, the effective interest rate on the Convertible Notes was approximately 2.00
The Convertible Notes were repaid in February 2026 with borrowings on our 2025 Delayed Draw Term Loan and $400 Million Revolver. The Capped Call options expired unexercised.
GIC Joint Venture Credit Facility
In September 2023, Summit JV MR 1, LLC (the “Borrower”), as borrower, and Summit Hospitality JV, LP (the “Parent” or “GIC Joint Venture”), as parent of the Borrower, and each party executing the credit facility documentation as a subsidiary guarantor, entered into a credit facility (the “GIC Joint Venture Credit Facility”) with Bank of America, N.A., as administrative agent and sole initial lender, and BofA Securities, Inc., as sole lead arranger and sole bookrunner. The Operating Partnership and the Company are not borrowers or guarantors of the GIC Joint Venture Credit Facility. The GIC Joint Venture Credit Facility is guaranteed by all of the Borrower’s existing and future subsidiaries, subject to certain exceptions.
The GIC Joint Venture Credit Facility is currently comprised of a $125 million revolving credit facility (the “$125 Million Revolver”) and after giving effect to a December 2024 increase to the term loan, a $125 million term loan (the “$125 Million Term Loan”). The GIC Joint Venture Credit Facility has an accordion feature which allows the GIC Joint Venture to further increase the total commitments for aggregate borrowings of up to $500 million.
At June 30, 2026, we had $125 million outstanding under the $125 Million Revolver and the $125 Million Term Loan was fully funded. Both the $125 Million Revolver and the $125 Million Term Loan have an initial maturity date of September 2027, which may be extended by the Borrower for an additional year, subject to certain conditions.
The interest rate on the $125 Million Revolver is based on the higher of (i) daily SOFR or term SOFR, plus a margin of 215 basis points, or, (ii) the base rate, plus a base rate margin of 115 basis points.
The interest rate on the $125 Million Term Loan is based on the higher of (i) daily SOFR or term SOFR, plus a margin of 210 basis points, or, (ii) the base rate, plus a base rate margin of 110 basis points.
In addition, on a quarterly basis, the GIC Joint Venture will be required to pay a fee on the unused portion of the GIC Joint Venture Credit Facility equal to the undrawn amount multiplied by an annual rate of 0.25 % of the average unused amount of the GIC Joint Venture Credit Facility. The GIC Joint Venture will also be required to pay other fees, including customary arrangement and administrative fees.
We are required to comply with various financial and other covenants to maintain borrowings under the GIC Joint Venture Credit Facility.
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GIC Joint Venture Term Loan
In January and March 2022, the Operating Partnership and the GIC Joint Venture closed on a transaction with NewcrestImage Holdings, LLC, a Delaware limited liability company, and NewcrestImage Holdings II, LLC, a Delaware limited liability company (together, “NewcrestImage”), to acquire a portfolio of 27 lodging properties, two parking structures, and various financial incentives (the “NCI Transaction”). In connection with the NCI Transaction, in January 2022, Summit JV MR 2, LLC, Summit JV MR 3, LLC and Summit NCI NOLA BR 184, LLC (each of which is a subsidiary of the GIC Joint Venture, and are collectively, the “JV Borrowers”), the GIC Joint Venture, as parent guarantor, and each party executing the credit facility documentation as a subsidiary guarantor, entered into a $410 million senior secured term loan facility (the “2022 GIC Joint Venture Term Loan”) with Bank of America, N.A., as administrative agent, to finance a portion of the NCI transaction.
In July 2025, the Term Loan Borrower entered into a $400 million term loan (the “2025 GIC Joint Venture Term Loan”) with Bank of America, N.A., as administrative agent, and a syndicate of lenders to refinance and replace the 2022 GIC Joint Venture Term Loan. As part of the transaction, we incurred costs of $4.7 million, which are recorded as a discount on the related debt on our Condensed Consolidated Balance Sheet at June 30, 2026. These costs and $0.5 million of unamortized debt issuance costs from the 2022 GIC Joint Venture Term Loan will be amortized over the term of the 2025 GIC Joint Venture Term Loan.
The 2025 GIC Joint Venture Term Loan has an accordion feature that permits an increase in the total commitments by up to $200 million, for aggregate potential borrowings of up to $600 million. The 2025 GIC Joint Venture Term Loan will mature in July 2028 and can be extended for two 12-month periods at the option of the GIC Joint Venture, subject to certain conditions. As such, the 2025 GIC Joint Venture Term Loan has a fully extended maturity date of July 2030. At June 30, 2026, we had $383.4 million outstanding on the 2025 GIC Joint Venture Term Loan.
The interest rate on the 2025 GIC Joint Venture Term Loan is based upon, at our option, (i) daily SOFR or Term SOFR (1-month or 3-month) plus a margin of 235 basis points, or (ii) the base rate plus a base rate margin of 135 basis points. We are also required to pay other fees, including customary arrangement and administrative fees.
Neither the Operating Partnership nor the Company are borrowers or guarantors of the 2025 GIC Joint Venture Term Loan. The 2025 GIC Joint Venture Term Loan is guaranteed by the GIC Joint Venture and all of the Term Loan Borrower's existing and future subsidiaries, subject to certain exceptions.
At June 30, 2026, the 2025 GIC Joint Venture Term Loan is secured primarily by a first priority pledge of the Term Loan Borrower's equity interests in the subsidiaries that hold a direct or indirect interest in the remaining 23 lodging properties and two parking facilities purchased in the NCI Transaction that constitute borrowing base assets.
We are required to comply with various financial and other covenants to draw and maintain borrowings under the 2025 GIC Joint Venture Term Loan.
PACE Loan
As part of the NCI Transaction, a subsidiary of the GIC Joint Venture assumed a Property Assessed Clean Energy (“PACE”) loan of approximately $6.5 million. The loan bears fixed interest at 6.10 %, has an amortization period of 20 years, and matures in July 2040. The PACE loan is secured by an assessment lien imposed by the County of Tarrant, TX for the benefit of the lender. At June 30, 2026, the outstanding balance of the PACE loan was $5.5 million.
Brickell Mortgage Loan
In June 2022, the Company entered into a joint venture (the “Brickell Joint Venture”) with C-F Brickell, LLC (“C-F Brickell”) to acquire the dual-branded 264 -guestroom AC Hotel by Marriott and Element Hotel in Miami, FL (together the “AC/Element Hotel”). The Brickell Joint Venture entered into a $47 million mortgage loan and non-recourse guarantee with City National Bank of Florida to fund a portion of the Initial Purchase Option. In May 2025, the Brickell Joint Venture closed on a $58 million mortgage loan (the “Brickell Mortgage Loan”) with Wells Fargo Bank, N.A., as administrative agent, the proceeds of which were primarily used to repay the $45.4 million outstanding balance of the mortgage loan with City National Bank of Florida that was scheduled to mature in June 2025.
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NOTE 6 - LEASES
The Company has operating leases related to the land under certain lodging properties, conference centers, parking spaces, automobiles, our corporate office, and miscellaneous office equipment. These leases have remaining terms of one year to 72.0 years, some of which include options to extend the leases for additional years. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize rental expense for these leases on a straight-line basis over the lease term.
Certain of our lease agreements include rental payments based on a percentage of revenue over contractual levels and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or restrictive covenants that materially affect our business.
Our right-of-use assets and related liabilities include renewal options reasonably certain to be exercised. We base our lease calculations on our estimated incremental borrowing rate. As of June 30, 2026 and December 31, 2025, our weighted average incremental borrowing rate was 4.9 % and 4.8 %, respectively.
The Company's total operating lease cost was $1.2 million and $1.1 million for the three months ended June 30, 2026 and 2025, respectively, and the cash payments on operating leases were $1.2 million and $1.1 million, respectively, during each of the three months ended June 30, 2026 and 2025.
The Company's total operating lease cost was $2.4 million and $2.3 million for the six months ended June 30, 2026 and 2025, respectively, and the cash payments on operating leases were $2.2 million and $2.1 million, respectively, during the six months ended June 30, 2026 and 2025.
As of June 30, 2026 and December 31, 2025, the weighted-average operating lease term was approximately 31.0 years and 31.4 years, respectively.
Operating lease maturities at June 30, 2026 are as follows (in thousands):
| For the Year Ending December 31, | Amount | |||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
Total lease payments (1) | ||||||||
| Less: Imputed interest | ( | |||||||
| Total | $ | |||||||
(1)Certain payments above include future increases to the minimum fixed rent based on the Consumer Price Index in effect at the initial measurement of the lease balances.
In addition, we rent or lease commercial space in certain of our lodging properties to third parties. We recorded gross third-party tenant income of $1.1 million and $1.3 million during the three months ended June 30, 2026 and 2025, respectively, and $2.1 million and $2.4 million during the six months ended June 30, 2026 and 2025, respectively, in Other income, net on our Condensed Consolidated Statements of Operations.
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As of June 30, 2026, non-cancelable commercial operating leases provide for future minimum rental income as follows (in thousands):
| For the Year Ending December 31, | Amount | |||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total lease payments | $ | |||||||
NOTE 7 - DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING
Information about our derivative financial instruments at June 30, 2026 and December 31, 2025 is as follows (dollars in thousands):
| Notional Amount | Fair Value | |||||||||||||||||||||||||||||||||||||||||||
| Contract Date | Effective Date | Expiration Date | Average Annual Effective Fixed Rate | June 30, 2026 | December 31, 2025 | June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
Operating Partnership: | ||||||||||||||||||||||||||||||||||||||||||||
| July 26, 2022 | January 31, 2023 | January 31, 2027 | % | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| July 26, 2022 | January 31, 2023 | January 31, 2029 | % | |||||||||||||||||||||||||||||||||||||||||
| June 5, 2025 | June 2, 2025 | May 15, 2028 | % | ( | ||||||||||||||||||||||||||||||||||||||||
| November 17, 2025 | December 31, 2025 | December 31, 2027 | % | ( | ||||||||||||||||||||||||||||||||||||||||
| Total Operating Partnership | ||||||||||||||||||||||||||||||||||||||||||||
GIC Joint Venture: | ||||||||||||||||||||||||||||||||||||||||||||
| March 24, 2023 | July 1, 2023 | January 13, 2026 | % | |||||||||||||||||||||||||||||||||||||||||
| March 24, 2023 | July 1, 2023 | January 13, 2026 | % | |||||||||||||||||||||||||||||||||||||||||
| January 19, 2024 | October 1, 2024 | January 13, 2026 | % | ( | ||||||||||||||||||||||||||||||||||||||||
| August 25, 2025 | January 13, 2026 | (2) | January 13, 2028 | % | ( | |||||||||||||||||||||||||||||||||||||||
| August 25, 2025 | January 13, 2026 | (2) | January 13, 2028 | % | ( | |||||||||||||||||||||||||||||||||||||||
Total GIC Joint Venture | ||||||||||||||||||||||||||||||||||||||||||||
Total | % | (1) | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
(1) Represents the weighted-average effective interest rate of our current interest rate swaps at June 30, 2026.
(2) In August 2025, the GIC Joint Venture entered into two $150 million forward starting interest rate swaps to fix one-month term SOFR to replace $300 million of existing GIC Joint Venture interest rate swaps that matured in January 2026. The forward starting interest rate swaps were outstanding at December 31, 2025 but did not become effective until January 13, 2026.
At June 30, 2026, debt related to our wholly-owned properties and our pro rata share of joint venture debt has a fixed-rate debt ratio of approximately 51 % of our total pro rata indebtedness when taking into consideration interest rate swaps that are currently in effect.
At June 30, 2026 and December 31, 2025, we had interest rate swaps in effect to convert $683
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Our interest rate swaps have been designated as cash flow hedges and are valued using a market approach, which is a Level 2 valuation technique. At June 30, 2026, all of our interest rate swaps were in an asset position. At December 31, 2025, four of our interest rate swaps were in an asset position and five were in a liability position. Derivative assets related to our interest rate swaps are recorded in Other assets and derivative liabilities are recorded in Accrued expenses and other on our Condensed Consolidated Balance Sheets. We are not required to post any collateral related to these agreements and are not in breach of any financial provisions of the agreements.
Changes in the fair value of the hedging instruments are deferred in Accumulated other comprehensive income on our Condensed Consolidated Balance Sheets and are reclassified to Interest expense on our Condensed Consolidated Statements of Operations in the period in which the hedged item affects earnings. In the next 12 months, we estimate that $5.1 million will be reclassified from Accumulated other comprehensive income and recorded as a decrease to Interest expense.
We characterize the realized and unrealized gain or loss related to derivative financial instruments designated as cash flow hedges as follows (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Unrealized gain (loss) recognized in Accumulated other comprehensive income (loss) on derivative financial instruments | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Gain reclassified from Accumulated other comprehensive income to Interest expense | $ | $ | $ | $ | ||||||||||||||||||||||
Total interest expense and other finance expense presented on the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded | $ | $ | $ | $ | ||||||||||||||||||||||
NOTE 8 - EQUITY
Common Stock
The Company is authorized to issue up to 500,000,000 0.01 one vote on all matters submitted to a vote of stockholders, including the election of directors and, except as may be provided with respect to any other class or series of stock, the holders of such shares possess the exclusive voting power.
Changes in Common Stock were as follows:
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Beginning shares of Common Stock outstanding | |||||||||||
| Common Unit redemptions | |||||||||||
| Shares repurchased under the 2025 Share Repurchase Program | ( | ( | |||||||||
Grants under the Equity Plan (as defined below in Note 12 - Equity-Based Compensation) | |||||||||||
| Annual grants to independent directors | |||||||||||
| Performance and time-based share forfeitures | ( | ( | |||||||||
| Shares acquired for employee withholding requirements | ( | ( | |||||||||
| Ending shares of Common Stock outstanding | |||||||||||
Preferred Stock
The Company is authorized to issue up to 100,000,000 0.01 89,600,000 is currently undesignated, 6,400,000 shares have been designated as 6.25 % Series E Cumulative Redeemable Preferred Stock (the “Series E Preferred Stock”) and 4,000,000 shares have been designated as 5.875 % Series F Cumulative Redeemable Preferred Stock (the “Series F Preferred Stock”).
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The Company's outstanding shares of preferred stock (collectively, “Preferred Shares”) rank senior to our Common Stock and on parity with each other with respect to the payment of dividends and distributions of assets in the event of a liquidation, dissolution, or winding up. The Preferred Shares do not have maturity dates and are not subject to mandatory redemption or sinking fund requirements. The Series E Preferred Stock is redeemable by the Company at its election. The Company may not redeem the Series F Preferred Stock prior to August 12, 2026, except in limited circumstances relating to the Company’s continuing qualification as a REIT or in connection with certain changes in control. When redeemable, the Company may, at its option, redeem the applicable Preferred Shares, in whole or from time to time in part, by payment of $25 per share, plus any accumulated, accrued and unpaid dividends up to, but not including the date of redemption. If the Company does not exercise its rights to redeem the Preferred Shares upon certain changes in control, the holders of the Preferred Shares have the right to convert some or all of their shares into a number of the Company’s Common Stock based on a defined formula, subject to a share cap, or alternative consideration. The share cap on each share of Series E Preferred Stock and Series F Preferred Stock is 3.1686 and 5.8275 shares of Common Stock, respectively, all subject to certain adjustments.
The Company pays dividends at an annual rate of $1.5625 for each share of Series E Preferred Stock and $1.46875 for each share of Series F Preferred Stock. Dividend payments are made quarterly in arrears on or about the last day of February, May, August, and November of each year.
2025 Share Repurchase Program
In April 2025, our Board of Directors authorized the repurchase of up to $50 million of our Common Stock (the “2025 Share Repurchase Program”). Repurchases may be made from time to time at management’s discretion, at prices management considers to be attractive, through open market purchases, subject to availability. Open market purchases will be conducted in accordance with the limitations set forth in Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other applicable legal requirements. We have no obligation to repurchase any shares under the program, and the timing, actual number and value of the shares that are repurchased, if any, are at the discretion of management. The 2025 Share Repurchase Program does not have an expiration date.
During the three and six months ended June 30, 2026, the Company repurchased 48,936 and 1,481,959 shares of our Common Stock, respectively, under the 2025 Share Repurchase Program for an aggregate purchase price and commissions of $0.2 million and $6.2 million, respectively, or an average of approximately $4.27 per share for repurchases during the three months ended June 30, 2026 and $4.17 per share for repurchases during the six months ended June 30, 2026. As of June 30, 2026, approximately $28.4 million remained available for repurchase under the 2025 Share Repurchase Program.
NOTE 9 - NON-CONTROLLING INTERESTS AND REDEEMABLE NON-CONTROLLING INTERESTS
Non-controlling Interests in Operating Partnership
Pursuant to the limited partnership agreement of our Operating Partnership, the unaffiliated third parties who hold Common Units have the right to request that we redeem their Common Units in exchange for cash based upon the fair value of an equivalent number of our shares of Common Stock at the time of redemption; however, the Company has the option to redeem Common Units with shares of our Common Stock on a one -for-one basis. The number of shares of our Common Stock issuable upon redemption of Common Units may be adjusted upon the occurrence of certain events such as share dividend payments, share subdivisions or combinations.
During the six months ended June 30, 2025, 2.9 million Common Units were converted to shares of our Common Stock. The conversion was recorded based on the average value per Common Unit on the original issuance dates. NewcrestImage owned approximately 12.9
We classify outstanding Common Units held by unaffiliated third parties as Non-controlling interests, a component of equity on our Condensed Consolidated Balance Sheets. The portion of net income (loss) allocated to these Common Units is included on the Company’s Condensed Consolidated Statements of Operations as Net income (loss) attributable to non-controlling interests.
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Non-controlling Interests in Consolidated Joint Ventures
At June 30, 2026, the Company is a partner with a majority equity interest in the three joint ventures described below, which are consolidated in our Condensed Consolidated Financial Statements. The portion of income (loss) related to our joint ventures allocated to these non-controlling interests is included on the Company’s Condensed Consolidated Statements of Operations as Income (loss) attributable to non-controlling interests.
GIC Joint Venture
In July 2019, the Company entered into the GIC Joint Venture to acquire assets that align with the Company’s current investment strategy and criteria. The Company serves as general partner and asset manager of the GIC Joint Venture and has historically and in the future intends to invest 51 % of the equity capitalization of the limited partnership, with GIC investing the remaining 49 %. The Company earns fees for providing services to the GIC Joint Venture and has the potential to earn incentive fees based on the GIC Joint Venture achieving certain return thresholds. At June 30, 2026, the GIC Joint Venture owns 39 lodging properties containing 5,503 guestrooms in 11 states.
The GIC Joint Venture owns the lodging properties through master REITs (the “Master REIT”) and subsidiary REITs (the “Subsidiary REIT”). All of the lodging properties owned by the GIC Joint Venture are leased to taxable REIT subsidiaries of the Subsidiary REITs (the “Subsidiary REIT TRSs”). To qualify as a REIT, the Master REIT and each Subsidiary REIT must meet all of the REIT requirements provided in the Internal Revenue Code, as amended. Taxable income related to the Subsidiary REIT TRSs is subject to federal, state, and local income taxes at applicable tax rates.
Brickell Joint Venture
In June 2022, the Company entered into the Brickell Joint Venture to complete the exercise of the Initial Purchase Option. Our joint venture partner, C-F Brickell, owns the remaining 10 % equity interest in the Brickell Joint Venture. The Company has a second option to purchase the remaining 10 % equity interest in the Brickell Joint Venture from C-F Brickell in December 2026 at its market value on the exercise date. The Company serves as the managing member of the Brickell Joint Venture.
Onera Joint Venture
In October 2022, the Company entered into the Onera Joint Venture with the acquisition of a 90 % equity interest in the Onera Joint Venture. Our joint venture partner, Onera Opportunity Fund I, LP, a developer of alternative accommodation properties, owns the remaining 10 % equity interest in the Onera Joint Venture. The Company serves as the managing member of the Onera Joint Venture. The Onera Joint Venture owns a 100 % fee simple interest in real property and improvements located in Fredericksburg, TX.
As part of the Onera Amendment, the Company entered into a purchase option agreement with Onera that gives the Company the option to purchase Onera’s remaining 10 % interest in the Onera Joint Venture at fair value based on independent third-party appraisals. The option is exercisable from October 1, 2027 until January 31, 2028, or upon the termination of the management agreement for the underlying property, if sooner.
Redeemable Non-controlling Interests
In connection with the NCI Transaction, Summit Hotel GP, LLC, a wholly-owned subsidiary of the Company and the sole general partner of the Operating Partnership, on its own behalf as general partner of the Operating Partnership and on behalf of the limited partners of the Operating Partnership, on January 13, 2022, entered into the Tenth Amendment (the “Tenth Amendment”) to the First Amended and Restated Agreement of Limited Partnership of the Operating Partnership, to provide for the issuance of up to 2,000,000 Series Z Preferred Units. In January 2022 and March 2022, in connection with the NCI Transaction, the Operating Partnership issued an aggregate of 2,000,000
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NOTE 10 - FAIR VALUE MEASUREMENT
The following table presents information about our financial instruments measured at fair value on a recurring basis at June 30, 2026 and December 31, 2025. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, we classify assets and liabilities based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.
Disclosures concerning financial instruments measured at fair value are as follows (in thousands):
| Fair Value Measurements at June 30, 2026 using | ||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | ||||||||||||||||||||||
| Onera Purchase Option | ||||||||||||||||||||||||||
| Fair Value Measurements at December 31, 2025 using | ||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | ||||||||||||||||||||||
| Onera Purchase Option | ||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| Interest rate swaps | ||||||||||||||||||||||||||
The Onera Purchase Option does not have a readily determinable fair value. The fair value was estimated using a modified Monte Carlo simulation model and was based on unobservable inputs for which there is little or no market information available. As such, we were required to develop assumptions to estimate the fair value of the Modified Onera Purchase Option as follows (dollars in thousands):
Estimated equity value | $ | |||||||
Weighted average cost of capital | % | |||||||
| Expected volatility | % | |||||||
| Risk free rate | % | |||||||
Term (1) | ||||||||
NOTE 11 - COMMITMENTS AND CONTINGENCIES
Franchise Agreements
All of our lodging properties (with the exception of the Onera Joint Venture property and the Nordic Lodge - Steamboat Springs, CO property) operate under franchise agreements with major hotel franchisors. The initial terms of our franchise agreements generally range from 10 to 30 years with various extension provisions. Each franchisor receives franchise fees ranging from 4 % to 8 % of each lodging property’s room revenue, and some agreements require that we pay marketing fees of up to 4.3 % of room revenue. In addition, some of these franchise agreements require that we deposit into a reserve fund for capital expenditures up to 5 % of the lodging property's gross room revenue to ensure that we comply with the franchisor's standards and requirements. We also pay fees to our franchisors for services related to reservation and information systems. We expensed fees related to our franchise agreements of $15.5 million and $15.0 million for the three months ended June 30, 2026 and 2025, respectively, and $29.8 million and $28.8 million for the six months ended June 30, 2026 and 2025, respectively.
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Management Agreements
Our lodging properties operate pursuant to management agreements with various professional third-party management companies. The remaining terms of our management agreements range from month-to-month to seven years and have various extension provisions. Each management company receives a base management fee, which is a percentage of total lodging property revenues. In addition, our lodging property management agreements generally provide that the lodging property manager can earn an incentive fee for hotel-level Earnings Before Interest, Taxes, Depreciation and Amortization over certain thresholds of a required investment return. In some cases, there are also monthly fees for certain services, such as accounting and shared services, based on the number of guestrooms. Generally, there are also incentive fees payable to our property managers based on attaining certain financial thresholds at lodging properties under their management. Management fee expenses were $4.4 8.6 million and $8.9 million for the six months ended June 30, 2026 and 2025, respectively.
Litigation
We are involved from time to time in litigation arising in the ordinary course of business. There are currently no pending legal actions that we believe would have a material effect on our consolidated financial position or results of operations.
NOTE 12 - EQUITY-BASED COMPENSATION
Our 2024 Equity Incentive Plan, which became effective May 22, 2024, and previously, the 2011 Equity Incentive Plan (collectively, the “Equity Plan”), provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, and other stock-based awards.
Stock options granted may be either incentive stock options or non-qualified stock options. Vesting terms may vary with each grant. At June 30, 2026, we only have outstanding restricted stock awards. All of our outstanding equity-based awards are classified as equity awards.
Time-Based Restricted Stock Awards Made Pursuant to Our Equity Plan
The following table summarizes time-based restricted stock award activity under our Equity Plan:
| Number of Shares | Weighted-Average Grant Date Fair Value | Aggregate Current Value | ||||||||||||||||||
| (per share) | (in thousands) | |||||||||||||||||||
| Non-vested at December 31, 2025 | $ | $ | ||||||||||||||||||
| Granted | ||||||||||||||||||||
| Vested | ( | |||||||||||||||||||
| Forfeited | ( | |||||||||||||||||||
| Non-vested at June 30, 2026 | $ | $ | ||||||||||||||||||
The awards granted to our non-executive employees vest over a three-year period based on continuous service (25 50 % on the third anniversary of the grant date).
The awards granted to our executive officers generally vest over a three-year period based on continuous service (25 50 % on the third anniversary of the grant date), subject to continued service through the applicable vesting date, except in certain terminations of employment or in certain circumstances upon a change in control and are subject to the other conditions described in the Equity Plan or award document.
The holders of these time-based restricted stock awards have the right to vote their unvested restricted shares of Common Stock and receive all dividends declared and paid whether or not vested. The fair value of time-based restricted stock awards granted is calculated based on the market value of our Common Stock on the date of grant.
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Performance-Based Restricted Stock Awards Made Pursuant to Our Equity Plan
The following table summarizes performance-based restricted stock activity under the Equity Plan:
| Number of Shares | Weighted-Average Grant Date Fair Value (1) | Aggregate Current Value | ||||||||||||||||||
| (per share) | (in thousands) | |||||||||||||||||||
| Non-vested at December 31, 2025 | $ | $ | ||||||||||||||||||
| Granted | ||||||||||||||||||||
| Forfeited | ( | |||||||||||||||||||
| Non-vested at June 30, 2026 | $ | $ | ||||||||||||||||||
(1) Amounts represent the expected future value of the performance-based restricted stock awards calculated using the Monte Carlo simulation valuation model.
Our performance-based restricted stock awards are market-based awards and are accounted for based on the fair value of our Common Stock on the grant date. The fair value of the performance-based restricted stock awards granted was estimated using a Monte Carlo simulation valuation model. These awards generally vest over a three-year period based on our total shareholder return relative to the total shareholder return of certain companies within the Dow Jones U.S. Hotels Index (or in the event such index is discontinued, or its methodology significantly changed, a comparable index selected by the Compensation Committee of the Board of Directors) at the end of the period or upon a change in control. The awards require continued service during the measurement period, except in the case of certain terminations of employment or in the case of a change in control and are subject to the other conditions described in the Equity Plan or award document.
The number of shares the executive officers may earn under these awards range from zero shares to twice the number of shares granted based on our percentile ranking within the Index at the end of the performance period. In addition, a portion of the performance-based shares may be earned based on the Company's absolute total shareholder return calculated during the performance period.
The holders of these performance-based restricted stock awards have the right to vote their unvested restricted shares of Common Stock, and any dividends declared accrue and will be subject to the same vesting conditions as the performance awards. Further, if additional shares are earned based on our percentile ranking within the index, dividends will be paid as if the additional shares had been held throughout the entire performance period.
Equity-Based Compensation Expense
Equity-based compensation expense included in Corporate general and administrative expenses on the Condensed Consolidated Statements of Operations is as follows (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Time-based restricted stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Performance-based restricted stock | ( | |||||||||||||||||||||||||
Director stock (1) | ||||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
(1) Represents annual stock awards to members of our Board of Directors that vest immediately upon grant.
We recognize equity-based compensation expense ratably over the vesting periods. In June 2026, the Company recognized a $1.4 million credit to stock-based compensation expense resulting from the reversal of previously recognized compensation expense upon the forfeiture of unvested awards following the departure of the Company's former Chief Financial Officer.
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Unrecognized equity-based compensation expense for all non-vested awards pursuant to our Equity Plan was $11.0 million at June 30, 2026 and will be recorded as follows (in thousands):
| Total | 2026 | 2027 | 2028 | 2029 | |||||||||||||||||||||||||||||||
| Time-based restricted stock | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Performance-based restricted stock | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
NOTE 13 - INCOME TAXES
We have elected to be taxed as a REIT. As a REIT, we are generally not subject to corporate-level income taxes on taxable income we distribute to our stockholders.
Income related to our TRS Lessees is subject to federal, state, and local taxes at applicable corporate tax rates. Our consolidated tax provision includes the income tax provision related to the operations of the TRS Lessees as well as state and local income taxes related to the Operating Partnership.
We consider all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. Certain of our TRS Lessees have incurred operating losses in the past and the realizability of certain of our deferred tax assets as of June 30, 2026 is not reasonably assured. Therefore, we have recorded a valuation allowance of $2.7 million against a portion of our deferred tax assets at June 30, 2026. We may reverse the valuation allowance in the future as additional evidence becomes available to support the realizability of the deferred tax assets.
The Company accounts for income taxes in interim periods in accordance with ASC No. 740 - Income Taxes. Under ASC No. 740, income tax expense (benefit) is recognized in interim periods based on our best estimate of the annual effective tax rate expected to be applicable for the full fiscal year. This estimated annual effective tax rate is updated quarterly and applied to year-to-date consolidated ordinary income (loss). Estimates of the annual effective tax rate are, of necessity, based on evaluations of possible future events and transactions that may be subject to subsequent refinement or revision. Actual tax expense for the full fiscal year may vary from these interim period estimates if actual full-year operating results, tax planning strategies, or jurisdictions in which income is earned differ significantly from our current forecasts. Tax effects of discrete, unusual, or infrequently occurring items are recognized entirely in the interim period in which they occur. The Company recorded an income tax benefit of $1.4 million and an income tax expense of $1.2 million for the three months ended June 30, 2026 and 2025, respectively, and an income tax benefit of $0.5 million and an income tax expense of $1.9 million for the six months ended June 30, 2026 and 2025, respectively.
We file U.S. and state income tax returns in jurisdictions with varying statutes of limitations. In general, we are not subject to tax examinations by tax authorities for years before 2022. In the normal course of business, we are subject to examination by federal, state, and local jurisdictions where applicable. We had no unrecognized tax benefits at June 30, 2026. We expect no significant increase or decrease in unrecognized tax benefits due to changes in tax positions within the next year.
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NOTE 14 - EARNINGS PER SHARE
The following is a summary of the components used to calculate basic and diluted earnings per share (in thousands, except per share amounts):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
| Adjusted for: | ||||||||||||||||||||||||||
| Distributions to and accretion of redeemable non-controlling interests | ( | ( | ( | ( | ||||||||||||||||||||||
| Preferred dividends | ( | ( | ( | ( | ||||||||||||||||||||||
| (Income) loss attributable to non-controlling interests in joint ventures | ( | ( | ( | |||||||||||||||||||||||
| Dividends paid on unvested time-based restricted stock | ( | ( | ( | ( | ||||||||||||||||||||||
Allocation of (income) loss to Common Units | ( | |||||||||||||||||||||||||
| Numerator for income (loss) per common stockholder - basic and diluted | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||
| Weighted average common shares outstanding - basic | ||||||||||||||||||||||||||
| Adjusted for: | ||||||||||||||||||||||||||
| Dilutive effect of equity-based compensation awards | ||||||||||||||||||||||||||
| Weighted average common shares outstanding - diluted | ||||||||||||||||||||||||||
| Net income (loss) per share available to common stockholders: | ||||||||||||||||||||||||||
| Basic | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
| Diluted | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
NOTE 15 - SUPPLEMENTAL CASH FLOW INFORMATION
We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted cash consists of certain funds maintained in escrow for property taxes, insurance, and certain capital expenditures. Funds may be disbursed from the account upon proof of expenditures and approval from the lender or other party requiring the restricted cash reserves.
Supplemental cash flow information is as follows (in thousands):
| Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash payments for interest | $ | $ | ||||||||||||
| Accrued improvements to lodging properties | $ | $ | ||||||||||||
| Cash payments for income taxes, net of refunds | $ | $ | ||||||||||||
| Accrued and unpaid dividends on unvested performance-based restricted stock | $ | $ | ||||||||||||
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NOTE 16 - SEGMENT INFORMATION
We have investments in lodging properties located in 24 states. Our lodging properties derive revenue primarily from guestroom sales, food and beverage sales, and revenues from other lodging services and amenities. Our President and Chief Executive Officer, who serves as our Chief Operating Decision Maker (“CODM”), evaluates the performance, makes capital allocation decisions, and manages the overall operating and investing strategy of each hotel individually. As such, we consider each lodging property to be an operating segment. Each of our properties has similar economic characteristics and risks, facilities, and services and distribute their products and services in the same manner through third-party management companies. Therefore, all of our lodging properties are aggregated into a single reportable segment. The accounting policies of the lodging property segment are the same as those described in “Note 2 - Basis of Presentation and Significant Accounting Policies” to the Condensed Consolidated Financial Statements. Our measure of segment assets is total assets as reported on our Condensed Consolidated Balance Sheets.
On a regular basis, the segment's performance is assessed, and decisions are made related to the allocation of resources primarily based on lodging property earnings before interest, taxes, depreciation and amortization (“Hotel EBITDA”) by comparing Hotel EBITDA results to budgets and forecasts, prior period results, and industry or peer group benchmarks. Additionally, the CODM considers other performance metrics such as total revenue, revenue per available room (“RevPAR”), average daily rate (“ADR”), occupancy, and hotel gross operating profit to assess operating performance.
Lodging revenues and Hotel EBITDA, including significant lodging expenses for our single reportable operating segment, are as follows (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
Lodging property revenues: | ||||||||||||||||||||||||||
| Room | $ | $ | $ | $ | ||||||||||||||||||||||
| Food and beverage | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Total revenues | ||||||||||||||||||||||||||
Lodging property expenses: | ||||||||||||||||||||||||||
| Room | ||||||||||||||||||||||||||
| Sales and marketing | ||||||||||||||||||||||||||
| Administrative and general | ||||||||||||||||||||||||||
| Property taxes, insurance and other | ||||||||||||||||||||||||||
| Food and beverage | ||||||||||||||||||||||||||
| Property operations & maintenance | ||||||||||||||||||||||||||
| Utility costs | ||||||||||||||||||||||||||
| Management fees | ||||||||||||||||||||||||||
| Other lodging property expenses | ||||||||||||||||||||||||||
Total lodging property expenses | ||||||||||||||||||||||||||
Hotel EBITDA | $ | $ | $ | $ | ||||||||||||||||||||||
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A reconciliation of Income from continuing operations before income taxes as shown on our Condensed Consolidated Statements of Operations to Hotel EBITDA is as follows (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Income from continuing operations before income taxes | $ | $ | $ | $ | ||||||||||||||||||||||
| Adjusted for: | ||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
| Corporate general and administrative | ||||||||||||||||||||||||||
| Loss on write-down of assets | ||||||||||||||||||||||||||
| (Gain) loss on disposal of assets, net | ( | ( | ||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
| Interest income | ( | ( | ( | ( | ||||||||||||||||||||||
| Other income, net | ( | ( | ( | ( | ||||||||||||||||||||||
Hotel EBITDA | $ | $ | $ | $ | ||||||||||||||||||||||
NOTE 17 - RELATED PARTY TRANSACTION
In June 2026, our GIC Joint Venture acquired an approximately one acre undeveloped parcel of land in Frisco, Texas for $1.4 million from an entity affiliated with Mehulkumar B. Patel, a member of our Board of Directors (the “Related Party Transaction”). The parcel is adjacent to the three GIC Joint Venture owned lodging properties in Frisco, TX that were acquired as part of the NCI Transaction. The purchase price was negotiated based on an independent third-party appraisal, which used market participant assumptions and valuation techniques consistent with ASC No. 820 - Fair Value Measurement, including consideration of comparable market data and the asset’s highest and best use. As such, we believe that the terms of the Related Party Transaction were consistent with market rates. Furthermore, the Related Party Transaction was reviewed and approved by our Board of Directors in accordance with our related party transaction policy. We have no continuing obligations related to the seller.
NOTE 18 - SUBSEQUENT EVENTS
Dividends
On July 28, 2026, our Board of Directors declared quarterly cash dividends and distributions of $0.08 per share on our Common Stock and per Common Unit of the Operating Partnership and cash dividends of $0.390625 per share of 6.25 % Series E Preferred Stock and $0.3671875 per share of 5.875 % Series F Preferred Stock. The Board of Directors also declared on behalf of the Operating Partnership, a cash distribution of $0.328125 per share of the Operating Partnership's unregistered 5.25 % Series Z Cumulative Perpetual Preferred Units. The dividends and distributions are payable on August 31, 2026 to holders of record as of August 17, 2026.
Pending Property Sale
In April 2026, we entered into a purchase and sale agreement to sell the 103 -guestroom Courtyard by Marriott, Dallas (Arlington South), TX and the 96 -guestroom Residence Inn by Marriott, Dallas (Arlington South), TX for a combined selling price of $19.0 million. We completed the sale of the properties on July 22, 2026 in accordance with the terms described above. The net selling price of the lodging properties approximated their aggregate net book value on the closing date.
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PART I — FINANCIAL INFORMATION
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our audited Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K for the year ended December 31, 2025, and our unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Unless stated otherwise or the context otherwise requires, references in this report to “we,” “our,” “us,” “our company” or “the company” mean Summit Hotel Properties, Inc. and its consolidated subsidiaries.
Cautionary Statement about Forward-Looking Statements
This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “forecast,” “project,” “potential,” “continue,” “likely,” “will,” “would” or similar expressions. Forward-looking statements in this report include, among others, statements about our business strategy, including acquisition and development strategies, industry trends, estimated revenues and expenses, ability to realize deferred tax assets and expected liquidity needs and sources (including capital expenditures and the ability to obtain financing or raise capital). You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and which could materially affect actual results, performance or achievements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to:
•global, national, regional and local economic and geopolitical conditions and events, including wars or potential hostilities, such as future terrorist attacks, that may negatively affect business transient, group, international and other travel or consumer behavior;
•changes in federal or state regulations or policies, such as the effect of significantly increased tariffs or retaliatory responses to increased tariffs, that could affect the labor market or our business;
•the effect of government shutdowns;
•macroeconomic conditions related to, and our ability to manage, inflationary pressures for commodities, labor and other costs of our business;
•consumer purchasing power and overall behavior, or a potential recessionary environment, which could adversely affect our costs, liquidity, consumer confidence, and demand for travel and lodging;
•levels of spending for business and leisure travel;
•adverse changes in occupancy, average daily rate (“ADR”) and revenue per available room (“RevPAR”) and other lodging property operating metrics;
•potential changes in operations, including as a result of new regulations or changes in brand standards;
•financing risks, including the risk of leverage and the corresponding risk of default on our existing indebtedness and potential inability to refinance or extend the maturities of our existing indebtedness;
•effects of infectious disease outbreaks or pandemics;
•default by borrowers to which we lend or provide seller financing;
•supply and demand factors in our markets or sub-markets;
•the effect of alternative accommodations on our business;
•financial condition of, and our relationships with, third-party property managers and franchisors;
•the degree and nature of our competition;
•increased interest rates or continued high rates of interest;
•increased renovation costs, which may cause actual renovation costs to exceed our current estimates;
•supply-chain disruption, which may reduce access to operating supplies or construction materials and increase related costs;
•changes in zoning laws;
•significant increases in real property taxes;
•significant increases in insurance costs or availability, including losses in excess of estimates for self-insured risks;
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•risks associated with lodging property acquisitions, including the ability to ramp up and stabilize newly-acquired lodging properties with limited or no operating history or that require substantial amounts of capital improvements for us to earn economic returns consistent with our expectations at the time of acquisition;
•risks associated with dispositions of lodging properties, including our ability to successfully complete the sale of lodging properties under contract to be sold, including the risk that the purchaser may not have access to the capital needed to complete the purchase;
•the nature of our structure and transactions such that our federal and state taxes are complex and there is risk of successful challenges to our tax positions by the Internal Revenue Service (“IRS”) or other federal and state taxing authorities;
•availability of and the abilities of our property managers and us to retain qualified personnel at our lodging property and corporate offices;
•our failure to maintain our qualification as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “IRC”);
•changes in our business or investment strategy;
•availability, terms and deployment of capital;
•general volatility of the capital markets and the market price of our common stock;
•environmental uncertainties and risks, including related to natural disasters;
•our ability to recover fully under third-party indemnities or our existing insurance policies for insurable losses and our ability to maintain adequate or full replacement cost “all-risk” property insurance policies on our properties on commercially reasonable terms;
•a data breach or significant disruption of our information technology systems and networks, or those of our brand or third-party property manager partners, due to cybersecurity incidents may result in losses that are greater than insurance coverages or indemnities from service providers. Cybersecurity incidents could also result in, among other things, a loss of business due to a decline in consumer confidence;
•our ability to manage rapidly advancing artificial intelligence technology related to our business;
•our ability to effectively manage our joint ventures with our joint venture partners;
•current and future changes to the IRC;
•our ability to continue to maintain an effective corporate responsibility program;
•our ability to successfully implement our share repurchase program or implement future share repurchase programs;
•the other factors discussed under the heading “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Accordingly, there is no assurance that our expectations will be realized. Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Overview
Summit Hotel Properties, Inc. is a self-managed lodging property investment company that was organized in June 2010 and completed its initial public offering in February 2011. We focus on owning lodging properties with efficient operating models that generate strong margins and investment returns. Our lodging properties are typically located in markets with multiple demand generators such as corporate offices and headquarters, retail centers, airports, state capitols, convention centers, and leisure attractions. Substantially all of our assets are held by, and all of our operations are conducted through, our operating partnership, Summit Hotel OP, LP (the “Operating Partnership”). Through a wholly-owned subsidiary, we are the sole general partner of the Operating Partnership. At June 30, 2026, we owned, directly and indirectly, approximately 89% of the Operating Partnership’s issued and outstanding common units of limited partnership interest (“Common Units”), and all of the Operating Partnership’s issued and outstanding 6.25% Series E and 5.875% Series F preferred units of limited partnership interest. NewcrestImage Holdings, LLC and NewcrestImage Holdings II, LLC own all of the issued and outstanding 5.25% Series Z Cumulative Perpetual Preferred Units of the Operating Partnership (“Series Z Preferred Units”), which were issued as part of the NCI Transaction (as defined in “Note 5 - Debt” to the accompanying Condensed Consolidated Financial Statements). We collectively refer to preferred units of limited partnership interests of our Operating Partnership as “Preferred Units.”
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At June 30, 2026, our portfolio consisted of 94 lodging properties with a total of 14,226 guestrooms located in 24 states of the United States of America. We own our lodging properties in fee simple, except for six lodging properties which are subject to ground leases or subleases. As of June 30, 2026, we own 100% of the outstanding equity interests in 52 of the 94 lodging properties. We own a 51% controlling interest in 39 lodging properties through a joint venture that was formed in July 2019 with USFI G-Peak, Ltd. (“GIC”), a private limited company incorporated in the Republic of Singapore (the “GIC Joint Venture”). We also own 90% equity interests in two separate joint ventures (the “Brickell Joint Venture” and the “Onera Joint Venture”). The Brickell Joint Venture owns two lodging properties, and the Onera Joint Venture owns one lodging property.
Our hotel properties primarily operate under premium franchise brands owned by Marriott® International, Inc. (“Marriott”), Hilton® Worldwide (“Hilton”), Hyatt® Hotels Corporation (“Hyatt”) and InterContinental® Hotels Group (“IHG”). We also own two independent lodging properties.
We have elected to be taxed as a REIT for federal income tax purposes commencing with our short taxable year ended December 31, 2011. To qualify as a REIT, we cannot operate or manage our lodging properties. Accordingly, all of our lodging properties are leased to our taxable REIT subsidiaries (“TRS Lessees” or “TRSs”). All of our lodging properties are operated pursuant to lodging property management agreements between our TRS Lessees and professional, third-party lodging property management companies that are not affiliated with us as follows:
| Management Company | Number of Properties | Number of Guestrooms | ||||||||||||
| Affiliates of Aimbridge Hospitality, LLC | 48 | 7,323 | ||||||||||||
| OTO Development, LLC | 11 | 1,560 | ||||||||||||
| Affiliates of Magna Hospitality Group, L.C. | 10 | 1,619 | ||||||||||||
| Stonebridge Realty Advisors, Inc. and affiliates | 7 | 1,042 | ||||||||||||
| Crestline Hotels & Resorts, LLC | 7 | 927 | ||||||||||||
| Affiliates of Marriott, including Courtyard Management Corporation, SpringHill SMC Corporation and Residence Inn by Marriott, Inc. | 3 | 413 | ||||||||||||
| White Lodging Services Corporation | 2 | 453 | ||||||||||||
| Hersha Hospitality Management | 2 | 338 | ||||||||||||
| MIA Hospitality Management, LLC | 2 | 264 | ||||||||||||
| InterContinental Hotel Group Resources, Inc., an affiliate of IHG | 1 | 252 | ||||||||||||
| Blink Data Services, LLC | 1 | 35 | ||||||||||||
| Total | 94 | 14,226 | ||||||||||||
Our typical lodging property management agreement requires us to pay a base fee to our lodging property manager calculated as a percentage of lodging property revenues. In addition, our property management agreements generally provide that the lodging property manager can earn an incentive fee for hotel-level Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) over certain thresholds of a required investment return to us. Our TRS Lessees may employ other lodging property managers in the future. We currently do not have any ownership or economic interest in any of the lodging property management companies engaged by our TRS Lessees. However, we have a purchase option to acquire a minority equity interest in the entity that owns the Onera brand, which is an affiliate of Blink Data Services, LLC, if we reach certain investment thresholds in Onera-branded properties.
Our revenues are derived from lodging property operations and consist of room revenue, food and beverage revenue and other lodging property operations revenue. Revenues from our other lodging property operations consist of ancillary revenues related to parking, cancellation fees, meeting rooms, and other guest services provided at certain of our lodging properties.
Industry Trends and Outlook
Room-night demand in the U.S. lodging industry is generally correlated to certain macroeconomic trends. Key drivers of demand, and therefore lodging revenues, include changes in gross domestic product, corporate profits, capital investments, employment, government policy, inbound international travel, and consumer and corporate sentiment. Hotel demand and pricing dynamics have improved in recent months and, combined with a stabilized cost environment, have resulted in hotel level profit margins expanding. However, certain costs continue to grow above historical levels and changes in hotel demand patterns or operating cost dynamics could affect our ability to continue to drive hotel level profit growth.
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During the second quarter of 2026, we experienced strong same-store RevPAR growth, driven by an increase in ADR, which offset a slight decline in occupancy. Total portfolio revenue grew year-over-year, primarily from an increase in room revenue with other revenue categories, such as food and beverage and ancillary services, also growing in the period. The current outlook for the industry remains positive, with expectations of sustained growth in room night demand and ADR, supported by limited supply growth and increasing travel demand.
Our Lodging Property Portfolio
According to current chain scales as defined by STR Global (“STR”), as of June 30, 2026, six of our lodging properties with a total of 954 guestrooms are categorized as Upper-upscale hotels, 71 of our lodging properties with a total of 10,944 guestrooms are categorized as Upscale hotels and 15 of our lodging properties with a total of 2,248 guestrooms are categorized as Upper-midscale hotels. We have two independent lodging properties that are not categorized by STR. Lodging property information at June 30, 2026 is as follows:
| Franchise/Brand | Number of Lodging Properties | Number of Guestrooms | ||||||||||||
| Marriott | ||||||||||||||
| Courtyard by Marriott | 14 | 2,618 | ||||||||||||
| Residence Inn by Marriott | 16 | 2,256 | ||||||||||||
| AC Hotel by Marriott | 6 | 1,026 | ||||||||||||
| SpringHill Suites by Marriott | 6 | 775 | ||||||||||||
| TownePlace Suites | 2 | 225 | ||||||||||||
| Marriott | 1 | 165 | ||||||||||||
| Fairfield Inn & Suites by Marriott | 1 | 140 | ||||||||||||
| Element by Marriott | 1 | 108 | ||||||||||||
| Total Marriott | 47 | 7,313 | ||||||||||||
| Hilton | ||||||||||||||
| Hampton Inn & Suites | 9 | 1,412 | ||||||||||||
| Hilton Garden Inn | 7 | 1,102 | ||||||||||||
| Homewood Suites | 3 | 369 | ||||||||||||
| Embassy Suites | 2 | 346 | ||||||||||||
| Canopy Hotel | 2 | 326 | ||||||||||||
| DoubleTree by Hilton | 1 | 210 | ||||||||||||
| Total Hilton | 24 | 3,765 | ||||||||||||
| Hyatt | ||||||||||||||
| Hyatt Place | 13 | 1,893 | ||||||||||||
| Hyatt House | 3 | 466 | ||||||||||||
| Total Hyatt | 16 | 2,359 | ||||||||||||
| IHG | ||||||||||||||
| Holiday Inn Express & Suites | 3 | 471 | ||||||||||||
| Staybridge Suites | 1 | 121 | ||||||||||||
| Hotel Indigo | 1 | 117 | ||||||||||||
| Total IHG | 5 | 709 | ||||||||||||
| Independent | ||||||||||||||
| Nordic Lodge | 1 | 45 | ||||||||||||
| Onera | 1 | 35 | ||||||||||||
| Total Independent | 2 | 80 | ||||||||||||
| Total | 94 | 14,226 | ||||||||||||
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Lodging Property Portfolio Activity
We continually evaluate alternatives to refine our portfolio to drive growth and create value. In the normal course of business, we evaluate opportunities to acquire additional properties that meet our investment criteria and opportunities to recycle capital through the disposition of properties. As such, the composition and size of our portfolio of properties may change materially over time. Significant changes to our portfolio of properties could have a material effect on our Condensed Consolidated Financial Statements.
See “Note 3 - Investments in Lodging Property, net” to the Condensed Consolidated Financial Statements for further information related to lodging property acquisitions and dispositions.
Results of Operations
The comparisons that follow should be reviewed in conjunction with the unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.
Comparison of the Three Months Ended June 30, 2026 with the Three Months Ended June 30, 2025
The following table contains key operating metrics for our portfolio for the three months ended June 30, 2026 compared with the three months ended June 30, 2025 (dollars in thousands, except ADR and RevPAR).
Three Months Ended June 30, | Quarter-over-Quarter | Quarter-over-Quarter | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Dollar Change | Percentage Change | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total Portfolio (94 properties) | Same-Store (1) Portfolio (94 properties) | Total Portfolio (97 properties) | Same-Store Portfolio (94 properties) | Total Portfolio (94/97 properties) | Same-Store Portfolio (94 properties) | Total Portfolio (94/97 properties) | Same-Store Portfolio (94 properties) | ||||||||||||||||||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Room | $ | 176,137 | $ | 176,137 | $ | 170,599 | $ | 167,436 | $ | 5,538 | $ | 8,701 | 3.2 | % | 5.2 | % | |||||||||||||||||||||||||||||||||||||
| Food and beverage | 11,098 | 11,098 | 11,195 | 10,904 | (97) | 194 | (0.9) | % | 1.8 | % | |||||||||||||||||||||||||||||||||||||||||||
| Other | 11,784 | 11,784 | 11,123 | 10,902 | 661 | 882 | 5.9 | % | 8.1 | % | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 199,019 | $ | 199,019 | $ | 192,917 | $ | 189,242 | $ | 6,102 | $ | 9,777 | 3.2 | % | 5.2 | % | |||||||||||||||||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Room | $ | 39,352 | $ | 39,350 | $ | 39,166 | $ | 38,502 | $ | 186 | $ | 848 | 0.5 | % | 2.2 | % | |||||||||||||||||||||||||||||||||||||
| Food and beverage | 8,480 | 8,480 | 8,388 | 8,140 | 92 | 340 | 1.1 | % | 4.2 | % | |||||||||||||||||||||||||||||||||||||||||||
| Other lodging property operating expenses | 60,671 | 60,677 | 58,943 | 57,541 | 1,728 | 3,136 | 2.9 | % | 5.5 | % | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 108,503 | $ | 108,507 | $ | 106,497 | $ | 104,183 | $ | 2,006 | $ | 4,324 | 1.9 | % | 4.2 | % | |||||||||||||||||||||||||||||||||||||
| Operational Statistics: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Occupancy | 76.3 | % | 76.3 | % | 77.7 | % | 77.7 | % | n/a | n/a | (1.9) | % | (1.9) | % | |||||||||||||||||||||||||||||||||||||||
| ADR | $ | 178.42 | $ | 178.42 | $ | 165.70 | $ | 166.63 | $ | 12.72 | $ | 11.79 | 7.7 | % | 7.1 | % | |||||||||||||||||||||||||||||||||||||
| RevPAR | $ | 136.06 | $ | 136.06 | $ | 128.79 | $ | 129.54 | $ | 7.27 | $ | 6.52 | 5.6 | % | 5.0 | % | |||||||||||||||||||||||||||||||||||||
(1) Same-store information includes operating results for 94 hotels owned by the Company as of January 1, 2025, and at all times during the three months ended June 30, 2026, and 2025.
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The portfolio information above for the three months ended June 30, 2026 and 2025 reflects operating results for various portions of each period for certain lodging properties as a result of sales of lodging properties. The following table details how the disposition transactions affect each reporting period:
| Transaction | Portion of Operating Results Included For The Three Months Ended June 30, | ||||||||||||||||||||||
| Date | 2026 | 2025 | |||||||||||||||||||||
| Sold Properties: | (Total Portfolio) | ||||||||||||||||||||||
Courtyard by Marriott - Amarillo, TX | October 2025 | None | Full Period | ||||||||||||||||||||
Courtyard by Marriott - Kansas City, MO | October 2025 | None | Full Period | ||||||||||||||||||||
| Hilton Garden Inn - Longview, TX | February 2026 | None | Full Period | ||||||||||||||||||||
Changes from the three months ended June 30, 2026 compared with the three months ended June 30, 2025 were due to the following:
•Revenues and RevPAR. Room revenues for our total portfolio during the second quarter of 2026 compared with the second quarter of 2025 increased by $5.5 million primarily as a result of an $8.7 million increase in same-store room revenues, partially offset by a $3.2 million decrease due to the sale of three lodging properties (collectively, the “Sold Properties”). The same-store increase was primarily driven by improved strong ADR performance across substantially all of our markets, in addition to incremental demand related to special events in certain markets such as the FIFA 2026 World Cup tournament, as well as ongoing performance improvement from the Courtyard Oceanside Fort Lauderdale Beach following the comprehensive renovation.
Occupancy decreased 1.9% and ADR increased by 7.7% for the total portfolio during the second quarter of 2026, which resulted in a 5.6% increase in RevPAR. On a same-store basis, we experienced a decrease of 1.9% in occupancy and a 7.1% increase in ADR during the second quarter of 2026. This resulted in an increase in same-store RevPAR of 5.0%. The increase in ADR was driven by improved performance in higher rated demand segments, notably the retail segment, and broad-based improvements in the corporate negotiated segment.
•Room Expenses. Room expenses for our total portfolio for the second quarter of 2026 compared with the second quarter of 2025 increased $0.2 million as a result of a $0.8 million increase in same-store room expenses primarily related to increases in wages and employee benefits, which were partially offset by decreased utilization of contract labor. The same-store increase was partially offset by a $0.6 million decrease due to the sale of the Sold Properties.
•Food and Beverage Revenues and Expenses. Total portfolio food and beverage revenues decreased $0.1 million for the second quarter of 2026 primarily due to a $0.3 million decrease from the sale of the Sold Properties, partially offset by a $0.2 million increase in same-store food and beverage revenues driven by increased banquet and catering sales. Total portfolio food and beverage expenses increased by $0.1 million as a result of a $0.3 million increase in same-store food and beverage expenses due to increases in labor and benefit expenses, partially offset by a $0.2 million decrease due to the sale of the Sold Properties.
•Other Lodging Property Operating Revenues and Expenses. Other lodging property operating revenues for our total portfolio during the second quarter of 2026 compared with the second quarter of 2025 increased $0.7 million as a result of a $0.9 million increase in same-store other revenues due to increases in resort and parking fees, partially offset by a $0.2 million decrease due to the sale of the Sold Properties.
The $1.7 million increase in other lodging property operating expenses for the total portfolio for the three months ended June 30, 2026 in comparison with the three months ended June 30, 2025 was attributable to a $3.1 million increase in same-store other lodging property operating expenses partially offset by a $1.4 million decrease due to the sale of the Sold Properties. The same-store increase was driven by increased franchise royalty and related brand fees as well as increased credit card fees, which was commensurate with increases in revenues, and an increase in administrative and general expenses due to increases in wages and earned incentives as a result of improved performance.
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The following table includes other consolidated income and expenses for the three months ended June 30, 2026 compared with the three months ended June 30, 2025 (dollars in thousands):
Three Months Ended June 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | Dollar Change | Percentage Change | |||||||||||||||||||||||
| Property taxes, insurance and other | $ | 13,571 | $ | 13,706 | $ | (135) | (1.0) | % | ||||||||||||||||||
| Management fees | 4,366 | 4,411 | (45) | (1.0) | % | |||||||||||||||||||||
| Depreciation and amortization | 36,413 | 37,259 | (846) | (2.3) | % | |||||||||||||||||||||
| Corporate general and administrative | 7,415 | 8,280 | (865) | (10.4) | % | |||||||||||||||||||||
| Interest expense | 22,068 | 20,628 | 1,440 | 7.0 | % | |||||||||||||||||||||
| Other income, net | 1,187 | 858 | 329 | 38.3 | % | |||||||||||||||||||||
| Income tax (benefit) expense | (1,430) | 1,178 | (2,608) | nm¹ | ||||||||||||||||||||||
¹ Not meaningful.
Changes for the three months ended June 30, 2026 compared with the three months ended June 30, 2025 were due to the following:
•Property Taxes, Insurance and Other. Property taxes, insurance and other decreased by $0.1 million during the three months ended June 30, 2026 as a result of a $0.3 million decrease from the sale of the Sold Properties, partially offset by a $0.2 million increase in same-store property taxes, insurance and other.
•Management Fees. Management fees were consistent during the three months ended June 30, 2026, as the increase in same-store management fees driven by an increase in same-store revenues, was offset by the reduction in management fees as a result of the sale of the Sold Properties.
•Depreciation and Amortization. Depreciation and amortization decreased by $0.8 million during the three months ended June 30, 2026 due to a $0.6 million decrease from the sale of the Sold Properties and a $0.2 million decrease in same-store depreciation and amortization, as the reduction from fully depreciated assets exceeded the depreciation of assets placed in service related to completed renovations.
•Corporate General and Administrative. Corporate general and administrative expenses decreased by $0.9 million during the three months ended June 30, 2026 primarily due to the $1.4 million reduction to stock-based compensation expense resulting from the reversal of previously recognized compensation cost upon the forfeiture of unvested stock awards following the departure of our former Chief Financial Officer, partially offset by a $0.3 million increase in corporate employee-related costs, a $0.2 million increase related to software implementation costs and a $0.2 million increase in professional fees.
•Interest Expense. Interest expense increased by $1.4 million during the three months ended June 30, 2026, primarily due to the refinancing in February 2026 of the $287.5 million 1.5% Convertible Notes with the $275 million 2025 Delayed Draw Term Loan, which has a higher variable interest rate, partially offset by a slight decrease in variable interest rates and average outstanding debt balances during the current period.
•Other Income, net. Other income, net for the three months ended June 30, 2026 consists primarily of $0.8 million of third-party tenant income and the realization of approximately $0.6 million of tax rebates related to the NCI Transaction during the period, partially offset by a net casualty loss of $0.3 million and debt transaction costs of $0.1 million.
Other income, net for the three months ended June 30, 2025 consists primarily of $0.9 million of third-party tenant income and the realization of approximately $0.3 million of tax rebates related to the NCI Transaction during the period, partially offset by a net casualty loss of $0.4 million.
•Income Tax Expense. The Company recorded an income tax benefit of $1.4 million during the three months ended June 30, 2026, compared to an income tax expense of $1.2 million during the same period in the previous year. Income tax expense varies based on changes in our effective tax rate and variability in quarterly net income (loss).
39
Comparison of the Six Months Ended June 30, 2026 with the Six Months Ended June 30, 2025
The following table contains key operating metrics for our portfolio for the six months ended June 30, 2026 compared with the six months ended June 30, 2025 (dollars in thousands, except ADR and RevPAR):
| Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Dollar Change | Percentage Change | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total Portfolio (94 properties)(1) | Same-Store Portfolio (94 properties)(2) | Total Portfolio (97 properties) | Same-Store Portfolio (94 properties) | Total Portfolio (94/97 properties) | Same-Store Portfolio (94 properties) | Total Portfolio (94/97 properties) | Same-Store Portfolio (94 properties) | ||||||||||||||||||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Room | $ | 338,701 | $ | 338,189 | $ | 334,330 | $ | 328,860 | $ | 4,371 | $ | 9,329 | 1.3 | % | 2.8 | % | |||||||||||||||||||||||||||||||||||||
| Food and beverage | 22,558 | 22,482 | 22,185 | 21,672 | 373 | 810 | 1.7 | % | 3.7 | % | |||||||||||||||||||||||||||||||||||||||||||
| Other | 22,813 | 22,794 | 20,880 | 20,481 | 1,933 | 2,313 | 9.3 | % | 11.3 | % | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 384,072 | $ | 383,465 | $ | 377,395 | $ | 371,013 | $ | 6,677 | $ | 12,452 | 1.8 | % | 3.4 | % | |||||||||||||||||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Room | $ | 75,699 | $ | 75,580 | $ | 75,298 | $ | 74,070 | $ | 401 | $ | 1,510 | 0.5 | % | 2.0 | % | |||||||||||||||||||||||||||||||||||||
| Food and beverage | 17,000 | 16,926 | 16,379 | 15,918 | 621 | 1,008 | 3.8 | % | 6.3 | % | |||||||||||||||||||||||||||||||||||||||||||
| Other lodging property operating expenses | 119,321 | 119,063 | 115,865 | 113,350 | 3,456 | 5,713 | 3.0 | % | 5.0 | % | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 212,020 | $ | 211,569 | $ | 207,542 | $ | 203,338 | $ | 4,478 | $ | 8,231 | 2.2 | % | 4.0 | % | |||||||||||||||||||||||||||||||||||||
| Operational Statistics: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Occupancy | 73.9 | % | 73.9 | % | 75.0 | % | 75.1 | % | n/a | n/a | (1.4) | % | (1.6) | % | |||||||||||||||||||||||||||||||||||||||
| ADR | $ | 177.53 | $ | 177.67 | $ | 169.22 | $ | 170.26 | $ | 8.31 | $ | 7.41 | 4.9 | % | 4.4 | % | |||||||||||||||||||||||||||||||||||||
| RevPAR | $ | 131.23 | $ | 131.34 | $ | 126.90 | $ | 127.92 | $ | 4.33 | $ | 3.42 | 3.4 | % | 2.7 | % | |||||||||||||||||||||||||||||||||||||
(1) Total portfolio information includes the operating results of the Hilton Garden Inn - Longview, TX, which was sold in the first quarter of 2026, from January 1, 2026 through the disposition date of February 20, 2026. Therefore, total portfolio operating results reflect 95 lodging properties for a portion of the period.
(2) Same-store information includes operating results for 94 hotels owned by the Company as of January 1, 2025, and at all times during the six months ended June 30, 2026, and 2025.
The total portfolio information above for the six months ended June 30, 2026 and 2025 reflects operating results for various portions of each period for certain lodging properties as a result of the sales and acquisitions of lodging properties. The following table details how the acquisition and disposition transactions affect each reporting period:
| Transaction | Portion of Operating Results Included For The Six Months Ended June 30, | ||||||||||||||||||||||
| Date | 2026 | 2025 | |||||||||||||||||||||
| Sold Properties: | (Total Portfolio) | ||||||||||||||||||||||
Courtyard by Marriott - Amarillo, TX | October 2025 | None | Full Period | ||||||||||||||||||||
Courtyard by Marriott - Kansas City, MO | October 2025 | None | Full Period | ||||||||||||||||||||
| Hilton Garden Inn - Longview, TX | February 2026 | Partial Period | Full Period | ||||||||||||||||||||
Changes from the six months ended June 30, 2026 compared with the six months ended June 30, 2025 were due to the following:
•Revenues and RevPAR. Room revenues for our total portfolio for the six months ended June 30, 2026 compared with the six months ended June 30, 2025 increased by $4.4 million as a result of a $9.3 million increase in same-store room revenues, partially offset by a $4.9 million decrease in room revenues due to the effect of the sale of the Sold Properties. The same-store increase was primarily driven by strong ADR performance across substantially all of our markets, in addition to incremental demand related to special events in certain markets such as the FIFA 2026 World Cup tournament, as well as ongoing performance improvement from the Courtyard Oceanside Fort Lauderdale Beach following the comprehensive renovation.
40
Occupancy decreased by 1.4% and ADR increased by 4.9% for the total portfolio during the six months ended June 30, 2026, which resulted in a 3.4% increase in RevPAR. On a same-store basis, occupancy decreased 1.6% and we experienced a 4.4% increase in ADR during the six months ended June 30, 2026. This resulted in an increase in same-store RevPAR of 2.7% for the six months ended June 30, 2026. The increase in ADR was driven by improved performance in higher rated segments, notably the retail segment, and broad-based improvements in the corporate negotiated segment.
•Room Expenses. Room expenses for our total portfolio for the six months ended June 30, 2026 compared with the six months ended June 30, 2025 increased by $0.4 million primarily due to a $1.5 million increase in same-store room expenses driven by increases in wages and employee benefits, which were partially offset by decreased utilization of contract labor. The same-store increase was partially offset by a $1.1 million decrease as a result of the sale of the Sold Properties.
•Food and Beverage Revenues and Expenses. Total portfolio food and beverage revenues for the six months ended June 30, 2026 increased by $0.4 million due to an $0.8 million increase in same-store food and beverage revenues partially as a result of the completion of the renovation of the Courtyard Oceanside Fort Lauderdale Beach, and increased banquet and catering sales, partially offset by a $0.4 million decrease due to the sale of the Sold Properties. Total portfolio food and beverage expenses increased by $0.6 million, due to a $1.0 million increase in same-store food and beverage expenses primarily due to increases in labor and benefits and costs to support the increase in food and beverage revenues, partially offset by a $0.4 million decrease due to the sale of the Sold Properties.
•Other Revenues and Other Lodging Property Operating Expenses. Other lodging property operating revenues for our total portfolio during the six months ended June 30, 2026 increased by $1.9 million as a result of a $2.3 million increase in same-store other lodging property and operating revenues related to an increase in amenity and parking fees, partially offset by a $0.4 million decrease in other lodging property operating revenues as a result of the sale of the Sold Properties.
The $3.5 million increase in other lodging property operating expenses for the total portfolio for the six months ended June 30, 2026 was driven by a $5.7 million increase in same-store other lodging property operating expenses, partially offset by a $2.3 million decrease due to the sale of the Sold Properties. The same-store increase was driven by increased franchise royalty and related brand fees as well as increased credit card fees, which was commensurate with increases in revenues, and an increase in administrative and general expenses due to increases in wages and earned incentives as a result of improved performance.
41
The following table includes other consolidated income and expenses for the six months ended June 30, 2026 compared with the six months ended June 30, 2025 (dollars in thousands):
| Six Months Ended June 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | Dollar Change | Percentage Change | |||||||||||||||||||||||
| Property taxes, insurance and other | $ | 27,455 | $ | 27,017 | $ | 438 | 1.6 | % | ||||||||||||||||||
| Management fees | 8,587 | 8,906 | (319) | (3.6) | % | |||||||||||||||||||||
| Depreciation and amortization | 73,187 | 74,489 | (1,302) | (1.7) | % | |||||||||||||||||||||
| Corporate general and administrative | 16,260 | 16,851 | (591) | (3.5) | % | |||||||||||||||||||||
| Interest expense | 42,518 | 40,584 | 1,934 | 4.8 | % | |||||||||||||||||||||
| Other income, net | 2,239 | 2,088 | 151 | 7.2 | % | |||||||||||||||||||||
| Income tax (benefit) expense | (538) | 1,932 | (2,470) | nm¹ | ||||||||||||||||||||||
¹ Not meaningful.
Changes from the six months ended June 30, 2026 compared with the six months ended June 30, 2025 were due to the following:
•Property Taxes, Insurance and Other. The $0.4 million increase in Property taxes, insurance and other during the six months ended June 30, 2026 is due to a $0.9 million increase in same-store property taxes, insurance and other, partially offset by a $0.5 million decrease as a result of the sale of the Sold Properties. The same-store increase is primarily due to an increase in property taxes as a result of higher cash refunds in the comparable prior year period due to successful appeals and increased property assessments in certain locations for the current period, partially offset by a decrease in insurance premiums due to favorable renewal rates in the current period for our property and casualty insurance.
•Management Fees. Management fees decreased by $0.3 million during the six months ended June 30, 2026 primarily due to certain property management transitions in 2025, which resulted in lower management fees during the six months ended June 30, 2026 and the effect of the sale of the Sold Properties.
•Depreciation and Amortization. Depreciation and amortization decreased by $1.3 million during the six months ended June 30, 2026 compared with the six months ended June 30, 2025 primarily due to the sale of the Sold Properties, partially offset by additional depreciation expense related to assets placed in service since the prior year period as a result of completed renovations.
•Corporate General and Administrative. Corporate general and administrative expenses decreased by $0.6 million during the six months ended June 30, 2026, primarily due to the $1.4 million reduction in stock-based compensation expense resulting from the reversal of previously recognized compensation cost upon the forfeiture of unvested stock awards following the departure of our former Chief Financial Officer, partially offset by a $0.5 million increase in corporate employee-related costs and a $0.2 million increase due to software implementation costs.
•Interest Expense. Interest expense increased by $1.9 million during the six months ended June 30, 2026 primarily due to the refinancing in February 2026 of the $287.5 million 1.5% Convertible Notes with the $275 million 2025 Delayed Draw Term Loan, which has a higher variable interest rate and an increase in amortization of debt issuance costs, offset by a decrease in variable interest rates and average outstanding debt balances during the current period.
•Other Income, net. Other income, net for the six months ended June 30, 2026 consists primarily of third-party tenant income of $1.4 million, the realization of $1.2 million of tax rebates related to the NCI Transaction and other miscellaneous items totaling $0.2 million, partially offset by a net casualty loss of $0.6 million.
Other income, net for the six months ended June 30, 2025 consists primarily of third-party tenant income of $1.6 million, the realization of $0.9 million of tax rebates related to the NCI Transaction and other miscellaneous items totaling $0.2 million, partially offset by a net casualty loss of $0.7 million.
•Income Tax Expense. The Company recorded $0.5 million in income tax benefit for the six months ended June 30, 2026, which represents a decrease of $2.5 million from the six months ended June 30, 2025. Income tax expense varies based on changes in our effective tax rate and variability in net income (loss).
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Non-GAAP Financial Measures
We disclose certain “non-GAAP financial measures,” which are measures of our historical financial performance. Non-GAAP financial measures are financial measures not prescribed by Generally Accepted Accounting Principles (“GAAP”). These measures are as follows: (i) Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) and Adjusted EBITDAre, (ii) Funds From Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”) (as described below). We caution investors that amounts presented in accordance with our definitions of non-GAAP financial measures may not be comparable to similar measures disclosed by other companies, since not all companies calculate these non-GAAP financial measures in the same manner. Our non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss) as a measure of our operating performance. Our non-GAAP financial measures may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expenditures, property acquisitions, debt service obligations and other commitments and uncertainties. Although we believe that our non-GAAP financial measures can enhance the understanding of our financial condition and results of operations, these non-GAAP financial measures are not necessarily better indicators of any trend as compared to a comparable measure prescribed by GAAP such as net income (loss).
EBITDA, EBITDAre and Adjusted EBITDAre
EBITDA
EBITDA represents net income or loss, excluding: (i) interest, (ii) income tax expense and (iii) depreciation and amortization. We believe EBITDA is useful to an investor in evaluating our operating performance because it provides investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe it helps investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results. Our management team also uses EBITDA as one measure in determining the value of acquisitions and dispositions.
EBITDAre and Adjusted EBITDAre
EBITDAre is based on EBITDA and is expected to provide additional relevant information about REITs as real estate companies in support of growing interest among generalist investors. EBITDAre is intended to be a supplemental non-GAAP performance measure that is independent of a company’s capital structure and will provide a uniform basis to measure the enterprise value of a company compared to other REITs.
EBITDAre, as defined by the National Association of Real Estate Investment Trusts (“Nareit”), is calculated as EBITDA, excluding: (i) loss and gains on disposition of property and (ii) asset impairments, if any. We believe EBITDAre is useful to an investor in evaluating our operating performance because it provides investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe it helps investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results.
We make additional adjustments to EBITDAre when evaluating our performance, such as adjustments related to the provision for credit losses, because we believe that the exclusion of certain additional non-recurring or certain non-cash items described below provides useful supplemental information to investors regarding our on-going operating performance. We believe that the presentation of Adjusted EBITDAre, when combined with the primary GAAP presentation of net income, is useful to an investor in evaluating our operating performance because it provides investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe it helps investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results.
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FFO and AFFO
As defined by the Nareit, FFO represents net income or loss (computed in accordance with GAAP), excluding preferred dividends, gains (or losses) from sales of real property, impairment losses on real estate assets, items classified by GAAP as extraordinary, the cumulative effect of changes in accounting principles, plus depreciation and amortization related to real estate assets, and adjustments for unconsolidated partnerships, and joint ventures. AFFO represents FFO excluding amortization of deferred financing costs, franchise fees, equity-based compensation expense, debt transaction costs, premiums on redemption of preferred shares, losses from net casualties, non-cash lease expense, non-cash interest income, and non-cash income tax related adjustments to our deferred tax assets. Unless otherwise indicated, we present FFO and AFFO applicable to our Common Stock and Common Units. We present FFO and AFFO because we consider FFO and AFFO important supplemental measures of our operational performance and believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of REITs, many of which present FFO and AFFO when reporting their results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO and AFFO exclude depreciation and amortization related to real estate assets, gains and losses from real property dispositions and impairment losses on real estate assets, FFO and AFFO provide performance measures that, when compared year over year, reflect the effect to operations from trends in occupancy, guestroom rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. Our computation of FFO differs slightly from the computation of Nareit-defined FFO related to the reporting of corporate depreciation and amortization expense, which is de minimis. Our computation of FFO may also differ from the methodology for calculating FFO used by other equity REITs and, accordingly, may not be comparable to such other REITs. FFO and AFFO should not be considered as alternatives to net income (loss) (computed in accordance with GAAP), as an indicator of our liquidity, nor are they indicative of funds available to meet our cash needs, including our ability to pay dividends or make distributions. Where indicated in this Quarterly Report on Form 10-Q, FFO is based on our computation of FFO and not the computation of Nareit-defined FFO unless otherwise noted.
EBITDA, EBITDAre and Adjusted EBITDAre
The following is an unaudited reconciliation of our Net income, determined in accordance with GAAP, to EBITDA, EBITDAre and Adjusted EBITDAre, (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Net income | $ | 9,735 | $ | 2,037 | $ | 3,822 | $ | 2,660 | ||||||||||||||||||
| Depreciation and amortization | 36,413 | 37,259 | 73,187 | 74,489 | ||||||||||||||||||||||
| Interest expense | 22,068 | 20,628 | 42,518 | 40,584 | ||||||||||||||||||||||
| Interest income on cash deposits | (177) | (132) | (295) | (245) | ||||||||||||||||||||||
| Income tax (benefit) expense | (1,430) | 1,178 | (538) | 1,932 | ||||||||||||||||||||||
| EBITDA | 66,609 | 60,970 | 118,694 | 119,420 | ||||||||||||||||||||||
| Loss on write-down of assets | — | — | 3,641 | — | ||||||||||||||||||||||
| (Gain) loss on disposal of assets and other dispositions, net | (134) | 80 | (94) | 79 | ||||||||||||||||||||||
EBITDAre | 66,475 | 61,050 | 122,241 | 119,499 | ||||||||||||||||||||||
| Amortization of key money liabilities | (164) | (129) | (293) | (258) | ||||||||||||||||||||||
| Equity-based compensation | 1,426 | 2,789 | 3,427 | 4,705 | ||||||||||||||||||||||
| Debt transaction costs | 142 | 15 | 142 | 15 | ||||||||||||||||||||||
| Non-cash lease expense, net | 122 | 133 | 251 | 266 | ||||||||||||||||||||||
| Casualty losses, net | 294 | 430 | 622 | 724 | ||||||||||||||||||||||
| Other | 3 | — | 56 | — | ||||||||||||||||||||||
| (Income) loss related to non-controlling interests in consolidated joint ventures | (776) | 769 | (1,944) | (514) | ||||||||||||||||||||||
| Adjustments related to non-controlling interests in consolidated joint ventures | (12,688) | (14,138) | (25,476) | (28,511) | ||||||||||||||||||||||
Adjusted EBITDAre | $ | 54,834 | $ | 50,919 | $ | 99,026 | $ | 95,926 | ||||||||||||||||||
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Adjusted EBITDAre increased $3.9 million for the three months ended June 30, 2026 in comparison with the three months ended June 30, 2025. The increase is primarily due to improved operating performance, partially offset by the sale of the Sold Properties. Adjusted EBITDAre increased $3.1 million for the six months ended June 30, 2026 in comparison with the six months ended June 30, 2025. The increase is primarily due to improved operating performance in the second quarter of 2026, partially offset by the sale of the Sold Properties.
FFO and AFFO
The following is an unaudited reconciliation of our Net income, determined in accordance with GAAP, to FFO and AFFO (in thousands, except per share/unit amounts):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Net income | $ | 9,735 | $ | 2,037 | $ | 3,822 | $ | 2,660 | ||||||||||||||||||
| Preferred dividends | (3,968) | (3,968) | (7,938) | (7,938) | ||||||||||||||||||||||
| Distributions to and accretion of redeemable non-controlling interests | (657) | (657) | (1,314) | (1,314) | ||||||||||||||||||||||
| (Income) loss related to non-controlling interests in consolidated joint ventures | (776) | 769 | (1,944) | (514) | ||||||||||||||||||||||
| Net income (loss) applicable to common shares and Common Units | 4,334 | (1,819) | (7,374) | (7,106) | ||||||||||||||||||||||
| Real estate-related depreciation | 35,861 | 36,694 | 72,075 | 73,357 | ||||||||||||||||||||||
| Loss on write-down of assets | — | — | 3,641 | — | ||||||||||||||||||||||
| (Gain) loss on disposal of assets and other dispositions, net | (134) | 80 | (94) | 79 | ||||||||||||||||||||||
| FFO adjustments related to non-controlling interests in consolidated joint ventures | (7,623) | (8,069) | (15,220) | (16,248) | ||||||||||||||||||||||
| FFO applicable to common shares and Common Units | 32,438 | 26,886 | 53,028 | 50,082 | ||||||||||||||||||||||
| Amortization of deferred financing costs | 1,919 | 1,677 | 3,916 | 3,350 | ||||||||||||||||||||||
| Amortization of franchise fees | 165 | 175 | 334 | 350 | ||||||||||||||||||||||
| Amortization of intangible assets, net | 224 | 262 | 486 | 524 | ||||||||||||||||||||||
| Equity-based compensation | 1,426 | 2,789 | 3,427 | 4,705 | ||||||||||||||||||||||
| Debt transaction costs | 142 | 15 | 142 | 15 | ||||||||||||||||||||||
| Non-cash lease expense, net | 122 | 133 | 251 | 266 | ||||||||||||||||||||||
| Casualty losses, net | 294 | 430 | 622 | 724 | ||||||||||||||||||||||
| Deferred tax (benefit) expense | (1,430) | 843 | (963) | 1,168 | ||||||||||||||||||||||
| Other | 3 | — | 56 | — | ||||||||||||||||||||||
| AFFO adjustments related to non-controlling interests in consolidated joint ventures | (420) | (503) | (891) | (1,118) | ||||||||||||||||||||||
| AFFO applicable to common shares and Common Units | $ | 34,883 | $ | 32,707 | $ | 60,408 | $ | 60,066 | ||||||||||||||||||
| FFO per common share and Common Unit | $ | 0.27 | $ | 0.22 | $ | 0.44 | $ | 0.40 | ||||||||||||||||||
| AFFO per common share and Common Unit | $ | 0.29 | $ | 0.27 | $ | 0.50 | $ | 0.49 | ||||||||||||||||||
| Weighted-average diluted common shares and Common Units | 121,154 | 123,125 | 121,511 | 123,742 | ||||||||||||||||||||||
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The following is an unaudited reconciliation of weighted-average diluted shares of Common Stock to non-GAAP weighted-average diluted shares of Common Shares and Common Units for FFO and AFFO (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Weighted average common shares outstanding - diluted | 106,181 | 107,633 | 105,241 | 107,820 | ||||||||||||||||||||||
| Adjusted for: | ||||||||||||||||||||||||||
Non-GAAP adjustment for restricted stock awards (1) | 1,964 | 2,483 | 3,261 | 2,393 | ||||||||||||||||||||||
Non-GAAP adjustment for dilutive effects of Common Units (2) | 13,009 | 13,009 | 13,009 | 13,529 | ||||||||||||||||||||||
| Non-GAAP weighted diluted shares of common stock and Common Units | 121,154 | 123,125 | 121,511 | 123,742 | ||||||||||||||||||||||
(1) Adjustment reflects the difference between the total weighted-average unvested restricted time-based shares outstanding as of the reporting date and the weighted-average restricted time-based shares computed for diluted earnings per share under the treasury stock method, plus the difference between the estimated total weighted average unvested restricted performance-based shares expected to vest based on achievement of the performance measures as if the vesting date were the reporting date and the estimated weighted-average unvested restricted performance-based shares computed for diluted earnings per share under the treasury stock method.
(2) The Company includes the outstanding Common Units issued by our Operating Partnership held by limited partners other than the Company because the Common Units are redeemable for cash or, at the Company’s option, shares of the Company’s common stock on a one-for-one basis.
AFFO applicable to shares of common stock and Common Units increased by $2.2 million for the three months ended June 30, 2026 compared with the three months ended June 30, 2025. The increase is primarily due to improved operating performance, partially offset by increased interest expense due to the refinancing of the $287.5 million 1.5% Convertible Notes with the $275 million 2025 Delayed Draw Term Loan in February 2026 and the sale of the Sold Properties.
AFFO applicable to shares of common stock and Common Units increased by $0.3 million for the six months ended June 30, 2026 compared with the six months ended June 30, 2025. The increase is primarily due to improved operating performance in the second quarter of 2026, partially offset by increased interest expense due to the refinancing of the $287.5 million 1.5% Convertible Notes with the $275 million 2025 Delayed Draw Term Loan in February 2026 and the sale of the Sold Properties.
Liquidity and Capital Resources
Our short-term cash obligations consist primarily of operating expenses and other expenditures directly associated with our lodging properties, recurring maintenance and capital expenditures necessary to maintain our lodging properties in accordance with internal and brand standards, capital expenditures to improve our lodging properties, interest payments, settlement of interest rate swaps, scheduled principal payments on outstanding indebtedness, restricted cash funding obligations, our joint venture acquisitions and capital requirements, contractual lease payments, corporate overhead, and dividends and distributions to our stockholders and unitholders when declared and paid. Our corporate overhead primarily consists of employee compensation expenses, professional fees, corporate insurance and rent expenses. Cash requirements for our corporate overhead expenses (excluding non-cash equity-based compensation), which are generally paid from operating cash flows, were $12.8 million and $12.1 million, for the six months ended June 30, 2026 and 2025, respectively. We generally expect our corporate overhead expenses to remain consistent with the level of our operating activities and market conditions for goods and services.
Our long-term cash obligations consist primarily of dividends and distributions, scheduled debt payments, including maturing loans, capital required for renovations and other non-recurring capital expenditures that periodically are made with respect to our lodging properties, and lease obligations.
Our sources of cash are primarily from operating cash flows, sales of lodging properties, principal and interest payments from borrowers on notes receivable, and debt financing including available balances on our revolving loans.
At June 30, 2026, we have scheduled debt principal payments in the next 12 months totaling $0.5 million. In February 2026 we drew upon our $275 million delayed draw term loan (the “2025 Delayed Draw Term Loan”) and $400 Million Revolver (defined in “Note 5 - Debt” to the accompanying Condensed Consolidated Financial Statements) to repay the outstanding Convertible Notes at their maturity.
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We have obtained financing through debt instruments having staggered maturities and intend to continue to do so in the future. Our debt includes, and may include in the future, debt secured by equity pledges, debt secured by first priority mortgage liens on certain lodging properties and unsecured debt. Our outstanding indebtedness requires us to comply with various financial and other covenants. We believe that we will have adequate liquidity to meet the requirements for scheduled maturities and principal repayments. However, we can provide no assurance that we will be able to refinance our indebtedness as it becomes due and, if refinanced, whether such refinancing will be available on favorable terms.
To satisfy the requirements for qualification as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute annually at least 90% of our REIT taxable income to our stockholders, determined without regard to the deduction for dividends paid and excluding any net capital gains. We intend to distribute a sufficient amount of our taxable income to maintain our status as a REIT and to avoid tax on undistributed income. Because we anticipate distributing a substantial amount of our available cash from operations, if sufficient funds are not available to us from lodging property dispositions, our senior revolving credit and term loan facilities and other loans, we may need to raise additional capital to grow our business.
From time to time, we may repurchase shares of our common stock pursuant to our 2025 Share Repurchase Program (see “Note 8 - Equity”). During the three and six months ended June 30, 2026, we repurchased 48,936 and 1,481,959 shares of our Common Stock, respectively, under the 2025 Share Repurchase Program for an aggregate purchase price and commissions of $0.2 million and $6.2 million, respectively, or an average of approximately $4.27 per share for repurchases during the three months ended June 30, 2026 and $4.17 per share for repurchases during the six months ended June 30, 2026. As of June 30, 2026, approximately $28.4 million remained available for repurchase under the 2025 Share Repurchase Program.
Outstanding Indebtedness
At June 30, 2026, we had $5 million in borrowings under our $400 Million Revolver, $200 million outstanding on our $200 Million Term Loan, no outstanding borrowings under our $50 Million Delayed Draw Term Loan, $275 million outstanding on our 2025 Delayed Draw Term Loan, and $200 million outstanding on our 2024 Term Loan (each of such credit facilities are defined in “Note 5 - Debt” to the accompanying Condensed Consolidated Financial Statements). Each of the credit facilities was supported by the 52 lodging properties included in the credit facility borrowing base.
In June 2026, the Company entered into a restated and amended Senior Credit Facility (the “Credit Facility Amendment”) to extend and replace the prior 2023 Senior Credit Facility (see “Note 5 - Debt” to the accompanying Condensed Consolidated Financial Statements). The Credit Facility Amendment extends the maturity date of our prior $400 Million Revolver to June 2030. Under the Credit Facility Amendment, the Company also has the right to further extend the maturity date of the new $400 Million Revolver for up to two consecutive six-month periods, subject to certain conditions. The Credit Facility Amendment extends the maturity date of the $200 Million Term Loan to June 2031. Additionally, the Credit Facility Amendment provides for a $50 million delayed draw term loan (the “$50 Million Delayed Draw Term Loan”).
The interest rate on the $400 Million Revolver pursuant to the Credit Facility Amendment is based on the higher of the following:
i.the Secured Overnight Financing Rate (“SOFR”) or term SOFR plus a margin ranging from 140 basis points to 230 basis points, depending on the Company's leverage ratio (as defined in the loan documents), or
ii.an applicable base rate (which is the greatest of the administrative agent’s prime rate, the federal funds rate plus 50 basis points, and 1-month term SOFR plus 100 basis points) (the “base rate”) plus a margin ranging from 40 basis points to 130 basis points, depending on the Company's leverage ratio (as defined in the loan documents).
The interest rate on the $200 Million Term Loan and the $50 Million Delayed Draw Term Loan, pursuant to the Credit Facility Amendment, is based on the higher of the following:
i.daily SOFR or term SOFR plus a margin ranging from 135 basis points to 225 basis points, depending on the Company's leverage ratio (as defined in the loan documents), or
ii.the base rate plus a margin ranging from 35 basis points to 125 basis points, depending on the Company's leverage ratio (as defined in the loan documents).
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At June 30, 2026, the GIC Joint Venture had $250 million outstanding under the GIC Joint Venture Credit Facility (as defined in “Note 5 - Debt” to the accompanying Condensed Consolidated Financial Statements), which included borrowings of $125 million on its $125 Million Term Loan and $125 million on its $125 Million Revolver. The GIC Joint Venture Credit Facility is secured primarily by a first priority pledge of the equity interests in the subsidiaries that own the 15 lodging property borrowing base assets, and the related TRS entities which wholly own the TRS Lessees.
In May 2025, the Company closed on a $58 million mortgage loan (the “Brickell Mortgage Loan”) for our dual-branded 264-guestroom AC Hotel by Marriott and Element Hotel in Miami, FL, with Wells Fargo Bank, N.A., as administrative agent, the proceeds of which were primarily used to repay the remaining $45.4 million balance of the mortgage loan with City National Bank of Florida that was scheduled to mature in June of 2025. In May 2026, the Brickell Mortgage Loan was amended to reduce the interest rate by 30 basis points from one-month term SOFR plus 260 to one-month term SOFR plus 230 basis points. The outstanding balance of the Brickell Mortgage Loan was $58 million at June 30, 2026.
In 2025, the Company closed on a $400 million senior unsecured term loan (the “2025 GIC Joint Venture Term Loan”) that refinanced and replaced the GIC Joint Venture Term Loan (as defined in “Note 5 - Debt” to the Condensed Consolidated Financial Statements). The 2025 GIC Joint Venture Term Loan has an initial maturity date of July 2028 and can be extended for two 12-month periods at the Company’s option, subject to certain conditions, for a fully extended maturity date of July 2030.
The GIC Joint Venture has a mortgage loan outstanding totaling $12.1 million related to the acquisition of the Embassy Suites in Tucson, AZ in December 2021 and a Property Assessed Clean Energy (“PACE”) loan totaling $5.5 million that was assumed as part of the NCI Transaction in the first quarter of 2022.
As a result of the Credit Facility Amendment, the 2025 GIC Joint Venture Term Loan financing and the 2025 Delayed Draw Term Loan financing, the Company has virtually no debt maturities until 2028 and has an average length to maturity of approximately 3.6 years.
At June 30, 2026, we and our GIC Joint Venture are in compliance with all of our loan agreements, and we believe we will be in compliance with these agreements for at least the next four quarters. For more information concerning our indebtedness, see “Note 5 - Debt” to the accompanying Condensed Consolidated Financial Statements.
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A summary of our debt at June 30, 2026 is as follows (dollars in thousands):
| Lender | Interest Rate | Initial Maturity Date | Fully Extended Maturity Date | Number of Encumbered Properties | Principal Amount Outstanding | |||||||||||||||||||||||||||||||||
| OPERATING PARTNERSHIP DEBT: | ||||||||||||||||||||||||||||||||||||||
| 2026 Senior Credit Facility | ||||||||||||||||||||||||||||||||||||||
| Bank of America, NA | ||||||||||||||||||||||||||||||||||||||
$400 Million Revolver (1) | 5.59% Variable | 6/29/2030 | 6/29/2031 | n/a | $ | 5,000 | ||||||||||||||||||||||||||||||||
$200 Million Term Loan (1) | 5.54% Variable | 6/29/2031 | 6/29/2031 | n/a | 200,000 | |||||||||||||||||||||||||||||||||
$50 Million Delayed Draw Term Loan (1) | 5.54% Variable | 6/29/2031 | 6/29/2031 | n/a | — | |||||||||||||||||||||||||||||||||
| Total Senior Credit Facility | 205,000 | |||||||||||||||||||||||||||||||||||||
| Term Loans | ||||||||||||||||||||||||||||||||||||||
Regions Bank 2024 Term Loan Facility (1) | 5.74% Variable | 2/26/2027 | 2/26/2029 | n/a | 200,000 | |||||||||||||||||||||||||||||||||
2025 Delayed Draw Term Loan (1) | 5.74% Variable | 3/27/2028 | 3/27/2030 | n/a | 275,000 | |||||||||||||||||||||||||||||||||
| 475,000 | ||||||||||||||||||||||||||||||||||||||
Total Operating Partnership Debt | 680,000 | |||||||||||||||||||||||||||||||||||||
| JOINT VENTURE DEBT: | ||||||||||||||||||||||||||||||||||||||
| Brickell Joint Venture Mortgage Loan | ||||||||||||||||||||||||||||||||||||||
| Wells Fargo Bank, N.A. | 5.92% Variable | 5/15/2028 | 5/15/2030 | 2 | 58,000 | |||||||||||||||||||||||||||||||||
| GIC Joint Venture Credit Facility and Term Loans | ||||||||||||||||||||||||||||||||||||||
| Bank of America, N.A. | ||||||||||||||||||||||||||||||||||||||
$125 Million Revolver (2) | 5.79% Variable | 9/15/2027 | 9/15/2028 | n/a | 125,000 | |||||||||||||||||||||||||||||||||
$125 Million Term Loan (2) | 5.74% Variable | 9/15/2027 | 9/15/2028 | n/a | 125,000 | |||||||||||||||||||||||||||||||||
Bank of America, N.A. 2025 Term Loan (3) | 5.99% Variable | 7/24/2028 | 7/24/2030 | n/a | 383,430 | |||||||||||||||||||||||||||||||||
| Wells Fargo | 4.99% Fixed | 6/6/2028 | 6/6/2028 | 1 | 12,110 | |||||||||||||||||||||||||||||||||
| PACE loan | 6.10% Fixed | 7/31/2040 | 7/31/2040 | n/a | 5,544 | |||||||||||||||||||||||||||||||||
| Total GIC Joint Venture Credit Facility and Term Loans | 1 | 651,084 | ||||||||||||||||||||||||||||||||||||
| Total Joint Venture Debt | 3 | 709,084 | ||||||||||||||||||||||||||||||||||||
| Total Debt | 3 | $ | 1,389,084 | |||||||||||||||||||||||||||||||||||
(1) The 2026 Senior Credit Facility, the Regions Bank 2024 Term Loan Facility, and the 2025 Delayed Draw Term Loan are supported by a borrowing base of 52 unencumbered hotel properties and their affiliates.
(2) The $125 Million Revolver and the $125 Million Term Loan are secured by pledges of the equity in the entities that own 15 lodging properties and affiliated entities.
(3) The GIC Joint Venture Term Loan with Bank of America, N.A. is secured by pledges of the equity in the entities that own 23 lodging properties and two parking garages and their affiliates.
Capital Expenditures
During the six months ended June 30, 2026, we funded $23.6 million in capital expenditures on a consolidated basis. When taking into consideration only our pro rata portion related to our joint ventures, capital expenditures for the six months ended June 30, 2026 were $18.5 million. We anticipate spending approximately $55 million to $65 million on capital expenditures on a pro rata basis during 2026. We expect to fund these expenditures through a combination of cash flows from operations and borrowings on our $400 Million Revolver, or other potential sources of capital, to the extent available to us.
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Cash Flows
Unaudited cash flow information is as follows (in thousands):
| Six Months Ended June 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||||||||||||||
| Net cash provided by operating activities | $ | 83,438 | $ | 74,686 | $ | 8,752 | |||||||||||||||||||||||
| Net cash used in investing activities | (13,019) | (39,102) | 26,083 | ||||||||||||||||||||||||||
| Net cash used in financing activities | (69,167) | (35,718) | (33,449) | ||||||||||||||||||||||||||
| Net change in cash, cash equivalents and restricted cash | $ | 1,252 | $ | (134) | $ | 1,386 | |||||||||||||||||||||||
Changes from the six months ended June 30, 2026 compared with the six months ended June 30, 2025 were due to the following:
•Net cash provided by operating activities. Cash flows from operating activities generally consist of the net cash generated by our lodging property operations, partially offset by the cash paid for interest, corporate expenses and other working capital changes. Cash provided by operating activities for the six months ended June 30, 2026 was the result of net income of $87.6 million, after adjusting for non-cash items such as depreciation and amortization and equity-based compensation, partially offset by a net change in working capital of $4.2 million. Cash provided by operating activities for the six months ended June 30, 2025 was the result of net income of $86.9 million, after adjusting for non-cash items such as depreciation and amortization and equity-based compensation, partially offset by a net change in working capital of $12.2 million. The net change in working capital each period can vary based on the timing and amounts incurred of working capital components and the timing of payments. The increase is primarily due to improved operating performance and changes in working capital, partially offset by increased interest expense due to the refinancing of the $287.5 million 1.5% Convertible Notes with the $275 million 2025 Delayed Draw Term Loan in February 2026 and the sale of the Sold Properties.
•Net cash used in investing activities. Cash used in investing activities for the six months ended June 30, 2026 was primarily due to $23.6 million of renovation expenditures and $1.4 million related to the purchase of a parcel of undeveloped land in Frisco, TX, partially offset by proceeds of $12.0 million related to the sale of the Hilton Garden Inn in Longview, TX in February 2026.
Cash used in investing activities for the six months ended June 30, 2025 was due to $40.2 million of renovation and development expenditures, partially offset by the net proceeds of $1.2 million related to the sale of an undeveloped parcel of land in San Antonio, TX in February 2025.
•Net cash used in financing activities. Cash used in financing activities for the six months ended June 30, 2026 was primarily related to the payment of dividends and distributions of approximately $39.0 million, the repayment of our Convertible Notes totaling $287.5 million from $275 million of borrowings on our 2025 Delayed Draw Term Loan and $12.5 million drawn on our $400 Million Revolver, $7.6 million of principal payments on debt, repurchases of our common stock of approximately $6.2 million, $8.0 million related to financing fees and costs, $0.9 million related to employee withholding requirements on vested restricted stock, and net repayments on our $400 Million Revolver of $7.5 million (excluding the $12.5 million borrowed for the repayment of the Convertible Notes).
Cash used in financing activities for the six months ended June 30, 2025 was primarily related to the payment of dividends and distributions of approximately $40.7 million, repurchases of our common stock of approximately $15.4 million, financing costs of approximately $5.4 million related to the 2025 Delayed Draw Term Loan, $1.6 million related to employee withholding requirements on vested restricted stock and scheduled principal payments on mortgage debt of $0.9 million, partially offset by net proceeds from the Brickell Mortgage Loan totaling $12.6 million, net proceeds on our line of credit of $15.0 million and joint venture contributions of $0.8 million.
Critical Accounting Policies
For critical accounting policies, see “Note 2 - Basis of Presentation and Significant Accounting Policies” to the accompanying Condensed Consolidated Financial Statements and our Annual Report on Form 10-K for the year ended December 31, 2025.
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Cybersecurity
Like many companies in the hospitality industry, including certain of the major brand and franchise companies, we and certain of our third-party managers and franchisors have in the past experienced cybersecurity breaches and we expect cyberattacks and incidents to continue in varying degrees. We are not aware of any material cybersecurity losses related to our corporate information technology environment or any of our properties but we cannot guarantee that material incidents will not occur in the future. Cybersecurity risks at our lodging properties are managed through our franchisors and property management companies. An important part of our cybersecurity risk mitigation efforts includes maintaining cybersecurity insurance and indemnifications in certain of our property management agreements. Our Board of Directors, primarily through the Audit Committee, oversees management's approach to managing cybersecurity risks.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices, and other market changes that affect market-sensitive instruments. In pursuing our business strategies, the primary market risk to which we are exposed is interest rate risk. All of our outstanding loans are now indexed to the Secured Overnight Financing Rate (“SOFR”), and therefore, our primary interest rate exposure is to SOFR. We primarily use derivative financial instruments to manage interest rate risk.
At June 30, 2026, we were party to six interest rate derivative agreements, pursuant to which we received variable-rate payments in exchange for making fixed-rate payments (dollars in thousands):
Contract Date | Effective Date | Expiration Date | Average Annual Effective Fixed Rate | Notional Amount | ||||||||||||||||||||||
Operating Partnership: | ||||||||||||||||||||||||||
| July 26, 2022 | January 31, 2023 | January 31, 2027 | 2.60 | % | $ | 100,000 | ||||||||||||||||||||
| July 26, 2022 | January 31, 2023 | January 31, 2029 | 2.56 | % | 100,000 | |||||||||||||||||||||
| June 5, 2025 | June 2, 2025 | May 15, 2028 | 3.57 | % | 58,000 | |||||||||||||||||||||
| November 17, 2025 | December 31, 2025 | December 31, 2027 | 3.31 | % | 125,000 | |||||||||||||||||||||
Total Operating Partnership | 383,000 | |||||||||||||||||||||||||
GIC Joint Venture: | ||||||||||||||||||||||||||
| August 25, 2025 | January 13, 2026 | January 13, 2028 | 3.26 | % | 150,000 | |||||||||||||||||||||
| August 25, 2025 | January 13, 2026 | January 13, 2028 | 3.27 | % | 150,000 | |||||||||||||||||||||
Total GIC Joint Venture | 300,000 | |||||||||||||||||||||||||
| Total | 3.10 | % | (1) | $ | 683,000 | |||||||||||||||||||||
(1) Represents the weighted-average effective interest rate of our current interest rate swaps at June 30, 2026.
At June 30, 2026, after giving effect to our interest rate derivative agreements, $700.7 million, or 50%, of our consolidated debt had fixed interest rates and $688.4 million, or 50%, had variable interest rates. At June 30, 2026, debt related to our wholly-owned properties and our pro rata share of joint venture debt has a fixed-rate debt ratio of approximately 51% of our total pro rata indebtedness when taking into consideration interest rate swaps that are currently in effect.
Taking into consideration our existing interest rate swaps, an increase or decrease in interest rates of 1.0% would decrease or increase, respectively, our cash flows by approximately $6.9 million per year. See “Note 7 - Derivative Financial Instruments and Hedging” to the accompanying Condensed Consolidated Financial Statements for additional information.
As our fixed-rate debts mature, they will become subject to interest rate risk. In addition, as our variable-rate debts mature, lenders may impose interest rate floors on new financing arrangements because of the low interest rates experienced a few years ago.
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Item 4. Controls and Procedures.
Controls and Procedures
Disclosure Controls and Procedures
Our management team evaluated, with the participation of our principal executive officer, who currently is also our interim principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of June 30, 2026. Based on that evaluation, our principal executive officer, who currently is also our interim principal financial officer concluded that, as of June 30, 2026, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
On June 12, 2026, the Company announced the departure of its Chief Financial Officer, as previously disclosed in a Current Report on Form 8-K filed on June 12, 2026. The Company’s Chief Executive Officer is serving as Interim Chief Financial Officer and as the Company’s principal financial officer.
Management has evaluated the impact of this transition and determined that it did not materially affect the Company’s internal control over financial reporting.
Except as described above with respect to the departure of the Company’s Chief Financial Officer, there were no changes in our internal control over financial reporting during the three-month period covered by this Quarterly Report on Form 10-Q, which were identified in connection with management’s evaluation required by Rules 13a-15(d) and 15d-15(d) under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
We are involved from time to time in litigation arising in the ordinary course of business; however, there are currently no pending legal actions that we believe would have a material adverse effect on our financial position or results of operations.
Item 1A. Risk Factors.
We are updating the risk factors in our Annual Report on Form 10-K for the year ended December 31, 2025 as follows:
Self-Insurance Risks
We are self-insured for certain general liability risks up to specified retention levels, with third-party coverage above those amounts. Our program exposes us to the risk that actual claims, including guest-related incidents, may exceed our estimates. We establish reserves based on historical experience and management’s judgment; however, these estimates may prove insufficient. Unfavorable claims experience or increases in claim frequency, severity, or related costs could result in additional expense and could negatively affect our results of operations and financial condition.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
(a) None.
(b) Not applicable.
(c) In April 2025, the Board of Directors authorized a share repurchase program. Our common stock may be repurchased from time to time depending upon market conditions, and repurchases may be made in the open market or through private transactions or by other means, including principal transactions with various financial institutions, accelerated share repurchases, forwards, options and similar transactions, and through one or more trading plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. The program does not obligate us to repurchase any specific number of shares or any specific dollar amount and may be suspended at any time at our discretion.
The following table represents shares repurchased by the Company for the three months ended June 30, 2026:
| Period | Total Shares Purchased | Weighted Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) | ||||||||||||||||||||||
| April 1, 2026 - April 30, 2026 | 48,936 | $ | 4.27 | 48,936 | $ | 28,416 | ||||||||||||||||||||
| May 1, 2026 - May 31, 2026 | — | $ | — | — | $ | 28,416 | ||||||||||||||||||||
| June 1, 2026 - June 30, 2026 | — | $ | — | — | $ | 28,416 | ||||||||||||||||||||
| Total | 48,936 | 48,936 | ||||||||||||||||||||||||
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During the quarter ended June 30, 2026, there were no adoptions terminations
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Item 6. Exhibits.
The following exhibits are filed as part of this report:
| Exhibit Number | Description of Exhibit | ||||||||||
| 101.INS | The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | ||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document (1) | ||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document (1) | ||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document (1) | ||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document (1) | ||||||||||
| 101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document (1) | ||||||||||
| 104 | Cover Page Interactive Data File (the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | ||||||||||
† - Filed herewith
†† - Furnished herewith
(1) - Submitted electronically herewith
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SUMMIT HOTEL PROPERTIES, INC. (registrant) | ||||||||
| Date: August 5, 2026 | By: | /s/ Jonathan P. Stanner | ||||||
| Jonathan P. Stanner President, Chief Executive Officer and Director (principal executive officer and principal financial officer) | ||||||||
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SEPARATION AND CONSULTING AGREEMENT THIS SEPARATION AND CONSULTING AGREEMENT ("Agreement"), dated as of June 12, 2026, is made by and among Summit Hotel Properties, Inc. (the "Company") and William Conkling ("Conkling"). WHEREAS, the Company and Conkling are party to that certain Employment Agreement, dated May 17, 2021 (the "Employment Agreement"), pursuant to which Conkling serves as Executive Vice President and Chief Financial Officer of the Company; WHEREAS, Conkling has informed the Company of his resignation from his position as Executive Vice President and Chief Financial Officer of the Company, and as an officer and employee of the Company and its subsidiaries and affiliates, and Conkling and the Company mutually desire to specify the terms of Conkling' s termination of employment with the Company; and WHEREAS, in connection with Conkling's termination of employment, the Company wishes to secure the services of Conkling as a consultant to the Company upon the terms and subject to the conditions set forth herein, and Conkling wishes to render such services to the Company upon the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the mutual agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: 1. Termination of Employment. a. Termination of Emplo ment. Effective as of June 15, 2026 (the "Termination Date"), Conkling hereby resigns his employment with, and as an officer of, the Company and its subsidiaries and affiliates, and Conkling' s employment with the Company and its subsidiaries and affiliates shall thereupon terminate. Effective as of the Termination Date, the Employment Agreement shall terminate and Conkling shall have no further rights thereunder; provided, however, that, except as modified by this Agreement, Sections 11 (Code Section 280G), 12 (Code Section 409A), 13 (Withholding), 14 (Covenants of the Executive), 17 (Arbitration), 18 (Applicable Law) and 21 (Recoupment) of the Employment Agreement shall remain in full force and effect in accordance with their terms. Conkling and the Company acknowledge and agree that Conkling' s termination of employment hereunder shall constitute a "Voluntary Termination" by Conkling within the meaning of the Employment Agreement. b. Waiver of Notice. Conkling and the Company each hereby waive for all purposes the notice requirements in Sections 7(b) and 7( c) of the Employment Agreement, including the requirement that the Date of Termination (as defined in the Employment Agreement) be thirty (30) days following the date of notice of termination ( and Conkling hereby waives any and all rights to pay in lieu of such notice). c. Accrued Obligations. On the Termination Date, the Company will pay to Conkling (i) all accrued salary earned through the Termination Date, and (ii) any accrued, unused vacation or paid time-off through the Termination Date, in each case, subject to standard payroll deductions and withholdings. Vested benefits (if any) under employee benefit plans or policies shall be governed by the terms and conditions of the applicable plans. d. Expenses. Conkling acknowledges that, within thirty (30) days after the Termination Date, Conkling will submit his final documented expense reimbursement statement reflecting all business expenses incurred by him through the Termination Date, if any, for which Conkling seeks reimbursement. The Company will reimburse Conkling for any such expenses pursuant to its regular business policies and practices.
e. Return of Company Property. Conkling aeknowledges and agrees that Conkling has returned, or as of the Termination Date will return, to the Company: (i) all keys, files, records (and copies thereof), equipment (including, but not limited to, computer hardware, software, and printers, wireless handheld devices and pagers), access or credit cards, Company identification, and any other Company-owned property in Conkling' s possession or control; and (ii) all documents and copies, including hard and electronic copies, of documents in Conkling's possession relating to any Company Confidential Information ( as defined in the Employment Agreement), including, without limitation, internal and external business forms, manuals, correspondence, notes, and computer programs, and Conkling shall not make or retain any copy or extract of any of the foregoing; provided, however, that notwithstanding the foregoing, Conkling may retain Conkling's Company-issued cell phone (and corresponding cell phone number), if any, and Company-issued tablet device, provided that all Confidential Information has been removed from such devices prior to the Termination Date (and Conkling agrees to permit the Company to examine such devices and remove any such Confidential Information). Notwithstanding the foregoing, the Company acknowledges and agrees that any Consulting Services (as defined in Section 2 below) requested by the Company pursuant to Section 2 below may require access to, or may include discussions involving, Confidential Information that Conkling will no longer have in Conkling's possession; and, accordingly, the Company will be required to provide such information ( or grant access to such information) as may be reasonably necessary for Conkling to perform such Consulting Services. f. Acknowledgements; Full Settlement. Except as expressly provided in this Agreement, and notwithstanding anything contained in the Employment Agreement or otherwise, the Company shall have no further obligations, and Conkling shall have no further right or entitlement, with respect to any payments or other termination or severance benefits, whether under the terms of the Employment Agreement or otherwise. Without limiting the generality of the foregoing, Conkling acknowledges and agrees that as of the Termination Date, any and all unvested equity-based awards held by Conkling shall automatically and without further action be cancelled and forfeited without payment of any consideration therefor, and Conkling shall have no further right to or interest with respect thereto. 2. Consulting Services. a. General. During the period commencing on June 16, 2026 and ending on September 30, 2026 or such earlier date on which Conkling's consulting relationship with the Company is terminated as provided in Section 2(b) below (any such date of expiration or termination, the "Consulting Termination Date") (in any case, the "Consulting Period"), Conkling shall provide such reasonable consulting services as may be reasonably requested by the Chief Executive Officer of the Company that are generally consistent with Conkling's prior role as Executive Vice President and Chief Financial Officer of the Company, including with respect to the transition of Conkling's duties as Executive Vice President and Chief Financial Officer of the Company (the "Consulting Services"). Conkling shall comply with all applicable written policies and procedures of the Company (including, without limitation, technology use, confidentiality, background check, and work authorization policies and procedures). During the Consulting Period, the Company shall pay to Conkling a consulting fee of $25,000 per calendar month (the "Consulting Fee") as consideration for performing or being available to perform the Consulting Services, payable not later than ten (10) business days following the last day of the applicable calendar month during the Consulting Period and pro-rated for any partial month of service (including any partial month that results from the termination of this Agreement prior to September 30, 2026, in accordance with Section 2(b) below). b. Termination of Consulting Services; Obligations of the Company. The Consulting Services and the consulting relationship established hereby may be terminated by Conkling or the Company at any time and for any reason upon the delivery ofat least fifteen (15) days' prior written notice to the other party. Notwithstanding the foregoing, the Company may terminate this Agreement and the Consulting Services established hereby at any time and without notice in the event of any act or omission by Conkling that would constitute a Termination With Cause (as defined in the Employment Agreement). In the event of 2
any such termination described in this Section 2(b ), the Company shall pay to Conkling the Consulting Fee earned through the date of such termination in accordance with Section 2(a) above. c. Independent Contractor. The Company and Conkling expressly agree that, during the Consulting Period, Conkling shall be solely an independent contractor and neither Conkling nor any principal, employee, or contractor of Conkling shall be construed to be an employee of the Company in any manner under any circumstances or for any purposes whatsoever. Nothing in this Agreement shall establish an agency, partnership, joint venture, or employee relationship between the Company and Conkling, and Conkling shall not represent himself as an employee or officer of the Company. Nothing in this Agreement shall require or be deemed to require Conkling to provide services exclusively to the Company during the Consulting Period, and it shall not be a violation of this Agreement for Conkling to provide services to any other company, organization, entity or enterprise during the Consulting Period, subject to the restrictive covenants set forth in Section 14 of the Employment Agreement (as modified by this Agreement) and in any other written agreement or arrangement between Conkling and the Company or its affiliates (together, the "Restrictive Covenants"). The Company and Conkling agree and acknowledge that neither party hereto renders legal, tax, or accounting advice to the other party. Without limiting the generality of the foregoing, during the Consulting Period, the Company shall not provide Conkling or any principal, employee, or contractor of Conkling with, and no such individual shall be eligible to receive from the Company under any Company plan, any benefits, including without limitation, any pension, health, welfare, retirement, workers' compensation, or other insurance benefits. Conkling shall be solely responsible for all taxes arising in connection with the Consulting Fee (except to the extent required by law, as determined by the Company), including, without limitation, any and all federal, state, local, and foreign income and employment taxes. 3. Releases of Claim and Notice of Rights. Conkling acknowledges and agrees that the opportunity to enter into this Agreement and his right to receive and retain the payments and benefits hereunder are subject to and conditioned upon his execution and delivery within twenty-one (21) days following the Termination Date, and non-revocation of a general release of claims ( a "Release") in the form attached hereto as Exhibit A. Conkling further acknowledges and agrees that the opportunity to enter into this Agreement and his right to receive and retain the payments and benefits hereunder are subject to and conditioned upon his execution and delivery, within twenty-one (21) days following the Consulting Termination Date, and non revocation of a second Release in the form attached hereto as Exhibit B. The parties agree that nothing in this Agreement (including in any Release) shall be construed to interfere with Conkling' s right to file a charge, communicate directly with, cooperate or participate in an investigation or proceeding conducted by the Equal Employment Opportunity Commission ("EEOC"), the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission, or any other federal, state, or local government agency or commission ("Government Agencies"). However, the consideration provided to Conkling in this Agreement shall be the sole relief provided to Conkling for the claims that are released by Conkling herein and Conkling will not be entitled to recover and agrees to waive any monetary benefits or recovery against the Company in connection with any such claim, charge or proceeding without regard to ho has brought uch complaint claim, or charge. except that this Agreement does not limit Conkling·s right to receive an award for information provided to any Government Agencies. Further, the parties hereto agree that nothing in this Agreement (including in any Release) restricts or impedes Conkling from: (i) exercising Conkling's rights under Section 7 of the National Labor Relations Act; (ii) testifying truthfully in any legal proceeding, including, but not limited to, responding accurately to any inquiries or request for information made by the EEOC or any federal, state, or other regulatory authority or government agency; (iii) disclosing factual information related to a claim filed in a civil action or complaint filed in an administrative action concerning sexual assault, sexual harassment, workplace harassment or discrimination, failure to prevent an act of workplace harassment or discrimination, or an act of retaliation against a person for reporting or opposing harassment or discrimination; (iv) discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that Conkling has reason to believe is unlawful; or (v) 3
testifying before an administrative, legislative, or judicial proceeding pursuant to a court order, subpoena, or written request from an administrative agency concerning alleged criminal conduct or alleged sexual harassment on the part of any party to this Agreement, or their agents or employees. Conkling is not required to contact the Company regarding the subject matter of any such communications within this Section before Conkling engages in such communications. The activities or rights described in this Section 3 shall be referred to as "Protected Conduct'. 4. Restrictive Covenants. In consideration of the compensation and benefits described herein and the Company's commitments hereunder, the Company and Conkling agree as follows: a. Covenants Against Competition. Solely for purposes of Section 14(b) of the Employment Agreement (Covenants Against Competition), the "Restriction Period" as defined therein is hereby amended such that the reference in the first sentence to "the earlier of the first anniversary of such termination or a Control Change Date" is now deemed to be "December 15, 2026". For the avoidance of doubt, this amendment shall not modify, limit, or otherwise amend the definition or duration of the Restriction Period as applied to Section 14( d) of the Employment Agreement (Nonsolicitation) or to any other provision of the Employment Agreement. In addition, the Company acknowledges and agrees that there are no other non-competition provisions applicable to Consultant in any other plan, program, agreement or arrangement of the Company; or, if there are, that all such non-competition provisions are hereby deemed to lapse on December 15, 2026. b. Acknowledgement and Affmnation of Restrictive Covenants. The Company and Conkling acknowledge and agree that (i) the Restrictive Covenants shall remain in full force and effect in accordance with their tetn1s (as modified by this Agreement), with all post-termination covenants set forth therein that continue for set durations (including such non-solicitation and noncompetition restrictions, as modified by this Agreement) commencing upon the Termination Date, (ii) Conkling remains bound by his obligations thereunder (as modified by this Agreement), (iii) such Restrictive Covenants shall survive Conkling's termination of service and the termination of the Employment Agreement and (iv) all of the Restrictive Covenants are reasonable and necessary for the protection of the Company's trade secrets, confidential business information and other legitimate business interests and Conkling has received adequate consideration for these covenants, including as set forth in this Agreement. c. Interpretation. In the event the terms of this Section 4 are determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, over the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action. 5. No Assignment. This Agreement and the rights and duties hereunder are personal to Conk)jng and may not be assigned. delegated, transferred, or pledged by Conkling. Conkling hereby acknowledges and agrees that the Company may assign. delegate, transfer, pledge, or sell this Agreement and the rights and duties hereunder (a) to an affiliate of the ompany or (b) to any third party in connection with (i) the sale transfer or other disposition of all or substantially all of the assets of the Company or (ii) a merger, con olidation, or other imilar corporate transaction involving the Company. 6. Withholding. Notwithstanding anything else herein to the contrary. the ompany or any of its affiliates may withhold (or cause there to be withheld. as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement or any other compensation payable to Conkling such federal, state and local income employment, or other taxes or other amount as may be required lo be withheld pursuant to any applicable law, regulation or contract. 4
7. Notices. Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and delivered personally or sent by email or registered or certified mail, postage prepaid, addressed as follows ( or if it is sent through any other method agreed upon by the parties): If to the Company: Summit Hotel Properties, Inc. 13215 Bee Cave Parkway, Suite B-300 Austin, Texas 78738 Attention: Corporate Secretary If to Conkling, to his most recent address on the Company's books and records. 8. Miscellaneous. a. Governing Law. This Agreement shall be governed, construed, interpreted, and enforced in accordance with the substantive laws of the State of Texas, without reference to the principles of conflicts oflaw ofTexas or any other jurisdiction, and where applicable, the laws of the United States. b. Amendments; Waivers. This Agreement may not be modified, amended, or terminated except by an instrument in writing signed by Conkling and the Company. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity. c. Binding Effect; Benefit. This Agreement shall inure to the benefit of and be binding upon the parties hereto and each of their respective successors and assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto and their respective successors and permitted assigns, any benefit, rights, remedies, obligations, or liabilities under or by reason of this Agreement. ' d. No Authority to Bind the Company. Following the date hereof, Conkling shall have no authority to, and Conkling shall not, (i) enter into any contract or agreement on behalf of the Company or otherwise bind or commit the Company or (ii) except as expressly authorized by the Company, incur any expense or liability on behalf of the Company. e. Enforcement. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable, this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a portion of this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable. f. Construction. This Agreement shall be deemed drafted equally by both parties. Its language shall be construed as a whole and according to its fair meaning. Any presumption or principle that 5
the language is to be construed against any party shall not apply. The headings in this Agreement are only for convenience and are not intended to affect construction or interpretation. g. Entire Agreement. The terms of this Agreement ( and any other agreements and instruments contemplated hereby or referred to or incorporated herein) are, as of the date hereof, intended by the parties to be the final expression of their agreement with respect to the subject matter hereof and may not be contradicted by evidence of any prior or contemporaneous agreement. As of the date hereof, this Agreement shall supersede all undertakings or agreements, whether written or oral, previously entered into by Conkling and the Company or any predecessor thereto or affiliate thereof with respect to the subject matter hereof (including, without limitation, the Employment Agreement, except as expressly provided herein). References in this Agreement to "this Agreement" and/or "herein" shall include all annexes and exhibits hereto. h. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same Agreement. i. Consultation with Counsel. Conkling acknowledges that Conkling has been given the opportunity to consult with an attorney regarding the Agreement. In signing this Agreement, Conkling acknowledges that Conkling's decision to enter into this Agreement is knowing and voluntary and was not induced by the Company through fraud or misrepresentation. 9. No Other Payments Due. Conkling acknowledges that Conkling has been paid all wages or other compensation, including, but not limited to, accrued, unused vacation benefits, incentives, or bonuses, that Conkling has earned or become entitled to during Conkling's employment with the Company through the date Conkling executes this Agreement. Conkling agrees that Conkling does not have knowledge of any potential or actual dispute with the Company about any unpaid wages or compensation which Conkling believes Conkling is entitled to but has not been paid as of the date Conkling executes this Agreement. Conkling understands and acknowledges that Conkling shall not be entitled to any payments or benefits from the Company other than those expressly set forth in Sections 1 and 2 above. 10. Arbitration. Any claim or controversy arising out of, or relating to, this Agreement or its breach or the Executive's employment with (or separation from) the Company, other than a claim or controversy arising under Section 14 of the Employment Agreement or Section 4 above, shall be settled by arbitration in Austin, Texas in accordance with the governing Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association. Judgment upon the award rendered may be entered in any court of competent jurisdiction. In the event one of the parties hereto requests an arbitration proceeding under this Agreement, such proceeding shall commence within thirty (30) days from the date of such request. The prevailing party shall be entitled to reasonable attorney's fees and costs. 11. Representation Concerning Filing of Legal Actions. Conkling represents and warrants that Conkling does not presently have on file, and further represents that Conkling will not hereafter file, any claims, grievances, actions, appeals or complaints against the Company or its affiliates in or with any state or federal court, board or before any other tribunal or panel of arbitrators, public or private, based upon any actions occurring prior to the date of this Agreement, including but not limited to any claims arising out of the cessation of Conkling's employment with the Company, unless otherwise permitted by law. If such an action or charge has been filed by Conkling, or on Conkling's behalf, Conkling agrees not to participate in any such proceeding and Conkling will use Conkling's best efforts to cause it immediately to be withdrawn and dismissed with prejudice. 12. Code Section 409A. 6
a. This Agreement and the amounts payable and other benefits provided under this Agreement are intended to comply with, or otherwise be exempt from, Section 409A of the Internal Revenue Code of 1986, as amended ("Section 409A"), after giving effect to the exemptions in Treasury Regulation section 1.409A-l(b )(3) through (b )(12). This Agreement shall be administered, interpreted and construed in a manner consistent with Section 409A. If any provision of this Agreement is found not to comply with, or otherwise not be exempt from, the provisions of Section 409A, it shall be modified and given effect, in the sole discretion of the Company's Board of Directors (the "Board") and without requiring the Executive's consent, in such manner as the Board determines to be necessary or appropriate to comply with, or to effectuate an exemption from, Section 409A;provided, however, that in exercising its discretion under this Section 12, the Board shall modify this Agreement in the least restrictive manner necessary and without reducing any payment or benefit due under this Agreement. Each payment under this Agreement shall be treated as a separate identified payment for purposes of Section 409A. b. With respect to any reimbursement of expenses of, or any provision of in-kind benefits to, the Executive, as specified under this Agreement, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following limitations: (i) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year, except for any medical reimbursement arrangement providing for the reimbursement of expenses referred to in Section I 0S(b) of the Code; (ii) Lhe reimbursement of an eligible expen e shall be made as specified in this Agreement and in no event later than the end of the year after the year in which such expense was incurred and (iii) the right to reimbursement or in-kind benefit shall not be subject to I iquidation or exchange for another benefit. c. If a payment obligation under this Agreement arises on account of a Change in Control (as defined in the Company's 2024 Equity Incentive Plan) or the Executive's termination of employment and such payment obligation constitutes "deferred compensation" (as defined under Treasury Regulation section l.409A-l(b)(l), after giving effect to the exemptions in Treasury Regulation section l.409A-l(b)(3) through (b)(l2)), it shall be payable only if the Change in Control constitutes a "control change event" (as defined under Treasury Regulation §l.409A-3(i)(5)) or after the Executive's "separation from service" (as defined under Treasury Regulation §l.409A-l(h)); provided, however, that if the Executive is a "specified employee" (as defined under Treasury Regulation §1.409A-l(i)), any such payment that is scheduled to be paid within six (6) months after such separation from service shall accrue without interest and shall be paid on the first day of the seventh (7th ) month beginning after the date of the Executive's separation from service or, if earlier, within fifteen (15) days after the appointment of the personal representative or executor of the Executive's estate following the Executive's death. [Signature Page Follows] 7
IN WITNESS WHEREOF, the parties hereto have executed this Separation and Consulting Agreement effective as of the date first written above. SUMMIT HOTEL PROPERTIES, INC. B~ --~------~------- Name: ---=-C,_'kv_,!-'-11'--+f-H-~-~ =---=,--- Title: ~vf ._ 6 e. ):1 .eYct.l Lo .Jr1S e, I ' CONKLING William Conkling [Signature Page to Separation and Consulting Agreement]
Exhibit A GENERAL RELEASE (EMPLOYMENT) 1. General Release of Claims. Except as excluded below in Section 2, William Conkling ("Conkling"), for Conkling and Conkling's agents, successors, heirs and assigns (all of whom are hereinafter individually and collectively referred to in this Section as "Releasors"), hereby releases, remises and forever discharges Summit Hotel Properties, Inc. (the "Company") and any of its subsidiaries, parent companies, affiliates, related companies, divisions, predecessors, successors, interests, assigns, and/or entities in which each has an ownership interest, and each of their future, present, and former members, directors, trustees, agents, servants, shareholders, employees, officers, representatives, attorneys, investors and insurers, and each of their respective heirs, successors, executors and administrators, and all persons acting by, through, under and/or in concert with any of foregoing (all of whom are hereinafter individually and collectively referred to in this Section as "Released Parties") of and from any and all claims, demands, causes of action, actions, rights, damages, judgments, costs, compensation, suits, debts, dues, accounts, bonds, covenants, agreements, expenses, attorneys' fees, damages, penalties, punitive damages and liability of any nature whatsoever, in law or in equity or otherwise, which any Releasor has had, now have, shall or may have, whether known or unknown, foreseen or unforeseen, suspected or unsuspected, by reason of any cause, matter or thing whatsoever, from the beginning of time up to and including the date that Conkling executes this General Release (this "Release"), including but not limited to claims for: a. violation of any written or unwritten contract, agreement, policy, benefit plan, retirement or pension plan, option plan, severance plan, or covenant of any kind, or failure to pay wages, bonuses, employee benefits, other compensation, attorneys' fees, damages, or any other remuneration (including any equity, ownership interest, management fee, carried interest, partnership interest, distributions, dividends or participation or ownership in any business venture related to the Company); and/or b. discrimination, harassment, or retaliation on the basis of any characteristic protected under law, including but not limited to race, color, national origin, sex, pregnancy, sexual orientation, gender identity, religion, disability, marital or parental status, age, union activity or other protected activity; and/or c. denial of protection or benefits under any statute, ordinance, executive order, regulation or constitution, including but not limited to claims under Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Civil Rights Act of 1866; the Americans with Disabilities Act; the Fair Labor Standards Act; the Family and Medical Leave Act; the Worker Adjustment and Retraining Notification Act; the Equal Pay Act; the Employee Retirement Income Security Act of 1974; Chapter 21 of the Texas Labor Code, Tex. Lab. Code Ann.§§ 21.001 to 21.556; the Texas Anti-Retaliation Act, Tex. Lab. Code Ann.§ 451.001; and the Texas Payday Law, Tex. Lab. Code Ann.§§ 61.001 to 61.095, each as amended, and any other foreign, federal, state or local statute, ordinance, executive order, regulation or constitution regarding employment, termination of employment, discrimination, harassment, retaliation, health and safety, privacy, notice, or wage and hour matters; and/or d. violation of any public policy or common law of any state or other jurisdiction relating to employment or personal injury, including but not limited to claims for wrongful discharge, defamation, invasion of privacy, damages, infliction of emotional distress, negligence, fraud, interference with contract, breach of good faith and fair dealing, or breach of :fiduciary duty. Conkling affirms that, as of the date of Conkling's signature below, no claim released by this Section 1 was pending against any of the Released Parties, and except with respect to the Protected Conduct
( as defined in the Separation Agreement ( as defined below)), Conkling agrees not to sue any of the Released Parties for any claims released by this Section 1. Notwithstanding the foregoing, this Release shall not operate to release any of Conkling' s rights or claims (i) to payments or benefits under that certain Separation Agreement, dated as of June 12, 2026, by and between Conkling and the Company (the "Separation Agreement"), which payments and benefits ( among other good and valuable consideration) are provided in exchange for this Release, (ii) to any claims for indemnification arising under any applicable insurance or indemnification obligation of the Company, or (iii) to any claims which cannot be waived by an employee under applicable law. 2. Effective Date. To accept this Release, Conkling must return Conkling's executed copy to the Company no earlier than the Termination Date and no later than twenty-one (21) days following the Termination Date (the "Review Period"). Conkling acknowledges and agrees that Conkling has had at least twenty-one (21) days to review this Release. Conkling acknowledges that Conkling is releasing any claims Conkling may have under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act, through the date of Conkling's signature. After Conkling signs this Release, Conkling has up to seven (7) days to revoke the Agreement (such seven (7)-day revocation period, the "Revocation Period"). In order to effectively revoke this Release, Conkling must send written notice of the decision to do so to the Company, to the attention of Chris Eng at ceng@shpreit.com, and such written notice must be received by the Company prior to the expiration of the Revocation Period. If Conkling fails to timely return Conkling's executed Agreement or if Conkling timely revokes this Release, in each case as provided herein, this Release shall be null and void and of no effect. If Conkling timely returns Conkling's executed Agreement to the Company and the Revocation Period expires without Conkling revoking this Release, this Release shall become effective, irrevocable, and enforceable on the eighth (8th ) day after Conkling executes this Release (the "Effective Date"). 3. Miscellaneous. a. Assignment. The Company may assign this Release and such assignment will take effect for the benefit of any successors or assigns of the Company created by merger, reorganization, and sale of assets or otherwise. Conkling hereby consents and agrees to such assignment and enforcement of such rights and obligations by the Company's successors or assigns, without further action required. b. No Admission. This Release is not, and shall not be construed to be, an admission of liability, culpability or any other legal conclusion. c. Governing Law. This Release shall be governed, construed, interpreted, and enforced in accordance with the substantive laws of the State of Texas, without reference to the principles of conflicts of law of Texas or any other jurisdiction, and where applicable, the laws of the United States. d. Construction. If any provision of this Release is declared or determined by any court to be illegal or invalid, the validity of the remaining parts, terms or provisions of the Agreement shall not be affected thereby and the illegal or invalid part, term or provision shall be deemed not to be a part of this Release. 4. Acknowledgment. Conkling acknowledges that: (a) Conkling has carefully reviewed this Release and understands its meaning; (b) the Company hereby advises Conkling to consult with an attorney prior to signing this Agreement; ( c) Conkling has been given a reasonable period of time in which to consider this Agreement, and the parties expressly agree that the Review Period shall not be extended upon any material or immaterial changes to the Agreement; ( d) if Conkling signs this Agreement prior to the end of the Review Period, Conkling voluntarily waives the remainder of such Review Period; and ( e) Conkling is signing this Agreement knowingly, willingly, and without duress. ExhibitA-2
(Signature page follows) ExhibitA~3
IN WITNESS WHEREOF, the undersigned has executed this Release as of the date set forth below. SUMMIT HOTEL PROPERTIES, INC. By:-- ------------ Name: _____________ _ Title: ______________ _ Date: _______ _ ______ _ CONKLING William Conkling Date: _______ _ _____ _ Exhibit A-4
ExhibitB GENERAL RELEASE (CONSUL TING) 1. General Release of Claims. Except as excluded below in Section 2, William Conkling ("Conkling"), for Conkling and Conkling's agents, successors, heirs and assigns (all of whom are hereinafter individually and collectively referred to in this Section as "Releasors"), hereby releases, remises and forever discharges Summit Hotel Properties, Inc. (the "Company'') and any of its subsidiaries, parent companies, affiliates, related companies, divisions, predecessors, successors, interests, assigns, and/or entities in which each has an ownership interest, and each of their future, present, and former members, directors, trustees, agents, servants, shareholders, employees, officers, representatives, attorneys, investors and insurers, and each of their respective heirs, successors, executors and administrators, and all persons acting by, through, under and/or in concert with any of foregoing (all of whom are hereinafter individually and collectively referred to in this Section as "Released Parties") of and from any and all claims, demands, causes of action, actions, rights, damages, judgments, costs, compensation, suits, debts, dues, accounts, bonds, covenants, agreements, expenses, attorneys' fees, damages, penalties, punitive damages and liability of any nature whatsoever, in law or in equity or otherwise, which any Releasor has had, now have, shall or may have, whether known or unknown, foreseen or unforeseen, suspected or unsuspected, by reason of any cause, matter or thing whatsoever, from the beginning of time up to and including the date that Conkling executes this General Release (this "Release"), including but not limited to claims for: a. violation of any written or unwritten contract, agreement, policy, benefit plan, retirement or pension plan, option plan, severance plan, or covenant of any kind, or failure to pay fees, consulting wages, other compensation, attorneys' fees, damages, or any other remuneration (including any equity, ownership interest, management fee, carried interest, partnership interest, distributions, dividends or participation or ownership in any business venture related to the Company); and/or b. discrimination, harassment, or retaliation on the basis of any characteristic protected under law, including but not limited to race, color, national origin, sex, pregnancy, sexual orientation, gender identity, religion, disability, marital or parental status, age, union activity or other protected activity; and/or c. denial of protection or benefits under any statute, ordinance, executive order, regulation or constitution, including but not limited to claims under Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Civil Rights Act of 1866; the Americans with Disabilities Act; the Fair Labor Standards Act; the Family and Medical Leave Act; the Worker Adjustment and Retraining Notification Act; the Equal Pay Act; the Employee Retirement Income Security Act of 1974; Chapter 21 of the Texas Labor Code, Tex. Lab. Code Ann.§§ 21.001 to 21.556; the Texas Anti-Retaliation Act, Tex. Lab. Code Ann.§ 451.001; and the Texas Payday Law, Tex. Lab. Code Ann.§§ 61.001 to 61.095, each as amended, and any other foreign, federal, state or local statute, ordinance, executive order, regulation or constitution regarding service, termination of service, discrimination, harassment, retaliation, health and safety, privacy, notice, or wage and hour matters; and/or d. violation of any public policy or common law of any state or other jurisdiction relating to employment or personal injury, including but not limited to claims for wrongful discharge, defamation, invasion of privacy, damages, infliction of emotional distress, negligence, fraud, interference with contract, breach of good faith and fair dealing, or breach of fiduciary duty. Conkling affirms that, as of the date of Conkling's signature below, no claim released by this Section 1 was pending against any of the Released Parties, and except with respect to the Protected Conduct ( as defined in the Separation Agreement ( as defined below)), Conkling agrees not to sue any of the Released Parties for any claims released by this Section 1.
Notwithstanding the foregoing, this Release shall not operate to release any of Co_!lkling' s rights or claims (i) to payments or benefits under that certain Separation Agreement, dated as of June 12, 2026, by and between Conkling and the Company (the "Separation Agreement''), which payments and benefits (among other good and valuable consideration) are provided in exchange for this Release, (ii) to any claims for indemnification arising under any applicable insurance or indemnification obligation of the Company, or (iii) to any claims which cannot be waived by an employee under applicable law. 2. Effective Date. To accept this Release, Conkling must return Conkling's executed copy to the Company no earlier than the Termination Date and no later than twenty-one (21) days following the Termination Date (the "Review Period"). Conkling acknowledges and agrees that Conkling has had at least twenty-one (21) days to review this Release. Conkling acknowledges that Conkling is releasing any claims Conkling may have under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act, through the date of Conkling's signature. After Conkling signs this Release, Conkling has up to seven (7) days to revoke the Agreement (such seven (7)-day revocation period, the "Revocation Period"). In order to effectively revoke this Release, Conkling must send written notice of the decision to do so to the Company, to the attention of Chris Eng at ceng@shpreit.com, and such written notice must be received by the Company prior to the expiration of the Revocation Period. If Conkling fails to timely return Conkling's executed Agreement or if Conkling timely revokes this Release, in each case as provided herein, this Release shall be null and void and of no effect. If Conkling timely returns Conkling's executed Agreement to the Company and the Revocation Period expires without Conkling revoking this Release, this Release shall become effective, irrevocable, and enforceable on the eighth (8th ) day after Conkling executes this Release (the "Effective Date"). 3. Miscellaneous. a ksignment. The Company may assign this Release and such assignment will take effect for the benefit of any successors or assigns of the Company created by merger, reorganization, and sale of assets or otherwise. Conkling hereby consents and agrees to such assignment and enforcement of such rights and obligations by the Company's successors or assigns, without further action required. b. No Admission. This Release is not, and shall not be construed to be, an admission ofliability, culpability or any other legal conclusion. c. Governing Law. This Release shall be governed, construed, interpreted, and enforced in accordance with the substantive laws of the State of Texas, without reference to the principles of conflicts of law of Texas or any other jurisdiction, and where applicable, the laws of the United States. d. Construction. If any provision of this Release is declared or determined by any court to be illegal or invalid, the validity of the remaining parts, terms or provisions of the Agreement shall not be affected thereby and the illegal or invalid part, term or provision shall be deemed not to be a part of this Release. 4. Acknowledgment. Conkling acknowledges that: (a) Conkling has carefully reviewed this Release and understands its meaning; (b) the Company hereby advises Conkling to consult with an attorney prior to signing this Agreement; ( c) Conkling has been given a reasonable period of time in which to consider this Agreement, and the parties expressly agree that the Review Period shall not be extended upon any material or immaterial changes to the Agreement; ( d) if Conkling signs this Agreement prior to the end of the Review Period, Conkling voluntarily waives the remainder of such Review Period; and ( e) Conkling is signing this Agreement knowingly, willingly, and without duress. (Signature page follows) ExhibitB-2
IN WITNESS WHEREOF, the undersigned has executed this Release as of the date set forth below. SUMMIT HOTEL PROPERTIES, INC. By: ------------- Name: _____________ _ Title: ______________ _ Date: ______________ _ CONKLING William Conkling Date: _ _ ___ _____ ___ _ E:xhibitB-3
Exhibit 31.1
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Jonathan P. Stanner, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Summit Hotel Properties, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statement for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by the report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: August 5, 2026 | /s/ Jonathan P. Stanner | |||||||
| Jonathan P. Stanner | ||||||||
| President, Chief Executive Officer and Director | ||||||||
| (principal executive officer) | ||||||||
Exhibit 31.2
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Jonathan P. Stanner, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Summit Hotel Properties, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statement for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by the report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: August 5, 2026 | /s/ Jonathan P. Stanner | |||||||
| Jonathan P. Stanner | ||||||||
| President, Chief Executive Officer and Director | ||||||||
| (principal financial officer) | ||||||||
Exhibit 32.1
Certification Pursuant To
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of The Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of Summit Hotel Properties, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jonathan P. Stanner, President, Chief Executive Officer and Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: August 5, 2026 | /s/ Jonathan P. Stanner | ||||||||||
| Jonathan P. Stanner President, Chief Executive Officer and Director (principal executive officer) | |||||||||||
Exhibit 32.2
Certification Pursuant To
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of The Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of Summit Hotel Properties, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jonathan P. Stanner, President, Chief Executive Officer and Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: August 5, 2026 | /s/ Jonathan P. Stanner | ||||||||||
| Jonathan P. Stanner President, Chief Executive Officer and Director (principal financial officer) | |||||||||||