CLDT 10-K & 10-Q changes, risk factors and insider trading
Chatham Lodging Trust (also CLDT-PA) · NYSE · Real Estate Investment Trusts · CIK 1476045 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We may face challenges managing rapidly advancing artificial intelligence in our business which could adversely affect our competitive position.”
New heading “A delay in approving a budget and/or continuing appropriation legislation to fund the operations of the federal government, failure to raise the borrowing limit for the federal government, and other legislative changes and governmental disruptions could affect travel directly and indirectly and may thereby negatively impact our revenues and cash available for distributions.”
Largest changes
“We may face challenges managing rapidly advancing artificial intelligence in our business which could adversely affect our competitive position.”see in full comparison
“A delay in approving a budget and/or continuing appropriation legislation to fund the operations of the federal government, failure to raise the borrowing limit for the federal government, and other legislative changes and governmental disruptions could affect travel directly and indirectly and may thereby negatively impact our revenues and cash available for distributions.”see in full comparison
“The development and evolution of artificial intelligence is occurring at a rapid pace. Artificial intelligence may present an opportunity to create meaningful efficiencies and improve our business performance, but it could present similar opportunities for our competitors, and the use of artificial intelligence by us or our hotel manager, franchisors or vendors may pose new and more severe cybersecurity challenges. The use of artificial intelligence by hotel guests may change the way they find and purchase lodging or other hotel services. …”see in full comparison
see in full comparisonThe rapid development and fluidity of the COVID-19 pandemic made it extremely difficult to assess the pandemic's full adverse economic impact, and future impact, on our financial condition, results of operations, cash flows and performance.An outbreak of another disease or similar public health threat, or fear of such an event, that affects travel demand, travel behavior or travel restrictions could have a material adverse impact on our business, financial condition and operating results. Outbreaks of other diseases could also result in increased government restrictions and regulation, such as those actions described above or otherwise, which could adversely affect our operations.
“The delay in approving a budget and continuing appropriation legislation to fund the federal government's operations caused many federal agencies to cease or curtail some activities during the fourth quarter of 2013 and for an even longer period of time beginning in the fourth quarter of 2018 and the third quarter of 2025. …”see in full comparison
Under our credit facility, consisting of an unsecured revolving credit facility and an unsecured termsee in full comparisonloan,loan facility, our distributions may not exceed the greater of (i) 95% of adjusted funds from operations (as defined in oursenior unsecured revolvingcreditfacility and term loanagreement) for the preceding four-quarter period or (ii) the amount required for us to maintain our status as a REIT. As a result, if we do not generate sufficient adjusted funds from operations during the four quarters preceding any common share dividend payment date, we would not be able to pay dividends to our common shareholders consistent with our past practice without causing a default under ourrevolvingcreditfacility and term loan.agreement. In the event of a default under ourrevolvingcreditfacility or term loan,agreement, we would be unable to borrow under our revolving credit facility or term loan and any amounts we have borrowed thereunder could become due and payable.
Full comparison: every changed paragraph (17)
The COVID-19 pandemic has had, and may continue to have, or a future pandemic could have, adverse effects on our financial condition, results of operations, cash flows and performance.
The COVID-19 pandemic has had a severe and negative impact on both the U.S. economy and the global economy. Financial markets have experienced significant volatility as a result of the COVID-19 pandemic. Globally and throughout the United States, federal and local governments instituted quarantines, restrictions on travel, school closings, "shelter in place" orders, and restrictions on types of businesses that could continue operations. These restrictions had a severe impact on the U.S. lodging industry.
The rapid development and fluidity of the COVID-19 pandemic made it extremely difficult to assess the pandemic's full adverse economic impact, and future impact, on our financial condition, results of operations, cash flows and performance. An outbreak of another disease or similar public health threat, or fear of such an event, that affects travel demand, travel behavior or travel restrictions could have a material adverse impact on our business, financial condition and operating results. Outbreaks of other diseases could also result in increased government restrictions and regulation, such as those actions described above or otherwise, which could adversely affect our operations.
•possible environmental problems;
•construction delays or cost overruns that may increase project costs;
•receipt of and expense related to zoning, occupancy and other required governmental permits and authorizations;
•development costs incurred for projects that are not pursued to completion;
•acts of God such as earthquakes, hurricanes, floods or fires that could adversely affect a project;
•inability to raise capital; and
•governmental restrictions on the nature or size of a project.
We may face challenges managing rapidly advancing artificial intelligence in our business which could adversely affect our competitive position.
The development and evolution of artificial intelligence is occurring at a rapid pace. Artificial intelligence may present an opportunity to create meaningful efficiencies and improve our business performance, but it could present similar opportunities for our competitors, and the use of artificial intelligence by us or our hotel manager, franchisors or vendors may pose new and more severe cybersecurity challenges. The use of artificial intelligence by hotel guests may change the way they find and purchase lodging or other hotel services. If we or our hotel manager, franchisors or vendors are unable to apply artificial intelligence to our business successfully or our competitors gain competitive advantages over us through their application of artificial intelligence, our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders may be adversely affected.
Future terrorist attacksattacks, rumors or threats of war, or changes in terror alert levels could adversely affect travel and hotel demand.
Previous terrorist attacksattacks, rumors or threats of war, and subsequent terrorist alerts have adversely affected the U.S. travel and hospitality industries, often disproportionately to the effect on the overall economy. The impact that terrorist attacks in the U.S. or elsewhere could have on domestic and international travel and our business in particular cannot be determined but any such attacksattacks, rumors, or the threat of such attacks could have a material adverse effect on our business, financial condition and results of operations and our ability to finance our business, to insure our properties and to make distributions to our shareholders.
A delay in approving a budget and/or continuing appropriation legislation to fund the operations of the federal government, failure to raise the borrowing limit for the federal government, and other legislative changes and governmental disruptions could affect travel directly and indirectly and may thereby negatively impact our revenues and cash available for distributions.
The delay in approving a budget and continuing appropriation legislation to fund the federal government's operations caused many federal agencies to cease or curtail some activities during the fourth quarter of 2013 and for an even longer period of time beginning in the fourth quarter of 2018 and the third quarter of 2025. There can be no assurance that similar action or inaction by federal or state government agencies, or other efforts to reduce government expenditures or growth, will not occur again in future periods, resulting in difficulties and discouraging travel or meetings and conferences. The reduction in income from both businesses and federal government employees and the possibility of another federal government impasse may adversely affect consumer confidence or may discourage both business and leisure travel, resulting in the deferral or cancellation of travel and a negative effect on our group and transient revenues in the future. Such impacts could have a material adverse impact on our consolidated financial statements.
Under our credit facility, consisting of an unsecured revolving credit facility and an unsecured term loan,loan facility, our distributions may not exceed the greater of (i) 95% of adjusted funds from operations (as defined in our senior unsecured revolving credit facility and term loanagreement) for the preceding four-quarter period or (ii) the amount required for us to maintain our status as a REIT. As a result, if we do not generate sufficient adjusted funds from operations during the four quarters preceding any common share dividend payment date, we would not be able to pay dividends to our common shareholders consistent with our past practice without causing a default under our revolving credit facility and term loan.agreement. In the event of a default under our revolving credit facility or term loan,agreement, we would be unable to borrow under our revolving credit facility or term loan and any amounts we have borrowed thereunder could become due and payable.
Management's Discussion & Analysis (MD&A)
Removed heading “Gain from Partial Lease Termination”
Largest changes
“Hotel operating expenses increased $5.8 million, or 3.3%, to $181.2 million for the year ended December 31, 2024 from $175.4 million for the year ended December 31, 2023. The increase in hotel operating expenses was related to the increase in revenues and occupancy caused by the continued recovery of business travel following the COVID-19 pandemic, increases in staffing levels, wage and benefit costs, insurance costs, and inflation. …”see in full comparison
Room expenses, which are the most significant component of hotel operating expenses,see in full comparisonincreaseddecreased$3.5$5.5 million from$61.8 million in 2023 to$65.3 million in2024.2024 to $59.8 million in 2025. Theincreasedecrease in room expenses was related primarily to the decrease in costs from the sales of seven hotels, partially offset by the increase in costs from the acquisition of one hotel and an increase in costs related to an increase in same property occupanciesand revenuesat ourhotels due to the continued recovery of business travel following the COVID-19 pandemic, increased staffing levels, wage and benefit costs, and inflation.hotels.
“The remaining hotel operating expenses increased $2.3 million, or 2.0%, from $113.6 million in 2023 to $115.9 million in 2024. The increase in other remaining expenses primarily was related to an increase in occupancies and revenues at our hotels due to the continued recovery of business travel following the COVID-19 pandemic, increased insurance costs and inflation.”see in full comparison
“Our mortgage debt agreements contain “cash trap” provisions that are triggered when the hotel’s operating results fall below a certain debt service coverage ratio or debt yield. When these provisions are triggered, all of the excess cash flow generated by the hotel is deposited directly into cash management accounts for the benefit of our lenders until a specified debt service coverage ratio or debt yield is reached. Such provisions do not allow the lender the right to accelerate repayment of the underlying debt. …”see in full comparison
“•FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not represent cash generated from operating activities as determined by GAAP and should not be considered as alternatives to net income or loss, cash flows from operations or any other operating performance measure prescribed by GAAP. FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA are not measures of our liquidity.”see in full comparison
Full comparison: every changed paragraph (59)
•Average Daily Rate (“ADR”), which is the quotient of room revenue divided by total rooms sold,
•Occupancy, which is the quotient of total rooms sold divided by total rooms available,
•Revenue Per Available Room (“RevPAR”), which is the product of occupancy and ADR, and does not include food and beverage revenue, or other operating revenue,
•Funds From Operations (“FFO”),
•Adjusted FFO,
•Earnings before interest, taxes, depreciation and amortization (“EBITDA”),
•EBITDAre,
•Adjusted EBITDA, and
•Adjusted Hotel EBITDA.
Results of operations for the year ended December 31, 20242025 include the operating activities of the 36 hotels we owned for the entire period and partial year results for three hotels sold during the period and one hotel acquired during the period. We sold one hotel located in Denver, CO on January 9, 2024, sold one hotel located in Maitland, FL on December 6, 2024, and sold one hotel located in Bloomington, MN on December 16, 2024.2024, one hotel located in Brentwood, TN on January 30, 2025, one hotel located in Houston, TX on March 17, 2025, one hotel located in Houston, TX on April 22, 2025, and one hotel located in Billerica, MA on December 23, 2025. We acquired one hotel located in Phoenix, AZ on May 30, 2024. The changes in results described below were driven primarily by the continued recoverysales of business travel following the COVID-19 pandemic, the sale of threeseven hotels, the acquisition of one hotel,hotel and inflationary cost pressures.
Total revenue increaseddecreased $6.1$22.1 million to $317.2$295.1 million for the year ended December 31, 20242025 compared to total revenue of $311.1$317.2 million for the 20232024 period. The increasedecrease in total revenue primarily was related to the 2.8% increase in same property RevPAR, the acquisition of one hotel on May 30, 2024, partially offset by the decrease in revenue from the sales of threeseven hotels duringthat contributed $8.9 million in revenue for the year ended December 31, 2024.2025, Thedown $24.6 million from the $33.5 million that the sold hotels contributed for the corresponding 2024 period. Same property RevPAR also decreased by 0.1%. This was partially offset by the increase in revenue from the acquisition of one hotel acquired during the year ended December 31, 2024, which was not owned during the year ended December 31, 2023,that contributed $3.3$8.6 million of room revenue during the year ended December 31, 2024.2025, Thisup was partially offset by the decrease in revenue from the sale of three hotels that contributed $10.4 million in room revenue for the year ended December 31, 2024, down $6.3$4.9 million from the $16.7$3.7 million thesethat hotelsthe acquired hotel contributed for the yearcorresponding ended2024 December 31, 2023.period. Since all of our hotels are select-service or limited-service hotels, room revenue is the primary revenue source as these hotels do not have significant food and beverage revenue or large group conference facilities. Room revenue comprised 91.5%91.2% and 91.6%91.5% of total revenue for the years ended December 31, 20242025 and 2023,2024, respectively. Room revenue was $290.3$269.2 million and $285.0$290.3 million for the years ended December 31, 20242025 and 2023,2024, respectively, and the increasedecrease in room revenue primarily was related to the same factors discussed above.
Food and beverage revenue was $7.7$6.9 million and $8.1$7.7 million for the years ended December 31, 20242025 and 2023,2024, respectively. The decrease in food and beverage revenue was related to the sale of three hotels.
Other revenue, comprised of parking, meeting room, gift shop, in-room movie and other ancillary amenities revenue, increaseddecreased $1.4$0.2 million for the year ended December 31, 2024. The increase in other operating revenue primarily was related to increases in revenue from parking.2025.
As reported by Smith Travel Research, U.S. lodging industry RevPAR for the years ended December 31, 20242025 and 20232024 increaseddecreased 1.8%0.3% and increased 4.9%,1.8%, respectively, as compared to the years ended December 31, 20232024 and 2022.2023. Smith Travel Research reported that U.S. lodging industry RevPAR increased 0.2%2.2% in the first quarter of 2024,2025, increaseddecreased 2.5%0.5% in the second quarter of 2024,2025, increaseddecreased 0.9%1.4% in the third quarter of 20242025 and increaseddecreased 3.6%1.1% in the fourth quarter of 2024.2025. WeSmith expectTravel thatResearch incurrently 2025, lodgingprojects industry RevPAR willgrowth continueof to0.6% increasein modestly.2026.
SameFor the year ended December 31, 2025, same property RevPAR increaseddecreased 2.8%0.1% due to an increase in occupancy of 2.4%0.5% and ana increasedecrease in ADR of 0.4%.0.7%.
Hotel operating expenses decreased $12.0 million, or 6.6%, to $169.2 million for the year ended December 31, 2025 from $181.2 million for the year ended December 31, 2024. The seven sold hotels contributed $6.0 million in operating expenses for the year ended December 31, 2025, down $15.9 million from the $21.9 million that the sold hotels contributed for the corresponding 2024 period. This was partially offset by the increase in operating expenses from the acquisition of one hotel that contributed $4.5 million in operating expenses for the year ended December 31, 2025, up $2.3 million from the $2.2 million that the acquired hotel contributed for the corresponding 2024 period. The remaining change in operating expenses was related to inflationary cost pressures.
Hotel operating expenses increased $5.8 million, or 3.3%, to $181.2 million for the year ended December 31, 2024 from $175.4 million for the year ended December 31, 2023. The increase in hotel operating expenses was related to the increase in revenues and occupancy caused by the continued recovery of business travel following the COVID-19 pandemic, increases in staffing levels, wage and benefit costs, insurance costs, and inflation. The one hotel acquired during the year ended December 31, 2024, which was not owned during the year ended December 31, 2023, contributed $2.2 million of operating expenses during the year ended December 31, 2024. The increase was partially offset by the sale of three hotels during the year ended December 31, 2024 that contributed $7.3 million of operating expenses during the year ended December 31, 2024, down $4.6 million from the $11.9 million the sold hotels contributed during the year ended December 31, 2023.
Room expenses, which are the most significant component of hotel operating expenses, increaseddecreased $3.5$5.5 million from $61.8 million in 2023 to $65.3 million in 2024.2024 to $59.8 million in 2025. The increasedecrease in room expenses was related primarily to the decrease in costs from the sales of seven hotels, partially offset by the increase in costs from the acquisition of one hotel and an increase in costs related to an increase in same property occupancies and revenues at our hotels due to the continued recovery of business travel following the COVID-19 pandemic, increased staffing levels, wage and benefit costs, and inflation.hotels.
The remaining hotel operating expenses decreased $6.5 million, or 5.6%, from $115.9 million in 2024 to $109.4 million in 2025. The decrease in the remaining operating expenses was related primarily to the decrease in costs from the sales of seven hotels, partially offset by the increase in costs from the acquisition of one hotel and an increase in costs related to inflationary cost pressures.
The remaining hotel operating expenses increased $2.3 million, or 2.0%, from $113.6 million in 2023 to $115.9 million in 2024. The increase in other remaining expenses primarily was related to an increase in occupancies and revenues at our hotels due to the continued recovery of business travel following the COVID-19 pandemic, increased insurance costs and inflation.
Depreciation and amortization expense increaseddecreased $2.4$1.0 million from $58.3 million for the year ended December 31, 2023 to $60.7 million for the year ended December 31, 2024.2024 to $59.7 million for the year ended December 31, 2025. Depreciation is generally recorded on our assets over 40 years for buildings, 20 years for land improvements, 15 years for building improvements and one to ten years for hotel furniture, fixtures and equipment from the date of acquisition on a straight-line basis. Depreciable lives of hotel furniture, fixtures and equipment are generally assumed to be the difference between the date of acquisition and the date that the furniture, fixtures and equipment will be replaced. Amortization of franchise fees is recorded on a straight-line basis over the term of the respective franchise agreement.
Impairment loss was $4.3 millionzero and $4.3 million for the years ended December 31, 20242025 and 2023,2024, respectively. The impairment loss in 2024 was due to the impairment recorded on a hotel property which is under contract to be sold. The impairment loss in 2023 was due to the impairmentCY recorded on the HGI Denver TechHouston hotel property which was sold on JanuaryApril 9,22, 2024.2025.
Total property taxes, ground rent and insurance expenses increaseddecreased $0.2$1.7 million from $23.5 million for the year ended December 31, 2023 to $23.7 million for the year ended December 31, 2024.2024 to $22.0 million for the year ended December 31, 2025. The increasedecrease was primarily was related to the sales of seven hotels partially offset by increases in property tax assessments and an increase in insurance costs partially offset by successful property tax appeals at multiple hotel properties.assessments.
General and administrative expenses principally consist of employee-related costs, including base payroll, bonuses and amortization of restricted stock and awards of LTIP units. These expenses also include corporate operating costs, professional fees and trustees’ fees. Total general and administrative expenses (excluding amortization of stock based compensation of $6.4$6.3 million and $6.1$6.4 million for the years ended December 31, 20242025 and 2023,2024, respectively) increaseddecreased $0.6$1.7 million to $10.3 million in 2025 from $12.0 million in 2024 from $11.4 million in 2023.2024.
Other charges decreased from $0.3 million for the year ended December 31, 2024 to $27 thousand for the year ended December 31, 2025.
Other charges decreased from $2.3 million for the year ended December 31, 2023 to $0.3 million for the year ended December 31, 2024. The decrease primarily was related to the 2023 write-off of $2.2 million of previous expenditures related to the development of a hotel in California that the Company decided to no longer pursue.
Gain on the sale of hotel properties increased $8.7 million to $14.4 million for the year ended December 31, 2025 compared to $5.7 million for the year ended December 31, 20242024. comparedThe toHWS Brentwood hotel property was sold on January 30, 2025, the yearHI endedHouston hotel property was sold on March 17, 2025, the CY Houston hotel property was sold on April 22, 2025, and the HWS Billerica hotel property was sold on December 31,23, 2023.2025, which resulted in a total gain of $14.4 million. The HGI Denver Tech hotel property was sold on January 9, 2024, the HWS Maitland hotel property was sold on December 6, 2024, and the HWS Bloomington hotel property was sold on December 16, 2024, which resulted in a total gain of $5.7 million.
Interest on cash and cash equivalents and other income increaseddecreased $0.2$1.4 million from $1.5 million for the year ended December 31, 2023 to $1.7 million for the year ended December 31, 2024.2024 to $0.3 million for the year ended December 31, 2025. The increasedecrease was due to higher cash balances and higher interest rates received onlower cash balances during the year ended December 31, 2024.2025.
Interest expense increaseddecreased $3.8$5.2 million, or 13.8%,16.9%, from $27.1 million for the year ended December 31, 2023 to $30.9 million for the year ended December 31, 2024.2024 to $25.7 million for the year ended December 31, 2025. Interest expense is comprised of the following (dollars in thousands):
The decrease in interest expense was due to lower debt balances and lower floating rate borrowing costs during the year ended December 31, 2025 than during the year ended December 31, 2024.
The increase in interest expense was due to the refinancing of maturing debt which had interest rates below current levels.
Loss on early extinguishment of debt decreasedincreased $0.7$0.2 million from $0.7 million for the year ended December 31, 2023 to $17 thousand for the year ended December 31, 2024.2024 to $0.2 million for the year ended December 31, 2025. The loss in 20232025 iswas related to the Company'sCompany repaymententering into a new unsecured revolving credit facility and the write-off of theunamortized constructiondeferred loanfinancing onfees from the Home2prior Woodland Hills hotel property.facility.
Gain from Partial Lease Termination
Gain from partial lease termination decreased $0.2 million from $0.2 million for the year ended December 31, 2023. The gain in 2023 is related to the Company's termination of a portion of its corporate office lease to vacate and surrender possession of 7,374 rentable square feet in exchange for an early termination payment of $0.1 million.
•FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
•FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
•FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect funds available to make cash distributions;
•EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may need to be replaced in the future, and FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect any cash requirements for such replacements;
•Non-cash compensation is and will remain a key element of our overall long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period using Adjusted EBITDA;
•Adjusted FFO, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect the impact of certain cash charges (including acquisition transaction costs) that result from matters we consider not to be indicative of the underlying performance of our hotel properties;
•Other companies in our industry may calculate FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA differently than we do, limiting their usefulness as a comparative measure; and
•FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not represent cash generated from operating activities as determined by GAAP and should not be considered as alternatives to net income or loss, cash flows from operations or any other operating performance measure prescribed by GAAP. FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA are not measures of our liquidity.
At December 31, 20242025 and 2023,2024, we had $110.0 million$0 and $0,$110.0 million, respectively, in outstanding borrowings under our revolving credit facility. We had $140.0$200.0 million and $90.0$140.0 million in outstanding borrowings under our unsecured term loan at December 31, 20242025 and 2023,2024, respectively. At December 31, 2024,2025, the maximum remaining borrowing availability under our revolving credit facility was $150.0$300.0 million. We also had mortgage debt on individual hotels aggregating $159.2$143.2 million and $396.1$159.2 million at December 31, 20242025 and 2023,2024, respectively.
On September 25, 2025, the Company entered into a new credit agreement for a credit facility (the "Credit Facility") consisting of a $300.0 million unsecured revolving credit facility and a $200.0 million unsecured term loan facility which replaced the existing $260.0 million revolving credit facility and the existing $140.0 million unsecured term loan facility. Proceeds from the new $200.0 million funded term loan were used to repay the $60.0 million of outstanding borrowings under the prior $260.0 million revolving credit facility and the $140.0 million of outstanding borrowings under the prior term loan. The new Credit Facility has an initial maturity date of September 25, 2029 and provides options to extend for one year. Total commitments of $500.0 million under the new Credit Facility can be increased up to $650.0 million through an accordion feature. Pricing on the new facilities is based on SOFR plus a spread of 1.50% to 2.25% for the revolving credit facility and a spread of 1.45% to 2.20% for the unsecured term loan facility based on the Company's leverage.
On October 28, 2022, Chatham entered into a $215.0 million unsecured revolving credit facility and a $90.0 million unsecured delayed-draw term loan facility that replaced the Company’s previous $250 million revolving credit facility that was scheduled to mature on March 8, 2023. The revolving credit facility has an initial maturity of October 28, 2026 and provides two six-month extension options. The unsecured delayed-draw term loan facility has an initial maturity of October 28, 2025 and provides two one-year extension options. On December 19, 2022, Chatham executed an amendment to its unsecured revolving credit facility, increasing commitments by $45.0 million for a total borrowing capacity of $260.0 million. On May 3, 2024, the Company amended its funded unsecured term loan to increase its size from $90.0 million to $140.0 million, its current balance outstanding as of December 31, 2024. Combined with its $140.0 million unsecured delayed-draw term loan, Chatham has $400.0 million of total commitments under the new facilities. Pricing on the new facilities is based on SOFR plus a spread of 1.50% to 2.25% for the revolving credit facility and a spread of 1.45% to 2.20% for the unsecured delayed-draw term loan facility based on the Company's leverage, and a credit spread adjustment of 0.10%.
Our revolving credit facility and unsecured delayed-draw term loan contain representations, warranties, covenants, terms and conditions customary for credit facilities of this type, including a maximum leverage ratio, a maximum secured leverage ratio, a maximum unsecured leverage ratio, a minimum fixed charge coverage ratioratio, a minimum unsecured interest coverage ratio, and minimum net worth financial covenants, limitations on (i) liens, (ii) incurrence of debt, (iii) investments, (iv) distributions, and (v) mergers and asset dispositions, covenants to preserve corporate existence and comply with laws, covenants on the use of proceeds of the revolving credit facility and default provisions, including defaults for non-payment, breach of representations and warranties, insolvency, non-performance of covenants, cross-defaults and guarantor defaults. We were in compliance with all financial covenants at December 31, 2024.2025.
Our mortgage debt agreements contain “cash trap” provisions that are triggered when the hotel’s operating results fall below a certain debt service coverage ratio or debt yield. When these provisions are triggered, all of the excess cash flow generated by the hotel is deposited directly into cash management accounts for the benefit of our lenders until a specified debt service coverage ratio or debt yield is reached. Such provisions do not allow the lender the right to accelerate repayment of the underlying debt. As of December 31, 2024, one of our mortgage debt lenders have enforced cash trap provisions resulting in $0.2 million of restricted cash. We do not expect that such cash traps will affect our ability to satisfy our short-term liquidity requirements.
In December 2017, we established a $50 million dividend reinvestment and stock purchase plan (the "DRSPP") which we renewed in December 2020 and renewed again in January 2024. Under the DRSPP, shareholders may purchase additional common shares by reinvesting some or all of the cash dividends received on common shares. Shareholders may also make optional cash purchases of the Company's common shares subject to certain limitations detailed in the prospectus for the DRSPP. During the year ended December 31, 2024,2025, the Company issued 5,8447,630 common shares under the DRSPP at a weighted average price of $9.15,$7.10, which generated $53$54 thousand of proceeds. As of December 31, 2024,2025, there was approximately $49.9 million inof common shares available for issuance under the DRSPP.
In January 2021, we established an "at-the-market" equity offering program (the "ATM Program") whereby, from time to time, we may publicly offer and sell our common shares having an aggregate offering price of up to $100 million by means of ordinary brokers transactions on the New York Stock Exchange (the "NYSE"), in negotiated transactions or in transactions deemed to be "at-the-market" offerings as defined in Rule 415 under the Securities Act of 1933, as amended. Cantor Fitzgerald & Co., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., BTIG, LLC, Citigroup Global Markets Inc., Regions Securities LLC, Stifel, Nicolaus & Company, Incorporated and Wells Fargo Securities act as sales agents under the ATM Program. The Company did not issue any common shares under the ATM Program during the year ended December 31, 2024.2025. As of December 31, 2024,2025, there was approximately $77.5 million inof common shares available for issuance under the ATM Program.
In May 2025, the Board of Trustees authorized and approved a $25.0 million share repurchase program (the "Share Repurchase Program") of our common shares. Under the Share Repurchase Program, we have the ability to repurchase up to $25.0 million of common shares through open market purchases or other privately negotiated transactions at times and in amounts as we deem appropriate. The Share Repurchase Program has no time limit and may be suspended or discontinued at any time. During the year ended December 31, 2025, the Company repurchased 1,313,795 common shares at a weighted-average price per share of $6.83 for an aggregate purchase price, including commissions, of approximately $9.0 million. As of December 31, 2025, there was approximately $16.0 million of common shares available for repurchase under the Share Repurchase Program.
Cash, cash equivalents, and restricted cash totaled $29.8$32.6 million as of December 31, 2024,2025, aan decreaseincrease of $55.9$2.8 million from December 31, 2023,2024, primarily due to net cash provided by operating activities of $73.8$64.1 million, net cash usedprovided inby investing activities of $29.2$45.4 million, and net cash used in financing activities $100.6$106.7 million.
Net cash flows provided by operating activities decreased $2.6$9.7 million to $64.1 million in 2025 compared to $73.8 million in 2024 compared to $76.4 million in 2023.2024. The decrease in cash from operating activities was primarily due to anthe increasesale of seven hotels in interest2024 expense.and 2025.
Net cash flows provided by (used in) investing activities increased $1.1$74.6 million to $45.4 million in 2025 compared to $(29.2) million in 20242024. comparedFor the year ended December 31, 2025, net cash flows provided by investing activities of $45.4 million consisted of $24.5 million related to $(28.1)capital improvements on our hotels and $0.1 million of payments of franchise application costs, partially offset by $70.0 million in 2023.net proceeds related to the sale of four hotels. For the year ended December 31, 2024, net cash flows used in investing activities of $(29.2) million consisted of $30.6 million related to capital improvements on our hotels, $43.7 million related to the acquisition of one hotel, and $0.7 million of payments of franchise application costs, partially offset by $45.9 million in net proceeds related to the sale of three hotels For the year ended December 31, 2023, net cash flows used in investing activities of $28.1 million consisted of $28.1 million related to capital improvements on our hotels.
Net cash flows used in financing activities increased $92.8$6.1 million to $(106.7) million in 2025 compared to $(100.6) million in 20242024. comparedFor the year ended December 31, 2025, net cash flows used in financing activities of $106.7 million were comprised of net repayments on our revolving credit facility of $110.0 million, the repayment of mortgage debt of $16.0 million, payments of financing costs of $6.2 million, repurchases of common shares of $9.0 million, distributions to $(7.7)common millionshare inand 2023.LTIP unit holders of $17.6 million, and distributions on preferred shares of $8.0 million, partially offset by net borrowings on our unsecured term loan of $60.0 million. For the year ended December 31, 2024, net cash flows used in financing activities of $(100.6) million were comprised of the repayment of mortgage debt of $297.2 million, distributions to common share and unit holders of $14.4 million, distributions on preferred shares of $8.0 million, payments of financing costs of $1.1 million, and payments of offering costs on common shares of $0.3 million, partially offset by net borrowings on our revolving credit facility of $110.0 million, borrowings on our unsecured term loan of $50.0 million, and proceeds from the issuance of mortgage debt of $60.3 million. For the year ended December 31, 2023, net cash flows used in financing activities of $(7.7) million were comprised of the repayment of our construction loan of $39.3 million, principal payments on mortgage debt of $117.7 million, distributions to common share and unit holders of $14.2 million, distributions on preferred shares of $8.0 million, and payments of deferred financing costs of $1.5 million, partially offset by borrowings on our unsecured term loan of $90.0 million and proceeds from the issuance of five new mortgage loans of $82.9 million.
We declared total dividends of $0.28$0.36 per common share and LTIP unit for the year ended December 31, 2025, and $0.28 per common share and LTIP unit, respectively,unit for the year ended December 31, 2024, and $0.28 and $0.28 per common share and LTIP unit, respectively, for the year ended December 31, 2023.2024. We declared total dividends of $1.65624 and $1.65624 per Series A preferred share for the years ended December 31, 20242025 and 2023,2024, respectively.
•At December 31, 2024, we had total debt principal and interest obligations of $506.1 million with $181.6 million of principal and interest payable within the next 12 months from December 31, 2024 (excluding available extension options). Debt principal obligations payable during the next 12 months consists of $16.0 million related to the maturity of the Company's mortgage loan secured by the Hampton Inn & Suites Houston-Medical Center hotel property and $140.0 million related to the initial maturity of the Company's unsecured term loan. The Company has two 1-year extension options for its $140.0 million unsecured term loan. See Note 6, “Debt” to our consolidated financial statements for additional information relating to our property loans, revolving credit facility and unsecured term loan.
•Lease payments due within the next 12 months from year-end 2024 total $2.0 million. See Note 12, “Leases” to our consolidated financial statements for additional information relating to our corporate office and ground leases.
Our hotel properties are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable over management's estimated holding period.Thisperiod. This estimated holding period incorporates management’s intent and ability to hold the hotel properties over the estimated holding period. Events or circumstances that may cause a review include, but are not limited to, adverse changes in the demand for lodging at the properties due to declining national or local economic conditions and/or new hotel construction in markets where the hotels are located. When such conditions exist, management will perform an analysis to determine if the estimated undiscounted future cash flows, without interest charges, from operations and the proceeds from the ultimate disposition of a hotel property exceed its carrying value. If the estimated undiscounted future cash flows are less than the carrying amount, an adjustment to reduce the carrying amount to the related hotel property's estimated fair value is recorded and an impairment loss recognized. For the year ended December 31, 2025, there were no impairment losses. For the year ended December 31, 2024, the Company incurred an impairment loss on one hotel property (See Note 5).property. For the year ended December 31, 2023, the Company incurred an impairment loss on one hotel property (See Note 5). For the year ended December 31, 2022, there were no impairment losses.
What changed in the latest 10-Q
Risk Factors
There have been no material changes to the Risk Factors previously disclosed under Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Comparison of the six months ended June 30, 2026 to the six months ended June 30, 2025”
New heading “Hotel Operating Expenses”
New heading “Depreciation and Amortization”
New heading “Property Taxes, Ground Rent and Insurance”
New heading “General and Administrative”
New heading “Reimbursable Costs from Related Parties”
New heading “Gain on Sale of Hotel Properties”
New heading “Interest and Other Income”
New heading “Interest Expense, Including Amortization of Deferred Fees”
New heading “Income Tax Expense”
Largest changes
“Comparison of the six months ended June 30, 2026 to the six months ended June 30, 2025”see in full comparison
“In January 2021, we established an "at-the-market" equity offering program (the "ATM Program") whereby, from time to time, we may publicly offer and sell our common shares having an aggregate maximum offering price up to $100.0 million by means of ordinary brokers transactions on the New York Stock Exchange (the "NYSE"), in negotiated transactions or in transactions that are deemed to be "at-the-market" offerings as defined in Rule 415 under the Securities Act of 1933, as amended. The Company did not issue any shares under the ATM Program during the three months ended March 31, 2026. …”see in full comparison
Full comparison: every changed paragraph (82)
At MarchJune 31,30, 2026, our leverage ratio was 24.6%24.1% measured as the ratio of our net debt (total debt outstanding before deferred financing costs less unrestricted cash and cash equivalents) to hotel investments at cost. Over the past several years, we have maintained a leverage ratio between the low 20s and the low 50s. As of MarchJune 31,30, 2026, we have total debt of $428.2$418.2 million at a weighted-average interest rate of approximately 5.84%.
Smith Travel Research reported that U.S. lodging industry RevPAR increased 3.8%5.7% for the three months ended MarchJune 31,30, 2026, with RevPAR up 0.4%4.4% in JanuaryApril 2026, up 4.3%4.0% in FebruaryMay 2026 and up 5.9%8.4% in MarchJune 2026. We expect that during the remainder of 2026, lodging industry RevPAR will continue to increase modestly.
Comparison of the three months ended MarchJune 31,30, 2026 to the three months ended MarchJune 31,30, 2025
Results of operations for the three months ended MarchJune 31,30, 2026 include the operating activities of the hotels we owned during the period. We sold one hotel located in Brentwood, TN on January 30, 2025, sold one hotel located in Houston, TX on March 17, 2025, sold one hotel located in Houston, TX on April 22, 2025, and sold one hotel located in Billerica, MA on December 23, 2025. We acquired a portfolio of six hotels on March 3, 2026, which were located in Paducah, KY, Joplin, MO, and Effingham, IL. The changes in results described below were driven primarily by an increase in RevPAR, the sales of fourtwo hotels, the acquisition of six hotels and inflationary cost pressures.increases.
Total revenue was $67.5$87.8 million for the three months ended MarchJune 31,30, 2026, downup $1.1$7.5 million compared to total revenue of $68.6$80.3 million for the corresponding 2025 period. The decreaseincrease in total revenue primarily was related to the four sold hotels in 2025, which contributed zero revenue during the three months ended March 31, 2026, down $4.1 million from the $4.1 million that the sold hotels contributed for the corresponding 2025 period. The decrease was partially offset by the 1.0%3.3% increase in same property RevPAR and the acquisition of six hotels in 2026, which contributed $2.2$7.3 million of revenue during the three months ended MarchJune 31,30, 2026. The increase was partially offset by the two hotels sold in 2025, which contributed zero revenue during the three months ended June 30, 2026, updown $2.2from the $2.1 million fromthat the sold hotels contributed for the corresponding 2025 period. Since all of our hotels are select-service or limited-service hotels, room revenue is the primary revenue source as these hotels do not have significant food and beverage revenue or large group conference facilities. Room revenue comprised 90.7%91.8% and 90.9%91.4% of total revenue for the three months ended MarchJune 31,30, 2026 and 2025, respectively.
Food and beverage revenue was $1.6 million for the three months ended MarchJune 31,30, 2026, down $0.1$0.3 million compared to $1.7$1.9 million for the corresponding 2025 period.
Other operating revenue is comprised of parking, meeting room, gift shop, in-room movie and other ancillary amenities revenue. Other operating revenue was $4.4$5.3 million and $4.3$4.8 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively.
Reimbursable costs from related parties were $0.3 million and $0.3$0.2 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The cost reimbursements were offset by the reimbursed costs from related parties included in operating expenses.
In the table below, we present both actual and same property room revenue metrics. Actual Occupancy, ADR and RevPAR metrics reflect the performance of the hotels for the actual days such hotels were owned by the Company during the periods presented. Same property Occupancy, ADR and RevPAR reflect results for the hotels owned by us as of MarchJune 31,30, 2026 that have been in operation for a full year regardless of our ownership during the period presented, which is a non-GAAP financial measure.presented. Results for the hotels for periods prior to our ownership were provided to us by prior owners and have not been adjusted by us.
For the three months ended MarchJune 31,30, 2026 same property RevPAR increased 1.0%3.3% due to ana increasedecrease in occupancy of 0.1%0.5% and an increase in ADR of 0.8%.3.9%. Same property RevPAR decreasedincreased 5.1%1.8% in JanuaryApril 2026, increaseddecreased 1.5%0.8% in FebruaryMay 2026 and increased 5.3%8.7% in MarchJune 2026. Same property RevPAR was $102.79$147.11 in JanuaryApril 2026, $132.81$151.69 in FebruaryMay 2026 and $149.53$175.32 in MarchJune 2026.
Hotel operating expenses decreasedincreased $1.1$3.5 million, or 2.7%,8.2%, to $40.7$46.5 million for the three months ended MarchJune 31,30, 2026 from $41.8$43.0 million for the three months ended MarchJune 31,30, 2025. The fourincrease in hotel operating expenses was related primarily to the acquisition of six hotels in 2026, which contributed $3.7 million in operating expenses during the three months ended June 30, 2026, and the impact of inflation. This was partially offset by the two sold hotels which contributed zero in operating expenses for the three months ended MarchJune 31,30, 2026, down $2.9 million from the $2.9$1.4 million that the sold hotels contributed for the corresponding 2025 period. This was partially offset by the acquisition of six hotels in 2026, which contributed $1.1 million in operating expenses during the three months ended March 31, 2026, up $1.1 million from the corresponding 2025 period, and the impact of inflation.
Room expenses, which are the most significant component of hotel operating expenses, decreasedincreased $0.8$1.6 million from $14.8$15.0 million for the three months ended MarchJune 31,30, 2025 to $14.0$16.6 million for the three months ended MarchJune 31,30, 2026. The decreaseincrease in room expenses was related primarily to the decrease in costs from the sales of four hotels, partially offset by the increase in costs from the acquisition of six hotels and the impact of inflation.inflation, partially offset by the sales of two hotels.
The remaining hotel operating expenses decreasedincreased $0.3$1.8 million, from $27.0$28.1 million for the three months ended MarchJune 31,30, 2025 to $26.7$29.9 million for the three months ended MarchJune 31,30, 2026.
Depreciation and amortization expense was $14.8$15.7 million and $15.0$15.4 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The decreaseincrease was primarily related to the sales of four hotels in 2025 partially offset by the acquisition of six hotels in 2026.2026 partially offset by the sales of two hotels in 2025.
Total property taxes, ground rent and insurance expenses decreased $0.5$0.8 million from $5.7$6.1 million for the three months ended MarchJune 31,30, 2025 to $5.2$5.3 million for the three months ended MarchJune 31,30, 2026. The decrease was primarily related to the sales of fourtwo hotels in 2025 and successful property tax appeals at multiple hotel properties, partially offset by the acquisition of six hotels in 2026.
General and administrative expenses principally consist of employee-related costs, including base payroll, bonuses and amortization of restrictedshare-based stockcompensation and awards of long-term incentive plan units ("LTIP units").expense. These expenses also include corporate operating costs, professional fees and trustees’ fees. Total general and administrative expenses (excluding amortization of share-based compensation of $1.5 million and $1.6 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively) was $3.1 million for the three months ended MarchJune 31,30, 2026 versus $3.0$2.4 million for the three months ended MarchJune 31,30, 2025.
Other charges increased from zero for the three months ended June 30, 2025 to $26 thousand for the three months ended June 30, 2026.
Other charges increased from $7 thousand for the three months ended March 31, 2025 to $0.5 million for the three months ended March 31, 2026 due to additional audit fees related to the acquisition of six hotels in 2026.
Reimbursable costs from related parties, comprised of shared office expenses and rent, were $0.3 million and $0.3$0.2 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The cost reimbursements were offset by the cost reimbursements from related parties included in revenues.
Gain on sale of hotel properties decreased $7.0$0.4 million to $0.1$10 thousand for the three months ended June 30, 2026 compared to $0.4 million for the three months ended MarchJune 31, 2026 compared to $7.1 million for the three months ended March 31,30, 2025. The HWS Brentwood hotel property was sold on January 30, 2025, and the HICY Houston hotel property was sold on MarchApril 17,22, 2025, which resulted in a total gain of $7.1 million in the prior period.
Interest on cash and cash equivalents and other income was $0.1$23 millionthousand and $0.1$59 millionthousand for the three months ended MarchJune 31,30, 2026 and 2025, respectively.
Interest expense decreasedincreased $0.7$0.5 million from $6.4 million for the three months ended June 30, 2025 to $6.9 million for the three months ended MarchJune 31, 2025 to $6.2 million for the three months ended March 31,30, 2026 and is comprised of the following (dollars in thousands):
The decreaseincrease in interest expense was due to lowerhigher floatingdebt SOFR-based interest ratesbalances during the three months ended MarchJune 31,30, 2026 than during the three months ended MarchJune 31,30, 2025.
Income tax expense was $0.1 million and zero for the three months ended MarchJune 31,30, 2026 and 2025, respectively. We are subject to income taxes based on the taxable income of our TRS Lessees at a combined federal and state tax rate of approximately 25%. The Company’s TRS continues to have cumulative three-year taxable losses and recognizes a full valuation allowance equal to 100% of the gross deferred tax assets due to the uncertainty of the TRS's ability to utilize these deferred tax assets.
Net (Loss) Income
Net lossincome was $(4.5)$8.5 million for the three months ended MarchJune 31,30, 2026, compared to net income of $1.5$5.5 million for the three months ended MarchJune 31,30, 2025. The change in net (loss) income was primarily due to the factors discussed above.
Comparison of the six months ended June 30, 2026 to the six months ended June 30, 2025
Results of operations for the six months ended June 30, 2026 include the operating activities of the hotels we owned during the period. We sold one hotel located in Brentwood, TN on January 30, 2025, sold one hotel located in Houston, TX on March 17, 2025, sold one hotel located in Houston, TX on April 22, 2025, and sold one hotel located in Billerica, MA on December 23, 2025. We acquired a portfolio of six hotels on March 3, 2026, which were located in Paducah, KY, Joplin, MO, and Effingham, IL. The changes in results described below were driven primarily by an increase in RevPAR, the sales of four hotels, the acquisition of six hotels and inflationary cost increases.
Revenues
Revenue, which consists primarily of room, food and beverage and other operating revenues from our hotels, was as follows for the periods indicated (dollars in thousands):
Total revenue was $155.3 million for the six months ended June 30, 2026, up $6.4 million compared to total revenue of $148.9 million for the corresponding 2025 period. The increase in total revenue primarily was related to the 2.3% increase in same property RevPAR and the acquisition of six hotels in 2026, which contributed $9.5 million of revenue during the six months ended June 30, 2026. The increase was partially offset by the sale of four hotels in 2025, which contributed zero revenue during the six months ended June 30, 2026, down from the $6.3 million that the sold hotels contributed for the corresponding 2025 period. Since all of our hotels are select-service or limited-service hotels, room revenue is the primary revenue source as these hotels do not have significant food and beverage revenue or large group conference facilities. Room revenue comprised 91.3% and 91.2% of total revenue for the six months ended June 30, 2026 and 2025, respectively.
Food and beverage revenue was $3.2 million for the six months ended June 30, 2026, down $0.3 million compared to $3.5 million for the corresponding 2025 period.
Other operating revenue is comprised of parking, meeting room, gift shop, in-room movie and other ancillary amenities revenue. Other operating revenue was $9.7 million and $9.1 million for the six months ended June 30, 2026 and 2025, respectively.
Reimbursable costs from related parties were $0.5 million and $0.5 million for the six months ended June 30, 2026 and 2025, respectively. The cost reimbursements were offset by the reimbursed costs from related parties included in operating expenses.
In the table below, we present both actual and same property room revenue metrics. Actual Occupancy, ADR and RevPAR metrics reflect the performance of the hotels for the actual days such hotels were owned by the Company during the periods presented. Same property Occupancy, ADR and RevPAR reflect results for the hotels owned by us as of June 30, 2026 that have been in operation for a full year regardless of our ownership during the period presented. Results for the hotels for periods prior to our ownership were provided to us by prior owners and have not been adjusted by us.
For the six months ended June 30, 2026 same property RevPAR increased 2.3% due to a decrease in occupancy of 0.3% and an increase in ADR of 2.5%.
Hotel Operating Expenses
Hotel operating expenses consist of the following for the periods indicated (dollars in thousands):
Hotel operating expenses increased $2.4 million, or 2.8%, to $87.2 million for the six months ended June 30, 2026 from $84.8 million for the six months ended June 30, 2025. The increase in hotel operating expenses was primarily related to the acquisition of six hotels in 2026, which contributed $4.8 million in operating expenses during the six months ended June 30, 2026, and the impact of inflation. This was partially offset by the four hotels sold which contributed zero in operating expenses for the six months ended June 30, 2026, down from the $4.2 million that the sold hotels contributed for the corresponding 2025 period.
Room expenses, which are the most significant component of hotel operating expenses, increased $0.8 million from $29.8 million for the six months ended June 30, 2025 to $30.6 million for the six months ended June 30, 2026. The increase in room expenses was related primarily to the acquisition of six hotels and the impact of inflation, partially offset by the decrease in costs from the sales of four hotels.
The remaining hotel operating expenses increased $1.6 million, from $55.0 million for the six months ended June 30, 2025 to $56.6 million for the six months ended June 30, 2026.
Depreciation and Amortization
Depreciation and amortization expense was $30.5 million and $30.4 million for the six months ended June 30, 2026 and 2025, respectively. The increase was primarily related to the acquisition of six hotels in 2026 partially offset by the sales of four hotels in 2025.
Property Taxes, Ground Rent and Insurance
Total property taxes, ground rent and insurance expenses decreased $1.5 million from $11.9 million for the six months ended June 30, 2025 to $10.4 million for the six months ended June 30, 2026. The decrease was primarily related to the sales of four hotels in 2025 and successful property tax appeals at multiple hotel properties, partially offset by the acquisition of six hotels in 2026.
General and Administrative
General and administrative expenses principally consist of employee-related costs, including base payroll, bonuses and amortization of share-based compensation expense. These expenses also include corporate operating costs, professional fees and trustees’ fees. Total general and administrative expenses (excluding amortization of share-based compensation of $3.0 million and $3.2 million for the six months ended June 30, 2026 and 2025, respectively) was $6.2 million for the six months ended June 30, 2026 versus $5.4 million for the six months ended June 30, 2025.
Other Charges
Other charges increased from $7 thousand for the six months ended June 30, 2025 to $0.5 million for the six months ended June 30, 2026 due to additional audit fees related to the acquisition of six hotels in 2026.
Reimbursable Costs from Related Parties
Reimbursable costs from related parties, comprised of shared office expenses and rent, were $0.5 million and $0.5 million for the six months ended June 30, 2026 and 2025, respectively. The cost reimbursements were offset by the cost reimbursements from related parties included in revenues.
Gain on Sale of Hotel Properties
Gain on sale of hotel properties decreased $7.4 million to $0.1 million for the six months ended June 30, 2026 compared to $7.5 million for the six months ended June 30, 2025. The HWS Brentwood hotel property was sold on January 30, 2025, the HI Houston hotel property was sold on March 17, 2025, and the CY Houston hotel property was sold on April 22, 2025 which resulted in a total gain of $7.5 million in the prior period.
Interest and Other Income
Interest on cash and cash equivalents and other income was $0.1 million and $0.1 million for the six months ended June 30, 2026 and 2025, respectively.
Interest Expense, Including Amortization of Deferred Fees
Interest expense decreased $0.2 million from $13.3 million for the six months ended June 30, 2025 to $13.1 million for the six months ended June 30, 2026 and is comprised of the following (dollars in thousands):
The decrease in interest expense was due to lower floating SOFR-based interest rates during the six months ended June 30, 2026 than during the six months ended June 30, 2025, partially offset by increased amortization of deferred financing costs from the new revolving credit facility and term loan.
Income Tax Expense
Income tax expense was $0.1 million and zero for the six months ended June 30, 2026 and 2025, respectively. We are subject to income taxes based on the taxable income of our TRS Lessees at a combined federal and state tax rate of approximately 25%. The Company’s TRS continues to have cumulative three-year taxable losses and recognizes a full valuation allowance equal to 100% of the gross deferred tax assets due to the uncertainty of the TRS's ability to utilize these deferred tax assets.
CLDT insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-10 | Brown William P |
Grant/award | 5,000 | — | — |
Well-known investors holding CLDT (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 1,124,357 | $14.9M | 0.01% | Added 4% |
| Renaissance Technologies | 2026-06-30 | 869,775 | $11.5M | 0.02% | Reduced 5% |
| Two Sigma Investments | 2026-06-30 | 475,102 | $6.3M | 0.0% | Added 108% |
| D. E. Shaw & Co. | 2026-06-30 | 375,690 | $5.0M | 0.0% | Reduced 12% |
| Millennium Management (Israel Englander) | 2026-06-30 | 203,760 | $2.7M | 0.0% | Added 181% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 34,262 | $453.3K | 0.0% | New position |