Indebtedness, net

6 Months Ended

Jun. 30, 2025

Indebtedness consisted of the following (in thousands):


							June 30, 2025		December 31, 2024
Indebtedness	Collateral		Maturity	Interest Rate			Debt Balance			Debt Balance


Mortgage loan(2)	2	hotels	February 2025		4.45	%	$	—		$	25,882
Mortgage loan(3)	1	hotel	March 2025		4.66	%	21,971			22,132
Mortgage loan(4)	18	hotels	April 2025	SOFR(1) +	3.70	%	743,625			862,027
Mortgage loan(2)	4	hotels	June 2025	SOFR(1) +	4.03	%	—			143,877
Mortgage loan(2)	4	hotels	June 2025	SOFR(1) +	4.29	%	—			159,424
Mortgage loan(2)	5	hotels	June 2025	SOFR(1) +	3.02	%	—			109,473
Mortgage loan(5)	8	hotels	July 2025	SOFR(1) +	3.28	%	325,000			325,000
Mortgage loan(6)	1	hotel	December 2025	SOFR(1) +	4.00	%	37,000			37,000
Term loan(7)	Equity		January 2026		14.00	%	—			44,722
Mortgage loan(8)	1	hotel	February 2026	SOFR(1) +	2.85	%	12,330			12,330
Mortgage loan(9)	17	hotels	March 2026	SOFR(1) +	3.39	%	409,750			409,750
Mortgage loan(10)	2	hotels	May 2026	SOFR(1) +	4.00	%	98,450			98,450
Mortgage loan(11)	1	hotel	May 2026	SOFR(1) +	3.98	%	267,200			267,200
Mortgage loan(2)	16	hotels	February 2027	SOFR(1) +	4.37	%	580,000			—
Mortgage loan(12)	1	hotel	November 2027	SOFR(1) +	4.75	%	121,500			121,500
Mortgage loan(13)	4	hotels	December 2028		8.51	%	30,200			30,200
Preferred interest(14)	1	hotel	May 2029		14.00	%	35,185			—
Bridge loan(15)(16)	1	hotel	September 2025		7.75	%	2,167			20,898
Construction loan(15)	1	hotel	May 2033		11.26	%	15,726			15,785
















Total indebtedness							$	2,700,104		$	2,705,650
Premiums (discounts), net							322			331
Capitalized default interest and late charges							3,549			36
Deferred loan costs, net							(31,976)			(8,459)
Embedded debt derivative (7)							—			29,099
Indebtedness, net							$	2,671,999		$	2,726,657

Indebtedness, net related to assets held for sale(4)	1	hotel	April 2025	SOFR(1) +	3.70	%	—			97,368
Indebtedness, net related to assets held for sale (9)	2	hotels	March 2026	SOFR(1) +	3.39	%	27,234			—
							$	2,644,765		$	2,629,289

_____________________________

(1) SOFR rates were 4.32% and 4.33% at June 30, 2025 and December 31, 2024, respectively.

(2) On February 12, 2025, this mortgage loan was refinanced into a new $580.0 million mortgage loan. The new mortgage loan is interest only and bears interest at a rate of SOFR + 4.37%, has a two-year initial term, and has three one-year extension options, subject to the satisfaction of certain conditions.

(3) As of June 30, 2025, this mortgage loan was in default under the terms and conditions of the mortgage loan agreement. Default interest of 5.00% was accrued in addition to the stated interest rate, in accordance with the terms of the mortgage loan agreement, and is reflected in the Company’s consolidated balance sheet and statement of operations.

(4) In January 2025, this mortgage loan was paid down $118.4 million in conjunction with the sale of the Courtyard Boston Downtown. As of June 30, 2025, this mortgage loan was in default under the terms and conditions of the mortgage loan agreement. Default interest of 4.00% was accrued in addition to the stated interest rate, in accordance with the terms of the mortgage loan agreement, and is reflected in the Company’s consolidated balance sheet and statement of operations. On June 9, 2025 and July 7, 2025, this loan entered into forbearance agreements that expired on July 7, 2025 and July 30, 2025, respectively. On July 30, 2025, this mortgage loan was amended to extend the maturity date to January 9, 2026 with a six month extension option, subject to the satisfaction of certain conditions, and is no longer in default. See note 18.

(5) This mortgage loan has six one-year extension options, subject to satisfaction of certain conditions. The sixth one-year extension period began in February 2025, subject to satisfaction of certain conditions, which must be completed by August 9, 2025. On August 7, 2025, this mortgage loan was amended to extend the waiver date from August 9, 2025 to September 9, 2025.

(6) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in December 2024. This mortgage loan has a SOFR floor of 0.50%.

(7) On February 12, 2025, we repaid this term loan including the $30.0 million exit fee.

(8) On February 24, 2025, we amended this mortgage loan. Terms of the amendment included extending the current maturity date to February 2026 and adding one one-year extension option, subject to satisfaction of certain conditions.

(9) On April 9, 2025, this mortgage loan was amended. Terms of the amendment included extending the current maturity date from April 2025 to March 2026, and adding two one-year extension options, subject to the satisfaction of certain conditions. As of June 30, 2025, the Hilton Houston NASA Clear Lake and Residence Inn Evansville properties are held for sale. See note 5.

(10) This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions. This mortgage loan has a SOFR floor of 0.50%.

(11) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions.

(12) This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions. This mortgage loan has a SOFR floor of 2.75%.

(13) This loan is associated with Stirling OP. See discussion in notes 1 and 2.

(14) On May 8, 2025, we received $35.0 million in return for an equity investment in a hotel property. The holder is entitled to a preferred return of 14.0% per annum. The investment is mandatorily redeemable on May 10, 2029.

(15) This loan is associated with 815 Commerce Managing Member, LLC. See discussion in notes 1, 2 and 8.

(16) In June 2025, this loan was amended. Terms of the amendment included extending the maturity date to September 2025.

We recognized net premium (discount) amortization as presented in the table below (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
Line Item	2025		2024		2025		2024
Interest expense and amortization of discounts and loan costs	$	26	$	(18)	$	9	$	(879)

The amortization of the net premium (discount) is computed using a method that approximates the effective interest method.

During the three months ended June 30, 2025, the Company capitalized $4.8 million of default interest and late charges related to our Morgan Stanley Pool mortgage loan upon the refinancing of the loan. The amount was capitalized into the principal balance and will be amortized over the remaining initial term of the mortgage loan using the effective interest method. The amount of the capitalized principal that was amortized during the three and six months ended June 30, 2025 was $1.3 million. For the three and six months ended June 30, 2024, the Company amortized $101,000 and $244,000, respectively, of capitalized principal that related to debt restructurings which occurred in the 2021 and 2020 fiscal years. These amounts are included as a reduction to “interest expense and amortization of discounts and loan costs” in the consolidated statements of operations.

On March 1, 2024, the Company received notice that the hotel properties that secured the KEYS Pool A and KEYS Pool B loans have been transferred to a court-appointed receiver. Below is a summary of the hotel properties that secured the KEYS Pool A and Pool B loans:

KEYS A Loan Pool

Courtyard Columbus Tipton Lakes – Columbus, IN

Courtyard Old Town – Scottsdale, AZ

Residence Inn Hughes Center – Las Vegas, NV

Residence Inn Phoenix Airport – Phoenix, AZ

Residence Inn San Jose Newark – Newark, CA

SpringHill Suites Manhattan Beach – Hawthorne, CA

SpringHill Suites Plymouth Meeting – Plymouth Meeting, PA

KEYS B Loan Pool

Courtyard Basking Ridge – Basking Ridge, NJ

Courtyard Newark Silicon Valley – Newark, CA

Courtyard Oakland Airport – Oakland, CA

Courtyard Plano Legacy Park – Plano, TX

Residence Inn Plano – Plano, TX

SpringHill Suites BWI Airport – Baltimore, MD

TownePlace Suites Manhattan Beach – Hawthorne, CA

We derecognized the hotel properties that secured the KEYS Pool A and KEYS Pool B loans from our consolidated balance sheet in March 2024, when the receiver took control of the hotel properties and, accordingly, recognized a gain of $133.9 million, which is included in “gain (loss) on derecognition of assets” in our consolidated statements of operations for the three months ended March 31, 2024. We recorded a contract asset of $378.2 million as of March 31, 2024, which represented the liabilities from which we expect to be released upon final resolution with the lenders on the KEYS Pool A and KEYS Pool B mortgage loans in exchange for the transfer of ownership of the respective hotel properties. On July 2, 2024, the Courtyard Plano Legacy Park and the Residence Inn Plano were foreclosed on at a public auction. Additionally, on November 4, 2024 and

June 25, 2025, the receiver appointed for the KEYS Pool A and KEYS Pool B mortgage loans transferred the Courtyard Columbus Tipton Lakes and SpringHill Suites BWI Airport, respectively, to a third-party purchaser.

For the three and six months ended June 30, 2025, we recognized additional gains of $9.9 million and $19.9 million, respectively, which were included in “gain (loss) on derecognition of assets” in our consolidated statement of operations that increased the contract asset by a corresponding amount. The KEYS Pool A and the KEYS Pool B mortgage loans, as well as all accrued and unpaid interest, default charges and late fees will remain liabilities until final resolution with the lenders is concluded, and thus are included in “indebtedness associated with hotels in receivership” and “accrued interest associated with hotels in receivership” on our consolidated balance sheets.

On March 6, 2025, the $22.1 million non-recourse mortgage loan secured by the Hilton Scotts Valley reached final maturity and was not repaid, resulting in a default under the terms and conditions of the mortgage loan agreement.

On April 14, 2025, the Company successfully extended its Morgan Stanley Pool mortgage loan secured by 17 hotels. The loan had an original final maturity date in November of 2024. The extension provides for an initial maturity in March of 2026 and two, one-year extension options, subject to the satisfaction of certain conditions, with a final maturity date in March of 2028. The loan has a current balance of $409.8 million and continues to bear interest at a floating rate of SOFR + 3.39%.

We have extension options relating to certain property-level loans that will permit us to extend the maturity date of our loans if certain conditions are satisfied at the respective extension dates, including the achievement of debt yield targets required in order to extend such loans. To the extent we decide to extend the maturity date of the debt outstanding under the loans, we may be required to prepay a significant amount of the loans in order to meet the required debt yield.

If we violate covenants in our debt agreements, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. As of June 30, 2025, we were in compliance with all covenants related to mortgage loans, except where noted above. The assets of certain of our subsidiaries are pledged under non-recourse indebtedness and are not available to satisfy the debts and other obligations of Ashford Trust or Ashford Trust OP, our operating partnership, and the liabilities of such subsidiaries do not constitute the obligations of Ashford Trust or Ashford Trust OP.

Interest Rate Derivatives—We use interest rate caps and floors to hedge our debt and cash flows, which are recorded at fair value. Payments from counterparties on in-the-money interest rate caps and floors are recognized as realized gains on our condensed consolidated statements of operations. See note 9.

Compound Embedded Debt Derivative—On February 12, 2025, we repaid the outstanding balance on our corporate strategic financing with Oaktree Capital Management, L.P. (the “Oaktree Credit Agreement”), which included an exit fee of $30.0 million. Prior to the repayment date, the exit fee was considered under the applicable accounting guidance as an embedded derivative liability that met the criteria for bifurcation from the debt host and was measured at estimated fair value at each reporting period. See note 9.