Indebtedness, net

9 Months Ended

Sep. 30, 2025

Indebtedness consisted of the following (in thousands):


							September 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 (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 (4)	8	hotels	October 2025	SOFR(1) +	3.28	%	325,000			325,000
Mortgage loan (5)	1	hotel	December 2025	SOFR(1) +	4.00	%	37,000			37,000
Term loan (6)	Equity		January 2026		14.00	%	—			44,722
Mortgage loan (7)	18	hotels	January 2026	SOFR(1) +	4.15	%	733,625			862,027
Mortgage loan (8)	1	hotel	February 2026	SOFR(1) +	2.85	%	12,330			12,330
Mortgage loan (9)	15	hotels	March 2026	SOFR(1) +	3.62	%	378,350			409,750
Mortgage loan (10)	2	hotels	May 2026	SOFR(1) +	4.00	%	98,450			98,450
Mortgage loan (2)	16	hotels	February 2027	SOFR(1) +	4.37	%	580,000			—
Mortgage loan (11)	1	hotel	September 2027	SOFR(1) +	2.26	%	218,100			267,200
Mortgage loan (12)	1	hotel	November 2027	SOFR(1) +	4.75	%	121,500			121,500
Mortgage loan	4	hotels	December 2028		8.51	%	30,200			30,200
Preferred investment (13)	1	hotel	May 2029		11.14	%	88,622			—
Bridge loan (14) (15)	1	hotel	September 2025		7.75	%	—			20,898
Construction loan (14)	1	hotel	May 2033		11.26	%	15,696			15,785
















Total indebtedness							$	2,660,844		$	2,705,650
Premiums (discounts), net							311			331
Capitalized default interest and late charges							8,293			36
Deferred loan costs, net							(30,837)			(8,459)
Embedded debt derivative (6)							—			29,099
Indebtedness, net							$	2,638,611		$	2,726,657

Indebtedness, net related to assets held for sale (7)	1	hotel	April 2025	SOFR(1) +	3.70	%	—			97,368
Indebtedness, net related to assets held for sale (9)	1	hotel	March 2026	SOFR(1) +	3.62	%	28,355			—
							$	2,610,256		$	2,629,289

_____________________________

(1) SOFR rates were 4.13% and 4.33% at September 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 September 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) 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 November 9, 2025. On November 9, 2025, this mortgage loan was amended to extend the waiver date from November 9, 2025 to December 9, 2025.

(5) 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%.

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

(7) In January 2025, this mortgage loan was paid down $118.4 million in conjunction with the sale of the Courtyard Boston Downtown. On July 30, 2025, this mortgage loan was amended. Terms of the amendment included a $10.0 million principal paydown, extending the current maturity date to January 2026, and adding one six-month extension option, subject to the satisfaction of certain conditions.

(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 to March 2026, and adding two one-year extension options, subject to the satisfaction of certain conditions. In August 2025, this mortgage loan was paid down $31.4 million in conjunction with the sales of the Residence Inn Evansville and the Hilton Houston NASA Clear Lake. As of September 30, 2025, the Residence Inn San Diego Sorrento Mesa property is 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) On September 9, 2025, we amended this mortgage loan. Terms of the amendment included a principal reduction to $218.1 million, a reduction in the interest rate to SOFR + 2.26%, extending the current maturity to September 2027, and adding 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) On May 8, 2025, we received $35.0 million in return for a preferred equity investment in the Renaissance Hotel in Nashville, Tennessee. The holder was entitled to a preferred return of 14.0% per annum. On September 9, 2025, we received an additional $53.0 million increasing the preferred equity investment in the property and the return on the preferred equity investment was decreased from 14.0% per annum to 11.14% per annum. The investment is mandatorily redeemable on May 10, 2029 and is recorded within indebtedness, net in the Company’s consolidated balance sheet as required under GAAP.

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

(15) On August 14, 2025, we repaid this bridge loan.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
Line Item	2025		2024		2025		2024
Interest expense and amortization of discounts and loan costs	$	10	$	(17)	$	19	$	(896)

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

During the three and nine months ended September 30, 2025, the Company capitalized $9.3 million and $14.1 million of default interest and late charges related to our Highland Pool mortgage loan and Morgan Stanley Pool mortgage loan upon the refinancing of the loans. The amounts were capitalized into the principal balance and are amortized over the remaining initial term of the mortgage loans using the effective interest method. The amount of the capitalized principal that was amortized during the three and nine months ended September 30, 2025 were $4.3 million and $5.6 million, respectively. The amount of capitalized principal that was written off during the three and nine months ended September 30, 2025 was $207,000.

For the three and nine months ended September 30, 2024, the Company amortized $54,000 and $298,000, respectively, of capitalized principal that related to debt restructurings which occurred in the 2021 and 2020 fiscal years. The amount of capitalized principal that was written off during the three and nine months ended September 30, 2024 was $0 and $8,000, respectively. 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 nine months ended September 30, 2025, we recognized additional gains of $9.7 million and $29.6 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.

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 September 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.

With respect to upcoming maturities, no assurances can be given that we will be able to refinance our upcoming maturities. Additionally, no assurances can be given that we will obtain additional financings or, if we do, what the amount and terms will be. Our failure to obtain future financing under favorable terms could adversely impact our ability to execute our business strategy or may result in lender foreclosure.

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.