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Table of Contents

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, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-11527
SERVICE PROPERTIES TRUST
(Exact Name of Registrant as Specified in Its Charter)

Maryland |  | 04-3262075
(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)

Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts, 02458-1634
(Address of Principal Executive Offices) (Zip Code)
617-964-8389
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class |  | Trading Symbol |  | Name of each Exchange on which Registered
Common Shares of Beneficial Interest |  | SVC |  | The Nasdaq Stock Market LLC

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 every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 | ☒ |  | 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 ☒
Number of registrant’s common shares of beneficial interest, $.01 par value per share, outstanding as of August 2, 2024: 165,889,356.

Table of Contents
SERVICE PROPERTIES TRUST
FORM 10-Q
June 30, 2024
INDEX

|  | Page
PART I. | Financial Information |
Item 1. | Financial Statements (unaudited) |
| Condensed Consolidated Balance Sheets — June 30, 2024 and December 31, 2023 | 3
| Condensed Consolidated Statements of Comprehensive Income (Loss) — Three and Six Months Ended June 30, 2024 and 2023 | 4
| Condensed Consolidated Statements of Shareholders’ Equity — Three and Six Months Ended June 30, 2024 and 2023 | 5
| Condensed Consolidated Statements of Cash Flows — Six Months Ended June 30, 2024 and 2023 | 6
| Notes to Condensed Consolidated Financial Statements | 7
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 21
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 39
Item 4. | Controls and Procedures | 41
| Warning Concerning Forward-Looking Statements | 41
| Statement Concerning Limited Liability | 42
PART II. | Other Information |
Item 1A. | Risk Factors | 43
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 43
Item 6. | Exhibits | 44
| Signatures | 47

References in this Quarterly Report on Form 10-Q to the Company, SVC, we, us or our include Service Properties Trust and its consolidated subsidiaries unless otherwise expressly stated or the context indicates otherwise.
2

Table of Contents
Part I. Financial Information
Item 1. Financial Statements
SERVICE PROPERTIES TRUST
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
(unaudited)

|  | June 30, 2024 |  | December 31, 2023
ASSETS |  |  |  |
Real estate properties: |  |  |  |
Land |  | $ | 1,941,008 |  |  | $ | 1,972,145 |
Buildings, improvements and equipment |  | 7,636,707 |  |  | 7,814,192 |
Total real estate properties, gross |  | 9,577,715 |  |  | 9,786,337 |
Accumulated depreciation |  | (3,164,885) |  |  | (3,181,797) |
Total real estate properties, net |  | 6,412,830 |  |  | 6,604,540 |
Acquired real estate leases and other intangibles, net |  | 118,753 |  |  | 130,622 |
Assets held for sale |  | 116,984 |  |  | 10,500 |
Cash and cash equivalents |  | 14,626 |  |  | 180,119 |
Restricted cash |  | 14,830 |  |  | 17,711 |
Equity method investment |  | 108,106 |  |  | 113,304 |
Due from related persons |  | 28,959 |  |  | 6,376 |
Other assets, net |  | 306,573 |  |  | 292,944 |
Total assets |  | $ | 7,121,661 |  |  | $ | 7,356,116 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |
Revolving credit facility |  | $ | — |  |  | $ | — |
Senior secured notes, net |  | 970,051 |  |  | 968,017 |
Senior unsecured notes, net |  | 4,014,023 |  |  | 3,993,327 |
Mortgage notes payable, net |  | 563,727 |  |  | 558,876 |
Accounts payable and other liabilities |  | 552,649 |  |  | 587,005 |
Due to related persons |  | 12,405 |  |  | 22,758 |
Total liabilities |  | 6,112,855 |  |  | 6,129,983 |
Commitments and contingencies |  |  |  |
Shareholders’ equity: |  |  |  |
Common shares of beneficial interest, $.01 par value; 200,000,000 shares authorized; 165,903,837 and 165,769,595 shares issued and outstanding, respectively |  | 1,659 |  |  | 1,658 |
Additional paid in capital |  | 4,559,220 |  |  | 4,557,473 |
Cumulative other comprehensive income |  | 1,782 |  |  | 2,318 |
Cumulative net income |  | 2,318,267 |  |  | 2,470,500 |
Cumulative common distributions |  | (5,872,122) |  |  | (5,805,816) |
Total shareholders’ equity |  | 1,008,806 |  |  | 1,226,133 |
Total liabilities and shareholders’ equity |  | $ | 7,121,661 |  |  | $ | 7,356,116 |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3

Table of Contents
SERVICE PROPERTIES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(amounts in thousands, except per share data)
(unaudited)

|  | Three Months Ended June 30, |  | Six Months Ended June 30, |
|  | 2024 |  | 2023 |  | 2024 |  | 2023 |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |
Hotel operating revenues |  | $ | 412,486 |  |  | $ | 404,327 |  |  | $ | 748,722 |  |  | $ | 739,123 |  |  |  |  |
Rental income |  | 100,462 |  |  | 99,452 |  |  | 200,476 |  |  | 193,865 |  |  |  |  |
Total revenues |  | 512,948 |  |  | 503,779 |  |  | 949,198 |  |  | 932,988 |  |  |  |  |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |
Hotel operating expenses |  | 328,247 |  |  | 309,100 |  |  | 633,333 |  |  | 608,666 |  |  |  |  |
Net lease operating expenses |  | 4,958 |  |  | 4,372 |  |  | 9,681 |  |  | 8,277 |  |  |  |  |
Depreciation and amortization |  | 95,674 |  |  | 94,571 |  |  | 188,781 |  |  | 194,610 |  |  |  |  |
General and administrative |  | 10,681 |  |  | 12,420 |  |  | 21,187 |  |  | 23,331 |  |  |  |  |
Transaction related costs |  | — |  |  | 931 |  |  | — |  |  | 1,818 |  |  |  |  |
Loss on asset impairment, net |  | 34,887 |  |  | 9,005 |  |  | 37,338 |  |  | 9,005 |  |  |  |  |
Total expenses |  | 474,447 |  |  | 430,399 |  |  | 890,320 |  |  | 845,707 |  |  |  |  |
(Loss) gain on sale of real estate, net |  | (32) |  |  | (62) |  |  | (2,995) |  |  | 41,836 |  |  |  |  |
(Loss) gain on equity securities, net |  | — |  |  | (593) |  |  | — |  |  | 48,837 |  |  |  |  |
Interest income |  | 819 |  |  | 3,468 |  |  | 2,781 |  |  | 6,254 |  |  |  |  |
Interest expense (including amortization of debt issuance costs, discounts and premiums of $7,466, $6,804, $14,692 and $12,036, respectively) |  | (93,850) |  |  | (82,503) |  |  | (185,264) |  |  | (164,083) |  |  |  |  |
Loss on early extinguishment of debt, net |  | (16,048) |  |  | (238) |  |  | (16,048) |  |  | (282) |  |  |  |  |
(Loss) income before income tax expense and equity in (losses) earnings of an investee |  | (70,610) |  |  | (6,548) |  |  | (142,648) |  |  | 19,843 |  |  |  |  |
Income tax expense |  | (524) |  |  | (5,247) |  |  | (1,531) |  |  | (1,467) |  |  |  |  |
Equity in (losses) earnings of an investee |  | (2,716) |  |  | 517 |  |  | (8,054) |  |  | (3,704) |  |  |  |  |
Net (loss) income |  | (73,850) |  |  | (11,278) |  |  | (152,233) |  |  | 14,672 |  |  |  |  |
Other comprehensive (loss) income: |  |  |  |  |  |  |  |  |  |  |  |
Equity interest in investee’s unrealized (losses) gains |  | (192) |  |  | 215 |  |  | (536) |  |  | 1 |  |  |  |  |
Other comprehensive (loss) income |  | (192) |  |  | 215 |  |  | (536) |  |  | 1 |  |  |  |  |
Comprehensive (loss) income |  | $ | (74,042) |  |  | $ | (11,063) |  |  | $ | (152,769) |  |  | $ | 14,673 |  |  |  |  |
Weighted average common shares outstanding (basic and diluted) |  | 165,198 |  |  | 164,902 |  |  | 165,178 |  |  | 164,884 |  |  |  |  |
Net (loss) income per common share (basic and diluted) |  | $ | (0.45) |  |  | $ | (0.07) |  |  | $ | (0.92) |  |  | $ | 0.09 |  |  |  |  |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4

Table of Contents
SERVICE PROPERTIES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(dollars in thousands)
(unaudited)

| Number of Shares |  | Common Shares |  | Cumulative Common Distributions |  | Additional Paid in Capital |  | Cumulative Net Income |  | Cumulative Other Comprehensive Income |  | Total |
Balance at December 31, 2023 | 165,769,595 |  |  | $ | 1,658 |  |  | $ | (5,805,816) |  |  | $ | 4,557,473 |  |  | $ | 2,470,500 |  |  | $ | 2,318 |  |  | $ | 1,226,133 |  |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | (78,383) |  |  | — |  |  | (78,383) |  |
Equity interest in investee’s unrealized losses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (344) |  |  | (344) |  |
Common share grants | — |  |  | — |  |  | — |  |  | 430 |  |  | — |  |  | — |  |  | 430 |  |
Common share repurchases | (1,537) |  |  | — |  |  | — |  |  | (13) |  |  | — |  |  | — |  |  | (13) |  |
Distributions | — |  |  | — |  |  | (33,154) |  |  | — |  |  | — |  |  | — |  |  | (33,154) |  |
Balance at March 31, 2024 | 165,768,058 |  |  | 1,658 |  |  | (5,838,970) |  |  | 4,557,890 |  |  | 2,392,117 |  |  | 1,974 |  |  | 1,114,669 |  |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | (73,850) |  |  | — |  |  | (73,850) |  |
Equity interest in investee’s unrealized losses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (192) |  |  | (192) |  |
Common share grants | 146,040 |  |  | 1 |  |  | — |  |  | 1,395 |  |  | — |  |  | — |  |  | 1,396 |  |
Common share repurchases | (10,261) |  |  | — |  |  | — |  |  | (65) |  |  | — |  |  | — |  |  | (65) |  |
Distributions | — |  |  | — |  |  | (33,152) |  |  | — |  |  | — |  |  | — |  |  | (33,152) |  |
Balance at June 30, 2024 | 165,903,837 |  |  | $ | 1,659 |  |  | $ | (5,872,122) |  |  | $ | 4,559,220 |  |  | $ | 2,318,267 |  |  | $ | 1,782 |  |  | $ | 1,008,806 |  |
Balance at December 31, 2022 | 165,452,566 |  |  | $ | 1,655 |  |  | $ | (5,673,386) |  |  | $ | 4,554,861 |  |  | $ | 2,503,279 |  |  | $ | 2,383 |  |  | $ | 1,388,792 |  |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | 25,950 |  |  | — |  |  | 25,950 |  |
Equity interest in investee’s unrealized losses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (214) |  |  | (214) |  |
Common share grants | — |  |  | — |  |  | — |  |  | 514 |  |  | — |  |  | — |  |  | 514 |  |
Common share repurchases | (4,971) |  |  | — |  |  | — |  |  | (46) |  |  | — |  |  | — |  |  | (46) |  |
Common share forfeitures | (1,600) |  |  | — |  |  | — |  |  | (1) |  |  | — |  |  | — |  |  | (1) |  |
Distributions | — |  |  | — |  |  | (33,090) |  |  | — |  |  | — |  |  | — |  |  | (33,090) |  |
Balance at March 31, 2023 | 165,445,995 |  |  | 1,655 |  |  | (5,706,476) |  |  | 4,555,328 |  |  | 2,529,229 |  |  | 2,169 |  |  | 1,381,905 |  |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | (11,278) |  |  | — |  |  | (11,278) |  |
Equity interest in investee’s unrealized gains | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 215 |  |  | 215 |  |
Common share grants | 56,000 |  |  | — |  |  | — |  |  | 1,474 |  |  | — |  |  | — |  |  | 1,474 |  |
Common share repurchases | (16,761) |  |  | — |  |  | — |  |  | (150) |  |  | — |  |  | — |  |  | (150) |  |
Common share forfeitures | (1,400) |  |  | — |  |  | — |  |  | (2) |  |  | — |  |  | — |  |  | (2) |  |
Distributions | — |  |  | — |  |  | (33,089) |  |  | — |  |  | — |  |  | — |  |  | (33,089) |  |
Balance at June 30, 2023 | 165,483,834 |  |  | $ | 1,655 |  |  | $ | (5,739,565) |  |  | $ | 4,556,650 |  |  | $ | 2,517,951 |  |  | $ | 2,384 |  |  | $ | 1,339,075 |  |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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SERVICE PROPERTIES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)

|  | Six Months Ended June 30, |  |
|  | 2024 |  | 2023 |  |
Cash flows from operating activities: |  |  |  |  |  |
Net (loss) income |  | $ | (152,233) |  |  | $ | 14,672 |  |  |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |  |  |  |  |  |
Depreciation and amortization |  | 188,781 |  |  | 194,610 |  |  |
Net amortization of debt issuance costs, discounts and premiums as interest |  | 14,692 |  |  | 12,036 |  |  |
Straight line rental income |  | (10,546) |  |  | (319) |  |  |
Loss on early extinguishment of debt, net |  | 16,048 |  |  | 282 |  |  |
Loss on asset impairment, net |  | 37,338 |  |  | 9,005 |  |  |
Gains on equity securities, net |  | — |  |  | (48,837) |  |  |
Equity in losses of an investee |  | 8,054 |  |  | 3,704 |  |  |
Loss (gain) on sale of real estate, net |  | 2,995 |  |  | (41,836) |  |  |
Other non-cash income, net |  | (881) |  |  | (546) |  |  |
Changes in assets and liabilities: |  |  |  |  |  |
Due from related persons |  | (22,583) |  |  | (3,667) |  |  |
Other assets |  | (4,214) |  |  | 10,006 |  |  |
Accounts payable and other liabilities |  | (29,829) |  |  | 182,792 |  |  |
Due to related persons |  | (4,729) |  |  | (3,399) |  |  |
Net cash provided by operating activities |  | 42,893 |  |  | 328,503 |  |  |
Cash flows from investing activities: |  |  |  |  |  |
Acquisition of real estate properties |  | — |  |  | (165,688) |  |  |
Proceeds from sale of TravelCenters of America Inc. common shares |  | — |  |  | 101,892 |  |  |
Proceeds from sale of tradenames and trademarks |  | — |  |  | 89,400 |  |  |
Real estate improvements |  | (142,382) |  |  | (63,562) |  |  |
Hotel managers’ purchases with restricted cash |  | (2,869) |  |  | (3,041) |  |  |
Net proceeds from sale of real estate |  | 5,844 |  |  | 144,959 |  |  |
Investment in Sonesta |  | (3,392) |  |  | — |  |  |
Net cash (used in) provided by investing activities |  | (142,799) |  |  | 103,960 |  |  |
Cash flows from financing activities: |  |  |  |  |  |
Proceeds from mortgage notes payable, net of discounts |  | — |  |  | 576,946 |  |  |
Repayment of mortgage notes payable |  | (979) |  |  | (653) |  |  |
Proceeds from senior unsecured notes, net of discounts |  | 1,165,007 |  |  | — |  |  |
Repayment of senior unsecured notes |  | (1,162,520) |  |  | (500,000) |  |  |
Payment of debt issuance costs |  | (3,592) |  |  | (37,176) |  |  |
Repurchase of common shares |  | (78) |  |  | (196) |  |  |
Distributions to common shareholders |  | (66,306) |  |  | (66,179) |  |  |
Net cash used in financing activities |  | (68,468) |  |  | (27,258) |  |  |
(Decrease) increase in cash and cash equivalents and restricted cash |  | (168,374) |  |  | 405,205 |  |  |
Cash and cash equivalents and restricted cash at beginning of period |  | 197,830 |  |  | 45,420 |  |  |
Cash and cash equivalents and restricted cash at end of period |  | $ | 29,456 |  |  | $ | 450,625 |  |  |
Supplemental disclosure of cash and cash equivalents and restricted cash: |  |  |  |  |  |
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows: |  |
Cash and cash equivalents |  | $ | 14,626 |  |  | $ | 434,867 |  |  |
Restricted cash(1) |  | 14,830 |  |  | 15,758 |  |  |
Total cash and cash equivalents and restricted cash |  | $ | 29,456 |  |  | $ | 450,625 |  |  |
(1) Restricted cash consists of amounts escrowed pursuant to the terms of our hotel management agreements to fund capital improvements at our hotels and amounts escrowed as required by certain of our debt agreements. |  |
Supplemental cash flow information: |  |  |  |  |  |
Cash paid for interest |  | $ | 184,737 |  |  | $ | 152,294 |  |  |
Cash paid for income taxes |  | $ | 2,886 |  |  | $ | 1,398 |  |  |
Non-cash investing activities: |  |  |  |  |  |
Real estate improvements accrued, not paid |  | $ | 37,499 |  |  | $ | 17,081 |  |  |
Non-cash financing activities: |  |  |  |  |  |
Extinguishment of senior unsecured notes |  | $ | (2,569) |  |  | $ | — |  |  |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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SERVICE PROPERTIES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
(unaudited)
Note 1. Organization and Basis of Presentation
Service Properties Trust, or we, us or our, is a real estate investment trust, or REIT, organized on February 7, 1995 under the laws of the State of Maryland, which invests in hotels and service-focused retail net lease properties. At June 30, 2024, we owned, directly and through our subsidiaries, 220 hotels and 749 service-focused retail net lease properties.
Basis of Presentation
The accompanying condensed consolidated financial statements of us are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2023, or our 2023 Annual Report. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair statement of results for the interim period have been included. These condensed consolidated financial statements include our accounts and the accounts of our subsidiaries, all of which are 100% owned directly or indirectly by us. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods and those of our managers and tenants are not necessarily indicative of the results that may be expected for the full year.
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in our condensed consolidated financial statements include the allowance for credit losses, purchase price allocations, useful lives of fixed assets and impairment of real estate and related intangibles.
We have determined that each of our wholly owned taxable REIT subsidiaries, or TRSs, is a variable interest entity, or VIE, as defined under the Consolidation Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification™, or ASC. We have concluded that we must consolidate each of our wholly owned TRSs because we are the entity with the power to direct the activities that most significantly impact such VIEs’ performance and we have the obligation to absorb losses or the right to receive benefits from each VIE that could be significant to the VIE and are, therefore, the primary beneficiary of each VIE. The assets of our TRSs were $165,766 and $142,789 as of June 30, 2024 and December 31, 2023, respectively, and consist primarily of our TRSs’ investment in Sonesta Holdco Corporation’s, or Sonesta’s, common stock and amounts due from and working capital advances to certain of our hotel managers. The liabilities of our TRSs were $107,250 and $81,262 as of June 30, 2024 and December 31, 2023, respectively, and consist primarily of amounts payable to certain of our hotel managers. The assets of our TRSs are available to satisfy our TRSs’ obligations and we have guaranteed certain obligations of our TRSs.
Note 2. Recent Accounting Pronouncements
On November 27, 2023, the FASB issued Accounting Standards Update, or ASU, No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, or ASU No. 2023-07, which requires public entities to: (i) provide disclosures of significant segment expenses and other segment items if they are regularly provided to the Chief Operating Decision Maker, or the CODM, and included in each reported measure of segment profit or loss; (ii) provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by ASC 280, Segment Reporting, or ASC 280, in interim periods; and (iii) disclose the CODM’s title and position, as well as an explanation of how the CODM uses the reported measures and other disclosures. The amendments in ASU No. 2023-07 are incremental to the requirements in ASC 280 and do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. ASU No. 2023-07 should be applied retrospectively to all prior periods presented in the financial statements and is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact ASU No. 2023-07 will have on our consolidated financial statements and disclosures.
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SERVICE PROPERTIES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
(unaudited)
On December 14, 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, or ASU No. 2023-09, which requires public entities to enhance its annual income tax disclosures by requiring: (i) consistent categories and greater disaggregation of information in the rate reconciliation, and (ii) income taxes paid disaggregated by jurisdiction. ASU No. 2023-09 should be applied prospectively but entities have the option to apply it retrospectively to all prior periods presented in the financial statements. ASU No. 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact ASU No. 2023-09 will have on our consolidated financial statements and disclosures.
Note 3. Revenue Recognition
We report hotel operating revenues for managed hotels in our condensed consolidated statements of comprehensive income (loss). We generally recognize hotel operating revenues, consisting primarily of room and food and beverage sales, when goods and services are provided.
We report rental income for leased properties in our condensed consolidated statements of comprehensive income (loss). We recognize rental income from operating leases on a straight line basis over the terms of the lease agreements. We increased rental income by $4,778 and $2,767 for the three months ended June 30, 2024 and 2023, respectively, and increased rental income by $10,546 and $319 for the six months ended June 30, 2024 and 2023, respectively, to record scheduled rent changes under certain of our leases on a straight line basis. Other assets, net, includes $70,479 and $56,833 of straight line rent receivables at June 30, 2024 and December 31, 2023, respectively.
Certain of our lease agreements require additional percentage rent if gross revenues of our properties exceed certain thresholds defined in our lease agreements. We determine percentage rent due to us under our leases monthly, quarterly or annually, as applicable, depending on the specific lease terms, and recognize it when all contingencies are met and the rent is earned. We recorded percentage rent of $471 and $4,449 for the three months ended June 30, 2024 and 2023, respectively, and $1,015 and $4,792 for the six months ended June 30, 2024 and 2023, respectively.
We own all the escrowed reserves established for the regular refurbishment of our hotels, or FF&E reserves. We do not report the FF&E reserves for our managed hotels as FF&E reserve income.
Note 4. Per Common Share Amounts
We calculate basic earnings per common share using the two class method. We calculate diluted earnings per common share using the more dilutive of the two class method or the treasury stock method. Unvested common share awards and other potentially dilutive common shares, together with the related impact on earnings, are considered when calculating diluted earnings per share. For the three and six months ended June 30, 2024 and 2023, there were no dilutive common shares and certain unvested common shares were not included in the calculation of diluted earnings per share because to do so would have been antidilutive.
Note 5. Real Estate Properties
As of June 30, 2024, we owned 220 hotels with an aggregate of 37,697 rooms or suites and 749 service-focused retail net lease properties with an aggregate of 13,384,219 square feet that are primarily subject to “triple net” leases, or net leases where the tenant is generally responsible for payment of operating expenses and capital expenditures of the property during the lease term. Our properties had an aggregate undepreciated carrying value of $9,807,697, including $229,982 related to properties classified as held for sale as of June 30, 2024.
We funded capital improvements to certain of our properties of $135,124 during the six months ended June 30, 2024.
Dispositions
During the six months ended June 30, 2024, we sold four properties for an aggregate sales price of $6,247, excluding closing costs. The sales of these properties as presented in the table below do not represent significant dispositions, individually or in the aggregate, nor do they represent a strategic shift in our business. As a result, the results of the operations of these properties are included in continuing operations through the date of sale in our condensed consolidated statements of comprehensive income (loss).
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SERVICE PROPERTIES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
(unaudited)

Quarter Sold |  | Property Type |  | Number of Properties |  | Rooms or Suites / Square Feet |  | Gross Sales Price |  | Loss on Sale of Real Estate
Q1 2024 |  | Hotel |  | 1 |  | 84 |  |  | $ | 3,315 |  |  | $ | (863) |
Q1 2024 |  | Net Lease |  | 3 |  | 34,849 |  |  | 2,932 |  |  | (2,132) |
|  |  |  | 4 |  | 84 / 34,849 |  | $ | 6,247 |  |  | $ | (2,995) |

As of June 30, 2024, we had 20 hotels with an aggregate of 2,541 keys and an aggregate carrying value of $107,044 and 13 net lease properties with an aggregate of 142,329 square feet and an aggregate carrying value of $7,169 classified as held for sale. See Note 14 for further information on these properties.
From July 1, 2024 through August 2, 2024, we sold two hotels with an aggregate of 346 keys for an aggregate sales price of $10,800, excluding closing costs, and three vacant net lease properties with an aggregate of 9,388 square feet for an aggregate sales price of $1,800, excluding closing costs.
As of August 2, 2024, we have entered into agreements to sell 16 hotels with an aggregate of 1,930 keys for an aggregate sales price of $113,200, excluding closing costs, and one net lease property with 3,381 square feet for a sales price of $1,250, excluding closing costs. These pending sales are subject to conditions; accordingly, we cannot be sure that we will complete these sales, that these sales will not be delayed or that the terms will not change. We continue to market three hotels with an aggregate of 407 keys and nine net lease properties with an aggregate of 129,560 square feet for sale. We believe it is probable that the sales of these properties will be completed within one year.
Note 6. Management Agreements and Leases
As of June 30, 2024, we owned 220 hotels included in four operating agreements and 749 service-focused retail properties net leased to 178 tenants. We do not operate any of our properties.
As of June 30, 2024, all 220 of our hotels were managed by subsidiaries of the following companies: Sonesta (195 hotels), Hyatt Hotels Corporation, or Hyatt (17 hotels), Radisson Hospitality, Inc., or Radisson (seven hotels), and InterContinental Hotels Group, plc, or IHG (one hotel). As of June 30, 2024, we owned 749 service-focused retail net lease properties with 178 tenants, including 175 travel centers leased to TA, our largest tenant. Hereinafter, these companies are sometimes referred to as our managers and/or tenants, or collectively, operators.
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SERVICE PROPERTIES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
(unaudited)
Hotel Agreements
Sonesta Agreement. As of June 30, 2024, Sonesta managed 40 of our full-service hotels, 111 of our extended stay hotels and 44 of our select service hotels pursuant to management agreements for all of the hotels, which we collectively refer to as our Sonesta agreement. The hotels Sonesta managed for us comprised approximately 50.1% of our total historical real estate investments.
Our Sonesta agreement, which expires on January 31, 2037 and includes two 15-year renewal options, provides that we are paid an annual owner’s priority return if gross revenues of the hotels, after payment of hotel operating expenses and management and related fees (other than Sonesta’s incentive fee, if applicable), are sufficient to do so. The Sonesta agreement further provides that we are paid an additional return equal to 80% of the operating profits, as defined therein, after paying the owner’s priority return, reimbursing owner or manager advances, funding FF&E reserves and paying Sonesta’s incentive fee, if applicable. We do not have any security deposits or guarantees for our Sonesta hotels. We realized returns under our Sonesta agreement of $75,130 and $84,899 during the three months ended June 30, 2024 and 2023, respectively, and $102,505 and $115,136 during the six months ended June 30, 2024 and 2023, respectively.
Our Sonesta agreement requires us to fund capital expenditures made at our hotels. We incurred capital expenditures for hotels included in our Sonesta agreement in an aggregate amount of $106,366 and $54,209 during the six months ended June 30, 2024 and 2023, respectively, which resulted in increases in our contractual annual owner’s priority returns of $6,382 and $3,253, respectively. Our annual priority return under our Sonesta agreement as of June 30, 2024 was $360,353. We owed Sonesta $7,883 and $13,300 for capital expenditures and other reimbursements at June 30, 2024 and December 31, 2023, respectively. Sonesta owed us $28,959 and $6,376 in owner’s priority returns and other amounts as of June 30, 2024 and December 31, 2023, respectively. Amounts due from Sonesta are included in due from related persons and amounts owed to Sonesta are included in due to related persons in our condensed consolidated balance sheets. Our Sonesta agreement requires that 5% of the hotel gross revenues be escrowed for future capital expenditures as FF&E reserves, subject to available cash flows after payment of the owner’s priority returns due to us. No FF&E escrow deposits were required during either of the three or six months ended June 30, 2024 or 2023.
Pursuant to our Sonesta agreement, we incurred management, reservation and system fees and reimbursement costs for certain guest loyalty, marketing programs and third-party reservation transmission fees of $32,969 and $32,121 for the three months ended June 30, 2024 and 2023, respectively, and $59,984 and $58,257 for the six months ended June 30, 2024 and 2023, respectively. These fees and costs are included in hotel operating expenses in our condensed consolidated statements of comprehensive income (loss). In addition, we incurred procurement and construction supervision fees payable to Sonesta of $587 and $341 for the three months ended June 30, 2024 and 2023, respectively, and $987 and $548 for the six months ended June 30, 2024 and 2023, respectively, which amounts have been capitalized in our condensed consolidated balance sheets and are depreciated over the estimated useful lives of the related capital assets.
We are required to maintain working capital for each of our hotels managed by Sonesta and have advanced a fixed amount based on the number of rooms in each hotel to meet the cash needs for hotel operations. As of each of June 30, 2024 and December 31, 2023, we had advanced $48,490 of initial working capital to Sonesta net of any working capital returned to us on termination of the applicable management agreements in connection with hotels we have sold. These amounts are included in other assets, net in our condensed consolidated balance sheets. Any remaining working capital would be returned to us upon termination in accordance with the terms of our Sonesta agreement.
See Notes 7 and 11 for further information regarding our relationships, agreements and transactions with Sonesta.
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SERVICE PROPERTIES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
(unaudited)
Hyatt Agreement. As of June 30, 2024, Hyatt managed 17 of our select service hotels pursuant to a portfolio management agreement that expires on March 31, 2031, or our Hyatt agreement, and provides that, as of June 30, 2024, we are to be paid an annual owner’s priority return of $16,958. Any returns we receive from Hyatt are currently limited to the hotels’ available cash flows, if any, after payment of operating expenses. Hyatt has provided us with a $30,000 limited guarantee for 75% of the aggregate annual owner’s priority returns due to us that will become effective upon substantial completion of planned renovations of the hotels, which we currently expect to occur in 2024. We realized returns of $3,314 and $4,388 during the three months ended June 30, 2024 and 2023, respectively, and $2,206 and $6,711 during the six months ended June 30, 2024 and 2023, respectively, under our Hyatt agreement. In February 2024, we funded $2,300 of additional working capital to Hyatt. We may recover this amount in the future, if cash flows are sufficient to pay our owner’s priority return and other amounts in accordance with our Hyatt agreement. During the six months ended June 30, 2024 and 2023, we incurred capital expenditures for certain hotels included in our Hyatt agreement of $23,377 and $454, respectively, which resulted in an aggregate increase in our contractual annual owner’s priority returns of $1,403 and $27, respectively.
Radisson Agreement. As of June 30, 2024, Radisson managed seven of our full-service hotels pursuant to a portfolio management agreement that expires on July 31, 2031, or our Radisson agreement, and provides that we are to be paid an annual owner’s priority return of $10,898. Radisson has provided us with a $22,000 limited guarantee for 75% of the aggregate annual owner’s priority returns due to us that became effective on January 1, 2023, subject to adjustment for planned renovations of certain hotels, which we currently expect to be completed by the end of the third quarter of 2024. We realized returns under our Radisson agreement of $1,789 and $1,799 during the three months ended June 30, 2024 and 2023, respectively, and $3,240 and $3,364 during the six months ended June 30, 2024 and 2023, respectively. During the six months ended June 30, 2023, the hotels under this agreement generated cash flows that were less than the guaranteed owner’s priority level due to us for these periods, and we reduced hotel operating expenses by $140 to record the guaranteed amounts of the shortfalls due from Radisson. The available balance of the guaranty was $21,350 as of June 30, 2024. During the six months ended June 30, 2024 and 2023, we incurred capital expenditures of $544 and $4,749, respectively, for the hotels included in our Radisson agreement, which resulted in an aggregate increase in our contractual owner’s priority returns of $32 and $285, respectively.
Marriott Agreement. As of June 30, 2023, we had sold all 16 hotels previously managed by Marriott International, Inc., or Marriott. We realized a net operating loss of $2,762 during the six months ended June 30, 2023, under our management agreement with Marriott. We did not incur capital expenditures for any of the hotels included in our management agreement with Marriott during the six months ended June 30, 2023.
IHG Agreement. Our management agreement with IHG for one hotel expires on January 31, 2026. We realized returns under our management agreement with IHG of $1,536 and $1,517 during the three months ended June 30, 2024 and 2023, respectively, and $3,129 and $2,280 during the six months ended June 30, 2024 and 2023, respectively. Any returns we receive from IHG are limited to the hotel’s available cash flows, if any, after payment of operating expenses. During the six months ended June 30, 2024 and 2023, we incurred capital expenditures of $221 and $328, respectively, for the hotel included in our IHG agreement.
Net Lease Portfolio
As of June 30, 2024, we owned 749 service-focused retail net lease properties with an aggregate of 13,384,219 square feet with leases requiring annual minimum rents of $380,457 with a weighted (by annual minimum rents) average remaining lease term of 8.4 years. Our net lease properties were 97.3% occupied and leased by 178 tenants operating under 139 brands in 21 distinct industries.
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SERVICE PROPERTIES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
(unaudited)
TA Leases. As of June 30, 2024, TA is our largest tenant, representing 28.5% of our total historical real estate investments. We lease to TA a total of 175 travel centers under five master leases that expire in 2033, or our TA leases, subject to TA’s right to extend those leases, and require annual minimum rents of $259,080 as of June 30, 2024. TA receives a monthly rent credit totaling $25,000 per year over the 10-year initial term of the TA leases as a result of rent it prepaid. On February 28, 2024, TA acquired the leasehold interest of one of our travel centers from a third party landlord. The aggregate minimum rent due to us under our leases with TA for the remaining 175 travel centers was unchanged as a result of TA’s acquisition of this leasehold interest.
Our TA leases are “triple net” leases that require TA to pay all costs incurred in the operation of the leased travel centers, including personnel, utility, inventory, customer service and insurance expenses, real estate and personal property taxes, environmental related expenses, underground storage tank maintenance costs and ground lease payments at those travel centers at which we lease the property and sublease it to TA. Our TA leases generally require TA to indemnify us for certain environmental matters and for liabilities that arise during the terms of the leases from ownership or operation of the leased travel centers. Our TA leases do not require FF&E escrow deposits. However, TA is required to maintain the leased travel centers, including structural and non-structural components. BP Corporation North America Inc. guarantees payment under each of the TA leases, limited to an aggregate cap which was $3,037,475 as of June 30, 2024.
We recognized rental income from our TA leases of $67,834 and $65,260 for the three months ended June 30, 2024 and 2023, respectively, and $135,668 and $127,401 for the six months ended June 30, 2024 and 2023, respectively. Rental income was increased by $3,885 and $2,555 for the three months ended June 30, 2024 and 2023, respectively, and increased by $8,194 and reduced by $686 for the six months ended June 30, 2024 and 2023, respectively, to record the scheduled rent changes on a straight line basis. As of June 30, 2024 and December 31, 2023, we had receivables for current rent amounts owed to us by TA and straight line rent adjustments of $30,872 and $19,816, respectively, included in other assets, net in our condensed consolidated balance sheets.
Until May 15, 2023, our TA leases required TA to pay us percentage rent based upon increases in certain sales. We recognized percentage rent due under our TA leases as rental income when all contingencies were met. We recognized percentage rent of $3,507 during the three and six months ended June 30, 2023 under our TA leases. We had no deferred percentage rent for either the three or six months ended June 30, 2023.
For more information regarding our relationships with TA, including the TA Merger (as defined below), see Notes 7 and 11.
Our other net lease agreements generally provide for minimum rent payments and in addition may include variable payments. Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. We recognized rental income from our net lease properties (excluding TA) of $32,628 and $34,192 for the three months ended June 30, 2024 and 2023, respectively, which included $893 and $212, respectively, of adjustments to record scheduled rent changes under certain of our leases on a straight line basis, and $64,808 and $66,464 for the six months ended June 30, 2024 and 2023, respectively, which included $2,352 and $1,005, respectively, of adjustments to record scheduled rent changes under certain of our leases on a straight line basis.
We continually review receivables related to rent, straight line rent and property operating expense reimbursements and determine collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. The review includes an assessment of whether substantially all of the amounts due under a tenant’s lease are probable of collection. For leases that are deemed probable of collection, revenue continues to be recorded on a straight line basis over the lease term. For leases that are deemed not probable of collection, revenue is recorded as cash is received. We recognize all changes in the collectability assessment for an operating lease as an adjustment to rental income. We recorded reserves for uncollectable amounts and reduced rental income by $377 and $1,042 for the three and six months ended June 30, 2024, respectively, based on our assessment of the collectability of rents. We recorded reserves for uncollectable amounts and reduced rental income by $1,813 and $5,353 for the three and six months ended June 30, 2023, respectively, based on our assessment of the collectability of rents. We had reserves for uncollectable rents of $4,366 and $3,436 as of June 30, 2024 and December 31, 2023, respectively, included in other assets, net in our condensed consolidated balance sheets.
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SERVICE PROPERTIES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
(unaudited)
Note 7. Other Investments
Equity Method Investment
As of both June 30, 2024 and December 31, 2023, we owned 34% of Sonesta’s outstanding common stock. We account for our 34% non-controlling interest in Sonesta under the equity method of accounting.
As of June 30, 2024 and December 31, 2023, our investment in Sonesta had a carrying value of $108,106 and $113,304, respectively. On the date of acquisition of our initial equity interest in Sonesta (February 27, 2020), the cost basis of our investment in Sonesta exceeded our proportionate share of Sonesta’s total stockholders’ equity book value by an aggregate of $8,000. As required under GAAP, we are amortizing this difference to equity in earnings of an investee over 31 years, the weighted average remaining useful life of the real estate assets and intangible assets and liabilities owned by Sonesta as of the date of our acquisition. We recorded amortization of the basis difference of $65 in each of the three months ended June 30, 2024 and 2023 and $130 in each of the six months ended June 30, 2024 and 2023. We recognized losses related to our investment in Sonesta of $2,716 and earnings of $517 for the three months ended June 30, 2024 and 2023, respectively, and losses of $8,054 and $3,704 for the six months ended June 30, 2024 and 2023, respectively. These amounts, which include amortization of the basis difference, are included in equity in earnings (losses) of an investee in our condensed consolidated statements of comprehensive income (loss).
We recorded a liability of $42,000 for the fair value of our initial investment in Sonesta, as no cash consideration was exchanged related to the modification of our management agreement with, and investment in, Sonesta. This liability for our investment in Sonesta is included in accounts payable and other liabilities in our condensed consolidated balance sheets and is being amortized on a straight line basis through the initial term of the Sonesta agreement, January 31, 2037, as a reduction to hotel operating expenses in our condensed consolidated statements of comprehensive income (loss). We reduced hotel operating expenses by $621 for each of the three months ended June 30, 2024 and 2023 and $1,242 for each of the six months ended June 30, 2024 and 2023 for amortization of this liability. As of June 30, 2024 and December 31, 2023, the unamortized balance of this liability was $31,237 and $32,479, respectively.
In March 2024, we made a $3,392 pro rata capital contribution to Sonesta to support its growth initiatives, including its franchising efforts. We continue to maintain our 34% ownership in Sonesta after giving effect to this contribution.
See Notes 6 and 11 for further information regarding our relationships, agreements and transactions with Sonesta.
Investment in Equity Securities
Until May 15, 2023, we owned 1,184,797 shares, or approximately 7.8%, of TA common stock, which were reported at fair value based on quoted market prices (Level 1 inputs as defined in the fair value hierarchy under GAAP) as of the end of the period, with changes in fair value recorded in earnings in our condensed consolidated statements of comprehensive income (loss). As of May 15, 2023, our historical cost basis for these shares was $24,418 and our carrying value for these shares was $101,893. On May 15, 2023, BP Products North America Inc. acquired TA pursuant to a merger, or the TA Merger, for $86.00 per share of TA common stock in cash. We recorded a loss of $593 during the three months ended June 30, 2023, and a gain of $48,837 during the six months ended June 30, 2023 to adjust the carrying value of our former investment in shares of TA common stock to its fair value.
Note 8. Indebtedness
Our principal debt obligations at June 30, 2024 were: (1) $4,075,000 aggregate outstanding principal amount of senior unsecured notes; (2) $1,000,000 aggregate outstanding principal amount of senior secured notes; and (3) $607,590 aggregate outstanding principal amount of net lease mortgage notes. We had no amounts outstanding under our revolving credit facility as of June 30, 2024.
Our $650,000 secured revolving credit facility is available for general business purposes, including acquisitions. We can borrow, repay, and reborrow funds available under our revolving credit facility until maturity and no principal repayments are due until maturity. The maturity date of our revolving credit facility is June 29, 2027, and, subject to the payment of an extension fee and meeting certain other conditions, we have an option to further extend the stated maturity date of the facility by two additional six-month periods.
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SERVICE PROPERTIES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
(unaudited)
Interest payable on drawings under our revolving credit facility is based on the secured overnight financing rate, or SOFR, plus a margin ranging from 1.50% to 3.00% based on our leverage ratio, as defined in our credit agreement, which was 2.50% as of June 30, 2024. As collateral for all loans and other obligations under the credit facility, certain of our subsidiaries pledged all of their respective equity interests in certain of our direct and indirect property owning subsidiaries, and our pledged subsidiaries provided first mortgage liens on 72 properties, including 69 hotels and three net lease properties, with an aggregate undepreciated carrying value of $1,738,959 as of June 30, 2024. We also pay unused commitment fees of 20 to 30 basis points per annum on the total amount of lending commitments under our revolving credit facility based on amounts outstanding. As of June 30, 2024 and 2023, the annual interest rate payable on borrowings under our revolving credit facility was 7.83% and 7.64%, respectively. We had no borrowings outstanding under our revolving credit facility for either the three or six months ended June 30, 2024 or 2023.
Our debt agreements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes The RMR Group LLC, or RMR, ceasing to act as our business manager. Our debt agreements also contain covenants, including those that restrict our ability to incur debts or to make distributions under certain circumstances and generally require us to maintain certain financial ratios. Borrowings under our revolving credit facility are subject to meeting ongoing minimum performance and market values of the collateral properties, satisfying certain financial covenants and other credit facility conditions. We believe we were in compliance with the terms and conditions of our debt agreements as of June 30, 2024.
Senior Guaranteed Unsecured Notes Issuance
In June 2024, we issued $700,000 aggregate principal amount of 8.375% senior guaranteed unsecured notes due 2029, or the 2029 Notes, and $500,000 aggregate principal amount of 8.875% senior guaranteed unsecured notes due 2032, or the 2032 Notes, in underwritten public offerings. The aggregate net proceeds from these notes were $1,162,284, after underwriting discounts and other offering expenses. These notes are fully and unconditionally guaranteed, on a joint and several basis and on a senior unsecured basis, by all of our subsidiaries, except for our foreign subsidiaries and certain other excluded subsidiaries. Such other excluded subsidiaries include, but are not limited to, subsidiaries whose equity has been pledged to secure borrowings under our credit agreement and our 8.625% senior secured notes due 2031, and subsidiaries whose assets secure our net lease mortgage notes.
Repayment of 2025 Maturities
In June 2024, we redeemed all of our outstanding 7.50% senior unsecured notes due 2025 for a redemption price equal to the principal amount of $800,000, plus accrued and unpaid interest and a premium equal to a make whole amount. As a result of the redemption, we recorded a loss on early extinguishment of debt of $17,681 during the three and six months ended June 30, 2024, which represented the make whole premium and the write-off of unamortized discounts and issuance costs related to these notes.
In June 2024, we repurchased $272,803 principal amount of our $350,000 4.50% senior unsecured notes due 2025 at a total cost of $270,396, excluding accrued interest, pursuant to a cash tender offer. Also in June 2024, we effected the satisfaction and discharge of the remaining $77,197 principal amount of our $350,000 4.50% senior unsecured notes due 2025 that were not purchased as part of the tender offer in accordance with its terms. As a result of these transactions, we recorded a gain on early extinguishment of debt of $1,633 during the three and six months ended June 30, 2024, which represented the discount to par paid to repurchase the notes, net of the write-off of unamortized discounts and issuance costs related to these notes.
Net Lease Mortgage Notes
Our $610,200 in aggregate principal amount of net lease mortgage notes were issued on February 10, 2023 by our wholly owned, special purpose bankruptcy remote, indirect subsidiary, SVC ABS LLC, or the Issuer. The Issuer is a separate legal entity and is the sole owner of its assets and liabilities. The assets of the Issuer are not available to pay or otherwise satisfy obligations to the creditors of any owners or affiliates of the Issuer.
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SERVICE PROPERTIES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
(unaudited)
Our net lease mortgage notes are summarized below:

Note Class |  | Principal Outstanding as of June 30, 2024 |  | Coupon Rate |  | Initial Term (in years) |  | Maturity
Class A |  | $ | 302,967 |  |  | 5.15% |  | 5 |  | February 2028
Class B |  | 172,423 |  |  | 5.55% |  | 5 |  | February 2028
Class C |  | 132,200 |  |  | 6.70% |  | 5 |  | February 2028
Total / weighted average |  | $ | 607,590 |  |  | 5.60% |  |  |  |

The Class A notes and the Class B notes require monthly principal repayments at an annualized rate of 0.50% and 0.25% of the balance outstanding, respectively, and the Class C notes require interest payments only, with balloon payments due at maturity. The notes mature in February 2028 and may be redeemed without penalty 24 months prior to the scheduled maturity date beginning in February 2026. The notes are non-recourse and are secured by 308 net lease retail properties owned by the Issuer. The current leases relating to those properties require annual minimum rents of $65,173 and had an aggregate undepreciated carrying value of $753,474 as of June 30, 2024.
Note 9. Shareholders’ Equity
Share Awards
On June 14, 2024, in accordance with our Trustee compensation arrangements, we awarded 18,255 of our common shares, valued at $4.93 per share, the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day to each of our eight Trustees as part of their annual compensation.
Share Purchases
During the six months ended June 30, 2024, we purchased an aggregate of 11,798 of our common shares, valued at a weighted average share price of $6.66 per common share, from certain former officers and employees of RMR in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. We withheld and purchased these common shares at their fair market values based upon the trading prices of our common shares at the close of trading on Nasdaq on the applicable purchase dates.
Distributions
During the six months ended June 30, 2024, we declared and paid regular quarterly distributions to common shareholders as follows:

Declaration Date |  | Record Date |  | Paid Date |  | Dividend Per Common Share |  | Total Distributions
January 11, 2024 |  | January 22, 2024 |  | February 15, 2024 |  | $ | 0.20 |  |  | $ | 33,154 |
April 11, 2024 |  | April 22, 2024 |  | May 16, 2024 |  | 0.20 |  |  | 33,152 |
|  |  |  |  |  | $ | 0.40 |  |  | $ | 66,306 |

On July 11, 2024, we declared a regular quarterly distribution to common shareholders of record as of July 22, 2024 of $0.20 per common share, or approximately $33,178. We expect to pay this distribution on or about August 15, 2024.
Note 10. Business and Property Management Agreements with RMR
We have no employees. The personnel and various services we require to operate our business are provided to us by RMR. We have two agreements with RMR to provide management services to us: (1) a business management agreement, which relates to our business generally, and (2) a property management agreement, which relates to our property level operations of our net lease portfolio, the office building component of one of our hotels and major renovation or repositioning activities at our hotels that we may request RMR to manage from time to time.
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SERVICE PROPERTIES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
(unaudited)
Pursuant to our business management agreement with RMR, we recognized net business management fees of $7,440 and $8,287 for the three months ended June 30, 2024 and 2023, respectively, and $15,197 and $16,672 for the six months ended June 30, 2024 and 2023, respectively. Based on our common share total return, as defined in our business management agreement, as of each of June 30, 2024 and 2023, no incentive fees are included in the net business management fees we recognized for the three and six months ended June 30, 2024 or 2023. The actual amount of annual incentive fees for 2024, if any, will be based on our common share total return, as defined in our business management agreement, for the three-year period ending December 31, 2024, and will be payable in January 2025. We did not incur an incentive fee payable to RMR for the year ended December 31, 2023. We include business management fee amounts in general and administrative expenses in our condensed consolidated statements of comprehensive income (loss).
Pursuant to our property management agreement with RMR, we recognized aggregate property management and construction supervision fees of $2,839 and $1,846 for the three months ended June 30, 2024 and 2023, respectively, and $6,019 and $3,258 for the six months ended June 30, 2024 and 2023, respectively. Of those amounts, for the three months ended June 30, 2024 and 2023, $1,505 and $937, respectively, of property management fees were expensed to net lease operating expenses in our condensed consolidated statements of comprehensive income (loss) and $1,334 and $909, respectively, of construction supervision fees were capitalized as building improvements in our condensed consolidated balance sheets. For the six months ended June 30, 2024 and 2023, $2,989 and $1,882, respectively, of property management fees were expensed to net lease operating expenses in our condensed consolidated statements of comprehensive income (loss) and $3,030 and $1,376, respectively, of construction supervision fees were capitalized as building improvements in our condensed consolidated balance sheets. The amounts capitalized are being depreciated over the estimated useful lives of the related capital assets.
We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR on our behalf. We are generally not responsible for payment of RMR’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR employees assigned to work exclusively or partly at our net lease properties and the office building component of one of our hotels, our share of the wages, benefits and other related costs of RMR’s centralized accounting personnel, our share of RMR’s costs for providing our internal audit function, and as otherwise agreed. Our property level operating expenses are generally incorporated into rents charged to our tenants, including certain payroll and related costs incurred by RMR. We reimbursed RMR $1,032 and $1,116 for these expenses and costs for the three months ended June 30, 2024 and 2023, respectively, and $2,126 and $2,119 for these expenses and costs for the six months ended June 30, 2024 and 2023, respectively. We included these amounts in net lease operating expenses and general and administrative expenses, as applicable, in our condensed consolidated statements of comprehensive income (loss).
Note 11. Related Person Transactions
We have relationships and historical and continuing transactions with TA, Sonesta, RMR, The RMR Group, Inc., or RMR Inc., and others related to them, including other companies to which RMR or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. As of the effective time of the TA Merger on May 15, 2023, TA is no longer a related person to us. RMR is a majority owned subsidiary of RMR Inc. The Chair of our Board of Trustees and one of our Managing Trustees, Adam D. Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., the chair of the board of directors, a managing director and the president and chief executive officer of RMR Inc. and an officer and employee of RMR. John G. Murray, our other Managing Trustee and our former President and Chief Executive Officer, also serves as an officer and employee of RMR and as president and chief executive officer of Sonesta. In addition, each of our other officers serves as an officer of RMR. Some of our Independent Trustees also serve as independent trustees of other public companies to which RMR or its subsidiaries provide management services. Mr. Portnoy serves as chair of the boards and as a managing trustee of these public companies. Other officers of RMR, including certain of our officers, serve as managing trustees or officers of certain of these companies.
RMR provides management services to us and, until the TA Merger, provided services to TA, and Mr. Portnoy, until the TA Merger, also served as the chair of the board of directors and as a managing director of TA and, as of immediately prior to the TA Merger, beneficially owned 661,506 shares of TA common stock (including through RMR), representing approximately 4.4% of TA’s outstanding shares of common stock.
See Notes 6 and 7 for further information regarding our relationships, agreements and transactions with TA.
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SERVICE PROPERTIES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
(unaudited)
Sonesta. Sonesta is a private company. Mr. Portnoy is the largest owner and controlling shareholder and a director of Sonesta. Mr. Murray is a director of Sonesta and is its president and chief executive officer, and he is an officer and employee of RMR. Sonesta’s other director serves as RMR’s and RMR Inc.’s executive vice president, general counsel and secretary, as a managing director of RMR Inc. and as our Secretary. RMR also provides certain services to Sonesta. As of June 30, 2024, we owned 34% of Sonesta’s outstanding shares of common stock and Sonesta managed 195 of our hotels. See Notes 6 and 7 for further information regarding our relationships, agreements and transactions with Sonesta.
Our Manager, RMR. We have two agreements with RMR to provide management services to us. See Note 10 for further information regarding our management agreements with RMR.
For further information about these and certain other such relationships and certain other related person transactions, refer to our 2023 Annual Report.
Note 12. Income Taxes
We have elected to be taxed as a REIT under the United States Internal Revenue Code of 1986, as amended, or the IRC, and, as such, are generally not subject to federal and most state income taxation on our operating income provided we distribute our taxable income to our shareholders and meet certain organization and operating requirements. We are subject to income tax in Canada, Puerto Rico and certain states despite our qualification for taxation as a REIT. Further, we lease our managed hotels to our wholly owned TRSs that, unlike most of our subsidiaries, file a separate consolidated tax return and are subject to federal, state and foreign income taxes. Our consolidated income tax provision (or benefit) includes the income tax provision (or benefit) related to the operations of our TRSs and certain state and foreign income taxes incurred by us despite our qualification for taxation as a REIT.
During the three months ended June 30, 2024, we recognized income tax expense of $524, which includes $88 of state tax expense and $436 of foreign tax expense. During the three months ended June 30, 2023, we recognized income tax expense of $5,247, which includes $2,884 of state tax expense and $2,363 of foreign tax expense.
During the six months ended June 30, 2024, we recognized income tax expense of $1,531, which includes $709 of state tax expense and $822 of foreign tax expense. During the six months ended June 30, 2023, we recognized income tax expense of $1,467, which includes $587 of state tax expense and $880 of foreign tax expense.
Note 13. Segment Information
We aggregate our hotels and net lease portfolio into two reportable segments, hotel investments and net lease investments, based on their similar operating and economic characteristics.
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SERVICE PROPERTIES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
(unaudited)

|  | Three Months Ended June 30, 2024
|  | Hotels |  | Net Lease |  | Corporate |  | Consolidated
Revenues: |  |  |  |  |  |  |  |
Hotel operating revenues |  | $ | 412,486 |  |  | $ | — |  |  | $ | — |  |  | $ | 412,486 |
Rental income |  | — |  |  | 100,462 |  |  | — |  |  | 100,462 |
Total revenues |  | 412,486 |  |  | 100,462 |  |  | — |  |  | 512,948 |
Expenses: |  |  |  |  |  |  |  |
Hotel operating expenses |  | 328,247 |  |  | — |  |  | — |  |  | 328,247 |
Net lease operating expenses |  | — |  |  | 4,958 |  |  | — |  |  | 4,958 |
Depreciation and amortization |  | 55,389 |  |  | 40,285 |  |  | — |  |  | 95,674 |
General and administrative |  | — |  |  | — |  |  | 10,681 |  |  | 10,681 |
Loss on asset impairment, net |  | 33,107 |  |  | 1,780 |  |  | — |  |  | 34,887 |
Total expenses |  | 416,743 |  |  | 47,023 |  |  | 10,681 |  |  | 474,447 |
Loss on sale of real estate, net |  | (27) |  |  | (5) |  |  | — |  |  | (32) |
Interest income |  | 64 |  |  | 36 |  |  | 719 |  |  | 819 |
Interest expense |  | — |  |  | (11,441) |  |  | (82,409) |  |  | (93,850) |
Loss on early extinguishment of debt, net |  | — |  |  | — |  |  | (16,048) |  |  | (16,048) |
(Loss) income before income tax expense and equity in losses of an investee |  | (4,220) |  |  | 42,029 |  |  | (108,419) |  |  | (70,610) |
Income tax expense |  | — |  |  | — |  |  | (524) |  |  | (524) |
Equity in losses of an investee |  | — |  |  | — |  |  | (2,716) |  |  | (2,716) |
Net (loss) income |  | $ | (4,220) |  |  | $ | 42,029 |  |  | $ | (111,659) |  |  | $ | (73,850) |
|  | Six Months Ended June 30, 2024
|  | Hotels |  | Net Lease |  | Corporate |  | Consolidated
Revenues: |  |  |  |  |  |  |  |
Hotel operating revenues |  | $ | 748,722 |  |  | $ | — |  |  | $ | — |  |  | $ | 748,722 |
Rental income |  | — |  |  | 200,476 |  |  | — |  |  | 200,476 |
Total revenues |  | 748,722 |  |  | 200,476 |  |  | — |  |  | 949,198 |
Expenses: |  |  |  |  |  |  |  |
Hotel operating expenses |  | 633,333 |  |  | — |  |  | — |  |  | 633,333 |
Net lease operating expenses |  | — |  |  | 9,681 |  |  | — |  |  | 9,681 |
Depreciation and amortization |  | 110,475 |  |  | 78,306 |  |  | — |  |  | 188,781 |
General and administrative |  | — |  |  | — |  |  | 21,187 |  |  | 21,187 |
Loss on asset impairment, net |  | 33,107 |  |  | 4,231 |  |  | — |  |  | 37,338 |
Total expenses |  | 776,915 |  |  | 92,218 |  |  | 21,187 |  |  | 890,320 |
Loss on sale of real estate, net |  | (863) |  |  | (2,132) |  |  | — |  |  | (2,995) |
Interest income |  | 127 |  |  | 141 |  |  | 2,513 |  |  | 2,781 |
Interest expense |  | — |  |  | (22,958) |  |  | (162,306) |  |  | (185,264) |
Loss on early extinguishment of debt, net |  | — |  |  | — |  |  | (16,048) |  |  | (16,048) |
(Loss) income before income tax expense and equity in losses of an investee |  | (28,929) |  |  | 83,309 |  |  | (197,028) |  |  | (142,648) |
Income tax expense |  | — |  |  | — |  |  | (1,531) |  |  | (1,531) |
Equity in losses of an investee |  | — |  |  | — |  |  | (8,054) |  |  | (8,054) |
Net (loss) income |  | $ | (28,929) |  |  | $ | 83,309 |  |  | $ | (206,613) |  |  | $ | (152,233) |
|  | As of June 30, 2024
|  | Hotels |  | Net Lease |  | Corporate |  | Consolidated
Total assets |  | $ | 3,955,348 |  |  | $ | 3,010,215 |  |  | $ | 156,098 |  |  | $ | 7,121,661 |

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SERVICE PROPERTIES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
(unaudited)

|  | Three Months Ended June 30, 2023
|  | Hotels |  | Net Lease |  | Corporate |  | Consolidated
Revenues: |  |  |  |  |  |  |  |
Hotel operating revenues |  | $ | 404,327 |  |  | $ | — |  |  | $ | — |  |  | $ | 404,327 |
Rental income |  | — |  |  | 99,452 |  |  | — |  |  | 99,452 |
Total revenues |  | 404,327 |  |  | 99,452 |  |  | — |  |  | 503,779 |
Expenses: |  |  |  |  |  |  |  |
Hotel operating expenses |  | 309,100 |  |  | — |  |  | — |  |  | 309,100 |
Net lease operating expenses |  | — |  |  | 5,202 |  |  | (830) |  |  | 4,372 |
Depreciation and amortization |  | 53,449 |  |  | 41,122 |  |  | — |  |  | 94,571 |
General and administrative |  | — |  |  | — |  |  | 12,420 |  |  | 12,420 |
Transaction related costs |  | 473 |  |  | 415 |  |  | 43 |  |  | 931 |
Loss on asset impairment, net |  | — |  |  | 9,005 |  |  | — |  |  | 9,005 |
Total expenses |  | 363,022 |  |  | 55,744 |  |  | 11,633 |  |  | 430,399 |
Gain (loss) on sale of real estate, net |  | 20 |  |  | (82) |  |  | — |  |  | (62) |
Loss on equity securities, net |  | — |  |  | — |  |  | (593) |  |  | (593) |
Interest income |  | 21 |  |  | 23 |  |  | 3,424 |  |  | 3,468 |
Interest expense |  | — |  |  | (11,435) |  |  | (71,068) |  |  | (82,503) |
Loss on early extinguishment of debt |  | — |  |  | — |  |  | (238) |  |  | (238) |
Income (loss) before income tax expense and equity in earnings of an investee |  | 41,346 |  |  | 32,214 |  |  | (80,108) |  |  | (6,548) |
Income tax expense |  | — |  |  | — |  |  | (5,247) |  |  | (5,247) |
Equity in earnings of an investee |  | — |  |  | — |  |  | 517 |  |  | 517 |
Net income (loss) |  | $ | 41,346 |  |  | $ | 32,214 |  |  | $ | (84,838) |  |  | $ | (11,278) |
|  | Six Months Ended June 30, 2023
|  | Hotels |  | Net Lease |  | Corporate |  | Consolidated
Revenues: |  |  |  |  |  |  |  |
Hotel operating revenues |  | $ | 739,123 |  |  | $ | — |  |  | $ | — |  |  | $ | 739,123 |
Rental income |  | — |  |  | 193,865 |  |  | — |  |  | 193,865 |
Total revenues |  | 739,123 |  |  | 193,865 |  |  | — |  |  | 932,988 |
Expenses: |  |  |  |  |  |  |  |
Hotel operating expenses |  | 608,666 |  |  | — |  |  | — |  |  | 608,666 |
Net lease operating expenses |  | — |  |  | 8,277 |  |  | — |  |  | 8,277 |
Depreciation and amortization |  | 106,834 |  |  | 87,776 |  |  | — |  |  | 194,610 |
General and administrative |  | — |  |  | — |  |  | 23,331 |  |  | 23,331 |
Transaction related costs |  | 473 |  |  | 415 |  |  | 930 |  |  | 1,818 |
Loss on asset impairment, net |  | — |  |  | 9,005 |  |  | — |  |  | 9,005 |
Total expenses |  | 715,973 |  |  | 105,473 |  |  | 24,261 |  |  | 845,707 |
Gain (loss) on sale of real estate, net |  | 41,918 |  |  | (82) |  |  | — |  |  | 41,836 |
Gain on equity securities, net |  | — |  |  | — |  |  | 48,837 |  |  | 48,837 |
Interest income |  | 51 |  |  | 25 |  |  | 6,178 |  |  | 6,254 |
Interest expense |  | — |  |  | (17,757) |  |  | (146,326) |  |  | (164,083) |
Loss on early extinguishment of debt |  | — |  |  | — |  |  | (282) |  |  | (282) |
Income (loss) before income tax expense and equity in losses of an investee |  | 65,119 |  |  | 70,578 |  |  | (115,854) |  |  | 19,843 |
Income tax expense |  | — |  |  | — |  |  | (1,467) |  |  | (1,467) |
Equity in losses of an investee |  | — |  |  | — |  |  | (3,704) |  |  | (3,704) |
Net income (loss) |  | $ | 65,119 |  |  | $ | 70,578 |  |  | $ | (121,025) |  |  | $ | 14,672 |
|  | As of December 31, 2023
|  | Hotels |  | Net Lease |  | Corporate |  | Consolidated
Total assets |  | $ | 3,943,213 |  |  | $ | 3,084,686 |  |  | $ | 328,217 |  |  | $ | 7,356,116 |

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SERVICE PROPERTIES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
(unaudited)
Note 14. Fair Value of Assets and Liabilities
The table below presents certain of our assets carried at fair value at June 30, 2024, categorized by the level of inputs, as defined in the fair value hierarchy under GAAP, used in the valuation of each asset.

|  |  |  | Fair Value at Reporting Date Using
Description |  | Total |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Non-recurring Fair Value Measurement Assets: |  |  |  |  |  |  |  |
Assets of properties held for sale (1)(2) |  | $ | 44,025 |  |  | $ | — |  |  | $ | 40,211 |  |  | $ | 3,814 |

(1)We recorded impairment charges totaling $33,449 during the six months ended June 30, 2024, to reduce the carrying value of eight hotels and two net lease properties in our condensed consolidated balance sheet to their estimated fair value, less estimated costs to sell of $1,497, based on negotiated sales prices with third party buyers (Level 2 inputs as defined in the fair value hierarchy under GAAP).
(2)We recorded impairment charges totaling $3,889 during the six months ended June 30, 2024, to reduce the carrying value of three net lease properties in our condensed consolidated balance sheet to their estimated fair value, less estimated costs to sell of $270, based on brokers’ opinion of values (Level 3 inputs as defined in the fair value hierarchy under GAAP).
In addition to the assets included in the table above, our financial instruments include our cash and cash equivalents, restricted cash, rents receivable, revolving credit facility, net lease mortgage notes, senior notes and security deposits. At June 30, 2024 and December 31, 2023, the fair values of these financial instruments approximated their carrying values in our condensed consolidated balance sheets due to their short-term nature or floating interest rates, except as follows:

|  | June 30, 2024 |  | December 31, 2023
|  | Carrying Value (1) |  | Fair Value |  | Carrying Value (1) |  | Fair Value
Senior Unsecured Notes, due 2025 at 4.50% |  | $ | — |  |  | $ | — |  |  | $ | 349,181 |  |  | $ | 341,688 |
Senior Unsecured Notes, due 2025 at 7.50% |  | — |  |  | — |  |  | 796,007 |  |  | 808,888 |
Senior Unsecured Notes, due 2026 at 5.25% |  | 348,165 |  |  | 338,891 |  |  | 347,601 |  |  | 339,780 |
Senior Unsecured Notes, due 2026 at 4.75% |  | 448,652 |  |  | 421,650 |  |  | 448,347 |  |  | 419,909 |
Senior Unsecured Notes, due 2027 at 4.95% |  | 398,050 |  |  | 363,492 |  |  | 397,672 |  |  | 362,108 |
Senior Guaranteed Unsecured Notes, due 2027 at 5.50% |  | 446,195 |  |  | 418,023 |  |  | 445,631 |  |  | 412,002 |
Net Lease Mortgage Notes, due 2028 at 5.60% |  | 563,727 |  |  | 581,308 |  |  | 558,876 |  |  | 585,784 |
Senior Unsecured Notes, due 2028 at 3.95% |  | 395,930 |  |  | 334,992 |  |  | 395,355 |  |  | 327,708 |
Senior Guaranteed Unsecured Notes, due 2029 at 8.375% |  | 681,075 |  |  | 688,107 |  |  | — |  |  | — |
Senior Unsecured Notes, due 2029 at 4.95% |  | 420,873 |  |  | 322,443 |  |  | 420,477 |  |  | 351,726 |
Senior Unsecured Notes, due 2030 at 4.375% |  | 393,623 |  |  | 282,532 |  |  | 393,056 |  |  | 310,524 |
Senior Secured Notes, due 2031 at 8.625% |  | 970,051 |  |  | 1,042,310 |  |  | 968,017 |  |  | 1,047,430 |
Senior Guaranteed Unsecured Notes, due 2032 at 8.875% |  | 481,460 |  |  | 466,370 |  |  | — |  |  | — |
Total financial liabilities |  | $ | 5,547,801 |  |  | $ | 5,260,118 |  |  | $ | 5,520,220 |  |  | $ | 5,307,547 |

(1)Carrying value includes unamortized discounts, premiums and certain debt issuance costs.
At June 30, 2024 and December 31, 2023, we estimated the fair values of our senior notes using an average of the bid and ask price of the notes (Level 2 inputs) as of the measurement dates. At June 30, 2024 and December 31, 2023, we estimated the fair value of our net lease mortgage notes using discounted cash flow analyses and current prevailing market rates as of the measurement dates (Level 3 inputs). As Level 3 inputs are unobservable, our estimated value may differ materially from the actual fair value.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our 2023 Annual Report.
Overview (dollars in thousands, except per share amounts and per room hotel data)
We are a REIT organized under the laws of the State of Maryland. As of June 30, 2024, we owned 969 properties in 46 states, the District of Columbia, Canada and Puerto Rico.
In response to significant and prolonged increases in inflation, the U.S. Federal Reserve raised interest rates multiple times since the beginning of 2022. Although the U.S. Federal Reserve has indicated that it may lower rates in 2024, we cannot be sure that it will do so, and interest rates may remain at the current high levels or increase. These inflationary pressures in the United States, as well as global geopolitical instability and tensions, have given rise to uncertainty regarding economic downturns or a possible recession and potential disruptions in the financial markets. Consumer confidence, corporate travel and lodging demand will continue to be affected by economic and market conditions, unemployment levels, work from home policies, use of technologies and broader economic trends. Increased labor costs and other price inflation may continue to negatively impact our hotel operations and the operations of our tenants. An economic recession or continued or intensified disruptions in the financial markets could adversely affect our financial condition, operations at our hotels, our tenants and their ability or willingness to renew our leases or pay rent to us, may restrict our ability to obtain new or replacement financing, would likely increase our cost of capital, and may cause the values of our properties to decline.
Management Agreements and Leases. At June 30, 2024, we owned 220 hotels operated under four agreements. We leased all of these hotels to our wholly owned TRSs that are managed by hotel operating companies as of that date. At June 30, 2024, we also owned 749 service-focused retail properties leased to 178 tenants subject to “triple net” leases, where the tenants are generally responsible for the payment of operating expenses and capital expenditures. Our condensed consolidated statements of comprehensive income (loss) include hotel operating revenues and hotel operating expenses of our managed hotels and rental income and net lease operating expenses from our net lease properties.
Hotel Portfolio. As of June 30, 2024, we owned 220 hotels. During the three and six months ended June 30, 2024, the U.S. hotel industry generally realized increases in revenue per available room, or RevPAR, compared to the same periods in 2023. Our hotels produced year over year declines in RevPAR, which we believe is partially a result of disruption and displacement at certain of our hotels undergoing renovation and decreased business activity in areas where some of our hotels are located. The following table provides a summary for all of our hotels with these revenue metrics for the periods presented, which we believe are key indicators of performance at our hotels.

|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2024 |  | 2023 |  | Change |  | 2024 |  | 2023 |  | Change
All Hotels |  |  |  |  |  |  |  |  |  |  |  |
No. of hotels |  | 220 |  |  | 221 |  |  | (1) |  |  | 220 |  |  | 221 |  |  | (1) |
No. of rooms or suites |  | 37,697 |  |  | 37,777 |  |  | (80) |  |  | 37,697 |  |  | 37,777 |  |  | (80) |
Occupancy |  | 68.2 | % |  | 67.6 | % |  | 0.6 | pts |  | 62.2 | % |  | 62.7 | % |  | (0.5) | pts
ADR |  | $ | 142.99 |  |  | $ | 144.32 |  |  | (0.9) | % |  | $ | 141.56 |  |  | $ | 142.74 |  |  | (0.8) | %
RevPAR |  | $ | 97.50 |  |  | $ | 97.56 |  |  | (0.1) | % |  | $ | 88.10 |  |  | $ | 89.50 |  |  | (1.6) | %

Comparable Hotels Data. We present RevPAR, average daily rate, or ADR, and occupancy for the periods presented on a comparable basis to facilitate comparisons between periods. We define comparable hotels as those that were owned by us and were open and operating for the entirety of the periods being compared. For the three and six months ended June 30, 2024 and 2023, our comparable results exclude two hotels. One of the hotels was not owned for the entirety of the periods and the other hotel suspended operations during part of the periods presented. The following table provides a summary of these revenue metrics for the periods presented.
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|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2024 |  | 2023 |  | Change |  | 2024 |  | 2023 |  | Change
Comparable Hotels |  |  |  |  |  |  |  |  |  |  |  |
No. of hotels |  | 218 |  |  | 218 |  |  | — |  |  | 218 |  |  | 218 |  |  | — |
No. of rooms or suites |  | 37,349 |  |  | 37,349 |  |  | — |  |  | 37,349 |  |  | 37,349 |  |  | — |
Occupancy |  | 68.3 | % |  | 67.7 | % |  | 0.6 | pts |  | 62.2 | % |  | 62.7 | % |  | (0.5) | pts
ADR |  | $ | 141.96 |  |  | $ | 143.52 |  |  | (1.1) | % |  | $ | 140.00 |  |  | $ | 141.38 |  |  | (1.0) | %
RevPAR |  | $ | 96.91 |  |  | $ | 97.14 |  |  | (0.2) | % |  | $ | 87.13 |  |  | $ | 88.71 |  |  | (1.8) | %

Net Lease Portfolio. As of June 30, 2024, we owned 749 service-focused retail net lease properties with an aggregate of 13,384,219 square feet leased to 178 tenants subject to “triple net” leases (where the tenants are responsible for payments of operating expenses and capital expenditures) requiring annual minimum rents of $380,457. Our net lease properties were 97.3% occupied as of June 30, 2024 with a weighted (by annual minimum rent) average lease term of 8.4 years, operating under 139 brands in 21 distinct industries. TA is our largest tenant and as of June 30, 2024, leased 175 of our travel centers under five master leases that expire in 2033 and require annual minimum rents of $259,080. In addition, TA receives an annual credit of $25,000 as a result of prepaid rent. BP Corporation North America Inc. guarantees payment under the TA leases, subject to a cap.
Additional details of our hotel operating agreements and our net lease agreements are set forth in Note 6 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
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Results of Operations (amounts in thousands, except per share data)
Three Months Ended June 30, 2024 Compared to the Three Months Ended June 30, 2023

|  | Three Months Ended June 30,
|  | 2024 |  | 2023 |  | Increase (Decrease) |  | % Increase (Decrease)
Revenues: |  |  |  |  |  |  |  |
Hotel operating revenues |  | $ | 412,486 |  |  | $ | 404,327 |  |  | $ | 8,159 |  |  | 2.0 | %
Rental income |  | 100,462 |  |  | 99,452 |  |  | 1,010 |  |  | 1.0 | %
Total revenues |  | 512,948 |  |  | 503,779 |  |  | 9,169 |  |  | 1.8 | %
Expenses: |  |  |  |  |  |  |  |
Hotel operating expenses |  | 328,247 |  |  | 309,100 |  |  | 19,147 |  |  | 6.2 | %
Net lease operating expenses |  | 4,958 |  |  | 4,372 |  |  | 586 |  |  | 13.4 | %
Depreciation and amortization - hotels |  | 55,389 |  |  | 53,449 |  |  | 1,940 |  |  | 3.6 | %
Depreciation and amortization - net lease properties |  | 40,285 |  |  | 41,122 |  |  | (837) |  |  | (2.0) | %
Total depreciation and amortization |  | 95,674 |  |  | 94,571 |  |  | 1,103 |  |  | 1.2 | %
General and administrative |  | 10,681 |  |  | 12,420 |  |  | (1,739) |  |  | (14.0) | %
Transaction related costs |  | — |  |  | 931 |  |  | (931) |  |  | n/m
Loss on asset impairment, net |  | 34,887 |  |  | 9,005 |  |  | 25,882 |  |  | n/m
Total expenses |  | 474,447 |  |  | 430,399 |  |  | 44,048 |  |  | 10.2 | %
Loss on sale of real estate, net |  | (32) |  |  | (62) |  |  | 30 |  |  | (48.4) | %
Loss on equity securities, net |  | — |  |  | (593) |  |  | 593 |  |  | n/m
Interest income |  | 819 |  |  | 3,468 |  |  | (2,649) |  |  | (76.4) | %
Interest expense |  | (93,850) |  |  | (82,503) |  |  | (11,347) |  |  | 13.8 | %
Loss on early extinguishment of debt, net |  | (16,048) |  |  | (238) |  |  | (15,810) |  |  | n/m
Loss before income tax expense and equity in (losses) earnings of an investee |  | (70,610) |  |  | (6,548) |  |  | (64,062) |  |  | n/m
Income tax expense |  | (524) |  |  | (5,247) |  |  | 4,723 |  |  | (90.0) | %
Equity in (losses) earnings of an investee |  | (2,716) |  |  | 517 |  |  | (3,233) |  |  | n/m
Net loss |  | $ | (73,850) |  |  | $ | (11,278) |  |  | $ | (62,572) |  |  | n/m
Weighted average common shares outstanding (basic and diluted) |  | 165,198 |  |  | 164,902 |  |  | 296 |  |  | 0.2 | %
Net loss per common share (basic and diluted) |  | $ | (0.45) |  |  | $ | (0.07) |  |  | $ | (0.38) |  |  | n/m

References to changes in the income and expense categories below relate to the comparison of consolidated results for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
Hotel operating revenues. The increase in hotel operating revenues is primarily a result of a hotel acquisition ($5,899) in the 2023 period and increased occupancy at certain hotels during the 2024 period ($2,801), partially offset by the sale of certain of our hotels since April 1, 2023 ($541). Additional operating statistics of our hotels are included in the tables beginning on page 33.
Rental income. The increase in rental income is primarily a result of the amended TA leases that were effective starting in May 2023 ($2,574), partially offset by decreases in our other net lease portfolio as a result of lower rental income recognized and the sale of certain net lease properties since April 1, 2023 ($1,564).
Hotel operating expenses. The increase in hotel operating expenses is primarily a result of a hotel acquisition ($4,361) in the 2023 period, increases in wages and benefits ($6,903), property insurance ($4,097) and other operating expenses ($4,437) in the 2024 period, partially offset by our sale of certain hotels since April 1, 2023 ($651).
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Net lease operating expenses. The increase in net lease operating expenses is primarily the result of increased property management fees in the 2024 period ($565) and increases in other operating expenses at certain net lease properties ($727), partially offset by our sale of certain net lease properties since April 1, 2023 ($706).
Depreciation and amortization - hotels. The increase in depreciation and amortization - hotels is primarily a result of depreciation and amortization related to capital expenditures made since April 1, 2023 and our acquisition of a hotel in June 2023 ($4,300), partially offset by certain of our depreciable assets becoming fully depreciated since April 1, 2023 ($2,360).
Depreciation and amortization - net lease properties. The decrease in depreciation and amortization - net lease properties is primarily a result of our sale of certain net lease properties since April 1, 2023 ($837).
General and administrative. The decrease in general and administrative costs is primarily due to decreases in other professional fees ($891) and business management fees ($848) in the 2024 period.
Transaction related costs. Transaction related costs for the 2023 period primarily consisted of costs related to hotel rebranding activity and the demolition of certain vacant properties.
Loss on asset impairment, net. We recorded a $34,887 net loss on asset impairment during the 2024 period to reduce the carrying value of eight hotels and three net lease properties to their estimated fair value less costs to sell. We recorded a $9,005 net loss on asset impairment during the 2023 period to reduce the carrying value of 16 net lease properties to their estimated fair value less costs to sell.
Loss on sale of real estate, net. We recorded a $32 net loss on sale of real estate during the 2024 period in connection with the sale of one hotel. We recorded a $62 net loss on sale of real estate during the 2023 period in connection with the sale of two net lease properties.
Loss on equity securities, net. Loss on equity securities, net represents the adjustment to the carrying value of our former investment in shares of TA common stock to its fair value.
Interest income. The decrease in interest income is due to lower average cash balances invested during the 2024 period compared to the 2023 period.
Interest expense. The increase in interest expense is primarily due to higher weighted average interest rates during the 2024 period compared to the 2023 period.
Loss on early extinguishment of debt, net. We recorded a $16,048 loss on early extinguishment of debt, net in the 2024 period as a result of the redemption and purchase of certain senior notes in the 2024 period. We recorded a $238 loss on early extinguishment of debt, net due to the write off of certain deferred financing costs relating to the amendment of our revolving credit facility in the 2023 period.
Income tax expense. The decrease in income tax expense is primarily due to decreases in state tax expense ($2,796) and foreign tax expense ($1,927) during the 2024 period compared to the 2023 period.
Equity in (losses) earnin gs of an investee. Equity in (losses) earnings of an investee represents our proportionate share of the losses and earnings of Sonesta.
Net loss. Our net loss and net loss per common share (basic and diluted) each increased in the 2024 period compared to the 2023 period primarily due to the revenue and expense changes discussed above.
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Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023

|  | Six Months Ended June 30,
|  | 2024 |  | 2023 |  | Increase (Decrease) |  | % Increase (Decrease)
Revenues: |  |  |  |  |  |  |  |
Hotel operating revenues |  | $ | 748,722 |  |  | $ | 739,123 |  |  | $ | 9,599 |  |  | 1.3 | %
Rental income |  | 200,476 |  |  | 193,865 |  |  | 6,611 |  |  | 3.4 | %
Total revenues |  | 949,198 |  |  | 932,988 |  |  | 16,210 |  |  | 1.7 | %
Expenses: |  |  |  |  |  |  |  |
Hotel operating expenses |  | 633,333 |  |  | 608,666 |  |  | 24,667 |  |  | 4.1 | %
Net lease operating expenses |  | 9,681 |  |  | 8,277 |  |  | 1,404 |  |  | 17.0 | %
Depreciation and amortization - hotels |  | 110,475 |  |  | 106,834 |  |  | 3,641 |  |  | 3.4 | %
Depreciation and amortization - net lease properties |  | 78,306 |  |  | 87,776 |  |  | (9,470) |  |  | (10.8) | %
Total depreciation and amortization |  | 188,781 |  |  | 194,610 |  |  | (5,829) |  |  | (3.0) | %
General and administrative |  | 21,187 |  |  | 23,331 |  |  | (2,144) |  |  | (9.2) | %
Transaction related costs |  | — |  |  | 1,818 |  |  | (1,818) |  |  | n/m
Loss on asset impairment, net |  | 37,338 |  |  | 9,005 |  |  | 28,333 |  |  | n/m
Total expenses |  | 890,320 |  |  | 845,707 |  |  | 44,613 |  |  | 5.3 | %
(Loss) gain on sale of real estate, net |  | (2,995) |  |  | 41,836 |  |  | (44,831) |  |  | (107.2) | %
Gain on equity securities, net |  | — |  |  | 48,837 |  |  | (48,837) |  |  | n/m
Interest income |  | 2,781 |  |  | 6,254 |  |  | (3,473) |  |  | (55.5) | %
Interest expense |  | (185,264) |  |  | (164,083) |  |  | (21,181) |  |  | 12.9 | %
Loss on early extinguishment of debt, net |  | (16,048) |  |  | (282) |  |  | (15,766) |  |  | n/m
(Loss) income before income tax expense and equity in losses of an investee |  | (142,648) |  |  | 19,843 |  |  | (162,491) |  |  | n/m
Income tax expense |  | (1,531) |  |  | (1,467) |  |  | (64) |  |  | 4.4 | %
Equity in losses of an investee |  | (8,054) |  |  | (3,704) |  |  | (4,350) |  |  | 117.4 | %
Net (loss) income |  | $ | (152,233) |  |  | $ | 14,672 |  |  | $ | (166,905) |  |  | n/m
Weighted average common shares outstanding (basic and diluted) |  | 165,178 |  |  | 164,884 |  |  | 294 |  |  | 0.2 | %
Net (loss) income per common share (basic and diluted) |  | $ | (0.92) |  |  | $ | 0.09 |  |  | $ | (1.01) |  |  | n/m

References to changes in the income and expense categories below relate to the comparison of consolidated results for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Hotel operating revenues. The increase in hotel operating revenues is primarily a result of a hotel acquisition in the 2023 period ($15,785) and increases in food and beverage and other ancillary revenue in the 2024 period ($2,184), partially offset by our sale of certain hotels since January 1, 2023 ($8,370). Additional operating statistics of our hotels are included in the tables beginning on page 33.
Rental income. The increase in rental income is primarily a result of the amended TA leases that were effective starting in May 2023 ($8,267), partially offset by decreases in our other net lease portfolio as a result of lower rental income recognized and the sale of certain net lease properties since January 1, 2023 ($1,656).
Hotel operating expenses. The increase in hotel operating expenses is primarily a result of a hotel acquisition ($10,936) in the 2023 period and increases in wages and benefits ($12,373), property insurance ($8,460) and other operating expenses ($4,360) in the 2024 period, partially offset by our sale of certain hotels since January 1, 2023 ($11,462).
Net lease operating expenses. The increase in net lease operating expenses is primarily the result of increased property management fees in the 2024 period ($1,114) and increases in other operating expenses at certain net lease properties ($1,301), partially offset by our sale of certain net lease properties since January 1, 2023 ($1,011).
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Depreciation and amortization - hotels. The increase in depreciation and amortization - hotels is primarily a result of depreciation and amortization related to capital expenditures made since January 1, 2023 and our acquisition of a hotel in June 2023 ($8,353), partially offset by certain of our depreciable assets becoming fully depreciated since January 1, 2023 ($4,712).
Depreciation and amortization - net lease properties. The decrease in depreciation and amortization -net lease properties is primarily a result of our sale of certain net lease properties since January 1, 2023 ($6,718) and certain of our depreciable assets becoming fully depreciated since January 1, 2023 ($2,752).
General and administrative. The decrease in general and administrative costs in the 2024 period is primarily due to decreases in business management fees ($1,476) and other professional fees ($668).
Transaction related cos ts. Transaction related costs for the 2023 period primarily consisted of costs related to hotel rebranding activity, the demolition of certain vacant properties and potential acquisitions.
Loss on asset impairment, net. We recorded a $37,338 net loss on asset impairment during the 2024 period to reduce the carrying value of eight hotels and six net lease properties to their estimated fair value less costs to sell. We recorded a $9,005 net loss on asset impairment during the 2023 period to reduce the carrying value of 16 net lease properties to their estimated fair value less costs to sell.
(Loss) gain on sale of real estate, net. We recorded a $2,995 net loss on sale of real estate during the 2024 period in connection with the sale of one hotel and three net lease properties. We recorded a $41,836 net gain on sale of real estate during the 2023 period in connection with the sale of 18 hotels and two net lease properties.
Gain on equity securities, net. Gain on equity securities, net represents the adjustment to the carrying value of our former investment in shares of TA common stock to its fair value.
Interest income. The decrease in interest income is due to lower average cash balances invested during the 2024 period compared to the 2023 period.
Interest expense. The increase in interest expense is primarily due to higher weighted average interest rates during the 2024 period compared to the 2023 period.
Loss on early extinguishment of debt, net. We recorded a $16,048 loss on early extinguishment of debt, net in the 2024 period as a result of the redemption and purchase of certain senior notes in the 2024 period. We recorded a $282 loss on early extinguishment of debt, net in connection with our redemption of certain senior unsecured notes and the write off of certain deferred financing costs relating to the amendment of our revolving credit facility in the 2023 period.
Income tax expense. The increase in income tax expense is primarily due to an increase in our state income tax expense ($122) during the 2024 period, partially offset by a decrease in our foreign sourced income tax expense ($58) during the 2024 period.
Equity in losses of an investee. Equity in losses of an investee represents our proportionate share of the losses of Sonesta.
Net (loss) income. Our net (loss) income and net (loss) income per common share (basic and diluted) each decreased in the 2024 period compared to the 2023 period primarily due to the revenue and expense changes discussed above.
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Liquidity and Capital Resources (dollars in thousands, except per share amounts)
Our Managers and Tenants
As of June 30, 2024, all 220 of our hotels were managed by four hotel operating companies. Our 749 service-focused retail net lease properties were leased to 178 tenants as of June 30, 2024. The costs of operating and maintaining our properties are generally paid by the hotel managers as agents for us or by our tenants for their own account. Our hotel managers and tenants derive their funding for property operating expenses and for returns and rents due to us generally from property operating revenues and, to the extent these parties themselves fund our owner’s priority returns and rents, from their separate resources. As of June 30, 2024, our hotel managers included Sonesta (195 hotels), Hyatt (17 hotels), Radisson (seven hotels) and IHG (one hotel). TA is our largest tenant (175 travel centers).
We recorded reserves for uncollectable amounts and reduced rental income by $377 and $1,042 for the three and six months ended June 30, 2024, respectively, based on our assessment of the collectability of rents. We recorded reserves for uncollectible amounts and reduced rental income by $1,813 and $5,353 for the three and six months ended June 30, 2023, respectively, based on our assessment of the collectability of rents. We had reserves for uncollectable rents of $4,366 and $3,436 as of June 30, 2024 and December 31, 2023, respectively, included in other assets, net in our condensed consolidated balance sheets.
We define net lease coverage as earnings before interest, taxes, depreciation, amortization and rent, or EBITDAR, divided by the annual minimum rent due to us weighted by the minimum rent of the property to total minimum rents of the net lease portfolio. Tenants with no minimum rent required under the lease are excluded. EBITDAR amounts used to determine rent coverage are generally for the latest twelve-month period, based on the most recent operating information, if any, furnished by our tenants. Operating statements furnished by our tenants often are unaudited and, in certain cases, may not have been prepared in accordance with GAAP and are not independently verified by us. In instances where we do not have tenant financial information, we calculate an implied coverage ratio for the period based on other tenants with available financial statements operating the same brand or within the same industry. As a result, we believe using this implied coverage metric provides a more reasonable estimated representation of recent operating results and the financial condition for those tenants. Our net lease properties generated coverage of 2.25x and 2.94x as of June 30, 2024 and 2023, respectively.
Our Operating Liquidity and Capital Resources
Our principal sources of funds to meet operating and capital expenses, debt service obligations and distributions to our shareholders are owner’s priority returns from our hotels, rents from our net lease portfolio and borrowings under our revolving credit facility. We receive owner’s priority returns and rents from our managers and tenants monthly. We may receive additional returns, percentage rents and our share of the operating profits of our managed hotels after payment of management fees and other deductions, if any, either monthly or quarterly, and these amounts are usually subject to annual reconciliations. We believe these sources of funds will be sufficient to meet our operating expenses and capital expenditures, pay debt service obligations and make distributions to our shareholders for the next twelve months and for the foreseeable future thereafter. However, as a result of economic conditions, including if the U.S. enters an economic recession, or otherwise, our managers and tenants may become unable or unwilling to pay owner’s priority returns and rents to us when due, and, as a result, our cash flows and net income would decline and we may need to reduce the amount of, or even eliminate, our distributions to common shareholders.
The following is a summary of our sources and uses of cash flows for the periods presented:

|  | Six Months Ended June 30,
|  | 2024 |  | 2023
Cash and cash equivalents and restricted cash at the beginning of the period |  | $ | 197,830 |  |  | $ | 45,420 |
Net cash provided by (used in): |  |  |  |
Operating activities |  | 42,893 |  |  | 328,503 |
Investing activities |  | (142,799) |  |  | 103,960 |
Financing activities |  | (68,468) |  |  | (27,258) |
Cash and cash equivalents and restricted cash at the end of the period |  | $ | 29,456 |  |  | $ | 450,625 |

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The decrease in cash flow provided by operating activities in the 2024 period is primarily due to $188,000 of prepaid rent received from TA in the 2023 period, higher interest expense and lower hotel returns in the 2024 period. The change from cash flow provided by investing activities in the 2023 period to cash flow used in investing activities in the 2024 period is primarily due to proceeds from the sale of TA common shares and higher proceeds from the sale of real estate in the 2023 period and increased real estate improvements during the 2024 period. The increase in cash flow used in financing activities in the 2024 period is primarily due to higher net borrowings in the 2023 period.
We maintain our qualification for taxation as a REIT under the IRC by meeting certain requirements. We lease 220 hotels to our wholly owned TRSs that are managed by hotel operating companies. As a REIT, we do not expect to pay federal income taxes on the majority of our income; however, the income realized by our TRSs in excess of the rent they pay to us is subject to U.S. federal income tax at corporate income tax rates. In addition, the income we receive from our hotels in Canada and Puerto Rico is subject to taxes in those jurisdictions and we are subject to taxes in certain states where we have properties despite our qualification for taxation as a REIT.
Our Investment and Financing Liquidity and Capital Resources
Our hotel operating agreements generally provide that, if necessary, we may provide our managers with funding for capital improvements to our hotels in excess of amounts otherwise available in escrowed FF&E reserves or when no FF&E reserves are available. During the six months ended June 30, 2024, we funded $130,519 for capital improvements in excess of FF&E reserves available to our hotels. We currently expect to fund $195,000 for capital improvements to certain hotels during the last six months of 2024 using cash on hand and borrowings under our revolving credit facility.
Various percentages of total sales at some of our hotels are escrowed as FF&E reserves to fund future capital improvements. We own all the FF&E escrows for our hotels. During the six months ended June 30, 2024, certain of our hotel managers deposited $2,597 to these accounts and spent $2,869 from the FF&E reserve escrow accounts to renovate and refurbish our hotels. As of June 30, 2024, there was $5,411 on deposit in these escrow accounts, which was held directly by us and is reflected in our condensed consolidated balance sheets as restricted cash.
Our net lease portfolio leases do not require FF&E escrow deposits and tenants under these leases are generally required to maintain the leased properties, including structural and non-structural components. We may provide tenant improvement allowances to tenants in certain cases or may develop sites with the intent to lease them. During the six months ended June 30, 2024, we funded $1,696 for capital improvements to our net lease properties. As of June 30, 2024, we had $2,192 of unspent leasing-related obligations related to certain of our net lease tenants.
During the six months ended June 30, 2024, we sold one hotel with 84 rooms for a sale price of $3,315, excluding closing costs, and three net lease properties with an aggregate of 34,849 square feet for an aggregate sales price of $2,932, excluding closing costs. From July 1, 2024 through August 2, 2024, we sold two hotels with an aggregate of 346 keys for an aggregate sales price of $10,800, excluding closing costs, and three vacant net lease properties with an aggregate of 9,388 square feet for an aggregate sales price of $1,800, excluding closing costs. As of August 2, 2024, we have entered into agreements to sell 16 hotels with an aggregate of 1,930 keys for an aggregate sales price of $113,200, excluding closing costs, and one net lease property with 3,381 square feet for a sales price of $1,250, excluding closing costs. These pending sales are subject to conditions; accordingly, we cannot be sure that we will complete these sales, that these sales will not be delayed or that the terms will not change. We continue to market three hotels with an aggregate of 407 keys and nine net lease properties with an aggregate of 129,560 square feet for sale. We believe it is probable that the sales of these properties will be completed within one year.
In March 2024, we made a $3,392 pro rata capital contribution to Sonesta to support its growth initiatives, including its franchising efforts, using cash on hand. We continue to maintain our 34% ownership in Sonesta after giving effect to this contribution.
During the six months ended June 30, 2024, we declared and paid regular quarterly distributions to our common shareholders using cash on hand as follows:

Declaration Date |  | Record Date |  | Paid Date |  | Dividend Per Common Share |  | Total Distributions
January 11, 2024 |  | January 22, 2024 |  | February 15, 2024 |  | $ | 0.20 |  |  | $ | 33,154 |
April 11, 2024 |  | April 22, 2024 |  | May 16, 2024 |  | 0.20 |  |  | 33,152 |
|  |  |  |  |  | $ | 0.40 |  |  | $ | 66,306 |

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On July 11, 2024, we declared a regular quarterly distribution to common shareholders of record as of July 22, 2024 of $0.20 per common share, or approximately $33,178. We expect to pay this distribution on or about August 15, 2024 using cash on hand.
In order to meet cash needs that may result from our desire or need to make distributions or pay operating or capital expenses, we maintain a $650,000 secured revolving credit facility which is governed by a credit agreement. This revolving credit facility is available for general business purposes, including acquisitions. We can borrow, repay, and reborrow funds available under the revolving credit facility until maturity and no principal repayments are due until maturity. Availability of borrowings under our credit agreement is subject to ongoing minimum performance and market values of the collateral properties, satisfying certain financial covenants and other credit facility conditions. The maturity date of our revolving credit facility is June 29, 2027, and, subject to the payment of an extension fee and meeting certain other conditions, we have an option to further extend the stated maturity date by two additional six-month periods.
Interest payable on drawings under our revolving credit facility is based on SOFR plus a margin ranging from 1.50% to 3.00% based on our leverage ratio, as defined in our credit agreement, which was 2.50% as of June 30, 2024. As collateral for all loans and other obligations under the facility, certain of our subsidiaries pledged all of their respective equity interests in certain of our direct and indirect property owning subsidiaries, and our pledged subsidiaries provided first mortgage liens on 72 properties, including 69 hotels and three net lease properties, with an aggregate undepreciated carrying value of $1,738,959 as of June 30, 2024. We also pay unused commitment fees of 20 to 30 basis points per annum on the total amount of lending commitments under our revolving credit facility based on amounts outstanding. As of June 30, 2024 and 2023, the annual interest rate payable on borrowings under our revolving credit facility was 7.83% and 7.64%, respectively. We had no borrowings outstanding under our revolving credit facility as of June 30, 2024.
In June 2024, we issued $700,000 aggregate principal amount of the 2029 Notes and $500,000 aggregate principal amount of the 2032 Notes in underwritten public offerings. The aggregate net proceeds from these notes were $1,162,284, after underwriting discounts and other estimated offering expenses. These notes are fully and unconditionally guaranteed, on a joint and several basis and on a senior unsecured basis, by all of our subsidiaries, except for our foreign subsidiaries and certain other excluded subsidiaries. Such other excluded subsidiaries include, but are not limited to, subsidiaries whose equity has been pledged to secure borrowings under our credit agreement and our 8.625% senior secured notes due 2031 and subsidiaries whose assets secure our net lease mortgage notes. We used the net proceeds from these notes and cash on hand to redeem all of our outstanding 7.50% senior unsecured notes due 2025 and purchase and satisfy and discharge all of our outstanding 4.50% senior unsecured notes due 2025.
Our debt maturities (other than our revolving credit facility) as of June 30, 2024 were as follows:

Year |  | Maturity
2024 |  | $ | 979 |
2025 |  | 1,958 |
2026 |  | 801,958 |
2027 |  | 851,958 |
2028 |  | 1,000,737 |
2029 |  | 1,125,000 |
2030 |  | 400,000 |
2031 |  | 1,000,000 |
2032 |  | 500,000 |
|  | $ | 5,682,590 |

None of our senior note debt obligations require principal or sinking fund payments prior to their maturity dates. Our mortgage notes require monthly principal payments as described in Part I, Item 3 of this Quarterly Report on Form 10-Q.
We currently expect to use cash on hand, the cash flows from our operations, borrowings under our revolving credit facility, net proceeds from any asset sales and net proceeds of offerings of equity or the incurrence of debt to fund our operations, capital expenditures, investments, future debt maturities, distributions to our shareholders and other general business purposes.
When significant amounts are outstanding for an extended period of time under our revolving credit facility, or the maturities of our indebtedness approach, we currently expect to explore refinancing alternatives. Such alternatives may include
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incurring additional debt, issuing new equity securities and the sale of properties. We have an effective shelf registration statement that allows us to issue public securities on an expedited basis, but it does not assure that there will be buyers for such securities. We may also seek to participate in joint ventures or other arrangements that may provide us additional sources of financing. We may also assume mortgage debt on properties we may acquire or obtain mortgage financing on our existing properties.
While we believe we will generally have access to various types of financings, including debt or equity, to fund our future acquisitions and to pay our debts and other obligations, we cannot be sure that we will be able to complete any debt or equity offerings or other types of financings or that our cost of any future public or private financings will not increase.
Our ability to complete, and the costs associated with, future debt transactions depend primarily upon credit market conditions and our then perceived creditworthiness. We have no control over market conditions. Our credit ratings depend upon evaluations by credit rating agencies of our business practices and plans, including our ability to maintain our earnings, to stagger our debt maturities and to balance our use of debt and equity capital so that our financial performance and leverage ratios afford us flexibility to withstand any reasonably anticipated adverse changes. Similarly, our ability to raise equity capital in the future will depend primarily upon equity capital market conditions and our ability to conduct our business to maintain and grow our operating cash flows. We intend to conduct our business activities in a manner which will afford us reasonable access to capital for investment and financing activities. However, as discussed elsewhere in this Quarterly Report on Form 10-Q, the impacts of the current, and possibly future, inflationary conditions, increasing or sustained high interest rates and a possible economic recession are uncertain and may have various negative consequences on us and our operations, including a decline in financing availability and increased costs for financing. Further, such conditions could also disrupt the capital markets generally and limit our access to financing from public sources or on favorable terms, particularly if the global financial markets experience significant disruptions.
Debt Covenants
Our debt obligations at June 30, 2024 consisted of $5,075,000 aggregate principal amounts of senior notes and $607,590 aggregate principal amounts of mortgage notes secured by 308 net lease retail properties. For further information regarding our indebtedness, see Note 8 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Our publicly and privately issued senior notes are governed by our indentures and related supplements. These indentures and related supplements and our credit agreement contain covenants that generally restrict our ability to incur debts, including debts secured by mortgages on our properties, in excess of calculated amounts, and require us to maintain various financial ratios. Our credit agreement, net lease mortgage notes, secured senior notes and unsecured senior notes, indentures and their supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes RMR ceasing to act as our business manager. As of June 30, 2024, we believe we were in compliance with all of the covenants under our indentures and their supplements, net lease mortgage notes and our credit agreement.
Senior Notes Indenture Covenants
The following table summarizes the results of the financial tests required by the indentures and related supplements for our senior secured and unsecured notes as of June 30, 2024:

|  | Actual Results |  | Covenant Requirement
Total debt / adjusted total assets |  | 53.5% |  | Maximum of 60%
Secured debt / adjusted total assets |  | 15.1% |  | Maximum of 40%
Consolidated income available for debt service / debt service |  | 1.60x |  | Minimum of 1.50x
Total unencumbered assets / unsecured debt |  | 173.6% |  | Minimum 150%
Total unencumbered assets in guarantor subsidiaries / senior guaranteed unsecured debt |  | 4.10x |  | Minimum of 2.20x

As of June 30, 2024, adjusted total assets for covenant purposes as defined in our senior notes indentures were $10,618,426 and assets encumbered under our revolving credit facility, serving as collateral for our net lease mortgage notes or secured senior notes represented $3,543,066 of adjusted total assets, as defined in our senior notes indentures. Our unencumbered hotels, travel centers, other net lease properties and other corporate assets represent $4,470,481, $1,605,020, $858,664 and $141,195 of adjusted total assets, respectively.
The following table presents the calculation of adjusted total assets to total assets in accordance with GAAP:
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Total assets | $ | 7,121,661 |
Plus: accumulated depreciation | 3,164,885 |
Plus: impairment and other adjustments to reflect original cost of real estate assets | 563,515 |
Less: accounts receivable and intangibles | (231,635) |
Adjusted total assets | $ | 10,618,426 |

Our ability to incur additional debt is subject to meeting the required covenant levels and subject to the provisions of our credit agreement and senior notes indentures.
Acceleration and Cross-Default
Our indentures and their supplements contain cross default provisions to any other debt of $50,000 or more. Similarly, our credit agreement has cross default provisions to other indebtedness that is recourse of $25,000 or more and indebtedness that is non-recourse of $75,000 or more. Neither our indentures and their supplements nor our credit agreement contain provisions for acceleration which could be triggered by a change in our debt ratings.
Supplemental Guarantor Information
Our 5.50% senior notes due 2027, or the 2027 Notes, the 2029 Notes and the 2032 Notes are fully and unconditionally guaranteed, on a joint and several basis and on a senior unsecured basis, by all of our subsidiaries, except for certain excluded subsidiaries, including our foreign subsidiaries and our subsidiaries pledged under our credit agreement and our net lease mortgage notes. The notes and the guarantees will be effectively subordinated to all of our and the subsidiary guarantors’ secured indebtedness, respectively, to the extent of the value of the collateral securing such secured indebtedness, and will be structurally subordinated to all indebtedness and other liabilities and any preferred equity of any of our subsidiaries that do not guarantee the notes. Our remaining $2,425,000 of senior unsecured notes do not have the benefit of any guarantees.
A subsidiary guarantor’s guarantee of the 2027 Notes, the 2029 Notes and the 2032 Notes and all other obligations of such subsidiary guarantor under the indentures governing the notes will automatically terminate and such subsidiary guarantor will automatically be released from all of its obligations under such subsidiary guarantee and such indenture under certain circumstances, including on or after the date on which (a) the notes have received a rating equal to or higher than Baa2 (or the equivalent) by Moody’s Investor Services, or Moody’s, or BBB (or the equivalent) by Standard & Poor’s Ratings Services, or S&P, or if Moody’s or S&P ceases to rate the notes for reasons outside of our control, the equivalent investment grade rating from any other rating agency and (b) no default or event of default has occurred and is continuing under the indenture. Our non-guarantor subsidiaries are separate and distinct legal entities and will have no obligation, contingent or otherwise, to pay any amounts due on these notes or the guarantees, or to make any funds available therefor, whether by dividend, distribution, loan or other payments. The rights of holders of these notes to benefit from any of the assets of our non-guarantor subsidiaries are subject to the prior satisfaction of claims of those subsidiaries’ creditors and any preferred equity holders. As a result, these notes and the related guarantees will be effectively subordinated to all of our and the subsidiary guarantors’ secured indebtedness, respectively, to the extent of the value of the collateral securing such secured indebtedness, and will be structurally subordinated to all indebtedness and other liabilities of our subsidiaries that do not guarantee these notes, including guarantees of or pledges under other indebtedness of ours, payment obligations under lease agreements, trade payables and preferred equity.
The following table presents summarized financial information for us and the subsidiary guarantors, on a combined basis, after elimination of (i) intercompany transactions and balances among us and the subsidiary guarantors, and (ii) equity in earnings from, and any investments in, any of our non-guarantor subsidiaries:
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|  | As of June 30, 2024 |  | As of December 31, 2023
Real estate properties, net (1) |  | $ | 4,240,032 |  |  | $ | 4,372,682 |
Other assets, net |  | 397,921 |  |  | 552,196 |
Indebtedness, net |  | $ | 4,984,074 |  |  | $ | 4,961,344 |
Intercompany balances (2) |  | 735,692 |  |  | 752,146 |
Other liabilities |  | 368,590 |  |  | 395,433 |

|  | Six Months Ended June 30, 2024
Revenues |  | $ | 820,540 |
Expenses |  | 922,216 |
Net loss |  | (101,676) |

(1)Real estate properties, net as of June 30, 2024 includes $163,130 of properties owned directly by us and not included in the assets of the subsidiary guarantors.
(2)Intercompany balances represent payables to non-guarantor subsidiaries.
Related Person Transactions
We have relationships and historical and continuing transactions with RMR, RMR Inc., TA and Sonesta and others related to them. For further information about these and other such relationships and related person transactions, see Notes 6, 10 and 11 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, our 2023 Annual Report, our definitive Proxy Statement for our 2024 Annual Meeting of Shareholders and our other filings with the Securities and Exchange Commission, or SEC. In addition, see the section captioned “Risk Factors” in our 2023 Annual Report for a description of risks that may arise as a result of these and other related person transactions and relationships. We may engage in additional transactions with related persons, including businesses to which RMR or its subsidiaries provide management services.
Critical Accounting Estimates
The preparation of our condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the condensed consolidated financial statements include consolidation of VIEs, purchase price allocations, the determination of useful lives of fixed assets, classification of leases, and the assessment of the carrying values and impairment of real estate intangible assets and equity investments.
A discussion of our critical accounting estimates is included in our 2023 Annual Report. There have been no significant changes in our critical accounting estimates since the year ended December 31, 2023.
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Property and Operating Statistics (dollars in thousands, except hotel statistics)
As of June 30, 2024, we owned and managed a diverse portfolio of hotels and net lease properties across the United States and in Puerto Rico and Canada with 148 distinct brands across 22 industries.
Hotel Portfolio
The following tables summarize the operating statistics, including occupancy, ADR, and RevPAR reported to us by our hotel managers by hotel brand for the periods indicated. All operating data presented are based upon the operating results provided by our hotel managers for the indicated periods. We have not independently verified our managers’ operating data.

Comparable Hotels* |  |  |  | No. of Rooms or Suites |  | Occupancy |  | ADR |  | RevPAR
|  | Service Level |  | No. of Hotels |  |  | Three Months Ended June 30, |  | Three Months Ended June 30, |  | Three Months Ended June 30,
Brand |  |  |  |  | 2024 | 2023 | Change |  | 2024 | 2023 | Change |  | 2024 | 2023 | Change
Sonesta Hotels & Resorts® |  | Full Service |  | 22 |  |  | 7,153 |  |  | 64.1 | % | 68.3 | % | (4.2) | pts |  | $ | 158.19 |  | $ | 156.21 |  | 1.3 | % |  | $ | 101.45 |  | $ | 106.65 |  | (4.9) | %
Royal Sonesta Hotels® |  | Full Service |  | 17 |  |  | 5,663 |  |  | 67.5 | % | 63.5 | % | 4.0 | pts |  | 239.45 |  | 246.41 |  | (2.8) | % |  | 161.70 |  | 156.58 |  | 3.3 | %
Radisson® Hotels & Resorts |  | Full Service |  | 5 |  |  | 1,149 |  |  | 71.3 | % | 64.5 | % | 6.8 | pts |  | 146.39 |  | 145.76 |  | 0.4 | % |  | 104.33 |  | 94.05 |  | 10.9 | %
Crowne Plaza® |  | Full Service |  | 1 |  |  | 495 |  |  | 69.4 | % | 69.3 | % | 0.1 | pts |  | 144.36 |  | 140.51 |  | 2.7 | % |  | 100.25 |  | 97.44 |  | 2.9 | %
Country Inn & Suites® by Radisson |  | Full Service |  | 2 |  |  | 346 |  |  | 74.6 | % | 74.8 | % | (0.2) | pts |  | 152.57 |  | 145.49 |  | 4.9 | % |  | 113.89 |  | 108.82 |  | 4.7 | %
Full Service Total/Average |  | 47 |  |  | 14,806 |  |  | 66.4 | % | 66.3 | % | 0.1 | pts |  | 188.17 |  | 187.96 |  | 0.1 | % |  | 124.96 |  | 124.70 |  | 0.2 | %
Sonesta Select® |  | Select Service |  | 44 |  |  | 6,427 |  |  | 60.8 | % | 58.2 | % | 2.6 | pts |  | 116.90 |  | 118.30 |  | (1.2) | % |  | 71.09 |  | 68.81 |  | 3.3 | %
Hyatt Place® |  | Select Service |  | 17 |  |  | 2,107 |  |  | 70.9 | % | 74.2 | % | (3.3) | pts |  | 124.16 |  | 126.38 |  | (1.8) | % |  | 88.00 |  | 93.81 |  | (6.2) | %
Select Service Total/Average |  | 61 |  |  | 8,534 |  |  | 63.3 | % | 62.1 | % | 1.2 | pts |  | 118.91 |  | 120.68 |  | (1.5) | % |  | 75.27 |  | 74.98 |  | 0.4 | %
Sonesta ES Suites® |  | Extended Stay |  | 60 |  |  | 7,643 |  |  | 72.6 | % | 71.5 | % | 1.1 | pts |  | 125.90 |  | 131.59 |  | (4.3) | % |  | 91.37 |  | 94.05 |  | (2.8) | %
Sonesta Simply Suites® |  | Extended Stay |  | 50 |  |  | 6,366 |  |  | 74.1 | % | 73.8 | % | 0.3 | pts |  | 90.93 |  | 90.55 |  | 0.4 | % |  | 67.34 |  | 66.79 |  | 0.8 | %
Extended Stay Total/Average |  | 110 |  |  | 14,009 |  |  | 73.2 | % | 72.5 | % | 0.7 | pts |  | 109.83 |  | 112.75 |  | (2.6) | % |  | 80.45 |  | 81.75 |  | (1.6) | %
Comparable Hotels Total/Average |  | 218 |  |  | 37,349 |  |  | 68.3 | % | 67.7 | % | 0.6 | pts |  | $ | 141.96 |  | $ | 143.52 |  | (1.1) | % |  | $ | 96.91 |  | $ | 97.14 |  | (0.2) | %
Comparable Hotels* |  |  |  | No. of Rooms or Suites |  | Occupancy |  | ADR |  | RevPAR
|  | Service Level |  | No. of Hotels |  |  | Six Months Ended June 30, |  | Six Months Ended June 30, |  | Six Months Ended June 30,
Brand |  |  |  |  | 2024 | 2023 | Change |  | 2024 | 2023 | Change |  | 2024 | 2023 | Change
Sonesta Hotels & Resorts® |  | Full Service |  | 22 |  |  | 7,153 |  |  | 59.3 | % | 62.6 | % | (3.3) | pts |  | $ | 155.66 |  | $ | 154.48 |  | 0.8 | % |  | $ | 92.31 |  | $ | 96.74 |  | (4.6) | %
Royal Sonesta Hotels® |  | Full Service |  | 17 |  |  | 5,663 |  |  | 59.1 | % | 55.5 | % | 3.6 | pts |  | 238.28 |  | 243.26 |  | (2.0) | % |  | 140.90 |  | 134.89 |  | 4.5 | %
Radisson® Hotels & Resorts |  | Full Service |  | 5 |  |  | 1,149 |  |  | 65.9 | % | 64.8 | % | 1.1 | pts |  | 148.54 |  | 149.79 |  | (0.8) | % |  | 97.87 |  | 97.03 |  | 0.9 | %
Crowne Plaza® |  | Full Service |  | 1 |  |  | 495 |  |  | 67.0 | % | 63.9 | % | 3.1 | pts |  | 146.59 |  | 140.18 |  | 4.6 | % |  | 98.21 |  | 89.61 |  | 9.6 | %
Country Inn & Suites® by Radisson |  | Full Service |  | 2 |  |  | 346 |  |  | 67.5 | % | 66.9 | % | 0.6 | pts |  | 144.66 |  | 138.38 |  | 4.5 | % |  | 97.59 |  | 92.59 |  | 5.4 | %
Full Service Total/Average |  | 47 |  |  | 14,806 |  |  | 60.2 | % | 60.2 | % | — | pts |  | 185.46 |  | 184.77 |  | 0.4 | % |  | 111.64 |  | 111.17 |  | 0.4 | %
Sonesta Select® |  | Select Service |  | 44 |  |  | 6,427 |  |  | 55.2 | % | 54.7 | % | 0.5 | pts |  | 115.85 |  | 118.57 |  | (2.3) | % |  | 63.90 |  | 64.82 |  | (1.4) | %
Hyatt Place® |  | Select Service |  | 17 |  |  | 2,107 |  |  | 59.2 | % | 69.1 | % | (9.9) | pts |  | 122.44 |  | 125.49 |  | (2.4) | % |  | 72.46 |  | 86.72 |  | (16.4) | %
Select Service Total/Average |  | 61 |  |  | 8,534 |  |  | 56.2 | % | 58.2 | % | (2.0) | pts |  | 117.57 |  | 120.60 |  | (2.5) | % |  | 66.02 |  | 70.23 |  | (6.0) | %
Sonesta ES Suites® |  | Extended Stay |  | 60 |  |  | 7,643 |  |  | 68.4 | % | 67.5 | % | 0.9 | pts |  | 124.60 |  | 129.96 |  | (4.1) | % |  | 85.26 |  | 87.73 |  | (2.8) | %
Sonesta Simply Suites® |  | Extended Stay |  | 50 |  |  | 6,366 |  |  | 67.7 | % | 69.1 | % | (1.4) | pts |  | 89.65 |  | 90.69 |  | (1.1) | % |  | 60.68 |  | 62.66 |  | (3.2) | %
Extended Stay Total/Average |  | 110 |  |  | 14,009 |  |  | 68.1 | % | 68.2 | % | (0.1) | pts |  | 108.81 |  | 112.01 |  | (2.9) | % |  | 74.09 |  | 76.42 |  | (3.0) | %
Comparable Hotels Total/Average |  | 218 |  |  | 37,349 |  |  | 62.2 | % | 62.7 | % | (0.5) | pts |  | $ | 140.00 |  | $ | 141.38 |  | (1.0) | % |  | $ | 87.13 |  | $ | 88.71 |  | (1.8) | %

*We define comparable hotels as those that were owned by us and were open and operating for the entirety of the periods being compared. For the three and six months ended June 30, 2024 and 2023, our comparable results exclude two hotels; one of the hotels was not owned for the entirety of the periods presented and the other hotel suspended operations during part of the periods presented.
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All Hotels* |  |  |  | No. of Rooms or Suites |  | Occupancy |  | ADR |  | RevPAR
|  | Service Level |  | No. of Hotels |  |  | Three Months Ended June 30, |  | Three Months Ended June 30, |  | Three Months Ended June 30,
Brand |  |  |  |  | 2024 | 2023 | Change |  | 2024 | 2023 | Change |  | 2024 | 2023 | Change
Sonesta Hotels & Resorts® |  | Full Service |  | 23 |  |  | 7,403 |  |  | 64.5 | % | 68.1 | % | (3.6) pts |  | $163.08 | $160.61 | 1.5 | % |  | $ | 105.13 |  | $ | 109.32 |  | (3.8) | %
Royal Sonesta Hotels® |  | Full Service |  | 17 |  |  | 5,663 |  |  | 67.5 | % | 63.5 | % | 4.0 pts |  | 239.45 | 246.41 | (2.8) | % |  | 161.70 |  | 156.58 |  | 3.3 | %
Radisson® Hotels & Resorts |  | Full Service |  | 5 |  |  | 1,149 |  |  | 71.3 | % | 64.5 | % | 6.8 pts |  | 146.39 | 145.76 | 0.4 | % |  | 104.33 |  | 94.05 |  | 10.9 | %
Crowne Plaza® |  | Full Service |  | 1 |  |  | 495 |  |  | 69.4 | % | 69.3 | % | 0.1 pts |  | 144.36 | 140.51 | 2.7 | % |  | 100.25 |  | 97.44 |  | 2.9 | %
Country Inn & Suites® by Radisson |  | Full Service |  | 2 |  |  | 346 |  |  | 74.6 | % | 74.8 | % | (0.2) pts |  | 152.57 | 145.49 | 4.9 | % |  | 113.89 |  | 108.82 |  | 4.7 | %
Full Service Total/Average |  | 48 |  |  | 15,056 |  |  | 66.5 | % | 66.3 | % | 0.2 pts |  | 189.94 | 189.66 | 0.1 | % |  | 126.38 |  | 125.69 |  | 0.5 | %
Sonesta Select® |  | Select Service |  | 44 |  |  | 6,427 |  |  | 60.8 | % | 58.2 | % | 2.6 pts |  | 116.90 | 118.30 | (1.2) | % |  | 71.09 |  | 68.81 |  | 3.3 | %
Hyatt Place® |  | Select Service |  | 17 |  |  | 2,107 |  |  | 70.9 | % | 74.2 | % | (3.3) pts |  | 124.16 | 126.38 | (1.8) | % |  | 88.00 |  | 93.81 |  | (6.2) | %
Select Service Total/Average |  | 61 |  |  | 8,534 |  |  | 63.3 | % | 62.1 | % | 1.2 pts |  | 118.91 | 120.68 | (1.5) | % |  | 75.27 |  | 74.98 |  | 0.4 | %
Sonesta ES Suites® |  | Extended Stay |  | 60 |  |  | 7,643 |  |  | 72.6 | % | 71.5 | % | 1.1 pts |  | 125.90 | 131.59 | (4.3) | % |  | 91.37 |  | 94.05 |  | (2.8) | %
Sonesta Simply Suites® |  | Extended Stay |  | 51 |  |  | 6,464 |  |  | 73.3 | % | 73.0 | % | 0.3 pts |  | 90.93 | 90.55 | 0.4 | % |  | 66.69 |  | 66.13 |  | 0.8 | %
Extended Stay Total/Average |  | 111 |  |  | 14,107 |  |  | 72.9 | % | 72.2 | % | 0.7 pts |  | 109.83 | 112.75 | (2.6) | % |  | 80.10 |  | 81.39 |  | (1.6) | %
All Hotels Total/Average |  | 220 |  |  | 37,697 |  |  | 68.2 | % | 67.5 | % | 0.7 pts |  | $142.99 | $144.46 | (1.0) | % |  | $ | 97.50 |  | $ | 97.56 |  | (0.1) | %
All Hotels* |  |  |  | No. of Rooms or Suites |  | Occupancy |  | ADR |  | RevPAR
|  | Service Level |  | No. of Hotels |  |  | Six Months Ended June 30, |  | Six Months Ended June 30, |  | Six Months Ended June 30,
Brand |  |  |  |  | 2024 | 2023 | Change |  | 2024 | 2023 | Change |  | 2024 | 2023 | Change
Sonesta Hotels & Resorts® |  | Full Service |  | 23 |  |  | 7,403 |  |  | 59.9 | % | 62.7 | % | (2.8) pts |  | $163.21 | $161.73 | 0.9 | % |  | $ | 97.79 |  | $ | 101.36 |  | (3.5) | %
Royal Sonesta Hotels® |  | Full Service |  | 17 |  |  | 5,663 |  |  | 59.1 | % | 55.5 | % | 3.6 pts |  | 238.28 | 243.26 | (2.0) | % |  | 140.90 |  | 134.89 |  | 4.5 | %
Radisson® Hotels & Resorts |  | Full Service |  | 5 |  |  | 1,149 |  |  | 65.9 | % | 64.8 | % | 1.1 pts |  | 148.54 | 149.79 | (0.8) | % |  | 97.87 |  | 97.03 |  | 0.9 | %
Crowne Plaza® |  | Full Service |  | 1 |  |  | 495 |  |  | 67.0 | % | 63.9 | % | 3.1 pts |  | 146.59 | 140.18 | 4.6 | % |  | 98.21 |  | 89.61 |  | 9.6 | %
Country Inn & Suites® by Radisson |  | Full Service |  | 2 |  |  | 346 |  |  | 67.5 | % | 66.9 | % | 0.6 pts |  | 144.66 | 138.38 | 4.5 | % |  | 97.59 |  | 92.59 |  | 5.4 | %
Full Service Total/Average |  | 48 |  |  | 15,056 |  |  | 60.5 | % | 60.2 | % | 0.3 pts |  | 188.50 | 187.90 | 0.3 | % |  | 114.01 |  | 113.17 |  | 0.7 | %
Sonesta Select® |  | Select Service |  | 44 |  |  | 6,427 |  |  | 55.2 | % | 54.7 | % | 0.5 pts |  | 115.85 | 118.57 | (2.3) | % |  | 63.90 |  | 64.82 |  | (1.4) | %
Hyatt Place® |  | Select Service |  | 17 |  |  | 2,107 |  |  | 59.2 | % | 69.1 | % | (9.9) pts |  | 122.44 | 125.49 | (2.4) | % |  | 72.46 |  | 86.72 |  | (16.4) | %
Select Service Total/Average |  | 61 |  |  | 8,534 |  |  | 56.2 | % | 58.2 | % | (2.0) pts |  | 117.57 | 120.60 | (2.5) | % |  | 66.02 |  | 70.23 |  | (6.0) | %
Sonesta ES Suites® |  | Extended Stay |  | 60 |  |  | 7,643 |  |  | 68.4 | % | 67.5 | % | 0.9 pts |  | 124.60 | 129.96 | (4.1) | % |  | 85.26 |  | 87.73 |  | (2.8) | %
Sonesta Simply Suites® |  | Extended Stay |  | 51 |  |  | 6,464 |  |  | 67.0 | % | 68.4 | % | (1.4) pts |  | 89.65 | 90.69 | (1.1) | % |  | 60.10 |  | 62.05 |  | (3.1) | %
Extended Stay Total/Average |  | 111 |  |  | 14,107 |  |  | 67.8 | % | 67.9 | % | (0.1) pts |  | 108.81 | 112.01 | (2.9) | % |  | 73.77 |  | 76.08 |  | (3.0) | %
All Hotels Total/Average |  | 220 |  |  | 37,697 |  |  | 62.2 | % | 62.6 | % | (0.4) pts |  | $141.56 | $142.87 | (0.9) | % |  | $ | 88.10 |  | $ | 89.51 |  | (1.6) | %

*Includes results of all hotels owned as of June 30, 2024. Excludes the results of hotels sold during the periods presented and includes data for one hotel for periods prior to when we acquired it.
Net Lease Portfolio
As of June 30, 2024, our net lease properties were 97.3% occupied and we had 20 properties available for lease. During the six months ended June 30, 2024, we entered into lease renewals for 243,505 rentable square feet (26 properties) at weighted (by rentable square feet) average rents that were 12.2% below the prior rents for the same space. The weighted (by rentable square feet) average lease term for these leases was 4.9 years. We also entered into new leases for 108,803 rentable square feet (four properties) at weighted (by rentable square feet) average rents that were 13.7% below the prior rents for the same space. The weighted (by rentable square feet) average lease term for these leases was 18.5 years.
Generally, lease agreements with our net lease tenants require payment of minimum rent to us. Certain of these minimum rent payment amounts are secured by full or limited guarantees. Annualized minimum rent as used herein represents cash amounts and excludes adjustments, if any, necessary to record scheduled rent changes on a straight line basis or any expense reimbursement. Annualized minimum rent also excludes the impact of rents prepaid by TA.
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As of June 30, 2024, our net lease tenants operated across 139 brands. The following table identifies the top ten brands based on annualized minimum rent:

| Brand |  | No. of Properties |  | Investment (1) |  | Percent of Total Investment |  | Annualized Minimum Rent |  | Percent of Total Annualized Minimum Rent |  | Coverage (2) |  |
1. | TravelCenters of America Inc. |  | 131 |  | $ | 2,254,950 |  |  | 44.6 | % |  | $ | 176,793 |  |  | 46.5 | % |  | 1.59 | x | (3) |
2. | Petro Stopping Centers |  | 44 |  | 1,015,156 |  |  | 20.1 | % |  | 82,287 |  |  | 21.6 | % |  | 1.59 | x | (3) |
3. | The Great Escape |  | 14 |  | 98,242 |  |  | 1.9 | % |  | 7,711 |  |  | 2.0 | % |  | 6.20 | x |  |
4. | Life Time Fitness |  | 3 |  | 92,617 |  |  | 1.8 | % |  | 5,770 |  |  | 1.5 | % |  | 2.80 | x |  |
5. | Buehler's Fresh Foods |  | 5 |  | 76,469 |  |  | 1.5 | % |  | 5,657 |  |  | 1.5 | % |  | 2.88 | x |  |
6. | Heartland Dental |  | 59 |  | 61,120 |  |  | 1.2 | % |  | 4,769 |  |  | 1.3 | % |  | 4.56 | x |  |
7. | Norms |  | 10 |  | 53,673 |  |  | 1.1 | % |  | 3,759 |  |  | 1.0 | % |  | 3.68 | x |  |
8. | Express Oil Change |  | 23 |  | 49,724 |  |  | 1.0 | % |  | 3,717 |  |  | 1.0 | % |  | 4.32 | x |  |
9. | AMC Theatres |  | 5 |  | 57,247 |  |  | 1.1 | % |  | 3,547 |  |  | 0.9 | % |  | 2.18 | x |  |
10. | Pizza Hut |  | 40 |  | 45,285 |  |  | 0.9 | % |  | 3,444 |  |  | 0.9 | % |  | 2.44 | x |  |
| Other (4) |  | 415 |  | 1,256,984 |  |  | 24.8 | % |  | 83,003 |  |  | 21.8 | % |  | 3.56 | x |  |
| Total |  | 749 |  | $ | 5,061,467 |  |  | 100.0 | % |  | $ | 380,457 |  |  | 100.0 | % |  | 2.25 | x |  |

(1)Represents the historical cost of our properties plus capital improvements funded by us less impairment write-downs, if any.
(2)See page 27 for our definition of coverage.
(3)Rent coverage information provided by tenant is for all 175 sites on a consolidated basis and is as of June 30, 2024.
(4)Consists of 129 distinct brands with an average investment of $3,029 and average annual minimum rent of $200 per property.
As of June 30, 2024, our top ten net lease tenants based on our annualized minimum rent are listed below:

| Tenant |  | Brand Affiliation |  | No. of Properties |  | Investment (1) |  | Percent of Total Investment |  | Annualized Minimum Rent |  | Percent of Total Annualized Minimum Rent |  | Coverage (2)
1. | TravelCenters of America Inc. (3) |  | TravelCenters of America / Petro Stopping Centers |  | 175 |  | $ | 3,270,106 |  |  | 64.7 | % |  | $ | 259,080 |  |  | 68.1 | % |  | 1.59x
2. | Universal Pool Co., Inc. |  | The Great Escape |  | 14 |  | 98,242 |  |  | 1.9 | % |  | 7,711 |  |  | 2.0 | % |  | 6.20x
3. | Healthy Way of Life II, LLC |  | Life Time Fitness |  | 3 |  | 92,617 |  |  | 1.8 | % |  | 5,770 |  |  | 1.5 | % |  | 2.80x
4. | Styx Acquisition, LLC |  | Buehler's Fresh Foods |  | 5 |  | 76,469 |  |  | 1.5 | % |  | 5,657 |  |  | 1.5 | % |  | 2.88x
5. | Professional Resource Development, Inc. |  | Heartland Dental |  | 59 |  | 61,120 |  |  | 1.2 | % |  | 4,769 |  |  | 1.3 | % |  | 4.56x
6. | Norms Restaurants, LLC |  | Norms |  | 10 |  | 53,673 |  |  | 1.1 | % |  | 3,759 |  |  | 1.0 | % |  | 3.68x
7. | Express Oil Change, L.L.C. |  | Express Oil Change |  | 23 |  | 49,724 |  |  | 1.0 | % |  | 3,717 |  |  | 1.0 | % |  | 4.32x
8. | American Multi-Cinema, Inc. |  | AMC Theatres |  | 5 |  | 57,247 |  |  | 1.1 | % |  | 3,547 |  |  | 0.9 | % |  | 2.18x
9. | Pilot Travel Centers LLC |  | Flying J Travel Plaza |  | 3 |  | 41,681 |  |  | 0.8 | % |  | 3,279 |  |  | 0.9 | % |  | 4.94x
10. | Automotive Remarketing Group, Inc. |  | America's Auto Auction |  | 6 |  | 38,314 |  |  | 0.8 | % |  | 3,216 |  |  | 0.8 | % |  | 7.56x
| Subtotal, top 10 |  |  |  | 303 |  | 3,839,193 |  |  | 75.9 | % |  | 300,505 |  |  | 79.0 | % |  | 1.97x
11. | Other (4) |  | Various |  | 446 |  | 1,222,274 |  |  | 24.1 | % |  | 79,952 |  |  | 21.0 | % |  | 3.29x
| Total |  |  |  | 749 |  | $ | 5,061,467 |  |  | 100.0 | % |  | $ | 380,457 |  |  | 100.0 | % |  | 2.25x

(1)Represents the historical cost of our net lease properties plus capital improvements funded by us less impairment write-downs, if any.
(2)See page 27 for our definition of coverage.
(3)TA is our largest tenant. We lease 175 travel centers (131 under the TravelCenters of America brand and 44 under the Petro Stopping Centers brand) to a subsidiary of TA under five master leases that expire in 2033. TA has five renewal options for 10 years each for all of the travel centers under each lease. BP Corporation North America Inc. guarantees payments under each of the five master leases. The aggregate guaranty as of June 30, 2024 was approximately $3,037,475. Annualized minimum rent excludes the impact of rents prepaid by TA. Rent coverage was 1.54x, 1.58x, 1.69x, 1.76x and 1.42x for our TA leases no. 1, no. 2, no. 3, no. 4 and no. 5, respectively. Rent coverage is as of June 30, 2024.
(4)Consists of 168 tenants with an average investment of $2,741 and an average annual minimum rent of $179 per property.
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As of June 30, 2024, our net lease tenants operated across 21 distinct industries within the service-focused retail sector of the U.S. economy.

| Industry |  | No. of Properties |  | Investment (1) |  | Percent of Total Investment |  | Annualized Minimum Rent |  | Percent of Total Annualized Minimum Rent |  | Coverage (2) |  |
1. | Travel Centers |  | 178 |  | $ | 3,311,787 |  |  | 65.4% |  | $ | 262,359 |  |  | 69.0 | % |  | 1.63 x | (3) |
2. | Restaurants - Quick Service |  | 209 |  | 283,853 |  |  | 5.5% |  | 19,486 |  |  | 5.1 | % |  | 3.26 | x |  |
3. | Restaurants - Casual Dining |  | 55 |  | 194,333 |  |  | 3.8% |  | 11,652 |  |  | 3.1 | % |  | 2.88 | x |  |
4. | Health and Fitness |  | 13 |  | 186,365 |  |  | 3.7% |  | 11,184 |  |  | 2.9 | % |  | 2.18 | x |  |
5. | Home Goods and Leisure |  | 20 |  | 134,291 |  |  | 2.7% |  | 10,626 |  |  | 2.8 | % |  | 5.14 | x |  |
6. | Grocery Stores |  | 19 |  | 129,152 |  |  | 2.6% |  | 9,235 |  |  | 2.4 | % |  | 3.55 | x |  |
7. | Medical, Dental Office |  | 70 |  | 104,042 |  |  | 2.1% |  | 8,449 |  |  | 2.2 | % |  | 3.42 | x |  |
8. | Movie Theaters |  | 15 |  | 139,569 |  |  | 2.8% |  | 8,399 |  |  | 2.2 | % |  | 2.24 | x |  |
9. | Automotive Equipment and Services |  | 64 |  | 107,054 |  |  | 2.1% |  | 7,755 |  |  | 2.0 | % |  | 4.11 | x |  |
10. | Automotive Dealers |  | 8 |  | 62,656 |  |  | 1.2% |  | 4,973 |  |  | 1.3 | % |  | 6.26 | x |  |
11. | Educational Services |  | 8 |  | 54,759 |  |  | 1.1% |  | 4,365 |  |  | 1.1 | % |  | 1.55 | x |  |
12. | Entertainment |  | 4 |  | 61,436 |  |  | 1.2% |  | 4,347 |  |  | 1.1 | % |  | 2.89 | x |  |
13. | General Merchandise Stores |  | 4 |  | 55,457 |  |  | 1.1% |  | 3,928 |  |  | 1.0 | % |  | 3.22 | x |  |
14. | Building Materials |  | 29 |  | 33,883 |  |  | 0.7% |  | 2,857 |  |  | 0.8 | % |  | 6.95 | x |  |
15. | Car Washes |  | 6 |  | 30,798 |  |  | 0.6% |  | 2,411 |  |  | 0.6 | % |  | 2.87 | x |  |
16. | Miscellaneous Manufacturing |  | 5 |  | 24,156 |  |  | 0.5% |  | 1,713 |  |  | 0.5 | % |  | 13.05 | x |  |
17. | Drug Stores and Pharmacies |  | 6 |  | 17,111 |  |  | 0.3% |  | 1,122 |  |  | 0.3 | % |  | 1.16 | x |  |
18. | Sporting Goods |  | 3 |  | 18,234 |  |  | 0.4% |  | 1,099 |  |  | 0.3 | % |  | 5.23 | x |  |
19. | Legal Services |  | 5 |  | 11,362 |  |  | 0.2% |  | 1,075 |  |  | 0.3 | % |  | 6.47 | x |  |
20. | Dollar Stores |  | 3 |  | 2,971 |  |  | 0.1% |  | 190 |  |  | 0.1 | % |  | 1.99 | x |  |
21. | Other (4) |  | 5 |  | 27,245 |  |  | 0.5% |  | 3,232 |  |  | 0.9 | % |  | 3.84 | x |  |
22. | Vacant |  | 20 |  | 70,953 |  |  | 1.4% |  | — |  |  | — | % |  | — | x |  |
| Total |  | 749 |  | $ | 5,061,467 |  |  | 100.0% |  | $ | 380,457 |  |  | 100.0% |  | 2.25 | x |  |

(1)Represents the historical cost of our net lease properties plus capital improvements funded by us less impairment write-downs, if any.
(2)See page 27 for our definition of coverage.
(3)Rent coverage for TA is as of June 30, 2024.
(4)Consists of miscellaneous businesses with an average investment of $5,449 per property.
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As of June 30, 2024, lease expirations at our net lease properties by year are as follows:

Year (1) |  | Number of Properties |  | Square Feet |  | Annualized Minimum Rent Expiring |  | Percent of Total Annualized Minimum Rent Expiring |  | Cumulative Percent of Total Annualized Minimum Rent Expiring |
2024 |  | 27 |  | 368,559 |  |  | $ | 4,449 |  |  | 1.2% |  | 1.2% |
2025 |  | 25 |  | 491,212 |  |  | 8,505 |  |  | 2.2% |  | 3.4% |
2026 |  | 103 |  | 1,020,706 |  |  | 11,262 |  |  | 3.0% |  | 6.4% |
2027 |  | 37 |  | 942,288 |  |  | 12,562 |  |  | 3.3% |  | 9.7% |
2028 |  | 26 |  | 675,312 |  |  | 11,027 |  |  | 2.9% |  | 12.6% |
2029 |  | 61 |  | 400,274 |  |  | 8,133 |  |  | 2.1% |  | 14.7% |
2030 |  | 34 |  | 160,464 |  |  | 4,905 |  |  | 1.3% |  | 16.0% |
2031 |  | 27 |  | 390,854 |  |  | 5,015 |  |  | 1.3% |  | 17.3% |
2032 |  | 35 |  | 145,509 |  |  | 2,872 |  |  | 0.8% |  | 18.1% |
2033 |  | 212 |  | 5,342,487 |  |  | 264,979 |  |  | 69.5% |  | 87.6% |
2034 |  | 19 |  | 314,725 |  |  | 5,534 |  |  | 1.5% |  | 89.1% |
2035 |  | 44 |  | 1,152,479 |  |  | 19,084 |  |  | 5.0% |  | 94.1% |
2036 |  | 15 |  | 304,540 |  |  | 5,555 |  |  | 1.5% |  | 95.6% |
2037 |  | 8 |  | 303,702 |  |  | 2,886 |  |  | 0.8% |  | 96.4% |
2038 |  | 7 |  | 66,700 |  |  | 1,263 |  |  | 0.3% |  | 96.7% |
2039 |  | 9 |  | 138,043 |  |  | 3,276 |  |  | 0.9% |  | 97.6% |
2040 |  | 19 |  | 117,879 |  |  | 2,486 |  |  | 0.7% |  | 98.3% |
2041 |  | 6 |  | 216,040 |  |  | 2,233 |  |  | 0.6% |  | 98.9% |
2042 |  | — |  | — |  |  | — |  |  | —% |  | 98.9% |
2043 |  | 1 |  | 57,543 |  |  | 155 |  |  | —% |  | 98.9% |
2044 |  | 3 |  | 126,116 |  |  | 353 |  |  | 0.1% |  | 99.0% |
2045 |  | 11 |  | 154,966 |  |  | 3,923 |  |  | 1.0% |  | 100.0% |
Total |  | 729 |  | 12,890,398 |  |  | $ | 380,457 |  |  | 100% |  |  |

(1)The year of lease expiration is pursuant to contract terms.
As of June 30, 2024, shown below is the list of our top ten states where our net lease properties are located. No other state represents more than 3% of our net lease annualized minimum rents.

State |  | Number of Properties |  | Square Feet |  | Annualized Minimum Rent |  | Percent of Total Annualized Minimum Rent
Texas |  | 55 |  | 1,168,354 |  |  | $ | 33,935 |  |  | 8.9%
Ohio |  | 39 |  | 1,368,924 |  |  | 27,476 |  |  | 7.2%
Illinois |  | 54 |  | 976,308 |  |  | 27,339 |  |  | 7.2%
California |  | 22 |  | 399,045 |  |  | 25,870 |  |  | 6.8%
Georgia |  | 73 |  | 590,245 |  |  | 20,578 |  |  | 5.4%
Arizona |  | 25 |  | 476,651 |  |  | 17,031 |  |  | 4.5%
Florida |  | 46 |  | 529,040 |  |  | 16,907 |  |  | 4.4%
Indiana |  | 40 |  | 620,950 |  |  | 15,944 |  |  | 4.2%
Pennsylvania |  | 28 |  | 544,003 |  |  | 15,927 |  |  | 4.2%
New Mexico |  | 16 |  | 246,478 |  |  | 11,871 |  |  | 3.1%
Other |  | 351 |  | 6,464,221 |  |  | 167,579 |  |  | 44.1%
Total |  | 749 |  | 13,384,219 |  |  | $ | 380,457 |  |  | 100.0%

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Non-GAAP Financial Measures
We present certain “non-GAAP financial measures” within the meaning of the applicable SEC rules, including funds from operations, or FFO, and normalized funds from operations, or Normalized FFO. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income (loss) as indicators of our operating performance or as measures of our liquidity. These measures should be considered in conjunction with net income (loss) as presented in our condensed consolidated statements of comprehensive income (loss). We consider these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net income (loss). We believe these measures provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation and amortization expense, they may facilitate a comparison of our operating performance between periods and with other REITs.
Funds From Operations and Normalized Funds From Operations
We calculate FFO and Normalized FFO as shown below. FFO is calculated on the basis defined by The National Association of Real Estate Investment Trusts, which is net income (loss), calculated in accordance with GAAP, excluding any gain or loss on sale of real estate and loss on impairment of real estate assets, if any, plus real estate depreciation and amortization, less any gains and losses on equity securities, as well as adjustments to reflect our share of FFO attributable to an investee and certain other adjustments currently not applicable to us. In calculating Normalized FFO, we adjust for the items shown below. FFO and Normalized FFO are among the factors considered by our Board of Trustees when determining the amount of distributions to our shareholders. Other factors include, but are not limited to, requirements to satisfy our REIT distribution requirements, the availability to us of debt and equity capital, our distribution rate as a percentage of the trading price of our common shares, or dividend yield, and to the dividend yield of other REITs, our expectation of our future capital requirements and operating performance and our expected needs for and availability of cash to pay our obligations. Other real estate companies and REITs may calculate FFO and Normalized FFO differently than we do.
Our calculations of FFO and Normalized FFO for the three and six months ended June 30, 2024 and 2023 and reconciliations of net income (loss), the most directly comparable financial measure under GAAP reported in our condensed consolidated financial statements, to those amounts appear in the following table (amounts in thousands, except per share amounts):

|  |  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  |  | 2024 |  | 2023 |  | 2024 |  | 2023
Net (loss) income |  | $ | (73,850) |  |  | $ | (11,278) |  |  | $ | (152,233) |  |  | $ | 14,672 |
Add (less): | Depreciation and amortization |  | 95,674 |  |  | 94,571 |  |  | 188,781 |  |  | 194,610 |
| Loss on asset impairment, net |  | 34,887 |  |  | 9,005 |  |  | 37,338 |  |  | 9,005 |
| Loss (gain) on sale of real estate, net |  | 32 |  |  | 62 |  |  | 2,995 |  |  | (41,836) |
| Loss (gain) on equity securities, net |  | — |  |  | 593 |  |  | — |  |  | (48,837) |
| Adjustments to reflect our share of FFO attributable to an investee |  | 1,021 |  |  | 798 |  |  | 1,987 |  |  | 2,031 |
FFO |  | 57,764 |  |  | 93,751 |  |  | 78,868 |  |  | 129,645 |
Add (less): | Transaction related costs |  | — |  |  | 931 |  |  | — |  |  | 1,818 |
| Loss on early extinguishment of debt, net |  | 16,048 |  |  | 238 |  |  | 16,048 |  |  | 282 |
| Adjustments to reflect our share of Normalized FFO attributable to an investee |  | (2) |  |  | 207 |  |  | — |  |  | 528 |
Normalized FFO |  | $ | 73,810 |  |  | $ | 95,127 |  |  | $ | 94,916 |  |  | $ | 132,273 |
Weighted average common shares outstanding (basic and diluted) | 165,198 |  |  | 164,902 |  |  | 165,178 |  |  | 164,884 |
Basic and diluted per common share amounts: |  |  |  |  |  |  |  |
| Net (loss) income |  | $ | (0.45) |  |  | $ | (0.07) |  |  | $ | (0.92) |  |  | $ | 0.09 |
| FFO |  | $ | 0.35 |  |  | $ | 0.57 |  |  | $ | 0.48 |  |  | $ | 0.79 |
| Normalized FFO |  | $ | 0.45 |  |  | $ | 0.58 |  |  | $ | 0.57 |  |  | $ | 0.80 |
| Distributions declared per share |  | $ | 0.20 |  |  | $ | 0.20 |  |  | $ | 0.40 |  |  | $ | 0.40 |

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Item 3. Quantitative and Qualitative Disclosures About Market Risk (dollars in thousands, except per share amounts)
We are exposed to risks associated with market changes in interest rates. We manage our exposure to this market risk by monitoring available financing alternatives. Our strategy to manage exposure to changes in interest rates has not materially changed since December 31, 2023. Other than as described below, we do not currently foresee any significant changes in our exposure to fluctuations in interest rates or in how we manage this exposure in the near future.
Fixed Rate Debt
At June 30, 2024, our outstanding fixed rate debt consisted of the following:

Debt |  | Principal Balance |  | Annual Interest Rate |  | Annual Interest Expense |  | Maturity |  | Interest Payments Due
Senior unsecured notes |  | $ | 350,000 |  |  | 5.250 | % |  | $ | 18,375 |  |  | 2026 |  | Semi-Annually
Senior unsecured notes |  | 450,000 |  |  | 4.750 | % |  | 21,375 |  |  | 2026 |  | Semi-Annually
Senior unsecured notes |  | 400,000 |  |  | 4.950 | % |  | 19,800 |  |  | 2027 |  | Semi-Annually
Senior guaranteed unsecured notes |  | 450,000 |  |  | 5.500 | % |  | 24,750 |  |  | 2027 |  | Semi-Annually
Senior unsecured notes |  | 400,000 |  |  | 3.950 | % |  | 15,800 |  |  | 2028 |  | Semi-Annually
Net lease mortgage notes |  | 607,590 |  |  | 5.600 | % |  | 34,025 |  |  | 2028 |  | Monthly
Senior guaranteed unsecured notes |  | 700,000 |  |  | 8.375 | % |  | 58,625 |  |  | 2029 |  | Semi-Annually
Senior unsecured notes |  | 425,000 |  |  | 4.950 | % |  | 21,038 |  |  | 2029 |  | Semi-Annually
Senior unsecured notes |  | 400,000 |  |  | 4.375 | % |  | 17,500 |  |  | 2030 |  | Semi-Annually
Senior secured notes |  | 1,000,000 |  |  | 8.625 | % |  | 86,250 |  |  | 2031 |  | Semi-Annually
Senior guaranteed unsecured notes |  | 500,000 |  |  | 8.875 | % |  | 44,375 |  |  | 2032 |  | Semi-Annually
|  | $ | 5,682,590 |  |  |  |  | $ | 361,913 |  |  |  |  |

No principal repayments are due under our unsecured or secured senior notes until maturity. Our net lease mortgage notes require principal and interest payments through maturity pursuant to amortization schedules. Because these notes require interest at fixed rates, changes in market interest rates during the term of these debts will not affect our interest obligations. If these notes were refinanced at interest rates which are one percentage point higher than the rates shown above, our per annum interest cost would increase by approximately $56,826. Changes in market interest rates would affect the fair value of our fixed rate debt obligations; increases in market interest rates decrease the fair value of our fixed rate debt while decreases in market interest rates increase the fair value of our fixed rate debt. In response to significant and prolonged increases in inflation, the U.S. Federal Reserve has raised interest rates multiple times since the beginning of 2022. Although the U.S. Federal Reserve has indicated that it may lower interest rates in 2024, we cannot be sure that it will do so, and interest rates may remain at the current high levels or continue to increase. Based on the balances outstanding at June 30, 2024 and discounted cash flows analyses through the respective maturity dates, and assuming no other changes in factors that may affect the fair value of our fixed rate debt obligations, a hypothetical immediate one percentage point change in interest rates would change the fair value of those debt obligations by approximately $205,977.
Our fixed rate debt arrangements may allow us to make repayments earlier than the stated maturity date. In some cases, we are not allowed to make early repayment prior to a cutoff date and we are generally allowed to make prepayments only at a premium equal to a make whole amount, as defined, which is generally designed to preserve a stated yield to the noteholder. Also, we have in the past repurchased and retired some of our outstanding debts and we may do so again in the future. These prepayment rights and our ability to repurchase and retire outstanding debt may afford us opportunities to mitigate the risks of refinancing our debts at their maturities at higher rates by refinancing prior to maturity.
Floating Rate Debt
At June 30, 2024, we had no amounts outstanding under our revolving credit facility. The maturity date of our revolving credit facility is June 29, 2027, and, subject to our meeting certain conditions, including our payment of an extension fee, we have an option to extend the stated maturity date of the facility by two six-month periods. No principal repayments are required under our revolving credit facility prior to maturity and repayments may be made and redrawn subject to conditions at any time without penalty.
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Borrowings under our revolving credit facility are in U.S. dollars and require interest to be paid at a rate of SOFR plus premiums. Accordingly, we are vulnerable to changes in U.S. dollar based short term interest rates, specifically SOFR. In addition, upon renewal or refinancing of our revolving credit facility, we are vulnerable to increases in interest rate premiums due to market conditions or our perceived credit characteristics. Generally, a change in interest rates would not affect the value of this floating rate debt but would affect our operating results.
The following table presents the impact a one percentage point increase in interest rates would have on our annual floating rate interest expense at June 30, 2024 if we were fully drawn on our revolving credit facility:

| Impact of Increase in Interest Rates |  |
| Interest Rate Per Year (1) |  | Outstanding Debt |  | Total Interest Expense Per Year |  | Annual Per Share Impact (2)
At June 30, 2024 | 7.83 | % |  | $ | 650,000 |  |  | $ | 50,895 |  |  | $ | 0.31 |
One percentage point increase | 8.83 | % |  | $ | 650,000 |  |  | $ | 57,395 |  |  | $ | 0.35 |

(1)Based on SOFR plus a premium, which was 250 basis points per annum, at June 30, 2024.
(2)Based on diluted weighted average common shares outstanding for the six months ended June 30, 2024.
The foregoing table shows the impact of an immediate change in floating interest rates as of June 30, 2024. If interest rates were to change gradually over time, the impact would be spread over time. Our exposure to fluctuations in floating interest rates will increase or decrease in the future with increases or decreases in the outstanding amounts under our revolving credit facility or other floating rate debt, if any. Although we have no present plans to do so, we may in the future enter into hedge arrangements from time to time to mitigate our exposure to changes in interest rates.
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Item 4. Controls and Procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, our management carried out an evaluation, under the supervision and with the participation of our Managing Trustees, our President and Chief Investment Officer and our Chief Financial Officer and Treasurer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our Managing Trustees, our President and Chief Investment Officer and our Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective.
There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Warning Concerning Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws that are subject to risks and uncertainties. These statements may include words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions. These forward-looking statements include, among others, statements about: economic and market conditions and their potential impacts on us, our hotel managers and our tenants; expectations regarding demand for corporate travel and lodging; the sufficiency of our liquidity; our liquidity needs, sources and expected uses; our capital expenditure plans and commitments; our property dispositions and expected use of proceeds; and the amount and timing of future distributions.
Forward-looking statements reflect our current expectations, are based on judgments and assumptions, are inherently uncertain and are subject to risks, uncertainties and other factors, which could cause our actual results, performance or achievements to differ materially from expected future results, performance or achievements expressed or implied in those forward-looking statements. Some of the risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following:
• The ability of Sonesta to successfully operate the hotels it manages for us,
• Our ability and the ability of our managers and tenants to operate under unfavorable market and commercial real estate industry conditions due to, among other things, high interest rates, prolonged high inflation, labor market challenges, supply chain disruptions, volatility in the public equity and debt markets, pandemics, geopolitical instability and tensions, economic downturns or a possible recession or changes in real estate utilization,
• If and when business transient hotel business will return to historical levels and whether any improved hotel industry conditions will continue, increase or be sustained,
• Whether and the extent to which our managers and tenants will pay the contractual amounts of returns, rents or other obligations due to us,
• Competition within the commercial real estate, hotel, transportation and travel center and other industries in which our managers and tenants operate, particularly in those markets in which our properties are located,
• Our ability to repay or refinance our debts as they mature or otherwise become due,
• Our ability to maintain sufficient liquidity, including the availability of borrowings under our revolving credit facility,
• Our ability to pay interest on and principal of our debt,
• Our ability to pay distributions to our shareholders and to increase or sustain the amount of such distributions,
• Our ability to acquire properties that realize our targeted returns,
• Our ability to sell properties at prices we target,
• Our ability to raise or appropriately balance the use of debt or equity capital,
• Potential defaults under our management agreements and leases by our managers and tenants,
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• Our ability to increase hotel room rates and rents at our net leased properties as our leases expire in excess of our operating expenses and to grow our business,
• Our ability to increase and maintain hotel room and net lease property occupancy at our properties,
• Our ability to make cost-effective improvements to our properties that enhance their appeal to hotel guests and net lease tenants,
• Our ability to engage and retain qualified managers and tenants for our hotels and net lease properties on satisfactory terms,
• Our ability to diversify our sources of rents and returns that improve the security of our cash flows,
• Our credit ratings,
• The ability of our manager, RMR, to successfully manage us,
• Actual and potential conflicts of interest with our related parties, including our Managing Trustees, Sonesta, RMR and others affiliated with them,
• Our ability to realize benefits from the scale, geographic diversity, strategic locations and variety of service levels of our hotels,
• Limitations imposed by, and our ability to satisfy, complex rules to maintain our qualification for taxation as a REIT for U.S. federal income tax purposes,
• Compliance with, and changes to, federal, state and local laws and regulations, accounting rules, tax laws and similar matters,
• Acts of terrorism, outbreaks of pandemics or other public health safety events or conditions, war or other hostilities, global climate change or other man-made or natural disasters beyond our control, and
• Other matters.
These risks, uncertainties and other factors are not exhaustive and should be read in conjunction with other cautionary statements that are included in our periodic filings. The information contained elsewhere in this Quarterly Report on Form 10-Q or in our other filings with the SEC, including under the caption “Risk Factors”, or incorporated herein or therein, identifies other important factors that could cause differences from our forward-looking statements. Our filings with the SEC are available on the SEC’s website at www.sec.gov.
You should not place undue reliance upon our forward-looking statements.
Except as required by law, we do not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
Statement Concerning Limited Liability
The Amended and Restated Declaration of Trust establishing Service Properties Trust dated August 21, 1995, as amended and supplemented, as filed with the State Department of Assessments and Taxation of Maryland, provides that no trustee, officer, shareholder, employee or agent of Service Properties Trust shall be held to any personal liability, jointly or severally, for any obligation of, or claim against, Service Properties Trust. All persons dealing with Service Properties Trust in any way shall look only to the assets of Service Properties Trust for the payment of any sum or the performance of any obligation.
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Part II. Other Information
Item 1A. Risk Factors
There have been no material changes to risk factors from those we previously disclosed in our 2023 Annual Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer purchases of equity securities. The following table provides information about our purchases of our equity securities during the quarter ended June 30, 2024:

Calendar Month |  | Number of Common Shares Purchased (1) |  | Average Price Paid per Share |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |  | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2024 - April 30, 2024 |  | 8,159 |  |  | $ | 6.53 |  |  | — |  |  | $ | — |
May 1, 2024 - May 31, 2024 |  | 2,102 |  |  | 5.80 |  |  | — |  |  | — |
Total |  | 10,261 |  |  | $ | 6.38 |  |  | — |  |  | $ | — |

(1)These common share withholdings and purchases were made to satisfy tax withholding and payment obligations from certain former officers and employees of RMR in connection with the vesting of awards of our common shares. We withheld and purchased these common shares at their fair market values based upon the trading prices of our common shares at the close of trading on Nasdaq on the purchase dates.
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Item 6. Exhibits

Exhibit Number |  | Description
3.1 |  | Composite Copy of Amended and Restated Declaration of Trust, dated as of August 21, 1995, as amended to date. (Incorporated by reference to the Company’s Post-Effective Amendment No. 2 to Registration Statement on Form S-3, filed on July 15, 2020, File No. 333-226944.)
3.2 |  | Articles Supplementary to the Declaration of Trust of the Company, dated June 10, 2020. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 10, 2020.)
3.3 |  | Third Amended and Restated Bylaws of the Company, adopted effective June 14, 2024. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 17, 2024.)
4.1 |  | Form of Common Share Certificate. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.)
4.2 |  | Indenture, dated as of February 3, 2016, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association). (Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 4, 2016.)
4.3 |  | Second Supplemental Indenture, dated as of February 3, 2016, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 5.25% Senior Notes due 2026, including form thereof. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 4, 2016.)
4.4 |  | Third Supplemental Indenture, dated as of January 13, 2017, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 4.950% Senior Notes due 2027, including form thereof. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.)
4.5 |  | Fourth Supplemental Indenture, dated as of October 26, 2017, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 3.950% Senior Notes due 2028, including form thereof. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017.)
4.6 |  | Fifth Supplemental Indenture, dated as of February 2, 2018, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 4.375% Senior Notes due 2030, including form thereof. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.)
4.7 |  | Seventh Supplemental Indenture, dated as of September 18, 2019, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 4.750% Senior Notes due 2026, including form thereof. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 18, 2019.)
4.8 |  | Eighth Supplemental Indenture, dated as of September 18, 2019, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 4.950% Senior Notes due 2029, including form thereof. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 18, 2019.)
4.9 |  | Tenth Supplemental Indenture, dated as of November 20, 2020, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 5.50% Senior Notes due 2027, including form thereof. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.)
4.10 |  | Supplemental Indenture, dated as of January 29, 2021, among the Company, SVC Gatehall Drive TRS LLC and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 5.50% Senior Notes due 2027. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.)
4.11 |  | Supplemental Indenture, dated as of July 8, 2021, among the Company, SVCN 1 LLC, SVCN 4 LLC and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 5.50% Senior Notes due 2027. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.)

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Exhibit Number |  | Description
4.12 |  | Supplemental Indenture, dated as of October 28, 2021, among the Company, SVC Minneapolis TRS LLC and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 5.50% Senior Notes due 2027. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021.)
4.13 |  | Supplemental Indenture, dated as of July 27, 2023, among the Company, HPTWN Properties Trust, Highway Ventures Properties Trust, Highway Ventures Properties LLC, HPT TA Properties LLC and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 5.50% Senior Notes due 2027. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023.)
4.14 |  | Supplemental Indenture, dated as of April 4, 2024, among the Company, SVC Higgins Road TRS LLC, SVC Mannheim Road TRS LLC, and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 5.50% Senior Notes due 2027. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.)
4.15 |  | Eleventh Supplemental Indenture, dated as of June 3, 2024, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S. Bank Trust Company, National Association, relating to the Company’s 8.375% Senior Guaranteed Unsecured Notes due 2029, including form thereof. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 3, 2024.)
4.16 |  | Twelfth Supplemental Indenture, dated as of June 3, 2024, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S. Bank Trust Company, National Association, relating to the Company’s 8.875% Senior Guaranteed Unsecured Notes due 2032, including form thereof. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 3, 2024.)
4.17 |  | Indenture, dated as of November 16, 2023, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S. Bank Trust Company, National Association, relating to the Company’s 8.625% Senior Secured Notes due 2031, including form thereof. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.)
4.18 |  | Supplemental Indenture, dated as of April 4, 2024, among the Company, SVC Higgins Road TRS LLC, SVC Mannheim Road TRS LLC, and U.S. Bank Trust Company, National Association, relating to the Company’s 8.625% Senior Notes due 2031. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.)
4.19 |  | Registration Rights and Lock-Up Agreement, dated as of June 5, 2015, among the Company, ABP Trust (f/k/a Reit Management & Research Trust) and Adam D. Portnoy. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 8, 2015.)
10.1 |  | Amended, Restated and Consolidated Pooling Agreement, dated as of January 1, 2022, among Sonesta International Hotels Corporation, certain subsidiaries of the Company named therein as owners and certain subsidiaries of Sonesta International Hotels Corporation named therein as managers. (Retained Hotels) (Incorporated by reference to the Company’s Current Report on Form 8-K filed on January 10, 2022). (Schedules thereto filed herewith.)
10.2 |  | Representative Form of Amended and Restated Management Agreement among Sonesta International Hotels Corporation, Cambridge TRS, Inc., HPT CY TRS, Inc., HPT TRS IHG-2, Inc. and HRP TRS MRP, Inc. (Inc orporated by reference to the Company’s Current Report on Form 8-K filed on January 10, 2022.) (Schedule s there to filed herewith.) (Schedule of applicable agreements incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.)
22.1 |  | List of Subsidiary Guarantors. (Filed herewith.)
31.1 |  | Rule 13a-14(a) Certification. (Filed herewith.)
31.2 |  | Rule 13a-14(a) Certification. (Filed herewith.)
31.3 |  | Rule 13a-14(a) Certification. (Filed herewith.)
31.4 |  | Rule 13a-14(a) Certification. (Filed herewith.)
32.1 |  | Section 1350 Certification. (Furnished herewith.)
101.INS |  | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH |  | XBRL Taxonomy Extension Schema Document. (Filed herewith.)
101.CAL |  | XBRL Taxonomy Extension Calculation Linkbase Document. (Filed herewith.)

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Exhibit Number |  | Description
101.DEF |  | XBRL Taxonomy Extension Definition Linkbase Document. (Filed herewith.)
101.LAB |  | XBRL Taxonomy Extension Label Linkbase Document. (Filed herewith.)
101.PRE |  | XBRL Taxonomy Extension Presentation Linkbase Document. (Filed herewith.)
104 |  | Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101).

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SIGNATURES
Pursuant to the requirements 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.

| SERVICE PROPERTIES TRUST
| By: | /s/ Todd W. Hargreaves
|  | Todd W. Hargreaves
|  | President and Chief Investment Officer
|  | Dated: August 6, 2024
| By: | /s/ Brian E. Donley
|  | Brian E. Donley
|  | Chief Financial Officer and Treasurer
|  | (Principal Financial and Accounting Officer)
|  | Dated: August 6, 2024

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