Braemar Hotel & Resorts Inc.
08/11/2025 | Press release | Distributed by Public on 08/11/2025 04:01
Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q (this "Form 10-Q") contains registered trademarks that are the exclusive property of their respective owners, which are companies other than us, including Marriott International®, Hilton Worldwide®, Sofitel®, Hyatt® and Accor®.
FORWARD-LOOKING STATEMENTS
Throughout this Form 10-Q, we make forward-looking statements that are subject to risks and uncertainties. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," or other similar words or expressions. Additionally, statements regarding the following subjects are forward-looking by their nature:
•our business and investment strategy;
•anticipated or expected purchases or sales of assets;
•our projected operating results;
•completion of any pending transactions;
•our understanding of our competition;
•projected capital expenditures; and
•the impact of technology on our operations and business.
Such forward-looking statements are based on our beliefs, assumptions and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider this risk when you make an investment decision concerning our securities. Additionally, the following factors could cause actual results to vary from our forward-looking statements:
•the factors discussed in our Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (the "SEC") on March 12, 2025 (the "2024 10-K"), including those set forth under the sections entitled "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business," "Properties" and other filings under the Exchange Act;
•changes in interest rates and inflation;
•macroeconomic conditions, such as a prolonged period of weak economic growth, and volatility in capital markets;
•uncertainty in the business sector and market volatility;
•catastrophic events or geopolitical conditions, such as the conflict between Russia and Ukraine and the more recent Israel-Hamas war and changes to tariffs or trade policies;
•extreme weather conditions, which may cause property damage or interrupt business;
•our ability to raise sufficient capital and/or take other actions to improve our liquidity position or otherwise meet our liquidity requirements;
•general volatility of the capital markets and the market price of our common and preferred stock;
•general business and economic conditions affecting the lodging and travel industry;
•changes in our business or investment strategy;
•availability, terms and deployment of capital;
•risks associated with our ability to effectuate our dividend policy, including factors such as operating results and the economic outlook influencing our board's decision whether to pay further dividends at levels previously disclosed or to use available cash to pay dividends;
•unanticipated increases in financing and other costs, including changes in interest rates;
•changes in our industry and the markets in which we operate, interest rates, or local economic conditions;
•the degree and nature of our competition;
•actual and potential conflicts of interest with Ashford Trust, Ashford Inc. and its subsidiaries (including Ashford LLC, Remington Hospitality and Premier), Stirling Hotels & Resorts, Inc. ("Stirling Inc."), and our executive officers and our non-independent directors;
•changes in personnel of Ashford LLC or the lack of availability of qualified personnel;
•changes in governmental regulations, accounting rules, tax rates and similar matters;
•legislative and regulatory changes, including changes to the Internal Revenue Code of 1986, as amended (the "Code") and related rules, regulations and interpretations governing the taxation of REITs, including impacts from the One Big Beautiful Bill Act;
•limitations imposed on our business and our ability to satisfy complex rules in order for us to qualify as a REIT for U.S. federal income tax purposes; and
•future sales and issuances of our common stock or other securities, which might result in dilution and could cause the price of our common stock to decline.
When considering forward-looking statements, you should keep in mind the matters summarized under "Item 1A. Risk Factors" in Part I of our 2024 10-K and this Form 10-Q, and the discussion in this Management's Discussion and Analysis of Financial Condition and Results of Operations, could cause our actual results and performance to differ significantly from those contained in our forward-looking statements. Accordingly, we cannot guarantee future results or performance. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this Form 10-Q. Furthermore, we do not intend to update any of our forward-looking statements after the date of this Form 10-Q to conform these statements to actual results and performance, except as may be required by applicable law.
Overview
We are a Maryland corporation formed in April 2013 that invests primarily in high revenue per available room ("RevPAR"), luxury hotels and resorts. High RevPAR, for purposes of our investment strategy, means RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined by STR, LLC. Two times the U.S. national average was $199 for the year ended December 31, 2024. We have elected to be taxed as a REIT under the Code. We conduct our business and own substantially all of our assets through our operating partnership, Braemar OP.
We operate in the direct hotel investment segment of the hotel lodging industry. As of June 30, 2025, we owned interests in 15 hotel properties in seven states, the District of Columbia, Puerto Rico and St. Thomas, U.S. Virgin Islands with 3,807 total rooms, or 3,667 net rooms, excluding those attributable to our joint venture partner. The hotel properties in our current portfolio are predominantly located in U.S. urban markets and resort locations with favorable growth characteristics resulting from multiple demand generators. We own 14 of our hotel properties directly and one hotel property through an investment in a majority-owned consolidated entity.
We are advised by Ashford Hospitality Advisors LLC through an advisory agreement. Ashford LLC is a subsidiary of Ashford Inc. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC.
We do not operate any of our hotel properties directly; instead, we contractually engage hotel management companies to operate them for us under management contracts. As of June 30, 2025, Remington Hospitality, a subsidiary of Ashford Inc., managed five of our 15 hotel properties.Third-party management companies managed the remaining hotel properties.
Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest. These products and services include, but are not limited to, design and construction services, debt placement and related services, broker-dealer and distribution services, audio visual services, real estate advisory and brokerage services, insurance policies covering general liability, workers compensation and business automobile claims, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and cash management services.
Mr. Monty J. Bennett, chairman of our board of directors and chairman and chief executive officer of Ashford Inc. and his father, Mr. Archie Bennett, Jr. (together, the "Bennetts"), as of June 30, 2025, hold a controlling interest in Ashford Inc. The Bennetts owned approximately 809,937 shares of Ashford Inc. common stock, which represented an approximate 51.5% ownership interest in Ashford Inc., and owned 18,758,600 shares of Ashford Inc. Series D Convertible Preferred Stock, which, along with all unpaid accrued and accumulated dividends thereon, was convertible (at a conversion price of $117.50 per share) into an additional approximate 4,482,564 shares of Ashford Inc. common stock, which if converted as of June 30, 2025, would have increased the Bennetts' ownership interest in Ashford Inc. to 87.4%. The 18,758,600 shares of Series D Convertible Preferred Stock owned by Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. include 360,000 shares owned by trusts. Additionally, Mr. Monty J. Bennett acquired the right to direct votes, effective March 25, 2025, and as of June 30, 2025 those rights represented approximately 565,000 common shares.
As of June 30, 2025, Mr. Monty J. Bennett and Mr. Archie Bennett, Jr., together owned approximately 2,825,398 shares of our common stock (including common units, LTIP and performance LTIP units), which represented an approximate 3.8% ownership in the Company.
Recent Developments
On April 1, 2025, Ms. Kellie Sirna was appointed to serve on our board of directors, effective immediately, to serve until the next annual meeting of stockholders of the Company or until her successor is duly elected and qualified. The board of directors has determined that Ms. Sirna is an independent director under NYSE listing standards and the Company's corporate governance guidelines.
On May 5, 2025, the Company completed the transition of the 415-room Sofitel Chicago Magnificent Mile from a brand-managed hotel to a franchise structure. Under the franchise structure, the hotel will continue to be the Sofitel Chicago Magnificent Mile, but will be managed by Remington Hospitality under the existing terms of its Master Hotel Management Agreement. The management agreement with Remington Hospitality is terminable upon the sale of the hotel. The Company plans to renovate the lobby, restaurant, and meeting space over the next two years.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing the full effects of the legislation on our effective tax rate and cash tax position, but the changes resulting from the tax provisions in the OBBBA are not expected to have a material impact on our consolidated financial statements.
On July 25, 2025, we amended the mortgage loan secured by The Ritz-Carlton Lake Tahoe. Terms of the amendment included extending the maturity date from July 2025 to July 2026.
On August 7, 2025, we sold the Marriott Seattle Waterfront hotel pursuant to an Agreement of Purchase and Sale, entered into effective July 3, 2025, for $145 million in cash, subject to customary pro-rations and adjustments. Additionally, the Company repaid approximately $88.4 million on the mortgage loan that was partially secured by the hotel property.
Key Indicators of Operating Performance
We use a variety of operating and other information to evaluate the operating performance of our business. These key indicators include financial information that is prepared in accordance with GAAP, as well as other financial measures that are non-GAAP measures. In addition, we use other information that may not be financial in nature, including statistical information and comparative data. We use this information to measure the operating performance of our individual hotels, groups of hotels and/or business as a whole. We also use these metrics to evaluate the hotels in our portfolio and potential acquisitions to determine each hotel's contribution to cash flow and its potential to provide attractive long-term total returns. These key indicators include:
•Occupancy. Occupancy means the total number of hotel rooms sold in a given period divided by the total number of rooms available. Occupancy measures the utilization of our hotels' available capacity. We use occupancy to measure demand at a specific hotel or group of hotels in a given period.
•ADR. ADR means average daily rate and is calculated by dividing total hotel rooms revenues by total number of rooms sold in a given period. ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. We use ADR to assess the pricing levels that we are able to generate.
•RevPAR. RevPAR means revenue per available room and is calculated by multiplying ADR by the average daily occupancy. RevPAR is one of the commonly used measures within the hotel industry to evaluate hotel operations. RevPAR does not include revenues from food and beverage sales or parking, telephone or other non-rooms revenues generated by the property. Although RevPAR does not include these ancillary revenues, it is generally considered the leading indicator of core revenues for many hotels. We also use RevPAR to compare the results of our hotels between periods and to analyze results of our comparable hotels (comparable hotels represent hotels we have owned for the entire period). RevPAR improvements attributable to increases in occupancy are generally accompanied by increases in most categories of variable operating costs. RevPAR improvements attributable to increases in ADR are generally accompanied by increases in limited categories of operating costs, such as management fees and franchise fees.
RevPAR changes that are primarily driven by changes in occupancy have different implications for overall revenues and profitability than changes that are driven primarily by changes in ADR. For example, an increase in occupancy at a hotel would lead to additional variable operating costs (including housekeeping services, utilities and room supplies) and could also result in
increased other operating department revenue and expenses. Changes in ADR typically have a greater impact on operating margins and profitability as they do not have a substantial effect on variable operating costs.
Occupancy, ADR and RevPAR are commonly used measures within the lodging industry to evaluate operating performance. RevPAR is an important statistic for monitoring operating performance at the individual hotel level and across our entire business. We evaluate individual hotel RevPAR performance on an absolute basis with comparisons to budget and prior periods, as well as on a regional and company-wide basis. ADR and RevPAR include only rooms revenue. Rooms revenue is dictated by demand (as measured by occupancy), pricing (as measured by ADR) and our available supply of hotel rooms.
We also use funds from operations ("FFO"), Adjusted FFO, earnings before interest, taxes, depreciation and amortization for real estate ("EBITDAre") and Adjusted EBITDAre as measures of the operating performance of our business. See "Non-GAAP Financial Measures."
RESULTS OF OPERATIONS
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
The following table summarizes changes in key line items from our condensed consolidated statements of operations for three months ended June 30, 2025 and 2024 (in thousands except percentages):
| Three Months Ended June 30, | Favorable (Unfavorable) | ||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Rooms | $ | 109,824 | $ | 116,227 | $ | (6,403) | (5.5) | % | |||||||||||||||
| Food and beverage | 45,571 | 47,563 | (1,992) | (4.2) | |||||||||||||||||||
| Other | 23,682 | 23,797 | (115) | (0.5) | |||||||||||||||||||
| Total revenue | 179,077 | 187,587 | (8,510) | (4.5) | |||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Hotel operating expenses: | |||||||||||||||||||||||
| Rooms | 27,285 | 27,476 | 191 | 0.7 | |||||||||||||||||||
| Food and beverage | 35,767 | 36,664 | 897 | 2.4 | |||||||||||||||||||
| Other expenses | 56,445 | 58,155 | 1,710 | 2.9 | |||||||||||||||||||
| Management fees | 5,541 | 6,068 | 527 | 8.7 | |||||||||||||||||||
| Total hotel operating expenses | 125,038 | 128,363 | 3,325 | 2.6 | |||||||||||||||||||
| Property taxes, insurance and other | 7,892 | 10,058 | 2,166 | 21.5 | |||||||||||||||||||
| Depreciation and amortization | 23,360 | 24,694 | 1,334 | 5.4 | |||||||||||||||||||
| Advisory services fee | 7,191 | 7,828 | 637 | 8.1 | |||||||||||||||||||
| Corporate general and administrative | (2,298) | 4,469 | 6,767 | 151.4 | |||||||||||||||||||
| Total expenses | 161,183 | 175,412 | 14,229 | 8.1 | |||||||||||||||||||
| Operating income (loss) | 17,894 | 12,175 | 5,719 | 47.0 | |||||||||||||||||||
| Equity in earnings (loss) of unconsolidated entity | - | (85) | 85 | 100.0 | |||||||||||||||||||
| Interest income | 1,519 | 1,072 | 447 | 41.7 | |||||||||||||||||||
| Other income (expense) | (1,250) | - | (1,250) | (100.0) | |||||||||||||||||||
| Interest expense and amortization of discounts and loan costs | (25,361) | (27,285) | 1,924 | 7.1 | |||||||||||||||||||
| Write-off of loan costs and exit fees | (3) | (82) | 79 | 96.3 | |||||||||||||||||||
|
Gain (loss) on extinguishment of debt
|
- | (22) | 22 | 100.0 | |||||||||||||||||||
| Realized and unrealized gain (loss) on derivatives | 15 | 326 | (311) | (95.4) | |||||||||||||||||||
| Income (loss) before income taxes | (7,186) | (13,901) | 6,715 | 48.3 | |||||||||||||||||||
| Income tax (expense) benefit | 345 | 114 | 231 | (202.6) | |||||||||||||||||||
| Net income (loss) | (6,841) | (13,787) | 6,946 | 50.4 | |||||||||||||||||||
| (Income) loss attributable to noncontrolling interest in consolidated entities | (115) | 303 | 418 | 138.0 | |||||||||||||||||||
| Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | 1,489 | 1,919 | (430) | (22.4) | |||||||||||||||||||
| Net income (loss) attributable to the Company | $ | (5,467) | $ | (11,565) | $ | 6,098 | 52.7 | % | |||||||||||||||
All hotel properties owned for the three months ended June 30, 2025 and 2024 have been included in our results of operations during the respective periods in which they were owned. Based on when a hotel property was acquired or disposed of, operating results for certain hotel properties are not comparable for the three months ended June 30, 2025 and 2024. The hotel property listed below is not a comparable hotel property for the periods indicated and all other hotel properties are considered comparable hotel properties. The following disposition affects reporting comparability related to our condensed consolidated financial statements:
| Hotel Property | Location | Type | Date | |||||||||||||||||
|
Hilton La Jolla Torrey Pines
|
La Jolla, California
|
Disposition
|
July 17, 2024 | |||||||||||||||||
The following table illustrates the key performance indicators of all hotel properties that were included in our results of operations during the three months ended June 30, 2025 and 2024:
| Three Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Occupancy | 71.85 | % | 72.82 | % | |||||||
| ADR (average daily rate) | $ | 438.58 | $ | 415.24 | |||||||
| RevPAR (revenue per available room) | $ | 315.11 | $ | 302.37 | |||||||
| Rooms revenue (in thousands) | $ | 109,824 | $ | 116,227 | |||||||
| Total hotel revenue (in thousands) | $ | 179,077 | $ | 187,587 | |||||||
The following table illustrates the key performance indicators of the 15 hotel properties that were owned for the full three months ended June 30, 2025 and 2024:
| Three Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Occupancy | 71.85 | % | 71.46 | % | |||||||
| ADR (average daily rate) | $ | 438.58 | $ | 435.24 | |||||||
| RevPAR (revenue per available room) | $ | 315.11 | $ | 311.01 | |||||||
| Rooms revenue (in thousands) | $ | 109,824 | $ | 108,395 | |||||||
| Total hotel revenue (in thousands) | $ | 179,077 | $ | 173,475 | |||||||
Net Income (Loss) Attributable to the Company.Net loss attributable to the Company decreased $6.1 million, from $11.6 million for the three months ended June 30, 2024 (the "2024 quarter") to $5.5 million for the three months ended June 30, 2025 (the "2025 quarter"), as a result of the factors discussed below.
Rooms Revenue.Rooms revenue decreased $6.4 million, or 5.5%, to $109.8 million during the 2025 quarter compared to the 2024 quarter primarily due to the sale of the Hilton La Jolla Torrey Pines in July 2024. During the 2025 quarter, our 15 comparable hotel properties experienced a 39 basis point increase in occupancy and a 0.8% increase in room rates.
Fluctuations in rooms revenue between the 2025 quarter and the 2024 quarter are a result of the changes in occupancy and ADR between the 2025 quarter and the 2024 quarter as reflected in the table below (dollars in thousands):
| Hotel Property | Favorable (Unfavorable) | |||||||||||||||||||
| Rooms Revenue |
Occupancy (change in bps) |
ADR (change in %) | ||||||||||||||||||
| Comparable | ||||||||||||||||||||
|
Capital Hilton
|
$ | (692) | (457) | - | % | |||||||||||||||
|
Marriott Seattle Waterfront
|
93 | 227 | (1.7) | % | ||||||||||||||||
| The Notary Hotel | (77) | (15) | (0.7) | % | ||||||||||||||||
| The Clancy | 1,243 | 381 | 10.3 | % | ||||||||||||||||
| Sofitel Chicago Magnificent Mile | 164 | (3) | 2.0 | % | ||||||||||||||||
| Pier House Resort & Spa | 50 | 286 | (3.1) | % | ||||||||||||||||
|
The Ritz-Carlton St. Thomas
|
(1,696) | (749) | (4.2) | % | ||||||||||||||||
|
Park Hyatt Beaver Creek Resort & Spa(1)
|
(442) | (1,090) | 7.8 | % | ||||||||||||||||
|
Hotel Yountville(1)
|
(357) | (291) | (6.7) | % | ||||||||||||||||
|
The Ritz-Carlton Sarasota
|
199 | 363 | (3.1) | % | ||||||||||||||||
| Bardessono Hotel and Spa | (196) | (52) | (3.7) | % | ||||||||||||||||
|
The Ritz-Carlton Lake Tahoe(2)
|
446 | 694 | (3.3) | % | ||||||||||||||||
|
Cameo Beverly Hills
|
(95) | 533 | (10.3) | % | ||||||||||||||||
| The Ritz-Carlton Reserve Dorado Beach | 1,764 | 771 | 3.0 | % | ||||||||||||||||
| Four Seasons Resort Scottsdale | 1,025 | 571 | 1.5 | % | ||||||||||||||||
| Total | $ | 1,429 | 39 | 0.8 | % | |||||||||||||||
|
Non Comparable
|
||||||||||||||||||||
| Hilton La Jolla Torrey Pines | (7,832) | n/a | n/a | |||||||||||||||||
________
(1)This hotel was under renovation during the 2025 quarter.
(2)This hotel was under renovation during the 2024 quarter.
Food and Beverage Revenue.Food and beverage revenue decreased $2.0 million, or 4.2%, to $45.6 million during the 2025 quarter compared to the 2024 quarter. This decrease is attributable to a decrease of $4.8 million at the Hilton La Jolla Torrey Pines as a result of its sale on July 17, 2024 and a decrease of $2.6 million at Capital Hilton, The Ritz-Carlton St. Thomas, Park Hyatt Beaver Creek Resort & Spa, Cameo Beverly Hills and The Notary Hotel. These decreases were partially offset by an aggregate increase of $5.4 million at 10 comparable hotel properties.
Other Hotel Revenue.Other hotel revenue, which consists mainly of condo management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, decreased $115,000, or 0.5%, to $23.7 million during the 2025 quarter compared to the 2024 quarter. This decrease is attributable to an aggregate decrease in other hotel revenue of $663,000 at Park Hyatt Beaver Creek Resort & Spa, Four Seasons Resort Scottsdale, Cameo Beverly Hills, The Ritz-Carlton St. Thomas, Sofitel Chicago Magnificent Mile and Hotel Yountville and a decrease of $1.5 million due to the sale of Hilton La Jolla Torrey Pines, partially offset by an aggregate increase of $2.0 million at nine comparable hotel properties.
Rooms Expense. Rooms expense decreased $191,000, or 0.7%, to $27.3 million in the 2025 quarter compared to the 2024 quarter. This decrease is primarily attributable to an aggregate decrease of $306,000 at six comparable hotel properties and a decrease of $1.5 million due to the sale of Hilton La Jolla Torrey Pines, partially offset by an aggregate increase of $1.6 million at The Ritz-Carlton Reserve Dorado Beach, Four Seasons Resort Scottsdale, The Clancy, The Ritz-Carlton Lake Tahoe, Marriott Seattle Waterfront, The Ritz-Carlton Sarasota, Capital Hilton and The Notary Hotel.
Food and Beverage Expense.Food and beverage expense decreased $897,000, or 2.4%, to $35.8 million during the 2025 quarter compared to the 2024 quarter. This decrease is attributable to an aggregate decrease of $678,000 at six comparable hotel properties and a decrease of $2.4 million due to the sale of Hilton La Jolla Torrey Pines, partially offset by an aggregate increase of $2.2 million at The Ritz-Carlton Lake Tahoe, Four Seasons Resort Scottsdale, The Ritz-Carlton Reserve Dorado Beach, The Ritz-Carlton Sarasota, Marriott Seattle Waterfront, Pier House Resort & Spa, The Notary Hotel, The Clancy and Capital Hilton.
Other Operating Expenses.Other operating expenses decreased $1.7 million, or 2.9%, to $56.4 million in the 2025 quarter compared to the 2024 quarter. Hotel operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and incentive management fees.
We experienced an increase of $240,000 in direct expenses and a decrease of $2.0 million in indirect expenses and incentive management fees in the 2025 quarter as compared to the 2024 quarter. Direct expenses were 4.6% of total hotel revenue in the 2025 quarter and 4.2% in the 2024 quarter.
The increase in direct expenses is associated with higher direct expenses of approximately $587,000 at nine comparable hotel properties, partially offset by lower direct expenses of $212,000 due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of approximately $135,000 at Park Hyatt Beaver Creek Resort & Spa, The Clancy, Bardessono Hotel and Spa, Sofitel Chicago Magnificent Mile, Capital Hilton and Hotel Yountville.
The decrease in indirect expenses comprises decreases in: (i) incentive management fees of $1.1 million comprising an aggregate decrease of $1.0 million at our 15 comparable hotel properties and a decrease of $132,000 at the one disposed hotel property; (ii) lease expense of $926,000 comprising a decrease of $1.0 million at the one disposed hotel property partially offset by an aggregate increase of $87,000 at our 15 comparable hotel properties; (iii) general and administrative costs of $101,000 comprising a decrease of $936,000 at the one disposed hotel property partially offset by an aggregate increase of $835,000 at our 15 comparable hotel properties; and (iv) marketing costs of $67,000 comprising a decrease of $975,000 at the one disposed hotel property partially offset by an aggregate increase of $908,000 at our 15 comparable hotel properties. These decreases were partially offset by increases in: (i) repairs and maintenance of $170,000 comprising an aggregate increase of $505,000 at our 15 comparable hotel properties partially offset by a decrease of $335,000 at the one disposed hotel property; and (ii) energy costs of $112,000 comprising an aggregate increase of $552,000 at our 15 comparable hotel properties, partially offset by a decrease of $440,000 at the one disposed hotel property.
Management Fees.Base management fees decreased $527,000, or 8.7%, to $5.5 million in the 2025 quarter compared to the 2024 quarter. Base management fees decreased by $382,000 at seven comparable hotel properties and by $424,000 at the one disposed hotel property. These decreases were partially offset by an aggregate increase of $279,000 at Sofitel Chicago Magnificent Mile, The Notary Hotel, The Clancy, Marriott Seattle Waterfront, Pier House Resort & Spa, The Ritz-Carlton Lake Tahoe, The Ritz-Carlton Reserve Dorado Beach and Four Seasons Resort Scottsdale.
Property Taxes, Insurance and Other.Property taxes, insurance and other decreased $2.2 million, or 21.5%, to $7.9 million in the 2025 quarter compared to the 2024 quarter. The decrease is primarily attributable to an aggregate decrease of approximately $1.7 million at ten comparable hotel properties and a decrease of $766,000 at the one disposed hotel property. These decreases were partially offset by an aggregate increase of approximately $261,000 at the Capital Hilton, Bardessono Hotel and Spa, Cameo Beverly Hills, Four Seasons Resort Scottsdale and The Notary Hotel.
Depreciation and Amortization.Depreciation and amortization decreased $1.3 million, or 5.4%, to $23.4 million in the 2025 quarter compared to the 2024 quarter. There was an aggregate decrease of $2.2 million at seven comparable hotel properties and a decrease of $1.1 million at the one disposed hotel property, partially offset by an aggregate increase of $1.9 million at The Ritz-Carlton Lake Tahoe, Park Hyatt Beaver Creek Resort & Spa, Ritz Dorado Beach, Cameo Beverly Hills, Four Seasons Resort Scottsdale, Hotel Yountville, The Ritz-Carlton Sarasota and Bardessono Hotel and Spa.
Advisory Services Fee. Advisory services fee decreased $637,000, or 8.1%, to $7.2 million in the 2025 quarter compared to the 2024 quarter due to decreases of $934,000 in equity-based compensation and $460,000 in the incentive fee, partially offset by increases of $616,000 in reimbursable expenses and $141,000 in the base advisory fee.
In the 2025 quarter, we recorded an advisory services fee of $7.2 million, which included reimbursable expenses of $3.6 million, a base advisory fee of $3.5 million, incentive fee of $188,000 and a credit to expense of $51,000 associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.
In the 2024 quarter, we recorded an advisory services fee of $7.8 million, which included a base advisory fee of $3.3 million, reimbursable expenses of $3.0 million, equity-based compensation of $883,000 and an incentive fee of $648,000.
Corporate General and Administrative.Corporate general and administrative was a credit to expense of $2.3 million in the 2025 quarter as compared to expense of $4.5 million in the 2024 quarter. The decrease in corporate general and administrative expense is primarily due to a $5.0 million insurance recovery for prior legal expenses, a decrease in professional fees of $1.9 million and miscellaneous expenses of $251,000, partially offset by an increase in public company costs of $375,000.
Equity in Earnings (Loss) of Unconsolidated Entity.In the 2025 quarter and 2024 quarter, we recorded equity in loss of unconsolidated entity of $0 and $85,000, respectively, related to our investment in OpenKey.
Other Income (Expense). Other expense was $1.3 million in the 2025 quarter due to a realized loss on the sale of a portion of CMBS.
Interest Income.Interest income was $1.5 million and $1.1 million in the 2025 quarter and 2024 quarter, respectively. The increase in interest income in the 2025 quarter was primarily attributable to higher cash balances in the 2025 quarter compared to the 2024 quarter as well as interest income associated with a tranche of CMBS included in investment in securities.
Interest Expense and Amortization of Loan Costs. Interest expense and amortization of loan costs decreased $1.9 million, or 7.1%, to $25.4 million in the 2025 quarter compared to the 2024 quarter. This decrease is primarily due to lower interest expense from lower average interest rates. The average SOFR rates for the 2025 quarter and the 2024 quarter were 4.33% and 5.33%, respectively.
Write-off of Loan Costs and Exit Fees. Write-off of loan costs and exit fees was $3,000 in the 2025 quarter. Write-off of loan costs and exit fees was $82,000 in the 2024 quarter, primarily related to various loan modifications.
Gain (loss) on Extinguishment of Debt.In 2024 quarter, we recognized a loss of $22,000 attributable to the discount associated with the Cameo Beverly Hills mortgage loan that was repaid on April 9, 2024. There was no such gain (loss) recognized in the 2025 quarter.
Realized and Unrealized Gain (Loss) on Derivatives. Realized and unrealized gain on derivatives of $15,000 for the 2025 quarter consisted of a realized gain of $180,000 associated with payments received from counterparties on in-the-money interest rate caps, partially offset by an unrealized loss on interest rate caps of approximately $165,000.
Realized and unrealized gain on derivatives of $326,000 for 2024 quarter consisted of a realized gain of $1.5 million associated with payments received from counterparties on in-the-money interest rate caps, partially offset by an unrealized loss on interest rate caps of approximately $1.2 million.
Income Tax (Expense) Benefit. Income tax benefit increased $231,000, from $114,000 in the 2024 quarter to $345,000 in the 2025 quarter. This increase was primarily due to a decrease in the taxable income of certain of our TRS entities in the 2025 quarter compared to the 2024 quarter.
(Income) Loss Attributable to Noncontrolling Interest in Consolidated Entities. Our noncontrolling interest partners in consolidated entities were allocated income of $115,000 and loss of $303,000 in the 2025 quarter and the 2024 quarter, respectively. At June 30, 2025, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property held by one entity and a 25% ownership interest in a JV. At June 30, 2024, noncontrolling interest in consolidated entities represented an ownership interest of 25% in two hotel properties held by one entity.
Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in operating partnership were allocated a net loss of $1.5 million and $1.9 million in the 2025 quarter and the 2024 quarter, respectively. Redeemable noncontrolling interests in Braemar OP represented ownership interests of 8.51% and 8.02% as of June 30, 2025 and 2024, respectively.
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
The following table summarizes changes in key line items from our condensed consolidated statements of operations for the six months ended June 30, 2025 and 2024 (in thousands except percentages):
| Six Months Ended June 30, | Favorable (Unfavorable) | ||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Rooms | $ | 245,916 | $ | 254,779 | $ | (8,863) | (3.5) | % | |||||||||||||||
| Food and beverage | 97,359 | 101,110 | (3,751) | (3.7) | % | ||||||||||||||||||
| Other | 51,622 | 50,777 | 845 | 1.7 | % | ||||||||||||||||||
| Total hotel revenue | 394,897 | 406,666 | (11,769) | (2.9) | |||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Hotel operating expenses: | |||||||||||||||||||||||
| Rooms | 55,504 | 55,740 | 236 | 0.4 | |||||||||||||||||||
| Food and beverage | 75,977 | 77,381 | 1,404 | 1.8 | |||||||||||||||||||
| Other expenses | 116,821 | 118,231 | 1,410 | 1.2 | |||||||||||||||||||
| Management fees | 12,451 | 13,044 | 593 | 4.5 | |||||||||||||||||||
| Total hotel operating expenses | 260,753 | 264,396 | 3,643 | 1.4 | |||||||||||||||||||
| Property taxes, insurance and other | 18,357 | 20,755 | 2,398 | 11.6 | |||||||||||||||||||
| Depreciation and amortization | 46,755 | 50,114 | 3,359 | 6.7 | |||||||||||||||||||
| Advisory services fee | 13,802 | 14,528 | 726 | 5.0 | |||||||||||||||||||
| Corporate general and administrative | 596 | 2,231 | 1,635 | 73.3 | |||||||||||||||||||
| Total expenses | 340,263 | 352,024 | 11,761 | 3.3 | |||||||||||||||||||
| Operating income (loss) | 54,634 | 54,642 | (8) | - | |||||||||||||||||||
| Equity in earnings (loss) of unconsolidated entity | - | (134) | 134 | 100.0 | |||||||||||||||||||
| Interest income | 3,407 | 1,868 | 1,539 | 82.4 | |||||||||||||||||||
| Other income (expense) | (1,250) | - | (1,250) | (100.0) | |||||||||||||||||||
| Interest expense and amortization of discounts and loan costs | (50,188) | (53,776) | 3,588 | 6.7 | |||||||||||||||||||
| Write-off of loan costs and exit fees | (1,467) | (803) | (664) | (82.7) | |||||||||||||||||||
| Gain (loss) on extinguishment of debt | - | (22) | 22 | 100.0 | |||||||||||||||||||
| Realized and unrealized gain (loss) on derivatives | (183) | 1,258 | (1,441) | (114.5) | |||||||||||||||||||
| Income (loss) before income taxes | 4,953 | 3,033 | 1,920 | 63.3 | |||||||||||||||||||
| Income tax (expense) benefit | (1,122) | (1,338) | 216 | (16.1) | |||||||||||||||||||
| Net income (loss) | 3,831 | 1,695 | 2,136 | 126.0 | |||||||||||||||||||
| (Income) loss attributable to noncontrolling interest in consolidated entities | (51) | 1,046 | 1,097 | 104.9 | |||||||||||||||||||
| Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | 1,751 | 1,623 | (128) | 7.9 | |||||||||||||||||||
| Net income (loss) attributable to the Company | $ | 5,531 | $ | 4,364 | $ | 1,167 | (26.7) | % | |||||||||||||||
All hotel properties owned for the six months ended June 30, 2025 and 2024 have been included in our results of operations during the respective periods in which they were owned. Based on when a hotel property was acquired or disposed of, operating results for certain hotel properties are not comparable for the six months ended June 30, 2025 and 2024. The hotel properties listed below are not comparable hotel properties for the periods indicated and all other hotel properties are considered comparable hotel properties. The following disposition affects reporting comparability related to our condensed consolidated financial statements:
| Hotel Property | Location | Type | Date | |||||||||||||||||
|
Hilton La Jolla Torrey Pines
|
La Jolla, California
|
Disposition
|
July 17, 2024 | |||||||||||||||||
The following table illustrates the key performance indicators of all hotel properties that were included in our results of operations during the six months ended June 30, 2025 and 2024:
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Occupancy | 68.23 | % | 69.10 | % | |||||||
| ADR (average daily rate) | $ | 519.90 | $ | 479.67 | |||||||
| RevPAR (revenue per available room) | $ | 354.74 | $ | 331.47 | |||||||
| Rooms revenue (in thousands) | $ | 245,916 | $ | 254,779 | |||||||
| Total hotel revenue (in thousands) | $ | 394,897 | $ | 406,666 | |||||||
The following table illustrates the key performance indicators of the 15 comparable hotel properties that were owned for the full six months ended June 30, 2025 and 2024:
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Occupancy | 68.23 | % | 68.13 | % | |||||||
| ADR (average daily rate) | $ | 519.90 | $ | 506.85 | |||||||
| RevPAR (revenue per available room) | $ | 354.74 | $ | 345.31 | |||||||
| Rooms revenue (in thousands) | $ | 245,916 | $ | 240,652 | |||||||
| Total hotel revenue (in thousands) | $ | 394,897 | $ | 380,814 | |||||||
Net Income (Loss) Attributable to the Company.Net income attributable to the Company decreased $1.2 million from $4.4 million for the six months ended June 30, 2024 (the "2024 period") to $5.5 million for the six months ended June 30, 2025 (the "2025 period"), as a result of the factors discussed below.
Rooms Revenue.Rooms revenue decreased $8.9 million to $245.9 million during the 2025 period compared to the 2024 period primarily due to the sale of the Hilton La Jolla Torrey Pines in July 2024. During the 2025 period, our 15 comparable hotel properties experienced a 2.6% increase in room rates and a ten basis point increase in occupancy compared to the 2024 period.
Fluctuations in rooms revenue between the 2025 period and the 2024 period are a result of the changes in occupancy and ADR between the 2025 period and the 2024 period as reflected in the table below (dollars in thousands):
| Hotel Property | Favorable (Unfavorable) | |||||||||||||||||||
| Rooms Revenue |
Occupancy (change in bps) |
ADR (change in %) |
||||||||||||||||||
| Comparable | ||||||||||||||||||||
|
Capital Hilton (2)
|
$ | 981 | (290) | 8.7 | % | |||||||||||||||
|
Marriott Seattle Waterfront
|
215 | 227 | (1.0) | % | ||||||||||||||||
| The Notary Hotel | 897 | 279 | 2.9 | % | ||||||||||||||||
|
The Clancy
|
2,124 | 141 | 11.2 | % | ||||||||||||||||
| Sofitel Chicago Magnificent Mile | (75) | (226) | 3.4 | % | ||||||||||||||||
| Pier House Resort & Spa | 25 | 138 | (1.1) | % | ||||||||||||||||
|
The Ritz-Carlton St. Thomas
|
(2,161) | (426) | (1.3) | % | ||||||||||||||||
|
Park Hyatt Beaver Creek Resort & Spa(1)
|
201 | (480) | 11.0 | % | ||||||||||||||||
|
Hotel Yountville (1)
|
(748) | (834) | 0.6 | % | ||||||||||||||||
|
The Ritz-Carlton Sarasota (2)
|
(1,413) | 72 | (6.4) | % | ||||||||||||||||
|
Bardessono Hotel and Spa (2)
|
40 | 324 | (4.3) | % | ||||||||||||||||
|
The Ritz-Carlton Lake Tahoe (2)
|
1,056 | 148 | 5.0 | % | ||||||||||||||||
|
Cameo Beverly Hills
|
(212) | (90) | (2.4) | % | ||||||||||||||||
| The Ritz-Carlton Reserve Dorado Beach | 3,136 | 703 | (0.3) | % | ||||||||||||||||
| Four Seasons Resort Scottsdale | 1,198 | 477 | (1.9) | % | ||||||||||||||||
| Total | $ | 5,264 | 10 | 2.6 | % | |||||||||||||||
| Non-comparable | ||||||||||||||||||||
| Hilton La Jolla Torrey Pines | $ | (14,127) | n/a | n/a | ||||||||||||||||
________
(1)This hotel was under renovation during the 2025 period.
(2)This hotel was under renovation during the 2024 period.
Food and Beverage Revenue.Food and beverage revenue decreased $3.8 million, or 3.7%, to $97.4 million during the 2025 period compared to the 2024 period. We experienced an aggregate decrease in food and beverage revenue of $3.5 million at six comparable hotel properties and a decrease of $8.9 million due to the sale of Hilton La Jolla Torrey Pines. These decreases were partially offset by an aggregate increase of approximately $8.6 million at The Ritz-Carlton Lake Tahoe, Four Seasons Resort Scottsdale, The Ritz-Carlton Sarasota, The Ritz-Carlton Reserve Dorado Beach, The Notary Hotel, Marriott Seattle Waterfront, Pier House Resort & Spa, Bardessono Hotel and Spa and Hotel Yountville.
Other Hotel Revenue.Other hotel revenue, which consists mainly of condominium management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, increased $845,000, or 1.7%, to $51.6 million during the 2025 period compared to the 2024 period. This increase is attributable to higher other hotel revenue of $4.5 million at ten comparable hotel properties. These increases were partially offset by a decrease of $2.9 million due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of approximately $751,000 at Park Hyatt Beaver Creek Resort & Spa, The Ritz-Carlton St. Thomas, Hotel Yountville, The Clancy and Sofitel Chicago Magnificent Mile.
Rooms Expense.Rooms expense decreased $236,000, or 0.4%, to $55.5 million in the 2025 period compared to the 2024 period. This decrease is attributable to an aggregate decrease in rooms expense of $266,000 at Sofitel Chicago Magnificent Mile, Hotel Yountville and Pier House Resort & Spa, and a decrease of $2.8 million due to the sale of Hilton La Jolla Torrey Pines. These decreases were partially offset by an aggregate increase of $2.8 million at 12 comparable hotel properties.
Food and Beverage Expense.Food and beverage expense decreased $1.4 million, or 1.8%, to $76.0 million during the 2025 period compared to the 2024 period. This decrease is attributable to lower aggregate food and beverage expense of approximately $709,000 at The Ritz-Carlton St. Thomas, Cameo Beverly Hills, Park Hyatt Beaver Creek Resort & Spa, Hotel Yountville and Sofitel Chicago Magnificent Mile and a decrease of $4.6 million due to the sale of Hilton La Jolla Torrey Pines. These decreases were partially offset by an aggregate increase of approximately $3.9 million at ten comparable hotel properties.
Other Operating Expenses.Other operating expenses decreased $1.4 million, or 1.2%, to $116.8 million in the 2025 period compared to the 2024 period. Other operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and incentive management fees.
We experienced a decrease of $71,000 in direct expenses and a decrease of $1.3 million in indirect expenses and incentive management fees in the 2025 period compared to the 2024 period. Direct expenses were 4.5% of total hotel revenue in the 2025 period and 4.4% in the 2024 period.
The decrease in direct expenses is associated with lower direct expenses of approximately $304,000 at eight comparable hotel properties and a decrease of $429,000 due to the sale of Hilton La Jolla Torrey Pines. These decreases were partially offset by higher direct expenses of $662,000 at The Ritz-Carlton Sarasota, Four Seasons Resort Scottsdale, The Ritz-Carlton Reserve Dorado Beach, The Ritz-Carlton St. Thomas, The Notary Hotel, Marriott Seattle Waterfront and Cameo Beverly Hills.
The decrease in indirect expenses is comprised of decreases in: (i) lease expense of $1.6 million comprising of a decrease of $1.7 million at the one disposed hotel property partially offset by an aggregate increase of $135,000 at our 15 comparable hotel properties; (ii) incentive management fees of $761,000 including $629,000 at our 15 comparable hotel properties and $132,000 at the one disposed hotel property; and (iii) marketing costs of $275,000 comprising an aggregate decrease of $1.9 million at the one disposed hotel property partially offset by an increase of $1.6 million at our 15 comparable hotel properties. These decreases were partially offset by increases in: (i) general and administrative costs of $928,000 comprising an aggregate increase of $2.6 million at our 15 comparable hotel properties partially offset by a decrease of $1.7 million at the one disposed hotel property; (ii) repairs and maintenance of $318,000 comprising an aggregate increase of $936,000 at our 15 comparable hotel properties partially offset by a decrease of $618,000 at the disposed hotel property; and (iii) energy costs of $6,000 comprising an aggregate increase of $906,000 at our 15 comparable hotel properties partially offset by a decrease of $900,000 at the one disposed hotel property.
Management Fees.Base management fees decreased $593,000, or 4.5%, to $12.5 million in the 2025 period compared to the 2024 period. Management fees decreased $315,000 at six comparable hotel properties and $777,000 due to the sale of Hilton La Jolla Torrey Pines. These decreases were partially offset by an aggregate increase of $499,000 at The Ritz-Carlton Reserve Dorado Beach, Four Seasons Resort Scottsdale, The Clancy, The Notary Hotel, Marriott Seattle Waterfront, Pier House Resort & Spa, Capital Hilton, Bardessono Hotel and Spa and The Ritz-Carlton Lake Tahoe.
Property Taxes, Insurance and Other.Property taxes, insurance and other decreased $2.4 million, or 11.6%, to $18.4 million in the 2025 period compared to the 2024 period. This decrease is primarily attributable to a decrease of $1.6 million due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of $1.5 million at nine comparable hotel properties. These decreases were partially offset by an aggregate increase of approximately $680,000 at six comparable hotel properties.
Depreciation and Amortization.Depreciation and amortization decreased $3.4 million, or 6.7%, to $46.8 million for the 2025 period compared to the 2024 period. This decrease is comprised of a decrease of $2.1 million due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of $5.3 million at The Ritz-Carlton St. Thomas, Capital Hilton, The Clancy, The Notary Hotel, Pier House Resort & Spa, Marriott Seattle Waterfront and Sofitel Chicago Magnificent Mile. These decreases were partially offset by an aggregate increase of $4.0 million at eight comparable hotel properties.
Advisory Services Fee. Advisory services fee decreased $726,000, or 5.0%, to $13.8 million in the 2025 period compared to the 2024 period due to lower equity-based compensation of $2.1 million and a lower incentive fee of $378,000, partially offset by higher reimbursable expenses of $1.4 million and a higher base advisory fee of $390,000.
In the 2025 period, we recorded an advisory services fee of $13.8 million, which included a base advisory fee of $7.1 million, reimbursable expenses of $6.6 million, an incentive fee of $270,000 and a credit to expense of $99,000 associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.
In the 2024 period, we recorded an advisory services fee of $14.5 million, which included a base advisory fee of $6.7 million, reimbursable expenses of $5.2 million, $2.0 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. and an incentive fee of $648,000.
Corporate General and Administrative.Corporate general and administrative expense was $596,000 in the 2025 period and consisted of $3.1 million in professional fees, $1.6 million of public company costs and $839,000 in miscellaneous expenses. These expenses were partially offset by an expense reduction of $5.0 million from an insurance recovery for prior legal expenses.
Corporate general and administrative expense was $2.2 million in the 2024 period and consisted of $6.2 million in professional fees, $1.1 million in public company costs, and $602,000 in miscellaneous expenses. Additionally, during the 2024 period there was a revision to the estimated contribution amount associated with the Fourth Amended and Restated Contribution Agreement with Ashford Securities that resulted in a $5.6 million reduction to expense.
Equity in Earnings (Loss) of Unconsolidated Entity.There was no equity in earnings (loss) of unconsolidated entity in the 2025 period as a result of impairing the OpenKey investment in the fourth quarter of 2024. In the 2024 period we recorded equity in loss of unconsolidated entity of $134,000 related to our investment in OpenKey.
Other Income (Expense). Other expense was $1.3 million in the 2025 period due to a realized loss from the sale of a portion of CMBS.
Interest Income.Interest income was $3.4 million and $1.9 million in the 2025 period and the 2024 period, respectively. The increase in interest income in the 2025 period was primarily attributable to interest income associated with a tranche of CMBS included in investment in securities in the 2025 period compared to the 2024 period, partially offset by lower excess cash balances.
Interest Expense and Amortization of Discounts and Loan Costs.Interest expense and amortization of discounts and loan costs decreased $3.6 million, or 6.7%, to $50.2 million for the 2025 period compared to the 2024 period. The decrease is primarily due to lower interest expense from lower average interest rates in the 2025 period partially offset by higher amortization of loan costs of approximately $2.1 million in the 2025 period compared to the 2024 period. The average SOFR rates for the 2025 period and the 2024 period were 4.34% and 5.33%, respectively.
Write-off of Loan Costs and Exit Fees. Write-off of loan costs and exit fees was $1.5 million in the 2025 period related to various loan refinances and modifications. Write-off of loan costs and exit fees was $803,000 in the 2024 period related to various loan modifications.
Realized and Unrealized Gain (Loss) on Derivatives.Realized and unrealized loss on derivatives of $183,000 for the 2025 period consisted of an unrealized loss on interest rate caps of $551,000, partially offset by a realized gain of $368,000 associated with payments received from counterparties on in-the-money interest rate caps.
Realized and unrealized gain on derivatives of $1.3 million for the 2024 period primarily consisted of an unrealized gain on warrants of $12,000 and a realized gain of $3.2 million associated with payments received from counterparties on in-the-money interest rate caps, partially offset by an unrealized loss on interest rate caps of approximately $2.0 million.
Income Tax (Expense) Benefit.Income tax expense decreased $216,000, from $1.3 million in the 2024 period to $1.1 million in the 2025 period. This decrease was primarily due to a decrease in the taxable income of certain of our TRS entities in the 2025 period compared to the 2024 period.
(Income) Loss Attributable to Noncontrolling Interest in Consolidated Entities.Our noncontrolling interest partners in consolidated entities were allocated income of $51,000 and a loss $1.0 million in the 2025 period and the 2024 period, respectively. As of June 30, 2025, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property held by one entity and a 25% ownership interest in a JV. As of June 30, 2024, noncontrolling interest in consolidated entities represented an ownership interest of 25% in two hotel properties held by one entity.
Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in operating partnership were allocated a net loss of $1.8 million in the 2025 period and $1.6 million in the 2024 period. Redeemable noncontrolling interests represented ownership interests in Braemar OP of approximately 8.51% and 8.02% as of June 30, 2025 and 2024, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Our short-term liquidity requirements consist primarily of funds necessary to pay for operating expenses and other expenditures directly associated with our hotel properties, including:
•advisory fees payable to Ashford LLC;
•recurring maintenance necessary to maintain our hotel properties in accordance with brand standards;
•interest expense and scheduled principal payments on outstanding indebtedness;
•dividends on our common stock;
•dividends on our preferred stock;
•redemptions of our non-traded preferred stock; and
•capital expenditures to improve our hotel properties.
We expect to meet our short-term liquidity requirements generally through net cash provided by operations, capital market activities, asset sales and existing cash balances.
Pursuant to the advisory agreement between us and our Advisor, we must pay our Advisor on a monthly basis a base advisory fee, subject to a minimum base advisory fee. The minimum base advisory fee is equal to the greater of: (i) 90% of the base fee paid for the same month in the prior fiscal year; and (ii) 1/12thof the "G&A Ratio" for the most recently completed fiscal quarter multiplied by our total market capitalization on the last balance sheet date included in the most recent quarterly report on Form 10-Q or annual report on Form 10-K that we file with the SEC. Thus, even if our total market capitalization and performance decline, we will still be required to make payments to our Advisor equal to the minimum base advisory fee, which could adversely impact our liquidity and financial condition.
Our long-term liquidity requirements consist primarily of funds necessary to pay for the costs of acquiring additional hotel properties and redevelopments, renovations, expansions and other capital expenditures that need to be made periodically with respect to our hotel properties and scheduled debt payments. We expect to meet our long-term liquidity requirements through various sources of capital, including future common and preferred equity issuances, existing working capital, net cash provided by operations, hotel mortgage indebtedness and other secured and unsecured borrowings. However, there are a number of factors that may have a material adverse effect on our ability to access these capital sources, the state of overall equity and credit markets, our degree of leverage, our unencumbered asset base and borrowing restrictions imposed by lenders (including as a result of any failure to comply with financial covenants in our existing and future indebtedness), general market conditions for REITs, our operating performance and liquidity and market perceptions about us. The success of our business strategy will depend, in part, on our ability to access these various capital sources. While management cannot provide any assurances, management believes that our cash flow from operations, our existing cash balances and investment in securities will be adequate to meet upcoming anticipated requirements for interest and principal payments on debt (excluding any potential final maturity principal payments and paydowns for extension tests), working capital, and capital expenditures for the next 12 months and dividends required to maintain our status as a REIT for U.S. federal income tax purposes.
Our hotel properties will require periodic capital expenditures and renovations to remain competitive. In addition, acquisitions, redevelopments or expansions of hotel properties may require significant capital outlays. We may not be able to fund such capital improvements solely from net cash provided by operations because we must distribute annually at least 90% of our REIT taxable income, determined without regard to the deductions for dividends paid and excluding net capital gains, to qualify and maintain our qualification as a REIT, and we are subject to tax on any retained income and gains. As a result, our ability to fund capital expenditures, acquisitions or hotel redevelopment through retained earnings is very limited. Consequently, we expect to rely heavily upon the availability of debt or equity capital for these purposes. If we are unable to obtain the necessary capital on favorable terms, or at all, our financial condition, liquidity, results of operations and prospects could be materially and adversely affected.
Certain of our loan agreements contain cash trap provisions that may be triggered if the performance of our hotel properties declines. When these provisions are triggered, substantially all of the profit generated by the hotel properties securing such loan is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our various lenders. This could affect our liquidity and our ability to make distributions to our stockholders until such time that a cash trap is no longer in effect for such loan. These cash trap provisions have been triggered on one mortgage loan, as discussed below. Our loan that is in a cash trap may remain subject to the cash trap provisions for a substantial period of time which could limit our flexibility and adversely affect our financial condition or our qualification as a REIT. As of June 30, 2025, the mortgage loan secured by The Ritz-Carlton Lake Tahoe was in a cash trap. The amount of cash in the cash trap as of June 30, 2025 was $0.
As of June 30, 2025, the Company held cash and cash equivalents of $80.2 million and restricted cash of $55.5 million, the vast majority of which is comprised of lender and manager-held reserves. As of June 30, 2025, $24.2 million was also due to the Company from third-party hotel managers, most of which is held by one of the Company's managers and is available to fund hotel operating costs. As of June 30, 2025, our net debt to gross assets was 44.2%.
The Company's cash and cash equivalents are primarily comprised of corporate cash invested in short-term U.S. Treasury securities with maturity dates of less than 90 days and corporate cash held at commercial banks in Insured Cash Sweep ("ICS") accounts, which are fully insured by the FDIC. The Company's cash and cash equivalents also includes property-level operating cash deposited with commercial banks that have been designated as a Global Systemically Important Bank ("G-SIB") by the Financial Stability Board ("FSB") and a small amount deposited with other commercial banks.
Equity Transactions
On November 13, 2019, we filed an initial registration statement with the SEC, as amended on January 24, 2020, for shares of our non-traded Series E Redeemable Preferred Stock (the "Series E Preferred Stock") and our non-traded Series M Redeemable Preferred Stock (the "Series M Preferred Stock"). The registration statement became effective on February 21, 2020, and contemplates the issuance and sale of up to 20,000,000 shares of Series E Preferred Stock or Series M Preferred Stock in a primary offering and up to 8,000,000 shares of Series E Preferred Stock or Series M Preferred Stock pursuant to a dividend reinvestment plan. On February 25, 2020, we filed our prospectus with the SEC. Ashford Securities, a subsidiary of Ashford Inc., serves as the dealer manager and wholesaler of the Series E Preferred Stock and Series M Preferred Stock. On April 2, 2021, the Company filed with the State Department of Assessments and Taxation of the State of Maryland (the "SDAT") articles supplementary to the Company's Articles of Amendment and Restatement that provided for: (i) reclassifying the existing 28,000,000 shares of Series E Preferred Stock and 28,000,000 shares of Series M Preferred Stock as unissued shares of preferred stock; (ii) reclassifying and designating 28,000,000 shares of the Company's authorized capital stock as shares of the Series E Preferred Stock (the "Series E Articles Supplementary"); and (iii) reclassifying and designating 28,000,000 shares of the Company's authorized capital stock as shares of the Series M Preferred Stock (the "Series M Articles Supplementary"). The Series E Articles Supplementary and Series M Articles Supplementary were filed to revise the preferred stock terms related to the dividend rate, our optional redemption right and certain other voting rights. The Company also caused its operating partnership to execute Amendment No. 5 to the Third Amended and Restated Agreement of Limited Partnership to amend the terms of its operating partnership agreement to conform to the terms of the Series E Articles Supplementary and Series M Articles Supplementary. The Company issued approximately 16.4 million shares of Series E Preferred Stock and received net proceeds of approximately $369.5 million and issued approximately 2.0 million shares of Series M Preferred Stock and received net proceeds of approximately $47.6 million. On February 21, 2023, the Company announced the closing of its offering of the Series E Preferred Stock and Series M Preferred Stock.
On July 12, 2021, the Company entered into an equity distribution agreement (the "Virtu July 2021 EDA") with Virtu to sell from time-to-time shares of our common stock having an aggregate offering price of up to $100 million. We will pay Virtu a commission of approximately 1.0% of the gross sales price of the shares of our common stock sold. The Company may also sell some or all of the shares of our common stock to Virtu as principal for its own account at a price agreed upon at the time of sale. As of August 6, 2025, the Company has sold approximately 4.7 million shares of common stock under the Virtu July 2021 EDA and received gross proceeds of approximately $24.0 million.
On May 3, 2024, our board of directors approved a new share repurchase program, pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company's common stock, par value $0.01 per share, having an aggregate value of up to $50 million. The Company may repurchase shares through open market transactions, privately negotiated transactions or other means. The timing and amount of any transactions will be subject to the discretion of the Company based upon market conditions, and the program may be suspended or terminated at any time by the Company at its discretion without prior notice. The board of directors' authorization replaced any previous repurchase authorizations. As of August 6, 2025, the Company has not repurchased any common stock pursuant to the plan.
Debt Transactions
On January 14, 2025, the Company amended its mortgage loan secured by the 170-room Ritz-Carlton Lake Tahoe. The terms of the amendment included a $10.0 million principal pay down, extending the current maturity date to July 2025, an interest rate reduction to SOFR + 3.25%, and one six-month extension option subject to satisfaction of certain conditions. The mortgage loan had an initial maturity date in January 2025. The $43.4 million current mortgage loan amount represents an approximate 27% loan-to-value based on a third-party appraisal completed by the lender. The appraisal valued the hotel at $160 million based on its "as-is" value.
On March 7, 2025, the Company refinanced its $293.2 million mortgage loan secured by The Clancy, The Notary Hotel, Marriott Seattle Waterfront, and Sofitel Chicago Magnificent Mile, which had an interest rate of SOFR + 2.66% and a final maturity date in June of 2025 and its $62.0 million mortgage loan secured by The Ritz-Carlton Reserve Dorado Beach, which had an interest rate of SOFR + 4.75% and a final maturity date in March of 2026. The new $363.0 million mortgage loan bears interest at a floating interest rate of SOFR + 2.52% and has a two-year initial term with three one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is secured by five hotels: The Clancy, The Notary Hotel, Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, and The Ritz-Carlton Reserve Dorado Beach. The $363.0 million mortgage loan amount represents an approximate 49% loan-to-value based on third-party appraisals completed by the lender. The appraisals valued the hotels at $742 million based on the sum of their "as-is" values.
On April 4, 2025, the Company assumed a $5.4 million term loan secured by a parcel of land. The assumed term loan is interest only, bears interest at WSJ Prime Rate, and matures in March 2026. This term loan has a floor of 4.99%.
On July 25, 2025, we amended the mortgage loan secured by The Ritz-Carlton Lake Tahoe. Terms of the amendment included extending the maturity date from July 2025 to July 2026.
On August 7, 2025, we sold the Marriott Seattle Waterfront hotel pursuant to an Agreement of Purchase and Sale, entered into effective July 3, 2025, for $145 million in cash, subject to customary pro-rations and adjustments. Additionally, the Company repaid approximately $88.4 million on the mortgage loan that was partially secured by the hotel property.
Sources and Uses of Cash
We had approximately $80.2 million and $135.5 million of cash and cash equivalents at June 30, 2025 and December 31, 2024, respectively. We anticipate that our principal sources of funds to meet our cash requirements will include cash on hand, positive cash flow from operations and capital market activities.
Net Cash Flows Provided by (Used in) Operating Activities.Net cash flows provided by operating activities were $38.2 million and $60.2 million for the six months ended June 30, 2025 and 2024, respectively. Cash flows from operations were impacted by changes in hotel operations and the disposition of a hotel property in the third quarter of 2024. Cash flows from operations are also impacted by the timing of working capital cash flows, such as collecting receivables from hotel guests, paying vendors, settling with related parties and settling with hotel managers.
Net Cash Flows Provided by (Used in) Investing Activities.For the six months ended June 30, 2025, net cash flows used in investing activities were $11.7 million. The cash outflows were primarily attributable to $33.0 million of capital improvements made to various hotel properties and acquisition of land of $5.5 million, partially offset by cash inflows of $23.8 million from sale of investment in securities and $3.1 million from property insurance proceeds. Our capital improvements consisted of approximately $23.2 million of return on investment capital projects and approximately $9.9 million of renewal and replacement capital projects.
For the six months ended June 30, 2024, net cash flows used in investing activities were $38.7 million. These cash outflows were primarily attributable to $39.2 million of capital improvements made to various hotel properties partially offset by cash inflows of $542,000 related to proceeds from property insurance. Our capital improvements consisted of approximately $28.6 million of return on investment capital projects and approximately $10.6 million of renewal and replacement capital projects.
Return on investment capital projects are designed to improve the positioning of our hotel properties within their markets and competitive sets. Renewal and replacement capital projects are designed to maintain the quality and competitiveness of our hotels.
Net Cash Flows Provided by (Used in) Financing Activities.For the six months ended June 30, 2025, net cash flows used in financing activities were $75.9 million. Cash outflows primarily consisted of $365.2 million of repayments of indebtedness, $40.7 million for cash redemptions of Series E and Series M preferred stock, $24.2 million of dividend and distribution
payments, $8.9 million of payments of loan costs and exit fees, $508,000 to purchase interest rate caps, and $92,000 from the redemption of operating partnership units. These cash outflows were partially offset by cash inflows of $363.0 million from borrowings on indebtedness, $424,000 of proceeds from in-the-money interest rate caps and a contribution of $306,000 from a noncontrolling interest holder in a consolidated entity.
For the six months ended June 30, 2024, net cash flows provided by financing activities were $6.9 million. Cash outflows primarily consisted of $30.0 million of repayments of indebtedness, $26.2 million of dividend and distribution payments, $1.3 million to purchase interest rate caps, $3.3 million of payments of loan costs and exit fees and $11.0 million for cash redemptions of Series E and Series M preferred stock. These cash outflows were partially offset by cash inflows of $62.0 million from borrowings on indebtedness and $3.3 million of proceeds from in-the-money interest rate caps.
Dividend Policy
On December 10, 2024, our board of directors approved the Company's dividend policy for 2025. The Company expects to pay a quarterly cash dividend of $0.05 per share for the Company's common stock for 2025, or $0.20 per share on an annualized basis. On April 2, 2025, our board of directors declared a quarterly cash dividend of $0.05 per diluted share for the second quarter of 2025. On July 10, 2025, our board of directors declared a quarterly cash dividend of $0.05 per diluted share for the third quarter of 2025. The approval of our dividend policy does not commit our board of directors to declare future dividends with respect to any quantity or the amount thereof. The board of directors will continue to review its dividend policy on a quarter-to-quarter basis. For income tax purposes, distributions paid consist of ordinary income, capital gains, return of capital or a combination thereof.
Seasonality
Our properties' operations historically have been seasonal as certain properties maintain higher occupancy rates during the summer months and some during the winter months. This seasonality pattern can cause fluctuations in our quarterly lease revenue under our percentage leases. Quarterly revenue also may be adversely affected by renovations and repositionings, our managers' effectiveness in generating business and by events beyond our control, such as pandemics, extreme weather conditions, natural disasters, terrorist attacks or alerts, civil unrest, government shutdowns, airline strikes or reduced airline capacity, economic factors and other considerations affecting travel. To the extent that cash flows from operations and cash on hand are insufficient during any quarter due to temporary or seasonal fluctuations in lease revenue, we expect to utilize borrowings to fund distributions required to maintain our REIT status. However, we cannot make any assurances that we will make distributions in the future.
Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Our accounting policies that are critical or most important to understanding our financial condition and results of operations and that require management to make the most difficult judgments are described in the section "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2024 Form 10-K. There have been no material changes in these critical accounting policies.
Non-GAAP Financial Measures
The following non-GAAP presentations of EBITDA, EBITDAre, Adjusted EBITDAre, FFO and Adjusted FFO are presented to help our investors evaluate our operating performance.
EBITDA is defined as net income (loss) before interest expense and amortization of loan costs, depreciation and amortization, income taxes, equity in (earnings) loss of unconsolidated entity and after the Company's portion of EBITDA of OpenKey. In addition, we exclude impairment on real estate, (gain) loss on disposition of assets and hotel property and the Company's portion of EBITDAre of OpenKey from EBITDA to calculate EBITDA for real estate, or EBITDAre, as defined by NAREIT.
We then further adjust EBITDAre to exclude certain additional items such as amortization of favorable (unfavorable) contract assets (liabilities), transaction and conversion costs, other income/expense, write-off of loan costs and exit fees, gain/loss on insurance settlements, legal, advisory and settlement costs, advisory services incentive fee, gain/loss on extinguishment of debt, stock/unit-based compensation and the Company's portion of adjustments to EBITDAre of OpenKey and non-cash items such as unrealized gain/ loss on derivatives.
We present EBITDA, EBITDAre and Adjusted EBITDAre because we believe they are useful to an investor in evaluating our operating performance because they provide investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe they help investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results. Our management team also uses EBITDA as one measure in determining the value of acquisitions and dispositions. EBITDA, EBITDAre and Adjusted EBITDAre as calculated by us may not be comparable to EBITDA, EBITDAre and Adjusted EBITDAre reported by other companies that do not define EBITDA, EBITDAre and Adjusted EBITDAre exactly as we define the terms. EBITDA, EBITDAre and Adjusted EBITDAre do not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to operating income or net income determined in accordance with GAAP as an indicator of performance or as an alternative to cash flows from operating activities as determined by GAAP as an indicator of liquidity.
The following table reconciles net income (loss) to EBITDA, EBITDAre and Adjusted EBITDAre (in thousands) (unaudited):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net income (loss) | $ | (6,841) | $ | (13,787) | $ | 3,831 | $ | 1,695 | |||||||||||||||
| Interest expense and amortization of loan costs | 25,361 | 27,285 | 50,188 | 53,776 | |||||||||||||||||||
| Depreciation and amortization | 23,360 | 24,694 | 46,755 | 50,114 | |||||||||||||||||||
| Income tax expense (benefit) | (345) | (114) | 1,122 | 1,338 | |||||||||||||||||||
| Equity in (earnings) loss of unconsolidated entity | - | 85 | - | 134 | |||||||||||||||||||
| Company's portion of EBITDA of OpenKey | - | (82) | - | (139) | |||||||||||||||||||
|
EBITDA and EBITDAre
|
41,535 | 38,081 | 101,896 | 106,918 | |||||||||||||||||||
| Amortization of favorable (unfavorable) contract assets (liabilities) | 107 | 118 | 214 | 237 | |||||||||||||||||||
|
Transaction and conversion costs (1)
|
471 | 53 | 1,166 | (5,574) | |||||||||||||||||||
| Write-off of premiums, loan costs and exit fees | 3 | 82 | 1,467 | 803 | |||||||||||||||||||
| Realized and unrealized (gain) loss on derivatives | (15) | (326) | 183 | (1,258) | |||||||||||||||||||
| Stock/unit-based compensation | (47) | 1,135 | (95) | 2,262 | |||||||||||||||||||
|
Legal, advisory and settlement costs(2)
|
(4,626) | 2,870 | (4,482) | 4,817 | |||||||||||||||||||
| Advisory services incentive fee | 188 | 648 | 270 | 648 | |||||||||||||||||||
| (Gain) loss on extinguishment of debt | - | 22 | - | 22 | |||||||||||||||||||
|
Other (income) expense
|
1,250 | - | 1,250 | - | |||||||||||||||||||
| Company's portion of adjustments to EBITDAre of OpenKey | - | 3 | - | 3 | |||||||||||||||||||
| Adjusted EBITDAre | $ | 38,866 | $ | 42,686 | $ | 101,869 | $ | 108,878 | |||||||||||||||
__________________
(1)Includes amounts associated with funding certain expenses of Ashford Securities LLC, which in 2024 included a true up of these expenses based on capital raised.
(2)Includes amounts related to a $5.0 million expense reduction in 2025 from an insurance recovery for prior legal expenses.
FFO is calculated on the basis defined by NAREIT, which is net income (loss) attributable to common stockholders, computed in accordance with GAAP, excluding gains or losses on disposition of assets, plus impairment charges on real estate, depreciation and amortization of real estate assets, and after redeemable noncontrolling interests in the operating partnership and adjustments for unconsolidated entities. NAREIT developed FFO as a relative measure of performance of an equity REIT to recognize that income-producing real estate historically has not depreciated on the basis determined by GAAP. Our calculation of Adjusted FFO excludes transaction and conversion costs, other income/expense, write-off of premiums, loan costs and exit fees, legal, advisory and settlement costs, stock/unit-based compensation, severance, gain/loss on insurance settlements, gain/loss on extinguishment of debt, and non-cash items such as deemed dividends on redeemable preferred stock, interest expense accretion on refundable membership club deposits, amortization of loan costs, unrealized gain/loss on derivatives and the Company's portion of adjustments to FFO of OpenKey. FFO and Adjusted FFO exclude amounts attributable to the portion of a partnership owned by the third party. We present FFO and Adjusted FFO because we consider FFO and Adjusted FFO important supplemental measures of our operational performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO and Adjusted FFO when reporting their results. FFO and Adjusted FFO are intended to exclude GAAP historical cost depreciation and amortization, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO and Adjusted FFO exclude depreciation and amortization related to real estate assets, gains and losses from real property dispositions and impairment losses on real estate assets, FFO and Adjusted FFO provide performance measures that, when compared year over year, reflect the effect to operations from trends in occupancy, guestroom rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. We consider FFO and Adjusted FFO to be appropriate measures of our ongoing normalized operating performance as a REIT. We compute FFO in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that either do not define the term in accordance with the current NAREIT definition or interpret the NAREIT definition differently than us. FFO and Adjusted FFO do not represent cash generated from operating activities as determined by GAAP and should not be considered as an alternative to GAAP net income or loss as an indication of our financial performance or GAAP cash flows from operating activities as a measure of our liquidity. FFO and Adjusted FFO are also not indicative of funds available to satisfy our cash needs, including our ability to make cash distributions. However, to facilitate a clear understanding of our historical operating results, we believe that FFO and Adjusted FFO should be considered along with our net income or loss and cash flows reported in our condensed consolidated financial statements.
The following table reconciles net income (loss) to FFO and Adjusted FFO (in thousands) (unaudited):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net income (loss) | $ | (6,841) | $ | (13,787) | $ | 3,831 | $ | 1,695 | |||||||||||||||
| (Income) loss attributable to noncontrolling interest in consolidated entities | (115) | 303 | (51) | 1,046 | |||||||||||||||||||
| Net (Income) loss attributable to redeemable noncontrolling interests in operating partnership | 1,489 | 1,919 | 1,751 | 1,623 | |||||||||||||||||||
| Preferred dividends | (8,992) | (10,329) | (18,261) | (20,736) | |||||||||||||||||||
|
Deemed dividends on preferred stock
|
(1,559) | (26) | (5,835) | (2,024) | |||||||||||||||||||
| Net income (loss) attributable to common stockholders | (16,018) | (21,920) | (18,565) | (18,396) | |||||||||||||||||||
|
Depreciation and amortization on real estate (1)
|
22,690 | 23,696 | 45,366 | 47,876 | |||||||||||||||||||
| Net income (loss) attributable to redeemable noncontrolling interests in operating partnership | (1,489) | (1,919) | (1,751) | (1,623) | |||||||||||||||||||
| Equity in (earnings) loss of unconsolidated entity | - | 85 | - | 134 | |||||||||||||||||||
| Company's portion of FFO of OpenKey | - | (95) | - | (162) | |||||||||||||||||||
| FFO available to common stockholders and OP unitholders | 5,183 | (153) | 25,050 | 27,829 | |||||||||||||||||||
|
Deemed dividends on preferred stock
|
1,559 | 26 | 5,835 | 2,024 | |||||||||||||||||||
|
Transaction and conversion costs (2)
|
471 | 53 | 1,166 | (5,574) | |||||||||||||||||||
| Write-off of premiums, loan costs and exit fees | 3 | 82 | 1,467 | 803 | |||||||||||||||||||
| Unrealized (gain) loss on derivatives | 165 | 1,213 | 551 | 1,952 | |||||||||||||||||||
| Stock/unit-based compensation | (47) | 1,135 | (95) | 2,262 | |||||||||||||||||||
|
Legal, advisory and settlement costs (3)
|
(4,626) | 2,870 | (4,482) | 4,817 | |||||||||||||||||||
| Interest expense accretion on refundable membership club deposits | 135 | 150 | 286 | 315 | |||||||||||||||||||
|
Amortization of loan costs (1)
|
2,651 | 1,319 | 4,748 | 2,527 | |||||||||||||||||||
| Advisory services incentive fee | 188 | 648 | 270 | 648 | |||||||||||||||||||
| (Gain) loss on extinguishment of debt | - | 22 | - | 22 | |||||||||||||||||||
|
Other (income) expense
|
1,250 | - | 1,250 | - | |||||||||||||||||||
| Company's portion of adjustments to FFO of OpenKey | - | 3 | - | 3 | |||||||||||||||||||
| Adjusted FFO available to common stockholders and OP unitholders | $ | 6,932 | $ | 7,368 | $ | 36,046 | $ | 37,628 | |||||||||||||||
____________________
(1)Net of adjustment for noncontrolling interest in consolidated entities. The following table presents the amounts of the adjustments for noncontrolling interests for each line item:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Depreciation and amortization on real estate | $ | (670) | $ | (998) | $ | (1,389) | $ | (2,238) | |||||||||||||||
| Amortization of loan costs | (36) | (132) | (71) | (235) | |||||||||||||||||||
(2) Includes amounts associated with funding certain expenses of Ashford Securities LLC, which in 2024 included a true up of these expenses based on capital raised.
(3)Includes amounts related to a $5.0 million expense reduction in 2025 from an insurance recovery for prior legal expenses.
The following table presents certain information related to our hotel properties as of June 30, 2025:
| Hotel Property | Location | Total Rooms | % Owned | Owned Rooms | ||||||||||||||||||||||
| Fee Simple Properties | ||||||||||||||||||||||||||
| Capital Hilton | Washington, D.C. | 559 | 75 | % | 419 | |||||||||||||||||||||
| Marriott Seattle Waterfront | Seattle, WA | 369 | 100 | % | 369 | |||||||||||||||||||||
| The Notary Hotel | Philadelphia, PA | 499 | 100 | % | 499 | |||||||||||||||||||||
| The Clancy | San Francisco, CA | 410 | 100 | % | 410 | |||||||||||||||||||||
| Sofitel Chicago Magnificent Mile | Chicago, IL | 415 | 100 | % | 415 | |||||||||||||||||||||
| Pier House Resort & Spa | Key West, FL | 142 | 100 | % | 142 | |||||||||||||||||||||
| The Ritz-Carlton St. Thomas | St. Thomas, USVI | 180 | 100 | % | 180 | |||||||||||||||||||||
| Park Hyatt Beaver Creek Resort & Spa | Beaver Creek, CO | 193 | 100 | % | 193 | |||||||||||||||||||||
| Hotel Yountville | Yountville, CA | 80 | 100 | % | 80 | |||||||||||||||||||||
| The Ritz-Carlton Sarasota | Sarasota, FL | 276 | 100 | % | 276 | |||||||||||||||||||||
|
The Ritz-Carlton Lake Tahoe (1)
|
Truckee, CA | 170 | 100 | % | 170 | |||||||||||||||||||||
|
Cameo Beverly Hills (2)
|
Los Angeles, CA | 143 | 100 | % | 143 | |||||||||||||||||||||
|
The Ritz-Carlton Reserve Dorado Beach(3)
|
Dorado, Puerto Rico | 96 | 100 | % | 96 | |||||||||||||||||||||
| Four Seasons Resort Scottsdale | Scottsdale, AZ | 210 | 100 | % | 210 | |||||||||||||||||||||
|
Ground Lease Property(4)
|
||||||||||||||||||||||||||
|
Bardessono Hotel and Spa (5)
|
Yountville, CA | 65 | 100 | % | 65 | |||||||||||||||||||||
| Total | 3,807 | 3,667 | ||||||||||||||||||||||||
(1) The above information does not include the operations of the voluntary rental program with respect to condominium units not owned by the Company.
(2) Includes 138 hotel rooms and five residences adjacent to the hotel. On August 1, 2023, the Company announced the rebranding and planned conversion of its Mr. C Beverly Hills in Los Angeles, California to the Cameo Beverly Hills. Following an extensive renovation, which is expected to be completed by the end of 2025, the hotel will join LXR Hotels & Resorts.
(3) The above information does not include the operations of the voluntary rental program with respect to residential units not owned by the Company.
(4)Some of our hotel properties are on land subject to ground leases, one of which covers the entire property.
(5)The initial ground lease expires in 2065. The ground lease contains two 25-year extension options, at our election.
Braemar Hotel & Resorts Inc. published this content on August 11, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on August 11, 2025 at 10:02 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]