We are subject to the risks associated with the direct and indirect physical effects of climate change, which can include more frequent and more severe storms, hurricanes, flooding, droughts and wildfires, any of which could have a material adverse effect on our hotels, operating results and cash flows. To the extent climate change causes changes in weather patterns, our markets, particularly our coastal markets, could experience increases in storm frequency and intensity and rising sea levels causing damage to our hotels. As a result, we could become subject to significant losses and repair costs that may not be fully covered by insurance. Our markets in more remote locations may experience prolonged variations in temperature or precipitation that may limit access to the water needed to operate our hotels or significantly increase energy costs, which may subject those hotels to additional regulatory burdens, such as limitations on water usage or stricter energy efficiency standards. Climate change also may affect our business by increasing the cost of (or even making unavailable) property insurance on terms we find acceptable in areas most vulnerable to such events, increasing operating costs at our hotels, such as the cost of water or energy, and requiring us to expend funds as we seek to mitigate, repair and protect our hotels against such risks. A tightening of credit markets for, or a reduction in the availability of capital to, borrowers whose assets are in areas that are particularly adversely affected by the effects of climate change may reduce our ability to obtain financing on favorable terms, or at all, thereby increasing financing costs and/or requiring us to accept financing with increased restrictions and/or significantly higher interest rates, which could have a material adverse effect on our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders.

We are subject to operational risks associated with complying with increased environmental-related regulations, aligning with investor requirements concerning environmental issues and meeting shifting consumer preferences with regard to the environment. In an effort to mitigate the impact of climate change, our hotels could become subject to increased governmental regulations mandating energy efficiency standards, the usage of sustainable energy sources and updated equipment specifications, which may require additional capital investments or increased operating costs. Climate change may also affect our business by causing a shift in consumer preferences for sustainable travel. Our hotels may be subject to additional costs to manage consumer expectations for sustainable buildings and hotel operations.

There can be no assurance that climate change will not have a material adverse effect on our hotels, operating results or cash flows.

Noncompliance with environmental laws and governmental regulations could adversely affect our operating results and our ability to make distributions to shareholders.

Under various federal, state and local laws, ordinances and regulations, an owner of real property may be liable for the costs of removal or remediation of certain hazardous or toxic substances on or in such property. Such laws often impose such liability without regard to whether the owner knew of or was responsible for, the presence of such hazardous or toxic substances. The cost of any required remediation and the owner's liability therefore as to any property are generally not limited under such laws and could exceed the value of the property and/or the aggregate assets of the owner. The presence of such substances, or the failure to properly remediate contamination from such substances, may adversely affect our ~~or our joint ventures'~~ ability to sell the real estate or to borrow funds using such property as collateral, which could have an adverse effect on our return from such investment. Moreover, the presence of such substance or the failure to properly mediate such substances could adversely affect our operating results and our ability to make distributions to our shareholders.

Furthermore, various court decisions have established that third parties may recover damages for injury caused by release of hazardous substances and for property contamination. For instance, a person exposed to asbestos while working at or staying in a hotel may seek to recover damages if he or she suffers injury from the asbestos. Lastly, some of these environmental issues restrict the use of a property or place conditions on various activities. One example is laws that require a business using chemicals to manage them carefully and to notify local officials if regulated spills occur.

Although it is our policy to require an acceptable Phase I environmental ~~survey~~site assessment for all real property in which we invest prior to our investment, such surveys are limited in scope. As a result, there can be no assurance that a Phase I environmental ~~survey~~site assessment will uncover any or all hazardous or toxic substances on a property prior to our investment in that property. We cannot assure you:


•			that there are no existing liabilities related to our properties of which we are not aware;

•			that future laws, ordinances or regulations will not impose material environmental liability; or

•			that the current environmental condition of a hotel will not be affected by the condition of properties in the vicinity of the hotel (such as the presence of leaking underground storage tanks) or by third parties unrelated to us.

Compliance with the ADA and other changes in governmental rules and regulations could substantially increase our cost of doing business.

Our hotel properties are subject to the ADA. Under the ADA, all places of public accommodation are required to meet certain federal requirements related to access and use by disabled persons. Although we intend to continue to acquire assets that are substantially in compliance with the ADA, we may incur additional costs of complying with the ADA at the time of acquisition and from time-to-time in the future to stay in compliance with any changes in the ADA. A number of additional federal, state and local laws exist that also may require modifications to our investments, or restrict certain further renovations thereof, with respect to access thereto by disabled persons. Additional legislation may impose further burdens or restrictions on owners with respect to access by disabled persons.

If we are required to make substantial modifications to our hotel properties, whether to comply with the ADA or other changes in governmental rules and regulations, our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders could be adversely affected. The obligation to make readily achievable accommodations is an ongoing one, and we will continue to assess our properties and to make alterations as appropriate.

The outbreak of widespread contagious disease, such as the COVID-19, could reduce travel and adversely affect hotel demand.

The widespread outbreak of infectious or contagious disease, such as COVID-19 H1N1 influenza (swine flu), avian bird flu, SARS and Zika virus, has reduced travel into and from the affected areas, including travel from the affected areas to the U.S. Further outbreaks, especially in the U.S., could reduce travel and adversely affect the U.S. hotel industry generally and our business in particular.

General Risks Related to Real Estate Industry

Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our hotel properties.

Because real estate investments are relatively illiquid, our ability to promptly sell one or more hotel properties in our portfolio in response to changing economic, financial and investment conditions may be limited. The real estate market is affected by many factors that are beyond our control, including:


•			adverse changes in international, national, regional and local economic and market conditions;

•			changes in interest rates and in the availability, cost and terms of debt financing;

•			changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances;

•			the ongoing need for capital improvements, particularly in older structures;

•			changes in operating expenses; and

•			civil unrest, acts of God, including earthquakes, wildfires, tornadoes, hurricanes, floods and other natural disasters, which may result in uninsured losses, and acts of war or terrorism.

We may seek to sell hotel properties owned by us ~~or any of the JVs~~ in the future. There can be no assurance that we will be able to sell any hotel property on acceptable terms.

If financing for hotel properties is not available or is not available on attractive terms, it will adversely impact the ability of third parties to buy our hotels. As a result, we ~~or our JVs~~ may hold hotel properties for a longer period than we would otherwise desire and may sell hotels at a loss.

We may be required to expend funds to correct defects or to make improvements before a hotel property can be sold. We cannot assure you that we will have funds available to correct those defects or to make those improvements. In acquiring a hotel property, we may agree to lock-out provisions that materially restrict us from selling that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. These factors and any others that would impede our ability to respond to adverse changes in the performance of our properties could have a material adverse effect on our operating results and financial condition, as well as our ability to make distributions to our shareholders.

Increases in our property taxes would adversely affect our ability to make distributions to our shareholders.

Hotel properties are subject to real and personal property taxes. These taxes may increase as tax rates change and as the properties are assessed or reassessed by taxing authorities. In particular, our property taxes could increase following our hotel purchases as the acquired hotels are reassessed. If property taxes increase, our financial condition, results of operations and our ability to make distributions to our shareholders could be materially and adversely affected.

Our hotel properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem.

When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Concern about indoor exposure to mold has been increasing, as exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of mold to which hotel guests or employees could be exposed at any of the properties in which we own an interest could require us to undertake a costly remediation program to contain or remove the mold from the affected property. In addition, exposure to mold by guests or employees, management company employees or others could expose us to liability if property damage or health concerns arise.

Risks Related to Our Organization and Structure

Our rights and the rights of our shareholders to take action against our trustees and officers are limited, which could limit your recourse in the event of actions not in your best interests.

Under Maryland law generally, a trustee is required to perform his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Under Maryland law, trustees are presumed to have acted with this standard of care. In addition, our declaration of trust limits the liability of our trustees and officers to us and our shareholders for money damages, except for liability resulting from:


•			actual receipt of an improper benefit or profit in money, property or services; or

•			active and deliberate dishonesty by the trustee or officer that was established by a final judgment as being material to the cause of action adjudicated.

Our bylaws obligate us to indemnify our trustees and officers for actions taken by them in those capacities to the maximum extent permitted by Maryland law. Our bylaws require us to indemnify each trustee or officer, to the maximum extent permitted by Maryland law, in the defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service to us. In addition, we may be obligated to advance the defense costs incurred by our trustees and officers. As a result, we and our shareholders may have more limited rights against our trustees and officers than might otherwise exist absent the current provisions in our declaration of trust and bylaws or that might exist with other companies.

Provisions of Maryland law may limit the ability of a third party to acquire control of our Company and may result in entrenchment of management and diminish the value of our common shares.

Certain provisions of the Maryland General Corporation Law ("MGCL") applicable to Maryland real estate investment trusts may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide our common shareholders with the opportunity to realize a premium over the then-prevailing market price of such shares, including:


•			"Business combination" provisions that, subject to limitations, prohibit certain business combinations between us and an "interested shareholder" (defined generally as any person who beneficially owns 10% or more of the voting power of our shares) or an affiliate of any interested shareholder for five years after the most recent date on which the shareholder becomes an interested shareholder, and thereafter imposes special appraisal rights and special shareholder voting requirements on these combinations; and

•			"Control share" provisions that provide that our "control shares" (defined as shares which, when aggregated with other shares controlled by the shareholder, entitle the shareholder to exercise one of three increasing ranges of voting power in electing trustees) acquired in a "control share acquisition" (defined as the direct or indirect acquisition of ownership or control of "control shares") have no voting rights except to the extent approved by our shareholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.

Additionally, Title 3, Subtitle 8 of the MGCL permits our Board of Trustees, without shareholder approval and regardless of what is currently provided in our declaration of trust or bylaws, to implement certain takeover defenses, including, but not limited to, the adoption of a classified board. In November 2013, our Board of Trustees opted in to Subtitle 8 and adopted a classified board structure in order to protect shareholder value in the wake of what our Board considered to be an unsolicited and inadequate proposal to acquire us. Although our Board subsequently took action in April 2015 to opt back out of the provisions of Subtitle 8 and declassified our Board of Trustees, our Board may elect to opt back in to Subtitle 8 again in the future. These provisions may have the effect of inhibiting a third party from making an acquisition proposal for our company or of delaying, deferring or preventing a change in control of our company under the circumstances that otherwise could provide our common shareholders with the opportunity to realize a premium over the then current market price.

Provisions of our declaration of trust may limit the ability of a third party to acquire control of our Company and may result in entrenchment of management and diminish the value of our common shares.

Our declaration of trust authorizes our Board of Trustees to issue up to 500,000,000 common shares and up to 100,000,000 preferred shares. In addition, our Board of Trustees may, without shareholder approval, amend our declaration of trust to increase the aggregate number of our shares or the number of shares of any class or series that we have the authority to issue and to classify or reclassify any unissued common shares or preferred shares and to set the preferences, rights and other terms of the classified or reclassified shares. As a result, our Board of Trustees may authorize the issuance of additional shares or establish a series of common or preferred shares that may have the effect of delaying or preventing a change in control of our company, including transactions at a premium over the market price of our shares, even if shareholders believe that a change of control is in their interest.

Failure to make required distributions would subject us to tax.

To maintain our qualifications as a REIT, each year we must distribute to our shareholders at least 90% of our REIT taxable income, determined without regard to the deductions for dividends paid and excluding any net capital gain. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our taxable income, we will be subject to federal corporate income tax on our undistributed REIT taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our shareholders in a calendar year is less than a minimum amount specified under the Code. Our only source of funds to make these distributions comes from distributions that we will receive from our Operating Partnership. Accordingly, we may be required to borrow or raise capital on terms, or sell assets at prices or at times we regard unfavorable or make taxable distributions of our capital shares or debt securities, to enable us to pay out enough of our REIT taxable income to satisfy the distribution requirement and to avoid federal corporate income tax and the 4% nondeductible excise tax in a particular year.

Failure to maintain our qualification as a REIT would subject us to federal income tax and potentially to state and local taxes.

We elected to be taxed as a REIT for federal income tax purposes. However, qualification as a REIT involves the application of highly technical and complex provisions of the Code, for which only a limited number of judicial and administrative interpretations exist. Even an inadvertent or technical mistake could jeopardize our REIT qualification. Our qualification as a REIT depends on our satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis.

Moreover, new tax legislation, administrative guidance or court decisions, in each instance potentially applicable with retroactive effect, could make it more difficult or impossible for us to qualify as a REIT. If we were to fail to qualify as a REIT in any taxable year, we would be subject to federal income tax on our taxable income at regular corporate rates and distributions to shareholders would not be deductible by us in computing our taxable income. We may also be subject to state and local taxes if we fail to qualify as a REIT. Any such corporate tax liability could be substantial and would reduce the amount of cash available for distribution to our shareholders, which in turn could have an adverse impact on the value of our shares of beneficial interest. If, for any reason, we failed to qualify as a REIT and we were not entitled to relief under certain Code provisions, we would be unable to elect REIT status for the four taxable years following the year during which we ceased to so qualify, which would negatively impact the value of our common shares.

Our TRS Lessee structure subjects us to the risk of increased hotel operating expenses that could adversely affect our operating results and our ability to make distributions to our shareholders.

Our leases with our TRS Lessees require our TRS Lessees to pay rent based in part on revenues from our hotels. Our operating risks include decreases in hotel revenues and increases in hotel operating expenses, which would adversely affect our TRS Lessees' ability to pay rent due under the leases, including but not limited to the increases in wage and benefit costs, repair and maintenance expenses, energy costs, property taxes, insurance costs and other operating expenses.

Increases in these operating expenses can have a significant adverse impact on our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders.

Our TRS structure increases our overall tax liability.

Our TRS holding company is subject to applicable federal, state and local income tax on its taxable income, which consists of the revenues from the hotel properties leased by our TRS Lessees, net of the operating expenses for such hotel properties and rent payments to us. In certain circumstances, the ability of our TRS Lessees to deduct net interest expense could be limited. Accordingly, although our ownership of our TRS Lessees allows us to participate in the operating income from our hotel properties in addition to receiving rent, that operating income is fully subject to income tax. The after-tax net income of our TRS holding company is available for distribution to us.

Our transactions with our TRS will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm's-length terms.

A REIT may own up to 100% of the stock of one or more TRSs. A TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT, including gross operating income from hotels that are operated by eligible independent contractors pursuant to hotel management agreements. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. Overall, no more than 20% of the value of a REIT's gross assets may consist of stock or securities of one or more TRSs. In addition, the TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm's-length basis.

Our TRS holding company is subject to federal, foreign, state and local income tax on its taxable income, and its after-tax net income is available for distribution to us but is not required to be distributed to us. We believe that the aggregate value of the stock and securities of our TRS is and will continue to be less 20% of the value of our total gross assets (including our TRS stock and securities). Furthermore, we will monitor the value of our respective investments in our TRS holding company for the purpose of ensuring compliance with TRS ownership limitations. In addition, we will scrutinize all of our transactions with our TRS holding company and our TRS Lessees to ensure that they are entered into on arm's-length terms to avoid incurring the 100% excise tax described above. There can be no assurance, however, that we will be able to comply with the 20% limitation discussed above or to avoid application of the 100% excise tax discussed above.

If our leases with our TRS Lessees are not respected as true leases for federal income tax purposes, we would fail to qualify as a REIT.

To qualify as a REIT, we are required to satisfy two gross income tests, pursuant to which specified percentages of our gross income must be passive income, such as rent. For the rent paid pursuant to the hotel leases with our TRS Lessees, which should constitute substantially all of our gross income, to qualify for purposes of the gross income tests, the leases must be respected as true leases for federal income tax purposes and must not be treated as service contracts, joint ventures or some other type of arrangement. We have structured our leases, and intend to structure any future leases, so that the leases will be respected as true leases for federal income tax purposes, but there can be no assurance that the ~~Internal Revenue Service ("IRS")~~IRS will agree with this characterization, not challenge this treatment or that a court would not sustain such a challenge. If the leases were not respected as true leases for federal income tax purposes, we would not be able to satisfy either of the two gross income tests applicable to REITs and likely would fail to qualify for REIT status.

Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.

The maximum U.S. federal income tax rate applicable to qualified dividend income payable to certain non-corporate U.S. shareholders is 20%. Dividends payable by REITs, however, generally are not eligible for the reduced qualified dividend rates. For taxable years beginning before January 1, 2026, non-corporate taxpayers may deduct up to 20% of certain pass-through business income, including “qualified REIT dividends” (generally, dividends received by a REIT shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S. federal income tax rate of 29.6% on such income. Although the reduced U.S. federal income tax rate applicable to qualified dividend income does not adversely affect the taxation of REITs or dividends payable by REITs, the more favorable rates applicable to regular corporate qualified dividends and the reduced corporate tax rate could cause certain non-corporate investors to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our shares.

If our hotel managers do not qualify as "eligible independent contractors," we would fail to qualify as a REIT.

Rent paid by a lessee that is a "related party tenant" of ours will not be qualifying income for purposes of the two gross income tests applicable to REITs. We lease all of our hotels to our TRS Lessees. A TRS Lessee will not be treated as a "related party tenant," and will not be treated as directly operating a lodging facility to the extent the TRS Lessee leases properties from us that are managed by an "eligible independent contractor." In addition, our TRS holding company will fail to qualify as a “taxable REIT subsidiary” if it or any of our TRS Lessees lease or own a lodging facility that is not managed by an “eligible independent contractor.”

If our hotel managers do not qualify as "eligible independent contractors," we would fail to qualify as a REIT. Each of the hotel management companies that enters into a management contract with a TRS Lessee must qualify as an "eligible independent contractor" under the REIT rules in order for the rent paid to us by the TRS Lessee to be qualifying income for our REIT income test requirements and for our TRS holding company to qualify as a “taxable REIT subsidiary”. Among other requirements, in order to qualify as an eligible independent contractor, a manager must not own more than 35% of our outstanding shares (by value) and no person or group of persons can own more than 35% of our outstanding shares and the ownership interests of the manager, taking into account only owners of more than 5% of our shares and, with respect to ownership interests in such managers that are publicly traded, only holders of more than 5% of such ownership interests. Complex ownership attribution rules apply for purposes of these 35% thresholds. Although we intend to monitor ownership of our shares by our property managers and their owners, there can be no assurance that these ownership levels will not be exceeded.

Our ownership limitations may restrict or prevent you from engaging in certain transfers of our common shares.

In order to satisfy the requirements for REIT qualification, no more than 50% in value of our outstanding shares may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) at any time during the last half of each taxable year. To assist us in satisfying the requirements for our REIT qualification, our declaration of trust contains an ownership limit on each class and series of our shares. Under applicable constructive ownership rules, any common shares owned by certain affiliated owners generally will be added together for purposes of the common share ownership limit, and any shares of a given class or series of preferred shares owned by certain affiliated owners generally will be added together for purposes of the ownership limit on such class or series.

If anyone transfers shares in a way that would violate the ownership limit, or prevent us from qualifying as a REIT under the federal income tax laws, those shares instead will be transferred to a trust for the benefit of a charitable beneficiary and will be either redeemed by us or sold to a person whose ownership of the shares will not violate the ownership limit. If this transfer to a trust fails to prevent such a violation or our continued qualification as a REIT, then the initial intended transfer shall be null and void from the outset. The intended transferee of those shares will be deemed never to have owned the shares. Anyone who acquires shares in violation of the ownership limit or the other restrictions on transfer in our declaration of trust bears the risk of suffering a financial loss when the shares are redeemed or sold if the market price of our shares falls between the date of purchase and the date of redemption or sale.

The ability of our Board of Trustees to revoke our REIT qualification without shareholder approval may cause adverse consequences to our shareholders.

Our declaration of trust provides that our Board of Trustees may revoke or otherwise terminate our REIT election, without the approval of our shareholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. If we cease to qualify as a REIT, we would become subject to federal income tax on our taxable income and would no longer be required to distribute most of our taxable income to our shareholders, which may have adverse consequences on our total return to our shareholders.

The ability of our Board of Trustees to change our major policies may not be in our shareholders’ interest.

Our Board of Trustees determines our major policies, including policies and guidelines relating to our acquisitions, leverage, financing, growth, operations and distributions to shareholders and our continued qualification as a REIT. Our board may amend or revise these and other policies and guidelines from time to time without the vote or consent of our shareholders. Accordingly, our shareholders will have limited control over changes in our policies and those changes could adversely affect our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders.

If we fail to maintain an effective system of internal controls, we may not be able to accurately determine our financial results or prevent fraud. As a result, our investors could lose confidence in our reported financial information, which could harm our business and the value of our shares.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. We may in the future discover areas of our internal controls that need improvement. Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate and report on our internal controls over financial reporting and have our independent auditors annually issue their opinion on our internal control over financial reporting. As we grow our business and acquire new hotel properties, directly or through joint ventures, with existing internal controls that may not be consistent with our own, our internal controls will become more complex, and we will require significantly more resources to ensure our internal controls remain effective. If we or our independent auditors discover a material weakness, the disclosure of that fact, even if quickly remedied, could reduce the market value of our common shares. In particular, we will need to establish, or cause our third party hotel managers to establish, controls and procedures to ensure that hotel revenues and expenses are properly recorded at our hotels. The existence of any material weakness or significant deficiency would require management to devote significant time and incur significant expense to remediate any such material weaknesses or significant deficiencies and management may not be able to remediate any such material weaknesses or significant deficiencies in a timely manner. Any such failure could cause investors to lose confidence in our reported financial information and adversely affect the market value of our common shares or limit our access to the capital markets and other sources of liquidity.

Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.

To ~~qualify~~maintain our qualification as a REIT for federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our shareholders and the ownership of our shares of beneficial interest. In order to meet these tests, we may be required to forego investments we might otherwise make. Thus, compliance with the REIT requirements may hinder our performance.

In particular, we must ensure that at the end of each calendar quarter, at least 75% of the value of our gross assets consists of cash, cash items, government securities and qualified real estate assets. The remainder of our investment in securities (other than government securities, securities that constitute qualified real estate assets and securities of our TRS) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our gross assets (other than government securities, securities that constitute qualified real estate assets and securities of our TRS) can consist of the securities of any one issuer, no more than 25% of the value of our assets can consist of debt of "publicly offered REITs" that is not secured by real property, and no more than 20% of the value of our total gross assets can be represented by the securities of one or more TRSs. If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate otherwise attractive investments. These actions could have the effect of reducing our income and amounts available for distribution to our shareholders.

We may be subject to adverse legislative or regulatory tax changes that could reduce the market price of our shares.

At any time, the federal income tax laws governing REITs or the administrative interpretations of those laws may be amended. We cannot predict when or if any new federal income tax law, regulation, or administrative interpretation, or any amendment to any existing federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective and any such law, regulation, or interpretation may take effect retroactively. Several recent proposals have been made that would make substantial changes to the U.S. federal income tax laws generally. We cannot predict whether any of these proposed changes will become law, or the long-term effect of ~~any recent changes or~~ any future law changes on REITs and their ~~shareholders.~~shareholders generally. We and our shareholders could be adversely affected by any such change in, or any new, federal income tax law, regulation or administrative interpretation.

We may be unable to generate sufficient cash flows from our operations to make distributions to our shareholders at any time in the future.

We are generally required to distribute to our shareholders at least 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding any net capital gains) each year for us to qualify as a REIT under the Code, which requirement we currently intend to satisfy. To the extent we satisfy the 90% distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to federal corporate income tax on our undistributed taxable income. We have not established a minimum distribution payment level, and our ability to make distributions to our shareholders may be adversely affected by the risk factors described in this Form 10-K. Subject to satisfying the requirements for REIT qualification, we intend over time to make regular distributions to our shareholders. Our Board of Trustees has the sole discretion to determine the timing, form and amount of any distributions to our shareholders. Our Board of Trustees makes determinations regarding distributions based upon, among other factors, our historical and projected results of operations, financial condition, cash flows and liquidity, satisfaction of the requirements for REIT qualification and other tax considerations, capital expenditure and other expense obligations, debt covenants, contractual prohibitions or other limitations and applicable law and such other matters as our Board of Trustees may deem relevant from time to time. Among the factors that could impair our ability to make distributions to our shareholders are:


•			our inability to realize attractive returns on our investments;

•			unanticipated expenses that reduce our cash flow or non-cash earnings;

•			decreases in the value of the underlying assets; and

•			the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates.

As a result, no assurance can be given that we will be able to make distributions to our shareholders or that the level of any distributions we do make to our shareholders will achieve a market yield or increase or even be maintained over time, any of which could materially and adversely affect the market price of our common shares. Distributions could be dilutive to our financial results and may constitute a return of capital to our investors, which would have the effect of reducing each shareholder's basis in its common shares. We also could use borrowed funds or proceeds from the sale of assets to fund distributions.

In addition, distributions that we make to our shareholders are generally taxable to our shareholders as ordinary income. However, a portion of our distributions may be designated by us as long-term capital gains to the extent that they are attributable to capital gain income recognized by us or may constitute a return of capital to the extent that they exceed our earnings and profits as determined for tax purposes. A return of capital is not taxable, but has the effect of reducing the basis of a shareholder's investment in our common shares.

Our revolving credit facility may limit our ability to pay dividends on common shares.

Under our revolving credit facility, our distributions may not exceed the greater of (i) 95% of adjusted funds from operations (as defined in our senior unsecured revolving credit facility) for the preceding four-quarter period or (ii) the amount required for us to maintain our status as a REIT. As a result, if we do not generate sufficient adjusted funds from operations during the four quarters preceding any common share dividend payment date, we would not be able to pay dividends to our common shareholders consistent with our past practice without causing a default under our revolving credit facility. In the event of a default under our revolving credit facility, we would be unable to borrow under our revolving credit facility and any amounts we have borrowed thereunder could become due and payable.

The market price of our equity securities may vary substantially, which may limit your ability to liquidate your investment.

The trading prices of equity securities issued by REITs have historically been affected by changes in market interest rates and other factors. One of the factors that may influence the price of our shares in public trading markets is the annual yield from distributions on our common or preferred shares as compared to yields on other financial instruments. An increase in market interest rates, or a decrease in our distributions to shareholders, may lead prospective purchasers of our shares to demand a higher annual yield, which could reduce the market price of our equity securities.

Other factors that could affect the market price of our equity securities include the following:


•			actual or anticipated variations in our quarterly results of operations;

•			changes in market valuations of companies in the hotel or real estate industries;

•			changes in expectations of future financial performance or changes in estimates of securities analysts;

•			fluctuations in stock market prices and volumes;

•			issuances of common shares or other securities in the future;

•			the addition or departure of key personnel; and

•			announcements by us or our competitors of acquisitions, investments or strategic alliances or changes thereto.

Because we have a smaller equity market capitalization compared to some other hotel REITs and our common shares may trade in low volumes, the stock market price of our common shares may be susceptible to fluctuation to a greater extent than companies with larger market capitalizations. As a result, your ability to liquidate your investment in our company may be limited.

The number of shares available for future sale could adversely affect the market price of our common shares.

We cannot predict the effect, if any, of future sales of common shares, or the availability of common shares for future sale, on the market price of our common shares. Sales of substantial amounts of common shares (including shares issued to our trustees and officers), or the perception that these sales could occur, may adversely affect prevailing market prices for our common shares.

We also may issue from time to time additional common shares or common units in our Operating Partnership in connection with the acquisition of properties and we may grant demand or piggyback registration rights in connection with these issuances. Sales of substantial amounts of our common shares or the perception that these sales could occur may adversely affect the prevailing market price for our common shares or may impair our ability to raise capital through a sale of additional equity securities. Our Equity Incentive Plan provides for grants of equity based awards up to an aggregate of 3,000,000 common shares and we may seek to increase shares available under our Equity Incentive Plan in the future. Our Current DRSPP (defined below) permits the purchase of up to $50 million of our common shares through purchases and reinvestment of dividends on our common shares.

Future offerings of debt or equity securities or incurrence of debt may adversely affect the market price of our common shares.

If we decide to issue debt or equity securities in the future ranking senior to our common shares or otherwise incur indebtedness (including under our credit facility), it is possible that these securities or indebtedness will be governed by an indenture or other instrument containing covenants restricting our operating flexibility and limiting our ability to make distributions to our shareholders. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges, including with respect to distributions, more favorable than those of our common shares and may result in dilution to owners of our common shares. Because our decision to issue debt or equity securities in any future offering or otherwise incur indebtedness will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings or financings, any of which could reduce the market price of our common shares and dilute the value of our common shares.

Item 1B. Unresolved Staff Comments

None.

3536

Item 2. Properties

The following table sets forth certain operating information for our ~~39 wholly owned~~ hotels as of December 31, ~~2020:~~2021:


Property	Property	Location	Date of Acquisition	Year Opened	Number of Rooms	Purchase Price			Purchase Price per Room		Mortgage Debt Balance			Property	Location	Date of Acquisition	Year Opened	Number of Rooms	Purchase Price			Purchase Price per Room		Mortgage Debt Balance

Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington	Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington	Billerica, Massachusetts	4/23/2010	1999	147	$	12.5	million	$	85,714	$	15.4	million	Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington	Billerica, Massachusetts	4/23/2010	1999	147	$	12.5	million	$	85,714	$	15.1	million
Homewood Suites by Hilton Minneapolis-Mall of America	Homewood Suites by Hilton Minneapolis-Mall of America	Bloomington, Minnesota	4/23/2010	1998	144	$	18.0	million	$	125,000	—			Homewood Suites by Hilton Minneapolis-Mall of America	Bloomington, Minnesota	4/23/2010	1998	144	$	18.0	million	$	125,000	—
Homewood Suites by Hilton Nashville-Brentwood	Homewood Suites by Hilton Nashville-Brentwood	Brentwood, Tennessee	4/23/2010	1998	121	$	11.3	million	$	93,388	—			Homewood Suites by Hilton Nashville-Brentwood	Brentwood, Tennessee	4/23/2010	1998	121	$	11.3	million	$	93,388	—
Homewood Suites by Hilton Dallas-Market Center	Homewood Suites by Hilton Dallas-Market Center	Dallas, Texas	4/23/2010	1998	137	$	10.7	million	$	78,102	—			Homewood Suites by Hilton Dallas-Market Center	Dallas, Texas	4/23/2010	1998	137	$	10.7	million	$	78,102	—
Homewood Suites by Hilton Hartford-Farmington	Homewood Suites by Hilton Hartford-Farmington	Farmington, Connecticut	4/23/2010	1999	121	$	11.5	million	$	95,041	—			Homewood Suites by Hilton Hartford-Farmington	Farmington, Connecticut	4/23/2010	1999	121	$	11.5	million	$	95,041	—
Homewood Suites by Hilton Orlando-Maitland	Homewood Suites by Hilton Orlando-Maitland	Maitland, Florida	4/23/2010	2000	143	$	9.5	million	$	66,433	—			Homewood Suites by Hilton Orlando-Maitland	Maitland, Florida	4/23/2010	2000	143	$	9.5	million	$	66,433	—
Hampton Inn & Suites Houston-Medical Center	Hampton Inn & Suites Houston-Medical Center	Houston, Texas	7/2/2010	1997	120	$	16.5	million	$	137,500	$	17.4	million	Hampton Inn & Suites Houston-Medical Center	Houston, Texas	7/2/2010	1997	120	$	16.5	million	$	137,500	$	17.1	million
Residence Inn Long Island Holtsville	Residence Inn Long Island Holtsville	Holtsville, New York	8/3/2010	2004	124	$	21.3	million	$	171,774	—			Residence Inn Long Island Holtsville	Holtsville, New York	8/3/2010	2004	124	$	21.3	million	$	171,774	—
Residence Inn White Plains	Residence Inn White Plains	White Plains, New York	9/23/2010	1982	135	$	21.2	million	$	159,398	—			Residence Inn White Plains	White Plains, New York	9/23/2010	1982	135	$	21.2	million	$	159,398	—
Residence Inn New Rochelle	Residence Inn New Rochelle	New Rochelle, New York	10/5/2010	2000	127	$	21.0	million	$	169,355	$	12.6	million	Residence Inn New Rochelle	New Rochelle, New York	10/5/2010	2000	127	$	21.0	million	$	169,355	—
Residence Inn Garden Grove	Residence Inn Garden Grove	Garden Grove, California	7/14/2011	2003	200	$	43.6	million	$	218,000	$	31.5	million	Residence Inn Garden Grove	Garden Grove, California	7/14/2011	2003	200	$	43.6	million	$	218,000	$	30.8	million
Homewood Suites by Hilton San Antonio River Walk	Homewood Suites by Hilton San Antonio River Walk	San Antonio, Texas	7/14/2011	1996	146	$	32.5	million	$	222,603	$	15.2	million	Homewood Suites by Hilton San Antonio River Walk	San Antonio, Texas	7/14/2011	1996	146	$	32.5	million	$	222,603	$	14.8	million
Residence Inn Washington DC	Residence Inn Washington DC	Washington, DC	7/14/2011	1974	103	$	29.4	million	$	280,000	—			Residence Inn Washington DC	Washington, DC	7/14/2011	1974	103	$	29.4	million	$	280,000	—
Residence Inn Tysons Corner	Residence Inn Tysons Corner	Vienna, Virginia	7/14/2011	2001	121	$	37.0	million	$	305,785	$	20.8	million	Residence Inn Tysons Corner	Vienna, Virginia	7/14/2011	2001	121	$	37.0	million	$	305,785	$	20.2	million
Hampton Inn Portland Downtown	Hampton Inn Portland Downtown	Portland, Maine	12/27/2012	2011	125	$	28.0	million	$	229,508	—			Hampton Inn Portland Downtown	Portland, Maine	12/27/2012	2011	125	$	28.0	million	$	229,508	—
Courtyard Houston	Courtyard Houston	Houston, Texas	2/5/2013	2010	197	$	34.8	million	$	176,395	$	17.1	million	Courtyard Houston	Houston, Texas	2/5/2013	2010	197	$	34.8	million	$	176,395	$	16.7	million
Hyatt Place Pittsburgh North Shore	Hyatt Place Pittsburgh North Shore	Pittsburgh, Pennsylvania	6/17/2013	2010	178	$	40.0	million	$	224,719	$	21.0	million	Hyatt Place Pittsburgh North Shore	Pittsburgh, Pennsylvania	6/17/2013	2010	178	$	40.0	million	$	224,719	$	20.5	million
Hampton Inn Exeter	Hampton Inn Exeter	Exeter, New Hampshire	8/9/2013	2010	111	$	15.2	million	$	136,937	—			Hampton Inn Exeter	Exeter, New Hampshire	8/9/2013	2010	111	$	15.2	million	$	136,937	—
Hilton Garden Inn Denver Tech	Hilton Garden Inn Denver Tech	Denver, Colorado	9/26/2013	1999	180	$	27.9	million	$	155,000	—			Hilton Garden Inn Denver Tech	Denver, Colorado	9/26/2013	1999	180	$	27.9	million	$	155,000	—
Residence Inn Bellevue	Residence Inn Bellevue	Bellevue, Washington	10/31/2013	2008	231	$	71.8	million	$	316,883	$	43.0	million	Residence Inn Bellevue	Bellevue, Washington	10/31/2013	2008	231	$	71.8	million	$	316,883	$	42.1	million
Springhill Suites Savannah	Springhill Suites Savannah	Savannah, Georgia	12/5/2013	2009	160	$	39.8	million	$	248,438	$	29.4	million	Springhill Suites Savannah	Savannah, Georgia	12/5/2013	2009	160	$	39.8	million	$	248,438	$	28.9	million
Residence Inn Silicon Valley I	Residence Inn Silicon Valley I	Sunnyvale, CA	6/9/2014	1983	231	$	92.8	million	$	401,776	$	63.4	million	Residence Inn Silicon Valley I	Sunnyvale, CA	6/9/2014	1983	231	$	92.8	million	$	401,776	$	62.4	million
Residence Inn Silicon Valley II	Residence Inn Silicon Valley II	Sunnyvale, CA	6/9/2014	1985	248	$	102.0	million	$	411,103	$	69.2	million	Residence Inn Silicon Valley II	Sunnyvale, CA	6/9/2014	1985	248	$	102.0	million	$	411,103	$	68.1	million
Residence Inn San Mateo	Residence Inn San Mateo	San Mateo, CA	6/9/2014	1985	160	$	72.7	million	$	454,097	$	47.6	million	Residence Inn San Mateo	San Mateo, CA	6/9/2014	1985	160	$	72.7	million	$	454,097	$	46.8	million
Residence Inn Mountain View	Residence Inn Mountain View	Mountain View, CA	6/9/2014	1985	144	$	56.4	million	$	503,869	$	37.1	million	Residence Inn Mountain View	Mountain View, CA	6/9/2014	1985	144	$	56.4	million	$	503,869	$	36.5	million
Hyatt Place Cherry Creek	Hyatt Place Cherry Creek	Glendale, CO	8/29/2014	1987	199	$	32.0	million	$	164,948	—			Hyatt Place Cherry Creek	Glendale, CO	8/29/2014	1987	199	$	32.0	million	$	164,948	—
Courtyard Addison	Courtyard Addison	Addison, TX	11/17/2014	2000	176	$	24.1	million	$	137,178	—			Courtyard Addison	Addison, TX	11/17/2014	2000	176	$	24.1	million	$	137,178	—
Courtyard West University Houston	Courtyard West University Houston	Houston, TX	11/17/2014	2004	100	$	20.1	million	$	201,481	—			Courtyard West University Houston	Houston, TX	11/17/2014	2004	100	$	20.1	million	$	201,481	—
Residence Inn West University Houston	Residence Inn West University Houston	Houston, TX	11/17/2014	2004	120	$	29.4	million	$	245,363	—			Residence Inn West University Houston	Houston, TX	11/17/2014	2004	120	$	29.4	million	$	245,363	—
Hilton Garden Inn Burlington	Hilton Garden Inn Burlington	Burlington, MA	11/17/2014	1975	180	$	33.0	million	$	184,392	—			Hilton Garden Inn Burlington	Burlington, MA	11/17/2014	1975	180	$	33.0	million	$	184,392	—
Residence Inn San Diego Gaslamp	Residence Inn San Diego Gaslamp	San Diego, CA	2/25/2015	2009	240	$	90.0	million	$	375,000	—			Residence Inn San Diego Gaslamp	San Diego, CA	2/25/2015	2009	240	$	90.0	million	$	375,000	—
Residence Inn Dedham	Residence Inn Dedham	Dedham, MA	7/17/2015	2008	81	$	22.0	million	$	271,605	—			Residence Inn Dedham	Dedham, MA	7/17/2015	2008	81	$	22.0	million	$	271,605	—
Residence Inn Il Lugano	Residence Inn Il Lugano	Fort Lauderdale, FL	8/17/2015	2013	105	$	33.5	million	$	319,048	—			Residence Inn Il Lugano	Fort Lauderdale, FL	8/17/2015	2013	105	$	33.5	million	$	319,048	—
Hilton Garden Inn Marina del Rey	Hilton Garden Inn Marina del Rey	Marina del Rey, CA	9/17/2015	1998	136	$	45.1	million	$	336,194	$	20.5	million	Hilton Garden Inn Marina del Rey	Marina del Rey, CA	9/17/2015	1998	136	$	45.1	million	$	336,194	$	20.0	million

Hilton Garden Inn Portsmouth	Hilton Garden Inn Portsmouth	Portsmouth, NH	9/20/2017	2006	131	$	43.5	million	$	332,061	—			Hilton Garden Inn Portsmouth	Portsmouth, NH	9/20/2017	2006	131	$	43.5	million	$	332,061	—
Summerville Courtyard	Summerville Courtyard	Summerville, SC	11/15/2017	2014	96	$	20.2	million	$	210,417	—			Summerville Courtyard	Summerville, SC	11/15/2017	2014	96	$	20.2	million	$	210,417	—
Embassy Suites Springfield	Embassy Suites Springfield	Springfield, VA	12/6/2017	2013	219	$	68.0	million	$	310,502	—			Embassy Suites Springfield	Springfield, VA	12/6/2017	2013	219	$	68.0	million	$	310,502	—
Summerville Residence Inn	Summerville Residence Inn	Summerville, SC	8/27/2018	2018	96	$	20.8	million	$	216,667	—			Summerville Residence Inn	Summerville, SC	8/27/2018	2018	96	$	20.8	million	$	216,667	—
Dallas DT Courtyard	Dallas DT Courtyard	Dallas, TX	12/5/2018	2018	167	$	49.0	million	$	293,413	—			Dallas DT Courtyard	Dallas, TX	12/5/2018	2018	167	$	49.0	million	$	293,413	—
Residence Inn Austin Northwest/The Domain Area														Residence Inn Austin Northwest/The Domain Area	Austin, TX	8/3/2021	2016	132	$	37.0	million	$	280,000	—
TownePlace Suites Austin Northwest/The Domain Area														TownePlace Suites Austin Northwest/The Domain Area	Austin, TX	8/3/2021	2021	137	$	34.3	million	$	250,000	—

Total	Total				5,900	$1,408.1 million			$	238,661	$461.2 million			Total				6,169	$	1,479.4	million	$	239,804	$	439.9	million

Item 6. ~~Selected Financial Data~~

The consolidated financial data included in the following table has been derived from the financial statements for the last five years and includes the information required by Item 301 of Regulation S-K. The selected historical financial data should be read in conjunction with "Management’s Discussion and Analysis of Financial Condition and Results of Operations," and the financial statements and notes thereto, both included in this Annual Report on Form 10-K.

Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, 2020 December 31, 2019 December 31, 2018 December 31, 2017 December 31, 2016
(In thousands, except share and per-share data)
Statement of Operations Data:
Total revenue $ 144,916 $ 328,328 $ 324,230 $ 301,844 $ 295,871
Hotel operating expenses 95,498 174,251 170,562 155,679 148,777
Depreciation and amortization 53,871 51,505 48,169 46,292 48,775
Impairment loss — — — 6,663 —
Impairment loss on investment in unconsolidated real estate entities 15,282 — — — —
Property taxes, ground rent and insurance 23,040 24,717 23,678 20,916 21,564
General and administrative 11,564 14,077 14,120 12,825 11,119
Other charges 4,385 1,441 3,806 523 510
Reimbursed costs from unconsolidated real estate entities 4,045 5,670 5,743 5,908 6,190
Total operating expenses 207,685 271,661 266,078 248,806 236,935
Operating (loss) income before gain (loss) on sale of hotel property (62,769) 56,667 58,152 53,038 58,936
Interest and other income 179 190 462 30 51
Interest expense net of amounts capitalized, including amortization of deferred fees (28,122) (28,247) (26,878) (27,901) (28,297)
Loss on early extinguishment of debt — — — — (4)
Gain (loss) on sale of hotel property 21,116 (3,282) (18) 3,327 —
Loss from unconsolidated real estate entities (7,424) (6,448) (876) 1,582 718
Net gain (loss) from remeasurement and sales of investment in unconsolidated real estate entities — — — — (10)
(Loss) income before income tax expense (77,020) 18,880 30,842 30,076 31,394
Income tax expense — — 28 (396) 301
Net (loss) income $ (77,020) $ 18,880 $ 30,870 $ 29,680 $ 31,695
Net (loss) income attributable to non-controlling interest 997 (177) (229) (202) (212)
Net (loss) income attributable to common shareholders $ (76,023) $ 18,703 $ 30,641 $ 29,478 $ 31,483
(Loss) income per Common Share - Basic:
Net (loss) income attributable to common shareholders $ (1.62) $ 0.39 $ 0.66 $ 0.73 $ 0.82
(Loss) income per Common Share - Diluted:
Net (loss) income attributable to common shareholders $ (1.62) $ 0.39 $ 0.66 $ 0.73 $ 0.81
Weighted average number of common shares outstanding:
Basic 46,961,039 46,788,784 46,073,515 39,859,143 38,299,067
Diluted 46,961,039 47,023,280 46,243,660 40,112,266 38,482,875
Other Data:
Net cash (used in) provided by operating activities (19,961) 86,234 86,215 86,689 87,669
Net cash provided by (used in) investing activities 26,806 (44,575) (96,401) (158,411) (15,268)
Net cash provided by (used in) financing activities 4,426 (53,814) 6,024 71,171 (75,509)
Cash dividends declared per common share .22 1.32 1.32 1.30 1.30

[Reserved]

As of As of As of As of As of
December 31, 2020 December 31, 2019 December 31, 2018 December 31, 2017 December 31, 2016
(In thousands)
Balance Sheet Data:
Investment in hotel properties, net $ 1,265,174 $ 1,347,116 $ 1,373,773 $ 1,320,082 $ 1,233,094
Investment in hotel properties under development 43,651 20,496 —
Cash and cash equivalents 21,124 6,620 7,192 9,333 12,118
Restricted cash 10,329 13,562 25,145 27,166 25,083
Investment in unconsolidated real estate entities — 17,969 21,545 24,389 20,424
Right of use asset 20,641 21,270 — — —
Hotel receivables (net of allowance for doubtful accounts) 1,688 4,626 4,495 4,047 4,389
Deferred costs, net 5,384 4,271 5,070 4,646 4,642
Prepaid expenses and other assets 2,266 2,615 2,431 2,523 2,778
Deferred tax asset, net — 29 58 30 426
Total assets $ 1,370,257 $ 1,438,574 $ 1,439,709 $ 1,392,216 $ 1,302,954
Mortgage debt, net $ 460,145 $ 495,465 $ 501,782 $ 506,316 $ 530,323
Revolving credit facility 135,300 90,000 81,500 32,000 52,500
Construction loan 13,325 — — — —
Accounts payable and accrued expenses 25,374 33,012 33,692 31,692 27,782
Distributions in excess of investments of unconsolidated real estate entities 19,951 15,214 9,650 6,582 6,017
Lease liability 23,233 23,717 — — —
Distributions payable 469 6,142 5,667 5,846 4,742
Total liabilities 677,797 663,550 632,291 582,436 621,364
Total shareholders’ equity 677,752 762,377 797,466 803,162 676,742
Noncontrolling Interest in Operating Partnership 14,708 12,647 9,952 6,618 4,848
Total liabilities and equity $ 1,370,257 $ 1,438,574 $ 1,439,709 $ 1,392,216 $ 1,302,954

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

COVID-19 Pandemic

The lodging industry has been significantly impacted by the COVID-19 pandemic. Steps have been taken to restrict

inbound international travel and there has been a significant decline in domestic travel. The full impact of the COVID-19

pandemic on the lodging industry continues to evolve and will depend on future developments including the ~~duration~~continuing severity and ~~spread~~duration of the ~~outbreak,~~pandemic, and the ~~existence~~possibility of ~~governmental stay-at-home orders, deployment~~additional subsequent widespread outbreaks and variant strains and the impact of ~~vaccines, peoples'~~actions taken in response, people's willingness to travel and the strength and timing of an economic recovery. All of these factors are uncertain, and the full impact of the COVID-19 pandemic on the lodging industry and the Company cannot be predicted at this time. The full magnitude of the impact of the COVID-19 pandemic on the Company’s financial condition, liquidity and future results of operations will depend on future developments which are highly uncertain. The Company has taken actions to mitigate the operating and financial impact of the COVID-19 pandemic including suspending ~~monthly~~common share dividends, reducing ~~2020~~ capital expenditures, ~~borrowing under its credit facility,~~ obtaining credit facility covenant waivers and temporarily reducing executive compensation.

Overview

Chatham Lodging Trust (“we,” “us” or the “Company”) was formed as a Maryland real estate investment trust on October 26, 2009. The Company is ~~internally-managed~~internally managed and ~~was organized to invest~~invests primarily in upscale extended-stay and premium-branded select-service hotels in geographically diverse markets with high barriers to entry near strong demand generators. The Company has elected to be taxed as a real estate investment trust for federal income tax purposes ("REIT").

The Company had no operations prior to the consummation of its IPO. The net proceeds from our share offerings are contributed to Chatham Lodging, L.P., our operating partnership (the “Operating Partnership”), in exchange for partnership interests. Substantially all of the Company’s assets are held by, and all operations are conducted through, the Operating Partnership. The Company is the sole general partner of the Operating Partnership and owns 100% of the common units of limited partnership interest in the Operating Partnership ("common units"). Certain of the Company’s employees hold vested and unvested long-term incentive plan units in the Operating Partnership ("LTIP units"), which are presented as non-controlling interests on our consolidated balance sheets.

As of December 31, ~~2020,~~2021, the Company owned 3941 hotels with an aggregate of ~~5,900~~6,169 rooms located in 1516 states and the District of Columbia. ~~The~~Prior to September 23, 2021, the Company held a 10.0% noncontrolling interest in a joint venture (the "Inland JV") with affiliates of Colony Capital, Inc. ("CLNY"), which owned 48 hotels acquired from Inland American Real Estate Trust, Inc. ("Inland"), comprising an aggregate of 6,402 rooms. Chatham sold its interest in the Inland JV in September 2021. Prior to March 18, 2021, the Company also ~~(i)~~ held a 10.3% noncontrolling interest in a joint venture (the “NewINK JV”) with affiliates of ~~Colony Capital, Inc. ("CLNY"),~~CLNY, which ~~was formed in the second quarter of 2014 to acquire~~owned 46 hotels acquired from a joint venture (the "Innkeepers JV") between the Company and Cerberus Capital Management (“Cerberus”), comprising an aggregate of 5,948 ~~rooms and (ii) held a 10.0% noncontrolling~~rooms. Chatham sold its interest in a separate joint venture (the "Inland JV") with CLNY, which was formed in the fourth quarter of 2014 to acquire 48 hotels from Inland American Real Estate Trust, Inc. ("Inland"), comprising an aggregate of 6,402 rooms. As of December 31, 2020, the Inland JV hotels are in receivership. We sometimes use the term "JVs" which refers collectively to the NewINK JV ~~and the Inland JV.~~in March 2021 for $2.8 million.

To qualify as a REIT, the Company cannot operate its hotels. Therefore, the Operating Partnership and its subsidiaries lease ~~each of~~ the Company's ~~wholly owned~~ hotels to a taxable REIT subsidiary ~~lessee~~lessees (“TRS ~~Lessee”~~Lessees”), which isare wholly owned by the Company’s taxable REIT subsidiary (“TRS”) holding company. The Company indirectly (i) owns its 10.3% interest in the 46 NewINK JV hotels and (ii) 10.0% interest in the 48 Inland JV hotels through the Operating Partnership. All of the NewINK JV hotels and Inland JV hotels are leased to TRS Lessees, in which the Company indirectly owns or owned as applicable, noncontrolling interests through its TRS holding company. Each hotel is leased to a TRS Lessee under a percentage lease that provides for rental payments equal to the greater of (i) a fixed base rent amount or (ii) a percentage rent based on hotel ~~room~~ revenue. The initial term of each of the TRS leases is 5 years. Lease revenue from each TRS Lessee is eliminated in consolidation.

The TRS Lessees have entered into management agreements with third-party management companies that provide day-to-day management for the hotels. As of December 31, ~~2020,~~2021, Island Hospitality Management Inc. (“IHM”), which is ~~52.5%~~100% owned by Mr. Fisher, managed all 3941 of the Company’s ~~wholly owned~~ hotels. ~~As of December 31, 2020, all of the NewINK JV hotels were managed by IHM. As of December 31, 2020, none of the Inland JV hotels were managed by IHM.~~

4342

Key Indicators of Operating Performance and Financial Condition

We measure financial condition and hotel operating performance by evaluating non-financial and financial metrics and measures such as:

•Average Daily Rate (“ADR”), which is the quotient of room revenue divided by total rooms sold,

•Occupancy, which is the quotient of total rooms sold divided by total rooms available,

•Revenue Per Available Room (“RevPAR”), which is the product of occupancy and ADR, and does not include food and beverage revenue, or other operating revenue,

•Funds From Operations (“FFO”),

•Adjusted FFO,

•Earnings before interest, taxes, depreciation and amortization (“EBITDA”),

•EBITDAre,

•Adjusted EBITDA, and

•Adjusted Hotel EBITDA.

We evaluate the hotels in our portfolio and potential acquisitions using these metrics to determine each hotel’s contribution toward providing income to our shareholders through increases in distributable cash flow and increasing long-term total returns through appreciation in the value of our common shares. RevPAR, ADR and Occupancy are hotel industry measures commonly used to evaluate operating performance.

See “Non-GAAP Financial Measures” for further discussion of FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA.

Results of Operations

Industry outlook

The lodging industry has been ~~significantly~~severely impacted by the COVID-19 pandemic and there has been a significant decline in ~~travel.~~travel relative to 2019, but trends are improving and we expect continued strong growth in 2022 relative to 2021. Smith Travel Research reported that U.S. lodging industry RevPAR ~~declined 47.5%~~increased 58.2% for the year ended December 31, ~~2020,~~2021, with ~~RevPAR~~RevPAR down ~~19.3%~~27.7% in ~~the~~the first quarter of ~~2020, down 45.5%~~2021, up 160.4% in the second quarter of ~~2020, down 48.5%~~2021, up 83.8% in the third quarter of ~~2020~~2021 and ~~down 50.6%~~up 96.4% in the fourth quarter of ~~2020.~~2021. We expect that in 2022, RevPAR will continue to increase significantly versus 2021 and 2020, but remain below the ~~current trend of depressed~~ RevPAR levels to continue until there is widespread deployment of effective COVID-19 vaccines. The full impact of the COVID-19 pandemic on the lodging industry continues to evolve and will depend on future developments including the duration and spread of the outbreak, the existence of governmental stay-at-home orders, deployment of vaccines, peoples' willingness to travel, and the strength and timing of an economic recovery. All of these factors are uncertain, and the full impact of the COVID-19 pandemic on the lodging industry cannot be predicted at this time.achieved in 2019.

Comparison of the year ended December 31, ~~2020 (“2020”)~~2021 to the year ended December 31, ~~2019 (“2019”)~~2020

The section below provides a comparative discussion of our consolidated results of operations between fiscal ~~2020~~year 2021 and ~~2019.~~2020. See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019~~2020 for comparative a discussion of our consolidated results of operations between fiscal ~~2019~~2020 and fiscal ~~2018.~~2019.

Results of operations for the year ended December 31, ~~2020~~2021 include the operating activities of our 3941 wholly owned hotels that were owned for the entire period ~~partial period results for one hotel~~and two hotels located in Austin, TX which ~~was~~were acquired on August 3, 2021. We sold ~~during the period and~~ our ~~investments~~investment in the NewINK JV ~~and~~on March 18, 2021, sold our investment in the Inland ~~JV. We~~JV on September 23, 2021, and sold one hotel in San Diego, CA on November 24, ~~2020, one hotel in Altoona, PA on May 7, 2019 and one hotel in Washington, PA on May 15, 2019. Accordingly, the~~2020. The comparisons below are influenced by ~~these dispositions.~~the COVID-19 pandemic, the acquisition of two hotels, the sale of our investments in the NewINK JV and the Inland JV, and the disposition of one hotel.

4443

Revenue

Revenue, which consists primarily of room, food and beverage and other operating revenues from our ~~wholly owned~~ hotels, was as follows for the periods indicated (dollars in thousands):

Year ended
December 31, 2020 December 31, 2019 % Change
Room $ 130,564 $ 296,267 (55.9) %
Food and beverage 2,718 9,824 (72.3) %
Other 7,589 16,567 (54.2) %
Cost reimbursements from unconsolidated real estate entities 4,045 5,670 (28.7) %
Total revenue $ 144,916 $ 328,328 (55.9) %


	For the year ended
	December 31, 2021		December 31, 2020		% Change
Room	$	187,369	$	130,564	43.5	%
Food and beverage	3,525		2,718		29.7	%
Other	11,350		7,589		49.6	%
Cost reimbursements from unconsolidated entities	1,731		4,045		(57.2)	%
Total revenue	$	203,975	$	144,916	40.8	%

Total revenue ~~decreased $183.4~~increased $59.1 million to ~~$144.9~~$204.0 million for the year ended December 31, ~~2020~~2021 compared to total revenue of ~~$328.3~~$144.9 million for the ~~2019~~2020 period. The ~~decrease~~increase in total revenue primarily was related to the recovery from the COVID-19 ~~pandemic.~~pandemic and the two hotels acquired in 2021. The two hotels acquired in 2021 contributed $4.1 million in total revenue. This was partially offset by a decrease in total revenue related to the ~~two hotels sold in 2019 was $1.6 million and $0.5 million related to the~~ hotel sold in ~~2020.~~2020 of $6.3 million. Since all of our hotels are primarily select service or limited service hotels, room revenue is the primary revenue source as these hotels do not have significant food and beverage revenue or large group conference facilities. Room revenue comprised ~~90.1%~~91.9% and ~~90.2%~~90.1%, respectively, of total revenue for the years ended December 31, ~~2020~~2021 and ~~December 31, 2019.~~2020. Room revenue was ~~$130.6~~$187.4 million and ~~$296.3~~$130.6 million for the years ended December 31, 2021 and 2020, respectively, and ~~2019, respectively, with~~ the ~~decrease~~increase in room revenue primarily was related to the recovery from the COVID-19 ~~pandemic. The~~pandemic and the two hotels acquired in 2021. This was partially offset by a decrease in room revenue related to the ~~two hotels sold in 2019 was $1.5 million with $0.4 million related to the~~ hotel sold in ~~2020.~~2020 was $5.8 million.

Food and beverage revenue was ~~$2.7~~$3.5 million and ~~$9.8~~$2.7 million for the years ended December 31, 2021 and 2020, ~~and 2019.~~respectively. The ~~decrease~~increase in food and beverage revenue primarily was related to ~~a decline~~an increase in occupancies at our hotels due to the recovery from the COVID-19 pandemic.

Other revenue comprised of parking, meeting room, gift shop, in-room movie and other ancillary amenities revenue, was ~~down $9.0~~up $3.8 million for the year ended December 31, ~~2020.~~2021. The ~~decrease~~increase in other operating revenue primarily was related to ~~a decline~~an increase in occupancies at our hotels due to the recovery from the COVID-19 pandemic.

Reimbursed costs from unconsolidated ~~real estate~~ entities ~~comprised of payroll costs at the JVs~~were $1.7 million and ~~Castleblack, which is 97.5% owned by affiliates of CLNY and 2.5% by Mr. Fisher, where the Company is the employer, were~~ $4.0 million ~~and $5.7 million respectively,~~ for the years ended December 31, 2021 and 2020, ~~and 2019.~~respectively. The cost reimbursements were offset by the reimbursed costs from unconsolidated ~~real estate~~ entities included in operating expenses. The decrease in cost reimbursements primarily was related to the sale of the NewINK JV.

As reported by Smith Travel Research, U.S. lodging industry RevPAR for the years ended December 31, 2021 and 2020 increased 58.2% and ~~2019~~ decreased 47.5% ~~and increased 0.9%~~, respectively, as compared to the years ended December 31, ~~2019~~2020 and ~~2018.~~2019. Smith Travel Research reported that U.S. lodging industry RevPAR ~~declined 19.3%~~decreased 27.7% in ~~the~~the first quarter, ~~45.5%~~increased 160.4% in the second quarter, ~~48.5%~~increased 83.8% in the third quarter and ~~50.6%~~increased 96.4% in the fourth quarter of ~~2020.~~2021. We We expect that in 2022, RevPAR will continue to increase significantly versus 2021 and 2020, but remain below the ~~current trend of depressed~~ RevPAR levels ~~to continue until there is widespread deployment of effective COVID-19 vaccines.~~achieved in 2019.

4544

In the table below, we present both actual and same property room revenue metrics. Actual Occupancy, ADR and RevPAR metrics reflect the performance of the hotels for the actual days such hotels were owned by the Company during the periods presented. Same property Occupancy, ADR, and RevPAR results for the 3940 hotels wholly owned by the Company as of December 31, ~~2020~~2021 and that have been in operation for a full year regardless of our ownership during the period presented, which is a non-GAAP financial measure. Results for the hotels for the periods prior to our ownership were provided to us by prior owners and have not been adjusted by us.


		For the years ended December 31,																	For the year ended
		2020						2019						Percentage Change					December 31, 2021						December 31, 2020						% Change
		Same Property (39 hotels)			Actual (40 hotels)			Same Property (39 hotels)			Actual (42 hotels)			Same Property (39 hotels)		Actual (40/42 hotels)			Same Property (40 hotels)			Actual (41 hotels)			Same Property (40 hotels)			Actual (40 hotels)			Same Property (40 hotels)		Actual (41/40 hotels)
Occupancy	Occupancy	48.2		%	48.6		%	80.0		%	80.1		%	(39.8)	%	(39.3)	%	Occupancy	64.6		%	64.6		%	48.1		%	48.6		%	34.3	%	32.9	%
ADR	ADR	$	119.89		$	120.84		$	165.45		$	165.01		(27.5)	%	(26.8)	%	ADR	$	132.68		$	132.42		$	119.39		$	120.84		11.1	%	9.6	%
RevPAR	RevPAR	$	57.74		$	58.76		$	132.00		$	131.77		(56.3)	%	(55.4)	%	RevPAR	$	85.71		$	85.54		$	57.45		$	58.76		49.2	%	45.6	%


	For the year ended
	December 31,
	2021		2020		2019
Funds From Operations (“FFO”):
Net (loss) income	$	(18,845)	$	(77,020)	$	18,880
Preferred dividends	(3,975)		—		—
Net (loss) income attributable to common shares and common units	(22,820)		(77,020)		18,880
Loss (gain) on sale of hotel property	21		(21,116)		3,282

Loss on the sale of assets within unconsolidated real estate entities	—		2		219
Gain on sale of investment in unconsolidated real estate entities	(23,817)		—		—
Depreciation	53,967		53,627		51,258
Impairment loss	5,640		—		—
Impairment loss on investment in unconsolidated real estate entities	—		15,282		—
Impairment loss within the unconsolidated real estate entities	—		1,388		4,197
Adjustments for unconsolidated real estate entity items	568		4,434		7,493
FFO attributed to common share and unit holders	13,559		(23,403)		85,329
Other charges	711		4,385		1,441

Adjustments for unconsolidated real estate entity items	46		9		1,028
Adjusted FFO attributed to common share and unit holders	$	14,316	$	(19,009)	87,798
Weighted average number of common shares and units
Basic	49,281,763		47,635,600		47,238,309
Diluted	49,490,938		47,635,600		47,472,805

Diluted weighted average common share count used for calculation of adjusted FFO per share may differ from diluted weighted average common share count used for calculation of GAAP Net Income per share by LTIP units, which may be converted to common shares of beneficial interest and if Net Income per share is negative and Adjusted FFO is positive. Unvested restricted shares and unvested LTIP units that could potentially dilute basic earnings per share in the future would not be included in the computation of diluted loss per share for the periods where a loss has been recorded because they would have been anti-dilutive for the periods presented.

~~Earnings before interest, taxes, depreciation and amortization ("EBITDA")~~EBITDA is defined as net income or loss excluding: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sale of assets; (3) depreciation and amortization; and (4) unconsolidated real estate entity items including interest, depreciation and amortization excluding gains and losses from sales of real estate. We consider EBITDA useful to an investor in evaluating and facilitating comparisons of our operating performance between periods and between REITs by removing the impact of our capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from our operating results. In addition, EBITDA is used as one measure in determining the value of hotel acquisitions and dispositions.

In addition to EBITDA, we present EBITDAre in accordance with ~~NAREIT~~Nareit guidelines, which defines EBITDAre as net income or loss excluding interest expense, income tax expense, depreciation and amortization expense, gains or losses from sales of real estate, impairment, and adjustments for unconsolidated joint ventures. We believe that the presentation of EBITDAre provides useful information to investors regarding the Company's operating performance and can facilitate comparison of operating performance between periods and between REITs.

We also present Adjusted EBITDA which includes additional adjustments for items such as other charges, gains or losses on extinguishment of indebtedness, costs associated with the departure of our former Chief Investment Officer, amortization of share-based compensation and certain other expenses that we consider outside the normal course of operations. We believe that Adjusted EBITDA provides useful supplemental information to investors regarding our ongoing operating performance that, when considered with net income, EBITDA and EBITDAre, is beneficial to an investor's understanding of our performance.

The following is a reconciliation of net (loss) income to EBITDA, EBITDAre and Adjusted EBITDA for the years ended December 31, 2021, 2020 ~~2019~~ and ~~2018~~2019 (in thousands):

For the year ended
December 31,
2020 2019 2018
Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”):
Net (loss) income $ (77,020) $ 18,880 $ 30,870
Interest expense 28,122 28,247 26,878
Income tax expense — — (28)
Depreciation and amortization 53,871 51,505 48,169
Adjustments for unconsolidated real estate entity items 8,965 18,214 16,495
EBITDA 13,938 116,846 122,384
Impairment loss on investment in unconsolidated real estate entities 15,282 — —
Impairment loss from unconsolidated real estate entities 1,388 4,197 —
(Gain) loss on sale of hotel property (21,116) 3,282 18
Loss on the sale of assets within unconsolidated real estate entities 2 219 —
EBITDAre
9,494 124,544 122,402
Other charges 4,385 1,441 3,806
Adjustments for unconsolidated real estate entity items 9 293 1,081
Share based compensation 4,597 4,719 4,210
Adjusted EBITDA $ 18,485 $ 130,997 $ 131,499


	For the year ended
	December 31,
	2021		2020		2019
Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”):
Net (loss) income	$	(18,845)	$	(77,020)	$	18,880
Interest expense	24,460		28,122		28,247

Depreciation and amortization	54,215		53,871		51,505
Adjustments for unconsolidated real estate entity items	1,184		8,965		18,214
EBITDA	61,014		13,938		116,846
Impairment loss	5,640		—		—
Impairment loss on investment in unconsolidated real estate entities	—		15,282		—
Impairment loss within the unconsolidated real estate entities	—		1,388		4,197
Loss (gain) on sale of hotel property	21		(21,116)		3,282
Loss on the sale of assets within unconsolidated real estate entities	—		2		219
Gain on sale of investment in unconsolidated real estate entities	(23,817)		—		—
EBITDAre	42,858		9,494		124,544
Other charges	711		4,385		1,441

Adjustments for unconsolidated real estate entity items	46		9		293
Share based compensation	4,823		4,597		4,719
Adjusted EBITDA	$	48,438	$	18,485	$	130,997

Adjusted Hotel EBITDA is defined as net income before interest, income taxes, depreciation and amortization, corporate general and administrative, impairment loss, loss on early extinguishment of debt, other charges, interest and other income, losses on sales of hotel properties and income or loss from unconsolidated real estate entities. We present Adjusted Hotel EBITDA because we believe it is useful to investors in comparing our hotel operating performance between periods and comparing our Adjusted Hotel EBITDA margins to those of our peer companies. Adjusted Hotel EBITDA represents the results of operations for our wholly owned hotels only.

The following is a presentation of Adjusted Hotel EBITDA for the years ended December 31, 2021, 2020 ~~2019~~ and ~~2018~~2019 (in thousands):

For the year ended
December 31,
2020 2019 2018
Net (loss) income (77,020) 18,880 30,870
Add: Interest expense 28,122 28,247 26,878
Depreciation and amortization 53,871 51,505 48,169
Corporate general and administrative 11,564 14,077 14,120
Other charges 4,385 1,441 3,806
Loss from unconsolidated real estate entities 7,424 6,448 876
Impairment loss on investment in unconsolidated real estate entities 15,282 — —
Loss on sale of hotel property — 3,282 18
Less: Interest and other income (179) (190) (462)
Income tax benefit — — (28)
Gain on sale of hotel property (21,116) — —
Adjusted Hotel EBITDA $ 22,333 $ 123,690 $ 124,247


		For the year ended
		December 31,
		2021		2020		2019
Net (loss) income		$	(18,845)	$	(77,020)	$	18,880
Add:	Interest expense	24,460		28,122		28,247

	Depreciation and amortization	54,215		53,871		51,505
	Corporate general and administrative	15,752		11,564		14,077
	Other charges	711		4,385		1,441
	Impairment loss	5,640		—		—
	Loss from unconsolidated real estate entities	1,231		7,424		6,448
	Impairment loss on investment in unconsolidated real estate entities	—		15,282		—
	Loss on sale of hotel property	21		—		3,282

Less:	Interest and other income	(243)		(179)		(190)


	Gain on sale of hotel property	—		(21,116)		—
	Gain on sale of investment in unconsolidated real estate entities	(23,817)		—		—
Adjusted Hotel EBITDA		$	59,125	$	22,333	$	123,690

Although we present FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA because we believe they are useful to investors in comparing our operating performance between periods and between REITs that report similar measures, these measures have limitations as analytical tools. Some of these limitations are:

•FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

•FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

•FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect funds available to make cash distributions;

•EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;

•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may need to be replaced in the future, and FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect any cash requirements for such replacements;

•Non-cash compensation is and will remain a key element of our overall long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period using Adjusted EBITDA;

•Adjusted FFO, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect the impact of certain cash charges (including acquisition transaction costs) that result from matters we consider not to be indicative of the underlying performance of our hotel properties; and

•Other companies in our industry may calculate FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA differently than we do, limiting their usefulness as a comparative measure.

•In addition, FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not represent cash generated from operating activities as determined by GAAP and should not be considered as alternatives to net income or loss, cash flows from operations or any other operating performance measure prescribed by GAAP. FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA are not measures of our liquidity. Because of these limitations, FFO, Adjusted FFO, EBITDA, Adjusted EBITDA and Adjusted Hotel EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA only supplementally. Our consolidated financial statements and the notes to those statements included elsewhere are prepared in accordance with GAAP.

Liquidity and Capital Resources

We plan to maintain a prudent capital structure and intend to maintain our leverage over the long term at a ratio of net debt to investment in hotels (at cost) (defined as our initial acquisition price plus the gross amount of any subsequent capital investment and excluding any impairment charges) at a level that will be similar to the levels at which we have operated in the past. A subsequent decrease in hotel property values will not necessarily cause us to repay debt to comply with this limitation. At December 31, 2021, our leverage ratio was approximately 30.6%, which decreased from 35.8% at December 31, 2020 based on the ratio of our net debt (total debt outstanding before deferred financing costs less unrestricted cash and cash equivalents) to hotel investments at cost. At December 31, 2021, we had total debt of $544.9 million at an average rate of approximately 4.7%. We intend to continue to fund our investments with a prudent balance of debt and equity. Our debt may include mortgage debt collateralized by our hotel properties and unsecured debt.

At December 31, 2021 and 2020, we had $70.0 million and $135.3 million, respectively, in outstanding borrowings under our revolving credit facility. We had $35.0 million and $13.3 million in outstanding borrowings under our construction loan for the Warner Center hotel development at December 31, 2021 and 2020, respectively. At December 31, 2021, the maximum borrowing availability under our revolving credit facility was $250.0 million. We also had mortgage debt on individual hotels aggregating $439.9 million and $461.1 million at December 31, 2021 and 2020, respectively.

Our revolving credit facility contains representations, warranties, covenants, terms and conditions customary for credit facilities of this type, including a maximum leverage ratio, a minimum fixed charge coverage ratio and minimum net worth financial covenants, limitations on (i) liens, (ii) incurrence of debt, (iii) investments, (iv) distributions, and (v) mergers and asset dispositions, covenants to preserve corporate existence and comply with laws, covenants on the use of proceeds of the revolving credit facility and default provisions, including defaults for non-payment, breach of representations and warranties, insolvency, non-performance of covenants, cross-defaults and guarantor defaults. We were in compliance with all financial covenants at December 31, 2021.

On October 26, 2021, Chatham executed an amendment to its credit facility which extended a waiver of financial covenants until June 30, 2022, provided for the immediate exercise of an option to extend the maturity of the entire $250 million facility through March 8, 2023, and added two six-month options to further extend the maturity of the facility through March 8, 2024 from lenders representing $227.5 million of commitments. In conjunction with the amendment, Chatham provided credit facility lenders with equity pledges on three unencumbered hotels. The spread on the facility did not change as a result of the amendment. The amendment places limits on the Company’s ability to incur debt, pay dividends, and make capital expenditures during the covenant waiver period. During the covenant waiver period interest will be calculated as LIBOR (subject to a 0.5% floor) plus a spread of 2.50% if borrowings remain at or below $200 million and a spread of 3.0% if borrowings exceed $200 million. As of December 31, 2021, the Company was in compliance with all of its modified financial covenants.

Our mortgage debt agreements contain “cash trap” provisions that are triggered when the hotel’s operating results fall below a certain debt service coverage ratio or debt yield. When these provisions are triggered, all of the excess cash flow generated by the hotel is deposited directly into cash management accounts for the benefit of our lenders until a specified debt service coverage ratio or debt yield is reached. Such provisions do not allow the lender the right to accelerate repayment of the underlying debt. As of December 31, 2021, the debt service coverage ratios or debt yields for eight of our mortgage loans were below the minimum thresholds such that the cash trap provision of each respective loan could be enforced. As of December 31, 2021, none of our mortgage debt lenders has enforced cash trap provisions. We do not expect that such cash traps will affect our ability to satisfy our short-term liquidity requirements.

In December 2017, we established a $50 million dividend reinvestment and stock purchase plan (the "Prior DRSPP"). We filed a new $50 million shelf registration statement for the dividend reinvestment and stock purchase plan (the "Current DRSPP" and together with the Prior DRSPP, the "DRSPP") on December 22, 2020 to replace the Prior DRSPP. Under the DRSPPs, shareholders may purchase additional common shares by reinvesting some or all of the cash dividends received on the Company's common shares. Shareholders may also make optional cash purchases of the Company's common shares subject to certain limitations detailed in the prospectuses for the DRSPP. During the year ended December 31, 2021, we issued 149,686 shares under the Current DRSPP at a weighted average price of $13.77, which generated $2.1 million of proceeds. As of December 31, 2021, there were common shares having a maximum aggregate sales price of approximately $47.9 million available for issuance under the Current DRSPP.

In December 2017, we established an "at-the-market" offering program (the "Prior ATM Plan") whereby, from time to time, we may publicly offer and sell our common shares having an aggregate maximum offering price up to $100 million by means of ordinary brokers transactions on the New York Stock Exchange (the "NYSE"), in negotiated transactions or in transactions that are deemed to be "at-the-market" offerings as defined in Rule 415 under the Securities Act of 1933, as amended. We filed a $100 million registration statement for a new ATM program (the "ATM Plan") on January 5, 2021 to replace the prior program. At the same time, the Company entered into a sales agreement with Cantor Fitzgerald & Co., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., BTIG, LLC, Citigroup Global Markets Inc., Regions Securities LLC, Stifel, Nicolaus & Company, Incorporated and Wells Fargo Securities as sales agents. During the year ended December 31, 2021, we issued 1,595,528 shares under the ATM Plan at a weighted average price of $14.13 per share, which generated $22.5 million of proceeds. As of December 31, 2021, there were common shares having a maximum aggregate sales price of approximately $77.5 million available for issuance under the ATM Plan.

We expect to meet our short-term liquidity requirements generally through existing cash balances and availability under our credit facility. We believe that our existing cash balances and availability under our credit facility will be adequate to fund operating obligations, pay interest on any borrowings and fund dividends in accordance with the requirements for qualification as a REIT under the Code. We expect to meet our long-term liquidity requirements, such as hotel property acquisitions and debt maturities or repayments through additional long-term secured and unsecured borrowings, the issuance of additional equity or debt securities or the possible sale of existing assets.

The COVID-19 pandemic has caused, and is continuing to cause, significant disruption in the financial markets both globally and in the United States, and will continue to impact, possibly materially, our business, financial condition and results of operations. We cannot predict the degree, or duration, to which our operations will be affected by the COVID-19 outbreak, and the effects could be material. While we believe the liquidity provided by our unrestricted cash and credit facility availability, and aggressive cost reduction initiatives will enable us to fund our current obligations for the foreseeable future, COVID-19 has resulted in significant disruption of global financial markets, which could have a negative impact on our ability to access capital in the future. Because the situation is ongoing, and because the duration and severity remain unclear, it is difficult to forecast any impacts on our future results.

We intend to continue to invest in hotel properties as suitable opportunities arise. We intend to finance our future investments with free cash flow, the net proceeds from additional issuances of common and preferred shares, issuances of common units in our Operating Partnership or other securities, borrowings or asset sales. The success of our acquisition strategy depends, in part, on our ability to access additional capital through other sources. There can be no assurance that we will continue to make investments in properties that meet our investment criteria. Additionally, we may choose to dispose of certain hotels as a means to provide liquidity.

We had no material off-balance sheet arrangements at December 31, 2021.

Sources and Uses of Cash

Our principal sources of cash include net cash from operations, availability under our revolving credit facility, and proceeds from debt and equity issuances. Our principal uses of cash include acquisitions, capital expenditures, operating costs, corporate expenditures, interest costs, debt repayments and distributions to equity holders.

~~As of December 31, 2020 and December 31, 2019, we had cash and~~Cash, cash equivalents, and restricted cash ~~of approximately $31.5~~totaled $29.9 million ~~and $20.2 million, respectively. Additionally, we had $114.7 million available under our $250.0 million revolving credit facility~~ as of December 31, 2021, a decrease of $1.6 million from December 31, 2020, primarily due to net cash provided by operating activities of $28.8 million, net cash used in investing activities of $(101.9) million, and net cash provided by financing activities $71.6 million.

Cash from Operations

Net cash flows provided by operating activities increased $48.7 million to $28.8 million in 2021 compared to ($19.9) million in 2020. The increase in cash from operating activities was primarily due to improving operating results from our hotels which generated RevPAR growth of 45.6% in 2021 versus 2020.

Investing Activities Cash Flows

Net cash flows used in investing activities increased $128.7 million to $101.9 million in 2021 compared to ($26.8) million in 2020. For the year ended December 31, 2021, net cash flows used in investing activities of $101.9 million consisted of $71.3 million related to the acquisitions of the RI Austin and TPS Austin hotels, $9.5 million related to capital improvements on our 41 wholly owned hotels and $23.9 million related to the development of the Home2 Suites Warner Center, offset by $2.8 million of proceeds from the sale of an unconsolidated real estate entity (the NewINK JV). For the year ended December 31, 2020, net cash flows used in operations were $19.9 million, driven by net loss of $77.0 million and by $61.7 million of non-cash items, including $55.2 million of depreciation and amortization and $4.6 million of share-based compensation expense, $0.3 million of accelerated LTIP compensation, losses of $7.4 million from unconsolidated real estate entities and $15.3 million related to the impairment of our interest in the Inland JV, offset by $21.1 million from the gain on the sale of a hotel. In addition, changes in operating assets and liabilities due to the timing of cash receipts, payment for real estate taxes, payments of corporate compensation and payments from our hotels resulted in net cash inflow of $4.6 million. Net cash flows provided by investing activities ~~were~~of $26.8 million ~~primarily~~consisted of $14.4 million related to capital improvements on our 39 wholly owned hotels ~~of $14.4 million,~~and $23.2 million related to the development of ~~a new hotel,~~the Home2 Suites Warner Center, offset by proceeds from the sale of the San Diego, CA hotel of $64.4 million.

We expect to invest approximately $23.7 million on renovations, discretionary and emergency expenditures on our existing hotels in 2022, including improvements required under any brand PIP, and expect to spend $2.4 million in 2022 on the Home2 Suites Warner Center development.

Financing Activities Cash Flows

Net cash flows provided by financing activities ~~were~~increased $67.2 million to $71.6 million in 2021 compared to $4.4 million in 2020. For the year ended December 31, 2021, net cash flows provided by financing activities of $71.6 million were comprised of $115.9 million of net proceeds from our Series A Preferred Shares offering, $24.6 million of common equity proceeds raised through sales under our DRSPPs and ATM Plan, and net borrowings on our construction loan of $21.7 million, offset by net repayments of our senior unsecured revolving credit facility of $65.3 million, amortization payments on mortgage debt of $8.7 million and the repayment of the $12.5 million mortgage loan on the Residence Inn New Rochelle, payments of financing and offering costs of $1.6 million, distributions to unit holders of $0.3 million and distributions on preferred shares of $2.3 million. For the year ended December 31, 2020, net cash flows provided by financing activities of $4.4 million were comprised of $0.2 million of common equity proceeds raised through sales under our Prior DRSPP, ~~(as defined below),~~ net borrowings on our credit facility of $45.3 million, and net borrowing on our construction loan of $13.2 million, offset by principal payments on mortgage debt of $35.7 million, payments of deferred financing and offering costs of $2.4 million, and distributions to shareholders and LTIP unit holders of $16.2 million.

~~For~~We declared total dividends of $0 and $0 per common share and LTIP unit for the year ended December 31, ~~2019, net cash flows provided by operations were $86.2 million, driven by net income of $18.9 million~~2021 and by $66.8 million of non-cash items, including $52.4 million of depreciation and amortization and $4.7 million of share-based compensation expense, $3.3 million of loss on the sale of hotels and losses of $6.4 million from unconsolidated real estate entities. In addition, changes in operating assets and liabilities due to the timing of cash receipts, payment for real estate taxes, payments of corporate compensation and payments from our hotels resulted in net cash inflow of $0.5 million. Net cash flows used in investing activities were $44.6 million, primarily related to capital improvements on our 40 wholly owned hotels of $35.9 million, $12.2 million related to the development of a new hotel and the purchase of a parcel of land for $8.2 million, offset by proceeds from the sale of the Altoona and Washington, PA hotels of $9.0 million and distributions of $2.7 million received from unconsolidated real estate entities. Net cash flows used in financing activities were $53.8 million, comprised of $7.3 million of common equity proceeds raised through sales under our Prior ATM Plan (as defined below) and Prior DRSPP, net borrowings on our unsecured credit facility of $8.5 million, offset by principal payments or payoffs on mortgage debt of $6.7 million, payments of deferred financing and offering costs of $0.2 million, and distributions to shareholders and LTIP unit holders of $62.7 million.

~~For the year ended December 31, 2018,~~ net cash flows provided by operations were $86.2 million, driven by net income of $30.9 million and by $54.1 million of non-cash items, including $49.1 million of depreciation and amortization and $4.2 million of share-based compensation expense and losses of $0.8 million from unconsolidated real estate entities. In addition, changes in operating assets and liabilities due to the timing of cash receipts, payment for real estate taxes, payments of corporate compensation and payments from our hotels resulted in net cash inflow of $1.2 million. Net cash flows used in investing activities were $96.4 million, primarily related the purchase of the Residence Inn Summerville for $21.0 million and the Dallas Downtown Courtyard for $49.0 million, capital improvements on our 42 wholly owned hotels of $31.4 million, reduced by distributions of $5.0 million received from unconsolidated real estate entities. Net cash flows provided by financing activities were $6.0 million, comprised of $24.5 million of common equity proceeds raised through sales under our Prior ATM Plan and Prior DRSPP, net borrowings on our unsecured credit facility of $49.5 million, principal payments or payoffs on mortgage debt of $4.9 million, payments of deferred financing and offering costs of $1.5 million, and distributions to shareholders and LTIP unit holders of $61.6 million.

~~We declared total dividends of~~ $0.22 and $0.22 per common share and LTIP unit for the year ended December 31, 2020, respectively. We declared total dividends of $0.89713 and ~~$1.32 and $1.32~~$0 per ~~common~~Series A preferred share ~~and LTIP unit~~ for ~~the year ended December 31, 2019, respectively.~~

~~Liquidity and Capital Resources~~

We plan to maintain a prudent capital structure and intend to maintain our leverage over the long term at a ratio of net debt to investment in hotels (at cost) (defined as our initial acquisition price plus the gross amount of any subsequent capital investment and excluding any impairment charges) at a level that will be similar to the levels at which we have operated in the past. A subsequent decrease in hotel property values will not necessarily cause us to repay debt to comply with this limitation. At December 31, 2020, our leverage ratio was approximately 35.8 percent, which increased from 34.1 percent at December 31, 2019 based on the ratio of our net debt (total debt outstanding before deferred financing costs less unrestricted cash and cash equivalents) to hotel investments at cost. At December 31, 2020, we had total debt of $609.7 million at an average rate of approximately 4.4%. We intend to continue to fund our investments with a prudent balance of debt and equity. Our debt may include mortgage debt collateralized by our hotel properties and unsecured debt.

At December 31, 2020 and 2019, we had $135.3 million and $90.0 million, respectively, in outstanding borrowings under our revolving credit facility. We had $13.3 million and zero, respectively, in outstanding borrowings under our construction loan for the Warner Center hotel development at December 31, 2020 and 2019. At December 31, 2020, the maximum borrowing availability under our revolving credit facility was $250.0 million. We also had mortgage debt on individual hotels aggregating $461.1 million and $496.9 million at December 31, 2020 and 2019, respectively.

On December 16, 2020, the Company entered into a Third Amendment to the Company’s Amended and Restated Credit Agreement, dated as of March 8, 2018 (as amended by the Credit Agreement Amendment, and as previously amended by that certain First Amendment to the Amended and Restated Credit Agreement, dated as of May 6, 2020, and as further amended by that certain Second Amendment to Amended and Restated Credit Agreement, dated as of July 23, 2020), with certain lenders for whom Barclays Bank PLC is acting as the administrative agent. The amendment provides for the waiver of certain financial covenants through December 31, 2021 and allows the Company to borrow up to the entire $250 million facility size during this period. During this covenant waiver period, the Company will be required to maintain a minimum liquidity of $25 million which will include both unrestricted cash and credit facility availability. In connection with the amendment, the Company added six hotels to the credit facility’s borrowing base which now has a total of 24 properties. The amendment provided the Company’s credit facility lenders with pledges of the equity in the 24 borrowing base hotels. The amendment places additional limits on the Company’s ability to incur debt, pay dividends, and make capital expenditures during the covenant waiver period. During the covenant waiver period interest will be calculated as LIBOR (subject to a 0.5% floor) plus a spread of 2.50% if borrowings remain at or below $200 million and a spread of 3.0% if borrowings exceed $200 million. As of December 31, 2020, the Company was in compliance with all of its modified financial covenants.

~~Our mortgage debt agreements contain “cash trap” provisions that are triggered when the hotel’s operating results~~

fall below a certain debt service coverage ratio or debt yield. When these provisions are triggered, all of the excess cash flow generated by the hotel is deposited directly into cash management accounts for the benefit of our lenders until a specified debt service coverage ratio or debt yield is reached. Such provisions do not allow the lender the right to accelerate repayment of the underlying debt. As of December 31, 2020, the debt service coverage ratios or debt yields for all of our mortgage loans were below the minimum thresholds such that the cash trap provision of each respective loan could be enforced. As of December 31, 2020, none of our mortgage debt lenders has enforced cash trap provisions. We do not expect that such cash traps will affect our ability to satisfy our short-term liquidity requirements.

In December 2017, we established a $50 million dividend reinvestment and stock purchase plan (the "Prior DRSPP"). We filed a new $50 million shelf registration statement for the dividend reinvestment and stock purchase plan (the "Current DRSPP") and together with the Prior DRSPP, the "DRSPP") on December 22, 2020 to replace the prior program. Under the DRSPPs, shareholders may purchase additional common shares by reinvesting some or all of the cash dividends received on the Company's common shares. Shareholders may also make optional cash purchases of the Company's common shares subject to certain limitations detailed in the prospectuses for the DRSPPs. During the year ended December 31, 2020, we issued 20,512 shares under the Prior DRSPP at a weighted average price of $8.89, which generated $0.2 million of proceeds. As of December 31, 2020, there were common shares having a maximum aggregate sales price of approximately ~~$50.0~~ ~~million available for issuance under the Current DRSPP.~~

In December 2017, we established an "At-the-Market-Plan" program (the "Prior ATM Plan") whereby, from time to time, we may publicly offer and sell our common shares having an aggregate maximum offering price up to $100 million by means of ordinary brokers transactions on the New York Stock Exchange (the "NYSE"), in negotiated transactions or in transactions that are deemed to be "at-the-market" offerings as defined in Rule 415 under the Securities Act of 1933, as amended. We filed a $100 million registration statement for a new ATM program (the "ATM Plan") on January 5, 2021 to replace the prior program. At the same time, the Company entered into a sales agreement with Cantor Fitzgerald & Co., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., BTIG, LLC, Citigroup Global Markets Inc., Regions Securities LLC, Stifel, Nicolaus & Company, Incorporated and Wells Fargo Securities as sales agents.. During the year ended December 31, 2020, we issued no shares under the Prior ATM Plan. As of December 31, 2020, there were common shares having a maximum aggregate sales price of approximately ~~$100.0~~ ~~million available for issuance under the ATM Plan.~~

The COVID-19 pandemic has caused, and is continuing to cause, significant disruption in the financial markets both globally and in the United States, and will continue to impact, possibly materially, our business, financial condition and results of operations. We cannot predict the degree, or duration, to which our operations will be affected by the COVID-19 outbreak, and the effects could be material. While we believe the liquidity provided by our unrestricted cash and credit facility availability, valuable unencumbered assets and aggressive cost reduction initiatives will enable us to fund our current obligations for the foreseeable future, COVID-19 has resulted in significant disruption of global financial markets, which could have a negative impact on our ability to access capital in the future. Because the situation is ongoing, and because the duration and severity remain unclear, it is difficult to forecast any impacts on our future results.

~~Capital Expenditures~~

We intend to maintain each hotel property in good repair and condition and in conformity with applicable laws and regulations and in accordance with the franchisor’s standards and any agreed-upon requirements in our management and loan agreements. After we acquire a hotel property, we may be required to complete a property improvement plan (“PIP”) in order to be granted a new franchise license for that particular hotel property. PIPs are intended to bring the hotel property up to the franchisor’s standards. Certain of our loans require that we escrow for property improvement purposes, at the hotels collateralizing these loans, amounts up to 5% of gross revenue from such hotels. We intend to spend amounts necessary to comply with any reasonable loan or franchisor requirement and otherwise to the extent that such expenditures are in the best interest of the hotel. To the extent that we spend more on capital expenditures than is available from our operations, we intend to fund those capital expenditures with available cash and borrowings under our senior unsecured revolving credit facility.

~~For~~ the years ended December 31, 2021 and 2020, ~~and 2019, we invested approximately $14.5 million and $35.9 million, respectively, on capital projects in our hotels. As a result of~~respectively.

Material Cash Requirements

Our material cash requirements include the ~~COVID-19 pandemic, we reduced our planned 2020 capital expenditures by approximately $10 million. We expect to invest approximately~~following contractual obligations:

~~$6.3 million~~ ~~on renovations, discretionary and emergency expenditures on our existing hotels in 2021, including improvements required under any brand PIP.~~

~~We are developing a hotel in Los Angeles, CA on a parcel~~•At December 31, 2021, we had total debt principal and interest obligations of ~~land owned by us. We expect the total development costs for construction of the hotel to be approximately $70.0~~$582.7 million ~~which includes the cost of the land. We have incurred $43.7~~with $34.7 million of ~~costs~~principal and interest payable within the next 12 months from year-end 2021. See Note 7, “Debt” to ~~date, which included $6.6 million of the land acquisition costs~~our consolidated financial statements for additional information relating to our property loans and $37.1 million of other development costs. We reclassified the $6.6 million of land acquisition costs from Land to Hotel Properties Under Development during the year ended December 31, 2019 in conjunction with our development activities.revolving credit facility.

•Lease payments due within the next 12 months from year-end 2021 total $2.1 million. See Note 13, “Leases” to our consolidated financial statements for additional information relating to our corporate office and ground leases.

Related Party Transactions

We have entered into transactions and arrangements with related parties that could result in potential conflicts of interest. See “Risks Related to Our Business” and Note 15, “Related Party Transactions”, to our consolidated financial statements included in this Annual Report on Form 10-K. See also Item 13 of this Form 10-K.

~~Off-Balance Sheet Arrangements~~

~~We had no material off-balance sheet arrangements at December 31, 2020 other than non-recourse debt associated with the NewINK JV and Inland JV as discussed below.~~

~~Contractual Obligations~~

The following table sets forth our contractual obligations as of December 31, 2020, and the effect these obligations are expected to have on our liquidity and cash flow in future periods (in thousands).

Payments Due by Period
Contractual Obligations Total Less Than
One Year One to Three
Years Three to Five
Years More Than Five
Years
Corporate office lease (1) $ 4,994 $ 832 $ 1,726 $ 1,814 $ 622
Revolving credit facility, including interest (2) 140,488 4,383 136,105 — —
Construction loan (2) 17,032 1,033 2,065 13,934 —
Ground leases 72,241 1,219 2,438 2,486 66,098
Property loans, including interest (2) 511,507 43,920 147,374 320,213 —
Total $ 746,262 $ 51,387 $ 289,708 $ 338,447 $ 66,720

1.The Company entered into a corporate office lease in 2015. The lease is for eleven years and includes a 12-month rent abatement period and certain tenant improvement allowances. The Company will share the space with related parties and will be reimbursed for the pro-rata share of rentable space occupied by related parties.

2.Does not reflect paydowns or additional borrowings under the revolving credit facility, construction loan or properties loans after December 31, 2020. Interest payments are based on the interest rate in effect as of December 31, 2020. See Note 7, “Debt” to our consolidated financial statements for additional information relating to our property loans.

In addition to the above listed obligations, we pay management and franchise fees to our hotel management companies and franchisors based on the revenues of our hotels. The table above also does not include ~~$6.3 million~~ that we expect to invest on renovations, discretionary and emergency capital expenditures on our existing hotels in 2021, or $26.3 million of estimated remaining costs associated with our Los Angeles hotel development. Our contracts associated with these planned capital expenditures contain clauses that allow us to cancel all or some portion of the work. If cancellation of a contract occurred, our commitment would be any costs incurred up to the cancellation date, in addition to any costs associated with the discharge of the contract.

The Company’s ownership interests in the NewINK JV and Inland JV are subject to change in the event that either we or CLNY calls for additional capital contributions to the respective JVs necessary for the conduct of that JV's business, including contributions to fund costs and expenses related to capital expenditures. CLNY may also approve certain actions related to the JVs without the Company’s consent, including certain property dispositions conducted at arm’s length, certain actions related to the restructuring of the JVs and removal of the Company as managing member in the event the Company fails to fulfill its material obligations under the respective joint venture agreements. On September 24, 2020, CLNY announced that it had entered into an agreement to sell 6 of its hospitality portfolios, including the NewINK JV, in a transaction with a gross equity sale price of $67.5 million. The Inland JV is not included in this proposed transaction. CLNY has not disclosed a proposed allocation of the sale price among the 6 portfolios. On December 23, 2020, the Company entered into an agreement with CLNY to sell the Company's interest in the NewINK JV for $2.8 million concurrent with the closing of the portfolio sales. The transaction is subject to closing conditions, including the assumption of debt by the purchaser.

In connection with certain non-recourse mortgage loans in either the NewINK JV or Inland JV, our Operating Partnership could require us to repay our pro rata share of portions of each respective JV's indebtedness in connection with certain customary non-recourse carve-out provisions such as environmental conditions, misuse of funds and material misrepresentations.

Inflation

Operators of hotels, in general, possess the ability to adjust room rates daily to reflect the effects of inflation. However, competitive pressures may limit the ability of our management companies to raise room rates.

Critical Accounting ~~Policies~~Estimates

We consider the following ~~policies~~estimates critical because they require estimates about matters that are inherently uncertain, involve various assumptions and require management judgment. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates and assumptions.

Investment in Hotel Properties

We allocate the purchase prices of hotel properties acquired as asset acquisitions based on the fair value of the acquired real estate, furniture, fixtures and equipment, identifiable intangible assets and assumed liabilities. In making estimates of fair value for purposes of allocating the purchase price, we utilize a number of sources of information that are obtained in connection with the acquisition of a hotel property, including valuations performed by independent third parties and information obtained about each hotel property resulting from pre-acquisition due diligence.

Our hotel properties are carried at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, generally 40 years for buildings, 20 years for land improvements, 5 to 20 years for building improvements and one to ten years for furniture, fixtures and equipment. Renovations and/or replacements at the hotel properties that improve or extend the life of the assets are capitalized and depreciated over their useful lives, while repairs and maintenance are expensed as incurred. Upon the sale or retirement of property and equipment, the cost and related accumulated depreciation are removed from the Company’s accounts and any resulting gain or loss is recognized in the consolidated statements of operations.

Our hotel properties are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be ~~recoverable.~~recoverable over management's estimated holding period.This estimated holding period incorporates management’s intent and ability to hold the hotel properties over the estimated holding period. Events or circumstances that may cause a review include, but are not limited to, adverse changes in the demand for lodging at the properties due to declining national or local economic conditions and/or new hotel construction in markets where the hotels are located. When such conditions exist, management will perform an analysis to determine if the estimated undiscounted future cash flows, without interest charges, from operations and the proceeds from the ultimate disposition of a hotel property exceed its carrying value. If the estimated undiscounted future cash flows are less than the carrying amount, an adjustment to reduce the carrying amount to the related hotel property's estimated fair market value is recorded and an impairment loss recognized. For the ~~years~~year ended December 31, 2021, we recorded an impairment loss on a hotel that is under contract for sale (See Note 5). For the year ended December 31, 2020, ~~and 2019,~~ there were no impairment losses.

For properties the Company considers held for sale, depreciation and amortization are no longer recorded and the value the properties is recorded at the lower of depreciated cost or fair value, less costs to sell. If circumstances arise that were previously considered unlikely, and, as a result, the Company decides not to sell a property previously classified as held for sale, the Company will reclassify such property as held and used. Such property is measured at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. The Company classifies properties as held for sale when all criteria within the Financial Accounting Standards Board's ("FASB") guidance on the impairment or disposal of long-lived assets are met. As of December 31, ~~2020,~~2021, we had no hotel properties held for sale.

~~Investment in Unconsolidated Real Estate Entities~~

If it is determined that the Company does not have a controlling interest in a joint venture, either through its financial interest in a variable investment entity ("VIE") or in a voting interest entity, the equity method of accounting is used if the company has the ability to exercise significant influence. Under this method, the investment, originally recorded at cost, is adjusted to recognize the Company’s share of net earnings or losses of the affiliates as they occur rather than as dividends or other distributions are received, advances to and commitments for the investee.

Investment in unconsolidated real estate entities are accounted for under the equity method of accounting and the Company records its equity in earnings or losses under the hypothetical liquidation of book value (“HLBV”) method of accounting due to the structures and the preferences we receive on the distributions from the joint ventures pursuant to the joint venture agreements. Under this method, the Company recognizes income and loss in each period based on the change in liquidation proceeds we would receive from a hypothetical liquidation of our investment based on depreciated book value. Therefore, income or loss may be allocated disproportionately as compared to the ownership percentages due to specified preferred return rate thresholds and may be more or less than actual cash distributions received and more or less than what the Company may receive in the event of an actual liquidation. In the event a basis difference is created between the carrying amount of the Company's share of partner's capital, the resulting amount is allocated based on the assets of the investee and, if assigned to depreciable or amortizable assets, then amortized as a component of income (loss) from unconsolidated real estate entities.

The Company periodically reviews the carrying value of its investment in unconsolidated joint ventures to determine if circumstances indicate impairment to the carrying value of the investment that is other than temporary. When an impairment indicator is present, the Company will estimate the fair value of the investment. The Company’s estimate of fair value takes into consideration factors such as expected future operating income, trends and prospects, as well as other factors. This determination requires significant estimates by management, including the expected cash flows to be generated by the assets owned and operated by the joint venture. To the extent impairment has occurred and is other than temporary, the loss will be measured as the excess of the carrying amount over the fair value of the Company’s investment in the unconsolidated joint venture. As of December 31, 2020, the Company recorded an impairment of the entire carrying value of $15.3 million on our investment in the Inland JV related to a decline in operating performance caused by the COVID-19 pandemic (See Note 6).

Revenue Recognition

Revenue from hotel operations is recognized when rooms are occupied and when services are provided. Revenue consists of amounts derived from hotel operations, including sales from room, meeting room, gift shop, in-room movie and other ancillary amenities. Sales, use, occupancy, and similar taxes are collected and presented on a net basis (excluded from revenues) in the accompanying consolidated statements of operations.

5755

On January 1, 2018, the Company adopted accounting guidance under Accounting Standards Update (ASU) Topic 2014-09, "Revenue from Contracts with Customers" on a modified retrospective basis. Our current revenue streams are not affected under the new model and we did not recognize a cumulative effect adjustment as part of the modified retrospective method of adoption. Furthermore, the new accounting guidance will not materially impact the recognition of or the accounting for disposition of hotels since we primarily dispose of hotels to third parties in exchange for cash with few contingencies. As it relates to capitalization of costs to acquire customer contracts, the Company has elected to use the Financial Accounting Standards Board's ("FASB") practical expedient which allows us to expense costs to acquire customer contracts as they are incurred due to their short-term nature for a specified number of nights that never exceed one year. This guidance applies to all contracts as of the adoption date. The Company has applied all relevant disclosures of this standard.

Share-Based Compensation

We measure compensation expense for the restricted share awards based upon the fair market value of our common shares at the date of grant. The Company measures compensation expense for the ~~LTIP~~Time-Based and ~~Class A Performance~~Performance-Based LTIP units based upon the Monte Carlo approach using volatility, dividend yield and a risk free interest rate in the valuation. Compensation expense is recognized on a straight-line basis over the vesting period and is included in general and administrative expense in the accompanying consolidated statements of operations. We pay dividends on vested and non-vested restricted shares ~~except for performance-based shares for which dividends on unvested shares are not paid until these shares are vested.~~and Time-Based LTIP units. The Company has also issued ~~Class A Performance~~Performance-Based LTIP units ~~from time to time~~ as part of its compensation plan. ~~Prior to vesting, holders of Class A Performance LTIP Units will not be entitled to vote their Class A Performance LTIP units. In addition, under~~Under the terms of the ~~Class A Performance~~Performance-Based LTIP units, a holder of a ~~Class A Performance~~Performance-Based LTIP unit will generally (i) be entitled to receive 10% of the distributions made on a common unit of the Operating Partnership during the period prior to vesting of such ~~Class A Performance~~Performance-Based LTIP unit (the “Pre-Vesting Distributions”), (ii) be entitled, upon the vesting of such ~~Class A Performance~~Performance-Based LTIP unit, to receive a special one-time “catch-up” distribution equal to the aggregate amount of distributions that were paid on a common unit during the period prior to vesting of such ~~Class A Performance~~Performance-Based LTIP unit minus the aggregate amount of Pre-Vesting Distributions paid on such ~~Class A Performance~~Performance-Based LTIP unit, and (iii) be entitled, following the vesting of such ~~Class A Performance~~Performance-Based LTIP unit, to receive the same amount of distributions paid on a common unit of the Operating Partnership.

Income Taxes

We elected to be taxed as a REIT for federal income tax purposes commencing with our 2010 taxable year. In order to qualify as a REIT under the Code, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our annual REIT taxable income to our shareholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, we generally will not be subject to federal income tax to the extent we currently distribute our taxable income to our shareholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the IRS grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to shareholders. However, we believe we have been organized and that we operate in such a manner as to qualify for treatment as a REIT.

~~Recently Adopted Accounting Standards~~

~~On January 1, 2019, the Company adopted accounting guidance under Accounting Standards Update (ASU)~~ ~~2016-02 (“ASU 2016-02”),~~ ~~Leases, which relates to the accounting for leasing transactions.~~ ~~On February 25, 2016,~~ the FASB issued updated accounting guidance which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The accounting guidance requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on whether or not the lease is effectively a financed purchase by the lessee. The classification of the lease will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases. We adopted the accounting guidance on January 1, 2019 and applied it based on the optional transition method provided for, which allows entities to recognize a cumulative-effect adjustment to the balance sheet on the adoption date. Upon adoption, we applied the package of practical expedients made available under the new accounting guidance and also make an accounting policy election to not recognize right-of-use assets or lease liabilities for leases with terms of 12 months or less. For our ground lease agreements and corporate office lease agreement, all of which are currently accounted for as operating leases, we recognized lease liabilities of $25.7 million with corresponding right-of use assets ~~of $23.1 million on our consolidated balance sheet as of January 1, 2019.~~

~~On January 1, 2018, the Company adopted accounting guidance under Accounting Standards Update (ASU) Topic 2014-09, "Revenue from Contracts with Customers~~" on a modified retrospective basis. Our current revenue streams are not affected under the new model and we did not recognize a cumulative effect adjustment as part of the modified retrospective method of adoption. Furthermore, the new accounting guidance will not materially impact the recognition of or the accounting for disposition of hotels since we primarily dispose of hotels to third parties in exchange for cash with few contingencies. As it relates to capitalization of costs to acquire customer contracts, the Company has elected to use the Financial Accounting Standards Board's ("FASB") practical expedient which allows us to expense costs to acquire customer contracts as they are incurred due to their short-term nature for a specified number of nights that never exceed one year. This guidance applies to all contracts as of the adoption date. The Company has applied all relevant disclosures of this standard.

~~On January 1, 2018, the Company adopted accounting guidance under 2016-15 ("ASU 2016-15"),~~ ~~Classification of Certain Cash Receipts and Cash Payments,~~ which clarifies and provides specific guidance on eight cash flow classification issues with an objective to reduce the current diversity in practice. The Company has certain cash payments and receipts related to debt extinguishment that are affected by the new standard. The Company has historically classified distributions received from equity method investments under the cumulative earnings approach. As such, there was no impact due to application of the new guidance. The Company applied the new guidance on a retrospective basis.

~~On January 1, 2018, the Company adopted accounting guidance under ASU 2016-18 ("ASU 2016-18"),~~ ~~Restricted Cash,~~ which requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. This standard addresses presentation of restricted cash in the consolidated statements of cash flows only. Restricted cash represents purchase price deposits held in escrow for potential hotel acquisitions under contract and escrow reserves such as reserves for capital expenditures, property taxes or insurance that are required pursuant to the Company's loans. The Company applied the new guidance on a retrospective basis.

5956

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

We may be exposed to interest rate changes primarily as a result of our assumption of long-term debt in connection with our acquisitions and upon refinancing of existing debt. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve these objectives, we seek to borrow primarily at fixed rates or variable rates with the lowest margins available and, in some cases, with the ability to convert variable rates to fixed rates. With respect to variable rate financing, we will assess interest rate risk by identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities.

The Company estimates the fair value of its fixed rate debt by discounting the future cash flows of each instrument at estimated market rates. Rates take into consideration general market conditions, maturity and fair value of the underlying collateral. The estimated fair value of the Company’s fixed rate debt at December 31, 2021 and 2020 was $443.4 million and ~~December 31, 2019 was~~ $462.6 million, ~~and $501.5 million,~~ respectively.

At December 31, ~~2020,~~2021, our consolidated debt was comprised of floating and fixed interest rate debt. The fair value of our fixed rate debt indicates the estimated principal amount of debt having the same debt service requirements that could have been borrowed at the date presented, at then current market interest rates. The following table provides information about the maturities of our financial instruments as of December 31, ~~2020~~2021 that are sensitive to changes in interest rates (dollars in thousands):

2021 2022 2023 2024 2025 Thereafter Total Fair Value
Floating rate:
Debt — $ 135,300 — $ 13,325 — — $ 148,625 $ 148,625
Average interest rate — 3.07% — 7.75% — — 3.49%
Fixed rate:
Debt $21,441 $9,249 $117,875 $ 296,616 $ 15,935 — $ 461,116 $ 462,593
Average interest rate 5.29 % 4.63% 4.66 % 4.64% 4.25% — 4.66%


	2022			2023			2024			2025			2026		Thereafter		Total			Fair Value
Floating rate:
Debt	$	—		$	70,000		$	35,007		$	—		$	—	$	—	$	105,007		$	105,030
Average interest rate	—			3.43		%	7.75		%	—			—		—		4.87		%
Fixed rate:
Debt	$	9,249		$	117,919		$	296,811		$	15,947		$	—	$	—	$	439,926		$	443,387
Average interest rate	4.63		%	4.66		%	4.64		%	4.25		%	—		—		4.63		%

Our credit facility is currently subject to a 0.5% LIBOR floor and our construction loan is subject to a 0.25% LIBOR floor. At December 31, ~~2020~~2021 1-month LIBOR was ~~0.14%~~0.10%. We estimate that a hypothetical 100 basis points increase in LIBOR would result in additional interest of approximately ~~$1.0~~$0.7 million annually. This assumes that the amount of floating rate debt outstanding on our revolving credit facility remains ~~$135.3~~$70 million and the amount outstanding on our construction loan remains ~~$13.3~~$35.0 million, the balance as of December 31, ~~2020.~~2021.

6057

Item 8. Consolidated Financial Statements and Supplementary Data

See our Consolidated Financial Statements and the Notes thereto beginning at page F-1 included in Item 15, which are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter of ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f) and 15d-15(f). A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, ~~2020.~~2021. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control-Integrated Framework” (2013 framework). Based on this assessment, management has concluded that, as of December 31, ~~2020,~~2021, our internal control over financial reporting is effective, based on those criteria.

The effectiveness of our internal control over financial reporting as of December 31, ~~2020,~~2021, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which appears on page F-2 of this Annual Report on Form 10-K.

Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Part III

Item 10. Trustees, Executive Officers and Corporate Governance

The information required by this item is incorporated by reference to the Company's Proxy Statement for the ~~2021~~2022 Annual Meeting of Shareholders to be held on May ~~11, 2021.~~24, 2022.

Item 11. Executive Compensation

The information required by this item is incorporated by reference to the Company's Proxy Statement for the ~~2021~~2022 Annual Meeting of Shareholders to be held on May ~~11, 2021.~~24, 2022.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is incorporated by reference to the Company's Proxy Statement for the ~~2021~~

2022 Annual Meeting of Shareholders to be held on May ~~11, 2021.~~24, 2022.

Item 13. Certain Relationships and Related Transactions, and Trustee Independence

The information required by this item is incorporated by reference to the Company's Proxy Statement for the ~~2021~~

2022 Annual Meeting of Shareholders to be held on May ~~11, 2021.~~24, 2022.

Item 14. Principal Accountant Fees and Services

The information required by this item is incorporated by reference to the Company's Proxy Statement for the ~~2021~~

2022 Annual Meeting of Shareholders to be held on May ~~11, 2021.~~24, 2022.

6259

PART IV

Item 15. Exhibits and Financial Statement Schedules

1. Financial Statements

See the Index to Consolidated Financial Statements at pages F-1

2. Financial Statement Schedules

The following financial statement schedule is included herein at page ~~F-40:~~F-35:

Schedule III - Real Estate and Accumulated Depreciation as of December 31, ~~2020~~2021

All other schedules for which provision is made in Regulation S-X are either not required to be included herein under the related instructions or are inapplicable or the related information is included in the footnotes to the applicable financial statement and, therefore, have been omitted.

3. Exhibits

A list of exhibits required to be filed as part of this report on Form 10-K is set forth in the Exhibit Index, which immediately follows this item and is incorporated by reference herein.

6360

EXHIBIT INDEX


Exhibit Number						Description of Exhibit


3.1						Articles of Amendment and Restatement of Chatham Lodging Trust(12)

3.2						Second Amended and Restated Bylaws of Chatham Lodging Trust(1)

3.3						Articles Supplementary to the Company's Declaration of Trust designating the 6.625% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest, $0.01 par value per share(19)

4.1						Description of the Company's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

10.1*						Chatham Lodging Trust Equity Incentive Plan, Amended and Restated as of May 17, 2013 (2)

10.2*						Employment Agreement between Chatham Lodging Trust and Jeffrey H. Fisher(12)

10.3*						Employment Agreement between Chatham Lodging Trust and Peter Willis(12)

10.4*						Employment Agreement between Chatham Lodging Trust and Dennis M. Craven(12)

10.5*						Employment Agreement between Chatham Lodging Trust and Jeremy Wegner(3)

10.6*						First Amendment to Employment Agreement of Peter Willis dated January 30, 2015(4)

10.7*						First Amendment to Employment Agreement of Dennis Craven dated January 30, 2015(4)

10.8*						Form of Indemnification Agreement between Chatham Lodging Trust and its officers and trustees(5)

10.9*						Form of LTIP Unit Vesting Agreement(5)

10.10*						Form of Share Award Agreement for Trustees(5)

10.11*						Form of Share Award Agreement for Officers(6)

10.12*						Share Award Agreement, dated as of June 1, 2015, between Chatham Lodging Trust and Jeremy Wegner(7)

10.13*						LTIP Unit Award Agreement, dated as of June 1, 2015, between Chatham Lodging Trust, Chatham Lodging, L.P. and Jeffrey Fisher (Outperformance Plan) (8)

10.14*						LTIP Unit Award Agreement, dated as of June 1, 2015, between Chatham Lodging Trust, Chatham Lodging, L.P. and Dennis Craven (Outperformance Plan) (8)

10.15*						LTIP Unit Award Agreement, dated as of June 1, 2015, between Chatham Lodging Trust, Chatham Lodging, L.P. and Peter Willis (Outperformance Plan) (8)

10.16						Agreement of Limited Partnership of Chatham Lodging, L.P.(5)

10.17						First Amendment to the Agreement of Limited Partnership of Chatham Lodging, L.P.(7)

10.18						Second Amendment to the Agreement of Limited Partnership of Chatham Lodging, L.P.(20)

10.19						Form of IHM Hotel Management Agreement(5)

~~10.19~~10.20						Third Amended and Restated Limited Liability Company Agreement of INK Acquisition LLC, dated as of June 9, 2014, by and between Platform Member-T, LLC and Chatham Lodging, L.P.(9)

~~10.20~~10.21						Second Amended and Restated Limited Liability Company Agreement of INK Acquisition III, LLC, dated as of June 9, 2014, by and between Platform Member Holdings-T Cam2, LLC and Chatham TRS Holding, Inc.(9)

~~10.21~~10.22						Loan Agreement, dated as of June 9, 2014, between Grand Prix Sili II, LLC, as borrower, and JP Morgan Chase Bank, National Association, as lender.(9)

~~10.22~~10.23						Limited Liability Company Agreement of IHP I Owner JV, LLC, dated as of November 17, 2014, by and between Platform Member II-T, LLC and Chatham IHP, LLC.(10)

~~10.23~~10.24						Limited Liability Company Agreement of IHP I OPs JV, LLC, dated as of November 17, 2014, by and between Platform Member Holdings II-T Cam2, LLC and Chatham TRS Holding, Inc.(10)

~~10.24~~10.25						Amended and Restated Credit Agreement, dated as of March 8, 2018, among Chatham Lodging Trust, Chatham Lodging, L.P., the lenders party thereto and Barclays Bank PLC, as administrative agent.(14)


10.2510.26						Form of 2016 Time-Based LTIP Unit Award Agreement(12)

10.2610.27						Form of 2016 Performance-Based LTIP Unit Award Agreement(12)


10.2710.28						Form of 2017 Time-Based LTIP Unit Award Agreement(13)

10.2810.29						Form of 2017 Performance-Based LTIP Unit Award Agreement(13)

~~10.~~29 10.30						Separation Agreement and General Release, dated as of March 5, 2020, by and between Chatham Lodging Trust and Peter Willis(15)

~~10.30~~10.31						First Amendment to Amended and Restated Credit Agreement, dated as of May 6, 2020, among Chatham Lodging Trust, as parent guarantee, Chatham Lodging L.P., as borrower, the several banks and other financial institutions or entities that are parties thereto, as lenders and Barclays Bank PLC, as administrative agent(16)

~~10.31~~10.32						Third Amendment to Amended and Restated Credit Agreement, dated as of December 16, 2020, among Chatham Lodging Trust, as parent guarantee, Chatham Lodging L.P., as borrower, the several banks and other financial institutions or entities that are parties thereto, as lenders and Barclays Bank PLC, as administrative agent(17)

~~10.32~~10.33						Sales Agreement, dated January 4,5, 2021, by and among Chatham Lodging Trust, Chatham Lodging, L.P. and Cantor Fitzgerald & Co., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., BTIG, LLC, Citigroup Global Markets Inc., Regions Securities LLC, Stifel, Nicolaus & Company, Incorporated and Wells Fargo Securities, LLC(18)

10.34						Fourth Amendment to Amended and Restated Credit Agreement, dated October 26, 2021, among Chatham Lodging Trust, Chatham Lodging, L.P., as borrower, the several banks and other financial institutions or entities that are parties thereto, as lenders, and Barclays Bank PLC, as administrative agent.

21.1						List of Subsidiaries of Chatham Lodging Trust

23.1						PricewaterhouseCoopers LLP Consent of Independent Registered Public Accounting Firm

31.1						Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2						Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1						Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS**						The instance document does not appear in the interactive data file because its inline XBRL tags are embedded within the inline XBRL document.

101.SCH**						Inline XBRL Taxonomy Extension Schema Document

101.CAL**						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**						Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB**						Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE**						Inline XBRL Taxonomy Extension Presentation Linkbase Document

104						Cover Page Interactive Data File - the cover page interactive data file does not appear in the interactive date file because its XBRL tags are embedded within the inline XBRL document

* Denotes management contract or compensation plan or arrangement in which trustees or officers are eligible to participate.

** Submitted electronically herewith. Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets at December 31, ~~2020~~2021 and ~~2019;~~2020; (ii) Consolidated Statements of Operations for the years ended December 31, 2021, 2020 ~~2019~~ and ~~2018;~~2019; (iii) Consolidated Statements of Equity for the years ended December 31, 2021, 2020 ~~2019~~ and ~~2018;~~2019; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 ~~2019~~ and ~~2018;~~2019; and (v) Notes to the Consolidated Financial Statements.

6562


(1)			Incorporated by reference to the ~~Registrant's~~Company's Current Report on Form 8-K filed with the SEC on April 21, 2015 (File No. 001-34693).
(2)			Incorporated by reference to the ~~Registrant's~~Company's Definitive Proxy Statement on Schedule 14A filed on April 15, 2013 (File No. 001-34693).
(3)			Incorporated by reference to the ~~Registrant’s~~Company’s Current Report on Form 8-K filed with the SEC on May 5, 2015 (File No. 001-34693).
(4)			Incorporated by reference to the ~~Registrant's~~Company's Current Report on Form 8-K filed with the SEC on February 5, 2015 (File No. 001-34693).
(5)			Incorporated by reference to Amendment No. 4 to the ~~Registrant’s~~Company’s Registration Statement on Form S-11 filed with the SEC on February 12, 2010 (File No. 333-162889).
(6)			Incorporated by reference to the ~~Registrant's~~Company's Quarterly Report on Form 10-Q filed with the SEC on August 13, 2010 (File No. 001-34693).
(7)			Incorporated by reference to the ~~Registrant's~~Company's Quarterly Report on Form 10-Q filed with the SEC on August 6, 2015 (File No. 001-34693).
(8)			Incorporated by reference to the ~~Registrant's~~Company's Quarterly Report on Form 10-Q filed with the SEC on August 6, 2015 (File No. 001-34693).
(9)			Incorporated by reference to the ~~Registrant's~~Company's Quarterly Report on Form 10-Q filed with the SEC on August 11, 2014 (File No. 001-34693).
(10)			Incorporated by reference to the ~~Registrant's~~Company's Current Report on Form 8-K filed with the SEC on November 30, 2014 (File No. 001-34693).
(11)			Incorporated by reference to the ~~Registrant's~~Company's Current Report on Form 8-K filed with the SEC on November 30, 2015 (File No. 001-34693).
(12)			Incorporated by reference to the ~~Registrant's~~Company's Annual Report on Form 10-K filed with the SEC on February 29, 2016 (File No. 001-34693).
(13)			Incorporated by reference to the ~~Registrant’s~~Company's Quarterly Report on Form 10-Q filed with the SEC on May 9, 2017 (File No. 001-34693).
(14)			Incorporated by reference to the ~~Registrant's~~Company's Annual Report on Form 10-K filed with the SEC on February 25, 2019 (File No. 001-34693).
(15)			Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on March 6, 2020 (File No. 001-34693).
(16)			Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on May 6, 2020 (File No. 001-34693).
(17)			Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on December 17, 2020 (File No. 001-34693).
(18)			Incorporated by reference to Exhibit 1.1 to the Company's Current Report on Form 8-K filed with the SEC on January 5, 2021 (File No. 001-34693).
(19)			Incorporated by reference to Exhibit 3.3 to the Company's Registration Statement on Form 8-A filed with the SEC on June 25, 2021 (File No. 001-34693).
(20)			Incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed with the SEC on June 28, 2021 (File No. 001-34693).

6663

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		CHATHAM LODGING TRUST

Dated:	February ~~24, 2021~~25, 2022	/s/ JEFFREY H. FISHER
		Jeffrey H. Fisher
		Chairman of the Board, President and Chief Executive Officer
		(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

SIGNATURE

TITLE

DATE

/s/ JEFFREY H. FISHER

Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)

February ~~24, 2021~~25, 2022

Jeffrey H. Fisher

/s/ JEREMY B. WEGNER

Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

February ~~24, 2021~~25, 2022

Jeremy B. Wegner

/s/ EDWIN B. BREWER, JR.

Trustee

February ~~24, 2021~~25, 2022

Edwin B. Brewer, Jr.

/s/ THOMAS J. CROCKER

Trustee

February ~~24, 2021~~25, 2022

Thomas J. Crocker

/s/ ~~JACK P. DEBOER~~DAVID GRISSEN

Trustee

February ~~24, 2021~~25, 2022

~~Jack P. DeBoer~~David Grissen

/s/ MARY ELIZABETH HIGGINS

Trustee

February ~~24, 2021~~25, 2022

Mary Elizabeth Higgins

/s/ ROBERT PERLMUTTER

Trustee

February ~~24, 2021~~25, 2022

Robert Perlmutter

/s/ ROLF E. RUHFUS

Trustee

February ~~24, 2021~~25, 2022

Rolf E. Ruhfus

/s/ ETHEL ISAACS WILLIAMS

Trustee

February 25, 2022

Ethel Isaacs Williams

6764

CHATHAM LODGING TRUST

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS




						Page No.

Report of Independent Registered Public Accounting Firm (PCAOB ID: 238)						F-2
Consolidated Balance Sheets at December 31, ~~2020~~2021 and ~~2019~~2020						F-4
Consolidated Statements of Operations for the years ended December 31, 2021, 2020 ~~2019~~ and ~~2018~~2019						F-5
Consolidated Statements of Equity for the years ended December 31, 2021, 2020 ~~2019~~ and ~~2018~~2019						F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 ~~2019~~ and ~~2018~~2019						F-7
Notes to Consolidated Financial Statements						F-8

Financial Statement Schedule
Schedule III - Real Estate and Accumulated Depreciation at December 31, ~~2020~~2021						F-3732

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of Chatham Lodging Trust

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Chatham Lodging Trust and its subsidiaries (the “Company”) as of December 31, ~~2020~~2021 and ~~2019,~~2020, and the related consolidated statements of operations, of equity and of cash flows for each of the three years in the period ended December 31, ~~2020,~~2021, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, ~~2020,~~2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, ~~2020~~2021 and ~~2019,~~2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2020~~2021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2020,~~2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

~~Change in Accounting Principle~~

~~As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.~~

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the Management Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures

~~F-2~~

that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

F-2

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment Evaluation of Investments in Hotel Properties

As described in Notes 2 and 5 to the consolidated financial statements, as of December 31, ~~2020,~~2021, the Company had an investment in hotel properties, net of $1.3 billion and for the year ended December 31, ~~2020,~~2021, there ~~were no~~was an impairment ~~losses recorded.~~loss of $5.6 million. Management periodically reviews its hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable over management’s estimated holding period. This estimated holding period incorporates management’s intent and ability to hold the hotel properties over the estimated holding period. Events or circumstances that may cause a review include, but are not limited to, adverse changes in the demand for lodging at the properties due to declining national or local economic conditions and/or new hotel construction in markets where the hotels are located. When such conditions exist and management has identified uncertainty surrounding the recoverability of the hotel property carrying value, management will perform an analysis to determine if the estimated undiscounted future cash flows, without interest charges, from operations and the estimated proceeds from the ultimate disposition of a hotel property exceed its carrying value. If the estimated undiscounted future cash flows are less than the carrying amount, an adjustment to reduce the carrying amount to the related hotel property's estimated fair market value is recorded and an impairment loss recognized.

The principal considerations for our determination that performing procedures relating to the impairment evaluation of investments in hotel properties is a critical audit matter are the significant judgments by management when evaluating whether events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable over management’s estimated holding period. This in turn led to a high degree of auditor judgment and subjectivity in performing procedures and evaluating audit evidence relating to management’s intent and ability to hold its hotel properties and management’s assessment of economic conditions of the Company’s hotels.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the impairment evaluation of the Company’s investments in hotel properties, including controls over management’s evaluation of whether events or changes in circumstances indicate that the carrying value of hotel properties may not be recoverable. These procedures also included, among others, testing management’s process for evaluating whether events or changes in circumstances indicate that the carrying value may not be recoverable. Testing management’s process included evaluating management’s intent and ability to hold its hotel properties over the estimated holding period, evaluating management’s assessment of economic conditions, and considering whether the assessment of economic conditions of the Company’s hotels were consistent with external industry data and evidence obtained in other areas of the audit.

/s/ PricewaterhouseCoopers LLP

~~Miami,~~Hallandale Beach, Florida

February ~~24, 2021~~25, 2022

We have served as the Company’s auditor since 2009.

F-3

CHATHAM LODGING TRUST

Consolidated Balance Sheets

(In thousands, except share and per share data)

December 31,
2020 December 31,
2019

Assets:
Investment in hotel properties, net $ 1,265,174 $ 1,347,116
Investment in hotel properties under development 43,651 20,496
Cash and cash equivalents 21,124 6,620
Restricted cash 10,329 13,562
Investment in unconsolidated real estate entities 0 17,969
Right of use asset, net 20,641 21,270
Hotel receivables (net of allowance for doubtful accounts of $248 and $451, respectively) 1,688 4,626
Deferred costs, net 5,384 4,271
Prepaid expenses and other assets 2,266 2,615
Deferred tax asset, net 0 29
Total assets $ 1,370,257 $ 1,438,574
Liabilities and Equity:
Mortgage debt, net $ 460,145 $ 495,465
Revolving credit facility 135,300 90,000
Construction loan 13,325 0
Accounts payable and accrued expenses 25,374 33,012
Distributions and losses in excess of investments of unconsolidated real estate entities 19,951 15,214
Lease liability, net 23,233 23,717
Distributions payable 469 6,142
Total liabilities 677,797 663,550
Commitments and contingencies (see note 14) 0 0
Equity:
Shareholders’ Equity:
Preferred shares, $0.01 par value, 100,000,000 shares authorized and unissued at December 31, 2020 and 2019 0 0
Common shares, $0.01 par value, 500,000,000 shares authorized; 46,973,473 and 46,928,445 shares issued and outstanding at December 31, 2020 and 2019, respectively 470 469
Additional paid-in capital 906,000 904,273
Accumulated deficit (228,718) (142,365)
Total shareholders’ equity 677,752 762,377
Noncontrolling Interests:
Noncontrolling interest in operating partnership 14,708 12,647
Total equity 692,460 775,024
Total liabilities and equity $ 1,370,257 $ 1,438,574


	December 31, 2021		December 31, 2020
Assets:
Investment in hotel properties, net	$	1,282,870	$	1,265,174
Investment in hotel properties under development	67,554		43,651
Cash and cash equivalents	19,188		21,124
Restricted cash	10,681		10,329
Right of use asset, net	19,985		20,641
Hotel receivables (net of allowance for doubtful accounts of $382 and $248, respectively)	3,003		1,688
Deferred costs, net	4,627		5,384
Prepaid expenses and other assets	2,791		2,266

Total assets	$	1,410,699	$	1,370,257
Liabilities and Equity:
Mortgage debt, net	$	439,282	$	460,145
Revolving credit facility	70,000		135,300
Construction loan	35,007		13,325
Accounts payable and accrued expenses	27,718		25,374
Distributions and losses in excess of investments of unconsolidated real estate entities	—		19,951
Lease liability, net	22,696		23,233
Distributions payable	1,803		469
Total liabilities	596,506		677,797
Commitments and contingencies (see note 14)	0		0
Equity:
Shareholders’ Equity:
Preferred shares, $0.01 par value, 100,000,000 shares authorized; 4,800,000 and 0 shares issued and outstanding at December 31, 2021 and 2020, respectively	48		—
Common shares, $0.01 par value, 500,000,000 shares authorized; 48,768,890 and 46,973,473 shares issued and outstanding at December 31, 2021 and 2020, respectively	487		470
Additional paid-in capital	1,048,070		906,000
Accumulated deficit	(251,103)		(228,718)
Total shareholders’ equity	797,502		677,752
Noncontrolling Interests:
Noncontrolling interest in operating partnership	16,691		14,708
Total equity	814,193		692,460
Total liabilities and equity	$	1,410,699	$	1,370,257

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

F-4

CHATHAM LODGING TRUST

Consolidated Statements of Operations

(In thousands, except share and per share data)

For the year ended
December 31,
2020 2019 2018
Revenue:
Room $ 130,564 $ 296,267 $ 295,897
Food and beverage 2,718 9,824 8,880
Other 7,589 16,567 13,710
Reimbursable costs from unconsolidated real estate entities 4,045 5,670 5,743
Total revenue 144,916 328,328 324,230
Expenses:
Hotel operating expenses:
Room 31,883 65,270 63,877
Food and beverage 2,456 8,396 7,312
Telephone 1,451 1,638 1,766
Other hotel operating 1,629 4,039 3,296
General and administrative 16,733 25,641 25,567
Franchise and marketing fees 11,608 25,850 24,864
Advertising and promotions 3,983 6,043 6,227
Utilities 9,229 10,867 10,835
Repairs and maintenance 9,799 14,321 14,710
Management fees 5,289 10,822 10,754
Insurance 1,438 1,364 1,354
Total hotel operating expenses 95,498 174,251 170,562
Depreciation and amortization 53,871 51,505 48,169
Impairment loss on investment in unconsolidated real estate entities 15,282 0 0
Property taxes, ground rent and insurance 23,040 24,717 23,678
General and administrative 11,564 14,077 14,120
Other charges 4,385 1,441 3,806
Reimbursable costs from unconsolidated real estate entities 4,045 5,670 5,743
Total operating expenses 207,685 271,661 266,078
Operating (loss) income before gain (loss) on sale of hotel property (62,769) 56,667 58,152
Gain (loss) on sale of hotel property 21,116 (3,282) (18)
Operating (loss) income (41,653) 53,385 58,134
Interest and other income 179 190 462
Interest expense net of amounts capitalized, including amortization of deferred fees (28,122) (28,247) (26,878)
Loss from unconsolidated real estate entities (7,424) (6,448) (876)
(Loss ) income before income tax expense (77,020) 18,880 30,842
Income tax expense 0 0 28
Net (loss) income (77,020) 18,880 30,870
Net (loss) income attributable to non-controlling interest 997 (177) (229)
Net (loss) income attributable to common shareholders $ (76,023) $ 18,703 $ 30,641
(Loss) income per Common Share - Basic:
Net (loss) income attributable to common shareholders (Note 11) $ (1.62) $ 0.39 $ 0.66
(Loss) income per Common Share - Diluted:
Net (loss) income attributable to common shareholders (Note 11) $ (1.62) $ 0.39 $ 0.66
Weighted average number of common shares outstanding:
Basic 46,961,039 46,788,784 46,073,515
Diluted 46,961,039 47,023,280 46,243,660
Distributions per common share: $ 0.22 $ 1.32 $ 1.32


	For the year ended
	December 31,
		2021		2020		2019
Revenue:
Room		$	187,369	$	130,564	$	296,267
Food and beverage		3,525		2,718		9,824
Other		11,350		7,589		16,567
Reimbursable costs from unconsolidated entities		1,731		4,045		5,670
Total revenue		203,975		144,916		328,328
Expenses:
Hotel operating expenses:
Room		40,396		31,883		65,270
Food and beverage		2,404		2,456		8,396
Telephone		1,502		1,451		1,638
Other hotel operating		2,299		1,629		4,039
General and administrative		20,424		16,733		25,641
Franchise and marketing fees		16,560		11,608		25,850
Advertising and promotions		3,721		3,983		6,043
Utilities		10,255		9,229		10,867
Repairs and maintenance		11,784		9,799		14,321
Management fees		7,156		5,289		10,822
Insurance		2,792		1,438		1,364
Total hotel operating expenses		119,293		95,498		174,251
Depreciation and amortization		54,215		53,871		51,505
Impairment loss		5,640		—		—
Impairment loss on investment in unconsolidated real estate entities		—		15,282		—
Property taxes, ground rent and insurance		23,826		23,040		24,717
General and administrative		15,752		11,564		14,077
Other charges		711		4,385		1,441
Reimbursable costs from unconsolidated entities		1,731		4,045		5,670
Total operating expenses		221,168		207,685		271,661
Operating (loss) income before (loss) gain on sale of hotel property		(17,193)		(62,769)		56,667
(Loss) gain on sale of hotel property		(21)		21,116		(3,282)
Operating (loss) income		(17,214)		(41,653)		53,385
Interest and other income		243		179		190
Interest expense net of amounts capitalized, including amortization of deferred fees		(24,460)		(28,122)		(28,247)

Loss from unconsolidated real estate entities		(1,231)		(7,424)		(6,448)
Gain on sale of investment in unconsolidated real estate entities		23,817		—		—
(Loss) income before income tax expense		(18,845)		(77,020)		18,880
Income tax expense		—		—		—
Net (loss) income		(18,845)		(77,020)		18,880
Net loss (income) attributable to non-controlling interest		435		997		(177)
Net (loss) income attributable to Chatham Lodging Trust		(18,410)		(76,023)		18,703
Preferred dividends		(3,975)		—		—
Net (loss) income attributable to common shareholders		$	(22,385)	$	(76,023)	$	18,703
(Loss) income per Common Share - Basic:
Net (loss) income attributable to common shareholders (Note 11)		$	(0.46)	$	(1.62)	$	0.39
(Loss) income per Common Share - Diluted:
Net (loss) income attributable to common shareholders (Note 11)		$	(0.46)	$	(1.62)	$	0.39
Weighted average number of common shares outstanding:
Basic		48,349,027		46,961,039		46,788,784
Diluted		48,349,027		46,961,039		47,023,280
Distributions per common share:		$	—	$	.22	$	1.32

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

F-5

CHATHAM LODGING TRUST

Consolidated Statements of Equity

(In thousands, except share and per share data)

Common Shares
Additional
Paid - In
Capital
Accumulated
Deficit
Total
Shareholders’
Equity
Noncontrolling
Interest in
Operating
Partnership
Total
Equity
Shares Amount
Balance January 1, 2018 45,375,266 450 871,730 (69,018) 803,162 6,618 809,780
Issuance of shares pursuant to Equity Incentive Plan 21,670 — 500 — 500 — 500
Issuance of shares, net of offering costs of $518 1,135,095 15 23,953 — 23,968 — 23,968
Issuance of restricted time-based shares 5,000 — — — — — 0
Amortization of share based compensation — — 103 — 103 3,607 3,710
Dividends declared on common shares ($1.32 per share) — — — (60,908) (60,908) — (60,908)
Distributions declared on LTIP units ($1.32 per unit) — — — — — (1,154) (1,154)
Forfeited distributions on LTIP units — — — — — 652 652
Net income — — — 30,641 30,641 229 30,870
Balance, December 31, 2018 46,537,031 465 896,286 (99,285) 797,466 9,952 807,418
Issuance of shares pursuant to Equity Incentive Plan 27,870 — 500 — 500 — 500
Issuance of shares, net of offering costs of $209 363,544 4 7,087 — 7,091 — 7,091
Issuance of restricted time-based shares 0 — — — — — 0
Amortization of share based compensation — — 63 — 63 4,206 4,269
Dividends declared on common shares ($1.32 per share) — — — (61,783) (61,783) — (61,783)
Distributions declared on LTIP units ($1.32 per unit) — — — — — (1,351) (1,351)
Reallocation of noncontrolling interest — — 337 — 337 (337) 0
Net income — — — 18,703 18,703 177 18,880
Balance, December 31, 2019 46,928,445 $ 469 $ 904,273 $ (142,365) $ 762,377 $ 12,647 $ 775,024
Issuance of shares pursuant to Equity Incentive Plan 24,516 — 450 — 450 — 450
Issuance of shares, net of offering costs of $49 20,512 1 133 — 134 — 134
Amortization of share based compensation — — 30 — 30 4,406 4,436
Dividends declared on common shares ($0.22 per share) — — — (10,330) (10,330) — (10,330)
Distributions declared on LTIP units ($0.22 per unit) — — — — — (234) (234)
Reallocation of noncontrolling interest — — 1,114 — 1,114 (1,114) 0
Net loss — — — (76,023) (76,023) (997) (77,020)
Balance, December 31, 2020 46,973,473 $ 470 $ 906,000 $ (228,718) $ 677,752 $ 14,708 $ 692,460


	Preferred Shares			Common Shares			Additional Paid - In Capital		Accumulated Deficit		Total Shareholders’ Equity		Noncontrolling Interest in Operating Partnership		Total Equity
	Shares	Amount		Shares	Amount


























































Balance, January 1, 2019	—	$	—	46,537,031	$	465	$	896,286	$	(99,285)	$	797,466	$	9,952	$	807,418
Issuance of shares pursuant to Equity Incentive Plan	—	—		27,870	—		500		—		500		—		500
Issuance of shares, net of offering costs of $209	—	—		363,544	4		7,087		—		7,091		—		7,091

Amortization of share based compensation	—	—		—	—		63		—		63		4,206		4,269
Dividends declared on common shares ($1.32 per share)	—	—		—	—		—		(61,783)		(61,783)		—		(61,783)
Distributions declared on LTIP units ($1.32 per unit)	—	—		—	—		—		—		—		(1,351)		(1,351)
Reallocation of noncontrolling interest	—	—		—	—		337		—		337		(337)		—

Net income	—	—		—	—		—		18,703		18,703		177		18,880
Balance, December 31, 2019	—��	$	—	46,928,445	$	469	$	904,273	$	(142,365)	$	762,377	$	12,647	$	775,024
Issuance of shares pursuant to Equity Incentive Plan	—	—		24,516	—		450		—		450		—		450
Issuance of shares, net of offering costs of $49	—	—		20,512	1		133		—		134		—		134

Amortization of share based compensation	—	—		—	—		30		—		30		4,406		4,436
Dividends declared on common shares ($0.22 per share)	—	—		—	—		—		(10,330)		(10,330)		—		(10,330)
Distributions declared on LTIP units ($0.22 per unit)	—	—		—	—		—		—		—		(234)		(234)

Reallocation of noncontrolling interest	—	—		—	—		1,114		—		1,114		(1,114)		—
Net loss	—	—		—	—		—		(76,023)		(76,023)		(997)		(77,020)
Balance, December 31, 2020	—	$	—	46,973,473	$	470	$	906,000	$	(228,718)	$	677,752	$	14,708	$	692,460
Issuance of preferred shares, net of offering costs of $4,063	4,800,000	48		—	—		115,889		—		115,937		—		115,937
Issuance of common shares pursuant to Equity Incentive Plan	—	—		40,203	—		450		—		450		—		450
Issuance of common shares, net of offering costs of $822	—	—		1,745,214	17		23,773		—		23,790		—		23,790
Issuance of restricted time-based shares	—	—		10,000	—		—		—		—		—		—
Amortization of share based compensation	—	—		—	—		43		—		43		4,293		4,336


Forfeited distributions on LTIP units	—	—		—	—		—		—		—		40		40
Dividends accrued on preferred shares	—	—		—	—		—		(3,975)		(3,975)		—		(3,975)
Reallocation of noncontrolling interest	—	—		—	—		1,915		—		1,915		(1,915)		—
Net loss	—	—		—	—		—		(18,410)		(18,410)		(435)		(18,845)
Balance, December 31, 2021	4,800,000	$	48	48,768,890	$	487	$	1,048,070	$	(251,103)	$	797,502	$	16,691	$	814,193

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

F-6

CHATHAM LODGING TRUST

Consolidated Statements of Cash Flows

(In thousands)

For the year ended
December 31,
2020 2019 2018
Cash flows from operating activities:
Net (loss) income $ (77,020) $ 18,880 $ 30,870
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation 53,627 51,258 47,932
Amortization of deferred franchise fees 244 247 237
Amortization of deferred financing fees included in interest expense 1,275 912 902
(Gain) loss on sale of hotel property (21,116) 3,282 18
Impairment loss on investment in unconsolidated real estate entities 15,282 0 0
Deferred tax expense (benefit) 29 29 (28)
Share based compensation 4,597 4,719 4,210
Accelerated share based compensation for employee severance 288 0 0
Loss from unconsolidated real estate entities 7,424 6,448 876
Changes in assets and liabilities:
Right of use asset 629 613 —
Hotel receivables 2,940 (102) (437)
Deferred costs (6) (17) (243)
Prepaid expenses and other assets 292 (308) 64
Accounts payable and accrued expenses (7,962) 664 1,814
Lease liability (484) (391) —
Net cash (used in) provided by operating activities (19,961) 86,234 86,215
Cash flows from investing activities:
Improvements and additions to hotel properties (14,487) (35,859) (31,417)
Investment in hotel properties under development (23,155) (12,224) 0
Acquisition of hotel properties, net of cash acquired 0 (8,171) (70,020)
Proceeds from sale of hotel properties, net 64,448 8,987 0
Distributions from unconsolidated entities 0 2,692 5,036
Net cash provided by (used in) investing activities 26,806 (44,575) (96,401)
Cash flows from financing activities:
Borrowings on revolving credit facility 86,000 74,500 149,000
Repayments on revolving credit facility (40,700) (66,000) (99,500)
Borrowings on construction loan 13,325 0 0
Payments on mortgage debt (35,744) (6,695) (4,899)
Payments of financing costs (2,351) (48) (955)
Payment of offering costs (49) (209) (518)
Proceeds from issuance of common shares 182 7,298 24,486
Distributions - common shares/units (16,237) (62,660) (61,590)
Net cash provided by (used in) financing activities 4,426 (53,814) 6,024
Net change in cash, cash equivalents and restricted cash 11,271 (12,155) (4,162)
Cash, cash equivalents and restricted cash, beginning of period 20,182 32,337 36,499
Cash, cash equivalents and restricted cash, end of period $ 31,453 $ 20,182 $ 32,337
Supplemental disclosure of cash flow information:
Cash paid for interest $ 28,119 $ 27,274 $ 25,328
Capitalized interest $ 1,473 $ 445 $ 0
Cash paid for income taxes $ 328 $ 748 $ 887


	For the year ended
	December 31,
	2021		2020		2019
Cash flows from operating activities:
Net (loss) income	$	(18,845)	$	(77,020)	$	18,880
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	53,967		53,627		51,258
Amortization of deferred franchise fees	248		244		247
Amortization of deferred financing fees included in interest expense	1,825		1,275		912
Loss (gain) on sale of hotel property	21		(21,116)		3,282
Gain on sale of unconsolidated real estate entities	(23,817)		—		—
Impairment loss	5,640		—		—
Impairment loss on investment in unconsolidated real estate entities	—		15,282		—


Deferred tax expense	—		29		29
Share based compensation	4,823		4,597		4,719
Accelerated share based compensation for employee severance	—		288		—
Loss from unconsolidated real estate entities	1,231		7,424		6,448

Changes in assets and liabilities:
Right of use asset	656		629		613
Hotel receivables	(1,314)		2,940		(102)
Deferred costs	(327)		(6)		(17)
Prepaid expenses and other assets	(526)		292		(308)
Accounts payable and accrued expenses	5,732		(7,962)		664
Lease liability	(537)		(484)		(391)
Net cash provided by (used in) operating activities	28,777		(19,961)		86,234
Cash flows from investing activities:
Improvements and additions to hotel properties	(9,505)		(14,487)		(35,859)
Investment in hotel properties under development	(23,903)		(23,155)		(12,224)
Acquisition of hotel properties, net of cash acquired	(71,335)		—		(8,171)
Proceeds from sale of hotel properties, net	—		64,448		8,987
Distributions from unconsolidated entities	—		—		2,692
Proceeds from sale of unconsolidated real estates entities	2,800		—		—
Net cash (used in) provided by investing activities	(101,943)		26,806		(44,575)
Cash flows from financing activities:
Borrowings on revolving credit facility	90,000		86,000		74,500
Repayments on revolving credit facility	(155,300)		(40,700)		(66,000)
Borrowings on construction loan	21,682		13,325		—
Payments on mortgage debt	(21,190)		(35,744)		(6,695)


Payments of financing costs	(736)		(2,351)		(48)
Payment of offering costs on common shares	(822)		(49)		(209)
Proceeds from issuance of common shares	24,612		182		7,298
Payment of offering costs on preferred shares	(4,063)		—		—
Proceeds from issuance of preferred shares	120,000		—		—
Distributions - common shares/units	(282)		(16,237)		(62,660)
Distributions - preferred shares	(2,319)		—		—
Net cash provided by (used in) financing activities	71,582		4,426		(53,814)
Net change in cash, cash equivalents and restricted cash	(1,584)		11,271		(12,155)
Cash, cash equivalents and restricted cash, beginning of period	31,453		20,182		32,337
Cash, cash equivalents and restricted cash, end of period	$	29,869	$	31,453	$	20,182

Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	$	25,931	$	28,119	$	25,328
Capitalized interest	$	3,551	$	1,473	$	—
Cash paid for income taxes	$	387	$	328	$	887

-continued-

Supplemental disclosure of non-cash investing and financing information:

On January ~~15, 2021~~18, 2022, the Company issued ~~40,203~~34,672 shares to its independent trustees pursuant to the Company’s Equity Incentive Plan as compensation for services performed in 2021. On January 15, 2021, the Company issued 40,203 shares to its independent trustees pursuant to the Company’s Equity Incentive Plan as compensation for services performed in 2020. On January 15, 2020, the Company issued 24,516 shares to its independent trustees pursuant to the ~~Company’s~~Company's Equity Incentive Plan as compensation for services performed in 2019. ~~On January 16, 2019,~~

As of December 31, 2021, the Company ~~issued 27,870 shares to its independent trustees pursuant to the Company's Equity Incentive Plan as compensation for services performed in 2018.~~

had accrued distributions payable of $1.8 million. As of December 31, 2020, the Company had accrued distributions payable of $0.5 million. As of December 31, 2019, the Company had accrued distributions payable of $6.1 million. ~~As of December 31, 2018, the Company had accrued distributions payable of $5.7 million.~~

Accrued share based compensation of $0.5 million, $0.5 million and $0.5 million is included in accounts payable and accrued expenses as of December 31, 2021, 2020 ~~2019~~ and ~~2018,~~2019, respectively.

Accrued capital improvements of $1.0 million, $4.5 million ~~$3.8 million~~ and ~~$2.4~~$3.8 million are included in accounts payable and accrued expenses as of December 31, 2021, 2020, ~~2019,~~ and ~~2018~~2019 respectively.

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

F-7

CHATHAM LODGING TRUST

Notes to the Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

1. Organization

Chatham Lodging Trust (“we,” “us” or the “Company”) was formed as a Maryland real estate investment trust on October 26, 2009. The Company is internally-managed and was organized to invest primarily in upscale extended-stay and premium-branded select-service hotels. The Company has elected to be treated as a real estate investment trust for federal income tax purposes ("REIT").

The Company had no operations prior to the consummation of its initial public offering ("IPO") in April 2010. The net proceeds from our share offerings are contributed to Chatham Lodging, L.P., our operating partnership (the “Operating Partnership”), in exchange for partnership interests. Substantially all of the Company’s assets are held by, and all operations are conducted through, the Operating Partnership. The Company is the sole general partner of the Operating Partnership and owns 100% of the common units of limited partnership interest in the Operating Partnership ("common units"). Certain of the Company’s executive officers hold vested and unvested long-term incentive plan units in the Operating Partnership ("LTIP units"), which are presented as non-controlling interests on our consolidated balance sheets.

As of December 31, ~~2020,~~2021, the Company owned 3941 hotels with an aggregate of ~~5,900~~6,169 (unaudited) rooms located in 1516 states and the District of Columbia (unaudited). ~~As of December 31, 2020,~~Prior to September 23, 2021, the Company held a 10.0% noncontrolling interest in a joint venture (the "Inland JV") with affiliates of Colony Capital, Inc. ("CLNY"), which owned 48 hotels acquired from Inland American Real Estate Trust, Inc. ("Inland"), comprising an aggregate of 6,402 (unaudited) rooms. Chatham sold its interest in the Inland JV in September 2021. Prior to March 18, 2021, the Company also ~~(i)~~ held a 10.3% noncontrolling interest in a joint venture (the “NewINK JV”) with affiliates of ~~Colony Capital, Inc. ("CLNY"),~~CLNY, which ~~was formed in the second quarter of 2014 and currently owns~~owned 46 hotels acquired from a joint venture (the "Innkeepers JV") between the Company and Cerberus Capital Management (“Cerberus”), comprising an aggregate of 5,948 (unaudited) ~~rooms, (ii) held a 10.0% noncontrolling~~rooms. Chatham sold its interest in a separate joint venture (the "Inland JV") with CLNY, which was formed in the fourth quarter of 2014 which owns 48 hotels acquired from Inland American Real Estate Trust, Inc. ("Inland"), comprising an aggregate of 6,402 (unaudited) rooms. As of December 31, 2020, the Inland JV hotels are in receivership. We sometimes use the term, "JVs", which refers collectively to the NewINK JV ~~and Inland JV.~~in March 2021 for $2.8 million.

To qualify as a REIT, the Company cannot operate its hotels. Therefore, the Operating Partnership and its subsidiaries lease the Company's wholly owned hotels to taxable REIT subsidiary lessees (“TRS Lessees”), which are wholly owned by the Company’s taxable REIT subsidiary (“TRS”) holding company. The Company indirectly (i) owns its 10.3% interest in the 46 NewINK JV hotels and (ii) owns its 10.0% interest in the 48 of the Inland JV hotels through the Operating Partnership. All of the NewINK JV hotels and Inland JV hotels are leased to TRS Lessees, in which the Company indirectly owns noncontrolling interests through its TRS holding company. Each hotel is leased to a TRS Lessee under a percentage lease that provides for rental payments equal to the greater of (i) a fixed base rent amount or (ii) a percentage rent based on hotel room revenue. The initial term of each of the TRS leases is 5 years. Lease revenue from each TRS Lessee is eliminated in consolidation.

The TRS Lessees have entered into management agreements with third-party management companies that provide day-to-day management for the hotels. As of December 31, ~~2020,~~2021, Island Hospitality Management Inc. (“IHM”), which is ~~52.5%~~100% owned by Jeffrey H. Fisher, the Company's Chairman, President and Chief Executive Officer, managed all 3941 of the Company’s ~~wholly owned~~ hotels. ~~As of December 31, 2020, all of the NewINK JV hotels were managed by IHM. As of December 31, 2020, all of the Inland JV hotels were managed by other management companies.~~

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements and related notes have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and in conformity with the rules and regulations of the Securities and Exchange Commission (“SEC”). These consolidated financial statements, in the opinion of management, include all adjustments consisting of normal, recurring adjustments which are considered necessary for a fair statement of the consolidated balance sheets, consolidated statements of operations, consolidated statements of equity, and consolidated statements of cash flows for the periods presented.

The consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation.

~~F-8~~

~~Reclassifications~~

In accordance with the SEC’s Disclosure Update and Simplification release, dated August 18, 2018, the Company presented the Gain (loss) on sale of hotel property line on the Company’s Consolidated Statements of Operations within Operating income for all periods presented.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

F-8

Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, restricted cash, hotel receivables, accounts payable and accrued expenses, distributions payable, mortgage debt and revolving credit facility. Due to their relatively short maturities, the carrying values reported in the consolidated balance sheets for these financial instruments approximate fair value except for mortgage debt and the revolving credit facility, the fair value of which is separately disclosed in Note 7.

Investment in Hotel Properties

The Company allocates the purchase prices of hotel properties acquired as asset acquisitions based on the fair value of the acquired real estate, furniture, fixtures and equipment, identifiable intangible assets and assumed liabilities. In making estimates of fair value for purposes of allocating the purchase price, the Company utilizes a number of sources of information that are obtained in connection with the acquisition of a hotel property, including valuations performed by independent third parties and information obtained about each hotel property resulting from pre-acquisition due diligence.

The Company’s investments in hotel properties are carried at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, generally 40 years for buildings, 20 years for land improvements, 5 to 20 years for building improvements and one to ten years for furniture, fixtures and equipment. Renovations and/or replacements at the hotel properties that improve or extend the life of the assets are capitalized and depreciated over their useful lives, while repairs and maintenance are expensed as incurred. Upon the sale or retirement of property and equipment, the cost and related accumulated depreciation are removed from the Company’s accounts and any resulting gain or loss is recognized in the consolidated statements of operations.

Management periodically reviews its hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable over management's estimated holding period. This estimated holding period incorporates management’s intent and ability to hold the hotel properties over the estimated holding period. Events or circumstances that may cause a review include, but are not limited to, adverse changes in the demand for lodging at the properties due to declining national or local economic conditions and/or new hotel construction in markets where the hotels are located. When such conditions exist and management has identified uncertainty surrounding the recoverability of the hotel property carrying value, management will perform an analysis to determine if the estimated undiscounted future cash flows, without interest charges, from operations and the estimated proceeds from the ultimate disposition of a hotel property exceed its carrying value. If the estimated undiscounted future cash flows are less than the carrying amount, an adjustment to reduce the carrying amount to the related hotel property's estimated fair market value is recorded and an impairment loss recognized. For the year ended December 31, 2021, the Company incurred an impairment loss on one hotel property (See Note 5). For the years ended December 31, 2020 and 2019, there were 0no impairment losses.

For properties the Company considers held for sale, depreciation and amortization are no longer recorded and the value the properties is recorded at the lower of depreciated cost or fair value, less costs to sell. If circumstances arise that were previously considered unlikely, and, as a result, the Company decides not to sell a property previously classified as held for sale, the Company will reclassify such property as held and used. Such property is measured at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. The Company classifies properties as held for sale when all criteria within the Financial Accounting Standards Board's ("FASB") guidance on disposal of long-lived assets are met. As of December 31, ~~2020~~2021 and ~~2019~~2020 the Company had 0no hotel properties held for sale.

~~F-9~~

Investment in Unconsolidated Real Estate Entities

If it is determined that the Company does not have a controlling interest in a joint venture, either through its financial interest in a variable interest entity ("VIE") or in a voting interest entity, but does have the ability to exercise significant influence, the equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize the Company’s share of net earnings or losses of the affiliates as they occur rather than as dividends or other distributions are received, advances to and commitments for the investee.

Investments in unconsolidated real estate entities are accounted for under the equity method of accounting and the Company records its equity in earnings or losses under the hypothetical liquidation of book value (“HLBV”) method of accounting due to the structures and the preferences we receive on the distributions from our joint ventures pursuant to the respective joint venture agreements for those joint ventures. Under this method, the Company recognizes income and loss in each period based on the change in liquidation proceeds it would receive from a hypothetical liquidation of its investment based on depreciated book value. Therefore, income or loss may be allocated disproportionately as compared to the ownership

F-9

percentages due to specified preferred return rate thresholds and may be more or less than actual cash distributions received and more or less than what the Company may receive in the event of an actual liquidation. In the event a basis difference is created between the carrying amount of the Company's share of partner's capital, the resulting amount is allocated based on the assets of the investee and, if assigned to depreciable or amortizable assets, then amortized as a component of income (loss) from unconsolidated real estate entities.

The Company periodically reviews the carrying value of its investment in unconsolidated joint ventures to determine if circumstances indicate impairment to the carrying value of the investment that is other than temporary. When an impairment indicator is present, the Company will estimate the fair value of the investment. The Company’s estimate of fair value takes into consideration factors such as expected future operating income, trends and prospects, as well as other factors. This determination requires significant estimates by management, including the expected cash flows to be generated by the assets owned and operated by the joint venture. To the extent impairment has occurred and is other than temporary, the loss will be measured as the excess of the carrying amount over the fair value of the Company’s investment in the unconsolidated joint venture. ~~As of~~During the year ended December 31, 2020, the Company recorded an impairment of the entire carrying value of $15.3 million on our investment in the Inland JV related to a decline in operating performance caused by the COVID-19 pandemic (See Note 6).

The Company evaluates the nature of the distributions from each of its unconsolidated joint ventures in order to classify the distributions as either operating activities or investing activities in the consolidated statements of cash flows. Any cash distribution that is considered to be a distribution of the earnings of the unconsolidated joint venture is presented as an operating activity in the consolidated statements of cash flows. Any cash distribution that is considered to be a return of capital from the unconsolidated joint venture is presented as an investing activity in the consolidated statements of cash flows.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand, demand deposits with financial institutions and short term liquid investments with an original maturity of three months or less. Cash balances in individual banks may exceed federally insurable limits.

Restricted Cash

Restricted cash represents purchase price deposits held in escrow for potential hotel acquisitions under contract and escrows for reserves such as reserves for capital expenditures, property taxes or insurance that are required pursuant to the Company’s ~~loans or hotel management agreements.~~loans. Restricted cash on the accompanying consolidated balance sheets at December 31, 2021 and 2020 ~~and 2019~~ is ~~$10.3~~$10.7 million and ~~$13.6~~$10.3 million, respectively.

Hotel Receivables

Hotel receivables consist of amounts owed by guests staying in the hotels and amounts due from business and group customers. An allowance for doubtful accounts is provided and maintained at a level believed to be adequate to absorb estimated probable losses. At December 31, ~~2020~~2021 and ~~2019,~~2020, the allowance for doubtful accounts was ~~$0.2~~$0.4 million and ~~$0.5~~$0.2 million, respectively.

F-10

Deferred Costs

Deferred costs consist of franchise agreement application fees for the Company’s hotels, costs associated with potential future acquisitions and loan costs related to the Company’s senior unsecured revolving credit facility. Deferred costs consisted of the following at December 31, ~~2020~~2021 and ~~2019~~2020 (in thousands):

December 31, 2020 December 31, 2019
Loan costs $ 4,455 $ 2,104
Franchise fees 4,311 4,409
Other 75 129
8,841 6,642
Less accumulated amortization (3,457) (2,371)
Deferred costs, net $ 5,384 $ 4,271


	December 31, 2021		December 31, 2020

Loan costs	$	5,174	$	4,455
Franchise fees	4,619		4,311
Other	19		75
	9,812		8,841
Less accumulated amortization	(5,185)		(3,457)
Deferred costs, net	$	4,627	$	5,384

Franchise fees are recorded at cost and amortized over a straight-line basis over the term of the franchise agreements. For the years ended December 31, 2021, 2020 ~~2019~~ and ~~2018,~~2019, amortization expense related to franchise fees of $0.2 million, $0.2 million and $0.2 million, respectively, is included in depreciation and amortization in the consolidated statements of operations. Amortization expense related to loan costs of ~~$0.9~~$1.5 million, ~~$0.5~~$0.9 million and $0.5 million for the years ended December 31, 2021, 2020 ~~2019~~ and ~~2018,~~2019, respectively, is included in interest expense in the consolidated statements of operations.

Mortgage Debt, net

Mortgage debt, net consists of mortgage loans on certain hotel properties less the costs associated with acquiring those loans. Mortgage debt consisted of the following at December 31, ~~2020~~2021 and ~~2019~~2020 (in thousands):


		December 31, 2020		December 31, 2019			December 31, 2021		December 31, 2020
Mortgage debt	Mortgage debt	$	461,116	$	496,860	Mortgage debt	$	439,926	$	461,116
Deferred financing costs	Deferred financing costs	(971)		(1,395)		Deferred financing costs	(644)		(971)
Mortgage debt, net	Mortgage debt, net	$	460,145	$	495,465	Mortgage debt, net	$	439,282	$	460,145

Right of Use Asset Lease Liability
Balance as of January 1, 2020 $ 21,270 $ 23,717
Amortization (629) (484)
Balance as of December 31, 2020 $ 20,641 $ 23,233


	Right of Use Asset		Lease Liability
Balance as of January 1, 2021	$	20,641	$	23,233
Amortization	(656)		(537)

Balance as of December 31, 2021	$	19,985	$	22,696


Lease Term and Discount Rate			December 31, ~~2020~~2021

Weighted-average remaining lease term (years)			~~40.62~~40.55
Weighted-average discount rate			~~6.57%~~6.60%

14. Commitments and Contingencies

Litigation

The ~~nature~~Company is subject to various claims, lawsuits and legal proceedings, including routine litigation arising in the ordinary course of business, regarding the operation of its hotels, its managers and other Company matters. While it is not possible to ascertain the ultimate outcome of such matters, the Company believes that the aggregate identifiable amount of such liabilities, if any, will not have a material adverse impact on its financial condition or results of operations.

Chatham RIMV LLC (a wholly owned subsidiary of the ~~operations of the Company's hotels exposes those hotels, the Company and the Operating Partnership to the risk of claims and litigation in the normal course of their business. IHM~~Company) is ~~currently~~ a defendant in ~~several class action lawsuits pending in~~a lawsuit brought by the ~~state~~City of ~~California.~~

~~The first class action lawsuit was~~San Diego and other related entities, San Diego Housing Commission et al. v. Neil et al. (Superior Court of California, County of San Diego, Case No. 37-2021-00033006-CU-BC-CTL) filed in connection with the ~~Santa Clara County Superior Court~~sale of the Residence Inn Mission Valley to the City of San Diego. The City of San Diego is seeking a return of monies spent on ~~October 21, 2016 under~~ the ~~title Ruffy, et al, v. Island Hospitality Management, LLC, et al. Case No. 16-CV-301473 (“Ruffy”)~~acquisition as well as a declaration that the purchase agreement executed in connection with the acquisition is void. At the time of this filing, the City of San Diego and the ~~second class action~~other Plaintiffs have made no allegations of wrongdoing by Chatham RIMV LLC or any other Company entity. We believe this lawsuit ~~was filed on March 21, 2018 under the title Doonan, et al, v. Island Hospitality Management, LLC, et al. Case No 18-CV-325187 (“Doonan”). The class actions relate~~is without merit and we are defending our case vigorously. As of December 31, 2021, we have accrued $40 thousand related to ~~hotels operated by IHM in the state of California and owned by affiliates of~~

~~F-31~~

the Company and the NewINK JV, and/or certain third parties. The complaint alleged various wage and hour law violations based on alleged misclassification of certain hotel managerial staff and violation of certain California statutes regarding incorrect information contained on employee paystubs. The plaintiffs seek injunctive relief, money damages, penalties, and interest. A settlement agreement has been negotiated and approved by the applicable courts for Ruffy and Doonan. In August 2020, ~~a payment of $0.1 million, which represents the Company’s total exposure~~legal costs incurred to ~~the~~ ~~Ruffy and Doonan litigations based on standard indemnification obligations under hotel management agreements with IHM, was paid~~date. At this time we believe potential future costs related to this lawsuit ~~settlement.~~

In addition, IHM is a defendant in the following series of interrelated class action lawsuits: Perez et al. v. Island Hospitality Management III LLC et al. (United States District Court for the Central District of California, Case No. 2:18-cv-04903-DMG-JPR) filed on March 15, 2018, Cruz v. Island Hospitality Management III LLC (Santa Clara County Superior Court Case No. 19CV353655) filed on August 19, 2019, Leon et al. v. Island Hospitality Management III LLC (Orange County Superior Court Case No. 30-2019-01050719-CU-OE-CXC) filed on April 2, 2019,are not probable and Vela v. Island Hospitality Management LLC et al. (San Diego County Superior Court, Case No. 37-2019-0003525) filed on July 9, 2019 (collectively the “Perez class actions”). The Perez class actions also relate to hotels operated by IHM in the state of California and owned by affiliates of the Company and the NewINK JV, and/or certain third parties. The complaints alleged various wage and hour law violations based on alleged violation of certain California statutes regarding rest and meal breaks and wage statements. The plaintiffs seek injunctive relief, money damages, penalties, and interest. In September 2020, a payment of $0.6 million, which represents the Company’s total exposure to the Perez class actions based on standard indemnification obligations under hotel management agreements with IHM, was paid related to this lawsuit settlement.estimable.

Management Agreements

The management agreements with IHM have an initial term of five years and automatically renew for 2 five-year periods unless IHM provides written notice to us no later than 90 days prior to the then current term's expiration date of their intent not to renew. The IHM management agreements provide for early termination at the Company’s option upon sale of any IHM-managed hotel for no termination fee, with six months advance notice. The IHM management agreements may be terminated for cause, including the failure of the managed hotel to meet specified performance levels. Base management fees are calculated as a percentage of the hotel's gross room revenue. If certain financial thresholds are met or exceeded, an incentive management fee is calculated as 10% of the hotel's net operating income less fixed costs, base management fees and a specified return threshold. The incentive management fee is capped at 1% of gross hotel revenues for the applicable calculation.

~~F-32~~F-28

As of December 31, ~~2020,~~2021, terms of the Company's management agreements are (dollars are not in thousands):

Property Management Company Base Management Fee Monthly Accounting Fee Monthly Revenue Management Fee Incentive Management Fee Cap
Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington IHM 3.0 % 1,200 1,000 1.0 %
Homewood Suites by Hilton Minneapolis-Mall of America IHM 3.0 % 1,200 1,000 1.0 %
Homewood Suites by Hilton Nashville-Brentwood IHM 3.0 % 1,200 1,000 1.0 %
Homewood Suites by Hilton Dallas-Market Center IHM 3.0 % 1,200 1,000 1.0 %
Homewood Suites by Hilton Hartford-Farmington IHM 3.0 % 1,200 1,000 1.0 %
Homewood Suites by Hilton Orlando-Maitland IHM 3.0 % 1,200 1,000 1.0 %
Hampton Inn & Suites Houston-Medical Center IHM 3.0 % 1,000 1,000 1.0 %
Residence Inn Long Island Holtsville IHM 3.0 % 1,000 1,000 1.0 %
Residence Inn White Plains IHM 3.0 % 1,000 750 1.0 %
Residence Inn New Rochelle IHM 3.0 % 1,000 750 1.0 %
Residence Inn Garden Grove IHM 3.0 % 1,200 1,000 1.0 %
Homewood Suites by Hilton San Antonio River Walk IHM 3.0 % 1,200 1,000 1.0 %
Residence Inn Washington DC IHM 3.0 % 1,200 1,000 1.0 %
Residence Inn Tysons Corner IHM 3.0 % 1,200 1,000 1.0 %
Hampton Inn Portland Downtown IHM 3.0 % 1,000 550 1.0 %
Courtyard Houston IHM 3.0 % 1,000 550 1.0 %
Hyatt Place Pittsburgh North Shore IHM 3.0 % 1,500 1,000 1.0 %
Hampton Inn Exeter IHM 3.0 % 1,200 1,000 1.0 %
Hilton Garden Inn Denver Tech IHM 3.0 % 1,500 1,000 1.0 %
Residence Inn Bellevue IHM 3.0 % 1,200 1,000 1.0 %
Springhill Suites Savannah IHM 3.0 % 1,200 1,000 1.0 %
Residence Inn Silicon Valley I IHM 3.0 % 1,200 1,000 1.0 %
Residence Inn Silicon Valley II IHM 3.0 % 1,200 1,000 1.0 %
Residence Inn San Mateo IHM 3.0 % 1,200 1,000 1.0 %
Residence Inn Mountain View IHM 3.0 % 1,200 1,000 1.0 %
Hyatt Place Cherry Creek IHM 3.0 % 1,500 1,000 1.0 %
Courtyard Addison IHM 3.0 % 1,500 1,000 1.0 %
Courtyard West University Houston IHM 3.0 % 1,500 1,000 1.0 %
Residence Inn West University Houston IHM 3.0 % 1,200 1,000 1.0 %
Hilton Garden Inn Burlington IHM 3.0 % 1,500 1,000 1.0 %
Residence Inn San Diego Gaslamp IHM 3.0 % 1,500 1,000 1.0 %
Hilton Garden Inn Marina del Rey IHM 3.0 % 1,500 1,000 1.0 %
Residence Inn Dedham IHM 3.0 % 1,200 1,000 1.0 %
Residence Inn Il Lugano IHM 3.0 % 1,500 1,000 1.0 %
Hilton Garden Inn Portsmouth IHM 3.0 % 1,500 1,000 1.0 %
Courtyard Summerville IHM 3.0 % 1,500 1,000 1.0 %
Embassy Suites Springfield IHM 3.0 % 1,500 1,000 1.0 %
Residence Inn Summerville IHM 3.0 % 1,500 1,000 1.0 %
Courtyard Dallas IHM 3.0 % 1,500 1,000 1.0 %


Property	Management Company	Base Management Fee		Monthly Accounting Fee	Monthly Revenue Management Fee	Incentive Management Fee Cap
Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington	IHM	3.0	%	$1,200	$1,000	1.0	%
Homewood Suites by Hilton Minneapolis-Mall of America	IHM	3.0	%	$1,200	$1,000	1.0	%
Homewood Suites by Hilton Nashville-Brentwood	IHM	3.0	%	$1,200	$1,000	1.0	%
Homewood Suites by Hilton Dallas-Market Center	IHM	3.0	%	$1,200	$1,000	1.0	%
Homewood Suites by Hilton Hartford-Farmington	IHM	3.0	%	$1,200	$1,000	1.0	%
Homewood Suites by Hilton Orlando-Maitland	IHM	3.0	%	$1,200	$1,000	1.0	%
Hampton Inn & Suites Houston-Medical Center	IHM	3.0	%	$1,000	$1,000	1.0	%
Residence Inn Long Island Holtsville	IHM	3.0	%	$1,000	$1,000	1.0	%
Residence Inn White Plains	IHM	3.0	%	$1,000	$750	1.0	%
Residence Inn New Rochelle	IHM	3.0	%	$1,000	$750	1.0	%
Residence Inn Garden Grove	IHM	3.0	%	$1,200	$1,000	1.0	%
Homewood Suites by Hilton San Antonio River Walk	IHM	3.0	%	$1,200	$1,000	1.0	%
Residence Inn Washington DC	IHM	3.0	%	$1,200	$1,000	1.0	%
Residence Inn Tysons Corner	IHM	3.0	%	$1,200	$1,000	1.0	%
Hampton Inn Portland Downtown	IHM	3.0	%	$1,000	$550	1.0	%
Courtyard Houston	IHM	3.0	%	$1,000	$550	1.0	%
Hyatt Place Pittsburgh North Shore	IHM	3.0	%	$1,500	$1,000	1.0	%
Hampton Inn Exeter	IHM	3.0	%	$1,200	$1,000	1.0	%
Hilton Garden Inn Denver Tech	IHM	3.0	%	$1,500	$1,000	1.0	%
Residence Inn Bellevue	IHM	3.0	%	$1,200	$1,000	1.0	%
Springhill Suites Savannah	IHM	3.0	%	$1,200	$1,000	1.0	%
Residence Inn Silicon Valley I	IHM	3.0	%	$1,200	$1,000	1.0	%
Residence Inn Silicon Valley II	IHM	3.0	%	$1,200	$1,000	1.0	%
Residence Inn San Mateo	IHM	3.0	%	$1,200	$1,000	1.0	%
Residence Inn Mountain View	IHM	3.0	%	$1,200	$1,000	1.0	%
Hyatt Place Cherry Creek	IHM	3.0	%	$1,500	$1,000	1.0	%
Courtyard Addison	IHM	3.0	%	$1,500	$1,000	1.0	%
Courtyard West University Houston	IHM	3.0	%	$1,500	$1,000	1.0	%
Residence Inn West University Houston	IHM	3.0	%	$1,200	$1,000	1.0	%
Hilton Garden Inn Burlington	IHM	3.0	%	$1,500	$1,000	1.0	%
Residence Inn San Diego Gaslamp	IHM	3.0	%	$1,500	$1,000	1.0	%
Hilton Garden Inn Marina del Rey	IHM	3.0	%	$1,500	$1,000	1.0	%
Residence Inn Dedham	IHM	3.0	%	$1,200	$1,000	1.0	%
Residence Inn Il Lugano	IHM	3.0	%	$1,500	$1,000	1.0	%
Hilton Garden Inn Portsmouth	IHM	3.0	%	$1,500	$1,000	1.0	%
Courtyard Summerville	IHM	3.0	%	$1,500	$1,000	1.0	%
Embassy Suites Springfield	IHM	3.0	%	$1,500	$1,000	1.0	%
Residence Inn Summerville	IHM	3.0	%	$1,500	$1,000	1.0	%
Courtyard Dallas	IHM	3.0	%	$1,500	$1,000	1.0	%
Residence Inn Austin Northwest/The Domain Area	IHM	3.0	%	$1,500	$1,000	1.0	%
TownePlace Suites Austin Northwest/The Domain Area	IHM	3.0	%	$1,500	$1,000	1.0	%

Management fees totaled approximately ~~$5.3~~$7.2 million, ~~$10.8~~$5.3 million and $10.8 million, respectively, for the years ended December 31, 2021, 2020 ~~2019~~ and ~~2018.~~2019. Incentive management fees paid to IHM for the years ended years ended December 31, 2021, 2020 ~~2019~~ and ~~2018~~2019 were $0.0 million, ~~$0.1~~$0.0 million and $0.1 million, respectively.

Franchise Agreements

The fees associated with the franchise agreements are calculated as a specified percentage of the hotel's gross room revenue. Terms of the Company's franchise agreements are as of December 31, ~~2020:~~2021:

~~F-33~~F-29

Property Franchise/Royalty Fee Marketing/Program Fee Expiration
Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington 4.0 % 4.0 % 2025
Homewood Suites by Hilton Minneapolis-Mall of America 4.0 % 4.0 % 2025
Homewood Suites by Hilton Nashville-Brentwood 4.0 % 4.0 % 2025
Homewood Suites by Hilton Dallas-Market Center 4.0 % 4.0 % 2025
Homewood Suites by Hilton Hartford-Farmington 4.0 % 4.0 % 2025
Homewood Suites by Hilton Orlando-Maitland 4.0 % 4.0 % 2025
Hampton Inn & Suites Houston-Medical Center 6.0 % 4.0 % 2035
Residence Inn Long Island Holtsville 5.5 % 2.5 % 2025
Residence Inn White Plains 5.5 % 2.5 % 2030
Residence Inn New Rochelle 5.5 % 2.5 % 2030
Residence Inn Garden Grove 5.0 % 2.5 % 2031
Homewood Suites by Hilton San Antonio River Walk 4.0 % 4.0 % 2026
Residence Inn Washington DC 5.5 % 2.5 % 2033
Residence Inn Tysons Corner 5.0 % 2.5 % 2031
Hampton Inn Portland Downtown 6.0 % 4.0 % 2032
Courtyard Houston 5.5 % 2.0 % 2030
Hyatt Place Pittsburgh North Shore 5.0 % 3.5 % 2030
Hampton Inn Exeter 6.0 % 4.0 % 2031
Hilton Garden Inn Denver Tech 5.5 % 4.3 % 2028
Residence Inn Bellevue 5.5 % 2.5 % 2033
Springhill Suites Savannah 5.0 % 2.5 % 2033
Residence Inn Silicon Valley I 5.5 % 2.5 % 2029
Residence Inn Silicon Valley II 5.5 % 2.5 % 2029
Residence Inn San Mateo 5.5 % 2.5 % 2029
Residence Inn Mountain View 5.5 % 2.5 % 2029
Hyatt Place Cherry Creek 3% to 5% 3.5 % 2034
Courtyard Addison 5.5 % 2.0 % 2029
Courtyard West University Houston 5.5 % 2.0 % 2029
Residence Inn West University Houston 6.0 % 2.5 % 2024
Hilton Garden Inn Burlington 5.5 % 4.3 % 2029
Residence Inn San Diego Gaslamp 6.0 % 2.5 % 2035
Hilton Garden Inn Marina del Rey 3% to 5.5% 4.3 % 2030
Residence Inn Dedham 6.0 % 2.5 % 2030
Residence Inn Il Lugano 3% to 6% 2.5 % 2045
Hilton Garden Inn Portsmouth 5.5 % 4.0 % 2037
Courtyard Summerville 6.0 % 2.5 % 2037
Embassy Suites Springfield 5.5 % 4.0 % 2037
Residence Inn Summerville 6.0 % 2.5 % 2038
Courtyard Dallas 4% to 6% 2.0 % 2038


Property	Franchise/Royalty Fee		Marketing/Program Fee		Expiration
Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington	4.0	%	4.0	%	2025
Homewood Suites by Hilton Minneapolis-Mall of America	4.0	%	4.0	%	2025
Homewood Suites by Hilton Nashville-Brentwood	4.0	%	4.0	%	2025
Homewood Suites by Hilton Dallas-Market Center	4.0	%	4.0	%	2025
Homewood Suites by Hilton Hartford-Farmington	4.0	%	4.0	%	2025
Homewood Suites by Hilton Orlando-Maitland	4.0	%	4.0	%	2025
Hampton Inn & Suites Houston-Medical Center	6.0	%	4.0	%	2035
Residence Inn Long Island Holtsville	5.5	%	2.5	%	2025
Residence Inn White Plains	5.5	%	2.5	%	2030
Residence Inn New Rochelle	5.5	%	2.5	%	2030
Residence Inn Garden Grove	5.0	%	2.5	%	2031
Homewood Suites by Hilton San Antonio River Walk	4.0	%	4.0	%	2026
Residence Inn Washington DC	5.5	%	2.5	%	2033
Residence Inn Tysons Corner	5.0	%	2.5	%	2031
Hampton Inn Portland Downtown	6.0	%	4.0	%	2032
Courtyard Houston	5.5	%	2.0	%	2030
Hyatt Place Pittsburgh North Shore	5.0	%	3.5	%	2030
Hampton Inn Exeter	6.0	%	4.0	%	2031
Hilton Garden Inn Denver Tech	5.5	%	4.3	%	2028
Residence Inn Bellevue	5.5	%	2.5	%	2033
Springhill Suites Savannah	5.0	%	2.5	%	2033
Residence Inn Silicon Valley I	5.5	%	2.5	%	2029
Residence Inn Silicon Valley II	5.5	%	2.5	%	2029
Residence Inn San Mateo	5.5	%	2.5	%	2029
Residence Inn Mountain View	5.5	%	2.5	%	2029
Hyatt Place Cherry Creek	5.0	%	3.5	%	2034
Courtyard Addison	5.5	%	2.0	%	2029
Courtyard West University Houston	5.5	%	2.0	%	2029
Residence Inn West University Houston	6.0	%	2.5	%	2024
Hilton Garden Inn Burlington	5.5	%	4.3	%	2029
Residence Inn San Diego Gaslamp	6.0	%	2.5	%	2035
Hilton Garden Inn Marina del Rey	5.5	%	4.3	%	2030
Residence Inn Dedham	6.0	%	2.5	%	2030
Residence Inn Il Lugano	6.0	%	2.5	%	2045
Hilton Garden Inn Portsmouth	5.5	%	4.0	%	2037
Courtyard Summerville	6.0	%	2.5	%	2037
Embassy Suites Springfield	5.5	%	4.0	%	2037
Residence Inn Summerville	6.0	%	2.5	%	2038
Courtyard Dallas	4.0% to 6.0%		2.0	%	2038
Residence Inn Austin Northwest/The Domain Area	5.5% to 6.0%		2.5	%	2036
TownePlace Suites Austin Northwest/The Domain Area	3.0% to 5.5%		2.0	%	2041

Franchise and marketing/program fees totaled approximately $16.6 million, $11.6 million ~~$25.9 million~~ and ~~$24.9~~$25.9 million, respectively, for the years ended December 31, 2021, 2020 ~~2019~~ and ~~2018.~~2019.

~~F-34~~F-30

15. Related Party Transactions

Prior to March ~~1, 2019,~~18, 2021, Mr. Fisher owned ~~51%~~52.5% of IHM. ~~On March 1, 2019,~~During the year ended December 31, 2021, Mr. Fisher acquired the ~~1.5%~~remaining 47.5% ownership interest ~~of an employee who was leaving IHM. As~~and as of December 31, ~~2020,~~2021, Mr. Fisher owns ~~52.5%~~100% of IHM. As of December 31, ~~2020,~~2021, the Company had hotel management agreements with IHM to manage 39all 41 of its ~~wholly owned~~ hotels. ~~As of December 31, 2020, all 46 hotels owned by the NewINK JV were managed by IHM.~~ Hotel management, revenue management and accounting fees accrued or paid to IHM for the hotels owned by the Company for the years ended December 31, 2021, 2020 and 2019 ~~and 2018~~ were ~~$5.3~~$7.2 million, ~~$10.8~~$5.3 million and $10.8 million, respectively. At December 31, ~~2020~~2021 and ~~2019,~~2020, the amounts due to IHM were $0.3 million and ~~$0.7~~$0.3 million, respectively. Incentive management fees paid to IHM by the Company for the years ended December 31, 2021, 2020 ~~2019~~ and ~~2018~~2019 were $0.0 million, $0.1 million and $0.1 million, respectively. The Company provides services to Castleblack, which is 97.5% owned by affiliates of CLNY and 2.5% owned by Mr. Fisher. For the years ended December 31, 2020 and 2019 the company provided services of $0.1$0.0 million and $0.1 million, respectively.

Cost reimbursements from unconsolidated ~~real estate~~ entities revenue ~~represents~~represent reimbursements of costs incurred on behalf of the NewINK JV, the Inland JV ~~Castleblack~~ and IHM. These costs relate primarily to corporate payroll costs at the NewINK JV and the Inland JV ~~and Castleblack~~ where the Company iswas the employer and office expenses ~~are~~ shared with these entities and IHM. Various shared office expenses and rent are paid by the Company and allocated to IHM based on the amount of square footage occupied by each entity. As the Company records cost reimbursements based upon costs incurred with no added markup, the revenue and related expense has no impact on the Company’s operating income or net income. Cost reimbursements are recorded based upon the occurrence of a reimbursed activity.

~~Various shared office expenses and rent are paid by the Company and allocated to the NewINK JV, the Inland JV, Castleblack and IHM based on the amount of square footage occupied by each entity.~~

~~F-35~~

~~16. Quarterly Operating Results (unaudited)~~

Quarter Ended - 2020
March 31 June 30 September 30 December 31
(in thousands, except share and per share data)
Total revenue $ 60,209 $ 20,173 $ 34,969 $ 29,565
Total operating expenses 77,895 38,793 45,214 24,667
Operating income (17,686) (18,620) (10,245) 4,898
Net income attributable to common shareholders (27,783) (26,827) (18,057) (3,356)
Income (loss) per common share, basic (1) (0.59) (0.57) (0.38) (0.07)
Income (loss) per common share, diluted (1) (0.59) (0.57) (0.38) (0.07)
Weighted average number of common shares outstanding:
Basic 46,948,533 46,960,289 46,965,526 46,969,483
Diluted 46,948,533 46,960,289 46,965,526 46,969,483
Quarter Ended - 2019
March 31 June 30 September 30 December 31
(in thousands, except share and per share data)
Total revenue $ 75,679 $ 87,874 $ 90,080 $ 74,695
Total operating expenses 65,786 71,741 70,182 67,234
Operating income 9,893 16,133 19,898 7,461
Net income attributable to common shareholders 1,613 9,437 10,002 (2,349)
Income per common share, basic (1) 0.03 0.20 0.21 (0.05)
Income per common share, diluted (1) 0.03 0.20 0.21 (0.05)
Weighted average number of common shares outstanding:
Basic 46,556,710 46,760,016 46,913,922 46,919,035
Diluted 46,734,958 46,976,999 47,152,166 47,220,671

(1) The sum of per share amounts for the four quarters may differ from the annual per share amounts due to the required method of computing weighted-average number of common shares outstanding in the respective periods and share offerings that occurred during the year. Unvested restricted shares and unvested LTIP units could potentially dilute basic earnings per share in the future were not included in the computation of diluted loss per share, for the periods where a loss has been recorded, because they would have been anti-dilutive for the periods presented.

~~F-36~~F-31

CHATHAM LODGING TRUST

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, ~~2020~~2021

(in thousands)

Initial Cost Gross Amount at End of Year
Description Year of Acquisition Encumbrances Land Buildings & Improvements Cost Cap. Sub. To Acq. Land Cost Cap. Sub. To Acq. Bldg & Improvements Land Buildings & Improvements Total Bldg & Improvements Accumulated Depreciation Year of Original Construction Depreciation Life
Homewood Suites Orlando - Maitland, FL 2010 0 $ 1,800 $ 7,200 $ 34 $ 5,185 $ 1,834 $ 12,385 $ 14,219 $ 12,385 $ 4,135 2000 (1)
Homewood Suites Boston - Billerica, MA 2010 15,693 1,470 10,555 48 3,848 1,518 14,403 15,921 14,403 3,990 1999 (1)
Homewood Suites Minneapolis - Mall of America, Bloomington, MN 2010 0 3,500 13,960 19 4,101 3,519 18,061 21,580 18,061 5,414 1998 (1)
Homewood Suites Nashville - Brentwood, TN 2010 0 1,525 9,300 12 3,683 1,537 12,983 14,520 12,983 3,929 1998 (1)
Homewood Suites Dallas - Market Center, Dallas, TX 2010 0 2,500 7,583 30 4,230 2,530 11,813 14,343 11,813 3,402 1998 (1)
Homewood Suites Hartford - Farmington, CT 2010 0 1,325 9,375 92 3,556 1,417 12,931 14,348 12,931 3,556 1999 (1)
Hampton Inn & Suites Houston - Houston, TX 2010 17,717 3,200 12,709 60 3,089 3,260 15,798 19,058 15,798 3,913 1997 (1)
Residence Inn Holtsville - Holtsville, NY 2010 0 2,200 18,765 0 1,244 2,200 20,009 22,209 20,009 5,563 2004 (1)
Residence Inn White Plains - White Plains, NY 2010 0 2,200 17,677 0 9,362 2,200 27,039 29,239 27,039 7,720 1982 (1)
Residence Inn New Rochelle - New Rochelle, NY 2010 12,936 0 20,281 9 6,642 9 26,923 26,932 26,923 6,777 2000 (1)
Residence Inn Garden Grove - Garden Grove, CA 2011 32,053 7,109 35,484 57 3,568 7,166 39,052 46,218 39,052 9,564 2003 (1)
Homewood Suites San Antonio - San Antonio, TX 2011 15,563 5,999 24,764 7 5,488 6,006 30,252 36,258 30,252 7,948 1996 (1)
Residence Inn Washington DC - Washington, DC 2011 0 6,083 22,063 28 6,145 6,111 28,208 34,319 28,208 7,868 1974 (1)
Residence Inn Tyson's Corner - Vienna, VA 2011 21,291 5,752 28,917 0 2,630 5,752 31,547 37,299 31,547 7,281 2001 (1)
Hampton Inn Portland Downtown - Portland, ME 2012 0 4,315 22,664 0 363 4,315 23,027 27,342 23,027 4,641 2011 (1)
Courtyard Houston - Houston, TX 2013 17,559 5,600 27,350 0 2,802 5,600 30,152 35,752 30,152 6,043 2010 (1)
Hyatt Place Pittsburgh - Pittsburgh, PA 2013 21,520 3,000 35,576 0 1,442 3,000 37,018 40,018 37,018 7,035 2011 (1)
Hampton Inn & Suites Exeter - Exeter, NH 2013 0 1,900 12,350 4 164 1,904 12,514 14,418 12,514 2,345 2010 (1)
Hilton Garden Inn Denver Tech - Denver, CO 2013 0 4,100 23,100 5 670 4,105 23,770 27,875 23,770 4,539 1999 (1)
Residence Inn Bellevue - Bellevue, WA 2013 43,857 13,800 56,957 0 2,351 13,800 59,308 73,108 59,308 11,022 2008 (1)
SpringHill Suites Savannah - Savannah, GA 2013 29,817 2,400 36,050 1 1,605 2,401 37,655 40,056 37,655 7,026 2009 (1)
Residence Inn Silicon Valley I - Sunnyvale, CA 2014 64,406 42,652 45,846 0 5,914 42,652 51,760 94,412 51,760 20,944 1983 (1)
Residence Inn Silicon Valley II - Sunnyvale, CA 2014 70,270 46,474 50,380 0 7,223 46,474 57,603 104,077 57,603 22,865 1985 (1)
Residence Inn San Mateo - San Mateo, CA 2014 48,305 38,420 31,352 0 5393 38,420 36,745 75,165 36,745 14,274 1985 (1)
Residence Inn Mt. View - Mountain View, CA 2014 37,670 22,019 31,813 0 10,186 22,019 41,999 64,018 41,999 16,600 1985 (1)
Hyatt Place Cherry Creek - Cherry Creek, CO 2014 0 3,700 26,300 0 1,844 3,700 28,144 31,844 28,144 4,654 1987 (1)
Courtyard Addison - Dallas, TX 2014 0 2,413 21,554 0 2,566 2,413 24,120 26,533 24,120 4,053 2000 (1)


			Initial Cost								Gross Amount at End of Year
Description	Year of Acquisition	Encumbrances	Land		Buildings & Improvements		Cost Cap. Sub. To Acq. Land		Cost Cap. Sub. To Acq. Bldg & Improvements		Land		Buildings & Improvements		Total		Bldg & Improvements		Accumulated Depreciation		Year of Original Construction	Depreciation Life

Homewood Suites Orlando - Maitland, FL	2010	—	$	1,800	$	7,200	$	34	$	5,212	$	1,834	$	12,412	$	14,246	$	12,412	$	4,736	2000	(1)
Homewood Suites Boston - Billerica, MA	2010	15,114	1,470		10,555		48		3,993		1,518		14,548		16,066		14,548		4,545		1999	(1)
Homewood Suites Minneapolis - Mall of America, Bloomington, MN	2010	—	3,500		13,960		19		4,277		3,519		18,237		21,756		18,237		6,109		1998	(1)
Homewood Suites Nashville - Brentwood, TN	2010	—	1,525		9,300		12		3,802		1,537		13,102		14,639		13,102		4,459		1998	(1)
Homewood Suites Dallas - Market Center, Dallas, TX	2010	—	2,500		7,583		30		4,518		2,530		12,101		14,631		12,101		3,959		1998	(1)
Homewood Suites Hartford - Farmington, CT	2010	—	1,325		9,375		92		3,662		1,417		13,037		14,454		13,037		4,060		1999	(1)
Hampton Inn & Suites Houston - Houston, TX	2010	17,058	3,200		12,709		60		3,147		3,260		15,856		19,116		15,856		4,473		1997	(1)
Residence Inn Holtsville - Holtsville, NY	2010	—	2,200		18,765		—		1,321		2,200		20,086		22,286		20,086		6,124		2004	(1)
Residence Inn White Plains - White Plains, NY	2010	—	2,200		17,677		—		9,585		2,200		27,262		29,462		27,262		8,834		1982	(1)
Residence Inn New Rochelle - New Rochelle, NY	2010	—	—		20,281		9		6,934		9		27,215		27,224		27,215		7,779		2000	(1)
Residence Inn Garden Grove - Garden Grove, CA	2011	30,839	7,109		35,484		57		5,518		7,166		41,002		48,168		41,002		10,869		2003	(1)
Homewood Suites San Antonio - San Antonio, TX	2011	14,808	5,999		24,764		6		5,602		6,005		30,366		36,371		30,366		8,957		1996	(1)
Residence Inn Washington DC - Washington, DC	2011	—	6,083		22,063		28		6,477		6,111		28,540		34,651		28,540		8,836		1974	(1)
Residence Inn Tyson's Corner - Vienna, VA	2011	20,243	5,752		28,917		—		2,752		5,752		31,669		37,421		31,669		8,215		2001	(1)
Hampton Inn Portland Downtown - Portland, ME	2012	—	4,315		22,664		—		369		4,315		23,033		27,348		23,033		5,235		2011	(1)
Courtyard Houston - Houston, TX	2013	16,673	5,600		27,350		—		2,947		5,600		30,297		35,897		30,297		6,935		2010	(1)
Hyatt Place Pittsburgh - Pittsburgh, PA	2013	20,515	3,000		35,576		5		1,506		3,005		37,082		40,087		37,082		8,037		2011	(1)
Hampton Inn & Suites Exeter - Exeter, NH	2013	—	1,900		12,350		4		189		1,904		12,539		14,443		12,539		2,675		2010	(1)
Hilton Garden Inn Denver Tech - Denver, CO	2013	—	4,100		23,100		5		675		4,105		23,775		27,880		23,775		5,153		1999	(1)
Residence Inn Bellevue - Bellevue, WA	2013	42,089	13,800		56,957		—		2,444		13,800		59,401		73,201		59,401		12,596		2008	(1)
SpringHill Suites Savannah - Savannah, GA	2013	28,873	2,400		36,050		1		1,703		2,401		37,753		40,154		37,753		8,056		2009	(1)
Residence Inn Silicon Valley I - Sunnyvale, CA	2014	62,374	42,652		45,846		—		6,016		42,652		51,862		94,514		51,862		24,462		1983	(1)
Residence Inn Silicon Valley II - Sunnyvale, CA	2014	68,054	46,474		50,380		—		7,428		46,474		57,808		104,282		57,808		26,790		1985	(1)
Residence Inn San Mateo - San Mateo, CA	2014	46,781	38,420		31,352		—		5448		38,420		36,800		75,220		36,800		16,780		1985	(1)
Residence Inn Mt. View - Mountain View, CA	2014	36,481	22,019		31,813		—		10,244		22,019		42,057		64,076		42,057		19,466		1985	(1)
Hyatt Place Cherry Creek - Cherry Creek, CO	2014	—	3,700		26,300		—		1,868		3,700		28,168		31,868		28,168		5,452		1987	(1)
Courtyard Addison - Dallas, TX	2014	—	2,413		21,554		—		2,645		2,413		24,199		26,612		24,199		4,791		2000	(1)

- continued -

~~F-37~~F-32


			Initial Cost								Gross Amount at End of Year
Description	Year of Acquisition	Encumbrances	Land		Buildings & Improvements		Cost Cap. Sub. To Acq. Land		Cost Cap. Sub. To Acq. Bldg & Improvements		Land		Buildings & Improvements		Total		Bldg & Improvements		Accumulated Depreciation		Year of Original Construction	Depreciation Life

Courtyard West University - Houston, TX	2014	—	2,012		17,916		—		1451		2,012		19,367		21,379		19,367		3,542		2004	(1)
Residence Inn West University - Houston, TX	2014	—	3,640		25,631		—		1,688		3,640		27,319		30,959		27,319		5,270		2004	(1)
Hilton Garden Inn Burlington - Burlington, MA	2014	—	4,918		27,193		—		(3,850)		4,918		23,343		28,261		23,343		5,685		1975	(1)
Residence Inn Gaslamp - San Diego, CA	2015	—	—		89,040		10		2,134		10		91,174		91,184		91,174		15,987		2009	(1)
Hilton Garden Inn - Marina del Rey, CA	2015	20,024	—		43,210		—		917		—		44,127		44,127		44,127		7,078		2013	(1)
Residence Inn - Dedham, MA	2015	—	4,230		17,304		—		2,159		4,230		19,463		23,693		19,463		3,209		1998	(1)
Residence Inn - Ft. Lauderdale, FL	2015	—	9,200		24,048		14		1,987		9,214		26,035		35,249		26,035		4,241		2008	(1)
Warner Center - Woodland Hills, CA	2017	35,007	6,500		—		99		—		6,599		—		6,599		—		—
Hilton Garden Inn - Portsmouth, NH	2017	—	3,600		37,630		—		610		3,600		38,240		41,840		38,240		4,107		2006	(1)
Courtyard - Summerville, SC	2017	—	2,500		16,923		7		220		2,507		17,143		19,650		17,143		1772		2014	(1)
Embassy Suites - Springfield, VA	2017	—	7,700		58,807		—		416		7,700		59,223		66,923		59,223		6,029		2013	(1)
Residence Inn - Summerville, SC	2018	—	2,300		17,060		—		256		2,300		17,316		19,616		17,316		1,478		2018	(1)
Courtyard Dallas Downtown - Dallas, TX	2018	—	2,900		42,760		—		140		2,900		42,900		45,800		42,900		3,300		2018	(1)
Silicon Valley III - Sunnyvale, CA	2018	—	8,171		—		—		—		8,171		—		8,171		—		—
Residence Inn Austin Northwest/The Domain Area - Austin, TX	2021	—	2,400		33,346		—		84		2,400		33,430		35,830		33,430		346		2016	(1)
TownePlace Suites Austin Northwest/The Domain Area - Austin, TX	2021	—	2,300		29,347		—		59		2,300		29,406		31,706		29,406		304		2021	(1)

Grand Total(s)			$	297,827	$	1,140,140	$	540	$	118,553	$	298,367	$	1,258,693	$	1,557,060	$	1,258,693	$	300,731

(1) Depreciation is computed based upon the following estimated useful lives:

Years

Building

Land improvements

Building improvements

5-20

- continued -

~~F-38~~F-33


Notes:	Notes:													Notes:

(a) The change in total cost of real estate assets for the year ended is as follows:	(a) The change in total cost of real estate assets for the year ended is as follows:													(a) The change in total cost of real estate assets for the year ended is as follows:
		2020		2019		2018		2017		2016		2015			2021		2020		2019		2018		2017		2016		2015
Balance at the beginning of the year	Balance at the beginning of the year	$	1,520,189	$	1,510,864	$	1,431,374	$	1,320,273	$	1,306,192	1,105,504		Balance at the beginning of the year	$	1,488,830	$	1,520,189	$	1,510,864	$	1,431,374	$	1,320,273	$	1,306,192	1,105,504
Acquisitions	Acquisitions	0		8,171		65,020		133,660		0		187,032		Acquisitions	67,393		—		8,171		65,020		133,660		—		187,032
Dispositions during the year	Dispositions during the year	(52,770)		(17,889)		0		(33053)		0		0		Dispositions during the year	—		(52,770)		(17,889)		—		(33,053)		—		—
Capital expenditures and transfers from construction-in-progress	Capital expenditures and transfers from construction-in-progress	21,411		19,043		14,470		10,494		14,081		13,656		Capital expenditures and transfers from construction-in-progress	837		21,411		19,043		14,470		10,494		14,081		13,656
Investment in Real Estate	Investment in Real Estate	$	1,488,830	$	1,520,189	$	1,510,864	$	1,431,374	$	1,320,273	$	1,306,192	Investment in Real Estate	$	1,557,060	$	1,488,830	$	1,520,189	$	1,510,864	$	1,431,374	$	1,320,273	$	1,306,192


Maryland						27-1200777
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

222 Lakeview Avenue, Suite 200
West Palm Beach, Florida						33401
(Address of Principal Executive Offices)						(Zip Code)


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	¨	Smaller reporting company	☐
		Emerging growth company	☐


	Value of initial investment at December 31, 2015		Value of initial investment at December 31, 2016		Value of initial investment at December 31, 2017		Value of initial investment at December 31, 2018		Value of initial investment at December 31, 2019		Value of initial investment at December 31, 2020
Chatham Lodging Trust	$	100.00	$	107.37	$	126.74	$	105.13	$	116.99	$	69.88
Russell 2000 Index	$	100.00	$	121.31	$	139.08	$	123.76	$	155.35	$	186.36
FTSE NAREIT All Equity REIT Index	$	100.00	$	109.28	$	119.41	$	114.51	$	146.66	$	138.06
FTSE NAREIT Lodging/Resorts Index	$	100.00	$	124.34	$	133.25	$	116.17	$	134.35	$	102.65


	Value of initial investment at December 31,
	2016		2017		2018		2019		2020		2021
Chatham Lodging Trust	$	100.00	$	118.04	$	97.92	$	108.96	$	65.09	$	82.68
Russell 2000	$	100.00	$	114.65	$	102.02	$	128.06	$	153.62	$	176.39
FTSE Nareit All Equity REITs	$	100.00	$	104.77	$	96.03	$	118.08	$	107.00	$	145.06
FTSE Nareit Lodging	$	100.00	$	101.61	$	83.82	$	91.21	$	68.37	$	80.79


	For the year ended
	December 31, 2021		December 31, 2020		% Change
Mortgage debt interest	$	21,081	$	23,227	(9.2)	%
Credit facility interest and unused fees	3,441		5,001		(31.2)	%
Interest rate cap	(52)		25		(308.0)	%
Construction loan interest	2,117		202		948.0	%
Capitalized interest	(3,551)		(1,473)		141.1	%
Amortization of deferred financing costs	1,424		1,140		24.9	%
Total	$	24,460	$	28,122	(13.0)	%


		Page
	PART I.

Item 1.	Business	5
Item 1A.	Risk Factors	1416
Item 1B.	Unresolved Staff Comments	3536
Item 2.	Properties	3637
Item 3.	Legal Proceedings	3738
Item 4.	Mine Safety Disclosures	3738

	PART II.

Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3839
Item 6.	~~Selected Financial Data~~[Reserved]	41
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	4342
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	6057
Item 8.	Consolidated Financial Statements and Supplementary Data	6158
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	6158
Item 9A	Controls and Procedures	6158
Item 9B.	Other Information	6158
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	58

	PART III.

Item 10.	Trustees, Executive Officers and Corporate Governance	6259
Item 11.	Executive Compensation	6259
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	6259
Item 13.	Certain Relationships and Related Transactions, and Trustee Independence	6259
Item 14.	Principal Accountant Fees and Services	6259

	PART IV

Item 15.	Exhibits and Financial Statement Schedules	6360


•			our business and investment strategy;
•			our forecasted operating results;
•			completion of hotel acquisitions and dispositions;
•			completion of hotel developments;
•			our ability to obtain future financing arrangements;
•			our expected leverage levels;
•			our understanding of our competition;
•			market and lodging industry trends and expectations;
•			our investment in joint ventures;
•			anticipated capital expenditures; and
•			our ability to maintain our qualification as a real estate investment trust ("REIT") for U.S. federal income tax purposes.


•			principal customer base includes business travelers, whether short-term transient travelers or those on extended assignments and corporate relocations;

•			services and amenities include complimentary breakfast and evening hospitality hour, high-speed internet access, in-room movie channels, limited meeting space, daily linen and room cleaning service, 24-hour front desk, guest grocery services, and an on-site maintenance staff; and

•			physical facilities include large suites, quality construction, full separate kitchens in each guest suite or suites that include a wet bar, refrigerator and microwave, quality room furnishings, pool, and exercise facilities.


•			Disciplined acquisition of hotel properties: We invest primarily in premium-branded upscale extended-stay and select-service hotels with a focus on the 25 largest metropolitan markets in the United States. We focus on acquiring hotel properties at prices below replacement cost in markets that have strong demand generators and where we expect demand growth will outpace new supply. We also seek to acquire properties that we believe are undermanaged or undercapitalized.

•			Opportunistic hotel repositioning: We employ value-added strategies, such as re-branding, renovating, expanding or changing management, when we believe such strategies will increase the operating results and values of the hotels we acquire.

•			Aggressive asset management: Although as a REIT we cannot operate our hotels, we proactively manage our third-party hotel ~~managers~~manager in seeking to maximize hotel operating performance. Our asset management activities seek to ensure that our third-party hotel ~~managers~~manager effectively ~~utilize~~utilizes franchise brands' marketing programs, develop effective sales management policies and plans, operate properties efficiently, control costs, and develop operational initiatives for our hotels that increase guest satisfaction. As part of our asset management activities, we regularly review opportunities to reinvest in our hotels to maintain quality, increase long-term value and generate attractive returns on invested capital.

•			Selective hotel development: We may consider developing a limited number of hotels in cases where we believe newly developed hotels will generate attractive returns and enhance the quality of our hotel portfolio.

•			Flexible selection of hotel management companies: We are flexible in our selection of hotel management companies and select managers that we believe will maximize the performance of our hotels. We utilize independent management companies, including IHM, a hotel management company ~~52.5%~~100% owned by Mr. Fisher that as of December 31, ~~2020,~~2021, managed all 39 of our ~~wholly owned hotels, all of the hotels owned by the NewINK JV and none of the hotels owned by the Inland JV.~~hotels. We believe this strategy increases the universe of potential acquisition opportunities we can consider because many hotel properties are encumbered by long-term management contracts.

•			Selective investment in hotel debt: We may consider selectively investing in debt collateralized by hotel property if we believe we can foreclose on or acquire ownership of the underlying hotel property in the relative near term. We do not intend to invest in any debt where we do not expect to gain ownership of the underlying property or to originate any debt financing.


•			there are not existing environmental liabilities related to our properties of which we are not aware;

•			future laws, ordinances or regulations will not impose material environmental liability; or

•			the current environmental condition of a hotel will not be affected by the condition of properties in the vicinity of the hotel (such as the presence of leaking underground storage tanks) or by third parties unrelated to us.


Property	Franchise Company	Franchise/Royalty Fee		Marketing/Program Fee		Expiration
Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington	Promus Hotels, Inc.	4.0	%	4.0	%	2025
Homewood Suites by Hilton Minneapolis-Mall of America	Promus Hotels, Inc.	4.0	%	4.0	%	2025
Homewood Suites by Hilton Nashville-Brentwood	Promus Hotels, Inc.	4.0	%	4.0	%	2025
Homewood Suites by Hilton Dallas-Market Center	Promus Hotels, Inc.	4.0	%	4.0	%	2025
Homewood Suites by Hilton Hartford-Farmington	Promus Hotels, Inc	4.0	%	4.0	%	2025
Homewood Suites by Hilton Orlando-Maitland	Promus Hotels, Inc.	4.0	%	4.0	%	2025
Hampton Inn & Suites Houston-Medical Center	Hampton Inns Franchise LLC	6.0	%	4.0	%	2035
Residence Inn Long Island Holtsville	Marriott International, Inc.	5.5	%	2.5	%	2025
Residence Inn White Plains	Marriott International, Inc.	5.5	%	2.5	%	2030
Residence Inn New Rochelle	Marriott International, Inc.	5.5	%	2.5	%	2030
Residence Inn Garden Grove	Marriott International, Inc.	5.0	%	2.5	%	2031
Homewood Suites by Hilton San Antonio River Walk	Promus Hotels, Inc.	4.0	%	4.0	%	2026
Residence Inn Washington DC	Marriott International, Inc.	5.5	%	2.5	%	2033
Residence Inn Tysons Corner	Marriott International, Inc.	5.0	%	2.5	%	2031
Hampton Inn Portland Downtown	Hampton Inns Franchise LLC	6.0	%	4.0	%	2032
Courtyard Houston	Marriott International, Inc.	5.5	%	2.0	%	2030
Hyatt Place Pittsburgh North Shore	Hyatt Hotels, LLC	5.0	%	3.5	%	2030
Hampton Inn Exeter	Hampton Inns Franchise LLC	6.0	%	4.0	%	2031
Hilton Garden Inn Denver Tech	Hilton Garden Inns Franchise LLC	5.5	%	4.3	%	2028
Residence Inn Bellevue	Marriott International, Inc.	5.5	%	2.5	%	2033
Springhill Suites Savannah	Marriott International, Inc.	5.0	%	2.5	%	2033
Residence Inn Silicon Valley I	Marriott International, Inc.	5.5	%	2.5	%	2029
Residence Inn Silicon Valley II	Marriott International, Inc.	5.5	%	2.5	%	2029
Residence Inn San Mateo	Marriott International, Inc.	5.5	%	2.5	%	2029
Residence Inn Mountain View	Marriott International, Inc.	5.5	%	2.5	%	2029
Hyatt Place Cherry Creek	Hyatt Hotels, LLC	3% to 5%		3.5	%	2034
Courtyard Addison	Marriott International, Inc.	5.5	%	2.0	%	2029
Courtyard West University Houston	Marriott International, Inc.	5.5	%	2.0	%	2029
Residence Inn West University Houston	Marriott International, Inc.	6.0	%	2.5	%	2024
Hilton Garden Inn Burlington	Hilton Garden Inns Franchise LLC	5.5	%	4.3	%	2029
Residence Inn San Diego Gaslamp	Marriott International, Inc.	6.0	%	2.5	%	2035
Hilton Garden Inn Marina del Rey	Hilton Franchise Holding LLC	3% to 5.5%		4.3	%	2030
Residence Inn Dedham	Marriott International, Inc.	6.0	%	2.5	%	2030
Residence Inn Il Lugano	Marriott International, Inc.	3% to 6%		2.5	%	2045
Hilton Garden Inn Portsmouth	Hilton Garden Inns Franchise LLC	5.5	%	4.0	%	2037
Courtyard Summerville	Marriott International, Inc.	6.0	%	2.5	%	2037
Embassy Suites Springfield	Hilton Franchise Holding LLC	5.5	%	4.0	%	2037
Residence Inn Summerville	Marriott International, Inc.	6.0	%	2.5	%	2038
Courtyard Dallas	Marriott International, Inc.	4% to 6%		2.0	%	2038


Total Future Lease Payments	Total Future Lease Payments			Total Future Lease Payments
		Amount			Amount

2021		$	2,051
2022	2022	2,071		2022	$	2,072
2023	2023	2,093		2023	2,093
2024	2024	2,115		2024	2,115
2025	2025	2,186		2025	2,186
2026				2026	1,894
Thereafter	Thereafter	66,720		Thereafter	64,825
Total lease payments	Total lease payments	$	77,236	Total lease payments	$	75,185


•			The current COVID-19 pandemic has had, and may continue to have, or a future pandemic could have, adverse effects on our financial condition, results of operations, cash flows and performance.
•			Our investment policies are subject to revision from time to time at our Board of Trustees' discretion.
•			We depend on the efforts and expertise of our key executive officers whose continued service is not guaranteed.
•			Our future growth depends on obtaining new financing.
•			We must rely on ~~third party~~third-party management companies to operate our hotels in order to qualify as a REIT.
•			The management of the hotels in our portfolio is currently concentrated in one hotel management company.
•			Our franchisors could cause us to expend additional funds on upgraded operating standards.
•			Our franchisors may cancel or fail to renew our existing franchise licenses.
•			Fluctuations in our financial performance, capital expenditure requirements and excess cash flow could adversely affect our ability to make distributions.
•			Future debt service obligations could adversely affect our overall operating results or cash flow and may require us to liquidate our properties.
•			If we are unable to repay our debt obligations in the future, we may be forced to refinance debt or dispose of or encumber our assets, which could adversely affect distributions to shareholders.
•			Interest expense on our debt may limit our cash available to fund growth strategies and shareholder distributions.
•			Failure to hedge effectively against interest rate changes may adversely affect us.
•			Changes in the method pursuant to which the LIBOR rates are determined and phasing out of LIBOR after 2021 may affect our financial results.
•			Joint venture investments that we may make could be adversely affected by our lack of decision-making authority, our reliance on joint venture partners' financial condition and disputes between us and our ~~joint venture~~joint-venture partners.
•			~~It may be difficult for us to exit a joint venture after an impasse with our co-venturer.~~
•			~~Our Operating Partnership acts as guarantor under certain debt obligations of the JVs.~~
•			We may from time to time make distributions to our shareholders in the form of our common shares, which could result in shareholders incurring tax liability without receiving sufficient cash to pay such tax.
•			Our conflict of interest policy may not be successful in eliminating the influence of future conflicts of interest that may arise between us and our trustees, officers and employees.
•			There may be conflicts of interest between us and affiliates owned by our Chief Executive Officer.
•			Hotel development is subject to timing, cost, and other risks.


•			The lodging industry has experienced significant declines in the past and failure of the lodging industry to exhibit improvement may adversely affect our ability to execute our business strategy.
•			Our ability to make distributions to our shareholders may be affected by operating risks in the lodging industry.
•			Competition for acquisitions may reduce the number of properties we can acquire.
•			Competition for guests may lower our hotels' revenues and profitability.
•			The cyclical nature of the lodging industry may adversely affect the return on our investments.
•			Due to our concentration therein, a downturn in the lodging industry would adversely affect our business.
•			The ongoing need for capital expenditures at our hotel properties may adversely affect our business.


•			The increasing use by consumers of Internet travel intermediaries and alternative lodging market places may adversely affect our profitability.
•			The need for business-related travel may be adversely affected by the use of business-related technology.
•			We and our hotel managers rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.
•			Future terrorist attacks or changes in terror alert levels could adversely affect travel and hotel demand.
•			We may assume liabilities in connection with the acquisition of hotel properties, including unknown liabilities.
•			Uninsured and underinsured losses could adversely affect our operating results.
•			We face risks associated with natural disasters and the direct and indirect physical effects of climate change, which may include more frequent and more severe storms, hurricanes, flooding, droughts and wildfires, any of which could have a material adverse effect on our hotel properties, operations, cash flows and financing options.
•			Noncompliance with environmental laws and governmental regulations could adversely affect our business.
•			Compliance with the ADA and other changes in governmental rules and regulations could substantially increase our cost of doing business.
•			The outbreak of widespread contagious disease, such as COVID-19, could reduce travel.


•			reducing the hotel revenue that we recognize with respect to hotels leased to our TRS Lessees; and

•			correspondingly reducing the profits (or increasing the loss) of hotels leased to our TRS Lessees. We may be unable to reduce many of our expenses in tandem with revenue declines, (or we may choose not to reduce them for competitive reasons), and certain expenses may increase while our revenue declines.


•			operating cash flow will be insufficient to make required payments of expenses, principal and interest;

•			our leverage may increase our vulnerability to adverse economic and industry conditions;

•			we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing cash available for distribution to our shareholders, funds available for operations and capital expenditures, future business opportunities or other purposes;

•			the terms of any refinancing will not be as favorable as the terms of the debt being refinanced; and

•			the terms of our debt may limit our ability to make distributions to our shareholders.


•			competition from other hotel properties and alternative lodging market places in the markets in which we ~~and our joint ventures~~ operate, some of which may have greater marketing and financial resources;

•			an over-supply or over-building of hotel properties in the markets in which we ~~and our joint ventures~~ operate, which could adversely affect occupancy rates and revenues;

•			dependence on business and commercial travelers and tourism;

•			increases in energy costs and other expenses and factors affecting travel, which may affect travel patterns and reduce the number of business and commercial travelers and tourists;

•			increases in operating costs due to inflation and other factors that may not be offset by increased room rates;

•			necessity for periodic capital reinvestment to repair and upgrade hotel properties;

•			changes in interest rates and in the availability, cost and terms of debt financing;

•			changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances;

•			unforeseen events beyond our control, such as terrorist attacks, travel related health concerns including pandemics and epidemics such as COVID-19, H1N1 influenza (swine flu), avian bird flu, SARS and Zika virus, political instability, regional hostilities, imposition of taxes or surcharges by regulatory authorities, travel related accidents and unusual weather patterns, including natural disasters such as hurricanes, tsunamis, earthquakes, wildfires and flooding;

•			disruptions to the operations of our hotels caused by organized labor activities, including strikes, work stoppages or slowdowns;

•			adverse effects of a downturn in the economy or in the hotel industry; and

•			risk generally associated with the ownership of hotel properties and real estate, as we discuss in detail below.


•			possible environmental problems;

•			construction cost overruns and delays;

•			possibility that revenues will be reduced temporarily while rooms or restaurants offered are out of service due to capital improvement projects;

•			a possible shortage of available cash to fund capital improvements and the related possibility that financing for these capital improvements may not be available on affordable terms;

•			uncertainties as to market demand or a loss of market demand after capital improvements have begun; and

•			disputes with franchisors/managers regarding compliance with relevant management/franchise agreements.


	Year Ended		Year Ended		Year Ended		Year Ended		Year Ended
	December 31, 2020		December 31, 2019		December 31, 2018		December 31, 2017		December 31, 2016
	(In thousands, except share and per-share data)
Statement of Operations Data:
Total revenue	$	144,916	$	328,328	$	324,230	$	301,844	$	295,871

Hotel operating expenses	95,498		174,251		170,562		155,679		148,777
Depreciation and amortization	53,871		51,505		48,169		46,292		48,775
Impairment loss	—		—		—		6,663		—
Impairment loss on investment in unconsolidated real estate entities	15,282		—		—		—		—
Property taxes, ground rent and insurance	23,040		24,717		23,678		20,916		21,564
General and administrative	11,564		14,077		14,120		12,825		11,119
Other charges	4,385		1,441		3,806		523		510
Reimbursed costs from unconsolidated real estate entities	4,045		5,670		5,743		5,908		6,190
Total operating expenses	207,685		271,661		266,078		248,806		236,935
Operating (loss) income before gain (loss) on sale of hotel property	(62,769)		56,667		58,152		53,038		58,936
Interest and other income	179		190		462		30		51
Interest expense net of amounts capitalized, including amortization of deferred fees	(28,122)		(28,247)		(26,878)		(27,901)		(28,297)
Loss on early extinguishment of debt	—		—		—		—		(4)
Gain (loss) on sale of hotel property	21,116		(3,282)		(18)		3,327		—
Loss from unconsolidated real estate entities	(7,424)		(6,448)		(876)		1,582		718
Net gain (loss) from remeasurement and sales of investment in unconsolidated real estate entities	—		—		—		—		(10)
(Loss) income before income tax expense	(77,020)		18,880		30,842		30,076		31,394
Income tax expense	—		—		28		(396)		301
Net (loss) income	$	(77,020)	$	18,880	$	30,870	$	29,680	$	31,695
Net (loss) income attributable to non-controlling interest	997		(177)		(229)		(202)		(212)
Net (loss) income attributable to common shareholders	$	(76,023)	$	18,703	$	30,641	$	29,478	$	31,483

(Loss) income per Common Share - Basic:
Net (loss) income attributable to common shareholders	$	(1.62)	$	0.39	$	0.66	$	0.73	$	0.82
(Loss) income per Common Share - Diluted:
Net (loss) income attributable to common shareholders	$	(1.62)	$	0.39	$	0.66	$	0.73	$	0.81
Weighted average number of common shares outstanding:
Basic	46,961,039		46,788,784		46,073,515		39,859,143		38,299,067
Diluted	46,961,039		47,023,280		46,243,660		40,112,266		38,482,875

Other Data:
Net cash (used in) provided by operating activities	(19,961)		86,234		86,215		86,689		87,669
Net cash provided by (used in) investing activities	26,806		(44,575)		(96,401)		(158,411)		(15,268)
Net cash provided by (used in) financing activities	4,426		(53,814)		6,024		71,171		(75,509)
Cash dividends declared per common share	.22		1.32		1.32		1.30		1.30


	As of		As of		As of		As of		As of
	December 31, 2020		December 31, 2019		December 31, 2018		December 31, 2017		December 31, 2016
	(In thousands)
Balance Sheet Data:
Investment in hotel properties, net	$	1,265,174	$	1,347,116	$	1,373,773	$	1,320,082	$	1,233,094
Investment in hotel properties under development	43,651		20,496		—
Cash and cash equivalents	21,124		6,620		7,192		9,333		12,118
Restricted cash	10,329		13,562		25,145		27,166		25,083
Investment in unconsolidated real estate entities	—		17,969		21,545		24,389		20,424
Right of use asset	20,641		21,270		—		—		—
Hotel receivables (net of allowance for doubtful accounts)	1,688		4,626		4,495		4,047		4,389
Deferred costs, net	5,384		4,271		5,070		4,646		4,642
Prepaid expenses and other assets	2,266		2,615		2,431		2,523		2,778
Deferred tax asset, net	—		29		58		30		426
Total assets	$	1,370,257	$	1,438,574	$	1,439,709	$	1,392,216	$	1,302,954

Mortgage debt, net	$	460,145	$	495,465	$	501,782	$	506,316	$	530,323
Revolving credit facility	135,300		90,000		81,500		32,000		52,500
Construction loan	13,325		—		—		—		—
Accounts payable and accrued expenses	25,374		33,012		33,692		31,692		27,782
Distributions in excess of investments of unconsolidated real estate entities	19,951		15,214		9,650		6,582		6,017
Lease liability	23,233		23,717		—		—		—
Distributions payable	469		6,142		5,667		5,846		4,742
Total liabilities	677,797		663,550		632,291		582,436		621,364
Total shareholders’ equity	677,752		762,377		797,466		803,162		676,742
Noncontrolling Interest in Operating Partnership	14,708		12,647		9,952		6,618		4,848
Total liabilities and equity	$	1,370,257	$	1,438,574	$	1,439,709	$	1,392,216	$	1,302,954


	Payments Due by Period
Contractual Obligations	Total		Less Than One Year		One to Three Years		Three to Five Years		More Than Five Years
Corporate office lease (1)	$	4,994	$	832	$	1,726	$	1,814	$	622
Revolving credit facility, including interest (2)	140,488		4,383		136,105		—		—
Construction loan (2)	17,032		1,033		2,065		13,934		—
Ground leases	72,241		1,219		2,438		2,486		66,098
Property loans, including interest (2)	511,507		43,920		147,374		320,213		—
Total	$	746,262	$	51,387	$	289,708	$	338,447	$	66,720


	December 31, 2020		December 31, 2019

Assets:
Investment in hotel properties, net	$	1,265,174	$	1,347,116
Investment in hotel properties under development	43,651		20,496
Cash and cash equivalents	21,124		6,620
Restricted cash	10,329		13,562
Investment in unconsolidated real estate entities	0		17,969
Right of use asset, net	20,641		21,270
Hotel receivables (net of allowance for doubtful accounts of $248 and $451, respectively)	1,688		4,626
Deferred costs, net	5,384		4,271
Prepaid expenses and other assets	2,266		2,615
Deferred tax asset, net	0		29
Total assets	$	1,370,257	$	1,438,574
Liabilities and Equity:
Mortgage debt, net	$	460,145	$	495,465
Revolving credit facility	135,300		90,000
Construction loan	13,325		0
Accounts payable and accrued expenses	25,374		33,012
Distributions and losses in excess of investments of unconsolidated real estate entities	19,951		15,214
Lease liability, net	23,233		23,717
Distributions payable	469		6,142
Total liabilities	677,797		663,550
Commitments and contingencies (see note 14)	0		0
Equity:
Shareholders’ Equity:
Preferred shares, $0.01 par value, 100,000,000 shares authorized and unissued at December 31, 2020 and 2019	0		0
Common shares, $0.01 par value, 500,000,000 shares authorized; 46,973,473 and 46,928,445 shares issued and outstanding at December 31, 2020 and 2019, respectively	470		469
Additional paid-in capital	906,000		904,273
Accumulated deficit	(228,718)		(142,365)
Total shareholders’ equity	677,752		762,377
Noncontrolling Interests:
Noncontrolling interest in operating partnership	14,708		12,647
Total equity	692,460		775,024
Total liabilities and equity	$	1,370,257	$	1,438,574


	RI Summerville		Dallas DT		Total
Acquisition date	8/27/2018		12/5/2018
Number of rooms (unaudited)	96		167		263
Land	$	2,300	$	2,900	$	5,200
Building and improvements	17,060		42,760		59,820
Furniture, fixtures and equipment	1,234		3,340		4,574
Cash	0		5		5

Accounts receivable	0		8		8

Prepaid expenses and other assets	0		68		68

Accounts payable and accrued expenses	(9)		(33)		(42)


Net assets acquired, net of cash	$	20,585	$	49,043	$	69,628


		For the Year Ended December 31, 2020				For the Year Ended December 31, 2019
	Acquisition Date	Revenue		Operating Income		Revenue		Operating Income
Residence Inn Summerville, SC	8/27/18	$	2,968	$	903	$	3,645	$	1,250
Courtyard Dallas Downtown, TX	12/05/18	3,574		838		7,833		2,479



Total		$	6,542	$	1,741	$	11,478	$	3,729


	December 31, 2020		December 31, 2019
Land and improvements	$	287,049	$	296,884
Building and improvements	1,195,276		1,216,849
Furniture, fixtures and equipment	84,381		81,707
Renovations in progress	11,225		31,589
	1,577,931		1,627,029
Less: accumulated depreciation	(312,757)		(279,913)
Investment in hotel properties, net	$	1,265,174	$	1,347,116


Balance Sheet
	December 31, 2020		December 31, 2019		December 31, 2018
Assets
Investment in hotel properties, net	$	1,604,501	$	2,221,718	$	2,309,396
Other assets	79,136		104,560		118,600
Total Assets	$	1,683,637	$	2,326,278	$	2,427,996

Liabilities
Mortgages and notes payable, net	$	1,622,305	$	1,612,217	$	1,606,334
Other Liabilities	80,423		34,948		37,051
Total Liabilities	1,702,728		1,647,165		1,643,385

Equity
Chatham Lodging Trust	(1,835)		69,008		79,744
Joint Venture Partner	(17,256)		610,105		704,867
Total Equity	(19,091)		679,113		784,611
Total Liabilities and Equity	$	1,683,637	$	2,326,278	$	2,427,996


Loan/Collateral	Interest Rate		Maturity Date	12/31/20 Property Carrying Value		Balance Outstanding as of
						December 31, 2020		December 31, 2019
Revolving Credit Facility (1)	3.07	%	March 8, 2022	$	608,319	$	135,300	$	90,000
Construction loan (2)	7.75	%	August 4, 2024	43,651		13,325		0
Residence Inn by Marriott New Rochelle, NY	5.75	%	September 1, 2021	21,883		12,602		12,936
Residence Inn by Marriott San Diego, CA	4.66	%	February 6, 2023	0		0		27,272
Homewood Suites by Hilton San Antonio, TX	4.59	%	February 6, 2023	28,622		15,195		15,563
Residence Inn by Marriott Vienna, VA	4.49	%	February 6, 2023	30,996		20,780		21,291
Courtyard by Marriott Houston, TX	4.19	%	May 6, 2023	30,152		17,126		17,559
Hyatt Place Pittsburgh, PA	4.65	%	July 6, 2023	33,760		21,031		21,520
Residence Inn by Marriott Bellevue, WA	4.97	%	December 6, 2023	62,419		42,998		43,857
Residence Inn by Marriott Garden Grove, CA	4.79	%	April 6, 2024	41,246		31,463		32,053
Residence Inn by Marriott Silicon Valley I, CA	4.64	%	July 1, 2024	75,680		63,418		64,406
Residence Inn by Marriott Silicon Valley II, CA	4.64	%	July 1, 2024	83,931		69,192		70,270
Residence Inn by Marriott San Mateo, CA	4.64	%	July 1, 2024	62,652		47,564		48,305
Residence Inn by Marriott Mountain View, CA	4.64	%	July 1, 2024	48,563		37,092		37,670
SpringHill Suites by Marriott Savannah, GA	4.62	%	July 6, 2024	33,349		29,358		29,817
Hilton Garden Inn Marina del Rey, CA	4.68	%	July 6, 2024	38,044		20,490		20,931
Homewood Suites by Hilton Billerica, MA	4.32	%	December 6, 2024	13,014		15,411		15,693
Hampton Inn & Suites Houston Medical Cntr., TX	4.25	%	January 6, 2025	15,769		17,396		17,717
Total debt before unamortized debt issue costs				$	1,272,050	$	609,741	$	586,860
Unamortized mortgage debt issue costs						(971)		(1,395)
Total debt outstanding						608,770		585,465


	Amount
2021	$	21,441
2022	144,549
2023	117,875
2024	309,941
2025	15,935
Thereafter	0
Total debt before unamortized debt issue costs	$	609,741
Unamortized mortgage debt issue costs	(971)
Total debt outstanding	$	608,770


		Record Date	Payment Date	Common share distribution amount		LTIP unit distribution amount		Taxable Ordinary Income		Return of Capital		Section 199A Dividends			Record Date	Payment Date	Common share distribution amount		LTIP unit distribution amount		Taxable Ordinary Income		Return of Capital		Section 199A Dividends
January	January	1/31/2020	2/28/2020	$	0.11	$	0.11	$	0	$	0.1100	$	0	January	1/31/2020	2/28/2020	$	0.11	$	0.11	$	—	$	0.1100	$	—
February	February	2/28/2020	3/27/2020	0.11		0.11		0		0.1100		0		February	2/28/2020	3/27/2020	0.11		0.11		—		0.1100		—

Total 2020	Total 2020			$	0.22	$	0.22	$	0	$	0.2200	$	0	Total 2020			$	0.22	$	0.22	$	—	$	0.2200	$	—


	Record Date	Payment Date	Dividend Per Preferred Share		Taxable Ordinary Income		Return of Capital		Section 199A Dividends


September	9/30/2021	10/15/2021	$	0.48307	$	0.48307	$	—	$	0.48307
December	12/31/2021	1/18/2022	$	0.41406	$	0.41406	$	—	$	0.41406

Total 2021			$	0.89713	$	0.89713	$	—	$	0.89713


	Relative TSR Hurdles (Percentile)	Payout Percentage
Threshold	25th	50%
Target	50th	100%
Maximum	75th	150%


		Grant Date	Number of Units Granted	Estimated Value per Unit	Volatility	Dividend Yield	Risk Free Interest Rate		Grant Date	Number of Units Granted	Estimated Value per Unit	Volatility	Dividend Yield	Risk-Free Interest Rate
Outperformance Plan		6/1/2015	183,300	$14.13	26%	4.5%	0.95%
2016 Time-Based LTIP Unit Awards	2016 Time-Based LTIP Unit Awards	1/28/2016	72,966	$16.69	28%	0%	0.79%	2016 Time-Based LTIP Unit Awards	1/28/2016	72,966	$16.69	28%	—%	0.79%
2016 Performance-Based LTIP Unit Awards	2016 Performance-Based LTIP Unit Awards	1/28/2016	39,285	$11.09	30%	5.8%	1.13%	2016 Performance-Based LTIP Unit Awards	1/28/2016	39,285	$11.09	30%	5.8%	1.13%
2017 Time-Based LTIP Unit Awards	2017 Time-Based LTIP Unit Awards	3/1/2017	89,574	$18.53	24%	0%	0.92%	2017 Time-Based LTIP Unit Awards	3/1/2017	89,574	$18.53	24%	—%	0.92%
2017 Performance-Based LTIP Unit Awards	2017 Performance-Based LTIP Unit Awards	3/1/2017	134,348	$19.65	25%	5.8%	1.47%	2017 Performance-Based LTIP Unit Awards	3/1/2017	134,348	$19.65	25%	5.8%	1.47%
2018 Time-Based LTIP Unit Awards	2018 Time-Based LTIP Unit Awards	3/1/2018	97,968	$16.83	26%	0%	2.07%	2018 Time-Based LTIP Unit Awards	3/1/2018	97,968	$16.83	26%	—%	2.07%
2018 Performance-Based LTIP Unit Awards	2018 Performance-Based LTIP Unit Awards	3/1/2018	146,949	$17.02	26%	6.2%	2.37%	2018 Performance-Based LTIP Unit Awards	3/1/2018	146,949	$17.02	26%	6.2%	2.37%
2019 Time-Based LTIP Unit Awards	2019 Time-Based LTIP Unit Awards	3/1/2019	88,746	$18.45	21%	0%	2.57%	2019 Time-Based LTIP Unit Awards	3/1/2019	88,746	$18.45	21%	—%	2.57%
2019 Performance-Based LTIP Unit Awards	2019 Performance-Based LTIP Unit Awards	3/1/2019	133,107	$18.91	21%	6.2%	2.55%	2019 Performance-Based LTIP Unit Awards	3/1/2019	133,107	$18.91	21%	6.2%	2.55%
2020 Time-Based LTIP Unit Awards	2020 Time-Based LTIP Unit Awards	3/1/2020	130,206	$13.05	20%	0%	1.06%	2020 Time-Based LTIP Unit Awards	3/1/2020	130,206	$13.05	20%	—%	1.06%
2020 Performance-Based LTIP Unit Awards	2020 Performance-Based LTIP Unit Awards	3/1/2020	195,301	$13.66	20%	8.1%	0.90%	2020 Performance-Based LTIP Unit Awards	3/1/2020	195,301	$13.66	20%	8.1%	0.90%
2021 Time-Based LTIP Unit Awards								2021 Time-Based LTIP Unit Awards	3/1/2021	132,381	$12.52	78%	—%	0.08%
2021 Performance-Based LTIP Unit Awards								2021 Performance-Based LTIP Unit Awards	3/1/2021	198,564	$15.91	64%	3.4%	0.30%


	Right of Use Asset		Lease Liability
Balance as of January 1, 2020	$	21,270	$	23,717
Amortization	(629)		(484)

Balance as of December 31, 2020	$	20,641	$	23,233


	Quarter Ended - 2020
	March 31		June 30		September 30		December 31
	(in thousands, except share and per share data)

Total revenue	$	60,209	$	20,173	$	34,969	$	29,565
Total operating expenses	77,895		38,793		45,214		24,667
Operating income	(17,686)		(18,620)		(10,245)		4,898
Net income attributable to common shareholders	(27,783)		(26,827)		(18,057)		(3,356)
Income (loss) per common share, basic (1)	(0.59)		(0.57)		(0.38)		(0.07)
Income (loss) per common share, diluted (1)	(0.59)		(0.57)		(0.38)		(0.07)

Weighted average number of common shares outstanding:
Basic	46,948,533		46,960,289		46,965,526		46,969,483
Diluted	46,948,533		46,960,289		46,965,526		46,969,483


	Quarter Ended - 2019
	March 31		June 30		September 30		December 31
	(in thousands, except share and per share data)

Total revenue	$	75,679	$	87,874	$	90,080	$	74,695
Total operating expenses	65,786		71,741		70,182		67,234
Operating income	9,893		16,133		19,898		7,461
Net income attributable to common shareholders	1,613		9,437		10,002		(2,349)
Income per common share, basic (1)	0.03		0.20		0.21		(0.05)
Income per common share, diluted (1)	0.03		0.20		0.21		(0.05)

Weighted average number of common shares outstanding:
Basic	46,556,710		46,760,016		46,913,922		46,919,035
Diluted	46,734,958		46,976,999		47,152,166		47,220,671